FEDERAL COURT OF AUSTRALIA

Kilcran, in the matter of Allco Finance Group Limited (Receivers and Managers Appointed) (In Liquidation) v Gothard [2014] FCAFC 6

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The appellant pay the respondents’ costs of the appeal to be taxed in default of agreement.

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

REASONS FOR JUDGMENT

THE COURT:

introduction

1    In 2008, the appellant was an employee of Allco Finance Group Limited (“AFG”). On 4 November 2008, a secured creditor of AFG appointed the respondents, Mr Gothard and Mr Sherman, to the position of receivers and managers of AFG. We will refer to the respondents as the receivers except where it is necessary to refer to one of them by name. The appellant’s employment by AFG came to an end in late 2008.

2    In February 2009, the appellant lodged a proof of debt or claim with AFG claiming employment related benefits. In June 2011, the receivers rejected his proof of debt or claim, other than his claim with respect to annual leave. The receivers’ rejection was based on the ground that the appellant had resigned from his employment with effect from 1 December 2008. Subject to an argument about the proper construction of the terms and conditions of his employment, which we address later in these reasons, the appellant accepts that if he resigned then he is not entitled to the employment related benefits he claims.

3    The appellant appealed to this Court against the receivers’ decision under s 1321(1) of the Corporations Act 2001 (Cth). He contended that his contract of employment was terminated by AFG, or repudiated by AFG (which repudiation he accepted), or that he was the subject of a constructive dismissal, or that he was made redundant. He contended that in those circumstances he was entitled to the employment related benefits he claimed. The trial judge found that the appellant’s employment by AFG came to an end by way of what he said could be fairly described as a consensual resignation and he dismissed the appellant’s claim (Kilcran, in the matter of Allco Finance Group Limited (Receivers and Managers Appointed) (In Liquidation) v Gothard [2012] FCA 1145). The appellant appeals to this Court.

BACKGROUND FACTS

4    It is convenient to start with the background facts which are, for the most part, not in dispute. They are taken from the trial judge’s reasons or from material which was before him and which was not in dispute.

5    On 4 November 2008, the respondents were appointed receivers and managers not only of the entire assets and undertakings of AFG, but also of a number of associated entities. However, there were entities under the umbrella of AFG to which the respondents were not appointed receivers and managers, and one of these entities was Allco SIF Ltd (“SIF”).

6    SIF was not a subsidiary of AFG, although 25% of its capital appeared to have been owned indirectly by the beneficiaries of the Allco Principals Trust. The original purpose of SIF appeared to have been investment in transport-related assets in Asia, North America and the Middle East. At one point, a listing on the Singapore Stock Exchange was contemplated.

7    As we have said, the assets and undertakings of SIF were not subject to the security under which the respondents had been appointed receivers and managers of AFG and the associated entities. However, the trial judge found that the receivership of AFG and its associated entities had what he called practical importance to SIF for three reasons. Those reasons were as follows:

(1)    All of SIF’s staff were employees of AFG who had been provided to SIF for free under a management agreement between a wholly owned subsidiary of AFG, being a company called Allco Wholesale Investment Management Ltd (“the Manager”), and SIF. Although the assets and undertakings of SIF itself were not subject to the control of the respondents as receivers, the employment of all of its staff technically was. There was five staff subject to this arrangement, and they included SIF’s chief executive officer, Mr RenÉ Mansveld, and the appellant, who was its head of Legal and Compliance. The appellant and Mr Mansveld gave evidence at the trial.

(2)    AFG and SIF were co-investors in certain rail and shipping assets. By the time of the respondents’ appointment as receivers on 4 November 2008, efforts by both to sell these assets had been underway for some time and, in the case of the rail assets, were well-advanced. Both AFG and SIF understood that it was in both their interests for these assets to be sold in the most timely fashion possible. The trial judge found (at [4]):

A necessary feature, however, of the relationship of co-investment was that either could bring the process of sale to a stop by withholding consent. Such a posture would, of course, have been damaging to both parties but nevertheless was a matter of some commercial significance.

(3)    SIF had issued bonds worth S$206,000,000 (Singapore dollars) to AFG through one of the latter’s wholly owned subsidiaries. The trial judge said that the management of SIF ultimately parlayed their ability to withhold consent to the sale of the rail and shipping assets in return for the respondents (as receivers) agreeing that SIF’s liability on these bonds would be limited to the proceeds of the sale of its assets after the payment of the secured creditors (and a sum for unsecured creditors).

8    Before turning to consider the course of events after the receivership, it is necessary to refer to certain events before the receivership.

9    Shortly after the appellant had been seconded to SIF, he had, in fact, been made redundant by AFG. He was informed of this fact by letter dated 27 March 2008. He was told his employment would come to an end on 27 June 2008 and he was promised a number of payments: $19,166.67 in lieu of notice; $34,413.19 for statutory entitlements; a bonus of $150,000; and six weeks salary by way of redundancy, being $26,538.47, less applicable taxes.

10    There was a section in AFG’s letter to the applicant dated 27 March 2008 which read as follows:

Conditions in relation to Redundancy Entitlements

You will only be entitled to the payments and benefits set out in this letter if the following are satisfied:

•    you continue to work until the Termination Date or such other date as advised to you by Allco. If you resign from your employment without Allco’s agreement or are dismissed for cause before this date you will not receive a redundancy entitlement, nor will you receive the benefit of the Outplacement and Employee Assistance Programs;

•    until the Termination Date you are expected to fulfil the responsibilities of your position including among other things, to assist Allco to complete outstanding work as directed by your manager.

11    On 27 June 2008 – the date upon which the appellant’s employment was due to come to an end – the original agreement was amended and replaced by another agreement that also set out his entitlements on redundancy. The conditions precedent to the specified entitlements were different. The letter contained the following:

Conditions in relation to Redundancy Entitlements

You will only be entitled to the payments and benefits set out in this letter if the following are satisfied:

•    you continue to work until the Termination Date;

•    until the Termination Date, you continue to fulfil the responsibilities of your position including among other things, assisting Allco to complete outstanding work as directed by your manager.

If you are dismissed for cause prior to your Termination Date you will not receive a redundancy entitlement, nor will you receive the benefit of the Outplacement and Employee Assistance Programs.

12    The Termination Date was 30 June 2009 or such other date designated by AFG by giving at least 1 month’s written notice.

13    There was no dispute that, prior to the receivership, Mr Mansveld, who had been a senior executive with AFG, was the chief executive officer of SIF with responsibility for its staff, including the appellant, and responsibility for communicating any decisions in relation to its staff to them. Mr Mansveld continued in that position after the receivership.

14    We now return to events after the receivership.

15    At a meeting of AFG employees on or about 7 November 2008, the receivers informed the employees that their position as employees would be made more clear to them by the end of the month.

16    There was no dispute that the receivers distributed a “Circular to Employees” dated 11 November 2008 to employees of AFG and that the document had attached to it a document entitled “Voluntary Administration. Australian Based Employee Q&A 11 November 2008”. In that document there was a statement that, with respect to those employees whose employment continued under the administration, reporting lines within the business remained the same. The circular also advised employees that the human resources processes within AFG remained the same and that the normal processes and procedures in relation to employee issues would apply.

17    At some point around 24 November 2008, however, the receivers decided that they would no longer provide staff for nothing to SIF. They communicated this to SIF by an email of that date, which was sent by Mr Gothard to Mr Mansveld. The email was in the following terms:

Dear Rene,

Thanks for your e-mail. I agree that we need to resolve the issues as between AFG and SIF. We might need to discuss these in greater detail, but I have summarised below our position on the matters raised:

1.    T3s – As we discussed today, let’s get John Hambly and Dominic Emmet talking as to the wording and see what they come up with.

2.    Funding and arrangements for your team – Steve and I have considered the position in relation to the funding of SIF and have concluded that it does not make sense for us to fund SIF’s expenses going forward. We would suggest that at the first instance, SIF meets its expenses from its own cashflow and, if this is insufficient, that the secured lenders and the T1, T2 and T3 bondholders contribute on a pro-rata basis with any such additional funding gaining priority of repayment over all other debts of SIF. This policy would impact on the arrangements for your team going forward. Ideally, SIF would SIF would [sic] take the team on directly (either as employees or consultants) on terms which are acceptable to you. The other alternative is for SIF to reimburse AFG for the cost of the staffing although we may be somewhat limited in that we would prefer to treat all AFG employees in the same way – currently on existing salary payment only. Clearly we need to discuss this further with you to determine the best course of action.

3.    Citi engagement letter – Citi are currently working through the indemnity issue. They have apparently switched the engagement so that it is run out of Sydney. I expect another engagement letter this evening or tomorrow morning.

4.    Shipping sales protocols – I am reviewing your proposal and will revert with comments shortly.

5.    Travel to London – as discussed this afternoon, it may be that this can be deferred. In any case I would refer to the comments in relation to funding raised above.

6.    Meeting with the SIF Board – as discussed I will see you at 11:30am tomorrow in your offices.

Please let me know if you wish to discuss any of the above.

Best regards,

Peter

18    The trial judge said that the reference to “T1, T2 and T3 bondholders” in this email was a reference to bonds issued by SIF. AFG was the holder of “T3” bonds, which were the most subordinated of the three tranches of bonds. In the email the receivers were suggesting that those who stood to benefit from SIF’s activities on selling the assets – the secured lenders and the bondholders – should meet the expenses of SIF’s activities, including the expenses of its staff. This could be achieved in one of two ways, either by SIF meeting the expenses directly or SIF reimbursing AFG for the expenses.

19    On 25 November 2008, there was a meeting between the first respondent, Mr Gothard, as receiver and manager of AFG, Mr Mansveld, as chief executive officer of SIF, and the board of SIF. A topic discussed at the meeting was whether AFG would continue to pay for the staff seconded to SIF including the appellant. Two different accounts of the discussion were given, one by Mr Mansveld and the other by Mr Gothard. We will set out these different accounts when we consider the trial judge’s reasons and the issues on the appeal.

20    The trial judge considered the principal issue in the case to be whether the appellant was dismissed from his employment by AFG by something alleged to have been said at the meeting on 25 November 2008 by Mr Gothard to Mr Mansveld.

21    On 2 December 2008, Mr Mansveld sent an email to Mr Gothard which contained the following passage:

2.    Staff and Office – I haven’t seen anything formal but assume that it is your intention to terminate myself and the team? As discussed, we are working on internalisation. It is unclear yet whether the SIF senior lenders will accept the proposal. We also need to discuss the terms of which we remain in the office (if that is what is intended).

22    On 8 December 2008, Mr Gothard sent an email to Mr Mansveld in the following terms:

Rene,

Could you please let me know whether the SIF internalisation of staff has been agreed?

As to mechanics – will the staff be immediately taken across to SIF or will they need to be paid through the AFG payroll for December with SIF reimbursing AFG for the cost? Happy to do this if it assists in the transition process but we need to know by tomorrow so that we can process the payroll.

Thanks,

Peter

23    On the same day, Mr Mansveld responded by email in the following terms:

Peter,

I have agreed the terms of the internalisation with the Board, however, as discussed, this is all contingent on resolving the standstill agreements and the T3 point. I had set a deadline of the end of last week on this but unfortunately it has drifted into this week. I expect to have the terms sheet etc signed this afternoon and I will be asking the senior lenders to agree to release the funds today.

If these things are not agreed the Board will not be in a position to reimburse AFG. It will all be moot in any case as if these things are not finalised in the next few day [sic] as the team will leave.

Regards

RenÉ

24    The SIF team, including the appellant, was not removed from the AFG payroll and they were paid in December 2008 by AFG. The “internalisation process”, that is, the process whereby SIF would take over the employment of Mr Mansveld and his team from AFG, did not take place until 19 December 2008.

25    The trial judge found that the first time Mr Mansveld informed AFG that the internalisation had occurred was on 30 December 2008 when he informed the man in charge of the AFG payroll, Mr Jim Sarantinos, of its occurrence. The email was in the following terms:

Jim,

The SIF Board has agreed to internalise the management of SIF (following confirmation from Peter in November that they did not wish to support the team going forward). This is effective from 1 December. When you are back in the office could we please speak about two things:

1.    The arrangements in relation to myself and the team staying in the office etc; and

2.    The December payroll. There was some confusion here about the arrangements which resulted in us being paid through the usual payroll for December. I have agreed with the team that the funds they received will need to be refunded to you - please let me know where you would like this to be paid and I will arrange for this to be done. You will need to adjust the PAYG accordingly.

I am back in the office on Monday, although will be travelling from Monday afternoon.

26    Mr Mansveld sent a copy of this email to Mr Gothard.

27    As we have said, the appellant lodged a proof of debt with the receivers in February 2009. At that time, the appellant was seeking the payment of his redundancy entitlements and the receivers were seeking the repayment of the wages paid to the appellant in December 2008. The appellant completed his proof of debt form and made inquiries concerning one of his claims in an email dated 20 February 2009 to a Mr Burrows, who was a member of AFG’s human resources team:

Under my employment contract, if I was terminated prior to 31 December 2008 I was entitled to receive a payment equal to my fixed remuneration for the period commencing on the date of termination and ending on 31 December 2008. Should this be included in the [proof of debt]?

28    Mr Burrows’ response was as follows:

Regarding point 2 you are absolutely correct and apologies for this oversight … You should indeed add 1 months’ pay (i.e. the period between [termination] and 1/1/09) to the form and attach the letter to support it

29    On 23 February 2009, the appellant lodged a proof of debt with AFG claiming the sum of $273,360.03 for “Employee Entitlements”, including a redundancy claim.

30    The trial judge described what happened thereafter in the following terms:

On 25 November 2010 an email was sent by ‘allcoemployees@fh.com.au’ informing Mr Kilcran that under his contractual documentation there needed to be an executed deed. On 29 November 2010, Mr Kilcran provided such a deed. On 7 December 2010, under his own hand, Mr Gothard wrote to Mr Kilcran in terms which are, with respect, absurd. He rejected the deed of release because it had not been signed by AFG. It complained that Mr Kilcran had not repaid his December salary even though he had been terminated on 30 November 2008.

31    After February 2009, the “internal Ferrier Hodgson inquiries”, as the trial judge described them, proceeded on the assumption that what had occurred with respect to the appellant’s employment was a termination.

32    Before leaving this section of our reasons, we mention one matter which played a part in the trial judge’s decision, but which was in dispute. The trial judge found that the receivers prepared, and Mr Gothard signed, a letter to the appellant dated 26 November 2008. It stated that the receivers wanted the appellant to continue in his role until the asset sales had been completed and that the receivers were committed to employing the appellant at least until the end of January 2009. Although Mr Gothard took administrative steps to have the letter delivered to the appellant and his colleagues, the delivery process failed to deliver the letter to the appellant.

THE TRIAL JUDGE’S REASONS

33    As we have said, the trial judge took the view that the principal issue in the case was whether the appellant was dismissed from his employment by AFG by something alleged to have been said by Mr Gothard to Mr Mansveld at the meeting on 25 November 2008. The trial judge concluded that what the appellant alleged was said was not said and that, therefore, the appellant’s case failed.

34    The trial judge set out the two accounts of what was said at the meeting on 25 November 2008. Mr Mansveld’s account of what Mr Gothard said was as follows (at [15]):

Having discussed this internally, Steve and I are of the view that we will not pay the salaries of the SIF staff, or other SIF expenses, beyond the end of November 2008. Ideally, SIF would take the team on directly. We are willing to consider some transitional arrangements relating to office space etc. in order to assist SIF.

35    Mr Gothard’s account of the conversation was as follows (at [17]):

36    The trial judge accepted that Mr Mansveld had the authority of AFG to pass on to his team, including the appellant, what Mr Gothard had told him. He did not have authority to pass on something which Mr Gothard did not say. The trial judge said that the appellant had raised the doctrine of ostensible authority, but not in a way so as to suggest that Mr Mansveld had authority to pass on something which was not said by Mr Gothard. In those circumstances, the trial judge said that the concept of ostensible authority added nothing to the concept of actual authority. The appellant challenges the trial judge’s approach to ostensible authority and, in due course, we will need to refer to the trial judge’s approach in more detail.

37    The trial judge said that, on the critical issue of what was said by Mr Gothard at the meeting on 25 November 2008, there was material which “cut in both directions”. After examining the evidence, however, he preferred Mr Gothard’s account of the discussion.

38    As far as Mr Mansveld’s account of the meeting was concerned, the trial judge said that a clear view that he and his team were out of their jobs by the end of November 2008 (which Mr Mansveld said he had as a result of the meeting) was inconsistent with his email to Mr Gothard of 2 December 2008. Furthermore, Mr Mansveld’s evidence on this topic to which the trial judge referred was unsatisfactory. A further difficulty with Mr Mansveld’s account was that the notion Mr Mansveld and his team would not be paid by AFG after the end of November 2008 was inconsistent with the email exchange between Mr Mansveld and Mr Gothard on 8 December 2008. The trial judge rejected the appellant’s case that payment by AFG of the wages of Mr Mansveld and his team in December 2008 was in error. He rejected Mr Mansveld’s account of a conversation with Mr Gothard on 17 December 2008 wherein Mr Gothard was alleged to have said that the payment of wages in December 2008 was an error.

39    The trial judge considered Mr Gothard’s account of the meeting to have advantages over Mr Mansveld’s because it was consistent with the email he sent the day before and because he could not see any reason why Mr Gothard would say something which “would only trigger redundancy obligations on AFG’s part”.

40    The trial judge referred to the complex issues at play between the parties, and that included the issue of whether Mr Mansveld and his team resigned or were terminated. In that context he said (at [44]):

Mr Mansveld and Mr Gothard were able to negotiate all of these issues away bar the last one. In it, Mr Gothard held the upper hand because he could achieve the result he sought by doing nothing. Sooner or later Mr Mansveld would need to jump. That is, in effect, what happened. How clearly Mr Mansveld’s team appreciated this is a matter I need not determine.

41    The trial judge said that it was principally for these reasons that he accepted Mr Gothard’s account and rejected Mr Mansveld’s. He went on to comment on the demeanour of the two witnesses.

42    The trial judge said that Mr Gothard impressed him as a very careful witness who was alive to all of the issues and chose his words with precision.

43    The trial judge said that Mr Mansveld impressed him with his confidence and certainty. However, Mr Mansveld’s confidence could not be fully reconciled with the other material that was available and the trial judge referred to the email of the preceding day and Mr Mansveld’s behaviour in December 2008. The trial judge had said earlier in his reasons that, in his evidence as to the purport of his email dated 2 December 2008, Mr Mansveld had shown himself to be “rather one-eyed about this question”.

44    The trial judge said that Mr Mansveld may well have said to the appellant after his meeting with Mr Gothard on 25 November 2008 that the appellant was out of a job at the end of the month, but that he did not need to and did not make a finding about this.

45    The trial judge turned to consider other material which might be seen as working against the conclusion that Mr Gothard did not say words to the effect that Mr Mansveld and his team were out of a job at the end of November 2008.

46    There were three broad matters which the trial judge addressed. They were first, that the evidence of Mr Gothard that he could not have had a conversation with Mr Mansveld on 17 December 2008 because he was attending the birth of his daughter was incorrect. Secondly, initially and for a period thereafter, the response of Mr Gothard and his firm to the appellant’s proof of debt and claim was not that he was not entitled to the claimed benefits because he had resigned. In fact, the response raised other grounds and seem to proceed on the basis that the appellant’s employment by AFG had been terminated. Finally, there was the letter produced by Mr Gothard dated 26 November 2008, which was from Mr Gothard and signed by him and addressed to the appellant but not received by him. This letter is referred to earlier in these reasons (at [32]). As we have said, the letter contains an assurance of continuing employment for the appellant “up to and including 31st January 2009 with such date to be updated at least 4 weeks in advance of this date”.

47    As to the first matter, the trial judge identified three reasons why, even though he found that Mr Gothard had a telephone conversation with Mr Mansveld on 17 December 2008, he nevertheless concluded that the conversation about the erroneous payment of the SIF staff did not occur until the end of December 2008 when Mr Gothard became aware of the internalisation within SIF. The trial judge recognised that the resolution of the payroll issue was “not entirely tidy or completely coherent from any perspective”.

48    As to the second matter, the trial judge said that Mr Gothard was saying that the appellant in his email exchange with the receivers’ staff in February 2009 implied that he had been terminated and that the payroll staff provided the appellant with figures based on that proposition. The trial judge noted Mr Gothard’s evidence that the internal Ferrier Hodgson inquiries – and correspondence including Mr Gothard’s letter dated 7 December 2010 – had proceeded on the basis that there had been a termination and that that was an oversight. It was only later when Mr Gothard reviewed the appellant’s position that he realised that the appellant had resigned, rather than been terminated. The trial judge accepted Mr Gothard’s evidence, even though it carried with it a conclusion that Mr Gothard had not read the letter dated 7 December 2010 “carefully (or possibly at all)”.

49    As to the third matter, being the letter dated 26 November 2008, the trial judge, after considering three possibilities he identified and weighing them carefully, concluded that Mr Gothard did write the letter on or about 26 November 2008 and that he took steps to have it delivered to the appellant and similar letters to his colleagues. The trial judge found that the delivery process failed to deliver the letter to the appellant. He referred to Mr Gothard’s silence in the face of Mr Mansveld’s email dated 2 December 2008 if he did write and arrange to have sent the letter dated 26 November as “perhaps puzzling”, but that was not sufficient to dissuade him from reaching the conclusions referred to above.

50    The trial judge said that he was required to consider not only individual items of evidence but also the evidence as a whole or, as his Honour put it, the totality of the evidence. He then said at [72] and [73]:

… To this point I have considered the implications of Mr Gothard’s silence in the face of the email of 2 December largely in isolation from any consideration of Mr Gothard’s evidence about the meeting of 25 November (above at [17]-[63]). It is necessary, however, that they be considered in an integrated way. The curiosity of Mr Gothard’s silence is rationally capable of bearing on whether his account of 25 November is to be accepted. Taking such a global view does, I think, advance Mr Kilcran’s case. Mr Gothard’s account is then vexed by his silence on 2 December (when he could have said he had confirmed the team’s employment), by the fact that he did speak with Mr Mansveld on 17 December (when his evidence initially was that he did not), by Mr Kilcran’s evidence that Mr Mansveld had mentioned a discussion at that time with Mr Gothard and by the foolish correspondence in the following year in which Mr Gothard asserted, contrary to his current position, that Mr Kilcran had been terminated. Viewed alone this evidence would provide some basis for rejecting Mr Gothard’s account of the meeting. But it is not the only evidence. There is the fact of the existence of the letter of 26 November. To accept Mr Kilcran’s case it seems to me that I would need to find that this letter was manufactured after the event. And that, so it seems to me, is quite unlikely for reasons I have already given. I would also need to conclude that Mr Mansveld was not discussing whether the team’s employment should be terminated in his 2 December email which, despite his testimony to the contrary, I am not prepared to do. In addition I would need to find that Mr Gothard’s position at the meeting changed from what was enunciated in his email of the previous day for no apparent reason. Implicit also would be an acceptance of the proposition that Mr Gothard said something which could only trigger redundancy obligations when it seems to me that an experienced receiver such as Mr Gothard would be most unlikely to make such an amateurish error.

Taken all together, whilst there are certainly difficulties in Mr Gothard’s position, there are more serious difficulties with Mr Kilcran’s. I conclude, therefore, that Mr Gothard’s account of the meeting of 25 November is, indeed, the correct one, although not without some hesitation.

51    The trial judge concluded that the appellant’s primary case failed, as did (for the same reasons) the arguments that the contract had been repudiated by AFG and the receivers or that the appellant had been the subject of a constructive dismissal.

52    The trial judge then addressed what he described as the appellant’s alternative cases. The appellant’s first alternative case was that he was made redundant on 30 November 2008 or, in the alternative, 19 December 2008. The trial judge noted that the management agreement between SIF and the Manager was not terminated until 19 December 2008 and that it was difficult to see how the appellant could have in fact been made redundant on 30 November 2008. Nor was it possible to see how, in view of the way the appellant had conducted his case, it could be said that the appellant continued to work for AFG after 30 November 2008.

53    In the course of addressing these issues the trial judge said (at [78] and [80]):

… No doubt it is the case that Mr Kilcran’s understanding that he was not providing services to AFG from 30 November 2008 was caused by Mr Mansveld’s inaccurate reporting of what Mr Gothard had said. Nevertheless, it remains plainly the case that Mr Kilcran’s argument is that his employment ended on 30 November 2008.

… Or is it the case that Mr Mansveld never told Mr Kilcran that Mr Gothard had said that the SIF team was being let go at the end of November and that Mr Kilcran’s evidence about his understanding to that effect is to be rejected as false? Or is it the case that Mr Mansveld deliberately misled Mr Kilcran as to the true state of affairs?

54    As will be seen, these observations are relevant to one of the arguments put by the appellant on the question of ostensible authority.

55    The appellant’s second alternative case was that, even if his employment came to an end consensually without termination or redundancy, he was nevertheless entitled to the employment related benefits he claimed under the contract of employment. The trial judge rejected this argument on the proper construction of the letter dated 27 June 2008, which he noted differed in material respects from the earlier letter. The earlier letter dated 27 March 2008 referred to resignation “without Allco’s agreement”.

56    In the course of his reasons the trial judge said that Mr Mansveld and the appellant were employees of AFG and SIF (at [6]). That is not correct as they were employees of AFG only. Neither party sought to make anything of this error and it did not affect the trial judge’s analysis.

issues on the appeal

57    The appellant’s first group of submissions on the appeal were put on the premise that the trial judge’s acceptance of Mr Gothard’s account of the conversation which took place on 25 November 2008 was correct. In summary form, the submissions were as follows:

(1)    There was no material difference between Mr Mansveld’s account and Mr Gothard’s account, and the latter’s account amounted to a termination of the appellant’s employment contract;

(2)    The trial judge erred in failing to conclude that Mr Mansveld had the ostensible authority of AFG and the receivers to say what he did to the appellant after the meeting on 25 November 2008;

(3)    The trial judge erred in failing to conclude that, even if what Mr Gothard said did not amount to an express termination, it did amount to a repudiation of the appellant’s contract of employment (which the appellant accepted) or a constructive dismissal of the appellant. The appellant put a further and alternative submission on the appeal to the effect that the receivers had repudiated the employment contract by indicating that they would only continue the contract on terms that the appellant was not entitled to a bonus.

(4)    The trial judge erred in failing to conclude that the appellant had been made redundant; and

(5)    The trial judge erred in his construction of the appellant’s contract of employment.

58    In the alternative to this first group of submissions, the appellant submitted that the trial judge erred in accepting Mr Gothard’s evidence about the discussion on 25 November 2008 and that he should have accepted the evidence of Mr Mansveld. The appellant submitted that the trial judge had erred in his approach to Mr Gothard’s letter dated 7 December 2010. He had erred in placing weight on the fact that Mr Gothard was an experienced receiver and would not have acted so as to render the company liable for redundancy benefits, or without also placing weight on the fact that the appellant would not have acted so as to lose his redundancy benefits. The appellant submitted that the trial judge had erred in the findings he made in relation to Mr Gothard’s letter dated 26 November 2008 and in his findings concerning Mr Gothard’s conversation with Mr Mansveld on 17 December 2008 and whether the payment of the appellant’s wages in December 2008 was intended and correct or was erroneous.

59    We start with the appellant’s first group of submissions.

Submissions on the Premise that the Trial Judge’s Findings about the Conversation are Correct

(1)    No material difference between the two accounts

60    The appellant submitted what Mr Gothard said as found by the trial judge amounted to a termination. He submitted that that was so, particularly when regard is had to the fact that a board member said that SIF was not prepared to reimburse AFG for the expenses of employing Mr Mansveld and his team.

61    In our opinion, the answer to this argument is that given by the trial judge. In light of the alternative referred to by Mr Gothard, of AFG providing the services of the relevant employees to SIF on condition that SIF reimburse AFG for the cost of the employees, to say that AFG would not continue to provide the employees to SIF for free is not the same as saying AFG would no longer employ the employees. Furthermore, no date was mentioned by Mr Gothard and, when regard is had to how the discussion ended and the contents of Mr Mansveld’s email dated 2 December 2008, we do not think any significant weight can be placed on the board member’s statement that SIF would not be prepared to reimburse AFG for the expenses of the employment of Mr Mansveld and his team.

62    The statements of Mr Gothard did not amount to an express termination of the contracts of employment of Mr Mansveld and his team by AFG and the receivers.

(2)    Ostensible Authority

63    Mr Mansveld had actual authority to communicate to his team what Mr Gothard had said at the meeting on 25 November 2008. That was the finding of the trial judge. The appellant submitted that he also had ostensible authority to communicate to his team any matter relevant to their continued employment, even if it was not something Mr Gothard had said. It was not suggested by the appellant that Mr Mansveld had ostensible authority to make a decision about his team’s continued employment, but rather that he had ostensible authority to communicate a decision about their continued employment.

64    The trial judge did not understand the appellant to put his case (in the alternative) in that way. He referred to the appellant’s argument in two passages in his reasons (at [22] and [74]). In the main passage (at [22]) he said:

Mr Kilcran also pursued an argument that Mr Mansveld had the ostensible authority of AFG to communicate whatever Mr Gothard had said or that it was estopped from denying such authority. But significantly, these species of authority were said – perhaps curiously – to extend only to authorise Mr Mansveld to pass on what had been said by Mr Gothard at the meeting. It was not suggested that Mr Mansveld had ostensible authority (or that AFG was estopped from denying his authority) to pass on information which had not been imparted to Mr Mansveld by Mr Gothard. That being so, this issue is only of relevance if it be concluded that Mr Mansveld’s account of the discussion is correct. Of course if that be so then the argument is otiose, as Mr Kilcran will have succeeded under the actual authority argument. In the way it was pursued, the ostensible authority argument could have no impact on the outcome of the case.

65    The appellant’s submissions give rise to three issues on the appeal. They are as follows:

(1)    Did the appellant advance a case of ostensible authority of the type now advanced to this Court before the trial judge and, if not, should he be permitted to put the case on appeal?

(2)    If yes to (1), should the appellant’s argument be accepted?

(3)    If yes to (1) and (2), is this Court in a position to reverse the decision of the trial judge or is the appropriate order an order that there be a retrial?

66    We are able to decide the submission as to ostensible authority by reference to the second issue, and it is not strictly necessary for us to consider the first and third issues. However, as they were the subject of detailed submissions, it is appropriate that we make reference to them.

67    As to the first issue, the appellant did plead in his Reply that Mr Mansveld had ostensible authority and it is referred to in written submissions made to the trial judge by the appellant. Furthermore, it was referred to in oral submissions made by the appellant’s counsel, mainly, so far as we can see, in closing submissions. The receivers accepted that the appellant did submit in closing that they would be bound by a miscommunication by Mr Mansveld. Nevertheless, the argument was an alternative case advanced by the appellant and, at the very least, not developed in the detail in which it is now put to this Court. We have read the documents and material to which this Court was referred and we are not convinced that it is appropriate to go behind the trial judge’s express statement as to how the appellant’s case was put to him. If the alternative case of ostensible authority was not advanced before the trial judge, we would be disposed not to allow it to be advanced for the first time on appeal. The question is what is in the interests of justice, and where an Appeal Court cannot be sure that all the evidence on the matter was advanced at trial it is not in the interests of justice to allow an appellant to advance the argument for the first time on the appeal (Coulton and Others v Holcombe and Others (1986) 162 CLR 1).

68    As to the third issue, a necessary element of the success of the ostensible authority submission is a finding that Mr Mansveld in fact told the appellant that his employment was to come to an end at the end of November 2008. The trial judge expressly refrained from making such a finding and he made no general finding as to the credibility or reliability of the appellant’s evidence. We think that the passage in the trial judge’s reasons set out above (at [53]) was said in a particular context i.e., the appellant’s alternative case that he was made redundant, and we think the trial judge was making certain assumptions when he was considering the argument. It is not sufficient to override his Honour’s express statement that he was not making a finding as to a particular matter.

69    The appellant submitted that, in any event, this Court could make the finding he sought because the evidence of the conversation between Mr Mansveld and the appellant was barely challenged. We have read the transcript to which the Court was referred and it is enough for us to say that we do not accept the appellant’s submission. Had the appellant’s ostensible authority submission otherwise been made out, this Court would have had to consider whether it was appropriate to order a retrial.

70    We come now to the second issue. As to the facts, the appellant relied principally on the following matters:

(1)    Before and after the receivership, Mr Mansveld was a senior executive of AFG and chief executive officer of SIF. He was the appellant’s superior. He had authority to communicate on employment matters with his subordinates;

(2)    The receivers had advised employees that reporting lines within the business remained the same. The appellant referred not only to the circular to employees, but also to evidence given by Mr Sherman that in early November 2008 he said to AFG employees that any change in their employment would be communicated to them by the receivers or “through existing lines of communication”;

(3)    Mr Mansveld had actual authority from AFG and the receivers to communicate to his team what Mr Gothard said at the meeting on 25 November 2008; and

(4)    Mr David Clarke, who was the chief executive officer of AFG, sent an email to employees of AFG including the appellant on 13 November 2008, which email contained the following passage:

Finally, while the terms of our employees’ termination have been determined by Ferriers, it is important to us that our employees hear the news from us rather than a stranger. As a result, employees will be informed by their manager and HR as and when their employment finishes.

Both receivers gave evidence that Mr Clarke did not have their authority to send this email. Having regard to the approach he took, the trial judge did not find it necessary to refer to this email or the evidence with respect to it.

71    The appellant referred to Australian Securities and Investments Commission v Lanepoint Enterprises Pty Ltd (ACN 110 693 251) (2006) 60 ACSR 217 at 221, [18] per French J (as his Honour then was), and Re Galaxy Media Pty Ltd (recs and mgrs apptd) (in liq) (2001) 39 ACSR 483 at 504 – 505, [80] per Santow J, in support of the proposition that a company’s internal structure is unaffected by a receivership. That is true to the extent that the receivership does not encompass the internal structure or aspects of it (Hawkesbury Development Co Ltd v Landmark Finance Pty Ltd [1969] 2 NSWR 782 at 790 per Street J). In this case, the decision as to the retention of the employees of AFG was in the hands of the receivers.

72    The appellant referred to a number of Australian authorities in support of his ostensible authority submission. In particular, he referred to Colonial Mutual Life Assurance Society Limited v The Producers and Citizens Co-operative Assurance Company of Australia Limited (1931) 46 CLR 41 (“Colonial Mutual Life”), Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 (“Pacific Carriers”) and In the matter of Idylic Solutions Pty Ltd – Australian Securities and Investments Commission v Hobbs [2012] NSWSC 1276 (“Idylic Solutions”).

73    We think Colonial Mutual is quite a different case from the present. In Colonial Mutual, the alleged agent had a general authority to make statements on behalf of the principal, subject to a prohibition known only to the principal and agent as to a particular type of statement. We do not think that the present case can be analysed in that way because we do not think that it can be said that Mr Mansveld had general authority to make statements on behalf of AFG and the receivers, subject to a prohibition on him making statements that the employee’s employment had been terminated as of the end of November 2008.

74    Nor do we think the decision of the High Court in Pacific Carriers advances the appellant’s submission. That was a case of an apparent general authority which was, in fact, quite a limited authority. We do not think there was an apparent general authority here. Mr Mansveld was authorised to pass on what Mr Gothard had said and we do not think his position added to his authority.

75    Idylic Solutions does not assist the appellant and, in fact, we think that one of the cases to which the judge in that case referred – Australasian Brokerage Limited v The Australian and New Zealand Banking Corporation Limited (1934) 52 CLR 430 – illustrates the flaw in the appellant’s argument. The following passage appears in the reasons of Dixon, Evatt and McTiernan JJ (at 451 – 452):

“A person who puts another in his place to do a class of acts in his absence, necessarily leaves him to determine, according to the circumstances that arise, when an act of that class is to be done, and trusts him for the manner in which it is done; and consequently he is held answerable for the wrong of the person so intrusted either in the manner of doing such an act, or in doing such an act under circumstances in which it ought not to have been done; provided that what was done was done, not from any caprice of the servant, but in the course of the employment," per Willes J., Bayley v. Manchester, Sheffield and Lincolnshire Railway Co.. "It is seldom possible to prove that the fraudulent act complained of was committed by the express authority of the principal, or that he gave his agent general authority to commit wrongs or frauds. Indeed it may be generally assumed that, in mercantile transactions, principals do not authorize their agents to act wrongfully, and consequently that frauds are beyond ‘the scope of the agent's authority’ in the narrowest sense of which the expression admits. But so narrow a sense would have the effect of enabling principals largely to avail themselves of the frauds of their agents, without suffering losses or incurring liabilities on account of them, and would be opposed as much to justice as to authority. A wider construction has been put upon the words. Principals have been held liable for frauds when it has not been proved that they authorized the particular fraud complained of or gave a general authority to commit frauds," per Sir Montague E. Smith, speaking for the Privy Council in Mackay v. Commercial Bank of New Brunswick.

76    To our minds, it cannot be said in this case that Mr Gothard had left to Mr Mansveld authority as to the manner and content of the statements he made to his team. Rather, there was a specific conversation which Mr Mansveld was authorised to communicate.

77    The appellant referred to a line of English authority which applied the doctrine of ostensible authority to the communication of a decision as distinct from the making of the decision. He referred to First Energy (UK) Ltd v Hungarian International Bank Ltd [1993] 2 Lloyd’s Rep 194 (“First Energy”) and Kelly and Others v Fraser [2012] 3 WLR 1008 (“Kelly v Fraser”). In the latter case, Lord Sumption JSC said (at 1016, [15]):

It is clear from the judgments in First Energy that the Court of Appeal regarded their approach in that case as being wholly consistent with the law stated by Lord Keith in Armagas Ltd v Mundogas SA [1986] AC 717. In the Board's opinion, they were right to regard them as consistent. Lord Keith's speech remains the classic statement of the relevant legal principles. An agent cannot be said to have authority solely on the basis that he has held himself out as having it. It is, however, perfectly possible for the proper authorities of a company (or, for that matter, any other principal) to organise its affairs in such a way that subordinates who would not have authority to approve a transaction are nevertheless held out by those authorities as the persons who are to communicate to outsiders the fact that it has been approved by those who are authorised to approve it or that some particular agent has been duly authorised to approve it. These are representations which, if made by someone held out by the company to make representations of that kind, may give rise to an estoppel. Every case calls for a careful examination of its particular facts.

78    The decision in First Energy was discussed by Gillard J in Powercor Australia v Pacific Power [1999] VSC 110 at [1237] – [1254], who noted that it had been criticised in Bowstead & Reynolds on Agency (16th ed, Sweet & Maxwell, 1996) p 372, now Bowstead & Reynolds on Agency (19th ed, Sweet & Maxwell, 2010) pp 369-370. The First Energy principle is very fact sensitive and we do not think it applies here. After the receivership, Mr Mansveld’s general authority was of no particular significance and all parties knew that the receivers were making a particular decision in a particular context. Mr Mansveld was authorised to pass on what they said, no more and no less.

(3)    Repudiation and Constructive Dismissal

79    The trial judge was correct to conclude that the appellant’s submission that AFG and the receivers had repudiated his contract of employment by what Mr Gothard had said on 25 November 2008 should be rejected for the same reasons the submission that the contract of employment had been terminated was rejected. Mr Gothard did not make an unequivocal statement that AFG considered that it was no longer bound by the contract of employment or that it would no longer honour the contract (see White v Norman and Another [2012] 199 FCR 488 at 499, [37]). In fact, he left open the prospect of continued employment by AFG with SIF reimbursing AFG for the cost of (relevantly) the appellant’s wages.

80    The appellant’s alternative argument in relation to repudiation was that the receivers indicated in their email dated 24 November 2008 that AFG would continue to employ him only on terms, inter alia, that he would not be entitled to a bonus. The appellant referred to the passage in the email which states that existing AFG employees (not including those seconded to SIF) were “currently on existing salary payments only”. The appellant acknowledged that he had not relied on this ground at the time to consider himself relieved of his contractual obligations to AFG, but he contended that that did not disqualify him from relying on it now and he referred to Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359.

81    This submission must be rejected. The respondent contends that the submission was not put to the trial judge. That seems to be the case as the submission is not referred to in his Honour’s reasons or addressed by him. In any event, the submission must fail because the statement in the email when read as a whole is far from a definite statement by the receivers as to how they would perform the contract. As we do not think that there were any acts of repudiation by AFG or the receivers, it is not necessary for the Court to consider whether there were any acts by the appellant constituting acceptance.

82    As far as constructive dismissal is concerned, the doctrine has been discussed in a number of cases. It is convenient to mention two of them.

83    In Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia and Grivell (1999) 74 SASR 240, Bleby J (with whom Doyle CJ and Martin J agreed) said (at 248 – 249, [35]):

There may also be a course of conduct which, although not amounting to repudiation by the employer, is nevertheless sufficient to justify an employee terminating the contract in circumstances which the courts have considered to be constructive dismissal by the employer. See Blaikie v SA Superannuation Board (1995) 65 SASR 85 and other cases referred to therein. It is not necessary to enter that difficult field in order to resolve this case.

84    In Thomson v Orica Australia Pty Ltd (2002) 116 IR 186, Allsop J (as his Honour then was) gave a more fulsome description of the type of conduct that might give rise to a finding of constructive dismissal. His Honour said (at 224, [141]):

Constructive dismissal is an unlawful termination of the contract of employment in circumstances where the employee leaves, without an express act or enunciation of “dismissal” by the employer. It will be taken to be a dismissal (hence the word “constructive”) if the employer has behaved towards the employee in a way that entitles the employee to treat the employment as at an end. How that behaviour of the employer is to be described is at the heart of the matter. One difficulty in a simple enunciation of the common law principle is the existence of legislation and case law on closely related topics. However, if one is to approach the matter in straightforward contractual terms there is ample authority for the implication of a term in a contract of employment that the employer will not, without reasonable cause, conduct itself in a manner likely to damage or destroy the relationship of confidence and trust between the parties as employer and employee: Burazin v Blacktown City Guardian (1996) 142 ALR 144 at 151 and the English cases there cited and Daw v Flinton Pty Ltd (1998) 85 IR 1 at 3. Breach of that implied term will entitle the employee to treat himself or herself as wrongfully dismissed. Olson J (sitting at first instance) in Blaikie v South Australian Superannuation Board (1995) 65 SASR 85 at 102-106 and (sitting on the Full Court, though in dissent) in Easling v Mahoney Insurance Brokers Pty Ltd [2001] SASC 22 at par 99, if I may say so, expressed the principle with clarity. The principle expressed by Olson J in Easling at par 99 was not the subject of any criticism from the majority (Doyle CJ and Bleby J). His Honour said:

“... Suffice to reiterate that the notion of constructive dismissal implies the existence of conduct on the part of an employer which is plainly inimical to a continuance of a contract of employment according to its express or implied terms. The authorities establish the concept that there is implied in a contract of employment a term that the employer will not, without reasonable and proper cause, conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. An intention to repudiate need not be proved. Rather, it is a matter of objectively looking at the employer's conduct as a whole and determining whether its effect, judged reasonably and sensibly, is such that the employee cannot be expected to put up with it.”

85    The appellant’s constructive dismissal submission fails. In saying what he said on 25 November 2008, Mr Gothard did not engage in conduct likely to damage or destroy the employment relationship or conduct plainly inimical to the terms of the contract of employment or (if this be part of the test) conduct the appellant could not reasonably be expected to put up with. Termination by AFG and the receivers might have been “just around the corner”, but that point had not been reached.

(4)    Redundancy

86    The trial judge’s reasons are summarised above (at [52]). Nothing was put by the appellant which suggested to us that there was an error in his Honour’s reasoning. The appellant’s submission that he was made redundant by AFG and the receivers must be rejected.

(5)    The Construction of the Appellant’s Contract of Employment

87    The appellant does not challenge the trial judge’s finding that the terms and conditions in the 27 March 2008 letter were replaced by the terms and conditions in the 27 June 2008 letter.

88    The construction argument put on the appeal is different from the construction argument put to the trial judge and dealt with by him. The submission on the appeal is put solely by reference to the letter dated 27 June 2008, and is that his Honour’s conclusion of a consensual resignation can be characterised in either of the following ways:

(1)    As an agreed variation to the Termination Date such that it should be found that the appellant worked until the Termination Date and was entitled to the benefits payable in those circumstances; or

(2)    As a resignation within the terms and conditions of the contract of employment whereupon the appellant became entitled to the Resignation Payments and benefits referred to in the letter. The Resignation Payments and benefits did not, in the circumstances of resignation prior to 1 January 2009, include a guaranteed bonus. A condition of entitlement to the Resignation Payments and benefits was that the employee give “at least 4 weeks written notice of [his] resignation” and that he continue to work until the Resignation Date.

89    An initial problem with this Court addressing these arguments is that they do not appear to have been put to the trial judge. In terms of the pleadings, the appellant denied that he had resigned from AFG’s employment. Nor do the grounds of appeal make it clear that the appellant was advancing these arguments. The grounds of appeal relevant to the construction of the contract are in the following terms:

Construction of contract

7.1    The Court erred by finding that the Appellant did not satisfy the necessary conditions for his contractual entitlements under the Contract by reason of his subjective belief in the truth of the Relevant Communications (Judgment at [88] and [78]).

7.2    The Court ought to have found that, in the circumstances of the present case, on the proper construction of the Contract, the Appellant performed all of his obligations under the Contract and complied with the necessary conditions of the Contract in relation to his contractual entitlements until the Contract in fact came to an end, such that AFG was obliged to make the payments the subject of the Appellant’s Proof of Debt.

90    On one view, the difficulty is compounded by the fact that the trial judge’s conclusion that it is fair to say that what occurred was a consensual resignation was made in the context of the different construction argument put to him. This led to debate before this Court as to whether what had occurred was more accurately described as an abandonment of the employment contract. The appellant signed a new employment contract with Awaruku Pty Limited on 19 December 2008 and his employment was said to commence from 1 December 2008. We do not need to pursue these matters because we do not think either argument can succeed in any event.

91    As to the termination argument, the letter dated 27 June 2008 is quite clear in that the appellant must continue to work until the Termination Date in order to be entitled to the employment benefits on redundancy, and Termination Date is defined as 30 June 2009 or such date designated by AFG by giving the appellant at least 1 month written notice. The appellant did not work until 30 June 2009 and, on the findings of the trial judge, the receivers, by their words or conduct objectively assessed, did not specify an earlier Termination Date.

92    As to the entitlements on resignation, the appellant had to give at least 4 weeks written notice of his resignation and continue to work until the Resignation Date. He did not do that. Even if the parties could vary those requirements by agreement, we do not think that, on the trial judge’s findings and the evidence to which the Court was referred, the words and conduct of the parties objectively assessed should lead to the conclusion that that is what the parties were doing.

93    The appellant’s construction arguments should be rejected.

94    We turn to the appellant’s second group of submissions.

The Appellant’s Challenge to the Trial Judge’s Findings about the Conversation

95    The thrust of the appellant’s submissions was that the trial judge either overlooked evidence or drew incorrect conclusions from it.

96    The appellant’s first submission was that the trial judge had not accorded Mr Gothard’s letter to the appellant dated 7 December 2010 the interpretation it plainly bore, namely, an admission or at least a statement by Mr Gothard that the appellant’s employment had been terminated on 30 November 2008. The appellant submitted that the trial judge’s conclusion that Mr Gothard had not read the letter carefully (or possibly at all) was erroneous for three reasons.

97    First, the Court was taken to passages in Mr Gothard’s cross-examination and it was submitted by the appellant that Mr Gothard had admitted to reading the letter. We have considered those passages. The trial judge was plainly troubled by the letter, but having regard to the evidence we think it was open to him to conclude that Mr Gothard had not read the letter carefully or possibly at all.

98    Secondly, the appellant referred to a letter from Mr Gothard to him dated 23 December 2010 to which the trial judge did not refer. The appellant submitted that like the letter dated 7 December 2010 this letter was plainly inconsistent with a conclusion that the receivers considered that the appellant had resigned from his employment. Again, the Court was referred to passages in Mr Gothard’s cross-examination and, in particular, to passages where Mr Gothard admitted reading the letter and admitted that it was inconsistent with the appellant having resigned from his employment. We do not think the trial judge erred in not referring to this letter. It was in the same class as the earlier letter and the trial judge carefully considered whether statements apparently made by Mr Gothard in December 2010 should dissuade him from accepting his evidence.

99    Thirdly, the appellant submitted that Mr Gothard’s evidence of confusion about whether the appellant had resigned was inconsistent with the conclusion that Mr Gothard clearly understood the position as he contended it to be by 30 December 2008. The trial judge was troubled by this evidence and said that he was not sure what to make of it. Ultimately, however, he accepted the evidence and we think that he was entitled to do that.

100    The appellant’s second submission was that the trial judge’s finding that the appellant was the source of the error on the part of the receivers’ staff that the appellant’s employment had been terminated was erroneous. We think the trial judge did make such a finding. The appellant asks this Court to find that Mr Burrows prepared the original proof of debt (which was not in evidence) on the basis that the appellant’s contract of employment had been terminated. The evidence is unclear on this point and we do not think the point is of sufficient weight to justify this Court in overturning the trial judge’s finding that he should accept Mr Gothard’s evidence.

101    The appellant’s third submission was that the trial judge erred in the conclusions he drew in relation to Mr Gothard’s letter dated 26 November 2008. It was submitted the trial judge overlooked a fourth possibility, and that was that the letter was prepared by the receivers and signed by Mr Gothard, but that there was no attempt by Mr Gothard to have the letter delivered. The appellant relied on the following matters.

102    Mr Sarantinos was a partner of the receivers’ firm in 2008 and he prepared a spreadsheet showing the status of AFG employees on 28 November 2008. The appellant was shown under the heading “Staff to be Provided with Tenure and Entitlements Commitment (Asset Sales)” as “confirm tenure to 31 January 2009” with “Comments” as “1 month”. The appellant submitted that this is to be compared with a schedule sent to Ms Belinda Castine, who was head of AFG’s human resources, by Mr Sarantinos on 8 December 2008, which has the appellant under the heading “Other Staff (December Terminations, Contractors, SIF, Record, Other Entities)” with a comment under the heading “Peter Gothard in ongoing discussions with Rene Mansveld re potential internalisation of SIF staff” and words or letters indicating that it was not known whether the appellant would be employed by AFG in December 2008 and that he would not be employed by AFG in January 2009. The appellant submitted that these records were inconsistent with a belief by the receivers that the appellant was employed by AFG until the end of January 2009 and that the letter dated 26 November had been sent. The appellant also submitted that Mr Gothard had not given evidence that he had given the letters to Ms Castine in accordance with his normal practice and, further, Ms Castine had written an email on 10 December 2008 in which she had said of SIF “none of these employees have tenure letters”. The appellant was shown under the heading “Letter Required” and under the heading “Comment” the following appears: “Ferriers confirming end date”. The appellant further submitted that the attempted delivery of the letter dated 26 November 2008 would be inconsistent with Mr Gothard’s account of the meeting on 25 November 2008 and knowledge that there had been no attempt to deliver the letter was a convincing explanation of Mr Gothard’s silence in the face of Mr Mansveld’s email dated 2 December 2008.

103    There was debate before this Court as to whether this fourth possibility had been put to Mr Gothard during cross-examination and the Court was given some transcript references after the hearing. It was certainly put to Mr Gothard that he had not given a letter to the appellant and other employees in a similar position on 26 November 2008 that confirmed his employment to the end of January 2009, but it was not put to him in terms that he had received the letter, signed it but then decided not to send it.

104    It was certainly open to the trial judge to conclude that Mr Gothard did not manufacture the letter after the event. The trial judge found that Mr Gothard made attempts to have the letter delivered. The evidence to which the appellant referred might suggest that Mr Gothard wrote and signed the letter, but then decided not to make attempts to have it delivered. Such conduct does not support the appellant’s case other than by the effect it might have on Mr Gothard’s credit. In fact, it is, so far as it goes, inconsistent with the appellant’s case. No reason for such conduct by Mr Gothard consistent with the appellant’s case was suggested by the appellant and we think it is such a fanciful possibility that the trial judge was entitled to ignore it.

105    The appellant’s fourth, fifth and sixth submissions can be dealt with together because they seek to re-agitate in large measure arguments put to the trial judge and rejected by him. They were that the trial judge placed too much weight on the apparent inconsistency between Mr Mansveld’s account of the discussion on 25 November 2008 and his email dated 2 December 2008, that he erred in concluding that AFG’s payments of the wages of Mr Mansveld’s team in December 2008 was not made in error, and that he erred in concluding that Mr Gothard’s account of the meeting on 25 November 2008 was consistent with his email of the previous day.

106    As to the first of these matters, the Court was referred to three emails which were said to support Mr Mansveld’s evidence as to what he meant by the statements in his email dated 2 December 2008. We have considered the emails. No doubt Mr Mansveld thought that things were going to change as far as his employment was concerned. However, that fact is not inconsistent with Mr Gothard’s account of the meeting on 25 November 2008.

107    As to the second of these matters, the question here is not whether the payment in December 2008 was erroneous, but rather when it was considered erroneous. The trial judge found that Mr Gothard had a discussion about erroneous payments, “but only in late December (when of course the internalisation had occurred)” and we think such a finding was open to him. We have reached this conclusion even though Mr Mansveld was not challenged about his account of his conversation with Mr Gothard on 17 December 2008. That circumstance did not preclude the trial judge from making the finding which he did.

108    As to the third of these matters, we do not think there is any significance in any differences between the email of 24 November 2008 and Mr Gothard’s account of the meeting on 25 November 2008 that cannot be explained by the fluid nature of the circumstances at the time.

109    Finally, the appellant submitted that the trial judge should not have placed weight on the fact that Mr Gothard would not have made what he called the “amateurish error” involved in an acceptance of Mr Mansveld’s account when he found that Mr Gothard had not read the letter dated 7 December 2010 carefully (or possibly at all). We reject this submission. It is a question of weight and it does not follow as a matter of logic from the latter circumstance that no weight could be placed on the former. Nor is the observation of the trial judge erroneous because (as submitted by the appellant) the receivers were laying off other staff or the continued employment of staff would be a cost ultimately borne by the chargee.

110    In this case, there were a number of arguments in the appellant’s favour. The trial judge acknowledged this expressly in his reasons. However, we do not think the trial judge erred in the way he resolved the difficulties plainly associated with the account of each party.

CONCLUSION

111    For these reasons, the appeal must be dismissed with costs.

Associate:

Dated:    18 February 2014