A court has ruled plans by an investor to have a strata company appoint his son’s brokerage Clearlake led to the invalid firing of a director who questioned the proposal.

The Federal Court heard James Angelis – described as a successful businessman who co-founded Coverforce – sought to remove Alexandra Victoria Commins as MD of private equity group Goldstone, also ending her directorship at strata manager Neighbourly. 

Goldstone Fund, established by Ms Commins and Mr Angelis, had invested in Parabellum International and Neighbourly, and they sat on the boards. 

In January this year, an email forwarded by Mr Angelis’ son John outlined a proposal for Clearlake to take over from Honan in providing insurance for Neighbourly schemes. 

The court judgment – noting increased public focus on strata – says Neighbourly’s founder flagged regulatory and reputational considerations and questioned “jumping into bed with a related party”. 

Ms Commins’ February 20 board meeting notes say she pointed out insurance “is an area that Neighbourly needs to be very careful with” and that it had already been investigated about commission disclosure. 

She proposed management compare Clearlake’s proposal with others, with a decision to be made on merit and in customers’ best interests, and with disclosure to be conducted properly given related-party involvement. 

Ms Commins’ February 24 meeting notes say Mr Angelis handed out a template in which Clearlake was given full scores and top rankings for all criteria, with other brokers given lesser scores, and he proposed it become the broker. 

Ms Commins said a legal review was agreed, which she anticipated would raise red flags.  

Disputes had also emerged between Mr Angelis and Ms Commins over Goldstone arrangements and remuneration, while she had told an employee to leave. 

Three days after the February 24 meeting, Ms Commins said Mr Angelis told her he was terminating her employment and directorships for gross misconduct, raising issues including those around the employee’s departure. 

Justice Ian Jackman says Mr Angelis did not want her to “be able to stand in the way of his plan to advance the business interests of his son by arranging for Neighbourly’s insurance portfolio to be transferred to Clearlake”.  

He added: “I regard the purported termination of Ms Commins’ employment as a petulant over-reaction to the commendable position which Ms Commins had taken in the interests of proper corporate governance and merit-based decision-making.” 

The judgement rejects nine points relied upon by defendants and finds “no reasonable person could have formed the opinion that Ms Commins had engaged in serious misconduct”. 

The decision is here.