Federal Court of Australia

Slater v Ecosol Pty Ltd, in the matter of Ecosol Pty Ltd [2026] FCA 208

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to r 26.01 of the Federal Court Rules 2011 (Cth), the originating application is summarily dismissed.

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

REASONS FOR JUDGMENT

CHARLESWORTH J

1    The plaintiff, Mr Matthew Slater, holds shares in the first defendant, Ecosol Pty Ltd (ACN 059 012 243).

2    By his Amended Originating Process Mr Slater applies for orders under s 233 of the Corporations Act 2001 (Cth) “to remedy oppression, unfair prejudice and unfair discrimination” against him in his capacity as a shareholder. He joins, as defendants, Ecosol, Mr Jeffery Smith (Ecosol’s former chairperson) and Mr David Bishop (one of Ecosol’s directors). The claimed relief includes orders compelling one or more of the defendants to purchase his shares at a price to be determined by the Court, orders awarding exemplary or punitive damages and compensation, and orders that Mr Bishop’s shares be transferred to Mr Slater or alternatively cancelled.

3    The facts alleged in support of the claimed relief are contained in affidavits filed by Mr Slater in the proceeding. For the purpose of what follows, I treat those affidavits as broadly outlining the allegations made against the defendants, but they are not the totality of the evidence that may be adduced by Mr Slater at any trial.

4    The allegations of oppression relate to the conduct of Ecosol’s affairs in the context of a management buy out offer (MBO) of its principal asset (a stormwater business) proposed by Mr Andrew Macklin. That sale occurred in 2019 pursuant to a contract between Ecosol and Urban Asset Solutions Pty Ltd (UAS), an entity established by Mr Macklin (among others). Mr Macklin was an employee and director of Ecosol at the time when proposals for the MBO were first made. By reason of his conflict of interest, he recused himself from discussions concerning the MBO and negotiations on Ecosol’s behalf were primarily conducted by Mr Smith. Mr Bishop was appointed as a director in light of Mr Macklin’s conflict of interest.

5    The decision to sell the stormwater business was the subject of a favourable vote of a majority of shareholders.

6    Broadly summarised, Mr Slater’s factual allegations are that the terms of the MBO were not in Ecosol’s best interests, that the sale occurred without shareholders first being provided with all relevant information, and that Mr Smith failed to engage in an orderly process for the sale of the stormwater business so as to maximise shareholder returns.

7    It is not disputed that Mr Slater made it known to Ecosol’s competitors that the stormwater business was for sale. He alleges that the directors failed to investigate or pursue competing buyers, failed to manage conflicts of interest, failed to obtain competent and reliable valuations and demonstrated bias toward Mr Macklin’s proposal, including by discriminating against other prospective buyers in due diligence and other processes. He alleges that other shareholders were presented with misleading or biased information concerning the MBO and that shareholders (including himself) who spoke out against the MBO were wrongfully silenced, including by threatened legal action. Mr Slater expressed his concerns about the MBO to Ecosol’s directors and other shareholders in November 2018.

8    Arising out of that state of affairs, two defamation suits were heard and determined together in the Supreme Court of South Australia: a suit commenced by Mr Slater (as plaintiff) against Ecosol and Mr Smith (as defendants) and a suit commenced by Mr Smith (as plaintiff) against Mr Slater (as defendant). Both actions were dismissed in July 2023: Slater v Ecosol Pty Ltd [2023] SASC 99. On 17 July 2025, the Supreme Court of South Australia Court of Appeal dismissed Mr Slater’s appeal from the order dismissing his claim: Slater v Ecosol Pty Ltd [2025] SASCA 78 (Slater CoA). That appeal remained undetermined at the time that this action was commenced on 4 November 2024, some six years after the conduct said to give rise to oppression.

9    Before the Court is the defendants’ application for orders that this proceeding be struck out or stayed as an abuse of process. The application raises three broad issues. First, whether the proceeding is vexatious in the sense that it is unduly oppressive, the claims for relief being founded on essentially the same facts that formed a part of the controversy in (at least) the defamation proceeding commenced by Mr Slater and the relief now sought could have been claimed in that proceeding. Secondly, whether the proceeding is an abuse of process because Mr Slater has such an intense dislike for Mr Smith that it should be inferred that he is prosecuting the claims of oppression for an improper purpose (to vex and annoy Mr Smith). Thirdly, whether the proceeding is an abuse of process because Mr Slater has no reasonable prospects of obtaining the relief sought.

10    In the result, I have concluded that the discretion to make an order dismissing the originating process is enlivened on the first of those grounds. I am satisfied that the defendants’ interlocutory application should be allowed on that basis. The second ground is rejected. The third is unnecessary to decide.

THE POWER TO SUMMARILY DISMISS

11    The power to summarily dismiss a proceeding is conferred by r 26.01 of the Federal Court Rules 2011 (Cth). It relevantly provides:

(1)    A party may apply to the Court for an order that judgment be given against another party because:

(a)    the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or

(b)    the proceeding is frivolous or vexatious; or

(c)    no reasonable cause of action is disclosed; or

(d)    the proceeding is an abuse of the process of the Court; or

(e)    the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding.

12    Alternate sources of power can be found in r 1.32 of the Rules or in s 31A of the Federal Court of Australia Act 1976 (Cth). To the extent that there are differences in those sources of power they are of little moment.

13    The principles guiding the exercise of the discretion are conveniently summarised by Wigney J in Dunstan v Orr (No 2) [2023] FCA 1536 as follows:

85    First, s 31A authorises summary disposition of proceedings ‘on a variety of bases under its general rubric’ (that being, ‘no reasonable prospect of successfully prosecuting…’). Those bases include, but are not limited to: cases where the pleadings disclose no reasonable cause of action and their deficiency is incurable; cases in which there is unanswerable or unanswered evidence of a fact fatal to either the pleaded case or any case that might be propounded by permissible amendment; and the ‘longstanding category of cases which are ‘frivolous or vexatious or an abuse of process’ ’: Spencer at [22] (per French CJ and Gummow J). It should be noted, in this context, that r 26.01 of the Rules expressly provides for summary judgment not only where there is no reasonable prospect of successfully prosecuting the proceeding, but also where the proceeding is frivolous or vexatious, or no reasonable cause of action is disclosed, or the proceeding is an abuse of process. The meaning of ‘vexatious’ in this context is considered later in the context of the principles relating to striking out pleadings.

86    Second, the power to summarily dismiss a proceeding is to be distinguished, in its application to deficient pleadings, from provisions such as r 16.21 of the Rules: Spencer at [23] (per French CJ and Gummow J). Where the evidence shows that a party may have a reasonable cause of action or reasonable prospects of success, but the party’s pleading does not disclose that to be the case, the Court may be empowered to strike out the pleading under r 16.21, but is not empowered to summarily dismiss the proceeding under s 31A of the FCA Act: see White Industries Australia Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298; [2007] FCA 511 at [47], referred to in Spencer at [23]. That said, a ‘failure after ample opportunity to plead a reasonable cause of action may suggest that none exists and therefore that the applicant has no reasonable prospects of success’: White Industries at [47].

87    Third, ‘a proceeding need not be ‘hopeless’ or ‘bound to fail’ for it to have no reasonable prospect of success’: Spencer at [17] (per French CJ and Gummow J). The enquiry required under s 31A is ‘not an enquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail’: Spencer at [52] (per Hayne, Crennan, Kiefel and Bell JJ).

88    Fourth, the ‘exercise of powers to summarily terminate proceedings must always be attended with caution’, whatever may be the basis upon which that disposition is sought: Spencer at [24] (per French CJ and Gummow J). It is not a power to be exercised lightly: Spencer at [60] (per Hayne, Crennan, Kiefel and Bell JJ). There must be a ‘high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way’: Batistatos v Roads & Traffic Authority (NSW) (2006) 226 CLR 256; [2006] HCA 27 at [46], citing Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [57], referred to in Spencer at [24] (per French CJ and Gummow J).

89    While s 31A does not expressly refer to abuse of process as being a ground upon which summary judgment may be given, it is clear from Spencer that abuse of process is encompassed by the general rubric of ‘no reasonable prospect of successfully prosecuting’. Abuse of process is also specified as a ground upon which summary judgment may be entered in r 26.01(1)(d) of the Rules.

90    The concept of abuse of process is flexible and insusceptible of a formulation which comprises closed categories; it applies in any circumstances in which the court’s processes are used for an illegitimate purpose, or are used in a way which would be unjustifiably oppressive to a party, or would bring the administration of justice into disrepute: Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 at [25]; Rogers v The Queen (1994) 181 CLR 251 at 255-256, 286; [1994] HCA 42. It is unnecessary to consider the many circumstances which may, or have been found to, amount to an abuse of process. It suffices to refer to one circumstance which is of particular relevance to this case.

91    The making of a claim or the raising of an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process, even where the earlier proceeding might not have given rise to an estoppel: Tomlinson at [26]; UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45 at [43], [68]. The rationale underlying the application of the concept of abuse of process in this context is that there should be finality in litigation and that ‘a party should not be twice vexed in the same matter’: UBS AG at [66] (per Gageler J) referring to Johnson v Gore Wood & Co [2002] 2 AC 1 at 31.

(emphasis added)

14    As Edelman and Steward JJ observed in Walton v ACN 004 410 833 Ltd (formerly Arrium Ltd) (in liq) (2022) 275 CLR 508 (at [130]):

Although the categories are not closed, the doctrine of abuse of process has conveniently, but loosely, been divided into three overlapping categories. These are: (i) the use of the court’s processes for an illegitimate purpose; (ii) the use of the court’s processes in a manner that is unjustifiably oppressive to one of the parties; and (iii) a category which might better be described as concerned with the integrity of the court and not merely its processes, and which is sometimes described as concerned with bringing the administration of justice into disrepute.

(citations omitted)

first issue

15    The first issue is whether the continuation of this proceeding by Mr Slater is unjustifiably vexatious and oppressive to the defendants because the claims for relief are based on the same facts and circumstances that have been alleged, tried and adjudicated upon by the Supreme Court of South Australia in the defamation proceedings, whether or not the technical requirements for enlivening the doctrines of res judicata, issue estoppel or Anshun estoppel are fulfilled. As to those technical requirements, see Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 (at 597 – 598). As French J explained in Spalla v St George Motor Finance Ltd (ACN 007 656 555) (No 6) [2004] FCA 1699 (at [59]) the doctrines are subsumed in this Court’s implied incidental power to prevent an abuse of its own processes, however (at [66]):

… they do not exhaust the circumstances in which a proceeding may be regarded as amounting to an abuse of process by way of attempted relitigation of a dispute already judicially determined.  …

16    His Honour referred to the factors identified in State Bank of New South Wales Ltd v Stenhouse Ltd (1997) Aus Torts Reports 81-423 (at 64,089) in determining whether litigation constitutes an abuse of process by relitigation. There, Giles CJ said:

It is apparent from this brief review of the decisions that whether proceedings are, or an aspect of proceedings is, an abuse of process because a party seeks to relitigate an issue already decided depends very much on the particular circumstances. The guiding considerations are oppression and unfairness to the other party to the litigation and concern for the integrity of the system of administration of justice, and amongst the matters to which regard may be had are –

(a)    the importance of the issue in and to the earlier proceedings, including whether it is an evidentiary issue or an ultimate issue;

(b)    the opportunity available and taken to fully litigate the issue;

(c)    the terms and finality of the finding as to the issue;

(d)    the identity between the relevant issues in the two proceedings;

(e)    any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceedings; all part of –

(f)    the extent of the oppression and unfairness to the other party if the issue is relitigated and the impact of the relitigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and

(g)    an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process.

17    The rationale underpinning this species of abuse of process is that there should be finality in litigation, because a party “should not be twice vexed in the same manner”: Johnson v Gore Wood & Co [2002] 2 AC 1, Lord Bingham (at 31), cited in UBS AG v Tyne (2018) 265 CLR 77, Gageler J (as his Honour then was) (at [66]).

18    Before proceeding further, it is convenient to repeat and elaborate upon some of the background to the transaction by which Ecosol disposed of its assets and liabilities.

Conduct of Ecosol’s affairs

19    The following summary of events adopts some wording from the defendants’ written submissions, the correctness of which did not appear to be disputed by Mr Slater:

(1)    Ecosol is a private company that formerly carried on a business manufacturing stormwater treatment products. It has approximately 50 shareholders. Mr Slater holds approximately 2.75% of the total issued shares in Ecosol.

(2)    Mr Smith was a director of Ecosol (and Ecosol’s chairperson) until July 2025.

(3)    Mr Bishop remains as Ecosol’s sole director.

(4)    Both Mr Smith and Mr Bishop are shareholders of Ecosol.

(5)    Ecosol has not conducted any form of business since November 2018 when its assets and liabilities were sold.

(6)    In late 2017 offers began to be made by Mr Macklin to purchase the assets and liabilities of Ecosol by way of the MBO. Mr Macklin was an employee of Ecosol and (at that time) a director of Ecosol.

(7)    Mr Macklin recused himself from discussions about the MBO due to his conflict of interest, with Mr Smith conducting negotiations on behalf of Ecosol. Mr Bishop was appointed as a director of Ecosol in light of Mr Macklin’s conflict of interest.

(8)    On 23 August 2018 Ecosol entered into a contract with UAS, a company set up by Mr Macklin and others, to acquire the stormwater treatment business.

(9)    The contract between UAS and Ecosol was subject to the approval of a majority of shareholders of Ecosol.

(10)    On 23 November 2018, a majority of Ecosol’s shareholders passed a resolution approving the sale to UAS. Nine of the then 40 shareholders voted against the resolution. Mr Slater was one of those shareholders.

(11)    Settlement of the sale of Ecosol’s business to UAS occurred on 30 November 2018.

Disputed issues in the defamation proceedings

20    I have already mentioned that the proceedings in the Supreme Court comprised two defamation proceedings heard and determined together. Mr Slater’s action related to statements made by (relevantly) Mr Smith during and relating to negotiations for the MBO. Mr Smith’s action related to statements made by Mr Slater during and relating to the same subject matter.

21    In defence of Mr Slater’s action, Mr Smith and Ecosol alleged that the statements concerning Mr Slater were made on an occasion of qualified privilege. By his Third Reply, Mr Slater alleged that the defence of qualified privilege was not available because Mr Smith’s publications were actuated by malice. The numerous facts (alleged in support of the malice plea in connection with the first of five publications) were pleaded at [2A] of Mr Slater’s Third Reply which included the following please (the emphasis is mine):

2A    The publication of the Defamatory Words were actuated by malice.

PARTICULARS

a.    The First Respondent knew that the Defamatory Words were or were substantially false;

b.    Alternatively the First Respondent was recklessly indifferent to whether the Defamatory Words were true or false

c.    In the alternative the First Respondent deliberately attempted to mislead the shareholders in the Second Respondent with the Defamatory Words.

d.    Further, the First Respondent’s dominant motive in publishing the Defamatory Words was to smear and undermine the credibility of the First Applicant and to maximise the damage to his reputation in the eyes of shareholders and hence for those shareholders to disregard or view with suspicion the communications the First Applicant made to them in regard to the actions of the directors and subcontractors of the Second Respondent and of the Second Respondent.

e.    Further, the Second Respondent’s dominant motive in publishing the Defamatory Words was to smear and undermine the credibility of the First Applicant and to maximise the damage to his reputation in the eyes of shareholders and hence for those shareholders to disregard or view with suspicion the communications the First Applicant made to them in with [sic] regard to the actions of the directors and subcontractors of the Second Respondent and of the Second Respondent.

f.    This improper motive was in furtherance of the First Respondent’s preferential treatment of the Management Buy Out Offer (‘MBO’) and improper bias towards it over all other alternatives to the disposal of the Second Respondent’s stormwater business rather than a process of orderly disposal of the stormwater business which would maximise the return to shareholders in the second respondent.

g.    This improper motive and bias was in furtherance of the Second Respondent’s preferential treatment of the MBO and improper bias over all other alternatives to the disposal of the Second Respondent’s stormwater business rather than a process of orderly disposal of the stormwater business which would maximise the return to shareholders in the second respondent.

h.    The improper motive and bias meant that the First Respondent in his capacity as a director and chairperson of the Second Respondent breached the Directors duty under s 182 of the Corporations Act 2001 (‘Corporations Act’) when he carried out the publication.

i.    The improper motive and bias meant that the First Respondent in his capacity as a director and chairperson of the Second Respondent breached the Director’s duty he owed to the Second Respondent under s 181 of the Corporations Act 2001 when he carried out the publication.

j.    The improper motive and bias meant that the First Respondent in his capacity as a director and chairperson of the Second Respondent breached the director’s duty he owed under s 180 of the Corporations Act 2001 when he carried out the publication.

k.    This improper motive and bias meant that the respondent was a [sic] breach of the First Respondent’s fiduciary duty he owed the Second Respondent as a director and chairperson to act with care, skill and diligence when he carried out the publication.

l.    This improper motive and bias meant that the First Respondent was in breach of the fiduciary duty which he owed the Second Respondent as a director and chairperson of the Second Respondent to act in good faith and in the best interests of the company when he carried out the publication.

m.    This improper motive and bias meant that the First Respondent was in breach of the fiduciary duty which he owed the Second Respondent as a director and chairperson of the Second Respondent to avoid conflicts of interest when lie [sic] carried out the publication.

…

u.    The First Respondent in carrying out the improper motive pleaded above at paragraph f has breached at least one of the directors duties he owed to the Second Respondent both under the Corporations Act and at least one of a director’s fiduciary duties he owed the Second Respondent when he did not enable a proper thorough and independent analysis of the competing bids received for the Second Respondent’s stormwater business received for the Second Respondent’s stormwater business in November 2018.

v.    The First Respondent in carrying out the improper motive pleaded above at paragraph f breached at least one of the directors duties he owed the Second Respondent both under the Corporations Act and at least one of a director’s fiduciary duties when he did not ensure that the disposal of the Second Respondent’s stormwater business was carried out so that shareholders could receive the best possible sale price for that business asset.

w.    The First Respondent in carrying out the improper motive pleaded above at paragraph f breached at least one of the directors duties he owed the Second Respondent both under the Corporations Act and at least one of the director’s fiduciary duties when he did not ensure that shareholders when they voted on the sale of the stormwater business in November 2018 did so in an informed manner.

x.    The First Respondent in carrying out the improper motive pleaded above at paragraph f breached at least one of the directors duties he owed the Second Respondent both under the Corporations Act and at least one of the director’s fiduciary duties when he did not enable shareholders to vote on the alternative bidders to the MBO even though he had told shareholders in writing beforehand that the MBO vote was a referendum on the other bidders for the Second Respondent’s stormwater business.

y.    The Second Respondent in carrying out the improper motive pleaded above at paragraph g - because of its inaction and failure to correct in the face of the above pleaded breaches of director’s duties both statutory and fiduciary. which it knew or should have known had occurred- failed to protect the best interests of its shareholders.

z.    The applicant repeats all material facts and particulars in his latest filed amended defence as third respondent

22    Those facts were then cross-referenced throughout the rest of the pleading in answer to defences raised in a connection with the remaining publications.

23    In defence of Mr Smith’s action against Mr Slater, Mr Slater alleged that the publications sued upon were justified, that is, that they were true or substantially true. The particulars of justification in Mr Slater’s Amended Defence (Revision 3) included the following:

…

18.    If the First Publication is found to contain an imputation that the applicant, as chairperson and director of Ecosol, refused in the first instance to countenance a higher offer to the MBO in a clear breach of his fiduciary duties (which is denied) then the imputation is substantially true, or in the alternative, true in substance and fact:

18.1.    The applicant as chairperson and director of Ecosol wrote to shareholders on 8 November 2018 to inform them that Ecosol would not consider the higher indicative offer of $3.00 per share or thereabouts for Ecosol stormwater business by Flow Defence Ply Ltd;

18.2.    On 9 November 2018 Ecosol’s largest shareholder emailed directors asking the shareholder vote on the MBO be postponed for 60 days to allow property consideration of the Flow Defence offer;

18.3.    On 9 November 2018 Stormwater 360 Ply Ltd expressed an interest in purchasing Ecosol;

18.4.    On 11 November 2018 the respondent made the complained of First Publication to shareholders;

18.5.    It was not until 12 November 2018 and after the preceding had transpired that the applicant, as Ecosol director and chairperson, then acquiesced to looking at the Flow Defence offer given that Stormwater 360 would be given the opportunity to put in a bid by 21 November 2018 and only in the circumstance of Ecosol granting Stormwater 360 Ply Ltd the opportunity to put in a bid;

18.6.    Whether Spel 360 cash bid received in November 2018 was higher even without discounting the UAS bid, due to it being a five year vendor finance offer, and whether the applicant even properly understood the key terms and condition of both bids is a known unknown to the respondent due to the applicants failure to abide by his discovery obligations and specific discovery orders against him and so this particular is subject to modification during trial.

…

21.    If the First Publication is found to contain an imputation that the applicant was biased towards the MBO then the imputation is substantially true, or in the alternative, true in substance and fact the first email was true in substance and in fact, or substantially true:

21. 1.    The applicant as director and Chairperson of Ecosol knowingly or he had a duty to have known that he falsely claimed or in the alternative fraudulently misrepresented by statement or by omission or in the alternative by his reckless and careless words or failure to inform deceived or in the alternative misled shareholders by making the following statements or omissions in his written communications to shareholders in the second half of 2018, and in his actions or failure to take actions in that period of time, in relation to offers. including the MBO offer of UAS, which were received in that time period:

21.1.1.    The Stormwater360 offer was substantially lower than the UAS offer

21.1.2.    The Stormwater 360 offer was markedly less attractive than the UAS offer

21.1.3.    UAS would assume transferring employee entitlements accrued at the date of settlement in their Ecosol employment with this particular subject to modification until the end of witness testimony as it is a known unknown due to the respondents breaching their discovery obligations

21.1.4.    Mr Smith omitting to disclose that unlike the UAS bid, the Stormwater360 bid without indemnity from Ecosol would recognise transferring employees accrued benefits

21.1.5.    Under the Stormwater360 bid Ecosol would be required to pay off all its HP obligations including $79K to ANZ to exit the lease on the Isuzu Tipper truck. Again UAS will take that liability across.

21.1.6.    While SW360 ... will leave Ecosol with cash receivables and all liabilities which would result in a net shortfall of about $100K which Ecosol will have to incur

21.1. 7.    If Ecosol Malaysian stormwater business was wound up that it would be a cost of $75k to Ecosol whereas UAS would take it over for no cost

21.1.8.    Closing the Malaysian subsidiary business would be a difficult task

21.1.9.    UAS bid would be the equivalent of $2.54 and Stormwater 360 bid was neared to $1.59 per share and stating that even that figure must be viewed with caution because of the uncertainty of the number of non transferring employees

21.1.10.    Mr Smith omitting to disclose when comparing the Stormwater360 bid to the UAS bid there should be no discount applied to the latter being it required 100% vendor finance and there was no security being provided other than personal guarantees and repayment would be dependent on the performance of the stormwater business when Gardiner Hall discounted those cash flows because of their uncertainty at 15-20% per annum

21.1. 11.It was a positive opportunity to provide vendor fiancé [sic] to UAS

21.1.12.    Mr Smith refusing to initially accept that Flow Defence was not intending to close down the SA plant and move to Qld that in someway Flow Defence in telling Ecosol that it was incorrect in its belief added to the uncertainty of the Flow Defence offer.

21.1.13.    The Flow Defence offer would result in acceptance on $190K in termination costs and that the UAS offer would not be exposed to the same risk.

21.1.14.    Ecosol employees of the stormwater business who were not transferring to UAS on settlement would be an additional cost to Ecosol if the Stormwater 360 bid was accepted and that would not be an additional cost if the UAS offer was accepted

21.1.15.    Mr Smith omitting to disclose that UAS would be entitled to whatever sum was in the Ecosol business bank accounts at settlement above the $50.000.00 and for it to be transferred to it which was a benefit that the Stormwater360 cash bidder would not receive

21.1.16.Mr Smith omitting to disclose that UAS would be the beneficiary of prepayments, other than those relating to stock, at settlement which was a benefit the Stormwater360 bid would not receive

21.1.17.Mr Smith omitting to disclose that the UAS would be the beneficiary of Ecosol receivables at settlement

21.1.18    That UAS were paying a fixed sum for the purchase of the stormwater business without any adjustments at settlement or post settlement date

21.1.19.    Flow Defence intends for Mrs Roy to transfer her Ecosol shares to Flow Defence, which would then use Mrs Roy’s Ecosol shareholding as part-secuirty [sic] for the vendor finance. That would not in any way improve the purchase price to be paid by Flow Defence.

21.1.20.Mr Smith criticised the security that Flow Defence would provide for the vendor finance to be granted to it but failed to make the same criticism of the UAS bid.

21.1.21.The Flow Defence offer cannot be considered binding because it contains what Flow Defence appears to say is a key term regarding Mrs Roy’s shares that does not make sense to Ecosol or its legal advisers. After requests for clarification from Flow Defence lawyers the explanation of the term still does not make sense

21.1.22.If Flow Defence owned Jodie Roy’s shares then it would be entitled to receive its share of any dividends paid by Ecosol, a situation that we find difficult to understand given that the share transfer is meant to benefit Ecosol shareholders and not Flow Defence itself

21.1.23.How would Flow Defence fund the closure of the Malaysian subsidiary

21.1.24.FD shows patent number AU 201518191 for its Flow Defence Barrier product that we cannot find on the AusPat database

21.1.25.We do not understand how Flow Defence arrived at the vendor finance figure of $1,092,496. It appears to rely on the netting off of the value of Mrs Roy’s shares against the loan amount after deduction of the book value of the Sydney property. We requested an explanation of how Flow Defence believed this work but none has been forthcoming so far.

21.1.26.    Mr Smith in representing what was included in the business sale agreement to UAS excluding to list the Cash, the Prepayments and the Receivables

21.1.27.Flow Defence offer is not credible and appears to be an attempt to further delay the UAS deal from being finalised.

21.1.28.It is noteworthy that the funding for the Flow Defence proposal would need to be almost twice the amount that the Company proposes to lend to UAS.

21.1.29.The Flow Defence proposal if it involves buying the same assets and taking on the same liabilities as contemplated in the UAS transaction would essentially mean that $1M of that $2.1M loan would be unsecured.

21.1.30.Contrary to the impression given by Brighthill Lawyers Flow Defence does not have any noticeable footprint in the stormwater industry and so it is reasonable to assume that it would not have the resources to contemplate an acquisition such as that proposed.

21.1.31.Brighthill Lawyers. on behalf of Jodie Roy, also want the Board to appoint a business broker to consider selling the business on the open market. This has already been considered and rejected in part because any offer that may be received, and such an outcome cannot be presumed would likely be at best at market value and the considerable business broker fees would need to be paid, thereby reducing the shareholder return accordingly.

21.1.32.Brighthill Lawyers and Mr and Mrs Roy, are either confused or the broker request and Flow Defence proposal are not genuine, since on the one hand they say the [sic] want the Company to appoint a broker to offer the business for sale to the open market but on the other hand, Flow Defence says it wants to by [sic] the Company’s business.

21.2.    The respondent repeats paragraphs 18.1 to 18.5 and paragraphs 19.1 to 19.7 above.

22.    If the First Publication is found to contain an imputation that the applicant had breached his fiduciary duties then the imputation is substantially true, or in the alternative, true in substance and fact:

22.1.    The applicant as director and chairman of Ecosol who had a blocking and then deciding vote on the Ecosol board in relation to the disposal of Ecosol’s stormwater business breached all of his fiduciary duties in the handling of that issue;

22.2.    In the alternative the applicant breached at least one of the fiduciary duties he owed Ecosol as director and chairman of Ecosol but not all:

Particulars

22.2.1.    The respondent refers to and relies on all of the actions taken or failed to be taken by Ecosol in the disposal of its stormwater business as disclosed by Ecosol in its written communication to shareholders, written communications between the respondent and Ecosol, the parties pleadings and submissions in both consolidated actions

22.2.2.    The respondent repeats paragraphs 12.1 to 12.14 and 13.1 above.

23.    If the First Publication is found to contain an imputation that the applicant had breached the Corporations Act 2001 (Cth) then the imputation is substantially true, or in the alternative, true in substance and fact:

23.1.    The applicant as director and chairman of Ecosol who had a blocking and then deciding vote on the Ecosol board in relation to the disposal of Ecosol’s stormwater business breached all of the statutory duties he owed Ecosol pursuant to the Corporations Act 2001 (Cth) in the handling of that issue;

23.2.    In the alternative the applicant breached at least one of the statutory duties he owed Ecosol pursuant to the Corporations Act 2001 (Cth) as director and chairman of Ecosol but not all:

Particulars

23.2.1    The respondent refers to and relies on all of the actions taken or failed to be taken by Ecosol in the disposal of its stormwater business as disclosed by Ecosol in its written communication to shareholders, written communications between the respondent and Ecosol and all pleadings, submissions and other evidence in the tender books on this issue in both consolidated actions;

23.2.2    The respondent repeats paragraphs 12.1 to 12.14 and 13.1 above.

24.    If the First Publication contained an imputation that the applicant as chairperson and director of Ecosol did not distribute important information to shareholders in a timely basis in the sale of Ecosol’s business asset then the imputation is substantially true, or in the alternative, true in substance and fact:

24.1.    David Bishop who was acting as the Ecosol intermediary to Spel Environmental Pty Ltd whilst the latter was carrying out due diligence in or around September 2018 knew some time prior to Spel formally notifying Ecosol in early November 2018 that it was unlikely to proceed to lodge a bid:

Particulars

24.1.1.    The respondent will rely on the testimony of witnesses at trial.

24.2.    The Supreme Court of Queensland on 2 October 2018 ordered the Second Respondent provide certain categories of books and records in relation to the MBO to Jodie Roy, the largest shareholder in Ecosol after Ecosol had refused to provide her or any other shareholders with the necessary material facts of the MBO offer a week or so out from the Ecosol shareholder meeting in September 2018 to vote on the MBO.

24.3.    The applicant is the director and chairman of Ecosol with the casting vote and Ecosol shareholders were not kept informed on a timely basis as to the sale of Ecosol’s business asset.

24.4.    The respondent refers to and relies on the pleadings and submissions in both actions which document the failure of Ecosol and its directors including the applicant to provide Ecsosol shareholders with complete, accurate and timely information in relation to the company.

24    It may be observed that the pleas in the Third Reply and in the Defence allege not only the existence of objective facts and circumstances, but subjective states of mind, and legal conclusions including breach of fiduciary duties owed by Mr Smith in his capacity as a director of Ecosol. The pleaded facts included an asserted failure to enable shareholders to vote on alternative competitive bids. A common theme running through the pleas is a factual allegation that Ecosol’s directors were engaged in a scheme, the features of which included an attitude of bias toward Mr Macklin’s MBO proposal and an associated failure to properly pursue competitive bids for the disposal of Ecosol’s assets to the detriment of all shareholders. The existence of the scheme (characterised by an improper motive) was put in issue by Mr Slater in his own defamation suit. It was an issue that proceeded to trial and that was the subject of findings recorded in the reasons for judgment: Slater (at [519] – [554]). The trial judge identified that a “principal” contention of Mr Slater was that (relevantly) Mr Smith’s conduct was in furtherance of a scheme to give preferential treatment to Mr Macklin’s proposed MBO and a bias against alternatives: Slater (at [519], [824]).

25    In the result, the trial judge did not accept that Mr Slater had discharged his onus of proving that the alleged scheme had been devised or implemented: Slater (at [521], [552] – [554]). As a consequence of that factual conclusion, the allegation of malice was rejected and the defence of qualified privilege upheld: Slater (at [558], [562] – [563]). The trial judge also concluded that Mr Smith did not breach any of the director duties owed to Ecosol: Slater (at [704], [708] – [709], [713], [715], [718] – [721], [728], [730], [839] – [842], [913] – [916]).

26    In Slater CoA, Livesey P, S Doyle JA and Hall AJA observed that the question of whether Mr Smith breached his directors’ duties owed to Ecosol would not alter the Court’s analysis because Mr Slater had failed to prove the scheme underpinning the allegations of breach. By way of illustration, their Honours said:

146    In rejecting any finding of malice based upon the alleged scheme, the judge concluded by observing that Mr Slater’s allegations of breaches of fiduciary and statutory duties did not alter the analysis:

[554]    As noted above, Mr Slater contends that, by participating in the scheme, the directors breached their fiduciary duties and various statutory duties. If in fact the directors had participated in the scheme, they would have breached their duties and would have been motivated by an ulterior purpose for the purposes of the doctrine of malice. However, as Mr Slater has failed to prove the existence of the scheme, he has failed to prove his principal contention of express malice. As Ecosol submits, the mere fact of the directors breaching their duties (if proved) would not amount to malice in the absence of proof of existence of the scheme.

…

…

182    For completeness, we add that we do not consider that Mr Smith’s position as a director, or Mr Slater’s allegations that Mr Smith breached his fiduciary and statutory duties, alters the above analysis. As elaborated upon later in these reasons, whilst Mr Smith’s position and duties formed part of the general context in which the issue of qualified privilege, and the connection of the defamatory statements to the occasion of privilege, fell to be considered, we do not think they affect or undermine the analysis or conclusions set out above.

…

211    We do not think the overlay of Mr Smith’s position and obligations as a director and fiduciary alters the analysis in this case. We do not think Mr Slater established that Mr Smith was in breach of his obligations as director or fiduciary. Certainly the judge did not make any finding to this effect. In so concluding, we do not think that the judge overlooked the strict and objective nature of those obligations. But more importantly for present purposes, we agree with the judge’s observation that, ‘the mere fact of the directors breaching their duties (if proved) would not amount to malice in the absence of proof of existence of the scheme’.

(footnote omitted)

27    As to the allegation of malice, the Court said:

198    In challenging the judge’s finding that Ecosol, through Mr Smith, was not actuated by malice, Mr Slater faces a difficult task. Not only was the judge’s conclusion supported by very detailed and careful reasoning, but also it was one informed by his Honour’s observations of Mr Smith, in the context of a relatively long and complicated trial. The judge had the opportunity to observe Mr Smith give evidence, with the benefit of a close understanding of the detail of the evidence that had been adduced at trial. Having had this opportunity, the judge accepted that, whilst fervent in his beliefs, and having an intense dislike for Mr Slater, Mr Smith was nevertheless an honest witness. Further, and more importantly, the judge’s demeanour-based findings extended to findings to the effect that Mr Smith honestly believed that the UAS transaction was in the best interests of the company and its shareholders, that the alternatives were inferior options, that Mr Slater’s opposition was not reasonably based and indeed included falsehoods and was improperly motivated, and that it was appropriate that Mr Smith communicate his response to Mr Slater’s opposition to shareholders.

199    Faced with findings to this effect, it is difficult to see how Mr Slater could expect to succeed in his challenge to the judge’s refusal to find malice on the facts as found. Far from establishing that Mr Smith was improperly motivated, the judge accepted that Mr Smith was genuinely motivated to inform shareholders of what he considered was in their best interests in making the impugned publications.

200    In this respect, the judge was right to emphasise the distinction, drawn in Roberts v Bass, between positive knowledge of falsity, and a mere lack of belief or even recklessness. On the judge’s findings, Mr Slater failed to establish that Mr Smith knew any of his defamatory statements were false. Indeed, this was not even a case where Mr Smith lacked belief in the statements he made, or made those statements recklessly without caring whether they were true. Rather, the judge accepted that Mr Smith genuinely believed the defamatory statements he made. Mr Smith’s acknowledgment in evidence that, at the time he made his defamatory statements, he did not know what was in Mr Slater’s mind, or even what information he had, did not stand in the way of the judge making this finding.

28    Having regard to the affidavits filed in support of the present application, I am satisfied that the factual allegations underpinning the claims for relief under s 233 of the Corporations Act formed a part of the central controversies pleaded and tried in the defamation proceedings.

29    In oral submissions, Mr Slater acknowledged that this proceeding and his defamation action involved the same “factual circumstances looking at it from two different angles”. That is a fair description in the sense that some of the factual issues raised in support of the malice and justification pleas are the very same facts and circumstances now raised in support of the claims for relief founded in oppression.

30    Further, in an affidavit affirmed on 20 December 2024, Mr Slater deposed “[t]he Defendants as a result of the consolidated proceedings in the Supreme Court of South Australia should be well aware of the material facts, if they have mistakenly not been included in this affidavit …”.

31    In this proceeding, the core factual controversy is whether the directors failed to undertake a sufficiently competitive sale process to attract and negotiate better terms for the sale of the stormwater business (including because they were biased toward the MBO), including by silencing Mr Slater’s opposition as a minority shareholder. The legal controversy is whether that conduct, if established, enlivens the Court’s jurisdiction and discretion to grant remedies under s 233 of the Corporations Act in the terms now sought by Mr Slater. The claimed relief (as amended) is as follows:

A.    DETAILS OF APPLICATION

This application is made under section 233 of the Corporations Act 2001 (Cth) (‘Act’) for oppression of shareholders. The Plaintiff applies for orders to remedy oppression, unfair prejudice and unfair discrimination to himself as a shareholder of the First Defendant

[On the facts stated in the supporting affidavit(s), the plaintiff claims:

…

4.    An order that one of more of the Defendants purchase the shares of the Plaintiff in the First Defendant at such price and on such terms (including if a purchase by the First Defendant is ordered with an appropriate reduction in the share capital of the Defendants) as the Court determines.

5.    Exemplary or punitive damages be awarded to the Plaintiff against one or more of the Defendants for the sum of $100,000.00

6.    The Defendants to be held jointly and severally liable for any financial compensatory order against any Defendant

…

16.    In addition or in the alternative and not necessarily in order number order the third defendant Ecosol shareholding be transferred to the plaintiff in whole or in part.

17.    In addition or in the alternative the third defendant’s Ecosol shareholding be cancelled in whole or in part.

…

26.    Such other relief as the Honourable Court deems appropriate.

27.    Coss; and

28.    Interest

Mr Slater’s submissions

32    Mr Slater’s affidavits include an allegation that Ecosol’s directors breached their duties to the company. In oral submissions Mr Slater contended that proof in this proceeding that the directors breached their duties would mean he must succeed in his claims alleging oppression. He submitted that the issues in this proceeding were different from those arising in the earlier litigation because (unlike an allegation of malice in the defamation context), the subjective intentions of the directors are irrelevant. It was enough, he submitted, to show that the directors had a subconscious bias toward the MBO and that there were other shortcomings in the sale process, of a kind identified by the trial judge in the defamation proceedings. He submitted that the finding of the trial judge in the defamation proceedings supported that aspect of his case and that the body of evidence adduced in those proceedings could be adduced at the trial of this action.

33    Mr Slater further submitted that this Court would not be bound by the trial judge’s favourable assessment of Mr Smith’s credit as a witness. He disclosed his intention to adduce in this proceeding material that emerged in interlocutory hearings relating to costs in the Supreme Court. From the bar table he asserted that those materials would support a finding that Mr Smith had acted dishonestly. Mr Slater further contended that in the defamation proceedings the defendants had belatedly discovered and produced evidence helpful to his case and he should not be expected to commence a suit in oppression without first having possession of that relevant material. He submitted the circumstance that the Court of Appeal had determined it unnecessary to decide whether Ecosol’s directors had breached their duties left that contest undetermined. Accordingly, he said, there was no obstacle to that question being adjudicated by this Court.

34    Mr Slater submitted that as a self represented litigant he could not be expected to know that his pursuit of a defamation action against Mr Smith could give rise to an application for summary judgment founded on the above principles in a different court and for a different remedy. He asserted that over the course of the long running and competing defamation claims, it was never once said to him that he could or should bring a claim in the same action seeking remedies under s 233 of the Corporations Act alleging oppression. From the bar table, he asserted a belief that the Supreme Court would not have jurisdiction to hear a claim for relief under s 233 of the Corporations Act in any event.

This proceeding is unjustifiably oppressive

35    I have concluded that the continuation of this action would be unjustifiably oppressive and that the proceeding for that reason should be dismissed as an abuse of this Court’s processes.

36    The Supreme Court had jurisdiction to grant the relief sought in this action: Corporations Act, ss 58AA, 232, 233.

37    Mr Slater is a self represented litigant and it may be assumed for present purposes that he believed this Court’s jurisdiction to be exclusive. However, a proceeding may constitute an abuse of process by relitigation in the sense described in the authorities irrespective of the subjective knowledge, intention or motivation of the party commencing and continuing it.

38    I find that Mr Slater has, since 2018, maintained a factual allegation that the directors had conducted Ecosol’s affairs in a manner contrary to his interests and the interests of shareholders as a whole, specifically by conducting the sale process in a way that demonstrated a bias for Mr Macklin’s MBO proposal. He expressed his views about that conduct in the lead up to and following the transaction for the sale of Ecosol’s stormwater business and he stood by his assertions in his own defamation suit against Mr Smith and in defence of the suit brought by Mr Smith against him. His factual allegations surrounding the transaction formed a central part of the controversy. They were positively raised in an action commenced by him and he bore the onus of proof in respect of them. In addition, he defended statements he had made that were critical of the sale process by alleging they were substantially true.

39    Irrespective of whether the doctrines of res judicata, issue estoppel or Anshun estoppel are fulfilled, I am satisfied that orders under s 233 of the Corporations Act could have been sought by way of claim or cross-claim on the basis of the same facts alleged in support of the malice and justification pleas. By this litigation, Mr Slater now seeks to relitigate those same facts in support of a different cause of action, including by inviting this Court to make different factual findings and to form a different view on a range of matters, including as to Mr Smith’s credit as a witness.

40    Mr Slater’s complaint that documents were discovered at a late stage of the defamation proceedings finds insufficient support in the evidence. I am not satisfied that Mr Slater was not in a forensic position to allege oppression in the defamation proceedings for reasons relating to any such default. The allegations concerning bias and other unsatisfactory aspects of the sale process were made by Mr Slater at the pretrial stage. It has not been established that the oppression caused by this proceeding is justifiable by reference to the emergence of evidence recently coming to Mr Slater’s attention by reason of the default of any other person.

41    It matters not whether it was necessary in the defamation proceedings to determine whether the facts alleged supported a finding that Mr Smith had breached his duties as a director of Ecosol. The issue sought to be relitigated is fundamentally factual in its nature. The vice lies in the attempt to retry the same factual controversy in support of a different form of relief. In any event, an allegation that the directors breached their duties to Ecosol was persisted with throughout the defamation proceedings and the attempt to relitigate that mixed question of fact and law constitutes an abuse, irrespective of whether and how the Supreme Court resolved it.

42    It is otherwise unnecessary to decide whether proof of a breach of director’s duties would in and of itself be sufficient to warrant orders under s 233 of the Corporations Act.

43    In reaching those conclusions I have had regard to the especially burdensome nature of the defamation proceedings. They were litigated over many years and were beset with interlocutory dispute. The judgments at first instance and on appeal are detailed and thorough in their coverage. That is a relevant consideration, both in my evaluation of whether this proceeding is unduly oppressive and in the exercise of my discretion to grant relief. It matters not whether the earlier proceeding was fractious and prolonged because of the wrongdoing of any person and I make no finding about that.

44    I have not overlooked a submission of Mr Slater to the effect that the defendants, through their insurer, are wrongfully seeking to shutdown a meritorious application by using a security for costs application as a weapon. That is not established on the material before me. It is true that the defendants have made a security for costs application against Mr Slater. A defendant party, whether insured or not, is entitled to seek an order for security for costs against an opponent in litigation and to have the application determined in accordance with its merits. I express no view concerning the merits of that application. To the extent that Mr Slater has been notified of an intention to seek costs against him should this proceeding be unsuccessful there is nothing improper in that. Whilst I accept that the conduct of a defendant party may be relevant in the exercise of the discretion to dismiss or stay an action as an abuse of process, the matters relied upon by Mr Slater do not preclude the relief sought by the defendants.

SECOND ISSUE

45    The defendants submit that in bringing this proceeding, Mr Slater is motivated by his intense dislike for Mr Smith and that the action is calculated to vex or annoy. I am not satisfied that that ground is made out. Mutual and intense dislike between parties to litigation is not unusual. However, on the material before me it has not been shown that Mr Slater is subjectively motivated by anything other than a firmly held conviction that he is right, a desire to have his opinions vindicated and a wish to have Ecosol’s directors pay him a sum of money as compensation for wrongs he believes they have committed.

46    The order summarily dismissing the originating application as an abuse of process will not be based on this ground.

THIRD ISSUE

47    The defendants submitted that the materials filed by Mr Slater disclose no reasonable cause of action within the meaning of r 26.01(1)(c) of the Rules.

48    They submitted that the allegations contained in Mr Slater’s affidavits rise no higher than assertions of breach of duty, that they are otherwise replete with conjecture and speculation and that they are so vague and unparticularised that it is not possible to respond to them.

49    I accept that some of the affidavit evidence is in the nature of speculation and conjecture. However, in the ordinary course, that may yet be remedied by procedural orders, including an order requiring that Mr Slater file all evidence upon which he proposes to rely at trial. I do not consider the pretrial processes have reached a stage at which it may comfortably be concluded that defects of the kind identified cannot be remedied by the filing of further or amended evidentiary material.

50    The defendants further submitted that the conduct complained of (even if established on the evidence) could not constitute oppression and that Mr Slater does not have reasonable prospects of showing otherwise. I do not accept that submission. In my view, a case alleging bias or other prejudicial treatment of competing bids to buy a company’s entire enterprise may, if established, arguably support a claim for remedies under s 232 and s 233 of the Corporations Act.

51    Relatedly, it was submitted that proof that a director had breached his duties to a company would not, in and of itself, constitute oppression:  MF Lady Pty Ltd (Trustee) v Henry Morgan Limited [2022] FCA 978, Jackson J (at [64]).

52    In a great variety of cases, that may be so. However, in my view it follows that Mr Slater has introduced a false issue in the sense that the question of breach of director’s duties is a potential distraction from the central factual questions arising under s 232 of the Corporations Act. To succeed in obtaining remedies under s 233 it is unnecessary for an applicant party to show that the conduct complained of would also constitute a breach of the duties of the kind alleged by Mr Slater both in this action and in the defamation proceedings.

53    The defendants then submitted that orders for the transfer of shares would have no utility because Ecosol no longer has assets, is no longer trading and its shares have no value. In addition, they submitted, the alleged acts of oppression are not ongoing so that an occasion for granting relief under s 233 of the Corporations Act does not arise.

54    In my view, those matters do not warrant the dismissal of this action as an abuse of process. Mr Slater’s argument is that the oppression is ongoing for so long as he has not been paid restitution for the financial losses suffered by reason of the conduct complained of and because he has received no apology. It is not necessary to express a view as to the prospects of those arguments succeeding at trial. It is sufficient to say that the defendants have not shown that the claims for relief would be untenable, proceeding (as I must) from an assumption that if the Court were considering heads of relief, it would proceed from the footing that the factual foundation for oppression claim had been established.

55    The order summarily dismissing the originating application as an abuse of process will not be based on this ground.

56    The parties should be heard as to costs.

Associate:

Dated:    5 March 2026