SQUARETAIL PTY LTD -v- UGLY BOATS PTY LTD AS TRUSTEE OF THE GEOFFREY STEVEN BAVOILLOT FAMILY TRUST NO 2 [2026] WASC 310

[2026] WASC 310 Page 1 JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERS CITATION : SQUARETAIL PTY LTD -v- UGLY BOATS PTY LTD AS TRUSTEE OF THE GEOFFREY STEVEN BAVOILLOT FAMILY TRUST NO 2 [2026] WASC 310 CORAM : LUNDBERG J HEARD : 29 JULY 2026 DELIVERED : 31 JULY 2026 FILE NO/S : CIV 1557 of 2025 BETWEEN : SQUARETAIL PTY LTD First Plaintiff EASTCOURT CAPITAL PTY LTD Second Plaintiff ECP ACQUISITIONS 15 PTY LTD Third Plaintiff AND UGLY BOATS PTY LTD AS TRUSTEE OF THE GEOFFREY STEVEN BAVOILLOT FAMILY TRUST NO 2 First Defendant MILREGAL PTY LTD AS TRUSTEE OF THE HICKS FAMILY TRUST Second Defendant STEPHEN JAMES MCGURK Third Defendant -- 1 of 22 -- [2026] WASC 310 Page 2 PILVALMUR PTY LTD Fourth Defendant SAMUEL JASON DRURY Fifth Defendant CJBASSOC PTY LTD Sixth Defendant MARK JAMES LEAVESLEY Seventh Defendant PENDAL HOLDINGS PTY LTD AS TRUSTEE FOR THE PENDAL FAMILY ACCOUNT Eighth Defendant KENNETH LUEHMAN AND GAIL LUEHMAN AS TRUSTEES FOR THE KG LUEHMAN SUPER FUND Ninth Defendant UGLY BOATS PTY LTD AS TRUSTEE OF THE GEOFFREY STEVEN BAVOILLOT FAMILY TRUST NO 2 MILREGAL PTY LTD AS TRUSTEE OF THE HICKS FAMILY TRUST STEPHEN JAMES MCGURK SAMUEL JASON DRURY CJBASSOC PTY LTD MARK JAMES LEAVESLEY Plaintiff by counterclaim SQUARETAIL PTY LTD Defendant by counterclaim EASTCOURT CAPITAL PTY LTD ECP ACQUISITIONS 15 PTY LTD Defendant by counterclaim -- 2 of 22 -- [2026] WASC 310 Page 3 ON APPEAL FROM: For File No : CIV 1557 of 2025 Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA Coram : REGISTRAR JENNINGS File Number : CIV 1557 OF 2025 Catchwords: Practice and procedure - Expert evidence - Appeal against Registrar's decision in relation to contested expert evidence regime - Shareholder dispute in relation to nascent company - Valuation of first plaintiff company in issue in proceedings - Leave granted to parties by Registrar to adduce expert evidence in forensic accounting discipline - Leave refused in respect of additional disciplines sought by defendants of engineering feasibility, commodity pricing and probability analysis - Scope of defendants' position narrowed on appeal - Whether leave should be granted to adduce expert evidence as to engineering feasibility and commodity pricing - Consideration of proportionality - Turns on own facts Legislation: Rules of the Supreme Court 1971 (WA), O 1 r 4A, O 1 r 4B, O 36A r 1 Result: Appeal allowed Category: B Representation: Counsel: First Plaintiff : I Freeman Second Plaintiff : I Freeman Third Plaintiff : I Freeman First Defendant : E M E John Second Defendant : E M E John Third Defendant : E M E John -- 3 of 22 -- [2026] WASC 310 Page 4 Fourth Defendant : E M E John Fifth Defendant : E M E John Sixth Defendant : E M E John Seventh Defendant : E M E John Eighth Defendant : No Appearance Ninth Defendant : No Appearance Plaintiff by counterclaim : E M E John Defendant by counterclaim : I Freeman Solicitors: First Plaintiff : Lavan Second Plaintiff : Lavan Third Plaintiff : Lavan First Defendant : Integrated IP Law Second Defendant : Integrated IP Law Third Defendant : Integrated IP Law Fourth Defendant : Integrated IP Law Fifth Defendant : Integrated IP Law Sixth Defendant : Integrated IP Law Seventh Defendant : Integrated IP Law Eighth Defendant : In Person Ninth Defendant : In Person Plaintiff by counterclaim : Integrated IP Law Defendant by counterclaim : Lavan Case(s) referred to in decision(s): CVW Group Holdings Pty Ltd v Addison [2011] WASC 267 East Metropolitan Health Service v Ellis (by his next friend Christopher Graham Ellis) [2020] WASCA 147 Eckersley v Binnie (1988) 18 Con LR 1 Kipoi Holdings Mauritius Limited v Robert Michael Kirman and Robert Conry Brauer as joint and several administrators of Tiger Resources Ltd (subject to a deed of company arrangement) [No 4] [2024] WASCA 145 McCausland v Surfing Hardware International Holdings Pty Ltd [2013] NSWSC 902 Priority Networking Pty Ltd v Peterson [2018] WASC 36 -- 4 of 22 -- [2026] WASC 310 Page 5 Table of Contents Introduction ................................................................................................................................ 6 The nature of the action .............................................................................................................. 6 The business of Squaretail .......................................................................................................... 8 Orders made by the Registrar ..................................................................................................... 9 The appeal................................................................................................................................. 10 The position of the first defendant ............................................................................................ 11 The position of the plaintiffs .................................................................................................... 14 Disposition ................................................................................................................................ 16 Conclusion and orders .............................................................................................................. 18 ATTACHMENT A Defendants' minute of proposed expert evidence orders ......................... 20 -- 5 of 22 -- [2026] WASC 310 LUNDBERG J Page 6 LUNDBERG J: Introduction 1 These reasons concern the first defendant's appeal brought pursuant to Order 60A of the Rules of the Supreme Court 1971 (WA) (RSC), against a decision made by a Registrar on 28 April 2026 to refuse leave to the first to seventh defendants to adduce expert evidence in certain disciplines. 2 For the following reasons, I will allow the appeal. The nature of the action 3 The action concerns a dispute between shareholders of a company where their rights, duties and liabilities are alleged to be governed by a shareholders agreement dated 28 February 2022 (Shareholders' Agreement).1 4 The Shareholders Agreement contains a mechanism in cl 16 for shareholders with 75% or more of the issued share capital in the company who are in receipt of a bona fide offer for the purchase of their shares, to require the balance of the shareholders to join in the sale and sell their shares.2 5 Clauses such as this are commonly referred to as 'drag-along' clauses, typically included in a shareholders' agreement for the benefit of the majority shareholder, in contradistinction to 'tag-long' clauses which are permissive and typically intended for the benefit of the minority shareholders. 6 The company at the centre of this action is the first plaintiff, Squaretail. The second plaintiff, Eastcourt Capital, is a majority shareholder in Squaretail.3 Eastcourt Capital has entered into an agreement to sell its shares to the third plaintiff (ECP Acquisitions),4 with the third plaintiff being a wholly owned subsidiary of Eastcourt Capital. 7 Presently, Eastcourt Capital holds 89.55% of the shares on issue in Squaretail. The defendants to this action hold the remaining shares, 1 SOC [3] and [9]. The Ugly Boats Defendants admit the existence of the shareholders' agreement, but it is pleaded that the second defendant did not enter into the agreement, see Defence [9]. 2 SOC [10]; admitted in the Defence [10], but the Ugly Boats Defendants also assert failures by the second plaintiff to comply with the cl 16 regime: see Defence [26] as well. 3 SOC [12]; admitted in the Defence [12]. 4 SOC [11]; not admitted in the Defence [11]. -- 6 of 22 -- [2026] WASC 310 LUNDBERG J Page 7 being 10.45% in total. Of all of the defendants, the first defendant (Ugly Boats Pty Ltd) holds the bulk of the minority interest, around 9%. The balance of the defendants thus hold less than 1.5% of the company. 8 It appears that two of the defendants have acquiesced to this sale, being the eighth and ninth defendants. 9 The balance of the defendants, being the first to the seventh defendants, have declined to sell their shares to ECP Acquisitions. For convenience, I will refer to the first to seventh defendants as the defendants in these reasons, noting that the appeal is brought solely by the first defendant. The plaintiffs allege the defendants are in breach of the Shareholders' Agreement, given that a value of the shares has now been determined (they allege) in accordance with the contractual regime. 10 The valuation relied upon by the plaintiffs has been prepared by Mr Adam Myers, an accountant with the firm BDO, and is contained in a valuation report dated 6 December 2024 (BDO Valuation Report).5 In that report, Mr Myers assessed the equity value of Squaretail as at 1 November 2024 11 The fourth defendant is represented by the same solicitors as the balance of the defendants but has filed a notice of intention to abide. 12 The plaintiffs seek specific performance and associated relief to require the transfer of all of the defendants' shares in Squaretail to ECP Acquisitions. 13 The defendants plead that cl 16 permits the minority shareholders to avoid the sale of their shares to ECP Acquisitions if they can establish that the proposed sale would constitute an act of shareholder oppression. The defendants contend that the proposed sale constitutes an act of oppression for the reasons set out at [45] to [51] of the Defence, and so the minority shareholders are not required to join in the sale of their shares.6 14 In brief, the defendants refer to: (a) the close relationship between Eastcourt Capital and ECP Acquisitions, the latter being a wholly owned subsidiary of the 5 Myers Affidavit [4] and Attachment AAM-2. 6 Defence [21], [45] - [51]. -- 7 of 22 -- [2026] WASC 310 LUNDBERG J Page 8 former, having a common, sole director and secretary, and having only been incorporated on 9 June 2020, having no real property and a paid up capital of only $1.00;7 (b) a placement of shares by Squaretail through a rights issue which was said to be for the sole purpose of raising working capital for Squaretail, and the holding of a general meeting at which the defendants were not present;8 (c) breaches of terms alleged to be implied into the Shareholders Agreement, as to the share valuation process;9 and (d) the significant disparity between the fair value offered by Eastcourt Capital and the true value of the shares (on their preferred approach to the valuation).10 15 As to this last point, the disparity between the valuations of the shares in Squaretail which is favoured by the respective camps of shareholders is significant. The value offered by ECP Acquisitions is $235 per share. The relief sought by the defendants is for the acquisition of their shares at a price of either $8,666, $7437.12, or $6,207 per share, being a difference of almost 37 times the plaintiffs' valuation, taken at its highest. 16 Several other matters arise in the action on the pleadings, but the above summary is sufficient for present purposes The business of Squaretail 17 It is not in dispute that Squaretail is a nascent business. 18 A commercial feasibility study was prepared for the business in July 2022 by Mr Myers (BDO Feasibility Report), followed by the establishment of a project plant.11 Mr Myers is an accountant with some 28 years' experience. 19 Considerable capital expenditure, in the region of $188 million, will be required from this point going forward, to advance the company into production. In short terms, the business proposes to commercialise the 'carbon capture' patented technology held by Squaretail's subsidiary. 7 Defence [35] - [36]. 8 Defence [37] - [44]. 9 Defence [26], [52]. 10 Defence [53]. 11 Myers Affidavit [3] and Attachment AAM-1. -- 8 of 22 -- [2026] WASC 310 LUNDBERG J Page 9 20 The business proposes to establish an annulus core reactor, which will use a process by which carbon dioxide is taken in and mixed with ammonia and water, resulting in an intermediary solution of ammonium bicarbonate and ammonium carbonate, which can then be further processed downstream into other industrial products. 21 One example of a possible downstream process is the production of calcium carbonate and ammonium sulphate through a reaction between gypsum and the intermediary solution. Orders made by the Registrar 22 On 24 March 2026, the Registrar made orders granting the parties leave to adduce expert evidence at the trial as to the equity value of Squaretail as at 1 November 2024. 23 A timetable was included in the above orders to facilitate the filing of the expert evidence. The plaintiffs complied with that timetable (Folio 26). Unfortunately, that timetable then broke down, with the defendants failing to file a minute of their proposed expert evidence in accordance with order 5. 24 A case management conference was requested by the plaintiffs as a result of the defendants' breach of the timetable (Folio 27). 25 A conference was scheduled by the court for 28 April 2026. 26 The court's records reveal that, rather sub-optimally, the defendants' minute of proposed expert evidence was filed on the day of the case management conference (Folio 28). Indeed, it was emailed to the court at 10.40am, just prior to the conference at 11.00am, notwithstanding the request from the Registrar's associate issued to the parties on 24 April 2026. 27 I have set out the orders which were sought by the defendants in Attachment A to these reasons. 28 It thus became apparent at the conference, from the competing minutes, that the plaintiffs proposed that the expert evidence be confined to the preparation of forensic accounting evidence, whilst the defendants proposed to adduce expert evidence much wider in scope than this, from multiple experts in several disciplines. The defendants proposed that the expert evidence extend to: -- 9 of 22 -- [2026] WASC 310 LUNDBERG J Page 10 (a) engineering feasibility study of plant construction and operating costs as at 1 November 2024; (b) forecast pricing assessment evidence of calcium carbonate, ammonia, ammonia sulphate and gypsum as at 1 November 2024; and (c) probability analysis of use of gypsum as a byproduct as at 1 November 2024. 29 So it was that, on 28 April 2026, the impasse between the parties came to be raised before the Registrar at the case management conference, with only short notice given to the court of the defendants' position and with little supporting material before the court. 30 Having heard from the parties, the Registrar, in effect, accepted the position advanced by the plaintiffs. The Registrar made orders granting leave to the parties to adduce expert evidence confined to 'forensic accounting evidence in relation to the share value of Squaretail Pty Ltd as at 1 November 2024'. The Registrar declined to make orders in terms of [1] – [3], [5] – [7], and [8] – [10] of the defendants' minute. The appeal 31 The appeal is brought pursuant to O 60A RSC. An appeal under this provision is by way of a new hearing of the matter that was before the Registrar: O 60A r 6 RSC. The appeal is a hearing de novo in the sense that: … the powers of the court on appeal are exercisable not only where the appellant can demonstrate that, having regard to all the evidence now before the court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error. On an appeal from a registrar the court may exercise its powers regardless of error.12 32 The notice of appeal asserts an error in the following terms, although strictly speaking, as just noted, it is unnecessary to identify an error given the nature of this appellate jurisdiction: 1. The Registrar erred in failing to allow the appellant to adduce expert evidence in relation to: (a) Engineering feasibility study of plant construction and operating costs as at 1 November 2024; 12 CVW Group Holdings Pty Ltd v Addison [2011] WASC 267 [17] (Le Miere J). See also Priority Networking Pty Ltd v Peterson [2018] WASC 36 [27] (Le Miere J). -- 10 of 22 -- [2026] WASC 310 LUNDBERG J Page 11 (b) Forecast pricing assessment evidence of calcium carbonate, ammonia, ammonia sulphate and gypsum as at 1 November 2024; and (c) Probability analysis of use of gypsum as a byproduct as at 1 November 2024 33 For the purposes of the appeal, the parties filed fulsome affidavit material and outlines of submissions in support of the competing positions. The position of the first defendant 34 The scope of the expert evidence which is pressed by the first defendant has narrowed on the appeal. 35 The first defendant now pursues orders only in respect of the expert evidence as to the plant construction and operating costs, and as to the forecast prices of the commodities identified. The expert evidence as to the probability analysis of use of gypsum is not pressed.13 36 The first defendant structures its contention, that a wider regime should be made in respect of the expert evidence in the action, solely on the draft report from Leadenhall Valuation Services which has been obtained by the defendants and produced to the court (Draft Leadenhall Report).14 37 The authors of the Draft Leadenhall Report are both chartered accountants. 38 The authors of the Draft Leadenhall Report consider that the utilisation of a net asset valuation methodology for the valuation of Squaretail is inappropriate. The authors propose that a discounted cash flow (DCF) methodology be adopted, in which the discount rate would be used to represent the risk-adjusted rate of return. Specifically, the authors observe that the discount rate compensates an investor for the time value of money and also for the relative riskiness of the investment. 39 In the case of Squaretail, being a start-up or early stage company, the authors of the Draft Leadenhall Report propose a pre-tax discount 13 The court understands this reflects the position of the second to the seventh defendants, not just the first defendant or, at least, the second to seventh defendants do not advocate on appeal any different position. 14 John Affidavit [6] - [7] and Attachment EJ-2. -- 11 of 22 -- [2026] WASC 310 LUNDBERG J Page 12 rate of 37% to 42% (equivalent to a pre-tax discount rate of 31% to 35.5%). 40 Within the Draft Leadenhall Report, the authors express the following views as to the appropriate methodology: It is generally accepted that the value of a company is based upon its capacity to generate future cash flows as well as the uncertainty of these cash flows. Where a company has a history of profitable operations and operates in a mature industry that encompasses a number of comparable companies, forecasting future cash flows with a relative degree of certainty is possible. Conversely, it is very difficult to estimate future cash flows for early stage businesses that are not yet profitable and in some cases are yet to generate revenue or prove commercial viability. According to Aswath Oamodaran, a leading business valuation academic, the problem with valuing early stage businesses is not a conceptual problem but one of estimation. The value of a company is still the present value of the expected cash flows from its assets, but those cash flows are likely to be much more difficult to estimate. In determining an appropriate valuation methodology, BDO state that to utilise a discounted cash flow approach, the forecast cash flows "need to be supported by a reliable forecast based on a trusted source of information." In the absence of such forecasts, BDO asserts that any result derived from the forecast would not be an accurate estimate of the value of the business. As set out above, the value of any early stage business is in its ability to generate future cash flows. Whilst it is difficult to forecast future cash flows for an early stage business, the risk associated with this process is captured in the discount rate. Thus, the discounted cash flow approach should not be rejected simply because it is difficult to forecast future cash flows. 41 The assessed equity value recorded in the Draft Leadenhall Report has a midpoint of $44,236,000 based on the DCF valuation. 42 On appeal, counsel for the first defendant emphasised that the authors of the Draft Leadenhall Report identify a number of assumptions in the report which will need to be demonstrated or proven by admissible evidence to provide a proper basis for the conclusions expressed. In essence, these defendants seek the opportunity to present a 'coherent reasoned rebuttal' of the position which will be advocated for by the plaintiffs. 43 In this regard, the first defendant has expressly adopted the language employed by Bingham LJ in Eckersley v Binnie.15 Bingham 15 Eckersley v Binnie (1988) 18 Con LR 1, 77 - 78 (Bingham LJ, as his Lordship then was), otherwise known as the Abbeystead Explosion Case. -- 12 of 22 -- [2026] WASC 310 LUNDBERG J Page 13 LJ observed, in his dissenting opinion in that case concerning one of the defendants, that a judge is not obliged to accept evidence 'simply because it comes from an illustrious source'. Further, Bingham LJ explained, that:16 …a coherent reasoned opinion expressed by a suitability qualified expert should be the subject of a coherent reasoning rebuttal, unless it can be discounted for other good reasons. 44 The context in which this observation was made was the proper role of appellate courts when deciding appeals against factual conclusions reached by trial judges. This is also the context in which Vaughan JA made reference to Bingham LJ's observations, in another decision cited by the first defendant.17 The full passages from the reasons of Bingham LJ are as follows (at 77 – 78): Since this appeal is very largely concerned with questions of fact, it is appropriate to touch on the proper role of this court in considering such questions. We were referred to the leading cases, all of high authority, which define the proper role of appellate courts when deciding appeals against factual conclusions reached by trial judges. The Court of Appeal has jurisdiction to entertain such appeals in cases such as this, and the appeal is by way of rehearing. But the Court of Appeal is a court of review. It does not approach the resolution of factual issues as if the sheet before it were blank. It has to be persuaded that the trial judge who is the primary judge of fact, has plainly erred. Very rarely, if ever, will the court be so persuaded if the trial judge's conclusions rest on his assessment of the credibility and demeanour of witnesses, because this assessment is one which the judge who sees and hears the witnesses may make, and judges who only read the transcript and the documents cannot. This advantage enjoyed by the trial judge must never be overlooked or devalued. But, while fully recognising and respecting the advantages enjoyed by the trial judge, the Court of Appeal should not abdicate its duty of review. If all the evidence on a point is one way, good reason needs to be shown for rejecting that conclusion. If the overwhelming weight of evidence on a point is to one effect, convincing grounds have to be shown for reaching a contrary conclusion. Where the trial judge has founded on a witness's oral evidence, the court will not uphold the finding if persuaded that it is not justified on a fair construction of what the witness actually said. The court will not support the dismissal of a witness's evidence where this rests on what is shown to be a misunderstanding, or a wrong impression. 16 Eckersley v Binnie (77 - 78). 17 Kipoi Holdings Mauritius Limited v Robert Michael Kirman and Robert Conry Brauer as joint and several administrators of Tiger Resources Ltd (subject to a deed of company arrangement) [No 4] [2024] WASCA 145 [513]. -- 13 of 22 -- [2026] WASC 310 LUNDBERG J Page 14 In resolving conflicts of expert evidence, the judge remains the judge; he is not obliged to accept evidence simply because it comes from an illustrious source; he can take account of demonstrated partisanship and lack of objectivity. But, save where an expert is guilty of a deliberate attempt to mislead (as happens only very rarely), a coherent reasoned opinion expressed by a suitably qualified expert should be the subject of a coherent reasoned rebuttal, unless it can be discounted for other good reason. The advantages enjoyed by the trial judge are great indeed, but they do not absolve the Court of Appeal from weighing, considering and comparing the evidence in the light of his findings, a task made longer but easier by possession of a verbatim transcript usually (as here) denied to the trial judge. (emphasis added) 45 When read in context, I do not understand Bingham LJ's observations to amount to some positive exhortation that a trial judge must grant leave for an opposing party to adduce competing expert evidence, so as to permit a coherent reasoned rebuttal. The observations, as I have noted above, were directed at the role of an appellate court and the resolution of conflicts on expert evidence. 46 In any event, in order for a rebuttal to be prepared, based on the DCF methodology, the first defendant submits that the forensic accounting experts they have engaged will require inputs from the experts in the disciplines which have been identified above. 47 The first defendant accepts this will be a costly exercise and take time, but it submits the expense and delay are not disproportionate when the stakes of the litigation are properly assessed, having regard to the much higher valuation favoured by the defendants, not simply by reference to the modest valuation favoured by the plaintiffs. The position of the plaintiffs 48 Counsel for the plaintiffs observed that Mr Myers had sworn an affidavit in which he has expressly deposed to his opinion favouring the appropriateness of the net asset valuation rather than the DCF methodology. No similar affidavit evidence has been adduced from the authors of the Draft Leadenhall Report, which counsel emphasised was merely an unsigned draft. 49 Mr Myers deposes that: [9] The Leadenhall Draft adopts a "Discounted Cash Flow" (DCF) methodology. In my professional opinion, a DCF methodology is an unsuitable methodology for purposes of assessing the First Plaintiff's equity value as at 1 November 2024. -- 14 of 22 -- [2026] WASC 310 LUNDBERG J Page 15 [10] A DCF methodology relies on a future cash flow forecast which needs to be supported by a reliable forecast based on trusted sources of information. [11] As at 1 November 2024, the First Plaintiff was in early stages of development, as it: [11.1] had an established proof of concept but it was unclear whether its technology was able to achieve outputs required to generate value; [11.2] was not at a stage to establish commercial viability; and [11.3] was not generating income and therefore solely relied on consistent funding from stakeholders. 50 Mr Myers further deposes that: [12] Due to the uncertainty in these factors, a reliable costing and future cash flow forecast would not be obtainable, and this is essential for a DCF methodology to produce an accurate estimate of the First Plaintiff's equity value. [13] In the course of preparing the BDO Feasibility Report, my colleagues and I identified several items requiring further diligence and research for future feasibility studies (which may uncover further issues). These items are set out at pages 17 to 18 of AAM-02. These issues would need to be resolved before the Further Expert Evidence, and by extension a DCF valuation, would be reliable. [14] The Further Expert Evidence does not overcome the absence of capital expenditure as at 1 November 2024 (save for shareholder funding, a majority being contributed by the Second Plaintiff) and the uncertainty of future capital expenditure. 51 Mr Myers deposes that a net asset value methodology is appropriate for the purposes of the first plaintiff's early stages of development. Mr Myers explains this methodology, and its appropriateness, in the BDO Valuation Report itself. Given his opinions in this regard, Mr Myers deposes that the further expert evidence sought by the first defendant is not necessary for the purposes of assessing the equity value of Squaretail as at 1 November 2024. 52 Mr Myers opines that, to the extent this further expert evidence is sought for purposes of a valuation based on a DCF methodology, he does not consider that such a methodology is suitable for purposes of assessing the equity value of Squaretail as at 1 November 2024. -- 15 of 22 -- [2026] WASC 310 LUNDBERG J Page 16 53 Counsel for the plaintiffs placed reliance on the decision of Slattery J in McCausland v Surfing Hardware International Holdings Pty Ltd18 in support of its position. In that decision, it is said by the plaintiffs that his Honour accepted that the DCF methodology was only appropriate where there were reliable contemporaneous long term cash flow forecasts available. 54 The plaintiffs submit that accounting evidence employing a DCF methodology would require reliable feasibility evidence and commodity evidence, the time and cost of which would be disproportionate to the nature and quantum of this claim. 55 Further, the plaintiffs submit that it is particularly important that the expert not be briefed in a way which suggests to them the answers to questions.19 Apropos this observation, the plaintiffs say they hold concerns that this is a real risk if the first defendant's appeal is allowed because the orders sought by the first defendant require the accounting evidence expert to have regard to the feasibility evidence and commodity evidence which are primary sources for a DCF valuation. Disposition 56 In proceedings in this court, parties do not have a right to call expert evidence. Leave is required pursuant to O 36A r 1 RSC. The case management considerations in O 1 r 4A and r 4B RSC are applicable to, and will inform, the grant of leave. 57 The plaintiffs and the defendants presently have a difference of view as to the valuation methodology which is most appropriate in this case. 58 The parties are in agreement, however, as to the question which is to be the subject of the expert evidence, namely the assessment of the equity value of Squaretail as at 1 November 2024. 59 In these circumstances, the difference of view between the parties would ordinarily await determination at trial, at which point the court would have the benefit of the reasoned analysis of the competing experts, a conference between the experts, and the expression of their opinions at trial, including through a concurrent expert evidence session. 18 McCausland v Surfing Hardware International Holdings Pty Ltd [2013] NSWSC 902 (McCausland). 19 Relying on East Metropolitan Health Service v Ellis (by his next friend Christopher Graham Ellis) [2020] WASCA 147 [177] - [182]. -- 16 of 22 -- [2026] WASC 310 LUNDBERG J Page 17 60 The difficulty which presently arises is that the defendants' preferred expert favours a valuation methodology which will require input from additional expert disciplines to enable that valuation to be properly undertaken. The defendants seek leave to adduce expert evidence in these additional disciplines. 61 The court is not presently in a position to select between the competing methodologies. 62 The net asset valuation methodology is strongly supported by Mr Myers, and it is evident that this methodology also found favour with Slattery J in McCausland, given the circumstances which were present in that case. In my view, neither of these matters is sufficient to justify the conclusion, at least at this stage, that the DCF methodology could never be an appropriate methodology for the purposes of valuing this company. 63 Indeed, the court has material before it from the defendants, albeit in an unsworn form, which provides support for the use, in the present circumstances, of the DCF methodology. I therefore consider that this methodology is at least arguably appropriate and cannot be excluded by the court. Ideally the court would have been presented with a sworn affidavit from the Leadenhall experts rather than a draft report appended to a solicitor's affidavit, but the court nonetheless has material before it which provides a platform for the first defendant's contention (including the submissions of counsel for the first defendant). 64 However, the court would not grant leave to the defendants to adduce the additional expert evidence it proposes if it was apparent that such an approach was inimical to case management considerations. That might be the case if the proposed pathway did not promote the just determination of the litigation, or was disproportionate, in terms of time and cost, to the value importance and complexity of the subject matter. The assessment of these factors requires some broad consideration of the issues arising in the action on the pleadings, the competing contentions of the parties, the particular urgency of the proceedings, and the overall likely costs of the litigation. The inquiry is multi- faceted. Some consideration of the relative financial position of the parties may also be required. 65 Further, the proportionality analysis should be undertaken with regard to the issues in dispute in the proceedings, on a fair reading, not -- 17 of 22 -- [2026] WASC 310 LUNDBERG J Page 18 solely by reference to one party's case. Thus, an analysis of this issue by reference only to the lower valuation proposed by the plaintiffs in this case would be wrong in principle, in my view. 66 The assessment must give due recognition to the quantum of the claim on the defendants' case, which is significantly greater than the quantum assessed by the plaintiffs. From the position of the defendants, the stakes of this litigation are much higher than is suggested by the BDO Valuation Report. 67 For these reasons, even if the expected cost of the additional experts is taken at its highest, I do not conclude that the cost involved would be disproportionate to the value and importance of the subject matter. 68 As for the further time involved, the most that can presently be said is that additional weeks or months may be involved in assembling the evidence proposed by the defendants. In the broader scheme of this dispute, I do not consider that this additional delay is so problematic as to justify refusal of the defendants' proposal, which I consider involves an arguable approach to the valuation of the company. 69 On balance, I do not assess the case management considerations as so compelling in this case to warrant the refusal of leave to the defendants to enable them to present expert evidence of matters which are likely to be required to facilitate an arguable valuation methodology, particularly where the court is otherwise granting leave to both parties to lead forensic accounting expert evidence. 70 Finally, I recognise the importance of the proposition that experts are not to be briefed in a manner which suggests to them the answers to questions. The plaintiffs raise a concern in this regard, which I have noted at [55] above. I do not presently see the structure of the defendants' expert regime as undermining this proposition. Conclusion and orders 71 For the reasons above, I will allow the appeal and set aside orders 2 to 10 of the orders made by the Registrar on 28 April 2026 so that the fulsome expert evidence regime can be ordered. 72 Additionally, orders will be made for the action to be admitted to the CMC List, and a further directions hearing will be scheduled to enable specific orders for the programming of the expert evidence to be -- 18 of 22 -- [2026] WASC 310 LUNDBERG J Page 19 made. The parties should confer as to the proposed orders to achieve this, and to facilitate the programming of the action to trial. 73 Further, it is expected by the court that the defendants would be in a position, expeditiously, to identify the additional experts to be engaged and the timetable required to complete the expert evidence. Similarly, the plaintiffs will need to assess whether it is their intention to adduce expert evidence in the additional disciplines identified by the defendants. 74 I will hear from the parties on the issue of the costs of the appeal at the next directions hearing. I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia. IR Associate to the Hon Justice Lundberg 31 JULY 2026 -- 19 of 22 -- [2026] WASC 310 LUNDBERG J Page 20 ATTACHMENT A Defendants' minute of proposed expert evidence orders The nature of the proposed expert evidence (i.e. the field of specialised knowledge of the proposed expert) 1. Engineering feasibility study of plant construction and operating costs as at 1 November 2024 2. Forecast pricing assessment evidence of calcium carbonate, ammonia, ammonia sulphate and gypsum as at 1 November 2024 and 3. Probability analysis of use case of gypsum as a byproduct as at 1 November 2024; and 4. Forensic accounting evidence in relation to the share value of Squaretail Pty Ltd as at 1 November 2024. [Accepted and ordered by the Registrar] The specific questions on which the proposed expert will be asked to opine (identifying each issue in the pleadings to which the evidence is directed) To engineering feasibility expert 5. As at 1 November 2024, what is the estimated cost of the construction of plant being constructed at the Kwinana Industrial Precinct in Perth that is capable of processing 500,000 tonnes of carbon dioxide per annum and producing 2.26 million tonnes of ammonium carbonate/bicarbonate solution per annum? 6. As at 1 November 2024, do you perceive any feasibility issues regarding the construction of the plant mentioned at 5 above? 7. As at 1 November 2024, what is the estimated duration of the construction of the plant mentioned at 5 above? To commodity pricing expert 8. Adopting the assumptions contained in the attached engineering feasibility report, what was the forecast global market selling price of the following commodities (per tonne) over a five year period from the date of construction of the plant, as at 1 November 2024: a. calcium carbonate; b. ammonia sulphate; c. ammonia; and d. gypsum. -- 20 of 22 -- [2026] WASC 310 LUNDBERG J Page 21 9. Adopting the assumptions contained in the attached engineering feasibility report, what was the forecast global market selling price of the following commodities (per tonne) over a fifteen year period from the date of construction of the plant, as at 1 November 2024: a. calcium carbonate; b. ammonia sulphate c. ammonia; and d. gypsum. 10. What is the probability that the process set out in Australian Patent Application Number 2017208716 would produce enough gypsum as a byproduct that could be sold or otherwise utilised? To the forensic accounting expert [Accepted and ordered by the Registrar] 11. In your expert opinion, and having regard to the matters set out at subclauses 17.1(c), (d), (g) to (k) inclusive of the Shareholders Agreement, what was the most appropriate: a. valuation basis or bases; and b. valuation methodology, for purposes of determining the fair value of the shares in Squaretail Pty Ltd as at 1 November 2024 and why? 12. What was the fair value of the shares in Squaretail Pty Ltd as at 1 November 2024? In answering this question, please have regard to: a. the matters set out at subclauses 17.1(c), (d), (g) to (k) inclusive of the Shareholders Agreement; b. your answers to the questions set out at paragraph 2 above; and c. the documents and sources of information set out paragraph 18 below. 13. Having regard to the parties’ pleadings set out at paragraphs 7 to 8 below, do you consider there to be any issues with the BDO valuation report dated 6 December 2024, including but not limited to BDO’s: a. valuation basis or bases; b. valuation methodology; c. sources of information; d. assumptions; and -- 21 of 22 -- [2026] WASC 310 LUNDBERG J Page 22 e. determined share value range and midpoint? 14. Do you consider there to be any issues with the share value range and midpoint pleaded by the Defendants as set out at paragraph 8 below? The assumptions that the expert or experts will be asked to make in providing his or her opinion on each question (and if there is a dispute about the validity of any assumption, the assumption should be identified and the position of the respective parties recorded) [Accepted and ordered by the Registrar] 15. In completing the valuation, please assume the standpoint of undertaking a valuation as at 1 November 2024. To that end, please disregard any facts or events that may affect the share value of Squaretail Pty Ltd following 1 November 2024 that you are aware of. The facts which are relevant to the expert opinion (and if there is a dispute about the facts, the facts sought to be relied upon should be identified and the position of the respective parties recorded) [Accepted and ordered by the Registrar] 16. The Plaintiffs’ pleading at paragraph 27 of the Statement of Claim: By a report dated 6 December 2024, BDO opined a value of the shares in the First Plaintiff as of an equity value of a range between $118.00 and $453.00, with a preferred value of $227.00 as at 1 November 2024. 17. The Defendant’s pleading at paragraph 27 of the Defence: The First, Second, Third, Fifth, Sixth and Seventh Defendants admit paragraph 27 of the Statement of Claim but state that the true value of the shares in the First Plaintiff to be between $6,207 and $8,666 with a midpoint of $7,437.12 particulars of which shall be provided after discovery. 18. The facts or information set out in the following documents and sources: [omitted from this document]. -- 22 of 22 --