FEDERAL COURT OF AUSTRALIA

Mount v Dover Castle Metals Pty Ltd [2025] FCA 101

ORDERS

THE COURT ORDERS THAT:

1.    The further amended originating application be dismissed.

2.    The question of costs be reserved, to be determined on the papers unless the Court decides otherwise.

3.    Any application for costs be filed and served by 4pm on 14 March 2025, supported by any affidavit evidence and submissions.

4.    Any affidavit(s) and submissions in response be filed and served by 4pm on 4 April 2025.

5.    Any evidence and submissions in reply be filed and served by 4pm on 11 April 2025.

6.    No submissions may exceed five pages without the leave of the Court.

7.    If no application for costs is made within the time fixed by order 3 above, there be no order as to costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

KATZMANN J

INTRODUCTION

1    Dover Castle Metals Pty Ltd (DCM) operates a mine in North Queensland. On 18 March 2021 Ryan Mount was appointed its Acting Chief Executive Officer for a period of 12 months. Days before accepting the appointment Mr Mount inspected the mine and identified a number of safety risks.

2    Two days after he started work for DCM, Mr Mount asked for a report on a safety concern from one of the directors who also worked for DCM as a geologist. He repeated his request on several occasions. He also issued directions limiting the work that should be performed in order to minimise the risk of injury but those directions were not followed. He requested the assistance of DCM’s directors and sought their intervention to stop work he had not authorised. He believed that the company had been mismanaged and that two of its four directors had behaved improperly. He recorded his opinions in two so-called whistleblower reports which he emailed to the other two directors. On 4 April 2021 he emailed the directors complaining about the undermining of his authority and the lack of communication, informed them of his obligations concerning health and safety at the mine, and told them that, if workers continued to ignore his directions, he was legally obliged to report the matter and seek the intervention of Resources Safety and Health Queensland. Within days, DCM summarily terminated his contract — three weeks into its term.

3    In this proceeding Mr Mount sues both DCM and its then directors. He alleges that he was wrongfully dismissed. He also alleges that numerous of his communications including those relating to safety risks at the mine were protected by Pt 9.4AAA of the Corporations Act 2001 (Cth) which DCM and others disclosed in contravention of s 1317AAE of that Act and that he was victimised for making the allegedly protected disclosures in contravention of s 1317AC. He seeks damages for breach of contract, declarations that DCM and its directors contravened ss 1317AAE and 1317AC, and compensation under ss 1317AD and 1317AE on the basis that his contract was terminated because of his disclosures. He also seeks orders under the Corporations Act for exemplary damages and pecuniary penalties.

4    Most of Mr Mount’s claims were hotly contested and the respondents denied he was entitled to any relief.

5    As originally formulated, the originating application and statement of claim included various claims under Pt 3-1 of the Fair Work Act 2009 (Cth) (FW Act). In their defence the respondents denied that Mr Mount was an employee of DCM and Mr Mount discontinued all those claims. Within a week of the commencement of the trial, however, the respondents filed an amended defence which effectively admitted that Mr Mount was DCM’s employee and in submissions the respondents accepted as much.

BACKGROUND FACTS

6    Having regard to the way in which the case was pleaded and conducted, a considerable amount of evidence was adduced. A good deal of it was only of peripheral relevance. Some matters were the subject of agreement or uncontested evidence. At this point I turn to the background facts in order to put the issues in context. I will refer later to other matters of fact upon which the parties agreed only where necessary. Throughout this judgment, where I make factual assertions, they are about matters which were or became uncontroversial, or they result from my resolution of the issues.

7    DCM was incorporated on 2 June 2014. It is involved in the business of mineral exploration. In or about the middle of 2014, it was granted an initial mining exploration licence for a tenement in Far North Queensland. Since then, it acquired additional mining tenements in the same area. I will refer to these tenements as the mine or the mine site.

8    On 15 July 2014 Craig Nettelbeck became a director of DCM. On 16 February 2017 Matthew John Haindl, the second respondent, a project geologist and (like his father, Walter) one of the founders of DCM, was also appointed a director.

9    Additional directors were appointed in 2021. They were George Tucker, Christos Perdikaris (also known as Chris Perdis), Simon Tripp and Philip Christensen. Mr Tucker was appointed a director on 5 February 2021, Messrs Perdikaris and Tripp on 8 March 2021. Messrs Perdikaris, Tripp and Tucker were also shareholders of DCM either directly or as beneficiaries of a bare trust. Mr Christensen served as managing director of DCM from 3 June 2021 until 27 June 2022. From time to time he also provided legal services to DCM through his firm, Christensen Legal.

10    In about December 2020 and January 2021 allegations of fraud were made against Mr Nettelbeck. Mr Haindl contacted Mr Christensen in December 2020 and asked him to do some work in relation to those matters.

11    All the relevant events occurred within the first few months of 2021.

January – February 2021

DCM engages FTI Consulting

12    On 13 January DCM engaged FTI Consulting, a firm of forensic accountants, to inquire into the potential misuse of company funds by Mr Nettelbeck and/or others. Apparently it was Mr Haindl’s idea. On 22 January Kelly Trenfield, Senior Managing Director of FTI, provided an initial memorandum which DCM passed on to Mr Christensen for advice.

Mr Nettelbeck is removed as a director

13    On 8 February Mr Nettelbeck was removed as a director by a resolution of the shareholders, presumably on the basis of Mr Christensen’s advice.

14    On 10 February Mr Christensen wrote to Mr Nettelbeck’s lawyer, Wendy Jacobs of Keypoint Law, amongst other things informing her of his removal as a director and the background to it and seeking certain undertakings from Mr Nettelbeck. Mr Christensen claimed that Mr Nettelbeck had admitted to misappropriation of company funds over a number of years.

15    On 11 February Ms Jacobs responded, refuting the allegations made against Mr Nettelbeck including the assertion that he had made admissions and making allegations of impropriety on the part of Mr Haindl and Mr Tucker. She attributed the allegations conveyed by Mr Christensen and the consequential actions to an “internal dispute between Mr Haindl and Mr Nettelbeck in relation to other matters”. Among other things, she alleged that Mr Haindl and Mr Tucker had defamed her client to investors; that Mr Tucker had not been validly appointed as a director; and that Mr Haindl had breached his duties as a director from the time of his appointment. She also sought undertakings, including from Mr Tucker that “he will not purport to act as a director of the company”. Both lawyers foreshadowed litigation.

Mr Perdikaris joins the board of DCM and enlists the assistance of Mr Mount

16    The same day or thereabouts, Messrs Tucker and Haindl informed Mr Perdikaris that Mr Nettelbeck had misappropriated company funds and had been removed as a director. They said they would make the bank records available so that he could see for himself what had happened and later did so. Mr Perdikaris became concerned about his investment, which was over $1 million at the time, and proposed to Messrs Tucker and Haindl that he be appointed to the board.

17    On or about 17 February Mr Perdikaris telephoned Mr Mount, whom he had known for years, to see if he was interested in managing the business of DCM. Apparently the directors were in agreement that the company “could do with a CEO”. As he had not been appointed to the DCM board and apprehended that Messrs Haindl and Tucker were not inclined to go ahead with his appointment, Mr Perdikaris also asked Mr Mount for advice on how to secure it.

18    Mr Mount is a director of Axiom Mining Limited, a foreign company registered in Australia as a public company. For about 10 years, until April 2020, he was its Chief Executive Officer. In that role he was involved in developing mining exploration and mining teams in Asia, Australia and the Pacific; leading and advising on “turnarounds” of mining companies, including in the areas of rebranding, devising business plans and implementing commercial strategies; securing capital; developing relationships with relevant governments in Australia and overseas; and public company and financial regulation. His work relevantly involved establishing and constructing exploration and mine sites including accommodation and logistics and implementing safety management systems, standard operating procedures, quality assurance and quality controls, including for the physical handling of geological and metallurgical samples and data collection and management.

19    Before working for Axiom, Mr Mount was a stockbroker and corporate advisor. From about 2007 to 2010 he worked for Yellow Brick Road Securities Ltd.

20    Mr Mount met Mr Perdikaris in about 2006. Mr Perdikaris was a client of his at Yellow Brick Road and had been a shareholder of Axiom since 2008.

21    After he received the call from Mr Perdikaris on or about 17 February 2021, Mr Mount undertook some preliminary investigations of his own into DCM. First, he carried out an internet search and examined information about DCM on the register of the Australian Securities and Investments Commission (ASIC) but was unable to find much information from public sources so he asked Mr Perdikaris whether he could send him some information. On 19 February, in response to that request, he received some documents, including DCM’s constitution, a shareholder register and a copy of a trust deed recording that Mr Tucker held shares on behalf of various other parties (Tucker Bare Trust).

22    On 18 February 2021, Mr Mount provided advice to Mr Perdikaris about how he could “formalise” his appointment to the board of DCM.

23    Mr Mount spoke to Mr Perdikaris again on or about 20 or 21 February, asking him whether he had had “any luck finding any geological report or the like for the project”. Mr Perdikaris said he had not.

24    Mr Mount and Mr Perdikaris met twice after these conversations, on 22 February at the China Doll restaurant in Woolloomooloo and on 10 March 2021 at the Bathers Pavilion restaurant in Mosman. At the Bathers Pavilion meeting Mr Perdikaris introduced Mr Mount to Mr Tripp.

25    On 22 February Mr Mount emailed a report on DCM to Mr Perdikaris (for his eyes only) “in reference to the allegations of fraud within the Company”. The report was based on the publicly available material he had seen. Mr Mount identified shareholders (commenting on some of them, raising questions from time to time); certain “share issues” including in relation to shareholders’ rights and the Tucker Bare Trust. Mr Mount professed to be unfamiliar with the concept of a bare trust and considered it “strange”. I pause to observe that there is nothing unlawful or improper about a bare trust. Although it has been said that the expression is “plagued by terminological indeterminacy” (Fischer v Nemeske Pty Ltd (2016) 257 CLR 615 at [107] per Gageler J), typically a bare trust is merely a trust in which the trustee “has no interests in the trust assets other than those which exist by reason of the office of trustee and the holding of legal title” and “no active duties to perform other than those which exist by virtue of the office of the trustee, with the result that the [trust] property awaits transfer to the beneficiaries or awaits some other disposition at their direction”: CGU Insurance Limited v One.Tel Limited (In Liquidation) (2010) 242 CLR 174 at [36] (French CJ, Heydon, Crennan, Kiefel and Bell JJ). See also Herdegen v Federal Commissioner of Taxation (1988) 84 ALR 271 at 281 (Gummow J).

26    The report concluded with two queries: first, whether each year Mr Perdikaris had been provided with the company accounts and directors’ reports and second, whether Mr Perdikaris had been invited to the annual general meetings. Three other documents were attached to the email. They were a draft request to Mr Tucker from Mr Perdikaris’s company, Metohes Pty Ltd, requesting a copy of the register of the Tucker Bare Trust; a draft request from Metohes to DCM for a copy of the share register; and a draft request from Metohes to DCM for a copy of the recent “Financial and Directors Report”. In the covering email Mr Mount offered some brief advice about how to communicate the requests should Mr Perdikaris decide to make them. He concluded by saying:

To be clear, I have had no involvement in Dover Castle & I make no accusations of anyone - I have been requested to provide the attached which I have done. To the best of my knowledge it is true and I have relied on documents which purport to be true and accurate.

Mr Mount introduces Mr Perdikaris to Resolve Litigation Lawyers

27    On 24 February Mr Mount sent an email to Nicola Nygh, a solicitor with Resolve Litigation Lawyers, introducing Mr Perdikaris to her. Ms Nygh had a professional relationship with Mr Mount through Axiom. The email provided background information, conveyed certain concerns of Mr Perdikaris and explained that Mr Perdikaris had the following “ultimate objective[s]” “in the following order”:

(1)    having himself appointed to the board so that “he [could] have confidence in the information”;

(2)    removing Mr Tucker from the board;

(3)    DCM being converted to a public company so that all shareholders are provided with regular information; and

(4)    returning any monies and assets owing to DCM.

28    Attached to the email were copies of the Tucker Bare Trust deed, the DCM constitution, the ASIC search on DCM, and other ASIC documents relating to the company.

29    The following day, Mr Perdikaris retained the services of Resolve.

March 2021

DCM receives reports from FTI Consulting

30    Ms Trenfield provided FTI’s initial report to DCM on 3 March. The initial report contained a section, then numbered 8, entitled “other matters”, which reads as follows:

During my review I identified significant brokerage fees incurred by the Company. Payments for those fees were made to related parties in that I have been advised George Tucker is an associate of Sequoia Asset Management. As part of my engagement, and for comparison purposes, I have also been asked to quantify the payments made to Sequoia Asset Management and George Tucker. Below is a table summarising the payments made to these parties:

Supporting documents uploaded to Xero indicate George Tucker was billing the Company as a Sole Trader under the ABN 97245059011 with a different address and bank details to Sequoia Asset Management.

31    Ms Trenfield sent DCM an amended report on 4 March and FTI’s final report on 9 March. Neither the amended report nor the final version contained that section 8. Mr Tucker deposed that he was unaware of, and uninvolved in, any decision or proposal to remove his name from the original report. Mr Haindl remembered discussing the section with Mr Christensen and Mr Tucker and testified that Mr Christensen had said that it was “basically somewhat irrelevant” and advised that the section be removed.

32    On 4 March an assistant to Mr Perdikaris, Melissa Mason, forwarded to Mr Mount an email chain attaching the amended FTI report. The email chain included emails from Ms Trenfield to Mr Haindl and Mr Christensen referring to the initial report, and a subsequent email from Ms Trenfield to Mr Haindl and Mr Christensen containing the amended report.

33    Later that day, Mr Perdikaris’s wife, Cindy Perdikaris, sent Mr Mount an email attaching a copy of DCM’s share register.

DCM considers hiring Mr Mount

34    As I mentioned earlier, on 8 March Mr Tripp and Mr Perdikaris were appointed directors of DCM. At lunch that day Mr Perdikaris promoted to Mr Tripp the possibility of Mr Mount being offered a role as CEO of DCM in the wake of Mr Nettelbeck’s removal. Mr Tripp expressed concerns about Mr Mount’s reputation.

35    At the meeting at the Bathers Pavilion on 10 March, there was a discussion about Mr Mount’s appointment as CEO of DCM following which Mr Mount agreed to “come on board”. Mr Tripp was satisfied he would be able to do the job. That evening Mr Mount received phone calls from Mr Haindl and Mr Tucker. The following day Mr Haindl sent Mr Mount a report to shareholders dated 15 December 2020.

Mr Mount visits the mine site

36    On 13 and 14 March Mr Mount visited the mine site at Mr Perdikaris’s expense and inspected the tenements. On each occasion he was met by Mr Haindl. Mr Haindl accompanied Mr Mount on a tour of the site. Mr Mount took photographs and made notes of his observations. He also asked Mr Haindl numerous questions. On 14 March Mr Mount started recording some of their conversations, albeit without Mr Haindl’s knowledge. When asked why in cross-examination he said he was “very concerned” about what he had seen the previous day, “felt that there was something very amiss”, and “wanted to protect [himself]” from the possibility of “being involved in a scam”.

37    During the tour of the site Mr Mount noticed a number of “historical mine shafts”, none of which were barricaded or fenced; old, weathered, sample bags lying around; and a number of uncapped drill holes, most of which were also “missing their tagging and pegging”. He also observed that Mr Haindl was not wearing a seatbelt and drove at a speed of 20 kilometres an hour despite the fact that the speed limit identified in the induction document was 10 kilometres an hour. When they stopped at the site of parts of a mill or processing plant, Mr Mount observed that a lot of the equipment seemed old and rusty and that it was not arranged in an orderly way in preparation for installation, even in the workshop area. He concluded that construction had not progressed for an extended period of time. When he asked Mr Haindl when construction would be complete and the mill commissioned, he was assured “it will be June or July” but “definitely by July”. Mr Mount also expressed concerns about a waterway running towards the plant area, which could affect “environmental approvals”, and a donga (a modular transportable building) said to accommodate Matthew Hancock, who worked for DCM at the site, apparently being used as a storage facility. In the donga he had been assigned, Mr Mount saw, among other things, a gun safe and, when he questioned Mr Haindl about the use of guns on the site, he was told that they had been used by Mr Nettelbeck and that “some of the boys just like to do some shooting”. He perceived the presence of guns on the site to be a safety risk, especially in circumstances where alcohol was permitted to be consumed there.

38    When Mr Mount asked Mr Haindl whether he or DCM had “a defined exploration objective or strategy”, Mr Haindl replied “not really”. When Mr Mount asked Mr Haindl to show him the financial model and business plan, he could not produce one.

Mr Mount has concerns about DCM’s operation

39    The site visit caused Mr Mount numerous concerns. As he put it in his affidavit, they were:

(a)    The wrong assay method had been used for many years in relation to something as important as mineral exploration and expensive drilling costing millions of dollars;

(b)    There were issues with safety, including:

i.    That the site induction was not readily available on his arrival;

ii.    A lack of fencing and barricades around mine shafts;

iii.    Drinking of alcohol, including in and around motor vehicles;

iv.    Gun storage at the Site, considering that alcohol was also drunk at the Site;

v.    Lack of a site map;

vi.    Lack of information about the telephone number for the satellite phone;

vii.    Missing keys, and no clear plan or arrangement for how keys should be stored (such as a key box or register for keys);

viii.    Significant non-compliance with the site induction rules, including by driving faster than the published speed limit and not wearing a seatbelt, which, while minor in itself, caused concern that safety plans generally might be on paper only rather than as actual protocols which were intended to be implemented in practice and breaches of other parts of the site induction booklet such as but not limited to ‘warning signs’, ‘gloves’, ‘Housekeeping on Site’ and ‘Housekeeping at the Camp’;

ix.    General lack of organisation, such as missing keys, confusion over whether or not gates were locked, sample bags lying around, lack of cleanliness at the camp, lack of information about who would be working on Site or directing workers, which could indicate an overly relaxed attitude towards issues generally;

(c)    The mill/processing plant was being built by a waterway, with potential environmental impacts and ramifications for environmental approvals;

(d)    The mill/processing plant was supposed to be commissioned for commercial production in June or July 2021, but:

i.    It was still under construction and did not appear to have been worked on for an extended period of time;

ii.    The plant site was not in an ordered state, which caused me to perceive that there may not be a clear person responsible for what was happening there;

iii.    There was no clear timeframe of when the equipment would be delivered, or clarity about what was causing delay in its delivery;

iv.    Mr Haindl had not been able to tell him about the required permits and licenses for production to commence;

(e)    Mr Haindl did not have knowledge about matters relevant to the viability of the business including:

i.    Why nearby companies had failed in their businesses;

ii.    Whether tin porphyry or tin tailings were being mined in Australia;

iii.    Data about the drilling campaigns;

iv.    What permits or licenses were required for commercial production;

v.    Lack of exploration plan and exploration strategy;

vi.    Lack of business plan.

(f)    The existing samples had not been safely and securely stored in an orderly manner and some samples were left out exposed to the weather for a prolonged period of time, which would impact on the ability of Dover to re-assay those samples;

(g)    There was a greater risk of technical breaches in circumstances where the previous managing director had been removed from his role due to allegations of fraud;

(h)    There was unnecessary spending, such as:

i.    Hiring a rental car — specifically, a Landcruiser which I understood to be an expensive option - rather than utilising one of the vehicles already owned by Dover, even though the rental car had minimal use during his time at the Site; and

ii.    Building a camp at the Site rather than using cheaper rental accommodation on a neighbouring property, although I did not have specific figures where Mr Haindl had not told him the construction cost or maintenance;

(i)    Mr Haindl seemed to have answered some of his questions in a manner that seemed to be evasive or intended to obscure the truth, including:

i.    When he told him that all of the raw samples were stored securely and away from the elements, even though I observed that this was not the case;

ii.    When he told him that he would have geological data formatted in software available for him to view overnight, when this did not occur;

iii.    When he was unable to provide information about the construction or maintenance costs of the camp;

iv.    When he told him that Dover had received $150,000 from the Queensland government as a grant, and then, after questions, said that Dover had not yet received the grant money as they were waiting on a report which was to be submitted on Monday;

v.    His general demeanour and body language as set out above in response to his questions;

(j)    That, so far as I could tell from his questions, there did not appear to be sufficient data to support some of the claims being made to shareholders about whether the proposed mining operation at the Site was commercially viable or the timelines for commercial production.

40    That evening Mr Haindl provided Mr Mount with a number of the documents he had requested, including a financial model. Mr Mount considered that the financial model was incomplete because it was “mostly devoid of any numbers” and was “lacking the inputs” of costs. He also noted that it did not include a business plan, a JORC resource estimate report or a map of the site. I interpolate that JORC is an acronym for Joint Ore Reserve Committee, the governing body for reporting standards for resources and reserve calculations. A JORC report is a report prepared in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

41    In an email an hour and a half later, Mr Mount offered a number of “ideas/suggestions” for Mr Haindl to consider, which he later forwarded separately to Mr Perdikaris and Luke Stewart. Mr Stewart, was the CEO of an environmental consultancy, EMM Consulting Pty Ltd. He was introduced to Mr Tucker in 2015 after which he decided to purchase shares in DCM. He was contacted by Mr Tucker in about January 2021 to provide assistance to DCM after the departure of Mr Nettelbeck. At all relevant times he attended DCM board meetings but, on his account, which I accept, was not then a party to any decisions of the board.

42    On 16 March, in response to Mr Mount’s request, Mr Haindl sent Mr Mount a copy of a “maiden” JORC Resource Estimate Report dated 7 May 2018 but representing the position as at December 2017. Aspects of that report caused Mr Mount concerns about the quality of the data held by DCM “and the risk that there were misjudgments of technical aspects of the exploration program which adversely impacted the capacity of [DCM] to assess the project’s potential”.

Mr Mount attends DCM board meeting

43    On 17 March Mr Mount attended a DCM board meeting at Mr Perdikaris’s house. Mr Haindl, Mr Perdikaris, Mr Stewart, Mr Tripp and Mr Tucker also attended the meeting. During the meeting various matters were discussed and Mr Mount was questioned about his experience, strengths and connections in the mining industry. The board agreed in principle to hire Mr Mount on terms he proposed.

44    At that meeting Mr Mount disclosed to the board that he was an advisor to Mr Perdikaris. Neither at that meeting nor any other time before or after he started work for DCM, however, did he or Mr Perdikaris disclose to the other directors that Mr Perdikaris had the objective of securing Mr Tucker’s removal as a director or that Mr Perdikaris had sought or obtained advice from Resolve in furtherance of that objective.

DCM hires Mr Mount

45    DCM engaged Mr Mount as its Acting CEO on 18 March and Mr Mount began work for the company the same day. The parties agreed that “written terms” were as set out in an email Mr Mount sent to the directors that day:

- fixed term agreement (12 months)

- $20k / month via either employment agreement or service agreement (TBA)

- all usual employment conditions - e.g. workers comp/insurance, sick, annual leave - Mon-Fri 830 - 5pm however it is expected of CEO’s to work reasonable extra hrs, if required, and at varied times including sometimes on weekends - with no overtime claimed; when on site, work hrs are 6am to 6pm (or all of day-light)

- standard clauses of good faith, no conflicts, confidentiality etc

- work out of office in Sydney however it is expected of [Mount] to travel to QLD (particularly Brisbane and the project sites), and generally anywhere in Australia, if required by the business.

- full provision of the company car; and work related costs associated to it.

- If significant value-adding milestones have been achieved in the business this year, it would be appreciated that a discussion on potential introduction to equity would be had with the Board.

46    The following day, 19 March, Mr Tucker provided Mr Mount with a company car.

47    Although a written contract was anticipated, Mr Perdikaris asked Mr Stewart to assist in the preparation of an employment contract, and Mr Stewart agreed to do so, none was forthcoming.

48    During the time he worked for DCM, Mr Mount did not work for any other company or person except for about an hour of unpaid work he did for Axiom in his role as a director.

Mr Haindl and Mr Mount exchange text messages – alleged safety “incident” raised

49    On 19 March, there was an exchange of texts between Mr Haindl and Mr Mount. Mr Haindl informed Mr Mount he had made arrangements for his brother, James, who also performed work for DCM, to travel to Cairns to purchase some hardware, as he would otherwise be alone on the site overnight and that “[w]e need to work out rosters so no one is at the mine alone”. Henceforth, I will continue to refer to Matthew Haindl as Mr Haindl unless it is necessary to distinguish between him and his brother. At 2.11pm the following day, 20 March, Mr Mount sent Mr Haindl an email in the following terms:

Referring to our SMS text exchange last night can you please provide me with a safety incident report. If Dover does not have a template or procedure for reporting the occurrence, can you, in this instance, provide me with all of the facts of the situation including recommended remedies to the situation.

50    About half an hour later Mr Mount emailed Messrs Haindl, Perdikaris, Tripp and Tucker, copying in Mr Stewart, reporting on the events the previous day in which, among other things, he said:

There was a minor safety incident last night. I have requested a safety incident report.

51    At 8.44pm on 21 March Mr Mount emailed Mr Haindl reiterating the need for “the incident report re Friday night safety situation/concern”.

52    At 5.43am on 22 March Mr Haindl emailed Mr Mount, relevantly expressing uncertainty about the “incident”, asking whether it was his “concern of having people alone at the mine”. In his reply, sent at 6.28am (copied to Messrs Perdikaris, Tucker, Stewart, Hancock and Tripp), Mr Mount confirmed that it was:

Yes, your concern for him being alone on Friday night is considered a safety incident. It needs to be written up, sent to me. From there we will review the situation, and take any actions needed to ensure our personnel are safe.

Mr Mount sends First Whistleblower report to Mr Perdikaris and Mr Tripp

53    At 8.58am the same day (four days after he started work) Mr Mount sent an email to Mr Perdikaris and Mr Tripp headed “Confidential report to new directors – subject to Whistle-blower Protection Act”, attaching what was said to be the First Whistleblower Report, though not the first allegedly protected disclosure. The report began as follows:

It has become apparent to me that there is widespread fraud in the business.

I provide you this report to make you aware of some urgent and critical matters.

This report is by no means complete in the sense that this is all that I am aware of, or suspect; sadly, there are so many ‘red flags’ or blatant breaches of the law, ethics and general/basic business functions, that I need more time to investigate so to factually report to you (and at the same time keep the wheels turning with the business!)

In light of the situation of that you are in as new directors, in what I believe is trying to do the honourable thing and save the company, by putting it back on a proper path and especially that you intend to raise capital, I hereby make you aware of the following, under my rights of the Whistleblower Act[.]

(Original emphasis.)

54    Mr Mount proceeded to make allegations of improper conduct, negligence and/or incompetence against Mr Haindl, Mr Nettelbeck and Mr Tucker.

Mr Mount instructs Mr Haindl to suspend operations on the mine site

55    At 9.09am Mr Mount emailed Mr Haindl asking him to suspend operations on the site. The email reads:

What we need in the very first instance is the following:

- All correspondence between you and ALS re sampling / assaying problem - LIDAR and drone results for the legacy dumps volume/Tonnage (feedstock for phase 1) & any other survey and geological testing reflecting the value(s) and size(s) of the historical legacy dumps - Safety incident report (from Friday night).

- List of all permit and licences for the commercial mining and processing (have requested this five times)

- What component of the processing plant(s) are not currently on site; if they are not on site are they available now to be transported to site.

- List of companies who applied for the Kaboora tenement Can you please compile this for me in professional format this morning, and put on a hard drive for my collection. This will need to be a priority.

Separately, Can you suspend operations on site (say until Thursday's board meeting), and have James cut some copies of the keys for all of the project sites.

56    At about 11.00am Mr Mount met with Mr Perdikaris and Mr Tripp at Mr Perdikaris’s home. Mr Perdikaris’s evidence is that he called the meeting in order to discuss the First Whistleblower Report. As will be seen, the weight of the evidence is that the meeting was arranged before the First Whistleblower Report was circulated and for a different purpose.

57    At 11.36am Mr Haindl sent Mr Mount a report on the safety incident. This was his description of the incident (without alteration):

Concern was raised over staff being alone at the mine site. The Dover Castle mine site is very remote. Steps have always been taken and safety procedures have been in place to minimise potential risks on site. One in the past has always been the supervision of staff on site being never work in a remote location alone.

Mr Mount instructs Mr Haindl to stop all work at the mine site except for “light camp duties” “light camp duties”

58    At 3.21pm Mr Mount sent an email to Mr Haindl in which, among other things, he requested that work at the site cease “apart from light camp duties”. The substance of the email reads as follows (errors in original):

As just discussed let’s cease any work at site at the moment; as I understand it there is James and two others at camp working on rehab and garnet blasting.

- lets focus the company’s energies on the reports needed for the next board meeting.

- Not having work on our project site this week reduces our risk and any potential safety risk to our stakeholders.

- I think it is well worth leaving Micheal Arthy’s two guys at site, with enough rations for the week but they are to do only light duties around the camp only and to not take an safety risks.

- James can travel back to Sydney to assist you with any work he can help you with. James can also bring a copy of ALL keys for our project site(s).

- If we are concerned of theft maybe leave the vehicles and XRF’s at the previous accommodation you mentioned (a school or caravan park in Petford?) This may not be needed.

Chris, mentioned to me you are working on a feasibility study for tomorrow, so you can focus your energies on this and the key items I requested this morning (some of which conveniently feeds into the FS).

I won’t come by the office this afternoon so to leave you to your work; and will come by after the you get though the above, sometime tomorrow midday/PM.

I am available if required.

59    Michael Arthy was an earthmoving contractor.

60    At 4.02pm Mr Haindl replied. He informed Mr Mount that he would tell staff at the site to cease work with the exception of Mr Arthy’s “two guys” and “get James” to return the keys to Sydney and prepare an inventory of the “gear waiting to be floated to site”.

61    At 5.48pm Mr Mount sent an email to James Haindl, copying Matthew, instructing James that the employees of Arthy Earthmoving on the DCM site that week should be “on light camp duties only (essentially security)”, limited to checking the plant a few times a day but most other times remaining “camp bound”.

62    At 8.24pm Matthew Haindl emailed Mr Mount, saying:

As discussed the painters will stay to finish their second coat of paint on machinery awaiting to be finished and Michael’s men will finish the week

63    At 8.30pm, Mr Mount replied (copying Messrs Perdikaris, Tucker, Stewart and Tripp):

Confirming the painters will finish that second coat tomorrow and Michael Arthy’s boys will only be on light duties in the camp. not taking any safety risks.

64    At 8.34pm Mr Mount replied to the 11.36am email to Matthew Haindl saying that he would defer discussion and review of the safety issue until the end of the week.

65    At 7.15pm the next day, 23 March, Mr Mount received an email from James Haindl, referring to a worker having “water-blasted camp roofs” and preparations for “sand blasting in the morning”, which led Mr Mount to believe that his direction to do light duties only was not being followed.

66    At 9.48pm Mr Mount emailed the Haindl brothers in the following terms:

I am quite surprised this type of work occurring. I recall only authorising the painting of the second coat and that there only be light duties around the camp.

There MUST not be any work other than light duties in the camp until the end of the week. Please ensure there is now deviation from this.”

67    At 9.58pm he forwarded the email to DCM’s directors, copying Messrs Haindl and Stewart, and wrote:

It appears that unauthorised work is occurring at our project site.

Our site is a particularly high risk project site with serious lack of safety protocols.

We are under-resourced and there appears to be contractors/employees(?)/stakeholders under “pressure”.

It is important staff safety be prioritised. As such I seek your assistance and intervention in this situation.

I am available any time tonight to speak with you if required.

Mr Mount sends Mr Stewart, Mr Perdikaris and Mr Tripp the Second Whistleblower Report

68    At 10.58pm Mr Mount sent an email to Messrs Stewart, Perdikaris and Tripp, attaching a further document titled “Report to new directors of Dover”, said to be the Second Whistleblower Report, which was in substantially the same terms as the First Whistleblower Report. In the covering email he wrote:

There are significant safety risks with the Dover Mining Lease area - winding down this week’s work up there is to prevent incidents in [light] of the apparent stress our organisation is under and the lack of proper site management.

Our contractor Michael Arthy has reported that he has been rang twice today by Matt Haindl stating I have passed on information that Arthy reported to the company in confidence of the instances of fraud and inappropriate conduct of contractors/employees in the area of our projects. Arthy very concerned.

This is not conducive to keeping the site settled and minimising risk at site.

The focus should be on employee safety, reorganising the company in a proper manner, finance and obtaining the reports relied upon for project development.

I am not accusing any of you of breaching the legal confidence of my report or anything improper but it does seem strange that Arthy was integrated by Matt Haindl as to the specific details of my report the very next day I released the details to you.

Indeed it is sad that the very person who has been honest with us and divulged important and legally protected information is the person we have asked to go on to site this week and protect our assets.

I am trying to prevent tensions from being transferred from Sydney to our project site, so as to avoid safety risks, accidents and potential theft at our project site - I am concerned that the Board and management are not united on at least matters of law (as to site management and whistleblower rights), then there will be further destruction of shareholder value and harm to people involved at our project site.

I provide you an updated report (attached) - the original report had me working through to 3am on Sunday, in an attempt to get you at least something ASAP but as such I made a few mistakes along the way, but only minor ones.

Whilst the report is daunting I do remain positive on the tenements and am keen to move forward with a clear strategy.

I am available to meet or speak with you on any of these matters.

I interpolate that the assertions made in the second paragraph of the covering email were not proven to be correct.

69    The next day, 24 March, at 8.30am Mr Haindl replied to Mr Mount’s email of 9.58pm the previous night asking him to “outline exactly what” Mr Mount’s safety concerns were.

70    That day a meeting was held at Mr Perdikaris’s house at his request. Mr Perdikaris sent an email to Mr Tripp and Mr Stewart in the early hours of the morning asking them to attend and they did. Despite the allegation in para 73 of the further amended statement of claim, no witness gave evidence that Mr Haindl attended the meeting. The email reads:

Morning guys

I’ve just woken up to the email from last night from mount. (fraud)

I need some guidance pls on this . Can we pls meet today ?

I haven’t asked for anything . I’m asking this I I’ve never had to deal with stuff like this whistleblower can we not talk with george or Haindl ?

I did not have anything to do with that email !!

I’m out between 6:00am and 7:30 am at this stage .

Mr Mount attends his second board meeting, his first as Acting CEO

71    On 25 March Mr Mount, Messrs Tucker, Haindl, Tripp, Perdikaris, Hancock, and Stewart, attended a meeting at Mr Perdikaris’s house, which was sound recorded. At that board meeting, Mr Haindl and Mr Hancock delivered a presentation on DCM’s business activities. At the beginning of the meeting, Mr Stewart asked the attendees whether they had any further disclosures in addition to the matters they had disclosed at the 17 March board meeting. Mr Hancock indicated that he needed to address certain issues.

72    During the meeting (apparently in the absence of Mr Mount), Messrs Tucker, Perdikaris and Stewart discussed matters relating to the timing and requirements for capital raising. Mr Tucker expressed the view that the information available to the board was “more than enough” to approach shareholders in order to raise capital. Mr Perdikaris suggested approaching shareholders to inform them that DCM was “out of money”. Mr Tucker opposed that course, saying that was “exactly what we don’t want to say” and that “[i]f we say we’re running out, that’s when the sharks arrive, right?” Mr Perdikaris complained about the state of the company’s financial documentation, saying “[w]e’re paying people money and right now the invoices I’ve seen horrify me. There’s no description on those invoices of what’s been done.”

73    When Mr Mount returned to the meeting, he emphasised that he wanted a list of everything necessary to get the mine to commercial production, legal and regulatory requirements, and proper documentation about the company’s expenses. He expressed concerns about making representations to third parties about the company’s financial position without having written evidence to support those claims. Towards the end of the meeting, Mr Perdikaris told Mr Mount that he needed to show “a certain level of respect” to the directors and that Mr Mount’s conduct was “too much too early in that first week”. The directors also signed a letter engaging McInnes Wilson Lawyers to provide advice about a possible claim against Logicca, the company’s former accountants and auditors.

74    During the board meeting Mr Mount emailed the Second Whistleblower Report to Ms Nygh. At the same time, he forwarded to her the covering email he sent to Messrs Stewart, Perdikaris and Tripp at 10.58pm on 23 March.

Mr Mount complains about insubordination

75    On 26 March at 11.17am Mr Mount emailed all the DCM directors stating that it was “great to see the Board meeting regularly”, that “[o]ne very important matter we need immediate resolution on is the activity occurring at the project site; subsequent to this the organisational structure and my authority needs to be made clear to the whole organisation”. Mr Mount also alleged in the email that there was “distinct insubordination or a miss-understanding of the CEO’s authority” that needed rectification. He attached a document entitled “Health & Safety – a quick review”.

76    At 11.26am Matthew Haindl replied to Mr Mount, copying the other directors, asking for details of the alleged insubordination. Mr Mount responded at 12.23pm in the following terms:

You rang me on Monday seeking permission for the only work to be done on the project site this week to be the painting which was to be finished the following day (Tuesday).

Since then I am hearing that there is significant work occurring including with heavy machinery and fuel tankers arriving; I have not received the agreement basic reporting, etc.

If we had agreed to this on Monday why is there all this other work occurring ?

Furthermore, there is no money left, and unless there is a proper finance plan in place we cannot legally be making any spending on discretionary items.

The whole feasibility study process is a resource draining process for all juniors and we have a fair bit more pressure than the usual junior miner at the moment, so lets reduce work where it is not critical so to focus on the critical path elements to survival..

77    At 12.09pm Mr Mount sent an email to Mr Haindl about arrangements for producing a feasibility study. He suggested they have a phone call to discuss, among other things, “what is achievable in a reasonable time frame under the current circumstances that would reflect a [feasibility study] and/or a basis to commit spend to construct and commissioning” and what information was “missing” from the feasibility study. At 12.12pm, Mr Mount forwarded the email to Mr Perdikaris and Mr Stewart saying that he had left Mr Haindl a voicemail asking him to call back to discuss the feasibility study.

78    At 12.45pm Mr Tucker replied to Mr Mount’s email of 11.17am in the following terms:

I apologise for not responding to my Dover Castle email address in the past I need to get it set up on my phone, so will get that done over the next day or so.

In relation the email body Ryan I thought it was established yesterday that Matt Hancock will manage the mine site.

He is the Assets and Site Operations Manager a similar role to the one he had at Newmont so he is clearly capable of managing that responsibility.

Matt Haindl exploration manager.

Matt Hancock site and processing manager.

Ryan Mount runs the operational side of the business. Is there something I am missing?

We need each member of that team to be shown the respect they deserve.

79    At 2.16pm Mr Mount replied to Mr Tucker, copying Messrs Perdikaris, Stewart, Haindl and Tripp, saying:

1. Assuming your “Operational” actually means ‘Corporate’., then your suggested organisational structure has never been conveyed to me nor have I come across it in any other company.

I and others in the company have sought clarity from the Board on the apparent confusion of the role of CEO and the organisational structure.

2. As it stands I am responsible and in-charge of the project site (the QLD government also explicitly shares this view).

My position stands on my directive of site operations.

If the Board wishes to overrule my authority there is a process for that. If the Board wants me to assist them in that process I am available to do so.

80    On 29 March Keely Graham, a principal of McInnes Wilson met with Mr Perdikaris at his home where she was introduced to Mr Mount.

Mr Mount attends his final board meeting

81    The final board meeting Mr Mount attended took place on 31 March 2021. Like the other board meetings, it occurred at Mr Perdikaris’s house.

The day before the meeting

82    The day before the board meeting Mr Mount prepared a report for the meeting. He also spent some time on the phone with Ms Nygh. They had a number of conversations about various matters relating to DCM, including (according to Ms Nygh’s file note) one in which Mr Mount told her that they “had to get these guys [Tucker and Haindl] out of the business”. Ms Nygh helped Mr Mount prepare a draft report for ASIC, dealing with his whistleblower complaints. She also prepared an advice addressed to Mr Perdikaris concerning directors’ duties and conflicts of interest which she sent to Mr Perdikaris and Mr Mount.

83    Mr Mount also contacted Jon White of Pacific People Solutions, a recruitment firm, informing him that he had been appointed Acting CEO of DCM and that he had been told that he “may soon be looking for an exploration manager” and a “plant manager”. As Matthew Haindl was the exploration manager, the respondents submitted that it could be inferred that Mr Mount was contemplating that Mr Haindl would soon be leaving the business.

84    At 7.02pm Ms Graham emailed Mr Perdikaris a letter of advice she had prepared for DCM concerning apparent breaches by Logicca of its duties to DCM and the potential actions to recover losses the company may have incurred as a result (the McInnes Wilson advice).

The day of the meeting

85    The last meeting Mr Mount attended took place on 31 March. I discuss at length below what happened during the meeting. It is sufficient at this point to observe that at some stage the McInnes Wilson advice was circulated and that subsequently both Mr Haindl and Mr Tucker were directed to leave and, on their accounts (supported by Mr Tripp and Mr Stewart but denied by Mr Mount and Mr Perdikaris), they were marched or escorted out of the room by two large, tattooed strangers whose presence they found intimidating.

86    Soon after the meeting finished, the respondents contacted Mr Christensen, seeking his advice, and steps were quickly taken to remove Mr Perdikaris from the board and terminate Mr Mount’s employment.

April 2021

Mr Perdikaris is removed from the board and Mr Mount’s employment is terminated

87    Mr Perdikaris was removed from the board on 6 April. Mr Mount’s employment was not terminated until 10 April 2021. But the decision to terminate Mr Mount’s employment was made earlier than that. The evidence indicates that it was made on 31 March, in the wake of the board meeting that day, and formalised on 6 April. A letter terminating his employment was emailed to the wrong email address on 6 April.

88    In the meantime, Mr Mount continued to act as CEO and also spent some time in consultation with Ms Nygh preparing to lodge a report to ASIC.

89    On 8 April, apparently under the impression that Mr Mount had received and read the 6 April email, Mr Haindl pressed Mr Mount to make arrangements for the return of the company car.

90    On 10 April, Mr Haindl and Mr Tucker separately emailed Mr Mount, this time at the correct email address, informing him that his employment had been terminated. On 11 April Mr Mount asked for reasons but none were offered. Assertions were made in a letter from Christensen Legal that DCM denied it had an employment contract with Mr Mount and that it had no obligation to provide him with reasons for the termination of his contract. Once again, Mr Mount was pressed to return the company car. This time, however, he was told that, if he did not return it by noon the following day, DCM would report the vehicle as stolen. The car was not returned. Consequently, on 6 May the car (with a number of Mr Mount’s personal belongings inside) was towed away from Mr Mount’s home.

Mr Mount brings proceedings in the Fair Work Commission

91    On 27 April Mr Mount applied to the Fair Work Commission alleging that his dismissal by DCM contravened Pt 3-1 of the FW Act. The respondents contended that the Commission did not have jurisdiction to hear the dispute because Mr Mount was not an employee.

92    On 30 September the Fair Work Commission rejected the jurisdictional objection, finding that Mr Mount was an employee of DCM: Ryan Mount v Dover Castle Metals Pty Ltd, Matthew Haindl, George Tucker, Simon Tripp [2021] FWC 6043 (Easton DP).

October 2021

Mr Mount commences court proceedings

93    On 15 September Mr Mount filed an application for preliminary discovery against DCM, the respondents and others with a view to commencing an action for defamation.

94    On 19 October, armed with the requisite certificate from the Fair Work Commission (saying that attempts to resolve the dispute had failed), Mr Mount commenced this proceeding.

95    On 11 November Bromwich J dismissed the application for preliminary discovery: Mount v Dover Castle Metals Pty Ltd [2021] FCA 1356.

THE WITNESSES

96    Mr Mount, Mr Haindl, Mr Tripp, Mr Tucker, Mr Stewart and Ms Graham provided affidavits upon which they were cross-examined. Ms Graham’s affidavit was procured by the respondents so she was cross-examined by senior counsel for Mr Mount. Mr Mount affirmed four affidavits, Mr Haindl and Ms Graham one, and Mr Tripp and Mr Tucker three, only two of which were read.

97    Mr Perdikaris was a substantial shareholder in DCM through his company, Metohes. As at January 2021 he had invested between $1.2 to $1.5 million in DCM which amounted to approximately six percent of its equity.

98    As I mentioned earlier, Mr Haindl was one of the founders of DCM and has been a director since February 2017. He apparently holds a Bachelor of Science (Geology). At all relevant times, Mr Haindl worked for DCM as its project geologist and was the site senior executive within the meaning of s 36 of the Mining and Quarrying Safety and Health Act 1999 (Qld) (Mining Safety Act). In his evidence Mr Haindl acknowledged that he had obligations in relation to the health and safety of people who might be affected by the operation of the mine, including to ensure that the health and safety risks were “at an acceptable level”; to develop, implement and maintain a management structure for the mine that helped to ensure health and safety of people at the mine; to develop and implement health and safety management systems; and to review safety and health management plans of contractors and service providers. He also acknowledged that, as a director of DCM, he had obligations of due diligence in relation to safety issues at the mine, which included acquiring and keeping up to date knowledge of mine health and safety matters and ensuring that DCM “implemented processes for complying with its legal obligations”.

99    Mr Tripp described himself as a professional investor. He was a director of DCM from 8 March 2021 to 11 March 2023, when he resigned.

100    Since about June 2014 Mr Tucker has been a senior advisor at Sequoia Asset Management in which position he performed brokerage, capital raising for companies and wealth management services. Previously he had been an investment advisor at Yellow Brick Road/SCM Equities for about six years. He has personally invested in mining stocks for about thirty years and has raised capital for a number of mining ventures including Axiom. Mr Tucker was first approached by Mr Nettelbeck and Matthew Haindl in about April 2014 to assist DCM with capital raising. He agreed to raise capital for DCM and continues to assist the company in this way. He introduced most of DCM’s current shareholders to the business. He also purchased shares in DCM himself and in September 2014 assisted DCM to establish the Tucker Bare Trust to enable more than 50 shareholders to purchase shares in the business without DCM having to become a publicly listed company and agreed to be its trustee. He served as a director of DCM from 5 February 2021 until 13 March 2023.

101    Mr Tucker has known Mr Mount and Mr Perdikaris for over a decade. They first met in 2009 when they worked together at Yellow Brick Road. At that time, they performed similar roles. After Mr Mount left Yellow Brick Road, Mr Tucker took over the brokerage for Axiom. He also purchased shares in Axiom. Mr Mount introduced Mr Tucker to Mr Perdikaris in about 2009 or 2010 and Mr Perdikaris became one of Mr Tucker’s “investor clients”. In about May 2014 Mr Tucker introduced Mr Perdikaris to “the opportunity” for investment with DCM. Mr Tucker described Mr Perdikaris as “a particularly enthusiastic and involved shareholder of DCM”. Mr Tucker deposed that he was reluctant for Mr Mount to become involved with DCM for three reasons. First, he had lost money investing in Axiom while Mr Mount was its CEO and Managing Director and, although he accepted that investors can lose money from time to time, the experience he had with his Axiom investments gave him no confidence in Mr Mount’s abilities. Second, while at Axiom, Mr Mount had engaged in long and expensive litigation in which Axiom ultimately failed and his approach “reflected an overly litigious nature and a lack of judgement”. He attributed the losses he and other shareholders suffered to Mr Mount’s approach. Third, he understood that, after “the events at Axiom and its performance”, Mr Mount did not have a good reputation in the market. He told Perdikaris, while the latter was pleading with him to engage Mr Mount, that he could not agree to that because “[t]he other shareholders won’t accept it”. He said he only agreed to the arrangement because of conversations Mr Tripp and Mr Perdikaris had had with Mr Mount. His preference was that Mr Mount not join DCM.

102    At the time he gave evidence Mr Stewart was a director of DCM and chair of the DCM board. He had held both those positions since about 28 June 2022. At all relevant times, however, he occupied no executive or non-executive positions with DCM. He agreed to assist DCM where he could but only “in the capacity of a voluntary observer”. He attended the three board meetings Mr Mount did in March 2021 but he insisted he did so only as “a voluntary observer and to help facilitate the meetings”. At the time he was the CEO and Executive Director of EMM, and did not consider he was able to do anything more. He aspired, however, to become a director after “stepping down” from that position, which he did in late June 2022 after Mr Christensen resigned as general manager.

103    Oral evidence was adduced from Wayne Clare, a neighbour and erstwhile friend of Mr Mount, and Freddy Jaja, a builder and former investor in DCM, a client of Mr Tucker, and a friend of Mr Mount — two of the people to whom Mr Tucker allegedly denigrated Mr Mount. They were both called to give evidence in support of Mr Mount’s case although Mr Clare’s proved to be unhelpful to Mr Mount. I was given no reason to doubt the evidence of either Mr Clare or Mr Jaja.

104    Oral evidence was also adduced on behalf of the respondents from Mr Christensen and Ms Nygh. There was no serious challenge to Mr Christensen’s credibility and I did not form the view that he was dissembling. There was no challenge to the credibility of Ms Nygh or, for that matter, Ms Graham.

105    No evidence was called from a number of witnesses Mr Mount had foreshadowed he would be calling. Similarly, while a subpoena was issued for Mr Hancock’s attendance and the respondents served an outline of evidence from him, he was not called to give evidence either.

106    While Mr Mount initially came across as a person who was doing his best to give an accurate account of events, some of his evidence strained credibility. I was not impressed by Mr Perdikaris, who was argumentative and at times difficult to follow. I consider him to be a largely unreliable witness. As will be seen, he was prepared to deceive the other DCM board members at the 31 March meeting and was otherwise loose with the truth. Nor was I impressed by Mr Tripp, who was loquacious, at times non-responsive, and generally smug.

107    At the conclusion of the evidence I had reached no firm views about who should be believed on a number of important issues.

THE CLAIMS

108    Mr Mount alleges that DCM contravened ss 1317AC, 1317AD, and 1317AAE of the Corporations Act by terminating his employment and by revealing his identity as the author of allegedly protected disclosures; that Messrs Haindl, Tripp and Tucker were involved in the contravention of s 1317AC and are therefore taken to have also contravened that section; and that Mr Tucker contravened s 1317AC by demanding that Mr Mount return the company car, reporting the car to the police as stolen, and damaging Mr Mount’s reputation and financial position.

109    Mr Mount also alleges that, by summarily dismissing him, DCM breached the terms of their contract and that he is entitled to loss of bargain damages for the residue of the 12-month fixed term.

THE ISSUES

110    The parties agreed upon a statement of issues arising from the pleading (the agreed issues). Like Mr Mount’s pleading itself, the statement was prolix, distracting at times from the matters that had to be proved in order for the various causes of action to be made out. In some cases it strayed from the pleading, yet no relevant application was made to expand or alter the pleading. In a case such as this, where adverse findings have serious consequences, the parties should be held to their pleadings unless they successfully apply to amend them.

111    Broadly speaking the real issues are:

(1)    whether Mr Mount had standing to bring the claims under ss 1317AAE and 1317AC (agreed issue 1);

(2)    which of the alleged disclosures qualify for protection under Pt 9.4AAA of the Corporations Act (agreed issue 3);

(3)    whether Mr Tripp disclosed to Mr Haindl Mr Mount’s identity as the author of the First Whistleblower Report or information likely to lead to his identification as such (agreed issues 4 and 5);

(4)    whether Mr Haindl disclosed to Mr Arthy Mr Mount’s identity as the author of the First Whistleblower Report or information likely to lead to his identification as such (agreed issues 4 and 5);

(5)    whether the reason, or part of the reason, DCM terminated Mr Mount’s contract was a belief held by Mr Haindl, Mr Tucker and/or Mr Tripp that Mr Mount had made a disclosure that qualifies for protection (agreed issues 6 and 7);

(6)    whether the, or part of the, reason Mr Tucker demanded the return of the company car and/or contacted the police to report it as stolen was that he believed or suspected that Mr Mount had made a disclosure that qualifies for protection (agreed issues 15 and 16);

(7)    whether Mr Tucker disparaged Mr Mount to members of the mining investment community between April 2021 and June 2021 in a manner that damaged his reputation and financial position and interfered with his efforts to mitigate his loss (agreed issues 17 and 18);

(8)    if so, whether the reason or part of the reason he did so was because he believed or suspected that Mr Mount had made a disclosure that qualifies for protection (agreed issues 19 and 20);

(9)    whether DCM was entitled to summarily terminate Mr Mount’s contract for any of the reasons upon which the respondents relied (agreed issues 29 to 41);

(10)    if any of the claims are established, in what amount, if any, should compensation and/or damages be awarded (agreed issues 21–28, 42 to 46 and 53); and

(11)    what, if any costs order should be made (agreed issues 2 and 54).

112    Agreed issues 47 to 52 fell away with the abandonment of one of Mr Mount’s claims. The resolution of agreed issues 2 and 54 abide the determination of the substantive issues and will be considered at a later date.

113    There were also significant issues about the credibility of a number of the witnesses, particularly Mr Mount and Mr Perdikaris and Messrs Haindl, Tripp and Tucker.

114    Owing to the common factual elements of a number of claims, some repetition is both unavoidable and necessary.

PROOF

115    The burden of proving the claims generally rests with Mr Mount. As will be seen, however, with respect to one of the claims under the Corporations Act and the claim in contract on critical questions it shifts to the respondents. As this is a civil matter, the standard of proof is the balance of probabilities: Corporations Act, s 1332, Evidence Act 1995 (Cth), s 140(1). In determining whether the burden is discharged, the Court is required to take into account the seriousness of the allegations and the gravity of the consequences flowing from the finding urged upon the Court: Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 (Dixon J). See also Evidence Act, s 140(2). In resolving questions of fact or deciding what inferences should be drawn from undisputed or established facts, a court “must feel an actual persuasion” of the fact or inference in question (Briginshaw at 361 per Dixon J); “[m]ere speculation about possibilities is always insufficient”: Martin v Norton Rose Fulbright (2021) 289 FCR 369 at [60] (Jagot, Katzmann and Banks Smith JJ).

116    In the present case, many of the claims made by both parties are serious. Some of the claims under the Corporations Act expose the respondents to the risk of civil penalties. In these circumstances, it is necessary to keep in mind Dixon J’s aphorism that the satisfaction of the Court “should not be produced by inexact proofs, indefinite testimony, or indirect inferences”. As will be seen, I was invited by both sides in this case to make critical findings based on just that.

THE PROCESS OF EVALUATION

117    To the extent that the resolution of the issues depends on the recollection of the witnesses, I have taken into account the fact that memory is notoriously “fallible and malleable, especially memory concerning past beliefs”: Dedakis v Deligiannis [2024] NSWSC 1018 at [15] (Leeming JA). The same is true about memory of past conversations. As McLelland CJ in Eq observed in Watson v Foxman (1995) 49 NSWLR 315 at 319:

[H]uman memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.

118    As Spigelman CJ remarked extra-curially, memory is “plastic”. “Without any dissimulation or propensity to lie”, witnesses “confidently assert the truth of conversations, observations and events which did not happen”: JJ Spigelman AC, “Truth and the law” in N Perram and R Pepper, The Byers Lectures 2000–2012 (The Federation Press, 2012, p 250).

119    There is a lengthy discussion of the fallibility and malleability of memory in several judgments, including Gestmin SGPS S.A. v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm) at [15]ff (Leggatt J, later Lord Leggatt) and The Nominal Defendant v Cordin [2017] NSWCA 6; 79 MVR 201; [2017] Aust Torts Reports¶ 82–337 at [165] (Davies J).

120    For these reasons, greater weight is usually given to contemporaneous documents than oral accounts unless the oral accounts are supported by contemporaneous documents. Even so, “memory may be unreliable even when retrieved and recorded in a document at a very early stage”: Lord Justice Popplewell, “Judging Truth from Memory: The Science”, a speech given to the Commercial Bar Association, 16 November 2023. As his Lordship went on to point out in that speech, the process of taking witness statements may create memories, not restore them; in this way memory can become corrupted and “the witness will honestly believe in the corrupted recollection[;] it will become their memory”.

121    In this case, in determining matters in dispute, I have carefully considered the evidence and generally preferred contemporaneous documents to conflicting oral accounts although I have been mindful of the risk involved in relying on self-serving documents, even when created contemporaneously with the events. As the Full Court observed in Martin at [60], “the objective contemporaneous evidence is by far the best evidence”.

THE CORPORATIONS ACT CLAIMS

The legislative framework

122    Part 9.4AAA of the Corporations Act provides protection for “eligible whistleblowers” and rights to compensation and other forms of relief in the event of the disclosure of information which qualifies for protection under that Part. The object or purpose of Pt 9.4AAA is to encourage employees, officers and subcontractors engaged by companies to report suspected breaches of the corporations law to either ASIC or internally within the company: Explanatory Memorandum to the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Bill 2003 (Cth) at [5.381]. The policy “reflects the dual aims of facilitating the early detection and prosecution of corporate misconduct, and promoting improved business practices and standards”: Quinlan v ERM Power Ltd (No 1) [2021] 7 QR 377 at [18] (Bowskill J).

123    Part 9.4AAA was inserted in the Corporations Act in 2004. Substantial amendments were made in 2019 by the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) (the Amendment Act). Those amendments commenced on 1 July 2019. The background to the amendments is explained in detail in the Revised Explanatory Memorandum to the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 (Revised EM).

124    Disclosures qualifying for protection under Pt 9.4AAA are described in s 1317AA. They relevantly include disclosures about “disclosable matters” made by “an eligible whistleblower” to “eligible recipients” in relation to “a regulated entity”: s 1317AA(2). “Regulated entity” is defined in s 1317AAB and includes a body corporate. “Eligible recipients” “in relation to a regulated entity that is a body corporate” are defined in s 1317AAC and the definition relevantly includes an officer or senior manager of the body corporate. An “eligible whistleblower” in relation to a “regulated entity” is relevantly defined in s 1317AAA to include a person who is, or has been (a) an officer of a regulated entity and (b) an employee of a regulated entity.

125    It is an agreed fact that, from his engagement on 18 March 2021 until the termination of his employment, Mr Mount was an “eligible whistleblower” and DCM “a regulated entity”. In fact, by reason of the definition, Mr Mount remains an eligible whistleblower.

126    Section 1317AA relevantly provides:

Disclosures qualifying for protection under this Part

Disclosure to ASIC, APRA or prescribed body

(1)    A disclosure of information by an individual (the discloser) qualifies for protection under this Part if:

(a)    the discloser is an eligible whistleblower in relation to a regulated entity; and

(b)    the disclosure is made to any of the following:

(i)    ASIC;

(ii)    APRA;

(iii)    a Commonwealth authority prescribed for the purposes of this subparagraph in relation to the regulated entity; and

(c)    subsection (4) or (5) applies to the disclosure.

…

Disclosure to eligible recipients

(2)    A disclosure of information by an individual (the discloser) qualifies for protection under this Part if:

(a)    the discloser is an eligible whistleblower in relation to a regulated entity; and

(b)    the disclosure is made to an eligible recipient in relation to the regulated entity; and

(c)    subsection (4) or (5) applies to the disclosure.

Disclosure to legal practitioner

(3)    A disclosure of information by an individual qualifies for protection under this Part if the disclosure is made to a legal practitioner for the purpose of obtaining legal advice or legal representation in relation to the operation of this Part.

Disclosable matters

(4)    This subsection applies to a disclosure of information if the discloser has reasonable grounds to suspect that the information concerns misconduct, or an improper state of affairs or circumstances, in relation to:

(a)    the regulated entity; or

(b)    if the regulated entity is a body corporate—a related body corporate of the regulated entity.

(5)    Without limiting subsection (4), this subsection applies to a disclosure of information if the discloser has reasonable grounds to suspect that the information indicates that any of the following:

(a)    the regulated entity, or an officer or employee of the regulated entity;

(b)    if the regulated entity is a body corporate—a related body corporate of the regulated entity, or an officer or employee of a related body corporate of the regulated entity;

has engaged in conduct that:

(c)    constitutes an offence against, or a contravention of, a provision of any of the following:

(i)    this Act;

(ii)    the ASIC Act;

(iii)    the Banking Act 1959;

(iv)    the Financial Sector (Collection of Data) Act 2001;

(v)    the Insurance Act 1973;

(vi)    the Life Insurance Act 1995;

(vii)    the National Consumer Credit Protection Act 2009;

(viii)    the Superannuation Industry (Supervision) Act 1993;

(ix)    an instrument made under an Act referred to in any of subparagraphs (i) to (viii); or

(d)    constitutes an offence against any other law of the Commonwealth that is punishable by imprisonment for a period of 12 months or more; or

(e)    represents a danger to the public or the financial system; or

(f)    is prescribed by the regulations for the purposes of this paragraph.

127    “Officer” of a corporation was defined at the relevant time in s 9 of the Corporations Act (and now in s 9AD) to include:

(a)    a director or secretary of the corporation; or

(b)    a person:

(i)    who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or

(ii)    who has the capacity to affect significantly the corporation’s financial standing; or

(iii)    in accordance with whose instructions or wishes the directors of the corporation are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the corporation)[.]

128    “Director” of a company was defined in s 9 (now in s 9AC – only the note to the definition differs and then not in substance) as:

(a)    a person who:

(i)    is appointed to the position of a director; or

(ii)    is appointed to the position of an alternative director and is acting in that capacity;

regardless of the name that is given to their position; and

(b)    unless the contrary intention appears, a person who is not validly appointed as a director if:

(i)    they act in the position of a director; or

(ii)    the directors of the company or body are accustomed to act in accordance with the person’s instructions or wishes (excluding advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the corporation).

Note:    Paragraph (b)—Contrary intention—Examples of provisions for which a person referred to in paragraph (b) would not be included in the term “director” are:

(a)    section 205B (notice to ASIC of change of address); and

(b)    section 249C (power to call meetings of a company’s members); and

(c)    subsection 251A(3) (signing minutes of meetings).

129    “Misconduct” is broadly defined in s 9 to include fraud, negligence, default, breach of trust and breach of duty. “Improper state of affairs or circumstances” is not a defined term. I therefore infer that Parliament intended these words to have their ordinary meanings. The ordinary meanings of “improper” include “not in accordance with truth, fact, reason or rule; abnormal, irregular; incorrect, inaccurate, erroneous, wrong”: Parker v Comptroller-General of Customs [2009] HCA 7; 83 ALJR 494; 252 ALR 619; 71 ATR 23 at [29] (French CJ). For this reason, DCM (and I infer all respondents) accepted that the word “has a broad construct”. The concession was appropriate. It is consistent with the intention of the legislation as explained in the Revised EM:

2.34    The broad categories of disclosable conduct are also intended to include conduct that may not be in contravention of particular laws. For example misconduct, or an improper state of affairs or circumstances in relation to a regulated entity, may not involve unlawful conduct but may indicate a systemic issue that would assist the relevant regulator in performing its functions.

2.35    Information that indicates a danger to the public or a danger to the financial system is also a disclosable matter. This is intended to cover a broad range of conduct that poses significant risk to public safety or the stability of, or confidence in, the financial system, whether or not it is in breach of any law.

130    Suspicion is a “state of conjecture or surmise where proof is lacking”: George v Rockett (1990) 170 CLR 104 at 115 (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ); The Environmental Group Ltd v Bowd [2019] FCA 951;137 ACSR 352 at [180] (Steward J).

131    Not all disclosures of information by eligible whistleblowers falling within the scope of s 1317AA qualify for protection. Section 1317AADA excludes from protection certain “personal work-related grievances”. It reads as follows:

Personal work-related grievances

(1)    Subsections 1317AA(1) and (2) do not apply to a disclosure of information by an individual (the discloser) to the extent that the information disclosed:

(a)    concerns a personal work-related grievance of the discloser; and

(b)    does not concern a contravention, or an alleged contravention, of section 1317AC that involves detriment caused to the discloser or a threat made to the discloser.

Note:    A disclosure concerning a personal work-related grievance that is made to a legal practitioner may qualify for protection under this Part under subsection 1317AA(3).

(2)    For the purposes of subsection (1), the information disclosed concerns a personal work-related grievance of the discloser if:

(a)     the information concerns a grievance about any matter in relation to the discloser’s employment, or former employment, having (or tending to have) implications for the discloser personally; and

(b)    the information:

(i)    does not have significant implications for the regulated entity to which it relates, or another regulated entity, that do not relate to the discloser; and

(ii)    does not concern conduct, or alleged conduct, referred to in paragraph 1317AA(5)(c), (d), (e) or (f).

Examples of grievances that may be personal work-related grievances under paragraph (a) (but subject to paragraph (b)) are as follows:

(a)    an interpersonal conflict between the discloser and another employee;

(b)    a decision relating to the engagement, transfer or promotion of the discloser;

(c)    a decision relating to the terms and conditions of engagement of the discloser;

(d)    a decision to suspend or terminate the engagement of the discloser, or otherwise to discipline the discloser.

132    This section implements Recommendation 5.1 of the Report of the Parliamentary Joint Committee on Corporations and Financial Services, Parliament of Australia, Whistleblower Protections (Report, September 2017) following the independent review of the Public Interest Disclosure Act 2013 (Cth) (PID Act) by the then Integrity Commissioner, Phillip Moss AM, published in July 2016 (Moss Review): Supplementary Explanatory Memorandum to the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 (Cth) (Supplementary EM) [1.16]. One of the key recommendations of the Moss Review, as outlined in the Executive Summary at [11] was:

[t]o strengthen the PID Act’s focus on significant wrongdoing like fraud, serious misconduct, and corrupt conduct in order to achieve the integrity and accountability aims.

(Original emphasis.)

133    To this end, Mr Moss explained that:

personal employment-related grievances would be excluded from the PID Act, unless they relate to systemic issues or reprisal, and ‘disciplinary conduct’ would be defined as termination or dismissal. Such issues are better investigated or resolved through other existing dispute resolution processes.

134    The view of the Parliamentary Joint Committee was that:

5.28    Given the findings of the Moss Review, the committee considers it important to ensure that any changes to whistleblower protections remain focussed on the most serious integrity risks.

5.29    However, the committee remains concerned that the most likely forms of reprisal are employment related. Therefore any amendments should ensure that employment related reprisals can still be dealt with under the PID Act.

5.30    In addition, the lack of clear information on what proportion of disclosures are actually related to personal employment matters is of concern. The committee considers the data should be collected and assessed before any legislative changes are made.

135    Thus, Recommendation 5.1 of the Parliamentary Joint Committee was that:

in implementing the Moss Review recommendation regarding employment related matters care is taken to ensure that:

•    allegations of reprisal action taken against a person that has made a public interest disclosure can still be dealt with under a Whistleblower Protection Act; and

•    data is gathered and assessed in a national database on the proportion of disclosures that are personal employment related, but that this not have to occur before any legislative changes are made as recommended in this report.

136    Before any disclosure qualifies for protection, the discloser must have reasonable grounds for forming the relevant suspicion. That “directs attention to the information which formed the basis of the particular discloser’s suspicion; rather than, objectively, by reference to other information not known by the discloser, or which becomes known subsequently”. See Quinlan at [33] (Bowskill J). Matters not within the knowledge of the putative whistleblower at the time of the disclosures are irrelevant to the question of whether the disclosures qualify for protection: Quinlan at [34]–[37] (Bowskill J); Bowd at [180] (Steward J). While s 1317AA originally stipulated (in sub-s (1)(e)) that, for a disclosure of information to qualify for protection under Pt 9.4AAA, the disclosure had to be made in good faith, that requirement was removed by the Amendment Act and replaced by the requirement for reasonable grounds. See Revised EM at [2.42]–[2.44].

137    In George v Rockett at 112 the High Court said:

When a statute prescribes that there must be “reasonable grounds” for a state of mind — including suspicion and belief — it requires the existence of facts which are sufficient to induce that state of mind in a reasonable person.

138    Section 1317AB(1) of the Corporations Act relevantly provides that if a person makes a disclosure that qualifies for protection under Pt 9.4AAA, “no contractual or other remedy may be enforced, and no contractual or other right may be exercised, against the person on the basis of the disclosure”. Section 1317AB(2)(b) provides that, without limiting sub-s (1), “a contract to which the person is a party may not be terminated on the basis that the disclosure constitutes a breach of the contract”. In the present context that means that it was not open to DCM to terminate Mr Mount’s employment on the ground that he had made such a disclosure.

139    Section 1317AAE relevantly provides:

Confidentiality of whistleblower’s identity

(1)    A person (the first person) contravenes this subsection if:

(a)    another person (the discloser) makes a disclosure of information (the qualifying disclosure) that qualifies for protection under this Part; and (b) the first person discloses any of the following (the confidential information):

(i)    the identity of the discloser;

(ii)    information that is likely to lead to the identification of the discloser; and

(b)    the confidential information is information that the first person obtained directly or indirectly because of the qualifying disclosure; and

(c)    the disclosure referred to in paragraph (b) is not authorised under subsection (2) or (3).

Note 1:    Failure to comply with this subsection is an offence (see subsection 1311(1)).

Note 2:     This subsection is also a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this subsection, see section 1317S.

(2)    A disclosure referred to in paragraph (1)(b) is authorised under this subsection if it:

(a)    is made to ASIC; or

…

(d)    is made to a legal practitioner for the purpose of obtaining legal advice or legal representation in relation to the operation of this Part; or

…

(f)    is made with the consent of the discloser.

…

(4)    Subsection (1) does not apply if:

(a)    the disclosure referred to in paragraph (1)(b):

(i)    is not of the identity of the discloser; and

(ii)    is reasonably necessary for the purposes of investigating a matter referred to in subsection 1317AA(4) or (5) to which the qualifying disclosure relates; and

(b)    the first person takes all reasonable steps to reduce the risk that the discloser will be identified as a result of the disclosure referred to in paragraph (1)(b).

140    Section 1317AC relevantly provides:

Victimisation prohibited

Actually causing detriment to another person

(1)    A person (the first person) contravenes this subsection if:

(a)    the first person engages in conduct; and

(b)    the first person’s conduct causes any detriment to another person (the second person); and

(c)    when the first person engages in the conduct, the first person believes or suspects that the second person or any other person made, may have made, proposes to make or could make a disclosure that qualifies for protection under this Part; and

(d)    the belief or suspicion referred to in paragraph (c) is the reason, or part of the reason, for the conduct.

Note 1:    Failure to comply with this subsection is an offence (see subsection 1311(1)).

Note 2:    This subsection is also a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this subsection, see section 1317S.

…

Officers and employees involved in contravention

(3)    If a company contravenes subsection (1) …, any officer or employee of the company who is involved in that contravention contravenes this subsection.

Note 1:    Failure to comply with this subsection is an offence (see subsection 1311(1)).

Note 2:    This subsection is also a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this subsection, see section 1317S.

…

141    Section 79 defines the circumstances in which a person is “involved” in a contravention within the meaning of the Act. It provides:

A person is involved in a contravention if, and only if, the person:

(a)    has aided, abetted, counselled or procured the contravention; or

(b)    has induced, whether by threats or promises or otherwise, the contravention; or

(c)    has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention; or

(d)    has conspired with others to effect the contravention.

142    Section 1317AD relevantly reads as follows:

Compensation and other remedies—circumstances in which an order may be made

(1)    A court may make an order under section 1317AE in relation to a person (the first person) if:

(a)    the first person engages in conduct (detrimental conduct) that:

(i)    causes any detriment to another person (the second person); or

(ii)    constitutes the making of a threat to cause any such detriment to another person (the second person); and

(b)    when the first person engages in the detrimental conduct, the first person believes or suspects that the second person or any other person made, may have made, proposes to make or could make a disclosure that qualifies for protection under this Part; and

(c)    the belief or suspicion referred to in paragraph (b) is the reason, or part of the reason, for the detrimental conduct.

(2)    A court may make an order under section 1317AE in relation to a person (the first person) if:

(a)    the first person is or was an officer or employee of a body corporate; and

(b)    paragraphs (1)(a), (b) and (c) of this section apply to the body corporate because of detrimental conduct engaged in by the body corporate; and

(c)    the first person:

(i)    aided, abetted, counselled or procured the detrimental conduct; or

(ii)    induced, whether by threats or promises or otherwise, the detrimental conduct; or

(iii)    was in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the detrimental conduct; or

(iv)    conspired with others to effect the detrimental conduct.

…

Burden of proof

(2B)    In proceedings where a person seeks an order under section 1317AE in relation to another person:

(a)    the person seeking the order bears the onus of adducing or pointing to evidence that suggests a reasonable possibility of the matters in:

(i)    if subsection (1) of this section applies—paragraph (1)(a); or

(ii)    if subsection (2) of this section applies—paragraph (1)(a), as mentioned in paragraph (2)(b); …

…

(b)    if that onus is discharged–the other person bears the onus of proving that the claim is not made out.

…

143    The effect of sub-s (2B) is to shift the legal burden of proof from the alleged victim to the alleged wrongdoer. Its rationale is apparent from [2.127] of the Revised EM:

This reversal of the onus of proof recognises the well documented propensity of organisations that are the subject of a disclosure of wrongdoing to accuse and victimise the whistleblower, citing reasons other than the disclosure for their actions. It also recognises the actual knowledge of the reasons for, and conduct of, any victimising conduct will lie exclusively with the defendant in these cases.

144    As Mr Mount submitted, s 1317AD(2B) is analogous to s 361 of the FW Act which requires that, where an allegation is made that a respondent took action because of a prohibited reason, the respondent bears the burden of proving otherwise.

145    Section 1317AE sets out the orders a court may make for the purposes of s 1317AD. It reads:

Compensation and other remedies—orders that may be made

(1)    For the purposes of subsections 1317AD(1), (2) and (2A), a court may make any of the following orders:

(a)    an order requiring the first person to compensate the second person, or any other person, for loss, damage or injury suffered as a result of the detrimental conduct;

(b)    if the court is satisfied that the first person engaged in the detrimental conduct in connection with the first person’s position as an employee:

(i)    an order requiring the first person to compensate the second person, or any other person, for a part of loss, damage or injury as a result of the detrimental conduct, and an order requiring the first person’s employer to compensate the second person, or any other person, for a part of loss, damage or injury as a result of the detrimental conduct; or

(ii)    an order requiring the first person and the first person’s employer jointly to compensate the second person, or any other person, for loss, damage or injury suffered as a result of the detrimental conduct; or

(iii)    an order requiring the first person’s employer to compensate the second person, or any other person, for loss, damage or injury as a result of the detrimental conduct;

(c)    an order granting an injunction, on such terms as the court thinks appropriate, to prevent, stop or remedy the effects of the detrimental conduct;

(d)    an order requiring the first person to apologise to the second person, or any other person, for engaging in the detrimental conduct;

(e)    if the second person is or was employed in a particular position and the detrimental conduct wholly or partly consists, or consisted, of the termination, or purported termination, of the second person’s employment—an order that the second person be reinstated in that position or a position at a comparable level;

(f)    if the court thinks it is appropriate—an order requiring the first person to pay exemplary damages to the second person, or any other person;

(g)    any other order the court thinks appropriate.

(2)    If the detrimental conduct wholly or partly consists, or consisted, of terminating or purporting to terminate a person’s employment (including detrimental conduct that forces or forced the person to resign), the court must, in making an order mentioned in paragraph (1)(a) or (b), consider the period, if any, the person is likely to be without employment as a result of the detrimental conduct. This subsection does not limit any other matter the court may consider.

(3)    In deciding whether to make an order under paragraph (1)(b) in relation to the first person’s employer, the court may have regard to the following:

(a)    whether the employer took reasonable precautions, and exercised due diligence, to avoid the detrimental conduct;

(b)    if the employer has a policy dealing with any or all of the matters referred to in subsection 1317AI(5) (whether or not section 1317AI requires the employer to have such a policy)—the extent to which the employer gave effect to that policy;

(c)    any duty that the employer was under to prevent the detrimental conduct, or to take reasonable steps to ensure that the detrimental conduct was not engaged in.

(4)    If the court makes an order under subparagraph (1)(b)(ii), the first person and the first person’s employer are jointly and severally liable to pay the compensation concerned.

146    “Detriment” for present purposes is defined in s 1317ADA as follows:

In sections 1317AC and 1317AD, detriment includes (without limitation) any of the following:

(a)    dismissal of an employee;

(b)    injury of an employee in his or her employment;

(c)    alteration of an employee’s position or duties to his or her disadvantage;

(d)    discrimination between an employee and other employees of the same employer;

(e)    harassment or intimidation of a person;

(f)    harm or injury to a person, including psychological harm;

(g)    damage to a person’s property;

(h)    damage to a person’s reputation;

(i)    damage to a person’s business or financial position;

(j)    any other damage to a person.

147    This definition is modelled on the definition in s 337BA(2) the Fair Work (Registered Organisations) Act 2009 (Cth) (Registered Organisations Act) but is intentionally broader in that the definition in that Act does not include “damage to a person’s business or financial position” or “any other damage to a person”: Revised EM at [2.100].

148    In its ordinary meaning a “detriment” is a disadvantage. In view of the words used in the chapeau to s 1317ADA it is reasonable to conclude that the intention of the Parliament was to capture any disadvantage and that the list was illustrative only.

149    Section 1317AF, which commenced on 1 July 2019, makes it clear that a person may bring civil proceedings for an order under s 1317AE or for a contravention of s 1317AC even if a prosecution for a criminal offence in relation to the same conduct has not been, or cannot be, brought.

150    Section 1317QB, which is in Div 2 of Pt 9.4B, provides:

(1)    In proceedings for a declaration of contravention or an order under Division 1 against a person for a contravention of a civil penalty provision, it is not necessary to prove:

(a)    the person’s intention; or

(b)    the person’s knowledge; or

(c)    the person’s recklessness; or

(d)    the person’s negligence; or

(e)    any other state of mind of the person.

(2)    Subsection (1) does not apply to the extent that the proceedings relate to attempting to contravene a still penalty provision, or being involved in a contravention of a civil penalty provision;

(3)    Subsection (1) does not affect the operation of section 1317QC (which is about mistake of fact).

(4)    Subsection (1) does not apply to the extent that the civil penalty provision, or a provision that relates to the civil penalty provision, expressly provides otherwise.

151    Section 1317QE provides that, if an element of a civil penalty provision is done by an employee, agent or officer of a body corporate acting within the actual or apparent scope of the employment or authority of the employee, agent or officer, that element must also be attributed to the body corporate.

152    The Revised EM describes the context in which the amendments were introduced and the purpose of the new provisions. Existing whistleblower regimes were said to “present a confusing web for whistleblowers to navigate, with differences and gaps in the protections available” ([1.7]) and, in contrast to the position in the public sector, private sector whistleblower laws were rarely utilised ([1.8]–[1.9]). The legislation was introduced following a report of an inquiry by the Senate Economics References Committee into the performance of ASIC which recommended a review of the corporate sector “whistleblower framework” to bring it closer to the public sector “whistleblower framework”: Revised EM at [1.10].

153    Part 9.4B deals with the civil consequences of contravening civil penalty provisions of the Corporations Act. Division 1 provides for the making of declarations (s 1317E), pecuniary penalty orders (s 1317G), orders for compensation and other orders not presently relevant. Division 2, which includes ss 1317J–1317S, deals with procedural and other matters relating to court orders.

The dispute

154    The parties are at odds about the extent to which the communications in question are protected, whether there was a prohibited disclosure, and whether Mr Mount suffered a detriment because he had made any such disclosure. They are also at odds about the remedies available to Mr Mount under the Corporations Act. In particular, the respondents contend that Mr Mount does not have standing to claim the relief he seeks.

The standing issue (agreed issue 1)

155    The respondents contend that Mr Mount does not have standing to apply for relief for contraventions of ss 1317AAE and 1317AC of the Corporations Act. They rely on s 1317J, which specifies the persons who may apply for declarations of contravention compensation orders and/or pecuniary penalty orders and expressly excludes any other person. Section 1317J appears in Div 2 of Pt 9.4B of the Act. Part 9.4B is concerned with the civil consequences of contravening civil penalty provisions and Div 2 with “procedural and other matters relating to orders by the Court”. Section 1317J relevantly reads as follows:

Who may apply for a declaration or order

Application by ASIC

(1)    ASIC may apply for a declaration of contravention, a pecuniary penalty order or a compensation order.

Application by corporation

(2)    The corporation, the responsible entity for the registered scheme or the operator of the notified foreign passport fund, may apply for a compensation order.

…

No one else may apply

(4)    No person may apply for a declaration of contravention, a pecuniary penalty order or a compensation order unless permitted by this section.

Director of Public Prosecutions Act 1983

(5)    Subsection (4) does not exclude the operation of the Director of Public Prosecutions Act 1983.

156    Mr Mount falls into none of the categories of eligible applicants. For contraventions of the kind he alleges, the legislation only authorises ASIC to seek a remedy. That much is clear from the text and confirmed by the authorities.

157    Subsections 1317J(1) and (4) were first enacted in 1999. They came into effect on 24 November 1999 and have never been amended. The respondents cited nine authorities from this Court and the NSW Supreme Court in support of their position. All but one was a judgment of a single judge. The exception is Macks v Viscariello (2017) 130 SASR 1 (Lovell J, Corboy and Slattery AJJ), on appeal from a judgment of Kourakis CJ: Viscariello v Macks [2014] SASC 189; 103 ACS 542. In Macks at [701]–[702], the Full Court confirmed that the effect of s 1317E, read with s 1317J, is that only ASIC has standing to seek a declaration of contravention under s 1317E and a declaration of contravention under s 1317E is a necessary precondition for the making of a pecuniary penalty order under s 1317G. That much is clear from the text of the legislation.

158    Mr Mount’s submissions on standing were barely coherent. He submitted that “as a matter of statutory interpretation” s 1317J must be read as “subject to the more recent remedial provision specifically dealing with whistleblower actions in Pt 9.4AAA”. He argued that “the language of s 1317AF is fairly open to the meaning that a whistleblower may bring proceedings for compensation under s 1317AE [and] civil proceedings for the imposition of civil penalties” and any ambiguity in the text should be interpreted beneficially in favour of the whistleblower and the public interest. He also contended that there was “some obscurity and absurdity” in the text arising from an apparent “drafting error” in that Parliament “overlooked the generality of s 1317J when amending the Act”.

159    I do not accept that there is any ambiguity about the matter. Nor do I accept that Parliament overlooked the generality of s 1317J when amending the Act, particularly when Pt 9.4B was amended at the same time to include ss 1317AAE(1) and 1317AC(1), (2) and (3) in the definition of “civil penalty provisions” in s 1317E.

160    The obvious intention of the Parliament was to incorporate ss 1317AAE(1) and 1317AC(1), (2) and (3) into the restrictive regime for obtaining relief under Pt 9.4B. Further, Mr Mount failed to identify any provision that would entitle him to seek a compensation order for a contravention of s 1317AAE or s 1317AC.

161    On the other hand, the Court has a general power to make declarations. The power is found in s 21 of the Federal Court of Australia Act 1976 (Cth) (FCA Act). It allows the Court in its discretion to make binding declarations of right in any matter within its original jurisdiction regardless of whether consequential relief is, or could be, claimed. Neither side addressed the question of whether declaratory relief was available under s 21 of the FCA Act although the reasoning in Macks, upon which the respondents relied, supports the proposition.

162    In their commentary on s 1317J Austin & Black in their Annotations to the Corporations Act state that the question whether a court could make declarations of contraventions of civil penalty provisions in its general jurisdiction was “left open” in Edenden v Bignell [2007] NSWSC 1122 (Barrett J) and Smith (in liq) v Bone (2015) 233 FCR 568 (Gleeson J) and “noted” in Macks. While the former statement is correct, the latter is not. In Macks the Full Court considered the question at length at [705]–[750], concluding at [749]–[750] that:

[W]e do not consider that the court’s power to make declarations under s 31 of the Supreme Court Act that civil penalty provisions such as ss 180-182 have been contravened has been impliedly excluded by provisions of Pt 9.4B or the CA considered as a whole. It is not necessary to construe Pt 9.4B, or more generally the CA, as impliedly excluding the court’s power under s 31 to give proper effect to the wording and objects of the Act.

As has been noted, the conclusion we have reached qualifies the scheme created by the CA by which remedies for a breach of its provisions are to be found within the Act. The qualification reflects the nature of declaratory relief. A contravention of a civil penalty provision does not create right of action at common law or a claim in equity; at most, it creates a statutory cause to the extent permitted by Pt 9.4B or other provisions of the CA such as ss 1101B(1) and 1324. However, the right to apply for a declaration, and the court’s powers on the application, are not contingent upon the existence of a cause of action and the possibility of consequential relief.

163    I interpolate that s 31 of the Supreme Court Act 1935 (SA) is analogous to, and not substantively different from, s 21 of the FCA Act.

164    In Macks at [768]–[769] their Honours held that it was open to the primary judge to conclude that the declarations sought should be granted in the exercise of the court’s discretion, having regard to the nature of Macks’ conduct which they considered “could be characterised as egregious or, at the very least, sufficiently serious as to warrant the court’s disapproval” and did not concern purely theoretical matters.

165    Earlier, in Lifeplan Australia Friendly Society Ltd v Woff [2013] FCA 613 at [38]–[39] Besanko J held that Pt 9.4B creates a special regime for declarations of the type it identifies, that the general jurisdiction conferred by s 1337B was “constrained or limited by the express terms of s 1317J read in the context of Part 9.4B as a whole”, and that there was no jurisdiction to make a declaration of contravention on the application of any party other than ASIC. In Macks at [733] the Full Court remarked that his Honour’s focus was on the availability of relief under Pt 9.4B with its attendant consequences, an issue which was resolved by the terms of s 1317J. In any event, the Court went on to observe at [734] that his Honour did not expressly consider whether the provisions of Pt 9.4B impliedly excluded the court’s power under s 21 of the FCA Act to declare that a corporate officer had contravened a civil penalty provision, a declaration which would not have the consequences provided for by Pt 9.4B, or, if he did, he did not explain why Pt 9.4B had that effect as a matter of statutory construction.

166    Based on Macks, Austin and Ramsey in Ford, Austin & Ramsay’s Principles of Corporations Law (LexisNexis, subscription service, last updated November 2024) at [3.400.3] observed that:

[Section] 1317E(1) is not an exclusive source of power available to a court to make a declaration of contravention of a civil penalty provision … This means that someone other than ASIC can seek a declaration that a civil penalty provision has been contravened provided the applicant has a sufficient interest in obtaining declaratory relief … A court may make such a declaration “to mark its disapproval of a party’s conduct or to fully and publicly record the outcome of an action”: Macks … at [684].

167    Neither side sought to persuade me that Macks was wrong in any relevant respect. And I am certainly not convinced that it is plainly wrong. As a decision of an intermediate appellate court on the interpretation of Commonwealth legislation, I am therefore bound to follow it: Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [135] (Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ). To the extent that the judgment addresses the power to grant declaratory relief under the South Australian Supreme Court Act, the reasons of the Full Court are equally applicable to the same power in the FCA Act.

168    Accordingly, I conclude that this Court has jurisdiction, conferred by the FCA Act, to make a declaration that ss 1317AAE and 1317AC of the Corporations Act have been contravened but is precluded by s 1317J, and has no jurisdiction, to make an order either for compensation or pecuniary penalties for any such contravention.

The s 1317AAE claims: disclosure of confidential information (agreed issues 3 to 5)

169    Mr Mount claims that DCM (through Mr Tripp) contravened s 1317AAE by disclosing to Mr Haindl his identity or information likely to lead to his identification as the author of the First Whistleblower Report. The factual basis of the claim, as pleaded and particularised, is that, after receiving the First Whistleblower Report on 22 March 2021, Mr Tripp made such disclosures to Mr Haindl, Mr Tucker and Mr Hancock and the next day Mr Haindl twice complained by telephone to Mr Arthy that Mr Mount had communicated the matters in the First Whistleblower Report to DCM. Mr Mount’s case, as put to Mr Tripp in cross-examination (and as put to the Court in argument), was that the alleged disclosures were made as a result of Mr Tripp reading the email and the Report attached to it.

170    As the respondents submitted, there is no reverse onus of proof here. The burden rests with Mr Mount to prove these allegations and it does not shift at any point. Section 1317AD(2B)(a)(i) does not apply to s 1317AAE. It is clear from the text and context that it only applies to claims under s 1317AD.

171    The respondents admitted that the First Whistleblower Report contained disclosures that qualify for protection. The Report included concerns that Mr Haindl had “not revealed his interest” in mineral projects near the DCM tenements “such as his shareholding and directorship of Freedom Metals Pty Ltd and In Situ Gold Pty Ltd”; concerns about Mr Hancock’s position as a director and shareholder of Sitara Pty Ltd, Freedom Metals and In Situ Gold, all of which he alleged had acquired mineral tenements near the DCM project site; concerns about Mr Hancock not working at the DCM site; a comment that Mr Arthy made to Mr Perdikaris that Mr Hancock was working for another company (Century Zinc) and had only been at the DCM site five times that year; statements attributed to Mr Arthy that DCM owns guns, two of which were in his possession; and allegations that Mr Tucker had apparently been engaging in criminal activity by seeking and receiving secret commissions.

172    There is no dispute that, if Mr Tripp disclosed to Mr Haindl, Mr Tucker or Mr Hancock Mr Mount’s identity as the author of the Report or information which would have revealed his identity as its author, such a disclosure was without Mr Mount’s consent.

173    It was agreed that at least some of the disclosures in the First Whistleblower Report qualifies for protection under Pt 9.4AAA. It follows that for the cause of action to be established Mr Mount must prove that:

(1)    Mr Tripp disclosed to Mr Haindl the fact that Mr Mount had made a protected disclosure or information that is likely to reveal that he did;

(2)    That information was obtained by Mr Tripp because Mr Mount had sent him a copy of the First Whistleblower Report;

(3)    Mr Tripp read the Report before Mr Haindl telephoned Mr Arthy;

(4)    After reading the Report, Mr Tripp contacted Messrs Haindl, Tucker and Hancock and revealed to them that Mr Mount had made a qualifying disclosure or information that could have led to the identification of Mr Mount as the person who made the disclosure; and

(5)    The information Mr Tripp disclosed to them was information he obtained because of the qualifying disclosure.

174    Mr Tripp denied the allegations. So did Mr Haindl and Mr Tucker. No evidence was adduced from Mr Arthy.

175    Although there is no dispute that the First Whistleblower Report was sent to Mr Tripp before Mr Haindl is said to have had the relevant conversation (or conversations) with Mr Arthy, Mr Tripp vehemently denied having read the Report. I will come to Mr Tripp’s evidence in due course but, even if I were to conclude that Mr Tripp’s denials in this respect were false, for the reasons given below I am not persuaded that he was the source of the information allegedly conveyed by Mr Haindl to Mr Arthy.

Did Mr Tripp disclose the relevant information to Mr Haindl? Did Mr Haindl disclose the relevant information to Mr Arthy?

176    The s 1317AAE claims were based on a number of assumptions, not all of which have been satisfactorily proved. They include first, that Mr Haindl telephoned Mr Arthy on 23 March 2021; second, that in that conversation Mr Handl disclosed information to Mr Arthy which could only have been derived from the First Whistleblower Report; third, that Mr Tripp was the only possible source of the information; and fourth, that, if Mr Tripp disclosed to Mr Haindl information which appeared in the Report, it necessarily follows that he revealed to Mr Haindl Mr Mount’s identity as the author of the Report, or information that would likely lead to his identification.

177    It is common ground that Mr Tripp received a copy of the First Whistleblower Report when it was emailed to him on the morning of 22 March 2021, but Mr Tripp denied reading the email.

178    It is also common ground that Mr Haindl spoke to Mr Arthy on 23 March 2021.

Did Mr Tripp read or know of the First Whistleblower Report before Mr Haindl’s conversation with Mr Arthy?

179    Mr Tripp’s evidence was that it was his practice not to read emails unless they were drawn to his attention. He deposed that he never read a single email Mr Mount had sent him and said that Mr Mount tried to call him once but he did not pick up the call. He also deposed that Mr Perdikaris complained to him several times about not replying to emails and that he told both Mr Mount and Mr Perdikaris that he does not respond to emails and that they should make arrangements to discuss the issues in any particular email by phoning or texting him. Mr Perdikaris did not dispute this. That claim was not challenged and there was no evidence to the contrary. Mr Tripp testified that he would not read any emails sent to him unless he was specifically requested to do so either by phone or text message. He claimed to have 27,000 unanswered emails on his phone.

180    Mr Tripp went so far as to say that he has never read either the email or the First Whistleblower Report and only became aware of them after Mr Mount initiated his action in the Fair Work Commission on 27 April.

181    The only relevant concession Mr Tripp made was that from time to time he would check his emails even if he did not read them.

182    Mr Mount submitted that the Court should reject Mr Tripp’s evidence that he did not read the email containing the First Whistleblower Report.

183    Mr Mount acknowledged that “common experience may suggest that busy business people seek to minimise time spent on unnecessary emails” but argued that Mr Tripp’s account of his practice was “inherently implausible”. Since Mr Tripp had access to his emails on his mobile phone, Mr Mount asked rhetorically: why would a text message receive greater attention? Mr Mount also submitted that there was evidence that Mr Tripp did read emails by pointing to an email he sent to Mr Mount on 18 March welcoming Mr Mount to the company and agreeing to his proposed terms, which he had set out in an email earlier in the day and another, sent on 20 March, replying to an email from Mr Perdikaris, apparently sent to Mr Christensen in his capacity as DCM’s lawyer. But that submission was not to the point as Mr Tripp’s evidence was not that he did not read emails but that he did not read them unless they were drawn to his attention in a phone call or text message.

184    Mr Mount submitted that Mr Tripp’s evidence should also be rejected because Mr Perdikaris gave evidence that after he (Mr Perdikaris) had read the First Whistleblower Report, he telephoned Mr Tripp and the following conversation then took place.

“Have you received the report we’re on – the whistleblower report?” He said “yes”. I said, “Maybe you’ve had a chance to read it all.” He said “yes”. I said, “Well, what do you say we – we convene and have a meeting about all this and formalise some sort of strategy, moving forward?”

185    I do not accept this evidence. There is no record in Mr Tripp’s phone log for the morning of 22 March of a phone call from Mr Perdikaris. The only record of any communication between them that morning is of a call by Mr Tripp to Mr Perdikaris at 10.59am (that is, a minute before the meeting was due to start) which it was put to Mr Tripp in cross-examination was to tell Mr Perdikaris that he was “almost there”, a proposition which Mr Tripp presumed was correct. Mr Tripp’s evidence was that presumably he had received a phone call or a text message from Mr Perdikaris informing him of the meeting. On the assumption that Mr Perdikaris did call or text Mr Tripp to inform him of the meeting, as there is no record in Mr Tripp’s phone log of a call from Mr Perdikaris that morning and Mr Perdikaris’s phone records were not tendered, there is no record of when any such call was made.

186    Mr Mount deposed that at the meeting there was a conversation to the following effect:

Mr Perdikaris:    Okay, what the hell is going on here?

Mr Tripp:    Yes, I'd like to know. Ryan, what is this report all about?

[Mr Mount]:     There are serious concerns in just about every key facet of the business …

Mr Tripp:    Ryan, is this some sort of ploy where the CEO trashes the business and the staff to get what he wants, like his own staff or more money or something like that?

[Mr Mount]:    Not at all. Everything in my report is factually to the best of my knowledge. At the moment, we have this huge rush to do all this work on site and raise capital on the basis that we have all been told that the project is economic, but I have seen no proof of that. You asked me last week to go through the data, go through the feasibility studies and report back to you. Well, I can tell you one thing, there is no feasibility study.

…

187    Evidently no recording was made of the conversations that took place that day. None of the attendees claimed to have made any contemporaneous notes.

188    Mr Perdikaris gave evidence, which was consistent with Mr Mount’s account although less detailed. He testified that Mr Tripp was “flabbergasted” by the Report, could not believe what was alleged, was “cranky” about it, questioned Mr Mount about it; insinuated that some of the material in the Report was “fabricated”. He also testified that Mr Tripp said that “he thought [Mr Mount] was in a process of trying to drive the value of the company down by this reporting and that he was entering into a – a path of taking the company to – for himself and his purported shareholders or friends”.

189    I do not consider it implausible that Mr Tripp did not read the email or the Report at or around the time it was sent. To the contrary, there is every prospect that he did not. It is a fact of life that people do not always read emails when they arrive in their inboxes. The exigencies of life get in the way. But I have trouble accepting his evidence that he has never read the Report. Indeed, considering the allegations made against him in this proceeding I find that part of his evidence difficult to believe.

190    Mr Tripp claimed not to have been told the purpose of the meeting and not to have inquired about it, but I find this evidence also difficult to believe. Mr Tripp did not strike me as a person who would readily agree to attending a meeting without at least querying why it was necessary.

191    On the other hand, the contemporaneous documentary evidence, such as it is, suggests that the meeting was pre-arranged and that it was not called to discuss the First Whistleblower Report. Rather, its purpose was to meet with Eugene Fung. Mr Fung is (or was then) a partner at Thomson Geer Lawyers. Mr Mount had mentioned him at the 17 March board meeting as a person who could assist DCM with corporate governance, strategy and capital raising. Although there does not appear to have been a resolution to that effect, Mr Mount deposed in his third affidavit that “the board had reached an oral consensus… to reach out to Eugene Fung to enquire as to engaging him to advise about the matters discussed” at the meeting. Mr Mount identified those matters as “the potential public listing of DCM”; “the obligations of directors to disclose information to shareholders”; and “the strategy for Nettelbeck”, including legal advice received from Mr Christensen. The day after the 17 March meeting (Mr Mount’s first day on the job) he notified the directors and Mr Stewart that Mr Fung had agreed to act for DCM. Mr Mount’s email to which the First Whistleblower Report was attached, reads:

I will see you at 11am today for meeting with the lawyer.

192    The email Mr Fung sent Mr Mount in the evening after the meeting on 22 March made no mention of the First Whistleblower Report. Nor did it allude to the matters raised in it.

193    Regardless of whether Mr Tripp had read the report before the meeting or whether the purpose of the meeting was not mentioned in the phone call, I think it unlikely that the Report was not mentioned at the meeting. After all, it was a matter of considerable importance to Mr Mount and Mr Perdikaris, not to mention the company itself to whose board Mr Tripp and Mr Perdikaris had only just been appointed.

194    For these reasons, regardless of whether he read the email or the report, I conclude that Mr Tripp was either aware of the Report before the meeting or became aware of it during the course of the meeting. Even so, it does not necessarily follow that Mr Tripp disclosed to Mr Haindl Mr Mount’s identity, or information likely to lead to Mr Mount’s identification, as its author (the confidential information).

Did Mr Tripp disclose the confidential information to Mr Haindl?

195    Mr Mount deposed that, at the meeting at Mr Perdikaris’s house on 22 March, Mr Tripp asked him why he had shut the mine down. In cross-examination Mr Tripp testified that he did not recall complaining to Mr Mount about the mine shutting down, but did not deny doing so and admitted that he could have. Mr Tripp denied the suggestion that Mr Haindl had called him that morning and told him so. He also categorically denied the suggestion that he then told Mr Haindl about the Report. He did, however, accept that Mr Mount raised the question of the need for a feasibility study and that there was a discussion about the geology and the viability of the mine.

196    Mr Haindl testified that he called Mr Tripp that morning and told him that Mr Mount had decided to shut the site down. In view of this evidence I do not accept Mr Tripp’s denial in this regard. Mr Mount submitted that, if Mr Tripp had read the Report, it is “implausible” that he would not have mentioned “the matter” to Mr Haindl when he called him, having regard to its contents and significance. Mr Mount also relied on evidence elicited from Mr Haindl in cross-examination in which he admitted to calling Mr Arthy on or about 23 March 2021. It was put to Mr Haindl that in that phone call he asked Mr Arthy whether he had been speaking to Mr Mount about “issues on the site”, specifically “that Mr Hancock wasn’t working on site” and that he was using the company’s quad bike to visit the other tenements owned by Freedom Metals and In Situ Gold. Mr Haindl said he had not.

197    Mr Haindl accepted that he called Mr Tripp on the morning of 22 March 2021 to discuss Mr Mount’s instruction to shut the mine down but insisted that Mr Tripp did not tell him anything about the First Whistleblower Report or its contents. I accept that evidence.

198    Mr Tripp admitted he called Mr Tucker on his way to the meeting. His telephone records reveal a call lasting one minute made at 9.47am which Mr Tripp admitted was to Mr Tucker. He denied that the purpose of the call was to tell Mr Tucker that he had received the First Whistleblower Report. Unsurprisingly, particularly having regard to the duration of the call, he could not remember what was discussed. He said he called him regularly. If Mr Tripp had indeed read the First Whistleblower Report at the time he made that call to Mr Tucker, I would be very surprised if the call would have lasted only a minute.

199    When he was cross-examined, Mr Tucker said he could not recall receiving a phone call from Mr Tripp at about 9.47 that morning and denied being told about the meeting or that Mr Mount had “issued” the First Whistleblower Report. Mr Tucker accepted, however, that at around that time he found out that work had been suspended on the site and that in all likelihood it was Mr Haindl who told him.

200    Mr Mount deposed that they took a call from Mr Fung during the meeting.

201    I do not doubt that there was a call to or from Mr Fung on 22 March. At 6.58pm that day Mr Mount emailed Mr Fung, copying Messrs Perdikaris and Tripp, thanking Mr Fung “for [his] time” that day, asking him to send “an engagement letter”, giving him the contact details for Mr Tripp and Mr Perdikaris, and asking him to circulate his contact details. Mr Fung replied some four hours later. Mr Fung’s email alludes to a discussion that morning but not to the people who participated in it and does not mention any whistleblower report. He wrote:

As discussed, it sounds like the steps are:

1.    Raise working capital - if loans from directors, will need to be signed off by the directors not associated with the lender

2.    Diligence – need to gather information / conduct diligence to verify:

a)    project feasibility;

b)    past activities of stakeholders including the various actors discussed this morning

3.    Stabilise – if there is a feasible project, then we need to stabilise the company by:

a)    securing its assets - e.g. cash and bank accounts

b)    restructuring Board

c)    either:

i)    securing settlements/commitments from various stakeholders including the parties we discussed this morning; or

ii)    preserving rights and seeking accountability

4.    Capital raising - having stabilised the company, raise the capital required to deliver the tailings project.

Happy to help. Look forward to receipt of further instructions.

202    Mr Perdikaris testified that he called Mr Fung and that the purpose of the call was to discuss the Report and seek Mr Fung’s advice about it. He said at the end of the discussion (conducted with Mr Fung on speaker) that it was agreed that Mr Fung would give them “some direction”. Neither Mr Mount nor Mr Tripp supported this evidence. Mr Mount deposed that the conversation with Mr Fung lasted about 20 minutes but, although Mr Mount had forwarded the Report to Mr Fung, he gave no evidence concerning the purpose or contents of the conversation. Mr Fung was scheduled to give evidence for Mr Mount, but he never did. Mr Tripp claimed not to remember the call, although he accepted that there was a discussion at the meeting about the geology and the feasibility of the project and about capital raising (although he gave a different account of the nature of the capital raising conversation). In cross-examination, Mr Tripp conceded that it was possible that the conduct of Mr Tucker and Mr Haindl was discussed “because it always was”. He referred to it as “an obsession” of both Mr Mount and Mr Perdikaris.

203    In these circumstances, I am not satisfied that the First Whistleblower Report was discussed with Mr Fung at the meeting on 22 March. Either Mr Perdikaris’s recollection was deficient or his evidence in this respect was dishonest. It is unnecessary to decide which alternative is correct.

204    Mr Mount also deposed that Mr Perdikaris called Mr Stewart, after Mr Perdikaris sought and obtained Mr Mount’s permission to send him the First Whistleblower Report. Mr Mount claimed not to have participated in the conversation with Mr Stewart, absenting himself from the room for about half an hour while it allegedly took place. Mr Perdikaris testified that he called Mr Stewart to inform him about the Report “and the severity of it”, and that he was “upset” and “stunned by it”. In his third affidavit, Mr Mount claimed to have heard Mr Perdikaris occasionally exclaiming words to the effect: “What do we do about this bloody whistleblower report?”

205    There is no doubt that at some point in time Mr Stewart received a copy of the First Whistleblower Report and that he did so with Mr Mount’s consent, but he did not have any recollection of any such telephone call on 22 March. In his affidavit Mr Stewart said that he “recall[ed] that [he] may have spoken to [Mr Perdikaris] and Mr Tripp about the First Whistleblower report” but did not recall “any specific discussions” and denied speaking to anyone else about the Report except for DCM’s legal advisors for the purpose of the proceedings. Annexure LS-3 to his affidavit is a copy of an email sent to him by Mr Perdikaris at 10.06am on 24 March 2021 and the attachment, which was a copy of the First Whistleblower Report. That evidence indicates that Mr Stewart first came into possession of the Report after Mr Arthy’s alleged complaint to Mr Perdikaris, which necessarily means that it was after the time when Mr Haindl spoke to Mr Arthy.

206    As I have already observed, it seems unlikely that the First Whistleblower Report was not mentioned during the meeting at Mr Perdikaris’s home on 22 March. But mention of the Report or its contents does not prove that Mr Tripp read it or that he disclosed the Report or any of its contents to Mr Haindl, still less that he revealed to Mr Haindl or Mr Tucker Mr Mount’s identity as its author, either explicitly or implicitly. There is no probative evidence to support the claim made against Mr Tripp.

207    While it may be strictly correct that Mr Mount first instructed Mr Haindl to suspend work at the mine in an email he sent at 9.09am on 22 March, Mr Mount deposed that at about 8.30am that day (before he sent the First Whistleblower Report) he had a telephone conversation with Mr Haindl in which, in response to a question from Mr Haindl, he told him to “down tools” and “suspend operations until the end of the week”. Mr Haindl’s evidence that he called Mr Tripp that morning and told him that Mr Mount had decided to shut the site down is entirely consistent with Mr Mount’s in this respect. No attempt was made to prove the time of the telephone call to Mr Tripp, although Mr Mount had subpoenaed Mr Tripp’s telephone records. It is at least equally possible, if not more likely, that Mr Tripp’s “complaint” to Mr Mount during the meeting at Mr Perdikaris’s house later that day about the mine shutting down was prompted by the conversation with Mr Haindl rather than with anything Mr Mount had written in the First Whistleblower Report. While Mr Haindl was asked in cross-examination whether Mr Tripp told him at the time “that Mr Mount had issued a report to the company which detailed a whole lot of issues and problems raised with the company”, he categorically denied it. He also testified that Mr Tripp did not mention any report, let alone a whistleblower report, in that conversation. I accept that evidence.

Did Mr Haindl disclose the confidential information to Mr Arthy?

208    Mr Haindl claimed not to remember whether he had told Mr Arthy that he had been speaking to Mr Mount about Mr Hancock being off site. Mr Haindl denied ever asking Mr Arthy if he had spoken to Mr Mount and denied asking Mr Arthy whether he had spoken to anyone about Mr Hancock using the quad bikes on the other tenements he owned. He claimed that he asked Mr Arthy about whether he had been speaking to Mr Perdikaris.

209    Mr Mount brushed aside these denials, submitting that “the timing is highly suggestive of the fact” that Mr Haindl, having spoken to Mr Tripp and Mr Tucker on the morning of 22 March, had been informed of the First Whistleblower Report and its contents. He asked rhetorically, why else would Mr Haindl have asked Mr Arthy whether he had been speaking to Mr Perdikaris. Mr Haindl’s explanation was that Mr Perdikaris had told him that he had spoken to Mr Arthy.

210    Since Mr Arthy did not give evidence, there is no direct evidence to support Mr Mount’s case.

211    The only contemporaneous evidence adduced on the matter consisted of an email Mr Perdikaris sent to himself at 9.35am on 23 March (after the circulation of the First Whistleblower Report and before the Second), which he later forwarded to Mr Mount (Perdikaris memo). Not all of the Perdikaris memo makes sense. But one thing is clear. Mr Perdikaris recorded his concern that Mr Stewart had spoken to Mr Haindl about matters Mr Perdikaris and Mr Mount had discussed with Mr Stewart over the phone. He did not even suspect that Mr Tripp was the source. The Perdikaris memo reads as follows (without alteration):

I just received a call from Micheal Arthy and he told me that he had a call from Matt Haindl saying that Ryan told him that Micheal said to Ryan that Matt handcock hadn’t been on site at Dover for months and Hancock was using company equipment on like the quad bike on the other tenaments owned by Haindl / handcock /nettlebeck. Arthy was very concerned that I had spoken to Ryan. However my concern is that Luke stuart has spoken to Matt Haindl what Ryan and myself discussed with him yesterday over the phone and email under the whistle blows act . I was very fucking precise and email sent by Ryan.

I received second call by Arthy telling me Haindl back on the phone harassing him whether he had spoken with nettlebeck and that maybe I had spoken to nettlebeck and maybe told ryan .

212    It is readily apparent that the propositions put to Mr Haindl in cross-examination about what he said to Mr Arthy are not consistent with this record.

213    The Perdikaris memo must be read in the context of what appears in the First Whistleblower Report. There, relevantly, Mr Mount wrote:

5. Project site

…

[Matt Haindl] told me the reason Matt Hancock was not at work when I was there was because it was the weekend and he needed to be with his family. Yet when I spoke to Hancock a week later he said he is not working because there is a need for more money to construct the plant properly ($1m).

i. He said this has been conveyed to Matt H[aindl]. (and he also said that he is also very worried about the feedstock i.e. there is poor quality and quantity analysis of the tailings). Mr Arthy told Chris Perdis that Matt Hancock is working for Century Zinc doing relining and has only been at Dovers project site five times this year.

214    With one qualification, I am not persuaded that the Perdikaris memo supports Mr Mount’s case. The qualification is that it supports the evidence Mr Perdikaris gave about calling Mr Stewart on 22 March and discussing the First Whistleblower Report with him. On balance, I am satisfied that there was such a conversation on 22 March but I cannot come to any conclusion about what Mr Perdikaris actually told Mr Stewart. Mr Mount was not a party to the conversation and was out of the room when it took place. Mr Perdikaris’s account of the conversation was sparse and I have no confidence in the reliability of his evidence generally. The full extent of his evidence on the subject is set out below:

And did you make any calls during that meeting?---To Luke Stewart.

Why did you call Luke Stewart? Why did you call - - -?---Just to inform him about this report and the severity of it.

And what did he say to you?---Luke was also upset about it, stunned by it.

Does that mean that – well, what did you say to Mr Stewart about the report in that call?---That the – I was going to forward the report onto him, and it was a whistleblowers report for his consideration as well

And after you spoke to Mr Stewart did you say anything to Mr Mount?---To Mr Mount.

Yes, about the report?---That Stewart had been told about it and – and his reaction, from memory.

And did you ask Mr Mount anything about the report?---I asked Ryan – I – I had never seen a whistleblowers report, to be perfectly frank, nor had any experience in relation to it. Just I wanted to understand why that report had that heading, for starters. And I notified him that I, you know, passed it on to – to Luke Stewart.

Did you say to him something about passing it on to Mr Stewart in the meeting? Did you say something to Mr Mount in the meeting about passing it on to Mr Stewart?---Yes, that I had done so.

215    It does not much matter, however, when Mr Stewart was sent the First Whistleblower Report because, notwithstanding Mr Perdikaris’s suspicions, Mr Stewart is not alleged to have disclosed any confidential information to Mr Haindl. Nor is it alleged that he passed on any confidential information to Mr Tripp who then disclosed it to Mr Haindl. Mr Mount’s case is that Mr Tripp read the First Whistleblower Report and then disclosed the information to Mr Haindl. If that case is not made out, this aspect of the claim must fail.

216    The allegation that Mr Tripp disclosed to anyone confidential information he had read in the First Whistleblower Report is based on mere speculation. Taken at its highest it is an educated guess. The evidence certainly falls short of proof to the requisite standard. Notably there was no mention in the First Whistleblower Report of Mr Hancock’s use on other tenements of company equipment like the quad bike and no reference in Mr Perdikaris’s note of the conversation with Mr Arthy of the statement in the Report that Mr Hancock was working for Century Zinc.

217    On the assumption that Mr Haindl did make the remarks to Mr Arthy which were attributed to him, Mr Tripp is by no means the only possible source.

218    One possible source is Mr Mount himself, through Mr Perdikaris.

219    The relevant part of the First Whistleblower Report is the following passage:

Mr Arthy told Chris Perdis that Matt Hancock is working for Century Zinc doing relining and has only been at Dovers project site five times this year.

220    Both these matters appear in Mr Perdikaris’s notes of the conversation with Mr Arthy. Those notes appear in an attachment to an email to Mr Arthy, which Mr Perdikaris forwarded to Mr Mount and which he testified he also sent to Mr Stewart. That document records, amongst other things, that Mr Hancock:

•    Has only been on site approx. 5 times since Christmas to date 21mar21

•    Has been working with Dale on In Situ Gold P/L in Hodgkinson pegging ground and using DCM’s ute when he is supposed to be at Dover Castle putting mill together etc

…

•    Hancock has been re-lining for Century Zinc whilst employed by DCM

221    While that document was marked “Confidential and Without Prejudice”, it is not a protected disclosure.

222    There is no reference to the quad bike in the document.

223    Mr Mount did not deny that he had spoken to Mr Haindl himself. Mr Mount deposed that Mr Perdikaris had told him a number of things Mr Arthy had related to him during a telephone call at about noon on 21 March and, to the extent that they contradicted Mr Haindl’s account, it would be surprising if Mr Mount had not raised them with Mr Haindl, if not in writing, by phone.

224    Mr Mount also relied on what he said was the disclosure by Mr Hancock at the board meeting on 25 March of his interests in Freedom Metals and In Situ Gold when, he submitted, the sole source of information in relation to “the issue concerning the interests” he, Mr Haindl and Mr Nettelbeck had in those companies was the First Whistleblower Report. His contention, in effect, was that that information must have been conveyed to him by Mr Tripp directly or indirectly through Mr Haindl. In cross-examination Mr Haindl not only denied that Mr Tripp told him that Mr Mount had sent a whistleblower report to DCM but he also denied that Mr Tripp told him that Mr Mount had reported to the company that he (Haindl) had an interest in Freedom Metals and In Situ Gold and that those companies had tenements near the DCM mine. What is more, he denied passing on that information to Mr Hancock. Mr Mount did submit that any inference should be drawn from the respondents’ failure to call Mr Hancock.

225    Mr Mount submitted that the Court can safely infer from this evidence that Mr Tripp read the email to which the Whistleblower Report was attached, discussed it with Mr Mount, Mr Perdikaris and Mr Stewart at the 22 March meeting, that Mr Tripp disclosed the fact that Mr Mount had “issued a disclosure report concerning DCM” to Mr Haindl and Mr Tucker and that Mr Tripp or Mr Haindl told Mr Hancock that he had issued the First Whistleblower Report. Consequently, he argued, Mr Tripp and Mr Haindl contravened s 1317AAE.

226    I cannot accept the submission.

227    I was not taken to any evidence to indicate that Mr Tripp had been in contact with Mr Hancock about the First Whistleblower Report. The disclosure by Mr Hancock at the Board meeting on 25 March is far too tenuous a basis for concluding that Mr Tripp had told him that Mr Mount had submitted the First Whistleblower Report or given him information that was likely to lead to Mr Mount’s identification as its author.

228    At the outset of the board meeting on 17 March Mr Stewart called for “disclosures” of interests, but both the minutes and the transcript of that meeting show that Mr Hancock was not in attendance. Mr Haindl disclosed an interest in Sitara but not Freedom Metals or In Situ Gold. In his evidence he explained that he did not make a disclosure about the latter two companies because his involvement in those companies was different in that, unlike Sitara, he was not a director of either of them.

229    The transcript of the Board meeting on 25 March reveals that Mr Stewart asked all the directors in attendance whether they had any or any further disclosures to make. In the circumstances, the query from Mr Stewart is entirely neutral. This is the exchange recorded in the transcript:

MR STEWART:     Mr Hancock, any disclosures from you?

MR HANCOCK:     Not yet mate. At the end we’ll have some disclosures and some feedback, I think.

MR Stewart:         Okay.

MR HANCOCK:     And answer some questions.

MR STEWART:     Okay. All right.

MR MOUNT:     I think the idea, just to sort of just make clear, the disclosures is not so much for the presentation. It’s more about if there’s anything that’s conflicting in the business in any sense that you may be part of.

MR HANCOCK:     There is the freedom and in situ issues that we’ve been left with, but we’ve got some answers for that for youse in a bit.

MR STEWART:     Okay. That’s important stuff. Okay.

MR HANCOCK:     And I’m sure that’s on people’s minds.

MR STEWART:     Sure. Okay.

(Emphasis added.)

230    Mr Hancock’s recorded response is certainly curious. The so-called “freedom and in situ issues” were not mentioned again in the transcript of the Board meeting. But it does not prove the pleaded allegations. Nor does it prove that Mr Tripp told him what was in the First Whistleblower Report or reveal that Mr Mount had submitted such a report. Mr Mount asserted in his submissions that “[t]he issue concerning the interests that Messrs Hancock, Nettelbeck and Haindl had in [Freedom Metals and In Situ Gold] … was at the time solely contained in [that Report]”, but that is no more than an assertion. Mr Tripp and the First Whistleblower Report were not the only possible sources of that information. An obvious source of that information was Mr Arthy. It is apparent from Mr Perdikaris’s email recording his conversation with Mr Arthy on the morning of 21 March (see [220] above) and Mr Arthy’s email in reply sent at around 9pm the next day that Mr Arthy mentioned both Mr Hancock’s work on In Situ Gold and an apparent “plan” of Messrs Hancock, Haindl and Nettelbeck to use DCM equipment to “process ore at Freedom Metals”. While Mr Haindl gave evidence that Mr Arthy did not tell him anything about his conversation with Mr Perdikaris (and indeed denied that he had spoken to him), in the absence of evidence from Mr Arthy or Mr Hancock, I cannot rule out the possibility that Mr Hancock disclosed those issues at the 25 March board meeting because Mr Arthy had mentioned the matter to him at some point before then.

231    In his affidavit Mr Stewart admitted to reading the First Whistleblower Report, although not “in any detail” and denied speaking to anyone else about it other than DCM’s lawyers for the purpose of the proceeding. In cross-examination he explained that he “would have looked at it” but, because he was not a director, and had an appreciation of the provisions of the legislation, it was important that he not read it “in detail”. He denied even skimming through the report at the time. His integrity was never impugned.

232    Mr Stewart deposed that he does not recall opening or reading the Report after receiving it from either Mr Mount or Mr Perdikaris or discussing either the First or Second Whistleblower Reports “in detail” at the meeting at Mr Perdikaris’s house the day before the 25 March board meeting. He said he did recall that during the meeting on 24 March Mr Perdikaris said that Mr Mount’s induction had been poor; the previous managing director was fraudulent; money is missing and “the data is also not there”; and that he referred to the feasibility study that was promised but not delivered. He added that he also recalled Mr Perdikaris saying words to the effect that “there is clearly fraudulent behaviour by Haindl” but he did not recall that either of the whistleblower reports was “a central theme of our discussions at the meeting”.

233    It is possible that Mr Stewart had spoken to Mr Hancock about the matter before the 25 March board meeting but he received the First Whistleblower Report from Mr Perdikaris with Mr Mount’s consent and it is no part of Mr Mount’s case that Mr Stewart disclosed any confidential information to either Mr Haindl or Mr Hancock or, for that matter, Mr Tucker. He is not a respondent. And Mr Stewart denied that he knew about the Freedom Metals and In Situ Gold “issue” because he had read either of the Whistleblower Reports. When in cross-examination he was asked how he was aware of that issue, his reply, on which he was not challenged, was as follows:

Because there [were] many conversations going on around this time. So much happened in a two-week period: things were raised around feasibility, this, that, and the other. There was a lot happening.

234    If, as appears from Mr Stewart’s carefully chosen words, there was a discussion of matters raised in the Reports at the meeting at Mr Perdikaris’s house on 24 March, that would cast doubt on Mr Tripp’s credibility, but only if someone at the meeting mentioned the Reports by name and referred to Mr Mount as the author. Nevertheless, since that meeting occurred after Mr Haindl’s alleged conversation with Mr Arthy (on 22 March), even if Mr Tripp was aware of the Reports (or either of them) on 24 March, it does not prove Mr Mount’s case as pleaded and particularised.

235    Finally, it is important to keep in mind that s 1317AAE does not prohibit the disclosure of the contents of information that qualifies for protection under Pt 9.4AAA. It prohibits the disclosure of the identity of the whistleblower or information that would likely lead to his identification. As I have already observed, even if Mr Tripp disclosed to Mr Haindl information which appeared in the Report, it does not necessarily follow that he revealed to Mr Haindl Mr Mount’s identity as the author of the Report, or information that would likely lead to his identification as its author. Indeed, the proposition that he did so was never even put to Mr Tripp. The closest the cross-examiner came was to suggest to Mr Tripp that he told Mr Haindl “about the whistleblower report” on the morning of 22 March in the telephone in which Mr Haindl told him that Mr Mount had shut down the mine. Telling someone about a report does not necessarily involve disclosing the identity of its author or information which would likely lead to the author’s identification.

236    For these reasons, I am not satisfied that the s 1317AAE claim is made out. That disposes of agreed issues 3 to 5.

The claims under ss 1317AC and 1317AD (agreed issues 6 to 20)

237    Mr Mount alleged that DCM contravened s 1317AC by dismissing him from his employment for making the disclosures “by way [of] the Whistleblower Reports” believing or suspecting that he had made disclosures that qualify for protection under Pt 9.4AAA of the Act and that belief or suspicion was the reason or part of the reason for doing so. He alleged that the other respondents were involved in the contravention, in that they were directly or indirectly knowingly concerned in it, so that they also contravened s 1317AC.

238    On the same basis, having regard to the terms of s 1317AD, Mr Mount also claimed that he is entitled to the relief for which s 1317AE provides, including compensation.

239    Mr Mount alleged that Mr Tripp was involved in the contravention because:

(a)    he received and read the First and Second Whistleblower Reports, disclosed their contents to Messrs Haindl, Tucker and Hancock on or about 23 March; and

(b)    together with Mr Haindl and Mr Tucker resolved at a board meeting on or about 6 April to dismiss him and/or terminate his contract.

240    Mr Mount alleged that Mr Haindl and Mr Tucker were involved in the contravention because they supported the resolution to dismiss him and/or terminate his contract and putting the resolution into effect.

241    Mr Mount additionally alleged that Mr Tucker caused him other damage which also amounts to a detriment. He claimed that Mr Tucker contravened s 1317AC by demanding the return of the company car on or after 10 April 2021 and reporting it as stolen, and over the period from April to June 2021 by disparaging him to persons within the mining investment community, including prospective employers or hirers of his services, and that he did so in each case because he believed or suspected that Mr Mount had made a protected disclosure.

242    Once again, for the same reasons, Mr Mount claims he is entitled to the relief for which s 1317AE provides.

Which disclosures qualify for protection?

243    Mr Mount alleged that each of the following amounted to “a disclosure of information to an eligible recipient or recipients which qualify for protection under s 1317AA(2)”:

(1)    three emails he sent to Matthew Haindl on 20, 21 and 22 March 2021 (at 2.11pm. 1.11pm and 8.44pm respectively) in which Mr Mount requested him to provide a safety incident report (Safety Incident Emails);

(2)    the First Whistleblower Report he sent to Messrs Tripp and Perdikaris on 22 March 2021;

(3)    three emails he sent on 22 March 2021 (22 March Emails), consisting of:

(i)    the email to Matthew Haindl at 9.09am in which he directed Mr Haindl to suspend operations on site until the forthcoming board meeting;

(ii)    the email he sent to James Haindl at 5.48pm that day, copied to Matthew Haindl, emphasising the importance that Mr Arthy’s employees be on “light camp duties only”; and

(iii)    the email he sent to Matthew Haindl at 8.30pm that day, copied to Messrs Tucker, Tripp, Perdikaris and Stewart, confirming that painting and light duties only were to be conducted in order to avoid safety risks;

(4)    the email he sent to James and Matthew Haindl at 9.48pm on 23 March 2021, copied to James Haindl, repeating his direction that only light duties be carried out (First 23 March 2021 Email;

(5)    the email he sent to Mr Tucker, Mr Tripp and Mr Perdikaris at 9.58pm that day, copied to Matthew Haindl and Mr Stewart, informing them that ‘[i]t appears that unauthorised work is occurring at our project site” and seeking their assistance and intervention (Second 23 March 2023 Email);

(6)    the Second Whistleblower Report sent to Messrs Tripp, Perdikaris and Stewart an hour later;

(7)    the following statements Mr Mount made about safety issues at the project site during the board meeting on 25 March 2021:

(a)    “Okay so what do we need to spend to get to production? What’s your personnel? OPEX? So these are the things I am going to get dealt with and dela with the board. George is going to raise money, I think we need to get this in writing”;

(b)    “…we need to know what’s it going to cost to get there, we need to know that our product is going to be accepted at a potential customer”;

(c)    “Now, I was told last week, there was a feasibility study. And I’ve asked for the information there isn’t that? Sure. So I’ve subsequently asked you for information that’s not forthcoming. And I was instructed by members of the board that the feasibility study was going to come through.”;

(d)    [(In response to this question from) Mr Tripp: “Can we just clarify a feasibility study at this juncture, given all the information that’s being presented today, is what’s required to go to the cost to complete, to turn the keys on [?].”]

(e)    “Is it a million dollars? Is it two million? You know, with a few other risks, I gonna say there are the risks, there is the two million dollars that’s needed”;

(8)    the email Mr Mount sent to the directors at 11.17am on 26 March 2021 in which he said there was either “insubordination” at the project site (because work was being conducted contrary to his direction to do only light duties) or there was a misunderstanding of his authority as CEO and a further email to Mr Haindl at 12.23am, copying the directors and Mr Stewart, specifying the details of Mr Haindl’s alleged insubordination.

(9)    the email he sent to the directors at 11.20pm on 4 April 2021, copied to Mr Stewart, concerning the project site, “Board matters” and transactions made by Logicca on 31 March 2021.

244    Mr Mount initially pleaded that the email he sent to Mr Tucker at 2.16pm on 26 March 2021, copied to Messrs Perdikaris, Stewart, Tripp and Matthew Haindl (extracted at [79] above) was a protected disclosure, but he omitted it from the further amended statement of claim.

245    In his opening submissions Mr Mount claimed that three emails sent to the respondents on 7 April and one on 10 April were also protected disclosures.

246    Mr Mount submitted that the above-mentioned items “self-evidently constitute disclosures concerning misconduct or an improper state of affairs in relation to a regulated entity”.

247    I do not consider that any of the items except for the First and Second Whistleblower Reports, contained disclosures that qualify for protection and, in closing argument, through his counsel, Mr Mount appeared to accept as much. Besides, Mr Mount’s arguments largely focussed on the matters raised in the First and Second Whistleblower Reports.

248    For a start, requests for reports or information do not constitute disclosures of information. That excludes the first item, the Safety Incident Emails. Nor do directions to employees or requests for assistance from board members. That excludes items 3, 4 and 5. The statements made by Mr Mount at the 25 March meeting are not disclosures of information either. In any case, Mr Mount made no submissions to support the allegation that they amounted to disclosures that qualify for protection. That excludes item 7.

249    Nor am I satisfied that item 8 consists of disclosures which qualify for protection.

250    In the first email sent at 11.17am, Mr Mount wrote that the alleged insubordination or misunderstanding of his authority required “urgent rectification as to project site management”. While the email attached a document entitled “Health & Safety – a quick review”, which raised concerns about inadequate health and safety measures on site, it was essentially an interpersonal complaint about Mr Haindl not following Mr Mount’s instructions. The directors to whom the email was sent would have had to speak to Mr Haindl (and potentially others, too) in order to address the allegations. And in any event, Mr Haindl, the target of the allegations, was one of the recipients. To the extent that the allegation of insubordination was a “disclosure”, it was not a disclosure protected by Pt 9.4AAA, as it concerned a personal work-related grievance within the meaning of ss 1317AADA. Mr Mount did not allege or submit that the information the subject of this “disclosure” concerned conduct of the kind that would be captured by s 1317AADA(2)(b). In particular, he did not contend that the contents of the email had significant implications for DCM or another regulated entity.

251    The second email in item 8, sent at 12.23pm to Mr Haindl et al, is set out at [76] above. It contains a complaint that work was continuing on the site despite permission being sought and granted only for painting to be finished and a request for an explanation. For the same reasons, it, too, was not disclosure qualifying for protection.

252    For the reasons set out below, I consider that the decision to terminate Mr Mount’s contract was made before the email the subject of item 9 was sent so, to all intents and purposes, it is irrelevant. The additional claims made in the submissions, concerning emails sent on 7 and 10 April are outside the scope of the pleading, were not mentioned in closing submissions, and in any event are also irrelevant for the same reason.

253    The respondents conceded that the First Whistleblower Report partly contained information, by way of mixed observation and assertion, concerning what might be characterised as misconduct or an improper state of affairs in relation to DCM. But they argued that, as at the date of that report, Mr Mount had no reasonable grounds to suspect that all the information in the report concerned either misconduct or an improper state of affairs or circumstances. They submitted that the Second Whistleblower Report does not qualify for protection because one of the people to whom it was sent was Mr Stewart and “Mr Stewart was not an eligible recipient”. These submissions give rise to the next two issues.

Were there reasonable grounds to suspect that all the information in the First Whistleblower Report concerned misconduct or an improper state of affairs or circumstances (agreed issue 3)?

254    The respondents pointed to two matters in respect of which, they contended, Mr Mount had no reasonable grounds to suspect that they concerned misconduct or an improper state of affairs or circumstances, that is to say, facts sufficient to induce such a state of mind in a reasonable person. While these matters were said to be illustrative, the respondents did not point to any others.

255    Mr Mount’s submissions on this issue were high-wide and handsome. He did not address either of these points in his written submissions, although he had for been aware for weeks of the arguments the respondents would be making (contained as they were in their outline of opening submissions).

256    The first of these matters was said to be contained in the section on Mr Tucker. The respondents argued that that part of the report contained “materially false information” and that no objective foundation for the suspicion had been identified.

257    The respondents described the “materially false” information as “fraud by a shareholder of DCM”, presumably Mr Tucker.

258    The report raised a number of issues concerning Mr Tucker. The first of them was apparently based on reasonable grounds, which were contained in the report itself. In substance, three days earlier DCM’s former accountants, Logicca, had informed Mr Mount that Mr Tucker was demanding it transfer shares from a founding shareholder’s personal shareholding without that person’s consent. If true, that would certainly provide reasonable grounds for a suspicion of misconduct or an improper state of affairs. I have been unable to find any proper basis for the allegation that Mr Tucker was receiving secret commissions. Mr Tucker appears to have made no secret of the fact that he was seeking payments for himself and Sequoia.

259    In closing argument, senior counsel for Mr Mount submitted that the factual basis for Mr Mount’s opinion that he had received secret commissions was to be found in the first FTI report dated 3 March 2021, pointing to the section which was removed (set out above at [30]–[31]). That report provides no factual foundation for a belief or suspicion that Mr Tucker was charging secret commissions or double billing. On the face of things, the deleted section is an anodyne account of amounts paid by DCM to Sequoia and Mr Tucker for brokerage fees. The fact that amounts paid to both Sequoia and Mr Tucker were recorded in DCM’s books and made available to Ms Trenfield to review indicates that the payments were not secret.

260    Senior counsel for Mr Mount also pointed to Mr Tucker’s failure to produce to Mr Perdikaris on request a share register disclosing the identities of the beneficial shareholders. He submitted that “all [Mr Tucker] could say about this was that [Tessa] Butler” (DCM’s operations and office manager) had told him that the documents relating to brokerage fees “reconciled” and that Mr Tucker was being “actively pursued about [both] those things … as late as 31 March”.

261    This submission was apt to mislead. The matter was discussed at the 31 March board meeting. This is the relevant part of the transcript:

MR PERDIKARIS:     Just before I got onto insolvency just one sec. George, did you get a chance to do that reconciliation on (indistinct) account from inception of--

MR TUCKER:         Yeah, got all that sent through, yeah.

MR PERDIKARIS:     Okay, so that was the email that we got-

MR TUCKER:         Yeah.

MR PERDIKARIS:     --(indistinct) you know, I'd like Matthew to say is that (indistinct) meant to, so apologies.

MR TUCKER:     I mean, the reconciliation being the brokerage rate and money I've raised and what's owing if Tess agrees with it.

MR PERDIKARIS:     Yeah, yeah, the money raised-

MR TUCKER:         Yeah.

MR PERDIKARIS:     --and the your invoicing—

MR TUCKER:         Yeah.

MR PERDIKARIS:     --for the amount? Okay, beautiful.

MR TUCKER:         Except for the outstanding amount-

MR PERDIKARIS:     Yes, okay.

MR TUCKER:         -you don 't have a copy.

MR STEWART:     Okay, so you shot that through the board, did you, George?

MR TUCKER:         Yes.

262    In this exchange Mr Perdikaris appears to accept Mr Tucker’s explanation that Ms Butler had reconciled the amounts. Mr Mount did not raise any question or comment on the subject during the meeting. The request for further documents relating to the Sequoia brokerage fees in no way proves that Mr Tucker’s conduct was dishonest or inappropriate. In any case, it post-dates the First Whistleblower Report.

263    While Mr Mount may have honestly suspected that Mr Tucker had charged secret commissions, the evidence does not provide any factual basis for it.

264    It is unnecessary for present purposes to consider whether there was a reasonable basis for making the other allegations relating to Mr Tucker and, in the absence of any assistance from counsel on the matter, I do not propose to do so.

265    The second matter was said to be contained in the section entitled “Project Site”. The respondents submitted that this section included information that “objectively does not reasonably support a suspicion of misconduct or an improper state of affairs referable to site safety risks”.

266    The Corporations Act does not require the reasonable grounds to be contained in the document containing the disclosure. Be that as it may, the grounds for Mr Mount’s concerns were set out in the Report. They are largely based on what he saw and what he was told on his site visit and they are supported by other contemporaneous documents including Mr Arthy’s email to Mr Perdikaris, emails passing between Mr Haindl and Mr Mount, and Mr Mount’s notes of the site visit (the reliability of which were not challenged). Some of the facts disclosed in that material are sufficient to arouse suspicion in the mind of a reasonable person at least of irregularities in relation to safety matters. The presence of open and unfenced mine shafts could obviously compromise the safety of workers on the site. The information obtained from the site visit indicated that Mr Haindl, as the site senior executive for the mine, had either not developed or not implemented a safety management system for the mine to help ensure the safety of persons at the mine which suggests that DCM, as the operator of the mine, was in breach of its obligations under s 38 of the Mining Safety Act.

267    Another safety issue raised in that section of the Report related to an observation by Mr Mount on his site visit about the apparent absence of a safety box or register of keys. He considered this was a safety risk, amongst other problems it presented. I am sure that a person might reasonably suspect that the absence of a safety box or register of keys could pose a safety risk.

268    The first safety issue related to the subject of the incident report Mr Mount had sought from Matthew Haindl. I agree that it provides no objective support for a reasonable suspicion of misconduct or an improper state of affairs referable to site safety risks. To the contrary, it indicates that Mr Haindl was aware of a relevant risk and had taken steps to avoid it. That part of the report reads as follows:

a.    On Friday evening, I received a text from Matt stating that James (his brother) will travel that evening to Cairns to buy materials (flagging tape and signs). I found this strange for this to be occurring on a Friday night. After an exchange of text’s he then stated it was a matter of safety for James to leave the camp since it was unsafe to be there alone.

i.    I have asked Matt for an incident report on the matter; but it has not been forth coming.

269    The only other identified safety risk was the potential for guns to be used at the mine when alcohol was permitted on the site when Mr Mount had been informed and had seen evidence of alcohol being drunk at the site. As he put it in the Report:

[I]t is a wet camp yet there are reports from Michael Arthy (contractor) that the company owns guns and that they have been site. (indeed, there is a gun safe on site) and Mr Arthy has confirmed he is holding two guns at his house which are the property of Dover.

270    In his first affidavit Mr Mount deposed that during his site visit he noticed a gun safe beside the fridge. He said that he perceived it to be a safety risk to have firearms at the site, especially when alcohol was consumed at the site. In his experience it is “unusual” to permit firearms at a site that also permits alcohol. At dinner during his site visit, Mr Haindl gestured to Mr Mount with a beer can and offered him a drink (which he declined). Matthew and James Haindl both drank beer during the meal.

271    Mr Mount remarked to Mr Haindl that he was “pretty sure” there was a gun safe in the room he was to sleep in that night and asked Mr Haindl whether guns were used or held at the site. Mr Haindl replied: “Well yes and no. There definitely were when Craig was here, but not so much anymore”. When Mr Mount asked him why guns were used on the site, Mr Haindl replied: “I think some of the boys just like to do some shooting”.

272    None of this evidence was challenged. It will be recalled that, unbeknown to Mr Haindl, Mr Mount had recorded the conversations.

273    The conversation continued:

MOUNT:    I see. So who is the SSE out here again?

HAINDL:    That's me.

MOUNT:    I suppose I've never had guns on a mine site that are used by internal personnel. Things can get a bit rough and tough after a hard day's work out here especially when drillers are operating and then with grog on site, I would have thought guns would not be a good element to mix in?

HAINDL:    Yeah, I suppose so. I don't know where the guns have gone so they are not here anymore.

MOUNT:    Do you have rules for the handling of the guns out here?

HAINDL    Well not really. But Ryan, no one has been shot.

274    The information Mr Mount had received together with his own observations provided a reasonable basis for his suspicions that there was a safety risk, that no attention had been paid to that risk, and that DCM’s conduct in this respect was irregular and therefore improper.

Was Mr Stewart an eligible recipient? What difference would it make if he were not?

275    It is convenient to deal with these questions now.

276    It is common ground that Mr Stewart was not a director of DCM. Mr Mount pleaded that he was an “officer” of the company within the meaning of s 9 of the Corporations Act.

277    The submissions on this question were brief.

278    The respondents submitted that Mr Stewart was not an “officer” of DCM “[h]aving regard to the evidence of what [he] actually did in respect of DCM” and that for this reason the disclosures in the Second Whistleblower Report did not qualify for protection.

279    As he was neither a director or the secretary of DCM, the only possible basis for the allegation that Mr Stewart was an officer of the company is that he was either a person who made, or participated in making, decisions that affected the whole, or a substantial part, of DCM’s business or a person “in accordance with whose instructions or wishes the directors” were “accustomed to act”, except for advice given by him “in the proper performance of functions attaching to [his] professional capacity or [his] business relationship with the directors”. It was not suggested, let alone proved, that Mr Stewart had the capacity to significantly affect DCM’s financial standing.

280    Neither of the possible alternatives was made out.

281    Mr Stewart’s understanding of his role was encapsulated in a statement he made at the DCM board meeting on 17 March, which appears in the transcript of the meeting:

I see my role initially – again I’m an observer similar to Ryan today. However, I'll be leading the meeting and hoping to become a director once I work through some internal factors at EMM where I’m stepping down (and this is in confidence because only the board and the CEO selection committee know) as CEO at the end of this financial year for reasons to let go of the pressure and give others opportunity and all that sort of stuff but I’ll still perform some executive role there. You know, I want to engage, draw out the best of everybody. You know, like things need to be constructive and, again, it's all about moving forward. Things have happened in the past but, you know, let’s see how we can best take this company forward.

282    From time to time, however, he acknowledged that he would prepare agendas for DCM board meetings; take minutes of DCM board meetings; follow-up on action items via email after DCM board meetings; and provide feedback or suggestions on request from the DCM board in his capacity as an investor in the company.

283    Mr Stewart deposed that throughout the period when he was assisting DCM, before he became a director, he did not make decisions which affected the whole or a substantial part of DCM’s business or participate in any such decisions and he had no capacity to significantly affect DCM’s financial standing (the limit of his involvement in DCM’s finances was as a shareholder).

284    It was put to Mr Stewart in cross-examination that he was “in effect, acting as chairman of the board during these board meetings and in preparation for them” and that the only reason he was not formally appointed a director, and “openly and formally act[ed] as chairman of the board and vote[d]” was that his contract with EMM prevented him from doing so. Mr Stewart rejected both these propositions. He testified that it would not have been “fair to the existing shareholders or the team at EMM” and he would not have had “the capacity to honour th[e] role” if he had taken it on. He also rejected the proposition that he was “very careful” to use the expression “voluntary support role” because he did not “want openly to acknowledge” that he was “acting, in effect, as the chairman or a director of [DCM]”. Mr Stewart said that he used the expression because he was “keeping [his] boundaries”. Presumably he was doing so in order to make it clear to everyone what his role actually was. I accept his evidence. While Mr Stewart attended the meetings and contributed to the debate, his role appears to have been as a facilitator of, and contributor, to the discussions. Although he opened the meetings, he did not purport to do so as chair and in none of the records of the meetings is he said to have been its chair. He did not call for a mover and seconder of motions as one might have expected had he acted as chair. He did not even see to it that proper meeting procedure was followed. In any event, even if he were the chair of the three board meetings Mr Mount attended, that would not have made him an officer of the company within the meaning of that term in the Corporations Act.

285    No evidence was adduced from any of the directors which would establish that they customarily followed his instructions or acted on the basis of his wishes. To the extent that he provided advice, it is properly characterised as advice given in the proper performance of functions based on his business relationship with the directors as a shareholder of the company with experience and skills they valued.

286    Mr Tucker gave evidence that Mr Stewart was not involved in any of the discussions or email correspondence regarding the removal of Mr Perdikaris as a director or the termination of Mr Mount’s employment. I was not taken to any evidence to the contrary. If he were an officer of the company, one would expect he would have been intimately involved in these matters.

287    So what does it matter that Mr Stewart was not an officer of DCM at the relevant time?

288    The respondents’ argument was that, where a disclosure of information is made in a single communication to both an eligible recipient and an ineligible recipient, that disclosure is not a disclosure that qualifies for protection under the Act. They cited no authority for that proposition and I do not accept it.

289    First, the statutory text provides no support for the submission. Section 1317AA(2)(b) provides that a disclosure of information by an individual qualifies for protection if (in addition to the matters in s 1317AA(2)(a) and (c)) the disclosure is made to an eligible recipient in relation to the regulated entity. It is not deprived of that character merely because the disclosure is also made to an ineligible recipient, even if the same disclosure does not qualify for protection to the extent that it was sent to the ineligible recipient.

290    Second, the respondents’ construction would defeat the purpose of Pt 9.4AAA. Part 9.4AAA seeks to protect disclosures by whistleblowers to particular classes of persons: Commonwealth regulators (s 1317AA(1)); eligible recipients in relation to a regulated entity such as officers, senior managers, auditors, actuaries and other persons authorised by the entity (ss 1317AA(2) and 1317AA(1)); and legal practitioners (s 1317AA(3)). If the respondents were right, an eligible recipient would be justified in terminating a person’s employment for raising allegations of misconduct merely because, unknown to the eligible recipient, the discloser had blind copied an ineligible recipient into the email containing the disclosure. That would be a perverse construction of Pt 9.4AAA. The preferable construction is that the disclosure qualifies for protection to the extent that it is sent to an eligible recipient but does not qualify for protection to the extent that it is sent to someone who is not. The relevance of that distinction will differ depending on the facts of each case.

291    I therefore find that the disclosure in question was not one that qualifies for protection under Pt 9.4AAA to the extent that it was sent to Mr Stewart, but that it is a disclosure that qualifies for protection to the extent that it was sent to eligible recipients.

292    In circumstances such as these, it might be open to a company to terminate a contract on the basis that the disclosure to an ineligible recipient was a breach of the contract. For example, a discloser made a disclosure containing confidential information about alleged misconduct or an improper state of affairs to both an eligible recipient and an ineligible recipient, Pt 9.4AAA would not prevent the company from taking action against the discloser for disclosing confidential information to the ineligible recipient. But the discloser would not be entitled to take action against the discloser for the disclosure to the eligible recipient. Neither scenario is relevant here, however. The respondents made no complaint that the disclosure to Mr Stewart of the Second Whistleblower Report was a breach of confidence or a reason to dismiss Mr Mount. Further, as Mr Mount’s complaint about breach of confidentiality relates only to the First Whistleblower Report, it was common ground that the differences between the First and Second Whistleblower Reports were immaterial, and as Mr Mount did not plead that Mr Stewart disclosed confidential information or took part in any detrimental conduct, no factual issue turns on the disclosure of the Second Whistleblower Report to Mr Stewart.

293    It may be arguable that disclosing information to a person who was not an eligible recipient amounts to a waiver of the confidentiality which would otherwise apply to the disclosures. But that was not the respondents’ argument. Besides such a contention would have to be pleaded in the defence (see Federal Court Rules 2011 (Cth), r 16.08) and it was not.

The disparagement of Mr Mount (agreed issues 8 and 9 and 17 to 20)

294    It is convenient to deal next with this question, which is the subject of agreed issues 8 and 9 (in relation to Mr Mount’s claim under s 1317AD) and 17 to 20 (in relation to Mr Mount’s claim under s 1317AC).

295    The allegation in the further amended statement of claim is that, over a period of about two months from about April 2021 to June 2021, Mr Tucker damaged Mr Mount’s reputation and financial position by disparaging him to “persons within the mining investment community”, including prospective employers or hirers of his services, and that the reason, or part of the reason, he did so was that Mr Mount had made disclosures which he alleged qualify for protection.

296    Mr Mount particularised this allegation as “oral assertions to several persons, whose identity is as yet unknown to [him]”, but who include Mr Jaja, Matthew Azar, Francis Joslin and Rogan Yates, “to the effect that [he] had acted fraudulently in relation to [DCM] and tried to undermine [its] business”.

297    Evidence on this question was given by Mr Mount, Mr Jaja, Mr Clare and Mr Tucker.

298    Mr Mount’s evidence contained a number of remarks made by various people to him and others. In submissions made before the close of evidence Mr Mount stated that he was “calling the persons identified in his [affidavits] as persons to whom Mr Tucker made detrimental statements to give direct evidence of the statements made”. Yet he only called two such people: Mr Jaja and Mr Clare.

299    As Mr Mount did not establish that the people who heard the remarks were not available to give evidence about them, a good deal of that evidence was hearsay and therefore inadmissible to prove the truth of the asserted facts: Evidence Act, s 64. The respondents conceded, however, that the evidence was relevant for a non-hearsay purpose (and therefore admissible under s 60), so that the objections which were initially taken to it were not pressed and the evidence was admitted. Indeed, the only purpose the evidence was proffered was to prove that the statements were made, not to prove the truth of them. Mr Mount maintained they were false and, although it was put to Mr Tucker in cross-examination that many of the statements he made were false, Mr Tucker insisted, in effect, that they were substantially true. Notably, Mr Mount did not seek an order under s 136 of the Evidence Act limiting their use to the non-hearsay purpose.

Matthew Azar

300    Mr Mount deposed that, after his employment with DCM was terminated, he sought work with Larus Energy Limited (Larus), a public company with oil and gas projects in Papua New Guinea, in which Mr Mount had shares and whose secretary, Matthew Azar, he had known for about 20 years.

301    Mr Mount deposed that he had a telephone conversation with Matthew Azar’s brother, David, on or about 29 April 2021 in which he told David Azar that he was available for work as a CEO or in a similar role and asked him whether there was an opening with Larus (“Does Larus have a CEO? Need to raise capital or need any corporate or strategic advice?”). He said that David Azar told him that “Larus will be difficult”, that “Matt had a call from George Tucker”; that “apparently George said you were a bad guy and a fraud and that you were trying to cripple and take over Dover Castle”; and that “it sounds like the same stuff Dicky was told by George, which Dicky has told me about”. Mr Mount said that he took “Dicky” to be a reference to Richard Colreavy.

302    Mr Mount deposed that on 7 May 2021 he had coffee with Matthew Azar in which he hoped to discuss future employment opportunities. He claimed to have had a conversation to the following effect:

MATT AZAR:    You know that I know George Tucker.

MR MOUNT:    Yeah, George is a good friend of mine!

MATT AZAR:    Well, based on what he told me, I doubt it. You need to bear in mind that George knows a number of shareholders and directors at Larus.

303    On 19 August 2021 Mr Mount emailed David Azar to tell him he was speaking to his lawyers about whether he could commence proceedings against people who were defaming him and was “aware from [Mr Azar] and/or others that apparently George Tucker has been defaming me about my time at Dover Castle”. He said he was seeking documents which record defamatory comments, such as text messages, social media messages or emails. He said he understood that “Richard and Matt” had said things to him about his time at DCM and asked him whether he could assist by providing documents.

304    David Azar replied:

I have nothing on text etc but do remember calls with Richard Colreavy (client of George) and Matt (my brother) who also has dealings with George and both expressed concern to me regarding your involvement with Dover as they had received information from George which was quite negative about your character and performance at Dover. I am not involved in Dover, the company, nor have dealings with George but logically I was surprised to hear these character defamations of you given my understanding that you were only involved with the Dover company for a very short period of time.

Hope this provides some clarity.

305    Mr Tucker denied that he had ever spoken directly to David Azar about Mr Mount or DCM. He also denied having had a conversation with Matthew Azar in which he told him that Mr Mount was a “bad guy”, “a fraud” or that Mr Mount was “trying to cripple and take over [DCM]”. He admitted to telephoning Matthew Azar on or about 20 August 2021 to inform him that Mr Mount had mentioned him in materials he had filed in the Fair Work Commission and deposed that they had a conversation to the following effect:

MR TUCKER:    Your name popped up in relation to Ryan Mount in legal documents he filed.

MATT AZAR:    Bloody hell, that doesn’t sound right. What the hell’s going on?

MR TUCKER:    Some defamation case by Mount.

MATT AZAR:    I don’t want to be involved in it. I’m very disappointed that my name’s popped up.

MR TUCKER:    It popped up because your brother mentioned your name.

306    As neither Matthew nor David Azar gave evidence, this aspect of Mr Tucker’s evidence is unchallenged.

Wayne Clare

307    Mr Clare is a shareholder of DCM. He had also been a shareholder of Axiom.

308    Mr Mount deposed that he had known Mr Clare for over 20 years and had acted as his financial advisor from about 2008 to mid-2010. He said that Mr Clare, together with his wife and daughter, attended Mr Mount’s wedding in the Solomon Islands in 2015. He also said that they spoke “from time to time” from about 2015 to 2019 and that by about early 2021 they were living in the same street. He annexed to his affidavit a text exchange which he said discussed his return and plan to “catch up”. The first message, sent on 19 February 2021, was from Mr Mount. It read:

Hello neighbour. Just moved into Malabar. If you are every thirsty, I’m nearby. Mounty

309    Evidently Mr Clare replied: “Macca said he saw u the other day we’ll have catch up”. Then on 10 March Mr Clare sent this message: “Hey mate give me a call”.

310    Mr Mount also deposed that on or around 11 or 12 March Mr Clare texted and rang him congratulating him and expressing his excitement on his imminent appointment as CEO of DCM. But no such text message was produced and evidence given by Mr Clare was inconsistent with Mr Mount’s account. Evidence elicited from Mr Clare in cross-examination indicated that it was highly unlikely he had rung Mr Mount to congratulate him on his impending appointment as CEO of DCM and scarcely conceivable that he was enthusiastic about it.

311    Considered as a whole, Mr Clare’s evidence did not assist Mr Mount’s case.

312    Mr Clare’s evidence in chief was as follows or to the following effect.

313    Mr Clare testified that he had known Mr Mount for over three decades and classed him as a good friend up until 2020.

314    He received a call from Mr Tucker in April 2021 in which Mr Tucker told him that Mr Mount had been dismissed; “that he had turned whistleblower on the company”; and that Mr Perdikaris and Mr Mount were “trying to take over the company”. Mr Tucker also told him that Mr Mount had closed down the mine for safety reasons. Mr Clare was “quite concerned as a shareholder” about what was happening with the company.

315    Although Mr Mount had moved into the house next door to him in about 2021, the two men have not spoken to each other since about June 2021.

316    In cross-examination Mr Clare testified that he rang Mr Tucker after he learned that Mr Mount was going to be appointed CEO of DCM and “voiced [his] objection to [the appointment] as a shareholder”. When asked why, he replied:

Well, I had been involved in other dealings with Mr Mount, Axiom being one and several other – several other investments which had gone bad and I just didn’t think he was up to the job.

317    Mr Clare agreed that he had a conversation with Mr Tucker about the board meeting on 31 March and, in that conversation, Mr Tucker told him something along the following lines:

You won’t believe what has just happened. Matt and I have just been forcibly removed from a board meeting by two big tattooed thugs organised by Mount and Perdikaris. Obviously, my position is that the ability for the board to work as one is untenable. Perdikaris and Mount believe that they have just booted us from the company. We’re obviously not going to walk away. If he thinks we’re going to walk away he’s crazy. I have an obligation to shareholders. I will let you know when there are any developments.

318    Mr Clare agreed that he remembered expressing his disbelief and inquiring of Mr Tucker about what was to happen next. He recalled that Mr Tucker said something like:

Well, they believe that they have booted me and Matt from the company, but there is no way we are walking away.

319    Mr Clare also remembered Mr Tucker telling him that they had called Phil Christensen about removing Mr Perdikaris as a board member and Mr Mount as Acting CEO and assuring him that he would not “walk away” from his responsibilities to shareholders and clients. Mr Clare asked Mr Tucker to let him know what happened and to “keep [him] in the loop”.

320    Importantly, Mr Clare agreed that Mr Tucker’s reference to Mr Mount being a whistleblower was made “later” in April or in May, that Mr Tucker had referred to Mr Mount claiming that he was a whistleblower, and that Mr Tucker did not say that Mr Mount was sacked for that reason.

Richard Colreavy

321    Mr Mount deposed that he has known Richard Colreavy for about 15 years. He was a client of Mr Mount when Mr Mount was a stockbroker and also a shareholder of Axiom. He said they had holidayed together overseas and they attended each other’s wedding, also held overseas.

322    In about late July 2021 Mr Mount said that he telephoned Mr Colreavy. He said he told Mr Colreavy that he was concerned (from not having been able to speak to him during the first few days he was at DCM and from what he was hearing from others) that Mr Tucker was saying that Mr Colreavy was “off him” and asked Mr Colreavy whether he was upset about his investment in Axiom. Mr Colreavy replied:

I don’t think I lost on Axiom, actually think I made money. But obviously what George said did get me thinking. I did discuss it with Azar. I’ve put a lot into Dover. So has a mate of mine who has another F45 gym – he’s obviously a bit worried too. But I don’t intend repeating what George told me about you to anyone.

323    This evidence did not disclose what Mr Tucker actually said to Mr Colreavy. But Mr Mount also tendered an email Mr Tucker sent to Mr Colreavy on 11 May 2021. The subject of the email was “Update on Dover over the last 10 weeks”. Although the email was sent to Mr Colreavy alone, its contents appear to have been pasted from another email, as it is addressed to “Dear All”. It opens in the following way:

I am writing this email to you all to explain what has happened with Dover over the last little while.

While the asset itself is in great shape and we are as confident as ever with the success of Dover Castle there has been quite frankly what amounts to generally poor human behaviour surrounding our company.

This letter is an attempt to describe to you all the sequence of events since late January. …

324    Mr Tucker testified that what he sent to Mr Colreavy was a draft for him to read and comment upon before he decided whether to send it to the whole shareholder group. There is no evidence to the contrary and no evidence to indicate that the email was sent to anyone else.

325    Mr Mount deposed that the email contained a number of incorrect statements. These were the statements he identified as incorrect:

    shareholders are trying to wind up Axiom, when Mr Mount knew of no such application or request;

    Mr Mount told the board “without any data that the ‘plant should never be turned on’”, when he never said that and when there was no plant at the site to be turned on;

    Mr Mount said that Gekko (a company that supplies mining processing equipment, which he deposed provided “the test work”) “destroyed small mining companies”, when he did not, rather he expressed concerns about whether Gekko products were appropriate for DCM;

    Mr Mount said that DCM’s tailings were “not commercial”, when what he actually said was that DCM needed to obtain the data necessary to determine whether they were commercial or economically viable;

    Mr Mount said that DCM “should do a discounted capital raise”, when he did not;

    Mr Mount and Mr Perdikaris were “making a play for Dover Castle”, when that was untrue and Mr Mount did not intend to purchase shares from capital raisings;

    Mr Mount tried to destroy the company’s credibility “by slighting the work of … geologists including John Nethery, Shane Marden and Nick Oliver”, when Mr Mount had not done so and had actually relied on their insights as the basis for some of his concerns;

    “at the following board meeting our third in a row we made it known that we were going to terminate Ryan’s contract”, when as far as Mr Mount was aware there had only been two board meetings after he had been hired by DCM and he did not hear any discussion of his termination (although he was aware of what was said in his absence at the 25 March meeting); and

    Mr Mount was “involved in thugs acting in an intimidating manner” at the 31 March board meeting, when he was not involved and when he did not witness any such conduct.

326    When it was put to Mr Tucker in cross-examination that these matters were not true, Mr Tucker denied each proposition except for the second. Mr Tucker said he could not recall whether Mr Mount said that the plant should never be turned on.

327    In the document Mr Tucker also said that Mr Perdikaris and Mr Mount had an agenda:

[T]o get rid of the old guard and the shareholder support that existed for Dover by rubbishing the asset and driving down its perceived value. Chris and Ryan did this by saying the product was a fraud and all the data surrounding the asset was a fake.

328    Mr Tucker accepted that Mr Perdikaris and Mr Mount did not use these words but testified that in his opinion that is what they were saying. He denied that he was exaggerating, accepted that his language was strong, but he maintained that his representation was accurate.

329    It was apparent from the cross-examination that some of the statements made in the email were exaggerated or otherwise misleading if not false. Much of it was intemperate. However Mr Tucker insisted that the email was never sent to anyone but Mr Colreavy. His evidence was that on reflection, and after consulting with Mr Colreavy, he decided not to send it to anyone else. There is no evidence to the contrary. And such evidence as there was did not suggest that the email was distributed more widely. While it was addressed to all shareholders, neither Mr Jaja nor Mr Clare claimed to have received it.

330    In any event, the statements contained in the email to Mr Colreavy are outside the scope of the particularised case, which relies solely on “oral assertions”. While the further amended statement of claim does say that “further particulars will be provided after discovery”, no application was made for discovery and no application was made to expand the scope of the particulars.

Freddy Jaja

331    With respect to Mr Jaja, Mr Mount’s evidence was as follows.

332    Notwithstanding the period alleged in the pleading (April to June 2021), Mr Jaja telephoned him a number of times from early April until September 2021 and reported a number of conversations he had had with Mr Tucker.

333    The first of those conversations was on or about 9 April 2021. In that call Mr Tucker informed Mr Jaja that a feasibility study would be completed within the next week or two and that Mr Mount was “misleading and manipulating” Mr Perdikaris. Mr Tucker also said words to the effect that Mr Mount had been “acting unethically to try to destroy the company and then steal it from us, and shut down the mine for no reason and for bullshit safety reasons”. Mr Tucker said that Mr Mount was working against shareholders of Axiom as well, even in recent times. In the same conversation Mr Jaja said that Joe Zarantenello had told him that he had heard the same thing from Mr Tucker. Mr Jaja told Mr Mount that he was “concerned about this stuff”.

334    Mr Mount deposed that this put him in a very uncomfortable position with Mr Jaja and his family. Mr Jaja had been a friend, a client, and an investor in the companies in which Mr Mount had been involved, including Axiom. He had attended Mr Mount’s wedding and other special family events and Mr Mount’s wife is godmother to his child. He said the two families were due to holiday together during the coming weekend. But he did not say that the holiday did not go ahead as planned or that Mr Jaja exhibited any ill will towards him during that period, or that his behaviour towards him or in his presence was any different.

335    The second conversation was on 12 April 2021 when Mr Mount was visiting Mr Jaja and Mr Jaja put the phone on speaker so that Mr Mount was able to hear what Mr Tucker said. Mr Mount deposed that Mr Tucker said words to the effect:

Ryan’s a very bad dude. He is a complete fucking fraud. He is trying to drive down the value of the company. He’s a con. He has no shame. He says there is no data but it’s all there! It’s a massive valuable asset. I don’t blame Chris, it’s actually Ryan who’s misled Chris. I have no problem returning your money if you don’t want to be in the investment. No problem.

336    It appears from Mr Jaja’s evidence that this conversation took place during the holiday Mr Mount mentioned because Mr Jaja testified that he took Mr Tucker’s call while the two families were at his (Mr Jaja’s) holiday house.

337    The third conversation occurred on 19 August 2021 when Mr Jaja asked Mr Mount what it was that he and Mr Perdikaris were actually doing to DCM. Mr Jaja told him that “George promised to buy my shares but is suggesting he can’t or is delayed in doing so because of you and Chris”. Mr Mount replied along the following lines:

I’m not entirely sure what exactly Chris is up to but I have a standard wrongful dismissal claim that is following the normal legal process. I’m not sure how that would dramatically affect the day-to-day functions of the business or your transaction with George or the company.

338    After this call, Mr Jaja forwarded a text message that Mr Tucker had sent him on 15 July 2021. The message reads (without alteration):

Not yet mate, wasting my time and the companies time on Ryan and Chris’s bullshit, don’t understand why Chris is attempting to damage his own investment, he’s a fool.

339    The final conversation occurred in about September 2021 when Mr Jaja rang Mr Mount and told him words to the following effect:

Mr Tucker’s finally arranged to buy back my shares for what I bought them for. When we met, he continued to talk about you. He said things like, “this whole thing is Ryan Mount’s fault”, and that you’re a fraud.

340    Mr Mount’s evidence was largely confirmed by Mr Jaja.

341    Mr Jaja testified that in early April 2021 Mr Tucker told him that Mr Mount was acting unethically, manipulating Mr Perdikaris, devaluing DCM stock or what was happening at the mine, highlighting a number of safety issues, closing down the mine, and running the mine down in order to purchase it. He said that he had several other conversations with Mr Tucker in which he made similar comments about Mr Mount.

342    Mr Jaja confirmed that Mr Tucker was on speaker when he took a call from him at his holiday home while Mr Mount was visiting, which I will take it occurred on or about 12 April 2021. When asked what he recalled of the conversation Mr Jaja replied:

Oh, he – well, he described – he described exactly what I’ve – well, some of the things I’ve mentioned and that he’s a fraud – he’s fraudulent, he is the worst guy he has ever met, that he’s – you know, the fact that he’s taking – well, he wants to, you know, rubbish the company down so he can take over. He is manipulating Mr Chris Perdikaris.

343    After the first conversation, Mr Jaja said that he told Mr Tucker that he no longer wanted to invest in DCM stock and wanted to sell his shares. Mr Jaja testified that he could not believe what Mr Tucker was telling him and was concerned to know whether what Mr Tucker was telling him was the truth but he did not want to take any risk. He also said that Mr Tucker “sort of convinced [him]” and had convinced others and he wanted to “get out”. When asked whether he had spoken to other investors, he indicated he had spoken to two. He could not remember the name of one of them but he named Joe Zarantenello as one investor to whom he had spoken and who also sold his shares in DCM.

344    Mr Jaja was not asked and did not volunteer that he thought any less of Mr Mount because of what Mr Tucker had said to him and told the respondents’ counsel during cross-examination that he regards Mr Mount as a friend.

345    None of Mr Jaja’s evidence about these conversations was challenged in cross-examination. After he was taken to an exchange of text messages, he confirmed that he asked Mr Tucker on 4 May 2021 to “organise for [him] to get out by the end of the week”, that Mr Tucker told him he would send him an off-market transfer form, and that the share transaction went through sometime in early or mid-July.

346    Mr Tucker admitted that he had a telephone conversation with Mr Jaja on or about 9 April 2021. He said he had several telephone conversations with him around the time Mr Mount’s contract was terminated regarding the status of matters at DCM. Mr Tucker denied that he told Mr Jaja that DCM would “have a feasibility study completed in the next week or two”, as Mr Mount had deposed, but did not deny the rest of the conversation. Mr Jaja did not mention anything in his evidence about a feasibility study. Mr Tucker also admitted that he called Mr Jaja on 12 April 2021 and did not deny that he told him the things attributed to him. When Mr Mount’s account of what Mr Tucker was said to have told Mr Jaja (set out above at [335]) was put to Mr Tucker in cross-examination, he agreed with the cross-examiner. Despite the concession, for some reason it was again put to Mr Tucker that he said those words to Mr Jaja on 12 April. This time Mr Tucker qualified his answer. Mr Tucker’s response to that question was as follows:

I admit I said some things to Freddie. I don’t know if those are exactly what I said. I said that I believed that Ryan was running down the value of the asset. I can’t say exactly that that’s what I said. I can’t remember the conversation. But it would have been along the lines of what I have already stated – that I thought Ryan was trying to run down the value of the company and that he was part of bringing thugs into a boardroom. And – those things, yes, but I’m just going off Freddie’s recollection now.

Frank Joslin

347    Frank Joslin is a shareholder of DCM and was formerly a shareholder of Axiom. Mr Mount called Mr Joslin on about 28 July 2021 and they had a conversation to the following effect:

MR MOUNT:    Frank, recently your name and some others came up in a court hearing document. It referred to you requesting my termination as CEO. I fully respect each shareholder's right to voice their opinion and their rights, but I just wondered if you could provide me some insight?

MR JOSLIN:    It was nothing personal, Ryan. George told Nick and I that you had closed down the mine site for no valid reason and with no explanation.

MR MOUNT:    Oh, okay.

MR JOSLIN:    Definitely nothing personal, Ryan. Nick and I also wanted there to be a process for the appointment of the CEO. I have also voiced those matters to George and others. We then got to a point of serious concern when we were told you had shut the mine site down. George was not happy and we were naturally not happy when it was done for no valid reason.

MR MOUNT:    Frank, just to be clear I have no problem with shareholders voicing their views to Directors. That is what directors are there for. However, just to be clear I did have good reason for requesting the mine site be suspended but there is no need for us to debate that.

348    So this is the statement that Mr Tucker is said to have made to Mr Joslin: that Mr Mount closed down the mine site for no valid reason or explanation. Mr Tucker admitted to making the statement to Mr Joslin. But it is not the allegation as particularised in the pleading.

Rogan Yates

349    Mr Mount deposed that on about 18 June 2021 he met Rogan Yates, a friend and a former Axiom shareholder who told him that he had recently been approached by Mr Tucker and that Mr Tucker had asked him whether he had heard “what is going on with Ryan and us”. Mr Tucker deposed that he met Mr Yates while he was working at Yellow Brick Road in about 2010 and he became a client of his after Mr Mount left Yellow Brick Road.

350    According to Mr Mount, Mr Yates replied that he did not really know, which prompted the following response from Mr Tucker:

Well he was doing the wrong thing. He was trying to steal the company. Trying to take it over with Chris Perdikaris. It was just bad stuff. We actually tried to settle with Ryan but he is too stubborn and just wanted the money immediately. We offered him a good payment but he refused to be paid later. Unbelievable.

351    Mr Mount said that this put him in a very difficult situation with Mr Yates because he was actively seeking his assistance and support to obtain employment in the market by leveraging his network and he had also loaned him money since his employment had been terminated.

352    Mr Tucker denied telling Mr Yates that Mr Mount was trying to steal the company but admitted that he told him words to the effect that Mr Mount came into DCM and was trying to undertake a deeply discounted raise.

Consideration

353    In order to make out this aspect of his claim under s 1317AD(1), Mr Mount must adduce or point to evidence that suggests a reasonable possibility that Mr Tucker engaged in detrimental conduct by making disparaging remarks and that those remarks damaged his reputation. If he meets that evidentiary burden, Mr Tucker has the onus of proving that Mr Mount’s claim under s 1317AD(1) is not made out. For the purposes of his claim against Mr Tucker under s 1317AC(1), Mr Mount bears the legal onus of proving all elements.

354    In A Code of the Law of Actionable Defamation, (2nd ed, Butterworth, 1923) at 3, Spencer Bower defined “reputation” as “the esteem in which [a person] is held, or the goodwill entertained towards him, or the confidence reposed in him by other persons, whether in respect of his personal character, his private or domestic life, his public, social, professional, or business qualifications, qualities, competence, dealings, conduct, or status, or his financial credit”. In Radio 2UE Sydney Pty Ltd v Chesterton (2009) 238 CLR 460 at [2]–[3] French CJ, Gummow, Kiefel and Bell JJ adopted this definition and went on to say that “[a] person’s reputation may therefore be said to be injured when the esteem in which that person is held by the community is diminished in some respect”.

355    Mr Mount submitted that damage to reputation is presumed. That is true for the law of defamation once publication is proved and if the defendant fails to establish a defence. But this is not a defamation case. There is nothing in the text of the Corporations Act to suggest that the Parliament intended that the principles applying in defamation proceedings should be applied to actions under s 1317AD of the Corporations Act and I was not taken to any extrinsic material that bears on the question. It seems unlikely that this was Parliament’s intention as none of the defences available to a defendant in a defamation case, including justification and contextual truth, both of which are concerned with the substantial truth of a defamatory publication, are available under the Corporations Act to a person who is alleged to have damaged the reputation of a whistleblower. Mr Mount merely proceeded on the basis that this was, in effect, a de facto defamation case without any of the strict pleading rules that apply in defamation proceedings or the protections that law affords a defendant.

356    In Rankin v Marine Power International Pty Ltd [2001] VSC 150; 107 IR 117 at [247] Gillard J observed that “[i]t cannot be denied that summary dismissal will have a detrimental effect upon the employee’s reputation”. Toohey J made a similar observation in Williams v Printers Trade Services (1984) 7 IR 82 at 85, when he said that summary dismissal “not only has financial implications for the employee but carries with it a certain obloquy”. But Mr Mount did not contend that his reputation was damaged by his summary dismissal.

357    Mr Mount also argued that, when it comes to the assessment of damages (strictly, compensation), the Court should take into account “the grapevine effect”, by which he meant the phenomenon recognised by the law that, “by the ordinary function of human nature, the dissemination of defamatory material is rarely confined to those to whom the matter is immediately published … the ‘poison’ of a libel may spread well beyond the confines of the person to whom it was immediately published”: Belbin v Lower Murray Urban and Rural Water Corporation [2021] VSC 535 at [217] (Kaye J). It is common ground, however, that the grapevine effect is not a doctrine of law or a phenomenon of life which operates independently of evidence: Palmer Bruyn & Parker Pty Ltd v Parsons [2000] NSWCA 53; Aust Torts Reports ¶81-562 at [37] (Heydon JA, with whom Stein JA and Foster AJA agreed at [1] and [55] respectively); Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 at [89] (Gummow J). The parties were at odds about its operation in the present case. Notably, as counsel for the respondents submitted, Mr Mount’s pleading was confined. It did not include an allegation that the disparaging remarks allegedly made by Mr Tucker were (or were likely to have been) disseminated beyond the people to whom they were made.

358    I accept that Mr Tucker made oral assertions about Mr Mount to Mr Jaja and Mr Clare, Mr Joslin and Mr Yates which had the potential to damage his reputation in that they were of a kind that could diminish the esteem in which he might have been held. They were certainly defamatory.

359    In the absence of direct evidence from Matthew and David Azar, Mr Joslin and Mr Yates, however, I place no weight on the accounts given by Mr Mount of his conversations with them save with respect to those parts Mr Tucker admitted or did not challenge. The evidence was received in circumstances in which they were expected to give evidence. Subpoenas for their attendance had been issued, outlines of evidence had been served, and no explanation was given for their absence. In those circumstances, I have no confidence in the reliability of Mr Mount’s account. The affidavit in which the evidence from Mr Mount appeared was affirmed in November 2022, more than a year after the conversations are said to have taken place and Mr Mount did not profess to have made any contemporaneous notes of these conversations.

360    Still, Mr Tucker admitted to making statements to other shareholders of DCM about Mr Mount “bringing thugs” into a board meeting and trying to run down the value of the company. Having regard to Mr Jaja’s evidence and Mr Tucker’s admission that he had spoken to other shareholders, I am persuaded that it is more likely than not that Mr Tucker did at least use language of the kind he used in his conversations with Mr Jaja when speaking to other shareholders after the 31 March board meeting. On the other hand, there is no evidence that the remarks were repeated in social media posts or, indeed, that Mr Mount was disparaged at all in social media. And Mr Mount did not plead that the statements Mr Tucker were disseminated beyond the people to whom they were made.

361    Furthermore, no witness testified that he thought any less of Mr Mount after Mr Tucker had made the disparaging remarks than they thought of him beforehand. That question was not explored. Mr Jaja testified that he continued to regard Mr Mount as a friend.

362    To the extent that Mr Clare’s attitude towards Mr Mount changed, it is not apparent that the change occurred as a result of Mr Tucker’s remarks. On his own account, he had a dim view of Mr Mount when he learned of his appointment as Acting CEO of DCM. Contrary to the evidence Mr Mount gave, he did not support Mr Mount’s appointment. In fact he objected to it and told Mr Tucker he considered he was unfit for the job because of his previous dealings with him.

363    Mr Mount acknowledged in his closing written submissions that he had not adduced evidence of Mr Tucker disparaging him to prospective employers or hirers or of damage to his financial position by reason of Mr Tucker’s statements.

364    I accept that it is possible that some people to whom Mr Tucker disparaged Mr Mount thought less of him after hearing Mr Tucker’s account, but I am not satisfied that Mr Mount has proved that his reputation was in fact damaged by Mr Tucker’s intemperate and defamatory remarks.

365    However, on the assumption that damage to reputation should be presumed or that an inference to that effect should be drawn from the evidence, I will consider whether Mr Tucker has proved that his remarks were not actuated in whole or in part by a belief or suspicion he may have had that Mr Mount made a disclosure that qualifies for protection under Pt 9.4AAA of the Corporations Act.

366    It will be recalled that Mr Tucker deposed that he was unaware that any of the relevant “disclosures” qualifies for protection under Pt 9.4AAA. Indeed, he deposed that he was unaware of the existence of “the specific whistleblower protections under Pt 9.4AAA” until on or about 27 April 2021 when Mr Mount filed his general protections application in the Fair Work Commission. He also denied that he made any statements about Mr Mount because of, or for reasons which included, that he believed or suspected that he had made such a disclosure.

367    In view of the evidence elicited from Mr Clare in cross-examination, I am satisfied that the reference by Mr Tucker in his conversation with Mr Clare to Mr Mount being a whistleblower was made in the context of Mr Mount referring to himself as a whistleblower and that the conversation in which he did so occurred after the respondents had been served with the Fair Work Commission application. Mr Clare’s evidence in this respect corroborates Mr Tucker’s evidence that he only became aware of the so-called whistleblower reports after the initiation of legal proceedings and that any protected disclosures played no part in his decision to denigrate Mr Mount to shareholders.

368    Without more, nothing in the content of Mr Tucker’s communications with Mr Colreavy, Mr Jaja, Mr Joslin or Mr Yates indicates that they were actuated in whole or in part by a belief or suspicion that Mr Mount made a disclosure that qualifies for protection under Pt 9.4AAA.

369    It follows that I am satisfied that Mr Tucker has discharged his onus of proof for the purposes of the s 1317AD claim and that Mr Mount has not discharged his onus of proof for the purposes of the s 1317AC claim. Accordingly, Mr Mount’s claims against Mr Tucker for damage to his reputation must be dismissed. That disposes of agreed issues 8 and 9, and 17 to 20.

The decision to remove Mr Mount (agreed issues 6, 7, 11, and 12 to 14)

The issues

370    The elements of the alleged contravention of s 1317AC and the conditions for making an order under s 1317AD are the same: first, that DCM dismissed Mr Mount from his employment; second, that the dismissal caused him a detriment; third, that at the time his dismissal DCM believed or suspected that he had made a disclosure that qualifies for protection; and fourth, that the belief or suspicion was the reason or part of the reason DCM decided to dismiss him.

371    It was common ground that the first two elements/conditions were made out.

372    Mr Mount submitted that the respondents admitted in para 73(e) of their defence that Messrs Tripp, Haindl and Tucker were involved in the contravention of s 1317AC. That submission is incorrect. The respondents merely admitted there that they were involved in the decision to terminate his contract. In para 73(c) they denied that they were involved in a contravention by DCM of s 1317AC and in para 73(e) they denied that s 1317AD(1) was “satisfied in relation to their conduct”. Issues 10 and 11 of the agreed statement of issues are whether s 1317AD(2B) applies to the alleged contraventions of s 1317AD for which Mr Mount seeks compensation under s 1317AE. That position did not change.

373    It will be recalled that s 1317QB(1) provides that, in proceedings for a declaration of contravention or an order against a person for a contravention of a civil penalty provision under Pt B Div 1, it is not necessary to prove the alleged contravener’s state of mind. The respondents submitted (and Mr Mount did not argue otherwise) that s 1317QB(1) does not apply here because the alleged contravener’s state of mind (in this case its belief or suspicion that the putative whistleblower made a disclosure qualifies for protection) is expressly included as an element of s 1317AC(1): see s 1317QB(4). Although in his opening submissions Mr Mount’s position was different, by the time of closing submissions it was common ground that for the purposes of s 1317AD, the respondents bore the legal onus of proving the third and fourth conditions but that Mr Mount bore the legal onus or proving those matters in order to satisfy the Court that the respondents had contravened s 1317AC.

374    It follows that the substantive issues are first, whether any or all of Messrs Haindl, Tripp and Tucker had the requisite belief or suspicion at the time DCM decided to dismiss Mr Mount, if so, whether that belief or suspicion was at least one of the reasons they made that decision.

375    Each of Mr Haindl, Mr Tripp and Mr Tucker deposed that they were unaware of the existence of the whistleblower protections in Pt 9.4AAA of the Corporations Act until after the Fair Work Commission proceeding was instituted.

376    I accept the respondents’ submission that s 1317AD(1)(b) will not be satisfied if DCM disproves that its decision makers believed or suspected that Mount had made a disclosure that qualifies for protection. A “disclosure qualifies for protection” if it satisfies the terms of s 1317AA. Section 1317AA, it will be recalled, relevantly qualifies a disclosure for protection under Pt 9.4AAA if the discloser is an eligible whistleblower in relation to a regulated entity; the disclosure is made to an eligible recipient in relation to the regulated entity and sub-s (4) or (5) applies to the disclosure. As I have already observed, there is no dispute that Mr Mount was an eligible whistleblower in relation to DCM; that DCM was a regulated entity; and that the disclosures in the First Whistleblower Report were made to eligible recipients in relation to the regulated entity. The dispute turns on whether sub-s (4) was satisfied. Subsection (4) applies Mr Mount had reasonable grounds to suspect that the information he disclosed concerned misconduct, or an improper state of affairs or circumstances, in relation to DCM.

377    Contrary to the respondents’ submission, however, I do not accept that the respondents can escape liability if they only prove that they did not know about the whistleblower provisions in the Corporations Act and the conditions for protection in s 1317AA. Neither of the two authorities they cited (which involved disclosures under the PID Act) addressed the point, at least squarely, and both involved litigants in person. In the circumstances, it is highly unlikely that the judgments were informed by full argument on the subject.

378    It is trite that ignorance of the law is no excuse. As Dowsett and Gleeson JJ observed in Gore v Australian Securities and Investment Commission (2017) 249 FCR 167 at [15]:

[I]t is settled that in general, it is not necessary to prove knowledge of the law, or knowledge that a particular fact situation attracts legal consequences. That proposition applies to the proof of both principal and accessorial liability.

379    I am of the opinion that s 1317AC(1)(c) and s 1317AD(1)(b) will not be satisfied if, at the time of the detrimental conduct, DCM’s decision makers neither believed nor suspected that Mr Mount had made a disclosure to an officer or senior manager of DCM (that being the only class of eligible recipient to which Mr Mount claimed to have made the relevant disclosures) of information he had reasonable grounds to suspect concerned misconduct or an improper state of affairs in relation to DCM. That means that, for the purpose of the claim under s 1317AD, DCM also bears the onus of proving that there were no reasonable grounds for Mr Mount’s suspicions.

Whose state of mind is attributable to DCM in relation to the decision to terminate Mr Mount contract?

380    Mr Mount submitted that he had discharged his onus of proving that DCM had the requisite state of mind with respect to all the disclosures which qualifies for protection. Although in his pleading he alleged that Mr Haindl and Mr Tucker were knowingly concerned in DCM’s decision, in his closing submissions he contended, in effect, that he could prove DCM’s state of mind in relation to this question through Mr Perdikaris, Mr Stewart and Mr Tripp. Putting to one side the question of whether or not Mr Stewart was an eligible recipient of the disclosures eligible for protection, neither Mr Perdikaris nor Mr Stewart was alleged to have been involved in DCM’s decision to terminate Mr Mount’s contract, so whatever knowledge they may have had is irrelevant. It follows that the only person whose state of mind could be attributed to DCM in relation to this decision is Mr Tripp’s.

The evidence upon which DCM relied

381    Each of Mr Haindl, Mr Tripp and Mr Tucker professed to have had no belief or suspicion that any of the putative disclosures (whether by means of the two Whistleblower Reports or otherwise) was “one that was protected by the whistleblower provisions of the Corporations Act”. Moreover, each professed not to have such a belief or suspicion when he made the decision to terminate Mr Mount’s “engagement” or “appointment” or to know of the whistleblower protections in Pt 9.4AAA at the time. It will be recalled that neither the First nor the Second Whistleblower Report was sent to Mr Haindl or Mr Tucker, and that Mr Tripp, who was sent a copy of both, denied reading either of them or the email to which they were attached. There is no evidence to indicate that Mr Tripp provided them with copies.

382    Mr Haindl deposed that he only decided to terminate Mr Mount’s “appointment” because of what occurred at the 31 March board meeting. Mr Tripp’s position was much the same. Mr Tucker’s reasons were more complex.

383    I will come to those reasons in due course. Before going any further, however, it is necessary to consider what happened at the 31 March board meeting and over the ensuing days.

What happened at the 31 March board meeting?

384    As I mentioned earlier, the board meeting was held at Mr Perdikaris’s house. It started at around 10am and concluded at around 4pm. It was conducted around the dining room table. Mr Haindl, Mr Perdikaris, Mr Tripp, Mr Tucker, Mr Mount and Mr Stewart attended. So, too, did Melissa Mason, an assistant to Mr Perdikaris. It appears that Ms Mason was recording the meeting. Although the transcript of the meeting does not refer to her, it was an agreed fact that Mr Perdikaris’s wife, Cindy, who was a shareholder in DCM was also present.

385    At the outset of the meeting Mr Mount referred to a report he had prepared outlining his activities over the previous fortnight since his appointment; the financial position of the company; disagreements he had with various assertions apparently made in the presentation by Messrs Haindl and Hancock at the previous board meeting and the lack of documentary evidence to support others; and identifying “urgent and critical steps” to ensure the company’s survival and success.

386    Thereafter there was a free-ranging discussion about a range of matters it is unnecessary to traverse.

387    During the meeting Mr Perdikaris handed out the McInnes Wilson advice.

388    The advice related to potential recovery actions that might be taken against Logicca, DCM’s former accountants. The advice contained some preliminary remarks based on the information available to Ms Graham at the time. On the face of the material she had seen, Ms Graham concluded that Logicca had breached its duties to DCM. She pointed out that, if a claim were made against Logicca:

Logicca will claim proportionate liability as against Mr Nettelbeck and Mr Haindl, as their failure to properly undertake their directors' duties and ensure accuracy of accounts and segregation of duties (the recording of loan documents, approval of expenditures etc) caused or contributed to the loss.

389    Ms Graham also foreshadowed the following possibilities: an ASIC investigation; a claim for damages by DCM against “the relevant directors” (Messrs Nettelbeck and Haindl); an order that damages awarded against the company be paid by the directors; shareholder actions against DCM and the directors and/or the accountants.

390    She concluded with advice about the “way forward”. Relevantly that advice included the following paragraphs:

25    These issues of potential breaches and liabilities, not just by Logicca but also by directors, need to be raised to the board (and possibly shareholders). I apologise for doing so in a rushed format, but note that the board meeting is less than a day away.

…

28    Two strong warnings (to reduce the risk of further allegations) are that:

(a)    Corporate governance must be properly implemented going forward; and

(b)    Any directors from the time of these breaches should excuse themselves from directors meetings for any future discussions about potential recovery against Logicca (or the directors) due to potential conflicts of interest.

(Emphasis added.)

391    The McInnes Wilson advice, presented to the 31 March meeting, contained no direct or indirect reference to Mr Tucker. Ms Graham told Mr Perdikaris in a telephone conversation with him on 23 March that, if what FTI said was true, “all directors at the time breached their duty by allowing this to happen and not taking even the most reasonable checks and precautions expected of directors …”. She also said that “if DCM sues Nettelbeck, he will claim [that] the existing directors are also liable for their breaches in not having proper checks and allowing such losses”. She said that Mr Haindl should be aware he was at risk of being sued by Mr Nettelbeck. “The existing directors” and the “directors at the time” were plainly references to Mr Nettelbeck’s fellow directors, as Ms Graham confirmed in cross-examination. Mr Tucker was not a director of DCM at that time. Her advice provided no basis for requiring Mr Tucker to absent himself from discussions about potential litigation, let alone to leave the meeting altogether.

392    At about 7.13pm the day before the meeting Ms Nygh emailed Mr Perdikaris and Mr Mount a document setting out provisions of the Corporations Act and parts of DCM’s constitution relating to conflicts of interest and voting at directors’ meetings. In the covering email she wrote:

In summary the directors of Dover Castle are obliged under the Corporations Act and the Dover Castle Constitution to disclose material personal interests relating to the affairs of the company either at the time that a conflict arises or before the conflict arises subject to certain exceptions set out in sub section 191(2) including relevantly where the other directors are aware of the nature and extent of the interest and its relation to the affairs of the company. Notice of a material personal interest must include details of the nature and extent of the interest and the relation of the interest to the affairs of the company and must be recorded in the minutes of the directors meeting (s191(3)). A director can give a standing notice to the other directors about the interest under s192 but that standing notice will cease to have effect if the nature and extent of the interest materially increases above that disclosed.

If notice is given of a director’s material personal interest in accordance with s191 and 192 of the Corporations Act, then the director can vote on any matter that relates to the interest under clause 8.4 of the Dover Castle Constitution and the director may retain the benefits under the transaction. However, if notice of the material personal benefit is not given, then Dover Castle may have a claim against the director in equity to account for the benefit that the director received from the transaction.

Furthermore, under section 193 of the Corporations Act the disclosure obligations operate in addition to any general law rule about conflicts of interest. In particular the laws relating to directors duties still apply. Under sections 180-184 of the Corporations Act and at general law directors of Dover Castle have a duty to exercise their powers and discharge their duties as directors with care and diligence (s180), in good faith in the best interests of Dover Castle and for a proper purpose (s181); must not improperly use their position to gain an advantage for themselves or someone else or cause detriment to Dover Castle (s182); and must not improperly use information gained as a director, officer or employee of Dover Castle to gain an advantage for themselves of someone else or cause detriment to Dover Castle (s183).

Breaches of sections 180-183 may give rise to civil penalties and liability to Dover Castle even if the director’s material personal interest has been disclosed.

A breach of the duties in s181 -183 that is made recklessly or dishonestly can give rise to criminal liability under s184 of the Corporations Act.

Directors who have interests in other companies or personal interests that would prevent them from complying with their duties owed to Dover Castle (eg from being able to act in the best interests of Dover Castle) should resign as directors of Dover Castle.

393    None of the other directors were copied into the email. Mr Mount did not refer to the email in his first affidavit, which was intended to set out his evidence in chief, and Mr Perdikaris did not directly refer to it in his evidence. Indeed, Mr Mount made no mention Ms Nygh (or her advice) in his first or second affidavit.

394    In re-examination Mr Mount testified that he printed copies of Ms Nygh’s 30 March email and distributed them to directors “at the board meeting, prior to the meeting”. He claimed not to remember whether he referred to it at the meeting, however, and gave no evidence that anyone appeared to read it. Each of Mr Haindl, Mr Tripp and Mr Tucker denied having seen it.

395    In light of the discussions as recorded in the transcript of the meeting, I have difficulty accepting that Mr Mount did distribute Ms Nygh’s email. At one point during the meeting Mr Mount asked: “Have you got a copy of [the] Corps Act?”. A little later, he announces: “Here’s the Corps Act”. He does not refer to Ms Nygh’s email or the attachment. Moreover, immediately after his announcement Mr Mount made the following comments:

So I think it’s important just from here on in, right, that we just, for the sake of the directors’ personal situations and the survival of the business, do everything according to the law. By the way, just for the avoidance of doubt, I believe there’s a very healthy path [scil.] forward but we just need to-… start getting legal advice.

(Emphasis added.)

396    If Ms Nygh’s email had been distributed, it would have been apparent that the process of “getting legal advice” had already started.

397    It is not clear from the transcript of the meeting when the McInnes Wilson advice was distributed. It was not formally tabled. Indeed, the DCM board meetings are notable for their informality. It looks like it was distributed during the discussion about the accountants, Logicca and the directors were given the opportunity of reading the letter carefully (Court Book Pt C pp 1364-5). The following exchange then took place:

MR PERDIKARIS:    But do you guys understand the content of that document?

MR HAINDL:        Yes, I do. I’ve read through it.

MR PERDIKARIS:    Okay, so –

MR HAINDL    It talks about the liability to directors who were directors at the time.

MR PERDIKARIS:    Correct, yeah.

MR HAINDL:        It also states in 28(b) that “Any directors from the time of these breaches should excuse themselves from directors meetings for any future discussions about potential recovery against Logicca (or the directors) due to potential conflicts of interest”.

MR PERDIKARIS:    Yeah. Thoughts?

I interpolate that in his first affidavit Mr Tucker deposed that he was unsure what Mr Perdikaris meant when he was discussing the McInnes Wilson advice and, having reflected on the matter in the course of the preparation of his affidavit, he did not understand that it applied to him or that he was required to leave the meeting because he was not a director of DCM at the time of Mr Nettelbeck’s alleged misappropriation of funds or when Logicca, the former accountants, were engaged.

398    At this point in the meeting, Mr Haindl was about to say something when Mr Stewart interrupted, saying that if he were to take the matter “on its merits” and in accordance with the McInnes Wilson advice, it would be necessary for Mr Haindl to “sit on the bench” but added that after the meeting Mr Haindl would have a “right of reply”. Mr Haindl asked whether they wanted him to “step out” of the meeting and Mr Perdikaris replied: “No, no”. Mr Mount asserted that Mr Haindl would have no entitlement to be heard in reply and Mr Stewart appears to have conceded as much. Then the transcript records the following exchange:

MR STEWART:    So when I said right of reply (indistinct) if Matt – hey, gents.

MR PERDIKARIS:    These are a couple of mates of mine. They’ve been waiting for a meeting, sorry.

MR STEWART:    So if Matt has commentary on this, is there a mechanism for him to provide that to the board?

399    Mr Mount replied and suggested that Mr Haindl might want to seek his own advice and may wish to raise the privilege against self-incrimination.

400    Mr Perdikaris interrupted and the discussion took a different turn:

MR PERDIKARIS:    … Matt and George are both under investigations in these: matters so--

MR MOUNT:        For?

MR PERDIKARIS:    Well, did you circulate the letter from Wendy Jacobs where she clearly says that both you guys are under investigation and they’d get back to us? You’ve been notified and you were also notified in that letter that if George doesn’t step down from the board that they without further adieu [sic] would go straight to the courts and for that to be withheld from the board is inexcusable.

MR MOUNT:    Can we just clarify who Wendy Jacobs is (indistinct).

…

MR TRIPP:    Who is Wendy Jacobs?

MR HAINDL:    Craig’s lawyer so let’s step back. I--

MR PERDIKARIS:    Anyway, it’s not a topic of discussion here. It’s inappropriate whilst there are legal proceedings going so you guys need to go, as it were.

MR HAINDL:    Like step outside?

MR PERDIKARIS:    No, no, no, like you need to go, full stop. We can’t have any conversations while you two are here.

MR TUCKER:    And that’s because why?

MR PERDIKARIS:    Well, it is clearly stated here.

MR TUCKER:    All right, I don’t know what’s going on. It’s wonderful, Chris.

MR PERDIKARIS:    Thanks, guys.

(Emphasis added.)

I assume the reference to the letter from Wendy Jacobs is the letter she sent on 11 February on behalf of Mr Nettelbeck making the allegations of impropriety against Messrs Haindl and Tucker. It will be recalled that Mr Tripp was appointed to the board about three weeks later. Mr Tripp deposed that he was unaware that Mr Haindl and Mr Tucker were “under investigation” at the time and had no knowledge of the letter Mr Perdikaris mentioned. Despite the acrimonious correspondence between the lawyers in February, I was not taken to any evidence to suggest that “legal proceedings were going on” at this time.

401    Mr Haindl and Mr Tucker then left the meeting.

402    Mr Mount deposed that around that time he noticed two men he did not know standing in the adjacent room. He said they did not enter the room where the meeting was taking place and by the time the meeting concluded they were gone. He said he had nothing do with their presence and did not approach them or speak to them at any time.

403    Despite what he told the meeting (see above at [398]), in his evidence to the Court Mr Perdikaris revealed that he knew perfectly well who the two men were and that he was responsible for their presence. He testified that the two men were “security”, whom he had hired because of concerns he harboured about Mr Tucker and “his prior reputation”. When asked what he meant by “prior reputation”, Mr Perdikaris replied:

Well, he [Mr Tucker] has got a scar on his face that he had gotten from a barbecue where he got involved in an altercation. There’s many stories, supported by his wife, of him being excluded from school excursions because of his behaviour and stuff like that.

404    Mr Perdikaris went on to say that he did not think that the advice from the lawyer “was going to be taken professionally”. When asked what particular advice he was referring to, he replied:

The lawyer had suggested that they, whilst they’re under investigation and would be – I forget the word – defendants to these accusations, that it was improper for them to be on the board.

I interpolate that that is not how I would read the McInnes Wilson advice (see [397] above). Mr Tucker’s interpretation accords with my own.

405    Like Mr Mount, Mr Perdikaris testified that the men did not enter the dining room where the meeting was being held.

406    After Mr Haindl and Mr Tucker left the meeting, the transcript of the meeting indicates that Mr Mount took a call from someone at Logicca and reported on that call. Thereafter the following exchanges are recorded:

MR TRIPP:    Just looks like some sort of thing that got – sorry, just explain what happened there because I’m obviously a little bit confused.

MR PERDIKARIS:    Just give me exactly 60 seconds –

MR TRIPP:        Yeah.

MR PERDIKARIS:     -and I’ll be straight back. I just need to go to the bathroom.

MR TRIPP:        Luke, did you—

MR STEWART:    It flattened me too. No.

407    There was then an exchange between Mr Mount and Mr Tripp in which Mr Tripp expressed concerns about the prospects for DCM if Mr Haindl were to leave the company, emphasising his value to the company.

408    When Mr Perdikaris returned to the room, Mr Tripp asked him:

What was that all about, Chris?

409    Soon after, Mr Stewart suggested that the meeting be closed so that those remaining could “talk amongst [themselves]”.

410    In contrast to the evidence that Mr Mount gave that the two men recruited by Mr Perdikaris did not enter the room where the meeting was being conducted, Mr Haindl, Mr Tucker, Mr Tripp and Mr Stewart all said they did.

411    Mr Stewart’s evidence was that “two large, tattooed men” he had never seen before entered the room at about the time he said the words “right of reply” for the second time and that is why he said “hey gents”. He deposed that the two men then stood behind the chairs where Mr Haindl and Mr Tucker were sitting and followed them out of the room when they left the meeting.

412    Mr Tripp described the two men in his first affidavit and no other witness took issue with his description. He deposed that at the time Mr Stewart said “hey gents” he immediately turned around and saw “extremely intimidating characters”:

One was about 6 foot 5 inches, 130 kilograms, Polynesian, extremely heavily tattooed, very muscly, with a tight T-shirt on, and the other one was slightly shorter and similar, about 110 kilograms.

413    Mr Haindl deposed that when he heard the exchange between Mr Stewart and Mr Perdikaris about the two men, he turned his head and saw that two men he had never seen before had come into the room and were standing behind him and Mr Tucker. He described them as “heavy set muscular men who appeared to be covered in tattoos from head to toe”. He observed that Mr Mount “did not seem surprised by the arrival of the men”.

414    The descriptions of the two men were not challenged in cross-examination. There is no dispute that the respondents received no warning that there would be “security” at the meeting.

415    Mr Haindl testified that he found these events “quite terrifying in the moment”. When it was put to him that no-one said anything to anyone about the two men after Mr Stewart’s comment, Mr Haindl replied:

Luke said, “Hey gents.” I was trying to read the document [which I take to be the McInnes Wilson advice], and I could feel them behind me, and the energy in the room was – I mean, everyone – it was a – I was frozen, basically, trying to calculate in my mind what exactly was going on and how absurd it was if what was going – what I thought and believed was going on was, in fact, going on.

416    The cross-examination continued:

Well, but nobody – the question I asked you was nobody said anything to anyone or to them? Nobody talked to the two men? Nobody talked to anyone else about the two men in that period, did they?---It was a very pivotal time in the meeting.

…

And none of the directors said anything to Mr Perdikaris as a matter of complaint about the two men being there?---Not in that moment, no. I think everyone was just dumbfounded.

417    It was put to Mr Haindl that he was not “frogmarched out of the meeting”. Mr Haindl said he was not entirely sure what that meant but he testified that he was “marched out of the meeting”.

418    In cross-examination Mr Tucker agreed that he was not manhandled and was not “physically touched” but he said, in effect, that the man standing behind him was only arm’s length away from him: If he put his arm out, he would have touched me on the shoulder, the guy standing behind me. That’s how close he was to me.”.

419    Mr Tripp deposed that Mr Haindl was “escorted” out of the room by one of the men and Mr Tucker by the other. He noted that Mr Mount did not react, adding that “[h]e was completely unperturbed”. He testified that he found that reaction “extraordinary”. He explained:

Because he’s the CEO. It was beyond any protocol for a board meeting for uninvited people of any dimension to enter unannounced, and previous to their arrival, Mr Mount had been pronouncing all sorts of things around corporate governance and how we needed to adhere to them. This was a major breach of corporate governance.

420    Mr Tucker testified that Mr Perdikaris appeared to have been expecting the two men and Mr Mount “had no look of surprise on his face and had a wry smile, in fact”.

421    In his first affidavit, Mr Tucker gave an account of what happened after he left the meeting and Mr Perdikaris’s house. As he left the house, one of the two men followed him onto the street and directed him to stay outside as “Chris wants to speak to you”. Mr Tucker refused to wait and walked briskly to his car. The same man continued to follow him for about five metres.

422    Mr Haindl deposed that as he left the house, he, too, was followed by one of the men who told him to wait so that “Chris” could talk to him. At that point he saw Mr Tucker drive past the house “in a fast manner”. Then Mr Perdikaris emerged from the house, running towards Mr Tucker’s car as it approached the house, yelling obscenities at Mr Tucker and threatening to “get” him. After Mr Tucker drove away, Mr Perdikaris walked towards Mr Haindl, put his hand on his shoulder, and told him: “The game’s up, this whole thing’s been a fraud since day one. We’ve got all the evidence”. Mr Haindl said he would like to see the “evidence”. Mr Perdikaris told him the evidence was with the lawyers, he need not worry about it, and “that’s the least of your concerns”. He then told him to “fuck off”. Mr Haindl then picked up his bag and began to walk down the street. He turned around and saw the two men were following him so he “cut down a bush track” to Balmoral beach. He said the experience was terrifying. When he reached the beach, he rang Mr Tucker to ask him to pick him up. After Mr Tucker collected him, they went to a pub in North Sydney. They tried to call Mr Tripp and Mr Stewart but could not reach them. Mr Haindl was in shock. They both expressed disbelief at “what just happened” and agreed that “Chris and Ryan have to go”. Mr Tucker urged him to call Mr Christensen, tell him what had happened, and take advice on how to proceed with removing Messrs Perdikaris and Mount. Mr Haindl called Mr Christensen. Mr Christensen told him that the board had become “completely dysfunctional” and that it was necessary to move quickly to remove them.

423    Neither of these accounts was challenged.

424    Mr Tucker deposed that, after the events that occurred at the board meeting, by which I understood him to mean the events surrounding his and Mr Haindl’s exclusion from the meeting, he formed the opinion that the actions taken by Mr Mount before the meeting, specifically the issues he raised about “alleged safety issues” at the DCM sites in Queensland and his allegations about the value of the DCM assets were “not genuine”. Rather, he said came to view them as “part of an attempt by [Mr Mount] and [Mr Perdikaris] to devalue DCM so that Mr Perdikaris could buy the shares at a deeply discounted price and take… control” of the company. Mr Haindl deposed that he formed the view that Mr Mount knew in advance what would happen at the meeting and had colluded with Mr Perdikaris in “an elaborate and intimidatory plan” to drive him and Mr Tucker out of DCM and take control.

425    On his way home, Mr Tripp telephoned Mr Tucker and had a conversation to the following effect:

Tripp:    How crazy was that. Are you ok? I've never seen anything like that in my entire business life. What happened after you were marched out by those thugs?

George    I just went straight to my car to get out of there and Chris was running after me, screaming at me, but I just drove off.

Tripp     We're going to have to urgently resolve this or we're going to lose the company. Clearly, Ryan was in collusion with Chris. He seemed to be completely aware of what was going down and he was completely unphased. He wouldn't even answer a direct question from me about what it was all about. He kept saying that Matt was the chief puppeteer of the fraud as some kind of justification for the actions that had been taken.

George     Let's stay in contact. This is a really serious situation and Chris and Ryan have total control.

Tripp    I've put a lot of investors into this company. We can't just cede control to these guys. Ryan keeps saying that we need to raise capital at a substantial discount to the 55 cents per share that most have paid. This gives me great concern.

426    Mr Christensen testified that on 31 March he received a call from Mr Haindl, “in quite a distressed state”, who told him that while presenting some material to the board he had been escorted out of a board meeting by two burly, tattooed men, apparently operating on the instructions of Mr Perdikaris. He said that Mr Haindl told him he was not just removed from the board meeting but from Mr Perdikaris’s house where the meeting was being held and instructed to stand in the corner outside and wait for Mr Perdikaris “to deal with him”. Mr Christensen added:

He then told me that, in addition, Mr George Tucker had also been – I believe he used the word “frogmarched out of the room” by the heavily tattooed security people who appeared to be operating on Mr Perdikaris’s instruction.

427    Mr Christensen said that Mr Haindl told him that while these events were taking place Mr Mount “just sat there at the board table”, observing what was happening, saying nothing but “smirk[ing]”.

428    Mr Christensen said Mr Haindl also told him that Mr Tucker did not stay with him. Rather, he “ran up the street to his car and took off”. Mr Haindl said that he did not know what to do. Mr Christensen advised him to stay where he was and “see what happens”.

429    Later that afternoon Mr Christensen was telephoned by either Mr Haindl or Mr Tucker, both were on the call, and Mr Tucker advised that:

he had been – I [Mr Christensen] will say “frogmarched” out of the room by two burly [scil.], tattooed men, told to stand in the corner outside, that he didn’t and he took off, and he was quite fearful for his person, and that – words to the effect that we need to do something about this. This is wrong.

430    He testified that Mr Tucker told him that “a board cannot operate when that sort of activity is undertaken”.

431    Mr Christensen also received a call from Mr Tripp that afternoon in which he reported much the same thing. As Mr Christensen recalled it:

Mr Tripp informed me that he had attended the board meeting at Mr Perdikaris’s house and during that board meeting Matthew Haindl and then George Tucker had been frogmarched out of the room in unceremonious fashion and that this was unacceptable and something needed to be done about that.

432    Mr Christensen did not produce a file note of any of these conversations. He claimed not to remember whether he had made one. Nevertheless, his credit was not successfully impugned and there was nothing about the way in which he gave his evidence which caused me to doubt that he was giving a frank account of the conversations to the best of his recollection. It was put to Mr Christensen in cross-examination that:

Mr Tucker and Mr Tripp and Mr Haindl may well have mentioned to you the 31 March board meeting when they rang you on that date, but they didn’t say to you they had been frog-marched out. They didn’t say to you they had been escorted. They didn’t say to you that they had been made to stand in the corner or intimidated. What they said to you – they gave you a version of what happened, but it was not nearly in the serious terms that you have given evidence about. What do you say to that?

433    Mr Christensen’s reply, which seemed to me to be sincere was:

I very strongly disagree with you. I remember the conversations extremely clearly. I’ve never had conversations like that. It was extraordinary.

434    When senior counsel for Mr Mount then asked “Well, why didn’t you take a file note?”, Mr Christensen replied:

I didn’t need to. It’s filed away in my memory very, very clearly.

435    The cross-examination on this subject ceased at this point and there was no attack on Mr Christensen’s credit either in written submissions or oral argument.

436    Moreover, it will be recalled that Mr Clare, who Mr Mount called to give evidence, testified that Mr Tucker had given a very similar account to him at around the same time. I regard his evidence as significant corroboration by an independent witness of the respondents’ account of the intrusion of the two strangers at the 31 March meeting and its impact upon them.

The termination of Mr Mount’s employment

437    At 1.33 pm the day of the 31 March board meeting, Ms Graham of McInnes Wilson sent an email to Mr Tucker in the following terms:

You are presently being investigated by Dover Castle Metals Pty Ltd in relation to, amongst other things, your financial and monetary dealings with, by and on behalf of the company.

Accordingly you are directed not to access or in any way interfere with any cash, bank, or other accounts held by Dover Castle Metals Pty Ltd, until further notice

438    At 1.45pm Mr Perdikaris sent an email to Mattthew Haindl and Mr Tucker, copying Messrs Stewart, Mount and Tripp, in the following terms:

You will be receiving a note from the board and Keely graham shortly. Until then you are formally instructed not to speak with Tess butler or logica.

You are also instructed not to access the Dover castle bank accounts for any reason especially to make payments and indeed the company credit.

This is only till you have a note from the lawyers. Lawyers have been informed.

439    At 5.32pm Mr Mount emailed Mr Tucker (copying in Mr Perdikaris, Mr Tripp and Mr Stewart), forwarding a letter which replicated the terms of Ms Graham’s letter. In the covering email Mr Mount wrote:

Hi George,

1.     Following on from today's Board meeting please read the attached. If you have any questions please let me know (or any Director).

2.    As per your commitment to the Board today to get all share reconciliations to the Board “this afternoon”, can you please include me in your email and please ensure the reconciliation includes all prices and shareholder details.

440    At about 6.21am the following day, 1 April 2021, Mr Christensen emailed Mr Haindl:

Matthew,

I had overlooked the simple way to remove Chris Perdis. This is NOT an April Fool’s joke.

Same way that Craig Nettelbeck was removed as a Director.

If you agree to this strategy, please inform Walter [Haindl] and George. I am happy to discuss with them if necessary. This is so much better than calling a shareholder meeting – which takes time and can be challenged etc. this has Immediate effect. Happy Easter!

Under the Constitution Article 2.5, shareholders who hold more than 50% in aggregate may remove a director from office immediately provided it is in writing, signed and delivered to the Company’s office.

…

This can thus be done by a combination of your shareholder company (Whiting Beach), Walter’s company (Ashton Enterprises) and George Tucker.

…

I will draft the notice now.

…

I am sorry that I overlooked this simple article. I guess I was mesmerised by the standover tactics at the meeting.

…

The key right now is to steady the ship and remove Chris Perdis…

As soon as that notice is delivered the Board should be convened (phone hook up will be sufficient) to inform them (I guess that means Simon Tripp as the board will be you, George and Simon as soon as the notice is delivered) what has happened and at sometime soon thereafter you can select the following.

The Board can then:

1.    Appoint you as Managing Director for XX years …

2.    Appoint a new Director to replace Chris Perdis …

3.    Appoint one of the Directors as Chairman.

4.    Terminate McInnes Wilson (and inform Wendy Jacobs and any others that need to know this including FTI).

5.    Terminate consultancy of Ryan Mount.

6.    Appoint an auditor.

7.    Notify ASIC of the change in Directorship.

…

(Emphasis added.)

The reference to the “standover tactics at the [board] meeting” was plainly an allusion to what he had been told the previous day.

441    At 7.03am Mr Tucker replied to Ms Graham’s email, questioning her authority:

Hi Keely,

If you are indeed the lawyer acting on behalf of Dover Castle Metals I would like to ask you why you are acting against two directors of the company on behalf of a third director without the consent of the fourth director?

You are currently involved in a strategy and or action which is against the wishes of the majority of the Dover Castle board which means you are not acting on behalf of the company at all.

Just so you are forewarned any part of your itemised bill which is spent on the matters relating to either Matt Haindl or myself will not be covered by Dover Castle Metals Pty Ltd.

The fact that you are currently acting against the wishes of the majority of the Dover Castle Board will also be investigated.

I have included the board of Dover Castle Metals in this reply to your email.

442    At 7.13am Mr Tucker replied to Mr Mount’s email sent at 5.32pm the previous day, saying:

I don’t currently recognise any position or authority you may currently have at Dover Castle Metals Ryan so this will be my last email to you until there is a satisfactory resolution to your involvement at the company.

443    At 8.30 or 9am that day Mr Haindl telephoned Mr Tucker, telling him that he had spoken to Mr Christensen and relaying his advice about how to “get rid of” Mr Mount and Mr Perdikaris. Mr Tucker replied: “If Phil thinks that’s what needs to be done, let’s get organised. I will call Simon and let him know”.

444    Mr Tucker than called Mr Tripp, telling him: “We need a majority of directors to get rid of Mount and a percentage of shareholder votes to get rid of Perdikaris”. Mr Tripp expressed concern about what Mr Perdikaris might do and urged Mr Tucker not to use his (Mr Tripp’s) vote unless it was necessary to do so.

445    At about 4.28pm Mr Tripp sent an email to Mr Perdikaris in the following terms (emphasis added, otherwise without alteration):

I have been reflecting on the actions taken yesterday at the board meeting and would like to share with you my views. I appreciate the enormous effort that’s been made on your behalf, at your own cost, to resolve all the issues facing the company at this time. I do not however agree with the actions taken yesterday to remove the two directors and the manner in which that was done, especially given there was no consultation at all in this regard. I have had a lot of experience sitting on company boards, both publicly listed and unlisted … Accordingly, I feel my experience can be invaluable and my views will be relevant. I can unequivocally say that I have never experienced a board meeting like the one yesterday and the actions taken were a serious breech.

Naturally, I expect there will be a strong response from Matt and George to challenge the actions taken. For your information, I have been inundated with calls from shareholders who are vehemently opposed to the appointment of Ryan Mount. It’s pointless going into the details of their opposition to his appointment, his reputation precedes him. To ignore the wishes of shareholders, particularly at this time, I feel is unconscionable, untenable and unlawful.

I encourage you and George to talk and resolve your differences. Going forward, I feel my experience will be invaluable as a director and I look forward to focusing on the realisation and development of the assets which I remain extremely optimistic about.

Once again I appreciate your contribution and effort. I have asked George to seriously look into offering you a buyout of your shares if you feel that you no longer want to be part of the Dover Castle investment. I would however far rather you remain involved and committed.

446    Mr Tripp testified that by 2 April 2021, he had decided Mr Mount should go.

447    That day, Mr Tucker and Mr Tripp had a conference call with Mr Christensen. In that call Mr Tripp told Mr Christensen that “the directors want to terminate Perdis and Mount given what’s gone down”. Mr Christensen told him that they had “a valid basis to remove [Mr Perdikaris], you’ve got the shareholder numbers”, the termination of Mr Mount’s contract was a decision for the board “and you have a valid reason to do so because of his conduct”.

448    At 3.48pm Mr Tucker replied to Mr Perdikaris, copying Messrs Haindl, Tripp, Stewart and Mount in which he said:

Your interest in being so law abiding sits ironically alongside the fact that you just got two thugs to eject two directors from a board meeting.

No point in pretending it was anything else other than that, I felt threatened as would anybody.

I would under the circumstances be interested in reaching an agreement regarding your stock.

If you feel you have been caught in a Ponzi scheme and everybody is lying to you this could be your exit.

(Emphasis added.)

449    On 3 April 2021 Mr Tucker circulated to Messrs Haindl and Tripp a draft email addressed to Mr Perdikaris (errors in original):

There has obviously been a ripple affect to Craig's embezzlement of Dover Castle's funds.

Part of this ripple affect has been unfortunately for you to believe that Matt and myself were somehow involved. We categorically deny this and we were also under the impression that incontrovertible evidence had been presented to you regarding Craig readily admitting we were not part of his embezzlement.

On top of this FTI never removed our names from the FTI report for any other reason than it was clear we were not part of Craig's fraud.

We have come to a point where we obviously have very different perspectives on what Dover is now worth.

We also have very different ideas on how we best monetise Dover from where we are now.

You believe that the data does not stack up nor in the validity of the plant.

Once you involved Ryan our paths very quickly became divergent. The rest of the board believes Ryan has no part to play in Dover for many reasons but one of the main reasons being Ryan doesn't believe the value of Dover where we currently sit is anywhere near where we believe it to be. Ryan doesn't believe in or understand the compiled data nor in the plants ability.

This has become very apparent in many conversations we have had with him over the last 3 weeks.

We also believe that the other 75 odd shareholders outside of your group who own the company or approximately the other 93% of the company will not support Ryan's nomination as acting CEO. We also know Ryan through many conversations he's had with all of us that he is looking at getting funding for Dover at a big discount to its last traded share price due to his perceived valuation of the asset.

Due to other irreconcilable differences that have emerged culminating in the board meeting last Wednesday it has been decided that we will make an offer for your shareholding.

This a one off offering that has no room for negotiating and we believe it values the company at a steep increase in valuation to where you and Ryan believe the companies valuation currently lies.

We will offer you $0.55c a share.

Could we please have your reply by 5pm Monday.

Failing a reply or a refusal of our offer we reserve our right to then take steps that we believe will be in the best interests of the majority of the shareholders.

450    Mr Tripp replied, saying:

I think the offer should be short and concise. If we talk about Ryan he may dig his heels in to protect Ryan. We clearly have the ability through a majority vote to change the board and subsequently remove Ryan if he rejects the offer.

451    He proposed writing to Mr Perdikaris in the following terms (without alteration):

It is regrettable that there is an impasse as to the way forward for Dover Castle. You have indicated that you are prepared to consider a buyout for both your shares and those shareholders that you have introduced to the investment. Accordingly, I will canvas our shareholder base to secure you an offer of $0.55 per share which would return your investment. I will do this raising at the same time as raising funds also at $0.55 to recapitalise the business to ensure solvency. I estimate that your group would total approximately $1.5m at this price and we would raise an additional $800,000 for working capital

For the record Matt and I categorically deny all allegations of fraud against Dover as per accusations made at the recent board meeting. Our denial is supported by the FTI forensic investigation and a tape recording of Craig Nettlebeck confirming that there no other parties involved in the embezzlement. It is not in the best interest of the company to hold up progress and the injection of fresh capital whilst these disputes are contested. I reaffirm that we have only the best interests for Dover and it’s shareholders

Please confirm your acceptance or otherwise of the offer by Monday 5 pm. Matt is completing the feasibility study which will be used as the supporting information for the capital raising. I would endeavour to settle the payment as soon as the raising was completed

452    The following day, 4 April, Mr Tucker sent an email to Mr Perdikaris in the terms Mr Tripp had proposed.

453    On the evening of 5 April Mr Tucker and Mr Haindl met to sign the form prepared by Mr Christensen authorising Mr Perdikaris’s removal as a director.

454    On 6 April 2021 Mr Christensen emailed to Mr Perdikaris the notice removing him as a director, signed by Matthew Haindl, George Tucker and Walter Haindl.

455    The same day the board resolved to terminate Mr Mount’s contract. The letter informing him of the decision, which as I said earlier was sent to the wrong email address at 6.45pm on the same day, read as follows:

By resolution today of the Board of the Company, your agreement for the provision of services was terminated with immediate effect. This letter serves as notice of that termination.

Note that Mr Christos Perdikaris was today removed from the office of director by a majority of the shareholders of the Company.

Should you wish to contact any of the Company, any of the Company’s directors, officers, employees or contractors, you are requested to do so through this law firm.

456    Although the letter did not come to his attention until later, Mr Mount was aware of the board’s decision by 7 April from an email sent to him by Ms Trenfield at 10.47am. In that email Ms Trenfield advised that she had been informed by Mr Christensen that Mr Perdikaris had been removed from the board, that the McInnes Wilson retainer had been terminated, and that his “role as CEO has likewise been terminated”. Mr Mount forwarded that email to Ms Nygh at 10.56am. Ms Nygh replied at 11.08am, writing “I assume no one has actually informed you that your position has been terminated”. At 11.14am, Mr Mount confirmed “no one has informed me either of Chris’s purported removal (other than Chris) and no one from the company has informed me of any change to my position”. At 11.28am Mr Hancock told Mr Mount that he had been advised by the board that he (Mr Mount) was “no longer working with the company”. Nevertheless, without reaching out to any of the directors or contacting Mr Christensen, Mr Mount continued to communicate with Ms Nygh, whom he purported to have retained on behalf of DCM, albeit without board approval, and the following morning he confirmed the costs agreement with Resolve on behalf of DCM. I will return to the question of Mr Mount’s relationship with Resolve later.

457    At 11.35am on 10 April Mr Tucker emailed Mr Mount in response to an email the latter had sent 15 minutes earlier, saying:

You were informed by email on Tuesday night that your contract with Dover Castle had ended. You knew this because you cancelled a meeting with Bob Bell from PKF on Wednesday stating as much. You are no longer acting for Dover and your continued interference with Dover Castle will be noted. You were also instructed to hand back the company motor vehicle which you are now driving illegally as well as the fact that you are not covered by the vehicles insurance. If we don’t receive it back from you in the next 48hrs we will report that you have stolen the vehicle. You are now acting illegally ringing people on behalf of Dover and you are misrepresenting your position with the company.

458    Seven minutes later, at 11.42am, also in response to Mr Mount’s earlier email, Mr Haindl emailed Mr Mount, copying Messrs Tucker and Tripp, confirming that his contract had been terminated and attaching the letter from Mr Christensen. He, too, insisted that arrangements be made for the return of the company vehicle.

459    It is common ground that the termination was effective on 10 April 2021.

460    I am persuaded by the evidence given by the respondents’ witnesses that, in substance, their version of the circumstances in which Mr Haindl and Mr Tucker came to leave the meeting should be accepted. I have come to that conclusion after carefully considering all the relevant evidence, which includes the contemporaneous reports of what occurred.

461    It follows that I am satisfied that the two burly, tattooed men did enter the meeting room to make sure that Mr Haindl and Mr Tucker left the meeting. Consequently, I am satisfied that in this respect the evidence given by Mr Mount and Mr Perdikaris on this subject was false.

462    Since on interrogation, no-one who was present said that they were touched by either of the two strangers, I cannot find that they were actually frogmarched out of the meeting. I find that they followed Mr Tucker and Mr Haindl out of the meeting and the house. The dictionary definition of “frogmarch” is “to force (someone) by walk by applying a half nelson or seizing them by the scruff of the neck and the trousers belt and forcing them forward” or “to carry (someone) face downwards, four people holding one limb each”: Macquarie Dictionary, (Pan Macmillan Australia, 2025). It is not apparent whether Mr Christensen’s recollection that that is what he was told is faulty or whether his informer did not understand the true meaning of “frogmarch”. Nevertheless, the weight of the evidence, which I accept, is that the presence of the two strangers came as a shock to all the participants in the meeting, including Mr Stewart, except for Mr Perdikaris and Mr Mount. I also accept that Mr Haindl and Mr Tucker found their presence intimidating and were both affronted and upset by Mr Perdikaris’s insistence that they take no further part in the meeting or, for that matter, the board.

463    Furthermore, the fact that Mr Mount stood by and said nothing when Mr Perdikaris insisted that both Mr Haindl and Mr Tucker should leave the meeting is troubling. He had read the McInnes Wilson letter. Having conducted a company search, he would also have known that Mr Tucker did not become a director of DCM until 11 February 2021 and he admitted as much in cross-examination. He therefore would have known that there was no need for Mr Tucker to absent himself from the meeting. After Mr Haindl and Mr Tucker were required to leave the meeting, Mr Mount’s remarks were directed to the possibility of Mr Haindl being conflicted, not Mr Tucker too. He should have corrected Mr Perdikaris.

464    But the evidence does not permit me to reach the necessary state of satisfaction that Mr Mount was complicit in the deployment of the two strangers or that he was aware that Mr Perdikaris had made arrangements for “security” to come to his house that day. Nor am I satisfied that Mr Mount condoned the recruitment of the two men to facilitate the removal of Mr Haindl and Mr Tucker. Nevertheless, I am persuaded that Mr Mount acquiesced in Mr Perdikaris’s conduct and that his silence at this time, coupled with the fact that it was Mr Perdikaris who urged the company to hire Mr Mount, caused Mr Haindl, Mr Tripp and Mr Tucker to believe that he was complicit.

465    I do not doubt that Mr Tripp, Mr Haindl and Mr Tucker considered that Mr Perdikaris had gone too far, that they thought that Mr Mount was implicated in Mr Perdikaris’s conduct at the meeting and took exception to it. Nor do I doubt that these matters triggered the move to remove Mr Perdikaris from the Board and terminate Mr Mount’s contract. These conclusions are supported by the actions they took immediately after they left Mr Perdikaris’s house that day, including their contemporaneous reports to Mr Christensen and the actions he took upon hearing their reports. The more difficult question is whether DCM satisfied its onus of proving that Mr Mount’s disclosures in the two Whistleblower Reports (or either of them) had no part to play in that decision. That is the question to which I now turn.

Has DCM discharged its onus of proof?

466    The answer to this question depends on the answers to two other questions.

467    The first is whether DCM has proved that at the time it decided to remove Mr Mount, it did not believe or suspect that he had made a disclosure that qualifies for protection under Pt 9.4AAA. The second is whether that belief or suspicion was not the reason or part of the reason for its action.

468    Mr Mount did not send Mr Haindl or Mr Tucker either the First or the Second Whistleblower Reports. Mr Haindl and Mr Tucker readily admitted to reading the various emails Mr Mount sent them (and which Mr Mount contended were also disclosures that qualify for protection) but they both denied any knowledge of the existence of the Whistleblower Reports until the Fair Work Commission proceeding. Mr Tripp denied ever reading either Report.

469    Mr Mount accepted that there was no direct evidence that any of Haindl, Tucker or Tripp had seen or read or been apprised of the contents of the Reports. His argument was that the reasons the respondents gave for their decision were, in substance, confected.

470    First, Mr Mount pointed to an alleged inconsistency between evidence given by Mr Tripp and Mr Tucker about their reasons for dismissing him. He also referred to the unlikelihood that Mr Tripp had not read any of Mr Mount’s emails, a matter I have already considered (at [179]–[194] above).

471    Second, Mr Mount alleged there was an inconsistency between Mr Haindl’s evidence that he only decided that Mr Mount’s employment should be terminated because of what occurred at the 31 March board meeting and other evidence he gave that suggested that other factors were operative.

472    Third, Mr Mount submitted that the evidence of these witnesses should not be accepted because, contrary to the evidence of Mr Tripp and Mr Tucker, there was no support for the notion that Mr Mount was pushing for a “deeply discounted capital raise”. He contended that the absence of a reference to him doing so in any of the pleaded disclosures, including the two Whistleblower Reports, is “the likely reason” the respondents “sought to manufacture it” as a reason for terminating his employment. He said that the evidence Mr Tripp and Mr Tucker gave about the matter was “a cloak for the real reasons which relate to Mr Mount’s efficient, open and speedy assessment that there were many problems, including safety compliance, with DCM’s mine operation, the data it had available to it to make a proper assessment of commercial viability, its over-optimistic and misleading representations to shareholders about the commercial viability of the mine and tenements and its financial state”, all of which were “the subject of the pleaded whistleblower disclosures”.

473    Fourth, Mr Mount submitted that Mr Tucker was conscious that he was being chased by Mr Stewart for share registry documents so that the board could understand the true position in relation to the share ownership of DCM, “obscured as it was behind the Bare Trust used by Mr Tucker to evade the requirements [in s 113 of the Corporations Act] to ensure that a proprietary company have no more than 50 non-employee shareholders”.

474    Consequently, Mr Mount submitted that the respondents’ evidence on this question should be rejected as unreliable and given no weight and the Court should find that their evidence about the reasons for dismissing Mr Mount were “disingenuous” and accordingly, they did not discharge their onus. Despite the similarities in their accounts, however, Mr Mount did not suggest to any of the respondents that they had conspired to give false evidence and no such proposition was put to them in cross-examination. The consistency of their accounts is therefore a factor which supports a finding that their accounts were substantially true.

475    As to the first two matters, Mr Mount submitted that in the affidavits they affirmed in February 2024, each of them, like Mr Haindl, insisted that their decision to terminate Mr Mount’s employment had nothing to do with any of the alleged Whistleblower Reports or disclosures or a belief or suspicion that he harboured about Mr Mount making any protected disclosures and focused on what happened at the 31 March meeting. Mr Mount argued, however, that in their earlier affidavits, Mr Tripp and Mr Tucker “made less guarded statements” about why they terminated his employment. As he put it in his written submissions (footnotes omitted):

35    While these affidavits describe the events at the 31 March board meeting, they are more expansive as to the reasons for terminating both Mr Mount and Mr Perdikaris. Mr Tripp said that he formed the view that the 31 March board meeting was an attempt by Mr Mount and Perdikaris to take control of DCM, and he agreed with Mr Tucker’s view expressed in a draft email to shareholders that “one of the main reasons” Mr Mount should be terminated was he did not believe in the value of DCM and he didn’t believe in or understand the data or plant’s ability, all matters that were expressed in Mr Mount’s whistleblower reports. Mr Tripp agreed with Mr Tucker’s statement that “irreconcilable differences” culminated in the 31 March board meeting.

36    Yet in paragraph [18] of his second affidavit Mr Tripp purported to restrict his reasons for terminating Mr Mount to his description of the 31 March board meeting and a single conversation with Phil Christensen.

37    In Mr Tucker’s second affidavit he makes a statement about the reasons for terminating Mr Mount, being that “following the events of the 31 March 2021 (sic) after which I formed the belief that Ryan and Chris had engaged two men to attend the meeting as a standover tactic to intimidate Matt and me, I no longer recognised Ryan as the Acting CEO of Dover and did not consider he was acting in the best interests of the business.” However, he contradicts that statement in paragraph [7] where he refers to his reasons being contained in paragraph [108] of his first affidavit.

38    In his first affidavit Mr Tucker was far more expansive. He gave several reasons in paragraph [108] and elsewhere for deciding to terminate Mr Mount, including that he was making operational decisions outside his remit such as shutting down the mine site, that he and Mr Perdikaris were attempting to take over DCM, that Mr Mount had raised “alleged safety issues at the DCM sites” and had made allegations about the DCM assets not being genuine, again all matters canvassed in Mr Mount’s disclosures.

476    I do not accept that there are any significant differences in the affidavits of Mr Tripp. Notably, there is no reference in Mr Mount’s whistleblower reports to Mr Mount not believing in the value of DCM or not believing in or understanding the data or the plant’s ability.

477    Nor do I accept that there is any relevant difference between the reasons Mr Tucker gave in his affidavits. Not only did he not resile from anything he said in his first affidavit, he also affirmed the reasons he gave there. This is what he said at paragraph 7 of his second affidavit:

My reasons for deciding to terminate Ryan’s appointment as Acting CEO of Dover are as set out in paragraph 108 of my First Affidavit. These were my only reasons for making that decision. I deny that my decision to terminate Ryan's appointment as Acting CEO was because of any of the alleged whistleblower reports or disclosures, nor was it because of, or for reasons including, that I believed or suspected that Ryan had made, may have made, proposed to make, or could have made disclosures protected by Part 9.4AAA of the Corporations Act 2001(Cth) (Whistleblower Disclosures). I actually did not have any such belief or suspicion when I made that decision.

(Emphasis added).

478    At para 108 of his first affidavit Mr Tucker said:

After the attempt to remove Matt and I from the DCM board on 31 March 2021, I decided that we had to terminate Ryan's engagement as Acting CEO. I formed this view for the following reasons:

(a)    from at least the 25 March 2023 board meeting, I had concerns about the suggestions that Ryan was making about DCM undertaking a deeply discounted capital raise (such as the suggestion he made during the conversations I had with him which I recount in paragraph [87] of this affidavit). I could see no financial basis for undertaking a deeply discounted raise, did not consider that Ryan had been involved with DCM for long enough to form a view that such a step was necessary, and was concerned that Ryan was attempting to deliberately devalue DCM for an ulterior purpose;

(b)    I considered that Ryan was making significant operational decisions which were outside of his remit, and doing so without consulting the DCM directors first, such as shutting down the site. These were the concerns I expressed during the DCM board meeting on 25 March 2021 when Ryan was outside of the room, and which are referred to in paragraph [89] of this affidavit: and

(c)    as described in paragraphs [96]-[ 100) of this affidavit, I had formed the view that Ryan had, in conjunction with Chris, orchestrated the presence of the Two Men at the DCM board meeting on 31 March 2021. I considered, and consider, the presence of the Two Men a standover tactic, designed to intimidate Matt and I, which was totally unacceptable for a director (in the case of Chris) and an Acting CEO (in the case of Ryan) to engage in. The presence of the Two Men at the 31 March 2021 board meeting reinforced my view that Ryan and Chris were acting for an ulterior purpose, namely to stage a takeover of DCM.

479    At the 25 March board meeting, while Mr Mount was out of the room, but while the proceedings were still being recorded, Mr Tucker expressed concern about “feathers being ruffled unnecessarily”. He continued:

The one thing that when we discussed Ryan coming on to do his job was that he wasn’t going to step on Matt’s toes and he wasn’t going to step on Matt’s toes, and he’s been anything but that. He’s really upset people - closing down the mine site and putting off the contractors that we have, and all that sort of stuff. I’m also hearing innuendos and, like, untruths about stuff and I’m just, I’m just concerned that, like, out of out of the Matts and Ryan, as far as I’m concerned, Ryan is the most expendable. That’s my opinion. I’m not saying that, you know- I’m just I’m just asking that Ryan stays in his fucking lane. And his lane is to get the governance in the corporate side of the company up to scratch if that’s what he’s meant to do.

480    Mr Tucker did not acquire or derive any of that information from either of the two Whistleblower Reports. Indeed, he agreed with a question put to him in cross-examination by senior counsel for Mr Mount that he was aware of all this “because of the emails” Mr Mount had copied to the directors and because Mr Haindl had spoken to him about what he called “the shutting down of the site”.

481    Mr Tucker also agreed with the proposition that he was concerned about the mine being shut down for any reason because he would not then be able to raise capital and could not advise shareholders that any progress was being made there.

482    Mr Tucker made no secret about his negative opinion of Mr Mount.

483    Mr Tucker admitted that he was never happy with Mr Mount’s employment. He was annoyed with Mr Mount’s intrusion into operational matters. He maintained that he only agreed to his engagement on the basis that he would be responsible for governance matters. Moreover, as he put it at the 25 March board meeting during the discussion with the directors in Mr Mount’s absence, Mr Mount “[came] in like a fucking steamroller, and he pissed everyone off”. “[That’s] not the way to communicate”. “It’s not the way to treat people”. In cross-examination he conceded that by that time he had already concluded that Mr Mount had to go and had discussed with Mr Tripp passing a resolution to that effect but Mr Tripp left the meeting early and he could not be sure the rest of the board would agree.

484    Mr Mount’s reference to his disclosures at para 38 of his submissions include statements made in documents I have decided at [243]–[251] above are not disclosures which qualify for protection.

485    Mr Mount submitted that Mr Tucker accepted that his reasons for deciding to get rid of Mr Mount included him shutting down the mine and raising allegations with the other directors about Mr Tucker and Mr Haindl. That submission is based on the following exchange in cross-examination:

And the reason why you had formed a view, [by] the 25 March 2021 meeting, to get rid of Mr Mount, was because of the issues I ha[ve] been putting to you, about him shutting down the mine, and raising allegations with the other directors about you, and Mr Nettelbeck, and Mr Haindl, correct?---To a certain extent, yes.

486    Mr Mount’s submission is unfair. Mr Tucker’s answer (“to a certain extent, yes”) is ambiguous and the cross-examiner did not attempt to remove the ambiguity. He went on to another topic. Reading Mr Tucker’s answer in context and considering his evidence as a whole, I do not take him to have agreed to the proposition that, by the 25 March meeting, he had determined to remove Mr Mount for a reason which included allegations raised only with Mr Tripp and Mr Perdikaris in the First and/or Second Whistleblower Reports. To hold otherwise, would offend against the principle in Briginshaw.

487    In Mr Tucker’s case, it is probably fair to say that what happened at that 31 March board meeting was the final straw. Now it was clear that Mr Haindl would support Mr Mount’s removal. And Mr Perdikaris’s removal would ensure that there was no opposition to such a resolution.

488    It is not to the point that factors apart from the events at the 31 March board meeting formed part of the reasons Mr Tucker decided Mr Mount should be dismissed unless one of those factors was a belief or suspicion he harboured that Mr Mount had made a disclosure which qualifies for protection. Neither the contents of the emails he was sent nor Mr Haindl’s remarks to him were disclosures which qualify for protection. If he was angry about anything Mr Mount had said in the Whistleblower Reports one would expect to see a reference to them in the transcripts or of the board meetings and/or in emails or text messages sent before Mr Mount was dismissed, at the very least, a reference to the serious allegations made against him in those reports. Yet there is none.

489    Mr Mount submitted that, although Mr Haindl deposed that Mr Mount’s “engagement” was only terminated because of the events that occurred at the 31 March board meeting, “he interpreted those events as a manifestation of the greater problem that Mr Mount and Mr Perdikaris were planning to drive him and Mr Tucker out of DCM”. Mr Mount submitted that Mr Haindl was clearly upset by Mr Mount’s attempts to supervise operations at the mine.

490    In support of the submission he pointed to remarks made by Mr Haindl in an email on 22 March in which he accused Mr Mount of pressuring employees to “illegally edit” site documents, an accusation which appears to have been based on assumptions on Mr Haindl’s part, which Mr Mount refuted and which Mr Haindl readily admitted in cross-examination were an “overreaction” and that he had jumped to the wrong conclusion. He also relied on remarks Mr Haindl had made at the 25 March board meeting in the absence of Mr Mount when he appeared to agree with Mr Tucker who said he was worried about Mr Mount and did not know whether he could trust him.

491    The email in question was a response to certain inquiries made by Mr Mount. Relevantly, Mr Mount asked Mr Haindl to “reconcile” an inconsistency between the site records, which showed that Mr Arthy and Jamie Rogue were present at the site on 13 March, and something Mr Mount was told (by whom he did not say) that the only people who were working there that day were Mr Haindl and Mr Hancock. Mr Haindl took umbrage at this inquiry:

The people who signed on to the morning meeting were at the morning meeting and were at site. You should always assume that if people are signed on to the morning meeting then they were at the meeting. Especially when you were not there. Everyone on site is an honest, hard working important part of our team and should be treated as such.

Correct and diligently collected onsite documentation is very important to DCM, the Queensland mines department and QHMS. To pressure staff on-site to Incorrectly edit these legal documents is seriously concerning. It opens the company up to a plethora of legal implications and I've not heard of such a thing in my years of mining especially not from management.

…

I find it very hard to contemplate the fact that after only four days that you have been involved in our company you are willing and feel comfortable to pressure employees into illegally editing site documents. The only reason I can think of that you would suggest such a thing is to imply that my team and I are untrustworthy, and lie in site safety related legal documents. Which is absurd.

492    In cross-examination Mr Haindl readily accepted that by the time of the 25 March board meeting he had formed a negative view of Mr Mount’s performance as CEO and, like Mr Tucker, was concerned about whether he could be trusted.

493    This evidence discloses that Mr Haindl was not happy with Mr Mount before 31 March. As the respondents accepted in their closing submissions, Mr Haindl had a dim view of Mr Mount’s understanding of the geology and potential of the mine and his understanding of how to manage safety matters.

494    The evidence does not disclose, however, that Mr Haindl had decided that Mr Mount should be removed from his position by this time. The evidence clearly establishes that he made that decision on 31 March after the surprising turn of events at the board meeting. Moreover, the evidence does not establish that at any time before he was served with Mr Mount’s application in the Fair Work Commission he believed or suspected that Mr Mount had made a disclosure that qualifies for protection under Pt 9.4AAA.

495    Whatever misgivings Messrs Haindl, Tripp and Tucker had about Mr Mount before 31 March, however, none of them took any steps to terminate his employment until after the board meeting that day.

496    That brings me to the third matter, the allegedly false evidence about Mr Mount arguing for a “deeply discounted capital raise”. The submission about this matter concerns the evidence of Mr Tucker and Mr Tripp only.

497    Mr Tucker’s evidence was that from the time of his appointment Mr Mount consistently advocated a “deeply discounted capital raise”. In his first affidavit, Mr Tucker deposed that “the only ‘strategy’ that [he] heard [Mr Mount] refer to during the 17 March 2021 board meeting was to undertake a deeply discounted capital raise”.

498    While transcript of the 17 March board meeting shows that Mr Mount was cautious about the mine’s prospects, it does not show that he advocated a deeply discounted capital raise or expressed a view about the share price for any capital raising. Indeed, he expressly stated that he did not have a view on price. In cross-examination, Mr Tucker ultimately accepted that Mr Mount did not propose a deeply discounted capital raising at the 17 March board meeting.

499    At this meeting Mr Tucker said that the average share price of the company was 51 cents. In that context Mr Tucker said:

I mean, you know, we had that one raise at 15 cents. It started off at $1 but the large proportion of money has been raised at 55 cents.

500    Later during that meeting, Mr Mount expressed caution about the representations DCM should make in raising capital from shareholders:

MR MOUNT:     Let’s come back to our objective because there is a strategy here, right. I can see that there’s a general - I sense a general acceptance of the larger shareholders understand that money needs to go in but at some stage you don’t want to keep funding this, I presume, and then you want to go to the broader market. So if you go and JORC this and you’re a public company you’re going to have to disclose is, right. Now, you've just got to be careful. You could kill a project when you're saying it’s--

…

MR MOUNT:         There's a saying “you drill to kill”, right--

….

MR MOUNT:     --and so you'd be very careful what your drill target is. You can't just spitfire drilling because if you drill that you have to disclose that to the market and if you close off a project it’s hard to promote it and sell it.

501    Mr Haindl appears not to have been troubled by Mr Mount’s concerns. He argued that the work performed since the previous capital raise at 55 cents per share had increased DCM’s value:

So since 2019 when we did our big raise at 55 cents, you know, there's a lot of value that's been added to the company, a huge amount of value. You know, we’ve done five diamond holes which we got the results we did.

…

We've worked out that the dumps are very valuable and that we can process them as well, which is a big thing . After corona, you know, there's this big economic rebound. The tin price has gone through the roof. You know, the tin price is greater (indistinct) and there's a huge push in the Australian government at the moment for critical and strategic metals. So we're beautifully placed in all of those areas.

502    Mr Tripp proposed a capital raise at 55 cents per share, to which Mr Tucker replied “55 cents is fair under the circumstances”.

503    While Mr Mount did not express an opinion about the price, he pressed upon the board, even at this stage (before he was appointed), a relatively conservative view about the prospects of the mine on the information available to him and against the directors’ optimistic opinions:

MR TRIPP:     We’re all really sort of basic laypeople who have had our levels of excitement raised significantly about what’s here, what has been discovered. Do you see enough there to get excited?

MR MOUNT:     Look, I think it’s definitely hot ground. I’m just nervous about the mining. I can’t tell you when I haven’t seen anything.

MR TRIPP:         Yeah.

…

MR MOUNT:     I’ll come to the exploration. So, look, I’m not saying it’s not possible. I’m just saying my value, what I’d add here, I’d just tighten it right up, squeeze it together and everyone's marching along moving towards building a mine and a processing plant and selling ore and getting all the components lined up ‘cause if it doesn’t, you know, besides losing a lot of money along the process and not getting everything done properly in the timelines and double handling and all that, morale will go out the door and as soon as there's problems people will have to go down the road and explain to the--

MR TRIPP:    If the processing plant or the mine fails this mine will fail, right?

MR MOUNT:         Well, that’s my concern.

MR TRIPP:     Right, so we’re rolling the dice by going this path but we almost have to because we don't have enough to raise sufficient money on the porphyry alone.

MR TUCKER:     Then you’d raise capital, drill, then see how the drilling results come back. Then you’d either raise capital at higher or lower prices again, which is why we're going down the path.

504    Mr Mount urged the board to “work out what our objective is here” before committing more money to the mine.

505    Later in the meeting, the discussion returned to the share price for any capital raise and the mechanism by which DCM would raise capital. Mr Tucker proposed that capital be raised at 55 cents per share. Mr Mount then proposed a mechanism for raising capital in the form of a convertible note:

MR MOUNT:     What we can do is, to incorporate the R&D, you can do it, set it up as a convertible note. It can be done at -you're saying it’s 55. I would suggest you do 55 cents or the lesser of the price over the next six months in case something unfortunate happens and someone - because, you know, in fact, this is an emergency capital raise, right? You’re saving the company. What you can do is you can do a - how much dollars were you suggesting putting in, say, 400 or 800?

506    Mr Tripp expressed concern about raising too much capital:

MR TRIPP:     Because within a month you’re going to get a settlement with Nettelbeck. That’s going to throw in a whole lot more money. We don’t want to over-raise here. Just let’s – yeah.

MR STEWART:     Sure (indistinct).

MR TRIPP:     I mean, it’s all very well to say, “Well, stick your hats up and stick more money in,” but this money is being pissed on the wall and I’m not that happy just putting in too much personally.

MR STEWART:     Sure. Sure.

MR TRIPP:         So I want to make sure that it’s minimised.

507    Mr Tripp then said that he was “fundamentally opposed to it”, though it is not clear from the transcript what he was referring to. Mr Perdikaris then replied: “Hundred per cent but I’m just not happy with the price.” Mr Mount then explained the basis for raising capital through the mechanism of a convertible note:

MR MOUNT:     Well, I think I’ve dealt with that. So I suggested a ratchet that if there’s some other raising in the future and it’s lower than 55 cents the people putting in now-

MR TUCKER:         Get that stock back, yeah.

MR TRIPP:     I mean, I think it’s reasonable as well, the other thing, to give maybe a one-for-one option with this maybe. Because it’s an emergency raise that effectively--

MR MOUNT:         But, look, the issue you’ve got there is you’re directors, right?

MR TUCKER:         Yeah, exactly.

MR MOUNT:     I know you’re trying to give yourself - I think that with a convertible notes you’d give yourself some downside protection.

MR TRIPP:         Well, there’s nothing to stick into a - if it’s a--

MR MOUNT:     If everything goes fine you'll never have the ratchet down, right?

MR TRIPP:         Yeah .

MR MOUNT:     But if something goes wrong you’ve got the ratchet down …

508    Mr Tripp replied that raising money “below 55 cents” would be a “terrible message” to send. Mr Perdikaris and Mr Tucker agreed. Mr Tucker expressed support for Mr Mount’s proposal, saying:

We should raise what we need to raise, I agree with Ryan, for the guys who put in money in this particular raise, this emergency raise, that if the price, for any reason something goes wrong and get dropped, whatever price that gets dropped to, you guys get that stock on top of the 55 cent price. So if it drops down to 40 cents for some reason you get an extra 15 cents worth of stock.

509    Mr Perdikaris appeared to take little comfort in the proposal, saying: “You can put it in there but that’s just fucking bullshit. If it drops we’re fucked–”.

510    Mr Tripp expressed the view that “[i]f we’re raising money at 30 cents we’re all gone” to which Mr Tucker responded “Yeah”.

511    At the end of the discussion, Mr Perdikaris asked Mr Mount whether he had anything to say, to which Mr Mount replied: “No, no, no. I don’t have a view on price. I’m not a shareholder. No”.

512    In cross-examination, Mr Tucker clarified that he “agreed with the prospect of a convertible note” but “[n]ot with a deeply discounted raise”. The minutes of the 17 March board meeting show that the directors agreed to raise $800,000 at 55 cents.

513    On 20 March, Mr Mount sent Mr Haindl an email requesting information about various matters, including the following:

- What is the $ amount needed to get the plant constructed and commissioned? including summarising where the money needs to be spent. (remembering we need the real number so that we do not go back to shareholders again after this next capital raising). And if there were different options/senario's [sic] for $ spend on this plant, then please explain the risks and benefits of this options.

514    About an hour later Mr Mount sent an email to the DCM board providing advice about the process of capital raising, while at the same time stating that the question of capital raising was a matter for the board. He wrote (without alteration):

Gents,

I have seen two emails and am hearing discussions regarding the next capital raising including as to matters of fees, structure & process.

The whole situation of the capital raising is a matter for the Board (not me); I however have some experience in this field and so I offer you the following advice / information on how these things are done properly:

1. Sequoia to deliver to to Dover a proposal - it details the services and fees Sequoia will offer as well as timetable for the execution of the proposed transaction.

2. Dover respond with comments e.g. negotiation on services, fees, comments on proposed transaction time table. Also at this point, Dover will do a check on Sequioa's AFSL to ensure they are licenced for such investment activities (I am sure they are but you MUST check )

3. If Dover agree to proceed with Sequoia for the transaction then a contract (often referred to as a ;mandate’) is executed between Dover and Sequioa.

4. Sequioa provide all relevant documentation for the investor(s) to invest including an Offer Letter and an Acceptance Form.

5. In light of the numerous reconciling items with Dovers capital raisings in the past you will want to utilise Sequioa's bank trust account i.e. all investor monies are deposited into the Sequioa Trust. Sequioa reconcile the monies and then provide Dover with a final list of the investors full registration details and corresponding share allocation amounts. On the same day Sequioa transfers the full and final $ amount to Dover's bank account (i.e. one single payment ) - Dover will register all the new issued shares into the investors names provided by Sequoia - this all occurs on the same day (often referred to as ‘Settlement Day’)

6. I have heard that there will be a meeting of directors at a pub with the new investors as some sort of way of updating them, disclosing some of the recent issues and also pitching them for the capital raising. I would advise against this. A more appropriate process of disclosure and marketing is for Sequioa to host the new investors in their office - there should be presentation by both Sequioa and Dover as to the company including any disclosures required. We can have a few drinks and finger food after the formal part of the meeting and/or head out afterwards for a beer and meal (DO NOT mix the social and formal parts of this process under current circumstances).

As to the amount of fees charged, in the end it is a simple business decision: you pay for a service / product if it adds value to the business. You need to understand what you are paying for and you must ensure you can justify paying the fee. Especially, with this situation since Sequoia is a ‘Related Party’ (as defined under the corporations Act) and they appear to be the single biggest recipient of shareholders funds from Dover.

Hope this helps.

515    Mr Tripp deposed that during his meeting with Mr Perdikaris and Mr Mount on 22 March, to which I have referred at [195] above, he had the following conversation with Mr Mount:

[Mr Mount]:    You guys think you’re sitting on a world-scale resource. You have been misled by Matt and Nettelbeck about the scale of this resource. We will need to do a deeply discounted capital raising. I have investors in Hong Kong and other places. I’ve done a comparable analysis of the value of this business and we need to raise money at a substantial discount to the 55 cents per share that we have been raising money at.

[Mr Tripp]:    Can you show me the comparable analysis?

([Mr Mount] did not supply it).

[Mr Mount]:    I suggest a capital raise in the range 15 cents per share.

[Mr Tripp]:    That’s ridiculous. We can’t do that.

516    In his third affidavit, Mr Mount denied Mr Tripp’s account of the conversation and denied that he had ever recommended that DCM “do a ‘deeply discounted capital raise’”. He maintained that denial in cross-examination, and said that, while he was of the view that DCM “definitely needed to raise money”, he “didn’t talk about any prices”.

517    Mr Tripp gave unchallenged evidence that in his experience, “seeking to raise capital at a discount is a common strategy for someone to take control of a company”.

518    In an email he sent to Mr Stewart on 23 March 2021, Mr Mount stated:

There is also a concern I am “too negative” on the project (which is not the case - I just have not been given all the data purportedly available; as such I cannot see a professional basis for more spend). So therefore having experts on the call provides the Board with some perspective and clarity. On this point, it may also be an idea for the Board to bring in an independent mining expert for the day to sit in on the meeting - I will not be offended

(Original emphasis.

519    In the same email, in response to Mr Stewart identifying “emergency fundraising” would be an issue at the next board meeting, Mr Mount wrote:

i) I understand George was asked to provide a reconciliation of all shares issued, to whom, at what price - this needs to be presented as part of the Board papers.

ii) I also understand, there was also a request for George and Matt to provide minutes and resolutions from the past 12 months.

iii) George also stated there is a 200,000 shares unreconciled - we need resolution or at least more clarity on this.

In my opinion, these three items need to be reconciled or at least viewed by the Board before creating an additional mechanism to our capital structure for financing. (and all of i,ii & iii should not be difficult to produce).

520    Mr Tucker deposed that on 25 March, shortly before the board meeting was due to start but before the others had arrived, he had a conversation with Mr Mount to the following effect:

[Mr Mount]:    We’re going to have to do a deeply discounted raise.

[Mr Tucker]:    Why?

[Mr Mount]:    I think the value of the company is around $3 million.

[Mr Tucker]:    How could you possibly have that level of insight into the company after being here for such a short time?

521    Mr Tucker said that he was concerned by Mr Mount’s advocacy for a “deeply discounted raise” because he “could see no basis for doing so”. He said that by 1 April he had become concerned that Mr Mount and Mr Perdikaris were carrying out an “effort… to steal DCM from the shareholders by devaluing the share price and undertaking a deeply discounted capital raise”.

522    Mr Tripp also deposed that shortly before he attended the meeting at Mr Perdikaris’s house on 24 March, Mr Perdikaris said to him:

Would you come around to my place to meet. It’s just a disaster. It’s like a Ponzi scheme. We’re being bullshitted to about the mine, the geology. The processing plant’s not going to work. Ryan is telling me we’re being sold a pup and we need to do a deeply discounted capital raising.

523    While it was put to Mr Tripp in cross-examination that Mr Perdikaris said no such thing, Mr Perdikaris did not deny it in his evidence in chief and was not recalled to give evidence to the contrary in reply.

524    There is no reference in the transcript of the 25 March board meeting to Mr Mount advocating a “deeply discounted capital raise”. Messrs Tucker, Perdikaris and Stewart discussed matters relating to the timing and requirements for capital raising in Mr Mount’s absence. Mr Tucker supported approaching shareholders to raise capital. Mr Perdikaris suggested that shareholders should be informed that DCM was “out of money”, which Mr Tucker firmly opposed. When Mr Mount returned to the meeting, he emphasised that he wanted a list of everything necessary to get the mine to commercial production, legal and regulatory requirements, and proper documentation about the company’s expenses. He expressed concerns about making representations to third parties about the company’s financial position without having written evidence to support those claims. There was no discussion about the share price. Mr Mount’s earlier proposal of a convertible note was also not raised.

525    In cross-examination, Mr Tucker explained his understanding of Mr Mount’s position as follows.

Well, just the fact that he was talking about deeply discounted raises that the company didn’t, in his opinion, have the data to – to justify the valuation that we thought it had – the people that were there before he turned up.

526    In a document dated 3 April 2021, entitled “Suggested Plan”, Mr Mount wrote:

2. Establish a path to raise capital in a legally acceptable mechanism(s).

Step 1: an immediate small debt transaction amongst a small group of shareholders to inject ~$500k (or more) into the business. So to be able to:

i. to bring corporate affairs into good (better?) standing

ii. bring our tenements in to good standing

iii. implement review of immediate project plans e.g. Feasibility study and near surface mineralisation.

iv. Work with lawyers (or a brokerage firm) to establish a legally accepted path to raise more capital (>$1m)

Step 2: Major capital raising (>$1m)

i. to complete construction of plant

ii. Implement other project objectives

527    The evidence shows that the board and Mr Mount agreed on the need to raise capital. They discussed the structure to use to raise capital and the representations to make to investors. They also considered whether the information available to the company was sufficient to raise capital. There was plainly a difference of opinion between Mr Mount, on the one hand, who urged a cautious and prudent approach to capital raising and, on the other, Mr Tucker and Mr Tripp, in particular, who were confident about the project and advocated a bullish approach.

528    The contemporaneous documents provide no support for the notion that Mr Mount advocated in terms for a “deeply discounted capital raise”. But they do reveal that Mr Mount was repeatedly urging the directors to adopt a cautious approach and not to mislead the market. Furthermore, he comes across as very negative — after only a week on the job. He consistently expressed doubts about the quality of the available data, urged the directors to obtain additional geological expert opinion, and requested further economic modelling of the costs of operating the mine. As the purpose of the capital raising was to fund the operations at the mine and the value of the company depended entirely on the exploitation of its resources, Mr Mount’s remarks could easily have been interpreted as a plea for a capital raise at a significantly lower price per share than Mr Tucker and Mr Tripp would countenance.

529    I reject the contention that the absence of a reference to Mr Mount pressing for a deeply discounted capital raising in any of the pleaded disclosures, including the two Whistleblower Reports, is “the likely reason” the respondents “sought to manufacture it” as a reason for terminating his employment.

530    Despite the absence of a record of Mr Mount pressing in terms for a “deeply discounted capital raise”, I am not satisfied that Messrs Tucker and Tripp were lying about the matter or that the remarks they attributed to Mr Mount were designed to obscure the real reason for their decision to remove him. It is at least equally possible that they misremembered what he said. After all, the transcripts of the board meetings do give one the impression that Mr Mount was pushing back against their proposal to raise capital at the time at 55 cents a share. Nor can I discount the possibility that Mr Mount did mention the matter orally in discussions which were not recorded or the subject of emails. I refer to what I said earlier about the plasticity of memory. I would add to that the following observation made by Leeming JA in Arizabaleta v The King [2023] NSWCCA 217 at [102]:

[I]t is … possible that a person’s memory may become distorted over time. It is not difficult for a belief in a possibility to become a belief in a probability. Nor is it difficult for a belief in a probability to become a belief in the fact. This merely reflects the plasticity of human memory and what happens when the witness is asked, repeatedly, to give his or her best account of what occurred. Every day courts encounter witnesses who genuinely believe their recollections of past events, and find that those beliefs are mistaken.

531    It is difficult to understand why Mr Mount would have mentioned the matter in the Whistleblower Reports, let alone “trumpeted” it there, as he suggested in submissions. The submission was not developed. The fact that it is not mentioned in the other documents upon which he relied as disclosures which qualify for protection under Pt 9.4AAA is neutral. It simply reflects the fact that there is no contemporaneous document to support the evidence Mr Tucker and Mr Tripp gave on this subject.

532    There was, however, other evidence which supported their account.

533    The evidence of Mr Tucker and Mr Tripp that Mr Mount was pushing for a discounted capital raise was corroborated by Mr Stewart in a passage of his affidavit upon which he was not cross-examined (para 47). Mr Stewart deposed that at the meeting with Mr Perdikaris and Mr Tripp on 24 March, he told Mr Perdikaris that he was “concerned about the reference by [Mr Mount] to bringing in shareholders at a discount” and that Mr Tripp expressed his concern about Mr Mount “devaluing the company with an ulterior motive”. This evidence also indicates that it was the understanding, not only of Messrs Tucker and Tripp, but also Mr Stewart as an interested shareholder, that Mr Mount was proposing raising capital at a discounted price based on a valuation of the company with which they disagreed, and that this was a matter that troubled all three of them at the time.

534    In any event, the question here is not whether Mr Mount was in fact pressing for a deeply discounted capital raise. It is whether the decisions of Mr Tucker and Mr Tripp were made in whole or in part because of a belief or suspicion that Mr Mount had made a disclosure that qualifies for protection. Even if they were mistaken about his attitude to capital raising, it would not necessarily undermine their evidence that they did not decide to dismiss him because they held such a belief or suspicion.

535    Mr Mount also submitted that Mr Clare confirmed that Mr Tucker had told him in April 2021 that Mr Mount was terminated and Mr Mount had turned “whistleblower on the company”. But that submission disregarded the evidence elicited from Mr Clare in cross-examination, which, it will be recalled, was that Mr Tucker did not say that Mr Mount had turned whistleblower but that “Mr Mount claimed to be a whistleblower”, a conversation I have concluded did not occur until late April or early May — after Mr Mount had filed his application in the Fair Work Commission and Mr Tucker became aware of the allegations he was making. Mr Clare’s evidence does not support the proposition that Mr Tucker knew he was a whistleblower at the time he decided that Mr Mount should be dismissed.

536    The fourth and final matter upon which Mr Mount relied was Mr Tucker’s awareness that he was being chased by Mr Stewart for share registry documentation so that the board could understand the true position in relation to the share ownership of DCM, allegedly obscured by the Tucker Bare Trust, and by Mr Perdikaris for copies of his brokerage invoices and those of Sequoia in order to reconcile them. He submitted that both these matters were raised in the Whistleblower Reports.

537    It is true that Mr Stewart asked Mr Tucker at the 17 March board meeting for a copy of DCM’s full share registry which would have disclosed which shares were held in trust and which were not. It is also true that Mr Tucker never provided Mr Stewart with that list. Mr Tucker accepted as much in cross-examination. But the matter was not taken any further. It was never put to Mr Tucker that he had failed to accede to Mr Stewart’s request because he believed or suspected that Mr Mount had made a disclosure that qualifies for protection under Pt 9.4AAA of the Corporations Act. Nor was it put to him that the reason he failed to do so was that he was concerned about what Mr Mount had written about him in one of the Whistleblower Reports. In these circumstances, it was not open to Mr Mount to rely upon Mr Tucker’s failure to do as Mr Stewart asked in order to impugn Mr Tucker’s credit concerning his reasons for deciding that Mr Mount’s employment should be terminated: Browne v Dunn (1893) 6 R 67 (HL).

538    In cross-examination Mr Tucker also admitted that Mr Perdikaris had asked for copies of his brokerage invoices and that he did not provide them at the meeting in which the request had been made. But he testified that he was waiting for Ms Butler to give him copies and, in any event, Ms Butler had informed him that she had told Mr Perdikaris and Mr Mount that they “matched up”. While it was put to Mr Tucker that that was untrue, I was not taken to any evidence to the contrary. Ms Butler did not give evidence. Nor was it put to Mr Tucker that he failed to produce the documents because of anything Mr Mount had said in either of the two Whistleblower Reports.

539    It is simply incorrect to say, as Mr Mount did in his closing submissions, that these particular matters were raised in the Whistleblower Reports. At all events these very matters were openly discussed in the presence of Mr Tucker and Mr Haindl at board meetings in which no-one referred to the Whistleblower Reports.

540    It is apparent that the relationship between Mr Mount on the one hand and Messrs Haindl, Tripp and Tucker on the other was strained before the 31 March board meeting. From the time Mr Mount was hired he was antagonising them. He did not trouble himself to win their confidence before taking them to task. Factors other than the events of 31 March clearly influenced their decision to remove him. Those factors were aired in open correspondence, at board meetings and in all likelihood in unrecorded conversations. Regardless of who bears the onus of proof, however, I am not persuaded that one of those factors was a belief or suspicion held by any of the respondents that Mr Mount had made a disclosure which qualifies for protection under Pt 9AAA. To put it another way Mr Mount did not discharge his onus in relation to the claims under s 1317AC and the respondents have discharged their onus in relation to the claims under s 1317AD.

541    As I mentioned earlier, all the individual respondents deposed that they were ignorant of the whistleblower provisions in Pt 9.4AAA until after the Fair Work Commission proceeding was instituted. That evidence was unchallenged and there is no evidence to the contrary. Consequently, I accept their evidence and find that at all material times they were unaware of those provisions. It follows that they were unaware that, if they took action against a person in Mr Mount’s position for a reason which included their beliefs or suspicions that he had made, may have made, proposed to make, or could make a disclosure which qualifies for protection, they could be charged with criminal offences, pay fines or penalties, and/or compensate Mr Mount for any loss or damage it may cause him.

542    While I rejected the respondents’ submission that knowledge of those provisions is a necessary element in the statutory causes of action, if the respondents had read the Whistleblower Reports or had been informed of their contents before they dismissed Mr Mount, one would expect to see evidence that they were complaining about and/or to Mr Mount that he was accusing them of committing “widespread fraud” and/or Mr Tucker of committing crimes or receiving secret commissions. And such evidence as there is indicates that they were unaware of these allegations. To take but one example, Mr Tucker’s response to Mr Perdikaris’s query at the 31 March board meeting about whether he had had the chance to “do a reconciliation” of his invoicing of brokerage fees against the money raised from investors (Court Book Pt C p 1352), is not that of a person who believes he is being accused of wrongdoing, let alone that of a director who knows that he has been accused by his CEO of engaging in serious criminal conduct.

543    The absence of any such evidence fortifies my opinion that the respondents’ reasons for terminating Mr Mount’s employment did not include any belief or suspicion that he had made a disclosure which qualifies for protection under Pt 9.4AAA.

544    For all these reasons, both the s 1317AC and the 1317AD claims relating to the decision to terminate Mr Mount must be dismissed. That disposes of agreed issues 6–7 and 12–13. Agreed issues 11 and 14, which concern the involvement of Messrs Tripp, Haindl and Tucker in any contravention by DCM, do not arise for consideration.

The demand for the return of the company car and reporting it as stolen (agreed issues 10, 15 and 16)

545    Mr Mount pleaded that Mr Tucker contravened s 1317AC and satisfied s 1317AD(1) by engaging in the following detrimental conduct after his contract was terminated:

(i)    demanding the return of the company car (the use of which [Mr Mount] was entitled to for the 12 month fixed period of the [c]ontract: and

(ii)    contacting the police and improperly reporting the car as stolen on 20 April 2021.

546    It was never suggested that, in demanding the return of the company car, and contacting the police and reporting it as stolen, Mr Tucker was on a frolic of his own. It is plain that, in doing so, he was acting on the company’s behalf. Yet, curiously, these allegations were only made against Mr Tucker. No such claim was made against DCM. But the respondents made nothing of this curiosity in cross-examination of Mr Mount or in submissions. Consequently, I will say nothing more about it.

547    The demand for the return of the company car was first made on 10 April 2021. That was four days after the decision had been made to terminate Mr Mount’s employment. By the time of the closing submissions, Mr Mount conceded he had no contractual right to the vehicle after his employment was terminated and that DCM was entitled to repossess it when the demand was made. As he had no claim of right to the vehicle, Mr Tucker, as a director of the company, was within his rights to report the vehicle as stolen.

548    Mr Tucker deposed that he took these actions because he believed that Mr Mount was no longer entitled to keep and use the car once his “engagement” had been terminated and that he was acting unlawfully in retaining it — not because of, or for reasons which included, any belief or suspicion that Mr Mount had made a “whistleblower disclosure”. I accept this evidence. I am convinced that the decision to require the car to be returned was made solely because Mr Mount’s employment had been terminated and Mr Tucker honestly believed Mr Mount had no continuing entitlement to retain it.

549    In any case, the demand for the return of the company car did not cause any detriment. The detriment he suffered was the termination of his contract and with it the right to possession of the vehicle, not, as he alleged in effect, the “forcible” towing of the company’s car from his property and the taking possession of the personal items he had left in it (which were nonetheless returned to him).

Conclusions

550    Mr Mount has no standing to seek a declaration under s 1317E of the Corporations Act or pecuniary penalties under s 1317G for the respondents’ alleged contraventions of ss 1317AAE and 1317AC. Nevertheless, s 21 of the FCA Act gives the Court jurisdiction to declare that the respondents contravened those provisions. However, I am not satisfied that any of the respondents contravened s 1317AAE or s 1317AC. Accordingly, the occasion for granting the declarations does not arise.

551    In relation to Mr Mount’s claims under ss 1317AD and 1317AE, the respondents agreed that Mr Mount suffered detriment by reason of the respondents’ decision to terminate his employment. Consequently, the respondents carried the onus of proving that his claim is not made out. Mr Mount adduced evidence that suggests a reasonable possibility that when the respondents terminated his employment, Mr Tripp and Mr Perdikaris believed or suspected that Mr Mount had made a disclosure that qualifies for protection under Pt 9.4AAA. But I am satisfied that the respondents discharged their onus of proving that the reasons for terminating Mr Mount’s employment did not include such a belief or suspicion that he had made a disclosure that qualifies for protection. Consequently, Mr Mount has not made out his claims under ss 1317AD and 1317AE.

THE CONTRACT CLAIM

The pleaded case and the dispute (agreed issues 29 to 41)

552    Mr Mount alleged that DCM breached its contract with him by terminating the contract without notice on 10 April 2021.

553    As I have already noted, the parties agreed that DCM terminated Mr Mount’s employment without notice on 10 April 2021. The issues are:

(1)    whether DCM was entitled to summarily dismiss Mr Mount because:

(a)    he breached his duties to DCM in that:

(i)    he was complicit in the actions of Mr Perdikaris in improperly removing Mr Haindl and Mr Tucker from the board meeting on 31 March 2021 against their will;

(ii)    he was aware before the board meeting of material Mr Perdikaris had used as justification for requiring them to leave the meeting;

(iii)    the cohesion of the board and senior management had fundamentally broken down; and/or

(b)    for other reasons of which it became aware after 10 April 2021 as pleaded in para 19 of the Defence to the Further Amended Statement of Claim; or

(c)    he engaged Resolve in or around March 2021 purportedly on behalf of DCM to provide advice to him including in relation to preparing and filing a report to ASIC regarding Mr Haindl and to cause payment for such services to be made using DCM funds without the authorisation of the DCM board;

(2)    if not, what is the measure of Mr Mount’s loss?

554    The reasons alleged in para 19 of the defence to the further amended statement of claim were that Mr Mount repudiated his contract with DCM or committed a fundamental breach of it because:

(a)    Mr Mount was complicit in the actions of Mr Perdikaris in improperly removing Mr Haindl and Mr Tucker from the 31 March board meeting against their will and the cohesion of the board and senior management had fundamentally broken down “including as a consequence of the [above-mentioned] circumstances”; and

(b)    there were other matters of which DCM became aware after Mr Mount’s dismissal that entitled it to terminate his employment, namely:

(i)    Mr Mount appointed Resolve on 8 April 2021 to act for DCM without the knowledge or approval of the company or any of its directors;

(ii)    Mr Mount purported to instruct Resolve after 10 April 2021 by which time he knew that his employment had been terminated;

(iii)    Mr Mount disclosed confidential information of DCM to Mr Perdikaris (either directly or through his assistant, Melissa Mason) after he knew that Mr Perdikaris had been removed as a director;

(iv)    Mr Mount engaged Resolve in or about March 2021 to advise him personally including in relation to preparing and filing a report to ASIC about Mr Haindl and causing DCM’s funds to be used to pay for Resolve’s services without authorisation from the board;

(v)    Mr Mount acted at Mr Perdikaris’s direction and in his personal interest in conflict with Mr Mount’s obligations to DCM.

555    In their defence, the respondents pleaded that this conduct amounted to a breach of the duties he owed to DCM as an officer of the company under ss 180, 181(1), 182(1) and 183(1) of the Corporations Act. Those provisions require an officer of a corporation to exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they were an officer of a corporation in the corporation’s circumstances and if they occupied the same office and held the same responsibilities (s 180); to exercise their powers and discharge their duties in good faith in the best interests of the corporation and for a proper purpose (s 181(1)); not to improperly use their position to gain an advantage for themselves or someone else or cause detriment to the corporation (s 182(1)); and if they obtain information because they are or have been an officer of the corporation, not to use that information to gain advantage for themselves or someone else or cause detriment to the corporation (s 183(1)).

556    These are serious allegations. Yet in their opening submissions the respondents merely asserted that Mr Mount’s conduct was “incompatible with the fulfilment of his duty to DCM and justified summary dismissal”. The assertion amounts to no more than a restatement of the allegation in the pleading. The point was not developed.

557    In the amended statement of issues filed after the close of evidence, no mention was made of the allegation that Mr Mount breached his duties under ss 180, 181(1), 182(1) or 183(1). The closest was issue 41, which was whether Mr Mount “acted upon the direction and in the personal interest of Mr Perdikaris in conflict with his duties and obligations to DCM as particularised in paragraph 19(b)(v) of the defence”. In their closing submissions, the only thing the respondents said about that issue was that Mr Mount’s conduct “demonstrates that, despite serious conflicts of interest, Mount worked in direct collaboration with Perdikaris, unbeknownst to Tripp, Haindl and Tucker to secure the removal of Tucker and Haindl from the Board and to effectively sideline them from the management of the business”. They did not develop the submission any further, either in writing or orally, and at no time identified which of Mr Mount’s duties to the company was breached by reason of this conduct. In these circumstances, and bearing in mind the seriousness of the allegations, I am not in a position to determine which, if any, of the pleaded duties Mr Mount may have breached. I have, however, addressed the substance of the allegations and the points developed by the parties.

558    Mr Mount alleged in his reply to the defence that as a matter of law it was not open to DCM to terminate Mr Mount’s contract on the basis of matters discovered after 10 April 2021 and made some specific responses to the particular grounds upon which the respondents relied. I will refer to these where they arise for consideration.

The legal principles

559    Subject to statutory rights and remedies, an employer may lawfully terminate a fixed term contract at any time before it comes to an end if the employee has committed a sufficiently serious breach so as to amount to a repudiation of the contract or has engaged in “conduct which manifests an intention no longer to be bound by one or more of the essential terms of the contract”: Sappideen C et al., Macken’s Law of Employment (9th ed, Lawbook Co., 2022) at [8.10].

560    A breach of a contract by repudiation occurs when one party evinces an intention no longer to be bound by it or to fulfil it only in a manner substantially inconsistent with the contractual obligations: Romero v Farstad Shipping (Indian Pacific) Pty Ltd (2014) 231 FCR 403 at [112] (Allsop CJ, Rares and McKerracher JJ). As their Honours went on to observe:

Repudiation will arise where there is conduct consistent with a renunciation either of the contract as a whole or a fundamental obligation under it: Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 at [44]. Repudiation of a contract is a serious matter and is not to be lightly found or inferred: Shevill v Builders Licensing Board (1982) 149 CLR 620 at 633. To amount to a refusal to perform the contract, the breach must be sufficiently serious: see, for example, Re Rubel Bronze and Metal Company Ltd [1918] 1 KB 315 at 322; The Product Star [1993] 1 Lloyd’s Rep 397 at 407 and Suisse Atlantique Société d’Armement Maritime SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361 at 394, 429, 435.

561    It is unnecessary to prove that the employee intended to repudiate the contract; the test is an objective one: Romero at [117].

562    An employee may be summarily dismissed for serious and wilful misconduct. The right is preserved in the FW Act (see s 123, which exempts an employer from the obligation to give notice or payment in lieu where the employee has engaged in “serious misconduct”), although in some circumstances, not presently relevant, a person who has been summarily dismissed may claim that the dismissal was unfair on that account and obtain relief under the Act (see Pt 3-2). A single act of wilful disobedience or misconduct can justify summary dismissal “if it is of a nature which goes to show (in effect) that the [employee] is repudiating the contract, or one of its essential conditions”: Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285 at 287, 289 (Lord Evershed MR, Lord Jenkins and Willmer LJ agreeing), cited with approval in North v Television Corporation Ltd (1976) 11 ALR 599 at 609 (Smithers and Evatt JJ). For summary dismissal to be justified, however, misconduct need not amount to a repudiation of the contract: Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221 at [13] and [15] (Tracey, Gilmour, Jagot and Beach JJ), citing Rankin v Marine Power International Pty Ltd [2001] VSC 150; 107 IR 117 at [253]–[254] (Gillard J). As Gillard J explained in Rankin at [254]:

At common law, the authorities do establish that there is an interaction between the principles of contract law justifying rescission of a contract, and the rules established by the authorities over the last 150 years in relation to the type of misconduct justifying the dismissal of an employee without notice. It cannot be denied that in some cases, the courts do speak in terms of the basic principles of contract law …, but in my opinion, it would be wrong to say, as was submitted on behalf of the plaintiff, that the right to terminate only exists where the conduct of the employee demonstrates repudiation of the contract, manifesting an intention not to perform the contractual obligations in the future. I do emphasise that many examples of conduct justifying termination would comfortably fit in with those principles. However, the authorities do establish that there are offences which justify dismissal but which would not, in themselves, show that the employee was intending not to perform contractual obligations in the future. There may be an example of a one‑off serious act of misconduct which would justify dismissal, even though the probabilities were high that it would not occur again …

563    The kind of misconduct that will justify summary dismissal is “[c]onduct which in respect of important matters is incompatible with the fulfilment of an employee’s duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee”: Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 at 81 (Dixon and McTiernan JJ); see, too, Starke and Evatt JJ at 72-73, confirmed by Gleeson CJ, Gaudron and Gummow JJ in Concut Pty Ltd v Worrell [2000] HCA 64; 75 ALJR 312; 176 ALR 693; 49 AILR ¶4–436; 103 IR 160 at [25]. The employee’s conduct must be repugnant to the employment relationship; uneasiness as to the employee’s future conduct is not enough: Blyth at 82 (Dixon and McTiernan JJ). Some employees, such as senior managers, have special obligations of conduct and confidence: Serventi v John Holland Group Pty Ltd [2016] FCA 1049; 58 AILR ¶100-527 at [6] (Madgwick J).

564    Where the circumstances justify summary dismissal, absent any obligation to the contrary imposed by legislation or an industrial instrument, an employee in private employment has no right to be warned, no right to be heard beforehand, and no right to be given reasons: see Macken’s Law of Employment at [8.100] and the authorities cited in footnote 93.

565    The assertion Mr Mount made in his reply that it is not open to the respondents “as a matter of law” to rely on matters discovered after his employment was terminated is wrong. Nearly a century ago in Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 at 370-1, Rich J described such a notion as “an ancient heresy” and expressed his surprise at finding a surviving adherent. Starke J at 373 said it was “quite immaterial” that the appellant’s misconduct was unknown to the respondent at the time of termination. As his Honour put it, “[i]f there were, in fact, any circumstances in existence at the time of the termination of the agreement which could have justified the respondent in so terminating it, then [the respondent] may justify the termination by subsequent proof of those circumstances. See also Dixon J at 377–8. As Dixon J went on to observe in Shepherd at 378, “the rule is of general application in the discharge of contract by breach … ‘that a contracting party, who, after he has become entitled to refuse performance of his contractual obligations, gives a wrong reason for his refusal, does not thereby deprive himself of a justification which in fact existed, whether he was aware of it or not’ (per Greer J, Taylor v Oakes Roncoroni & Co [(1922) 127 L.T., at p. 269; 27 Com. Cas., at p. 266]” …). The earliest authority cited goes back to 1835.

566    The onus is on employer to prove that summary dismissal is justified: Rankin at [250]. In Rankin at [250] Gillard J also said that the onus is “a heavy burden”. The use of such an expression to describe the onus of proof was deprecated by another intermediate court of appeal in Kantor v Vosahlo [2004] VSCA 235 at [24] (Ormiston JA) and [58] (Buchanan and Phillips JJA). Ormiston JA considered that in describing the onus of proof in a civil matter as a “heavy burden” the trial judge had misdirected himself. The relevant passages were cited with evident approval by the NSW Court of Appeal in Gianoutsos v Glykis (2006) 65 NSWLR 539 at [50] (McClellan CJ at CL, Sully J and Hislop J agreeing at [65] and [66] respectively). It is sufficient for me at this point to remind myself that the standard of proof is still the balance of probabilities but the seriousness of the allegations means that the onus will not be discharged by “inexact proofs, indefinite testimony or indirect inferences”.

Consideration

567    I will now proceed to consider the respondents’ pleaded justifications for summary dismissal.

Complicity in removal of Messrs Haindl and Tucker from 31 March board meeting

568    While it is true that Mr Mount did not object to, or comment upon, Mr Perdikaris’s actions or provide responsive answers to Mr Tripp’s question on the subject, I am not satisfied that Mr Mount’s silence or passivity on this matter is sufficient to show that he was complicit in Mr Perdikaris’s decision to invoke the services of the two burly men to effect or assist in their removal. There is no evidence to indicate that he was ever asked whether he had anything to do with it or whether he approved of it. Mr Tripp accepted under cross-examination that the only time he asked Mr Mount for an explanation was his request that Mr Mount “just explain what happened there” during the board meeting. As I have already explained, for present purposes it does not matter what DCM or the other directors thought at the time or afterwards. Whatever they may have thought, the evidence does not establish that Mr Mount was involved, and therefore complicit, in Mr Perdikaris’s decision or had anything to do with the recruitment of the two men.

The breakdown in the cohesion of the board and senior management

569    I fully accept that the cohesion of the board had broken down as a result of Mr Perdikaris’s actions and that, because the other directors believed that Mr Mount was complicit in his actions, it would have been impossible to maintain a working relationship with him. As Mr Mount was employed under a fixed term contract, however, absent proof of his complicity or the respondents’ establishing some other basis upon which summary dismissal was justified, DCM was only entitled to terminate his employment if it paid him the rest of his salary for the balance of the term.

The Resolve Litigation Lawyers issues (agreed issues 32 to 40)

The engagement of Resolve (agreed issues 31 to 37)

570    Mr Mount did not allege that he engaged Resolve in March 2021. He alleged that Mr Perdikaris did. The issue the parties agreed upon was whether Mr Perdikaris retained Resolve on 29 March as solicitors for DCM pursuant to authority given to Mr Perdikaris by DCM on 17 March and 25 March. In his written submissions on the March engagement, Mr Mount did not mention 17 March. Nor did he contend that Mr Perdikaris was given authority to engage Resolve for any reason on 25 March. He merely referred to the board’s agreement to engage McInnes Wilson and other matter matters that did not relate to the issue.

571    In February 2021, following Mr Mount’s letter of introduction, Ms Nygh provided advice to Mr Perdikaris in relation to concerns he had about the governance of DCM and about how the Metohes shares were held.

572    Ms Graham, of McInnes Wilson, deposed that she had a phone conversation with Mr Perdikaris on 23 March in which he told her that he wanted “to go after Sequoia”, Mr Tucker’s company. In her reply she told him to take one step at a time and that the first step was to “make sure the company is in order now, the board properly constituted and proper checks now in place”. She emphasised the importance of this and then said:

You may need to get some advice on this as it is important. If you cannot sort out the board and compliance you may need someone else in to help. I have been retained to look int recovery of money allegedly misappropriated by Nettelbeck [scil.], not the board set up …”.

573    During the 25 March board meeting Mr Mount forwarded to Ms Nygh the email he sent to Messrs Perdikaris, Tripp and Stewart on 23 March with the attachment (the Second Whistleblower Report). The covering email read:

FYI – this is the Board meeting I am in at the moment.

Can I call you after (and sorry for the adhoc communications the past two days).

The ad hoc communications are irrelevant as Ms Nygh testified that they related to a matter which concerned Axiom and there is no evidence to the contrary.

574    In cross-examination, Mr Mount accepted that the Second Whistleblower Report was “confidential information belonging to Dover” yet he did not tell the board members he had sent the document to Ms Nygh.

575    On 29 March Messrs Mount and Perdikaris met with Ms Nygh. The following day, Mr Mount telephoned Ms Nygh and told her that Mr Perdikaris “agreed for Haindl [and] Tucker to be reported to ASIC”.

576    By 29 March Ms Nygh said it was unclear whether the firm would be acting for Mr Perdikaris, Mr Mount or DCM. On and from 30 March, however, Ms Nygh’s file notes record the client as “Dover”, “Perdis Dover Castle” or “Dover Castle/Perdikaris”. Ms Nygh testified that her preference was to act for Mr Mount “as an individual because as a whistleblower what usually happens is that you get part of the way through your whistleblowing and your employment is terminated and if you’re acting for the company, then it’s down tools and you can’t see the – see the work through to its end”. But she also testified that Mr Mount was adamant he wanted the firm to act for the company. She told him she was prepared to do that provided he was aware that, if his employment was terminated, the file would have to be handed over to DCM. She testified that she did not discuss any other whistleblower report with Mr Mount and, because she was being instructed to act for the company “either actually or potentially”, she could not advise Mr Mount about how the whistleblower provisions affected him personally.

577    On 31 March Mr Mount instructed Ms Butler to pay $10,000 of DCM’s funds into Resolve’s trust account, which was Resolve’s estimate of its costs up to a certain point. Mr Mount appeared to accept in cross-examination that the total amount of fees he “committed” for Resolve’s work (including fees incurred thereafter) was around $18,000.

578    On 2 April, in an email addressed to Ms Nygh and Mr Perdikaris, Mr Mount set out certain opinions he had expressed to them and asked Ms Nygh to consider them and advise. Those opinions, which he described as “initial thoughts (and incorporating some suggestions from Ms Nygh)” were that:

(1)    “the truth” needed to be disclosed to the shareholders so that they could make informed decisions and that the current “scuttlebutt … which is preventing the business [from] operating” could cease;

(2)    before the 31 March board meeting Mr Tripp twice informed him and Mr Perdikaris that he would not “prosecute” Mr Tucker and therefore Mr Tripp should also “excuse himself from matters pertaining to the fraud and the necessary legal actions to be taken”, which would leave the board with a single member, Mr Perdikaris;

(3)    if Mr Perdikaris were to call a meeting “relating to the fraud and legal actions” and inform the shareholders, then cl 2.6 of the DCM constitution would require him first to appoint at least one other member to the board for the purposes of conducting the board meeting, suggesting Mr Stewart as a possible candidate and querying whether Mr Stewart, Mr Mount or “anyone else” could be appointed;

(4)    the board might then resolve to call such a meeting to inform the shareholders of “all this conduct” and any other relevant agenda items.

579    A second file (that is a file in addition to the one created for Mr Perdikaris) was not opened until 6 or 7 April and on 7 April Ms Nygh sent a retainer agreement to DCM. Ms Nygh charged DCM for her work on the file, including for conferring with Mr Mount in relation to, and lodging, the report to ASIC.

580    On the morning of 7 April Ms Nygh emailed a costs disclosure letter to Mr Mount, addressed to him as CEO of DCM, indicating that DCM had sought advice from Resolve on and from 29 March 2021. The heading of the letter was “advice in relation to governance of [DCM]” and the scope of the legal work was described in this way:

You have instructed us to act for Dover Castle Metals Pty Ltd (Dover Castle) and to assist and advise you in making a report to ASIC about the governance of Dover Castle.

You will provide us with instructions on behalf of Dover Castle.

581    The estimated costs were $10,000 for “the first stage of the work” which encompassed (without alteration):

(a)    obtaining instructions including in conference with you and Chris Perdikaris in conference on 29 March 2021;

(b)    reviewing background documents including reports by you and by FTI and advice by Wilson McInnnes;

(c)    making initial inquiries with ASIC;

(d)    preparing a report to ASIC; and

(e)    liaising with you throughout.

582    Mr Mount “confirm[ed]” Resolve’s costs agreement on 8 April. By this time Mr Perdikaris had been removed as a director. I understood it to be common ground that, before Mr Mount was dismissed, none of the other directors were informed of the costs disclosure or that Mr Mount had “confirmed” the costs agreement.

583    Mr Mount’s pleaded case was that Mr Perdikaris had authorised Resolve’s appointment while he was a director and, by signing the retainer agreement, he was merely confirming what Mr Perdikaris had authorised.

584    On 9 April Resolve sent an invoice to Mr Mount for work performed to date. The invoice is entitled “Advice in relation to governance of Dover Castle Metals”. The first item concerned the meeting with Mr Mount and Mr Perdikaris on 29 March. It includes fees charged for considering relevant provisions of the Corporations Act and DCM’s constitution; reviewing the constitution in relation to conflicts of interests and voting at directors meetings; settling the 30 March email advice from Ms Nygh which Mr Mount said he distributed at the 31 March board meeting; reviewing Mr Mount’s report to new directors (which I take to be the Second Whistleblower Report); reviewing points for discussion with ASIC; liaising with Mr Mount and ASIC; and reviewing/preparing a report for ASIC. The invoice supports Mr Mount’s evidence that he was seeking advice about corporate governance and a report to ASIC.

585    The following morning (at 9.50) Mr Mount instructed Resolve to use the DCM letterhead and his signature “in [his] role as CEO”.

586    Unless a company’s constitution provides otherwise, directors of a company may delegate any of their powers to anyone, including a single director, an employee of the company or a committee of directors: Corporations Act, s 198D.

587    The records of the board meetings of DCM which were tendered in evidence disclose that meetings were conducted without regard to ordinary meeting procedures and much of what is said is often difficult to understand.

588    Mr Mount relied on certain remarks made by Mr Perdikaris as recorded in the transcript from the 25 March board meeting. There, Mr Perdikaris is recorded as having made the following comment:

So under my portfolio, as I understand it, is the new accountants, right, the lawyer that we just discussed, the McInnes Lawyer, possible shortfall of Craig, FTI coming to an end, the Christensen file, I’ll wait. And, look, we’re going to negotiate with him, okay, at the end of the day, so that file should be resolved fairly quickly as well. Some options for the company's constitution, well, that’s another matter through these accountants and lawyers once we get to that and we’ve got the funds. All right?

589    Mr Mount submitted that “everyone” agreed that Mr Perdikaris had that “portfolio”. The only person who responded to Mr Perdikaris’s comment was Mr Stewart. He replied: “Good”. Nevertheless it was an agreed fact that during this meeting the directors signed a letter engaging McInnes Wilson as DCM’s lawyers. Ms Graham deposed that on 26 March she received an email from Cindy Perdikaris attaching the fee agreement signed by each of the DCM directors.

590    Draft minutes of the meeting, which I understand were prepared by Mr Stewart, suggest that the agreement was for a limited purpose. The “other business section” includes a dot point in the following terms:

CP liaise with McInnes Wilson regarding obligation to disclose fraud to insurers.

591    The mere fact that Mr Perdikaris was tasked with instructing one firm of lawyers with the authority of the other directors did not mean that he had authority to engage another firm of lawyers.

592    Earlier in the meeting Mr Perdikaris sought approval to instruct accountants and/or lawyers. He asked the meeting whether everyone was happy with “PFK”, which I take to be a reference to the accounting firm of that name. Mr Haindl, Mr Hancock and Mr Mount agreed. No-one disagreed.

593    A little later, on the same page, Mr Perdikaris is recorded as saying:

I was sort of going to say today, if you guys are happy to give me an approval up to a certain amount where I can instruct the accountants and/or the lawyers, be it, say, $5,000 for argument’s sake to get little bits going. If you want to have a think about that, that’s fine. But if you want to give me that approval today that gives you a bit of scope. But I’ll always ask any, so I won’t go off and do it without the board’s permission, especially in this current environment. Is that cool with you guys?

(Emphasis added.)

594    The exchanges that followed are also relevant:

MR STEWART:    Yeah, agree.

MR PERDIKARIS:    Sound all right? Okay, beautiful.

MR STEWART:    Absolutely. Look, moving forward, I think there’ll be something more formal around that once we move through this space--

MR PERDIKARIS:    Yeah, sure, sure, sure. Yeah, yeah, yeah.

MR STEWART:    and we have a delegation of authority or similar. The executives would sit across that and the CEO would have to sign off for X and--

MR PERDIKARIS:    That’s exactly right. I don't want (indistinct)--

MR STEWART:    (indistinct)--

MR PERDIKARIS:    responsibility for--

MR STEWART:    Thank you.

MR PERDIKARIS:    anything. It’s a board decision, yeah.

MR STEWART:    Okay.

MR PERDIKARIS:    Cool …

…

MR PERDIKARIS:    I've had some really good chats with McInnes Lawyers, some really good chats there. I must say I think we might have a really strong avenue, and I mean in the 90s, that whatever we don't recoup from Nettelbeck we'll be able to get through our insurance. So McInnes, they're very good, right? This is what they do. They're lawyers for insurances, okay?

MR TUCKER:        They think we've got a case, do they?

MR PERDIKARIS:    Well, extremely strong case.

MR TRIPP:        And it's a case against Logica, was it?

MR PERDIKARIS:    Yes, against Logica.

(Emphasis added, otherwise without alteration.)

595    No mention was made of Resolve or Ms Nygh and there is no evidence to suggest that Mr Perdikaris sought the approval of the board to retain their services.

596    It will be recalled that Ms Graham had a conversation with Mr Perdikaris on 23 March 2021 in which he told her that he wanted “to go after Sequoia”, Mr Tucker’s company. In her reply she told him to take one step at a time and that the first step was to “make sure the company is in order now, the board properly constituted and proper checks in place”. She emphasised the importance of these matters and then said:

You may need to get some advice on this as it is important. If you cannot sort out the board and compliance you may need someone else in to help. I have been retained to look int recovery of money allegedly misappropriated by Nettelbeck [scil.], not the board set up …”.

597    Mr Mount submitted that seeking advice from Resolve was “a natural progression” and that there could be no doubt that he was doing what he thought he was authorised to do by Mr Perdikaris and the board. He contended that Mr Perdikaris had implied authority to engage Resolve. He also submitted that the “authority given to Mr Perdikaris by the board included actual implied authority to do and act on whatever the advice given to DCM involved”.

598    I cannot accept these submissions. While seeking advice on corporate governance from other lawyers on corporate governance matters may well have been a “natural progression”, Mr Mount was present when the above statements were made. He therefore knew that Mr Perdikaris had undertaken to obtain board approval to retain any lawyers and that the board agreed to the engagement of McInnes Wilson but did not authorise the engagement of any other firm or solicitor. He did not suggest he was not paying attention during this discussion or that he was outside the room when it took place and it is most unlikely that he was not paying attention.

599    In cross-examination Mr Perdikaris admitted that he sought the board’s approval to retain McInnes Wilson because he knew that the retention by DCM of legal advisers for particular matters required consideration and approval by the board and that he did not obtain its approval to retain Resolve. While it was put to Ms Graham in cross-examination that she was suggesting Mr Perdikaris should go elsewhere to obtain advice about corporate governance if he needed it, it was not put to her that she advised him to consult another lawyer for that purpose. Even if Ms Graham’s advice should be understood in that way, it does not follow that Mr Perdikaris had authority from the board to do so. He certainly did not have express authority.

600    In Colin R Price and Associates Pty Ltd v Four Oaks Pty Ltd (2017) 251 FCR 404 at [150]-[151] Rares, Murphy and Davies JJ explained:

In relation to implied authority, the Court’s inquiry concerns the intention of the principal in conferring authority on the agent. Ordinarily, where a company has more than one director, a single director does not have implied authority to bind the company. A director’s normal power is to bind the company only by joining with other directors in a resolution of the board of directors: Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 (Northside) at 198, 205 (Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ); Junker at [42].

An implied grant of authority can result from acquiescence in a course of behaviour by persons who have actual authority to delegate. For example, if directors stand by while a single director enters into transactions outside his or her authority the board may be taken to have impliedly granted actual authority to do so: Junker at [43]. However, to confer implied authority there must usually be not only the acquiescence of the individual directors but evidence of a communication by word or conduct of their respective consents to one another and to the agent: Austin A, Ford H and Ramsay I, Company Directors: Principles of Law and Corporate Governance (LexisNexis Butterworths, 2005) at [3.41], citing Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480; Junker at [43].

(Emphasis added.)

601    It is abundantly clear from the discussion at the 25 March board meeting that the other directors did not acquiesce in the engagement of Resolve by Mr Perdikaris and there is no evidence of any communication of consent by word or conduct.

602    In his reply to the defence, Mr Mount pleaded that the respondents were aware at least from 31 March 2021 that DCM had engaged Resolve because they had been given an advice from the firm in relation to corporate governance at the board meeting held that day. Mr Mount relied on the email from Ms Nygh addressed to him and Mr Perdikaris in which certain provisions of the Corporations Act were extracted (the advice) and to which various provisions of the Act were attached, together with a copy of the DCM constitution.

603    Even if that were true, it would not prove that either Mr Perdikaris or Mr Mount had authority to engage Resolve on behalf of DCM from that time (see [588]–[589] above). But the evidence falls short of showing that they were aware that the company had engaged Resolve at that time.

604    It will be recalled that Mr Mount testified that that he printed out enough copies of the advice for the board and presented them at the board meeting prior to the meeting, by which I took him to be saying he distributed them to the attendees at the dining table before the meeting started. For the reasons given at [393]–[396], I do not accept that evidence. But even if the advice was distributed, it does not reveal that Ms Nygh or Resolve was retained by DCM. Nothing on the face of the email suggests that Resolve had been engaged to act for DCM. The board would have had no reason to think that Resolve had been retained by the company.

605    Did Mr Mount, himself, have authority to retain Resolve?

606    There is no evidence of the delegation of any particular power to Mr Mount and Mr Mount did not contend that he had express authorisation from the board to retain or instruct Resolve. Indeed, he accepted that he did not obtain such authority. He told the Court that he did not think it necessary to do so because he thought that the “remit” of CEOs generally includes getting advice and that includes engaging with lawyers.

607    The respondents merely asserted that he had no implied authority. The assertion was not supported by argument or authority.

608    The scope of Mr Mount’s duties was not reduced to writing. The agreement he reached with the board was that he would be appointed its Acting CEO for 12 months. Whatever the directors may have envisaged this would involve, it was not spelled out either orally or in writing.

609    In Ford, Austin & Ramsay’s Principles of Corporations Law at [13.070] Prof Ramsay wrote that, “where [as here] the company’s chief executive is not a member of the board, the fact that he or she is appointed to manage the company in everyday matters probably means that the chief executive has the same usual authority as a managing director”.

610    In Entwells Pty Ltd v National and General Insurance Co Ltd (1991) 5 ACSR 424 at 427 Ipp J observed that the task of a managing director is to deal with everyday matters, to supervise the daily running of the company and the other managers, “indeed generally be in charge of the business of the company”, citing Ford, Principles of Company Law, 5th ed., at [1425]. His Honour added, that “it is a characteristic of the power of a managing director that he is given powers of day to day management which are exercisable without reference to the board: Pennington’s Company Law, 5th ed., 657”. That includes engaging others to provide services for the company: Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 (CA).

611    In Nece Pty Ltd v Ritek Inc (1997) 24 ACSR 38 at 43; 15 ACLC 813 Lehane J said:

It is, I should think, highly unlikely that a managing director entrusted with the day to day management of a company would not have implied authority to instruct solicitors to take proceedings to recover debts or to resist claims against the company where the transactions concerned occurred in the daily operation of the company’s business. It would not follow, however, that the managing director should be regarded as having implied authority, if the evidence went no further, to instruct solicitors to oppose a winding up application of any apparent substance. Rather, it might be expected that that would be a matter with which the board would be directly and immediately concerned.

612    Whatever the directors may have thought about the scope of Mr Mount’s authority, it was common ground that he had authority to deal with matters relating to corporate governance. At the 25 March board meeting Mr Tucker insisted that Mr Mount’s role was “to get the governance and the corporate side of the company up to scratch”. In his first affidavit Mr Tucker explained that he “wanted to make it clear that [Mr Mount’s] role in DCM was to address the gaps in corporate governance that had been revealed by [Mr Nettelbeck’s] misconduct, and that he should limit himself to performing that function”, rather than get involved in the “operational” side of things which he believed would continue to be Mr Haindl’s responsibility.

613    It is arguable that submitting the report, or causing the report to be submitted, to ASIC was a matter that required the approval or express authorisation of the board. But the respondents did not make that argument. Nor did they include such a proposition in their defence. Their complaint was that he lacked authority to seek the advice from Resolve and to cause payment for that advice.

614    Mr Mount testified that he did not think it was appropriate to seek board approval before engaging Resolve because he considered the board was “highly conflicted” as “[t]hey were engaging in what [he] believed to be fraudulent activity in regards to capital raising”. He implied that, in acting as he did, he followed legal advice. As he put it: “I sought advice and the advice was I should – I should submit that report under the terms that I did”. This evidence aligns with the evidence that Ms Nygh gave in examination in chief by senior counsel for the respondents:

Was this document sent to any directors of Dover, to your knowledge?---Not by me. No.

All right. And to the best of your recollection or knowledge, by anyone else from your firm?---No.

All right. Now, is there any reason as to why that was not done that you know of?---Well, this was a letter about making a report about the conduct of directors of Dover. So it did not seem appropriate to send that letter to the directors of Dover.

Why not?---Because it was about a report about those directors’ misconduct, and so we considered whether Mr Mount had – was entitled to report that to ASIC in his capacity to retain lawyers in his capacity as CEO of Dover and, indeed, whether [scil.] – as an officer of the company, he had a duty to report misconduct to ASIC.

615    Ms Nygh was then questioned about the email from Ms Trenfield at about 10.47am on 7 April and which Mr Mount forwarded to her at 10.56am. There, it will be recalled, Ms Trenfield said that she had been told by Mr Christensen that Mr Mount’s employment had been terminated “as of” 6 April. It will also be recalled that Ms Nygh responded to Mr Mount saying that she assumed he had not been informed and he replied that “no one from the company has informed me of any change to my position”.

616    Senior counsel for the respondents asked Ms Nygh whether she had had any discussion with Mr Mount about this topic “on or around or shortly after 7 April”. Ms Nygh replied:

I recall having a conversation with Mr Mount about this ongoing issue that he was – that people – that – I’m just trying to think exactly what Mr Mount was saying. He – it was this conversation where he said, “This is really weird. They’re acting as if I’ve been terminated, but nobody has told me that I’ve been terminated. Nobody from the company has told me that I’ve been terminated,” and saying, well – me saying to Mr Mount that, well, “If you’ve been terminated, they need to tell you. You can’t just terminate somebody without telling them.”

617    The exchange continued:

Was there any discussion as to whether there might – you might take pause in terms of who you had been accepting instructions from in relation to matter 751 [Resolve’s file number for the advice]?---Not as far as I can recall. I think we took the attitude that he had not been informed of any termination.

Right?---He had not has his mandate removed.

And was any enquiry made by you or, to your knowledge, your firm with the board of Dover about that topic?---No. I had no contact with the board of Dover. I was preparing a report about the board’s misconduct.

618    In these circumstances, I accept Mr Mount’s evidence that his decision not to seek board approval was based on legal advice he received in his capacity as CEO of the company.

619    For these reasons I do not consider that DCM has proved that it was entitled to summarily dismiss Mr Mount because he had engaged Resolve in or around March 2021 to provide him with legal advice in his capacity as Acting CEO or to cause DCM to pay for it.

Purporting to instruct Resolve on behalf of DCM after Messrs Haindl and Tucker had informed him on 10 April that his engagement had been terminated (agreed issues 38 to 40)

620    The only evidence of instructions Mr Mount gave Ms Nygh after his employment had been terminated on 10 April appears in an email Mr Mount sent at 3.17pm, that is within hours of receiving the proof of it. In that email Mr Mount asked Ms Nygh to add the following text in the introduction to the report to ASIC:

This report is made on behalf of Dover by Ryan Mount, who was appointed CEO of Dover on 18 March 2021. Dover is a junior mining company with exploration tenements for tin in far north Queensland. It has a share capital of 38,027,679 shares with $11,400,000 of investor funds injected since 2014 and 138 shareholders including shares held for different shareholders in purported bare trusts.

Summary of Concerns and Reason for this Report to ASIC

I have serious concerns regarding the actions (and inaction) of a number of directors of Dover that are in my opinion in contravention of the Corporations Act, the Crimes Act and directors’ duties to shareholders. The actions of most concern were undertaken by the executive director, Mr Haindl, and in my opinion comprise:

•    Misleading and deceptive reporting (and non-disclosure of material matters) to the board, its investors and shareholders regarding the operations, corporate reporting and finances of Dover;

•    Use of Company monies for personal benefit (to himself and related parties), without disclosure or authorisation;

•    Basic management failure in implementing a number of critical operational and health and safety procedures on site, which breach the law and the terms of the Company’s permits;

•    Non-disclosure of other matters to the board that concern material conflicts of interest;

•    Failure to implement or comply with basic corporate procedures and governance as required by the Corporations Act and Dover’s constitution

•    I am gravely concerned that other Dover directors over a period of time have failed to provide appropriate oversight of the Company’s operations and failed to make reasonable enquiries regarding many of the actions outlined above, which having done so would have uncovered many of these breaches. They have also failed to take urgent action in relation to these matters when brought to their attention by me, since becoming CEO on 18 March 2021. Furthermore, they have sought to obfuscate, delay or defer the enquiries undertaken by myself and that of another recently appointed director, who they have since sought to summarily dismiss from office.

Therefore I felt obligated to report these matters to ASIC and am considering also reporting them to the NSW police.

621    It will be recalled that earlier in the day, Mr Mount had sent an email attaching a blank page bearing the DCM letterhead and a copy of Mount’s electronic signature to be used by Resolve as a sign-off on behalf of DCM.

622    At 5.10pm Ms Nygh informed Mr Mount that Resolve would lodge the report with ASIC “unless we hear from you otherwise” and the report was subsequently lodged.

623    In his reply to the allegation in the defence that the instructions he gave to Resolve on 10 April justified his summary dismissal, Mr Mount pleaded that:

any document provided to [Resolve] on 10 April 2021 after [he] had received emails notifying him of his termination by [DCM] was a further disclosure to [DCM] for the purposes of making a report under s 1317AA(2) or s 1317AAC(1)(d) of the Corporations Act or for the purpose of making a disclosure to ASIC under s 1317(1)(b)(i) and was protected under section 1317AA of the Corporations Act and cannot lawfully be a ground for termination of the Contract by reason of section 1317AB(2)(b) of the Corporations Act

624    This point seems to me to be a valid one and the respondents did not address it. Lawyers are eligible recipients within the meaning of that expression in the Corporations Act and the subject matter appears to be a disclosure which qualifies for protection. I cannot be definite about the disclosures themselves as the full ASIC report was not tendered. But Mr Mount’s point is no answer to this particular ground, which amounts to an allegation that he falsely represented that he was an officer of the company when he well knew he was not. It is therefore unnecessary to determine agreed issues 39 and 40.

625    It might be said that Mr Mount was less than frank in his opening remarks in the introduction in which he disclosed the date of his appointment and not the fact that his employment had been (or shortly would be) terminated. It is evident that by 7 April he knew that his dismissal was imminent. As I mentioned earlier, Ms Trenfield told him that Mr Christensen had informed her that his “role as CEO” had been terminated. I do not doubt that Mr Mount read that email on 7 April because he forwarded it to Ms Graham and Ms Nygh minutes after he received it. Moreover, at 12.33pm that day Mr Haindl emailed Mr Mount seeking to organise a time for him to return the company car. And in her file note of a telephone attendance with Ms Nygh that day she records that Mr Mount told her that he had been shut out of his Dover Castle emails. But he received no formal or direct communication that that had occurred until 10 April through the emails sent by Mr Tucker and Mr Haindl that morning and it was not put to him in cross-examination that he was seeking to mislead ASIC or Ms Nygh.

626    In his first affidavit Mr Mount said he received the emails from Mr Tucker and Mr Haindl at the times they were sent, but that evidence is ambiguous. It does not mean he read them at that time. It is not clear whether Mr Mount read the emails from Mr Tucker or Mr Haindl before he sent this email to Ms Nygh. He was not asked whether he did nor did he volunteer that he did so. There is no evidence that he replied to Mr Haindl’s email. He replied to Mr Tucker’s email, but not until 2.16pm the following day and then he simply told Mr Tucker that he had received the emails “this weekend”.

627    It is a matter of common experience that one may not read an email for some time after it is received. Mr Mount received the emails on a Saturday morning. For all I know Mr Mount was otherwise engaged or away from his phone or computer for some time. He may have been preoccupied preparing documents for Ms Nygh and/or ASIC. Presumably he spent some time considering the terms of the email. No questions were asked about that subject either. And it was never put to Mr Mount that he read the emails on the day he received them. Since the onus of proof rests with the respondents, I cannot conclude that Mr Mount was aware of the directors’ emails at the time he issued those instructions to Ms Nygh or, for that matter, at any time on 10 April. It follows that I am not satisfied that he gave Ms Nygh any instructions on behalf of DCM after he knew that his employment had been terminated.

628    But even if Mr Mount did give Ms Nygh instructions on behalf of DCM after he knew that his employment had been terminated, I am not satisfied that it would justify his summary termination. The principle in Shepherd, upon which the respondents relied, is that an employer may justify summary dismissal of an employee “by reference to any ground that was valid at the time of termination, even though it was not relied on at the time…”: Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 at 262 (Mason CJ). The respondents had already terminated Mr Mount’s employment by the time he provided his final instructions to Ms Nygh on 10 April. Moreover, it defies logic that an employer could justify the summary dismissal of an employee by reason of the employee’s behaviour after termination, where that behaviour can only be characterised as misconduct because it occurred after termination.

629    In those circumstances and bearing in mind the seriousness of the allegations and the cogency of proof required to discharge the respondents’ onus, I am not satisfied that the provision of instructions to Ms Nygh on 10 April justified his summary dismissal.

Disclosing to Mr Perdikaris confidential information of DCM after he knew that Mr Perdikaris had been removed as a director (agreed issue 31)

630    This ground is not made out.

631    The information in question was not particularised in the defence.

632    The respondents’ submission on the matter was unhelpful and not to the point. It simply reads:

Mount knew that Perdikaris was removed as a director on 6 April 2021. Mount nonetheless continued to collaborate with Perdikaris in relation to a report to ASIC involving confidential information relating to DCM. This was serious misconduct.

633    The respondents did not point to any confidential information Mr Mount disclosed to Mr Perdikaris after he knew that he had been removed as a director. In cross-examination Mr Mount agreed that Mr Perdikaris assisted him “in order to advance the preparation of the ASIC report”. In examination in chief Ms Nygh was asked what role she understood Mr Perdikaris had at the time in relation to the preparation of the report for ASIC and she replied:

Perdikaris’ role at that time was to check whether the conversations that he – that were reported in the report that he had had with various people were accurately recorded.

634    I cannot discern anything that would amount to a disclosure by Mr Mount after Mr Perdikaris’s removal from office of confidential information concerning DCM.

635    In any case, as Mr Mount pointed out in his submissions, the board resolution purporting to remove Mr Perdikaris from his office as a director was invalid. That is because, as Mr Tucker admitted in cross-examination (at T1167), he did not obtain the consent or direction of any of the beneficiaries in breach of the requirement in cl 2(b) of the Tucker trust deed poll which stipulates that:

The Trustee will hold the Shares on trust for the Beneficiary(s) and must deal with the Shares and exercise all voting and other rights attached to the Shares as directed by the Beneficiary(s).

Acting at the direction and in the personal interests of Mr Perdikaris in conflict with duties to DCM (agreed issue 41)

636    The particulars of this ground given in the defence were as follows:

1.    Christos Perdikaris provided information including confidential information to the applicant about the first respondent prior to the applicant’s employment, prior to Christos Perdikaris’s appointment to the board of the first respondent and without the approval of the first respondent or any director of the first respondent by emails from Melissa Mason, Mr Perdikaris’s assistant, on 19 February 2021 at about 9:47 am and 4 March 2021 at about 4:46pm and from Cindy Perdikaris on 4 March 2021 at about 4:49 pm.

2.    Christos Perdikaris engaged and funded the applicant to attend the Mine on 13 and 14 March 2021 and to provide him a report.

3.     [T]he applicant and Christos Perdikaris instructed and continued to instruct Resolve Litigation Lawyers without the knowledge or approval of the second, third and fourth respondents from on or about 23 March 2021 or alternatively, 4 March 2021.

4.    [O]n 25 March and again on 6 April 2021, Ms Mason sent emails to the applicant by which the applicant was given access to a website link established by or on behalf of Christos Perdikaris containing the audio recordings and transcripts of the first respondent’s board meetings that took place during the applicant’s employment by the first respondent, which access was not given to the respondents.

5.     The events set out in the particulars to 19(a)(i) and (ii) above;

6.     The matters set out in paragraphs 19(b)(i), (ii), (iii) and (iv) above.

637    I will deal with these matters in the same order.

638    The first and second matters are entirely neutral.

639    The respondents did not identify why any of the information with which the first matter is concerned were confidential.

640    The allegedly confidential information Mr Perdikaris provided to Mr Mount before he was employed consisted of copies of the Tucker Bare Trust deed, the DCM constitution and part of an ASIC search (19 February), an email chain referring to the initial FTI report and the amended FTI Consulting report, and a copy of the amended FTI report (4 March at 4.46pm); and an email attaching a copy of the DCM share register (4 March at 4.49pm).

641    I cannot see why the information in the Tucker Bare Trust deed, the DCM constitution or an ASIC search could be regarded as confidential information of DCM. Mr Perdikaris’s unchallenged evidence was that he received the documents from Mr Tucker and/or Matthew Haindl. It is a criminal offence to refuse to provide a copy of the constitution to a member who requests it (see Corporations Act, ss 139 and 1311) and the Corporations Act places no restrictions on the use a member might make of a company’s constitution. Mr Perdikaris, of course, was a member of the company. I do not understand why the information is confidential to DCM. Section 173(1) of the Corporations Act requires a company to provide a copy of its share register to anyone who asks for it.

642    The email chain relating to the FTI reports was not tendered in evidence so I cannot be satisfied that it was confidential. The respondents did not contend that any of this material was protected at the time by legal professional privilege.

643    Moreover, Mr Perdikaris was in possession of the emails and the second FTI report although at the time he was not a board member, and there was no suggestion that they were provided to him in confidence.

644    At the time Mr Mount received this material, he had been asked by Mr Perdikaris to see if he was interested in managing the business of DCM.

645    It will be recalled that Mr Perdikaris paid for Mr Mount to travel to the mine before he was hired by DCM. That included flights, car hire, food and equipment and some clothing, which Mr Mount agreed was worth around $3,000. There was no secret about that.

646    Although Mr Mount denied that Mr Perdikaris financed the trip so that he could prepare a report for him, he admitted that Mr Perdikaris made a disclosure at the 17 March meeting in the following terms:

I financed a trip for Ryan to attend the DCM site and to meet with Matt Hancock and write me a report.

647    In his own disclosure to the board that day, he said that Mr Perdikaris had financed the trip and had asked him for general advice.

648    As to the third matter, I have already considered the Resolve issues.

649    As to the fourth matter, I was not taken to any evidence to suggest that the respondents sought access to the recordings and transcript and were refused access.

650    The fifth matter concerns the allegations in para 19(a)(i) and (ii) of the defence. The allegation in para 19(a)(i) is that Mr Mount was complicit with Mr Perdikaris in the removal of Mr Haindl and Mr Tucker from the board meeting, an allegation I have not upheld. The allegation in para 19(a)(ii) can be put to one side. Over Mr Mount’s objection, the respondents were not given leave to amend their defence to include it.

651    The sixth and final matter concerns the allegations in para 19(b)(i)-(iv), which are the other grounds upon which the respondents say they were entitled to summarily dismiss Mr Mount.

652    The respondents submitted that, “despite serious conflicts of interest, Mount worked in direct collaboration with Perdikaris” unbeknown to the other board members, in order “to secure the removal of Tucker and Haindl from the Board and to effectively sideline them from management of the business” and that “[t]his caused a fundamental breakdown in the cohesion of the DCM Board which culminated in the events at the 31 March Board meeting”. They contended that that conduct “was repudiatory and incompatible with the fulfilment of his duty to DCM and justified summary termination”.

653    The respondents’ submission that there were serious conflicts of interests was no more than an ipsi dixit. That is to say, it was merely an assertion which was never proved. It is true that it was not in the interests of Mr Haindl and Mr Tucker that Mr Mount investigate their conduct or obtain legal advice about submitting a report to ASIC about either of them. But Mr Mount was employed by the company, not its individual directors, and his actions were not necessarily inconsistent with DCM’s interests. It is in the mutual interests of the shareholders and the company that the company is properly administered.

654    It will be recalled that Mr Perdikaris wanted to be appointed to the board so that he could have confidence in the information being given to shareholders. That was the first of his four “ultimate objectives” Mr Mount conveyed to Ms Nygh. The third was that DCM be converted to a public company so that all shareholders would be provided with regular information. The fourth was that any monies and assets owed to DCM be returned. All those objectives were in the company’s interests. Mr Perdikaris’s second objective — removing Mr Tucker from the board — was not necessarily inconsistent with that. Directors owe a duty to act in good faith in the best interests of the company (Corporations Act, s 181(1)(a)) and, while a company remains solvent, “the interests of the company” include the interests of the corporate entity itself, its shareholders, and, where the financial position of the company is precarious, its creditors: Cassimatis v Australian Securities and Investments Commission (2020) 275 FCR 533 at [453] (Thawley J); see also at [194] (Greenwood J).

655    Mr Perdikaris’s particular concern was that the company was being administered for the personal benefit of certain directors contrary to the interests of the shareholders and without regard to their rights. He suspected that Mr Tucker was using the bare trust for his personal advantage because of the voting power it afforded him. In particular, he was concerned about the purported exercise by one director, Mr Tucker, of his voting rights on behalf of shareholders whose shares he held on trust without seeking their opinions, let alone obtaining their consent, contrary to the terms of the trust deed (as Mr Tucker admitted in evidence to doing in relation to both the removal of Mr Nettelbeck and Mr Perdikaris). In the case of Mr Nettelbeck, Mr Tucker said he had contacted a couple of shareholders. In the case of Mr Perdikaris, he admitted he contacted none. That concern, as well as his concern about corporate governance more generally, was what caused Mr Perdikaris to seek advice from Resolve. “Good corporate governance requires that directors and managers observe the need for internal safeguards to reduce the risk that the company will be burdened with liabilities through the conduct of persons acting without actual authority”: IM Ramsay, Company Directors: Principles of Law and Corporate Governance (2nd ed, LexisNexis, 2023), [3.2].

656    Good corporate governance was indisputably in the interests of DCM and it was common ground that, at the time Mr Mount was offered the position of acting CEO, DCM’s corporate governance was poor. Mr Mount certainly acted hastily — some might say with unseemly haste — in reaching his opinions, but the contemporaneous evidence suggests that he was worried that if he did not move quickly the situation would be detrimental to the company’s interests. From the time he was first approached by Mr Perdikaris, he became increasingly suspicious that the company was being poorly run and that its directors could not be trusted. The evidence disclosed that there were valid reasons for some, if not most, of those concerns. In the first instance Mr Mount conveyed those suspicions to Mr Perdikaris who became alarmed. I did not form the view that he had any interest in taking over the company or that he connived with Mr Perdikaris to do so. I certainly did not get the impression that he acted at any time at Mr Perdikaris’s direction, and the respondents’ evidence was to the contrary. Mr Perdikaris admitted to having no business experience in dealing with the details of corporate governance. He sought out Mr Mount because Mr Mount had such experience and he relied on Mr Mount’s advice and experience. He did not ask, let alone direct, Mr Mount to prepare either of the Whistleblower Reports and I was not taken to any evidence to indicate that he directed Mr Mount to lodge a report with ASIC. It appears that all these steps were taken on Mr Mount’s initiative.

657    The respondents’ case rests on strongly held suspicions with insufficient foundations to sustain them.

Conclusion

658    The respondents have failed to prove that they were entitled to summarily dismiss Mr Mount from his employment.

DAMAGES/COMPENSATION

659    Mr Mount sought:

(1)    compensation under ss 1317AD and 1317AE of the Corporations Act;

(2)    damages for wrongful dismissal in the amount of $229,000, being the remuneration he would have received from DCM had he remained in its employment for the balance of the fixed term, “less the amount paid to [him] for his work until 31 March 2021”. together with superannuation and annual leave calculated on that amount, together with;

(3)    damages for “hurt, humiliation and stress” caused by the manner in which DCM recovered possession of the company car and took possession of his personal items that were in the car at that time;

(4)    compensation for harm to his reputation and interference with his efforts to mitigate his loss;

(5)    interest on the above sums;

(6)    exemplary damages; and

(7)    pecuniary penalty orders.

660    An additional claim for damages in the sum of $29,337 for the cost of leasing an equivalent vehicle to the company car for 11 months was abandoned by Mr Mount in closing submissions.

661    As the claim for damage to Mr Mount’s reputation was not made out, the claim for compensation for harm to his reputation and interference with his efforts to mitigate his loss on that account must be dismissed. Had it succeeded, given the limited number of people to whom the defamatory comments were made I would have awarded no more than $10,000 in compensation for damage to reputation and hurt feelings.

662    As all the claims under the Corporations Act were unsuccessful and the claim for exemplary damages was made under s 1317AE(1)(f) of that Act, there is no need to consider Mr Mount’s claim for exemplary damages. Nor is there any need to consider Mr Mount’s claims for compensation or pecuniary penalty orders. That disposes of agreed issues 21 to 28.

The claim for damages for wrongful dismissal

663    As the claims under s 1317AD of the Corporations Act were unsuccessful and Mr Mount had no standing to bring a claim for compensation under s 1317AC, he is left with a potential entitlement to damages for economic loss resulting from his wrongful dismissal. I say potential because the measure of Mr Mount’s economic loss is “the salary and wages and other contractual benefits of which he has been deprived less the salary or wages and other financial benefits which he received or acting reasonably should have received from the exercise of earning capacity freed up by the dismissal”: Tasman Capital Pty Ltd v Sinclair (2008) 75 NSWLR 1 at [72] (Giles JA, with whom McColl JA and Young CJ in Eq agreed at [76] and [77] respectively). The financial benefits received from the exercise of earning capacity freed up by the dismissal are often referred to as “avoided loss” and those the employee ought reasonably to have received as “avoidable loss”. The general principle was explained by the seven members of the High Court in Talacko v Talacko (2021) 272 CLR 478 at [57] in the following way:

[A] defendant’s liability to compensate for loss is usually reduced where a plaintiff takes successful action consequent upon the defendant’s wrong to reduce their loss. In some cases, this principle is described as one of the rules of mitigation, being the usual principle that the claimant cannot recover for avoided loss, even in some cases where a benefit is acquired and the steps taken were not mitigation measures that were reasonably required. In other cases, the principle is described simply as part of the principle of compensation that generally requires compensating advantages that are sufficiently connected to the wrongdoing to be deducted from the damages awarded for consequential loss.

(Footnotes omitted.)

664    In the case of avoided loss, the financial benefits to be brought into account are not confined to remuneration earned from other employers: I Neil and D Chin, The Modern Contract of Employment (2nd ed, LawBook Co, 2017) [13.74]. See, for example, Fishlock v The Campaign Palace Pty Ltd [2013] NSWSC 531; 234 IR 1 at [288]–[289] in which Sackar J deducted earnings derived by the former employee from his newly established consultancy business. As Neil and Chin go on to say at [13.74]:

Other benefits received from steps “arising out of” or as a direct consequence of (and not merely collateral) to a defaulting employer’s breach of contract may also be brought to account in reduction of the damages awarded for that breach.

665    Whether particular financial benefits are “too collateral or too remote to be considered relevant compensation is a question of characterisation of the relevant payment and assessment of its connection in legal and factual relationship with the loss”: Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 at [12] (Allsop P, Beazley JA agreeing at [19]). Relevant factors include “the temporal and purposive connection” of the benefits: Ibid.

666    DCM did not allege that Mr Mount had failed to mitigate his loss, that is to say that he had avoidable loss. Its case was that he had wholly mitigated his loss. That means that the onus is also on DCM to prove that the money Mr Mount earned after he was dismissed could and would not have been earned if he had remained in its employment: Tasman Capital at [95] (Young CJ in Eq). For the reasons which follow, I am satisfied that DCM has discharged its onus and therefore that Mr Mount is not entitled to damages to compensate him for his wrongful dismissal.

The scope of the dispute

667    The parties agreed on the amount Mr Mount would have earned had he remained in DCM’s employment for the duration of his contractual term; the amount of superannuation and annual leave to which he would have been entitled, and the amount he was paid during the short time he worked for DCM.

668    It is agreed that, if Mr Mount’s contract had run to its full term, he would have received additional salary payments totalling $224,219.18; $11,478.14 in annual leave; and $19,900.22 in superannuation (a grand total of $255,597.54). It is not in dispute that interest should be paid if he is entitled to damages.

669    Mr Mount also deposed that, since his employment was terminated, he has experienced depression and has been undergoing “medical treatment from a psychologist”. This evidence is entitled to little weight. There was no evidence to support it. Not only was there no report from the psychologist but the psychologist was not even identified. Moreover, unless the psychologist was also a registered medical practitioner, they would not have been able to provide medical treatment. That said, I accept that Mr Mount was upset that his employment was terminated. In Elisha v Vision Australia Limited [2024] HCA 50; 99 ALJR 171 the High Court accepted that damages may be awarded for psychiatric injury in a claim for breach of an employment contract but not hurt feelings or anything short of a diagnosable medical condition (especially at [66] per Gageler CJ, Gordon, Edelman, Gleeson and Beech-Jones JJ).

670    The parties identified five issues for resolution in their statement of issues (agreed issues 42 to 46). In truth, there is only one: what is the extent of Mr Mount’s loss? More particularly, the issue is whether, as DCM alleged, Mr Mount mitigated his loss by income he derived from work he performed during the residue of his contractual term.

The extent of the loss

671    In their defence, the respondents pleaded that Mr Mount fully mitigated any damage he may have suffered as a consequence of the termination of his employment. The respondents particularised the income his company, Balclutha Advisors, received from Oldfields Holdings Limited and Hall Chadwick for services provided by Mr Mount between his termination on 10 April 2021 and 17 March 2022. Mr Mount was the sole director of Balclutha.

672    It is common ground that the amount Mr Mount received from Hall Chadwick and Oldfields exceeded the amount he was entitled to receive under the terms of his contract with DCM. That amount was approximately $400,000 including GST. Even without GST, it was substantially higher than the total amount he would have received from DCM had it not been for the termination of his contract.

673    In his reply, Mr Mount pleaded:

In response to paragraph 77c of the Defence the Applicant says any income he earned from Oldfields Holdings Limited and Hall Chadwick as alleged was collateral and extraneous to the breach or repudiation of the contract and could have been earned even if the Applicant had still been in employment, and, alternatively, in relation to the success fee income received from Oldfields Holdings Limited, was earned by the Applicant’s labour or provision of services after 17 March 2022.

674    Mr Mount filed no evidence to support this plea. Despite filing four affidavits he omitted any mention of earnings from Oldfields or Hall Chadwick. Such evidence as there was first emerged in cross-examination.

675    In cross-examination Mr Mount testified that he secured management consultancy work in around September 2021, when he entered into a “Management Consultancy Deed” for paid work through Balclutha to advise Oldfields on raising $5 million in capital. The Deed was dated 21 September 2021 and signed on 5 October 2021. Relevantly, the “Project” was described in cl 4 of the Deed as:

The Company wishes to raise up to A$5 million in capital and Adviser is willing to assist it in that endeavour by advising the Company on the capital raising(s) and introducing and liaising with Investors to the Company for an Investment, noting the Advisor’s role is set out below.

The “Company” refers to Oldfields and the “Adviser” refers to Balclutha.

676    Balclutha’s role was described in cl 8 of the Deed in the following way:

In its capacity as a management and investor relations consultant, the Adviser will use its reasonable endeavours to identify, introduce and liaise with selected Investors to the Company for an Investment. This also involves assisting the Board and Management of the Company in preparing, arranging and executing the Investment. The Adviser is exclusive in this appointment and its Role for a period of 6 months. This shall be extendable by mutual written agreement. If an Investment occurs after this period with any of the Advisor's introduced Investors (including their associates) the Success Fee will be payable to the Advisor.

677    The Deed provided for a success fee of 7.5%, exclusive of GST, of the gross cash and other agreed consideration paid or to be provided on each occasion. Further, upon the signing of the Deed, Oldfields agreed to pay Balclutha a “work fee” of $15,000 plus GST per month or part thereof for three months. The details appear in cl 9:

Upon the occurrence, and out of the proceeds, of each completion/financial close of a single Investment or series of interdependent or contemporaneous Investments or other related transactions for or in relation to the Project for the Company or any one or more members of its Group with any Investor, the Company will pay to Adviser or its nominee(s) a Success Fee of 7.5% (exclusive of GST) of the gross cash and other agreed consideration paid or to be provided on each occasion.

This Success Fee(s) shall be a total fee payable by the Company and inclusive of any disbursements or brokerage fees payable to third parties (unless otherwise agreed to in writing by the parties)upon [sic]

In addition, commencing upon signing of this Deed, the Company will pay the Advisor $15,000.00 plus GST per month or part thereof (Work Fee) for three months.

The Work Fee will be invoiced monthly in arrears and payable upon receipt.

50% of the total Work Fee will be rebated upon completion of the Investment and payment of the Success Fee.

678    In cross-examination, Mr Mount agreed that he secured monthly “work fees” representing work he performed or services he rendered of $16,500 (including GST) for the month 5 October to 4 November 2021, another $16,500 (including GST) for the month 5 November to 4 December 2021 and $16,500 (including GST) for the month 5 December 2021 to 4 January 2022. Mr Mount also admitted that he had received $16,500 in work fees from Hall Chadwick in late 2021.

679    In re-examination Mr Mount testified that, for the three months in which he performed work for Oldfields under the Deed, he was only required to work “somewhere in the vicinity of an average of 45 minutes to an hour … most working days of the week”. In the period January-March 2022, he said that “the company did not require [his] assistance as much during those three months”. He also testified that “on or around 7 April [2022], the investor notified Oldfields that … they were considering, or essentially, were withdrawing from investing” and he then “reengaged” with the deal “extensively” from 12 to 22 April 2022. Mr Mount’s evidence was that it was this work after 12 April 2022 which salvaged the investment for Oldfields. No documentary evidence was proffered to support this testimony.

680    Mr Mount also testified that he had to repay 50% of the three months of earnings. No documents recording or evidencing any repayment by Balclutha to Oldfields were produced in answer to a call from DCM.

681    On 26 April 2022 Mr Mount issued an invoice from Balclutha to Oldfields. The invoice includes a sum of $375,000 (representing a “success fee” of 7.5% on an investment of $5 million) less a “rebate” of $22,500, representing 50% of the work fee that had already been invoiced and paid. The total amount was recorded as $352,500 before GST, with a total inclusive of GST of $387,750 due. The success fee was paid in two tranches. Balclutha bank statements for the relevant period disclose that on 2 May 2022, Oldfields deposited $200,000 into the Balclutha account and on 27 May 2022 Oldfields deposited a further $187,750 into the account (a total of $387,750). Clearly, the full amount paid included GST but did not include the $22,500 in work fees that had been deducted or “rebated” from the amount paid. Mr Mount gave unchallenged evidence that he paid $50,000 to an assistant out of the success fee, reducing the total amount to $302,500 (excluding GST).

682    It follows that Mr Mount earned more from the Oldfields work alone than the $255,606.54 he would have received from DCM had his employment not been terminated.

683    Senior counsel for Mr Mount argued that the payment to Mr Mount of the success fee was the result of the work in April 2022 to salvage the deal, and for this reason it was not mitigation of the income he lost during the balance of his contract with DCM from 11 April 2021 to 17 March 2022. He submitted:

Mr Mount earned the success fee of $375,000.00 by dint or the exertion of his labour to effect the ‘closing’ of the investment into Oldfields under clause 9 during the period from 12 to 22 April 2022, so that as a practical matter, the success fee was earned by Mr Mount’s labour as applied after 17 March 2022, the success fee being paid in two portions on 2 and 22 (sic) May 2022. If the relevant principle relied on by DCM is that a credit should be given for income received by Mr Mount by the exercise of his earning capacity freed up by the termination by DCM, then the period in which the success fee was earned by the exercise of that capacity was not a period of time freed up by the termination.

684    I cannot accept this argument. I am not satisfied that Mr Mount would have earned any of this money had it not been for the premature termination of his employment. Indeed, I am satisfied that it was only earned because of it.

685    First, the parties agreed that the terms of Mr Mount’s contract with DCM were as recorded in his email of 18 March 2021 at 3.39pm. There was no mention in that email of any entitlement to perform work for anyone else and it was no part of Mr Mount’s case that such a term should be implied.

686    Second, apart from his disclosure at the 17 March board meeting that he remained a director of Axiom, there is not a scintilla of evidence to suggest that Mr Mount had raised the possibility of doing work for others at any time, let alone that DCM would have approved or authorised it. Nor is it likely that DCM would have countenanced its CEO raising capital for other companies at the time it was in need of capital. The prospect of a conflict of interest is readily apparent.

687    Third, and in any event, the amount of time he was required to spend as CEO of DCM as well as his obligations to DCM as its CEO would have precluded him from performing the work that he carried out.

688    Mr Mount’s submission that he would have had the time to undertake consultancy work in addition to his duties as CEO of DCM is contradicted by his own evidence. In his first affidavit, Mr Mount deposed:

In order to work for Dover, I ceased doing consultancy work for Bambra Oy (Bambra), a Finnish company that had projects in Europe. I had already issued Bambra with an invoice for work I performed in January, 2021 in the amount of $10,000, a copy of which is at page 487. But for the approach by Dover, I would have continued to work for Bambra. The Bambra work did not involve full time work, and it was my intention to pursue consultancy work domestically and internationally in parallel with the work for Bambra. However, the Dover offer was a fulltime employment role which did not leave room for consultancy work. I was not able to resume working for Bambra after my engagement was terminated by Dover.

689    That evidence is supported by the contemporaneous documents which show that he was singularly devoted to the performance of his work at DCM, dispatching emails well beyond ordinary working hours, often from the break of dawn until late into the night. There is no reason to think that that pattern of work would not have continued for the duration of his employment.

690    In these circumstances, I do not consider that he would have been able to undertake consulting work while he was employed by DCM or that he had any intention of doing so.

691    Fourth, there is a clear connection between Mr Mount’s dismissal from DCM’s employment and the work he performed for Oldfields and Hall Chadwick. The income received by Balclutha was derived from Mr Mount’s skill and labour “freed up” by his dismissal.

692    In the absence of any corroboration and in light of the circumstances in which this evidence was given (in re-examination and therefore depriving the respondents of an opportunity to investigate it or cross-examine on it), I am sceptical of Mr Mount’s evidence that the success fee was derived through work done after his employment contract would have come to an end in the ordinary course.

693    In any case, even if Mr Mount’s evidence in this regard was truthful, the success fee was the result of the work Mr Mount carried out in the period from October 2021 to January 2022 and the additional work he claimed he undertook in April 2022 to salvage the deal. The evidence does not support the notion that he would have been in a position to salvage the deal regardless of the work he had undertaken in the earlier period.

694    Further, cll 8 and 9 of the Deed indicate that, once Mr Mount had introduced the investors to Oldfields, provided that the investment occurred at any time after the term of the Deed, the success fee would be paid. And Mr Mount testified that he introduced the investor who ultimately provided the capital to Oldfields within the first three months.

695    It is clear from the invoice sent on 26 April 2022 that the success fee was referable to the work Mr Mount performed between October 2021 and January 2022, not to any later work. That invoice refers to a “rebate” of 50% of three units of monthly work fees which had already been invoiced and paid and in cross-examination Mr Mount accepted that the work fees represented the work he performed between October 2021 and January 2022. Moreover, there is no evidence that Mr Mount invoiced Oldfields through Balclutha for services rendered or work performed in April 2022.

696    In short, even if he would not have earned the success fee but for his efforts between 12 and 22 April 2022, the success fee is directly referable to the services he rendered or work he performed between October 2021 and January 2022, which he would not have been in a position to undertake had his employment with DCM not been terminated. Consequently, Mr Mount could not have earned the success fee were it not for the termination of his engagement by DCM.

697    If I am wrong in this respect, I would reject Mr Mount’s submission that I should include in his loss the “rebate” of the $22,500 in work fees invoiced by Balclutha and paid by Oldfields for the period October 2021 to January 2022. Contrary to Mr Mount’s evidence, the invoices and bank records clearly establish that the amount of $22,500 was not repaid by Mr Mount. Rather, it was deducted from the success fee that was paid to him.

698    In these circumstances, I am satisfied that the income Mr Mount earned through Balclutha and Hall Chadwick was not collateral or extraneous to the termination of his employment with DCM but that it would not have been earned but for his dismissal. Consequently, I find that Mr Mount has wholly mitigated his loss and is not entitled to an award of damages. For the same reasons, if Mr Mount had succeeded in the claim against DCM under s 1317AD(1) of the Corporations Act, I would not have awarded him compensation.

OVERALL CONCLUSIONS

699    In respect of the claims under the whistleblower provisions in Pt 9.4AAA of the Corporations Act:

(1)    Mr Mount had standing to seek declaratory relief under s 21 of the FCA Act but no standing to seek an order for compensation or pecuniary penalties for any contraventions of ss 1317AAE or 1317AC of the Corporations Act.

(2)    However, the claims that the respondents contravened those sections have not been made out.

(3)    The claims under s 1317AD must be dismissed as I am satisfied that each of DCM and Mr Tucker has discharged their onus of proof in respect of each of those claims.

700    With respect to the claim in contract for wrongful dismissal:

(1)    I have found that DCM was entitled to dismiss Mr Mount but that it was not entitled to do so summarily.

(2)    However, I am not satisfied that Mr Mount is entitled to an award of damages because the income he derived from the exercise of his earning capacity, freed up by his dismissal by DCM, exceeded the amount that he would have earned had he remained in the employ of DCM for the rest of his contractual term.

DISPOSITION

701    It follows that the further amended originating application must be dismissed.

702    I will reserve the question of costs and make orders to facilitate its determination.

Associate:

Dated:    21 February 2025

SCHEDULE OF PARTIES