Federal Court of Australia

Jackson v Heart Research Institute Ltd [2025] FCA 301

ORDERS

THE COURT ORDERS THAT:

1.    Professor Jackson’s Further Amended Originating application, filed on 29 July 2024, be dismissed.

2.    Any application for costs, together with any evidence and submissions (of not more than four pages) be filed and served by 4:00pm on 16 April 2025.

3.    Any affidavit(s) and submissions (of not more than four pages) in response be filed and served by 4:00pm on 30 April 2025.

4.    If no application for costs is made within the time frame fixed by order 2 above, there be no order as to costs.

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

REASONS FOR JUDGMENT

RAPER J:

Introduction

1    Professor Shaun Jackson was employed by The Heart Research Institute Ltd from 1 October 2013 to 30 June 2024. Professor Jackson was HRI’s Director of Cardiovascular Research and head of its Thrombosis Research Group. Both Professor Jackson and the TRG were undertaking clinical trials for a potentially revolutionary drug to treat stroke victims, TBO-309. The TRG’s research and work was funded largely by grants allocated and tied to Professor Jackson’s employment by HRI. Professor Jackson was employed under a series of maximum term contracts.

2    From in or about August 2022, there were negotiations as between Professor Jackson and HRI’s representatives primarily with its then just appointed interim Scientific Director, Professor Andrew Coats and Mr Peter McGauran (HRI’s Chairman), as to the terms of Professor Jackson’s new employment contract and a collaboration agreement as between HRI and Professor Jackson’s company for the commercialisation of TBO-309 (ThromBio Holdings Pty Ltd). The parties had hoped that both agreements would be finalised by the end of 2022, but they were not. Also, from August 2022, the drug manufacture for the trial of TBO-309 had commenced.

3    In early 2023, concerns were raised with HRI as to the viability of the trial (largely because of the actual and committed costs for the manufacture of the drugs). At the same time, Professor Jackson and the CEO of a company incorporated by Professor Jackson to commercialise TBO-309, Mr Peter Bush, began to question the financial management and practices of HRI with respect to grants allocated to Professor Jackson. This included concerns that TRG had not received the “top-up” funding it had been entitled to in 2013 and 2014 from HRI (which, if it had, according to Mr Bush, the concerns regarding its viability would evaporate).

4    On 24 July 2023, HRI’s Board determined, following these queries and complaints being made, not to renew Professor Jackson’s contract. According to Professor Jackson, that decision was not, on its face, rationally explicable. In this context, HRI’s board minutes stated that Professor Jackson was “now querying historical transactions… from 10 years ago”.

5    By Professor Jackson’s further amended originating application filed on 29 July 2024, he sought relief on numerous grounds. Professor Jackson, consistent with the obligations of civil practice under s 37M of the Federal Court of Australia Act 1976 (Cth), for which his representatives are be commended, ultimately only pressed two of his pleaded claims.

6    There are therefore two main issues to be determined: First, whether HRI contravened s 1317AD(1) of the Corporations Act 2001 (Cth) in determining not to renew Professor Jackson’s employment contract on 24 July 2023 (the whistleblowing claim). Secondly, whether HRI engaged in misleading and deceptive conduct, contravening s 18 of sch 2 to the Competition and Consumer Act 2010 (Cth) (Australian Consumer Law) by representing that Professor Jackson’s contract would be extended by five years, and that HRI would finalise and enter into a collaboration agreement with ThromBio (the ACL claim).

7    Whilst, for the following reasons, Professor Jackson’s claim must fail, it very hard not to be sympathetic to the situation he found himself in. Professor Jackson is an extremely accomplished researcher undertaking critical health research. Whilst this decision finds that his allegations of being misled in contractual negotiations and subjected to detrimental treatment as a consequence of any alleged prohibited belief or suspicion are not established, the decision makes no findings as to any alleged misconduct on his part. The Court was not asked to make any such findings and could not have done so on the evidence. These conclusions concern the limited case before me.

8    For the following reasons, my conclusions with respect to each of these claims are as follows: First, the whistleblowing claim fails for three reasons: (a) the decision not to renew Professor Jackson’s employment does not constitute a detriment within the meaning of ss 1317AD(1), 1317ADA(b) or (j) of the Corporations Act; (b) in any event, HRI has discharged its onus under s 1317AD(2B) and proved that it did not hold the alleged prohibited belief or suspicion; and (c) further, even if it did, HRI was not motivated by this prohibited belief or suspicion in the decision not to renew Professor Jackson’s employment. Secondly, the ACL claim fails because Professor Jackson did not establish that the alleged representations were made and alternatively, even if they were, they were not misleading.

The witnesses in the proceedings

9    Professor Jackson relied upon the evidence of 10 witnesses, including himself. HRI made no serious challenge to the credit of any of his witnesses. This is unsurprising, given HRI’s position with respect to the two claims was that even if one accepted Professor Jackson’s account, his claims would fail.

10    Mr Bush, CEO of ThromBio, gave evidence concerning how ThromBio was funded, including funding from HRI, as well as discussions between him and HRI regarding Professor Jackson’s future employment with HRI and finalising the collaboration agreement for the commercialisation of TBO-309. In addition, Professor Jackson relied upon the evidence of members of the Steering Committee of the Safety and Tolerability of AZD6482 in Reperfusion for Stroke trial (STARS trial), the body responsible for oversight of the conduct of the clinical trials for TBO-309, being Professor Geoff Donnan, Dr Candice Delcourt, Professor Christopher Levi and Professor Craig Anderson. Their evidence was relied as to the question of relief (which for the reasons which follow, ultimately did not require determination). Associate Professor Schoenwaelder gave evidence on the impact upon her of HRI parting ways with ThromBio and Professor Jackson, as well as processes for approving Ardena Statements of Work (SoWs). Dr Yuping Yuan, Mr Benjamin Hoffma, Mr Ethan Italiano and Mr Imala Alwis gave evidence of working with Professor Jackson and the consequent effect upon of them of cessation of Professor Jackson’s relationship with HRI.

11    In support of HRI’s case, HRI relied upon the evidence of Mr McGauran (the Chair of HRI’s Board). Mr McGauran’s evidence concerned both the alleged representations in the ACL claim (some of which include what he said and his conduct), as well as him being one of the voting directors that made the decision not to renew Professor Jackson’s contract, in the whistleblowing claim. HRI relied upon the evidence of each of the other voting directors namely Professor Andrew Boyle, Mr Antony Pollitt, Professor Merilyn Sleigh, Mr Rodney Halstead, Mr Richard Rassi and Dr Kate McBride (in addition to Mr McGauran). They did not include Professor Coats, whose unchallenged evidence was that he did not vote on the resolution, nor did Dr Tim Gainsford. Dr Gainsford did not give evidence in the proceeding. He held the position of Chief Operating Officer. Ms Elissa Dwyer was Director of Human Resources. Dr Hana Krskova, held the position of Director of Finance. Her evidence went primarily to the attempts that were made between March and July 2023 to work out (with Mr Bush) the ongoing viability of the STARS trial. In addition, HRI relied upon the evidence of Mr Peter Howes, who was not a voting director but a member of HRI’s Audit, Risk and Finance Committee.

12    Additionally, HRI relied upon the evidence of Professor Coats, who had taken up the position of interim Scientific Director in August 2022. It was Professor Coats who reported to the Board regarding the negotiation of Professor Jackson’s future employment contract and also the collaboration agreement. In addition, it was Professor Coats who reported to the Board regarding the material events concerning Professor Jackson in the lead up to the decision not to renew Professor Jackson’s employment contract.

13    As will be evident, when dealing with the misleading and deceptive conduct claim below, to the extent necessary, I will make findings of credit in the context of considering the disputed evidence of conversations as between Professor Coats, Mr McGauran and Professor Jackson. It is my view, that all three witnesses endeavoured to give truthful evidence. However, on certain occasions, I have preferred the evidence of Mr McGauran and Professor Coats over Professor Jackson for the reasons set out below.

14    For the purpose of the whistleblowing claim, the evidence of each of the voting directors and Professor Coats is important. Professor Jackson sought to impugn each of their testimony. I have dealt with the challenges to credibility of each of these witnesses, where their evidence is specifically dealt with in my judgment. Ultimately, all challenges to the credibility of HRI’s witnesses have not succeeded.

15    Given much was made by Professor Jackson of Professor Coats’ credibility with respect to both the ACL claim and the whistleblowing claim, it is worthwhile expressing some views at this stage, noting more fulsome reasons are given later. This concern as to his credit was said to be borne out by his purported lack of candour and inaccurate accounts (as recorded in the Board minutes) of Professor Jackson’s alleged failure to progress negotiations. For the reasons which are set out below, when dealing with the specific instances, whilst I accept Professor Coats was not always frank in his dealings with Professor Jackson, that was a product of how Professor Coats negotiated and his concerns that his own interests and those of HRI did not align with what Professor Jackson was seeking at the negotiation table. Similarly, for the reasons set out below, Professor Coats did paint a particular picture of Professor Jackson to the Board that served his own interest. Initially, he was charged with negotiating the collaboration agreement with Professor Jackson. It appeared that Professor Coats wanted the Board to see his efforts in that role in the negotiation in the best possible light—it was not him or HRI (under his guidance) that was delaying negotiations but Professor Jackson. This appeared to continue a narrative that had formed before his involvement. The evidence revealed that in Board minutes from January 2022 onwards (but before Professor Coats became employed in August) notations were made about the protracted negotiations of the collaboration agreement with Professor Jackson and included that agreement on the quantification of HRI support for Professor Jackson’s lab (the Jackson lab) was “proving challenging”. In addition, Professor Coats formed views early in his tenure that HRI’s interests were not necessarily being best served by what Professor Jackson was seeking, Professor Jackson was not in a strong bargaining position (Professor Coats perceived that he could not get the same level of support elsewhere and he did not have offers of alternative employment) and he was stringing out the negotiation of the collaboration agreement to sure up the best deal he could regarding his new employment contract. It is these views that motivated Professor Coats to report to the Board in not necessarily the most accurate way. For the reasons which follow, it is not my view that his motivations, when reporting to the Board in the way he did, were because of or included as part, an unlawful one.

16    In closing, Professor Jackson identified a number of transcript references which he submitted illustrated inconsistencies in Professor Coats’ evidence. Unfortunately, almost no submission was made to develop how they illustrated the same other than by provision of the references. I am not persuaded by them. To the extent that I was able to decipher the bare tenor of the submission for each, a careful review of each of those references, did not prove persuasive. For example, to the extent that Professor Coats gave evidence about Dr Gainford providing factual information in Board meetings, I do not see that there is inconsistency in him saying that at critical meetings, Dr Gainsford did not say anything of substance. Professor Coats’ answers were responding to different questions on each occasion.

17    I do not accept that the evidence points against the Court accepting Professor Coats’ evidence but I agree that is indicative of the Court needing to exercise a degree of caution regarding the acceptance of his evidence. It was my view that Professor Coats gave evidence which was largely credible. True to his personality and general demeanour, he does not have the effusive, volubility and force of personality of Professor Jackson. He was guarded in his responses in the same way in which he was guarded when dealing with Professor Jackson. It appeared to stem from a belief that he did not need to show his hand with Professor Jackson and that they were in negotiations. It was clear that he believed (I think rightly) that Professor Jackson believed he could extract a better deal from others (particularly Mr McGauran) within HRI and was trying to work out ways to go around him at the negotiating table. Professor Coats was looking after his own and what he perceived to be HRI’s interests.

18    There is an unfortunateness to his lack of candour though: It left a lacuna in which Professor Jackson was left in the dark, and from that darkness, (ultimately unfounded) suspicions grew.

Background

19    The evidence, in summary, revealed the following.

20    In August 2022, negotiations were ongoing regarding Professor Jackson’s employment contract and a collaboration agreement. Professor Jackson was HRI’s Director of Cardiovascular Research and head of its TRG. During this year, Professor Jackson and TRG were embarking on clinical trials for TBO-309, referred to as the STARS trials. TRG’s research and work was funded largely by grants allocated and tied to Professor Jackson. At the same time, Professor Jackson was negotiating with HRI to enter this collaboration agreement whereby the parties would commercialise TBO-309, HRI would provide financial support to ThromBio (the entity registered in 2020 by Professor Jackson, with Mr Bush as its CEO, to commercialise TBO-309), as well as HRI employee time and premises, in exchange for equity in the company.

21    These negotiations were being undertaken when there was a changing of the guard at HRI: Mr McGauran came on board as Director in June 2022, Professor Coats as Interim Scientific Director in August 2022. Dr Hollings, Mr Scott Martin and Ms Debbie Ormsby (who had been previously involved in the negotiations) had left. This meant that there was very limited prior corporate knowledge (as to how Professor Jackson’s lab, funds and employment had been previously managed) but it also is material when issues arose as to his lab funds later (Professor Jackson remains but those on the HRI side do not have the prior corporate knowledge).

22    It is this disjunct (as to knowledge of past practices) which fuels (unfortunately, mistrust and confusion) on both sides, that is material in the demise of the relationship between the parties. Professor Jackson had a firm view about the past, past practices; how his lab funds were managed, what HRI was required to contribute, and his role in committing HRI to financial outlays. HRI had a different view, but one based not on direct corporate knowledge (by employees engaged at the time) of the past. However, there were certain voting directors who had a lengthy history on the Board and past experience of dealing with Professor Jackson in protracted contractual negotiations.

23    However, it was clear that, with respect to the collaboration agreement, that Professor Coats and Mr McGauran understood, as at August/September 2022, that it was in its final stages of negotiation and had been largely agreed. However, despite the fact that it was understood that HRI was to provide a draft of the collaboration agreement in fulsome terms, as drafted by HRI’s (then lawyers) Corrs, the draft agreement was not in fact provided to Professor Jackson and Mr Bush until 27 October 2022.

24    In the meantime, a Master Services Agreement had been entered between HRI and Ardena, (a company that provides drug development, manufacturing and analytical services to pharmaceutical companies), for the provision of services with respect to manufacturing the drugs for trials. There was no formal system for the creation of Statements of Work (SoWs). No policy nor instruction was given to Associate Professor Schoenwaelder nor Professor Jackson in this regard. There was a great deal of dispute between the parties regarding whether Professor Jackson was in fact “approving” the SoWs and in effect the commitments by HRI under HRI’s delegation policy. For the reasons already stated above, it appears this dispute arose from the fact that those within HRI who had worked with Professor Jackson in the past (on financial matters) had left, there was no clear demarcation in roles, nor communication regarding how the delegation policy was to be applied in practice.

25    It was Professor Jackson’s evidence that he was required to approve those SoWs as Chief Investigator A, the person responsible for the scientific leadership under the MRFF (clinical trial) grant but that, as to whether the funds would be committed by HRI, that was for HRI to approve as part of the co-signature approval process. This was hotly contested.

26    Of particular significance was the fact that an SoW was approved in August 2022 for $744,995. HRI denies knowledge of this commitment. It was HRI’s evidence that it did not become aware of this being approved by Professor Jackson until March 2023. It was Associate Professor Schoenwaelder’s evidence that when she electronically inserted Professor Jackson’s signature, the next step she took was for the invoice to be sent back to Dr Dan Ford, who was the direct conduit with Ardena. She would also copy in Dr Hollings and Ms Ormsby, and Mr Martin from time-to-time. Associate Professor Schoenwaelder’s evidence was that, from August 2022, she did not include any member of senior management on any email trails in relation to the approval of SoWs once Dr Hollings ceased employment.

27    Between August and October 2022, Mr Bush and Professor Coats were responsible for negotiations regarding the draft collaboration agreement. Mr Bush was engaged by May 2022 as CEO of ThromBio. Very little happened because Mr Bush was awaiting the Corrs draft, which was not provided until 27 October 2022.

28    With respect to the negotiation of the renewal of Professor Jackson’s employment contract, Professor Jackson’s contract of 1 July 2021 required by cl 2.6, as a condition of his employment that, by 31 December 2021, ThromBio and HRI would have entered into the collaboration agreement, and, not having entered into an agreement by that time, either party could terminate the contract. There was an agreed extension until 31 December 2022. There were a number of conversations about the employment contract, but by December 2022, the parties could not agree. It is my view that they did all generally want to agree, HRI did want Professor Jackson to remain and to benefit from his research. As much was said by Professor Coats in his text to Mr McGauran of 5 December 2022, but there were two primary sticking points: his title (and the important associated level of authority and autonomy) and his position proximate to Professor Coats’ position, and secondly, whether any additional funds from HRI would be given to Professor Jackson as part of the deal.

29    It appeared that Professor Jackson knew from the Balmoral dinner on 29 September 2022 (a dinner attended by Professor Jackson with Mr McGauran and Professor Coats), that with a potential merger in the mix for HRI with the Centenary Institute, Mr McGauran was not going to stick around and at that time, Professor Coats was only the interim Scientific Director until June 2023. It was not known by Professor Jackson in October/November 2022 that Professor Coats was no longer the interim Scientific Director. It appears that the HRI Board was already thinking Professor Coats was a longer term proposition.

30    The evidence revealed that Professor Coats, as a negotiator, would say one thing to appease Professor Jackson (between August and December 2022) but would in fact think or do another. This was clear in a number of respects. He had decided very early on that the collaboration agreement (adopting the view of the (then) in-house counsel) was not, in its then agreed terms, a good deal for HRI, but he did eventually provide it to Professor Jackson and Mr Bush on 27 October 2022. It was also his view that Professor Jackson was on a very good wicket and was not in a strong bargaining position regarding his employment contract. Professor Coats definitely did not want Professor Jackson to have the level of authority, autonomy and title that Professor Jackson was seeking. Indeed, Professor Coats conceded under cross-examination that he was concerned that Professor Jackson’s request for the Director of CV (cardiovascular) Research at the Charles Perkins Centre (CPC) would undermine his authority. Professor Coats perceived that Professor Jackson was already receiving a very high salary and would not get the same lab support elsewhere and therefore because he was not a flight risk, they could sit tight and not accede to his demands. It appeared that he believed Professor Jackson would come around.

31    As to what occurred at the 21 November 2022 meeting, according to Mr McGauran, this is when the “pointy end” crystallised and they were truly negotiating the contract. There were additional meetings in December and then on 3 February 2023. This was the last meeting regarding the negotiations. No agreement was reached at this meeting.

32    What happened thereafter distracted everyone from the negotiation of these two agreements. In essence, HRI started, from December 2022 to become concerned (a) about its own financial position; and (b) regarding whether it had a handle on the TRG’s own budget. HRI became concerned about whether there were sufficient grant funds to cover the STARS trial (and, in particular, the commitments Professor Jackson had already given to Ardena, who were manufacturing the drug) and started looking at the previous SoWs with Ardena (that Professor Jackson had signed off on) and the accounts. This became an even more pressing issue given HRI’s views regarding its own finances.

33    Thereafter, Dr Krskova and Mr Bush met and exchanged reports regarding the historical and current financial status of the TRG and the STARS trial. Dr Krskova was charged with this responsibility, given HRI’s concerns which I have just described. Mr Bush was seeking to explain TRG’s financial position so as to ensure that the concerns could be alleviated, and the deal could be done to enter the collaboration agreement.

34    This information exchange between Dr Krskova and Mr Bush led to Professor Coats informing the Board on numerous occasions in 2023 as to his concerns regarding deficits and insufficient funds to cover the STARS trial. This was all the while when Mr Bush was still trying to get to the bottom of the figures with Dr Krskova, and Professor Jackson had not been informed of the alleged serious breach of the delegation policy.

35    The evidence regarding the financial status of the STARS trial and where its funding had come from since 2014 was incomplete, often illegible and difficult to decipher. Both parties made clear to the Court that they were not seeking for the Court to make any findings about actual misallocation of funds and failure to provide top-ups. This is unfortunate in some ways because the Court is left without being able to determine the true picture—whether HRI had a basis for its alleged fears regarding the shortfall or for its claims regarding Professor Jackson’s conduct.

36    What is clear is that both sides believed very different things.

37    Dr Krskova was telling Professor Coats of an enormous deficit initially on 1 May 2023 of $849,000 but had revised it down and suggested Professor Jackson’s lab contained a surplus initially of $500,000 and then later of $74,000. Mr Bush was asserting that there was no deficit but in fact a surplus because (a) HRI had not provided top-up funding it had allegedly been required (under Professor Jackson’s previous contract) to provide in 2013 and 2014 (to the value of approximately $600,000 which he revealed on 6 July 2023); (b) that HRI was to provide funding for Professor Jackson’s employed associates; and (c) that the commercialisation costs were to be borne by HRI and accordingly there was a $1.4m surplus (as at 6 July 2023). These issues were never ultimately resolved.

38    In a sense, though, the parade had moved on by this point. The Board was then looking at other issues arising from its relationship with Professor Jackson, including whether Professor Jackson had committed HRI to the Ardena SoW of $744,995 (in August 2022) contrary to the delegation policy, and a number of other issues which led the Board not to renew his contract on 24 July 2023.

39    It is in this context that the whistleblowing claim arises. This is because, by reason of the sharing of financial information (between Dr Krskova and Mr Bush from February 2023 until July 2023), there were a few board papers, that referred to these requests made by Mr Bush for historical financial information (and suggestions that HRI had not done, in terms of providing financial support, what it had been required to do). It is Professor Jackson’s claim that his assertions in this regard, formed the basis for a contravention of s 1317AD(1), namely that his contract was not renewed (the alleged detrimental conduct) because HRI believed or suspected that Professor Jackson may make, proposes to make or could make a disclosure that qualified for protection.

40    Professor Jackson was then, after a decision had already been made not to renew his contract, issued with a letter on 15 August 2023, identifying a number of allegations against him and was informed that “HRI is not proposing to continue discussions with [him] about any further employment after the expiry of the Term” and cautioned that if the expressed “concerns are borne out” then his employment for the balance of the term “may be untenable” and requested a response. On 15 September 2023, Professor Jackson responded to the allegations and made his own report of alleged misconduct regarding two former HRI Governors (a claim about which Professor Jackson did not press ultimately at hearing), comprising a whistleblowing complaint. That complaint was investigated by HRI and found not to be substantiated in November 2023.

41    Thereafter, HRI made a number of other allegations against Professor Jackson. Ultimately, the Court was not charged with being asked to determine these allegations (nor was the Court in a position to).

42    Professor Jackson thereafter sought to canvass all options with HRI regarding transition arrangements that could be agreed to avoid the drug trial ceasing when his employment ceased. Unfortunately, no agreement was reached. Ultimately, Professor Jackson’s employment ceased on 30 June 2024.

Grounds

43    There is, in part, a factual overlap between each of the two claims. However, the chronology forming the basis for the misleading or deceptive conduct commences first in time and therefore this claim and the relevant facts will be dealt with first.

The ACL claim

Misleading or deceptive conduct

Pleaded case

44    Professor Jackson’s claim for relief under s 236 of the ACL by reason of HRI’s posited breach of s 18 of the ACL relies upon HRI having made two misleading or deceptive representations (by reason of conduct between June 2022 and 30 March 2023). First, that HRI would extend Professor Jackson’s employment contract for a five year period; and secondly, that it would finalise a collaboration agreement with ThromBio.

45    In addition, and alternatively, Professor Jackson claimed that, by reason of HRI’s conduct (pleaded as occurring between June 2022 and 30 March 2023), that conduct gave rise to a reasonable expectation of disclosure that if HRI was, at any time, considering that it may not abide by the terms of its representations to Professor Jackson, it would inform him of the same and that in the period between 3 February 2023 and 15 August 2023, despite having formed a view in or about late March or early April 2023 (as pleaded) or as submitted in closing, 3 February 2023, that it may not abide by the terms of its representations to Professor Jackson it would inform Professor Jackson of the same, and did not do so during that period.

46    HRI asserted that this claim fails because: First, HRI did not make any representation to Professor Jackson to the effect alleged, and the statements that were made did not have an objective tendency to lead him into error; and secondly, HRI was not obliged to make any disclosure to the contrary.

47    HRI submitted in its oral closing submissions that both the primary claim and the alternative claim are based on positive conduct occurring, as opposed to non-disclosure or inaction. Further, it submitted that the relevant, respective time periods, when the alleged conduct giving rise to the representations were made, were for the first claim, June 2022 to 3 February 2023, and the alternative claim from 3 February 2023 to 15 August 2023. However, both claims are dependent on the positive representations which were alleged to have been made in the period prior to 3 February 2023.

Relevant principles

48    The applicable principles in relation to actions for misleading or deceptive representations or conduct under s 18 of the ACL are well-settled. There was no apparent dispute between the parties as to the applicable principles but rather the dispute arose as to the application of those principles to the facts and circumstances of this case.

49    As observed by Wigney J in Australian Olympic Committee, Inc v Telstra Corporation Ltd [2016] FCA 857 at [131] many of the principles concerning misleading and deceptive conduct that are discussed in the authorities comprise common-sense or logical guides to the approach that should be taken in deciding what is, at the end of the day, a question of fact.

50    I note and adopt the helpful “simple” distillation made of the principles, in Australian Olympic Committee, at [132], as relevant to the resolution of this matter which were as follows:

•    Section 18 of the Australian Consumer Law is not limited to misleading and deceptive representations. The question is whether the respondent’s conduct, which may include acts, omissions, statements or silence, is misleading or likely to mislead or deceive: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at 655 [49] (per French CJ, Crennan, Bell and Keane JJ).

•    Conduct is misleading or deceptive if it has a tendency to lead a person into error, or to believe what is in fact false. Conduct is likely to mislead or deceive if there is a real or not remote chance or possibility that it will have that effect: Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 87-88. It is insufficient for the impugned conduct to only cause confusion or wonderment: Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at 87 [106] citing the judgment of a majority of the Full Court in Taco Company of Australia Inc v Taco Bell Pty Ltd [1982] FCA 170; (1982) 42 ALR 177 at 201 (per Deane and Fitzgerald JJ).

•    The question whether conduct is misleading or deceptive is an objective question of fact that is to be determined on the basis of the conduct of the respondent as a whole viewed in the context of all relevant surrounding facts and circumstances. Viewing isolated parts of the conduct of a party “invites error”: Butcher v Lachlan Elder Realty (2004) 218 CLR 592 at 625 [109] (per McHugh J); Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at 341-342 [102] (per Gummow, Hayne, Heydon and Kiefel JJ).

•    The question involves the characterisation of the relevant conduct. Evidence that persons have in fact been misled or deceived by the conduct is not an essential element, however, it can in some cases be relevant and material: Parkdale Custom Built Furniture v Puxu Pty Ltd (1982) 149 CLR 191 at 198 (per Gibbs CJ).

•    The tendency of the conduct or representation to mislead or deceive is to be considered or tested against the ordinary or reasonable members of the class to whom the representation was made or the conduct directed. The question is whether a substantial, or at least a reasonably significant, number of that class is likely to be misled or deceived: see Optical 88 Ltd v Optical 88 Pty Ltd (No 2) [2010] FCA 1380 at [336]-[342]. The focus on ordinary or reasonable members of the relevant class of consumers means, in effect, that possible extreme, unreasonable or illogical reactions can be put to one side.

•    It is not necessary to prove that the respondent intended to mislead or deceive, however evidence of such an intention may constitute evidence that the conduct was likely to succeed in misleading or deceiving, and may make a finding of contravention more likely: Yorke v Lucas (1985) 158 CLR 661 at 666 (per Mason ACJ, Wilson, Deane and Dawson JJ).

…

•    Where the conduct or representation is in the form of words, it would be wrong to fix on some words and ignore others which may provide relevant context and give meaning to the impugned words. It is necessary to have regard to the whole document: Butcher at 638-639 [152] (per McHugh J).

•    In assessing or characterising the relevant conduct or representation, it is necessary to have regard to any relevant disclaimer. The substance, effect and prominence of the disclaimer must be considered in the context of the conduct or representation as a whole: Australian Competition and Consumer Commission v Telstra Corporation [2007] FCA 1904; (2007) 244 ALR 470 at 494 [116] citing the judgment of the Full Court in Keen Mar Corp Pty Ltd v Labrador Park Shopping Centre Pty Ltd [1989] FCA 54.

•    The question must ultimately be whether any disclaimer communicates information in such a way or in such a manner that the effect of any otherwise misleading conduct or representation is reversed or erased: Butcher at 638-639 [152] (per McHugh J). A disclaimer in a document or on a website may be more effective than one on, for example, a television advertisement as the latter is likely to be more transient, ephemeral or less noticeable: TPG Internet at 654 [47] (per French CJ, Crennan, Bell and Keane JJ).

•    There may be some circumstances where an express disclaimer inconsistent with the message otherwise conveyed will not prevent the conduct or representation from being misleading or deceptive, or might even reinforce that message: Telstra at [114]. Each case must be considered having regard to its own facts and circumstances.

51    HRI emphasised that, in the context of commercial negotiations between parties where there are conflicting interests, there is no obligation of disclosure by parties who are sophisticated in nature (and where there is no great disparity of bargaining power between them and they are represented by lawyers), which was the case here.

52    It is instructive to refer to the observations made by French CJ and Kiefel JJ in Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited [2010] HCA 31; 241 CLR 357 at [20]–[22], regarding what may be taken into account in the context of commercial dealings:

20    In commercial dealings between individuals or individual entities, characterisation of conduct will be undertaken by reference to its circumstances and context. Silence may be a circumstance to be considered. The knowledge of the person to whom the conduct is directed may be relevant. Also relevant, as in the present case, may be the existence of common assumptions and practices established between the parties or prevailing in the particular profession, trade or industry in which they carry on business. The judgment which looks to a reasonable expectation of disclosure as an aid to characterising non-disclosure as misleading or deceptive is objective. It is a practical approach to the application of the prohibition in s 52.

21    To invoke the existence of a reasonable expectation that if a fact exists it will be disclosed is to do no more than direct attention to the effect or likely effect of non-disclosure unmediated by antecedent erroneous assumptions or beliefs or high moral expectations held by one person of another which exceed the requirements of the general law and the prohibition imposed by the statute. In that connection, Robson A-JA in the Court of Appeal spoke of s 52 as making parties “strictly responsible to ensure they did not mislead or deceive their customer or trading partners”. Such language, while no doubt intended to distinguish the necessary elements of misleading or deceptive conduct from those of torts such as deceit, negligence and passing off, may take on a life of its own. It may lead to the imposition of a requirement to volunteer information which travels beyond the statutory duty “to act in a way which does not mislead or deceive”. Cicero, in his famous essay On Duties, seems to have contemplated such a standard when he wrote:

Holding things back does not always amount to concealment; but it does when you want people, for your own profit, to be kept in the dark about something which you know and would be useful for them to know.

It would no doubt be regarded as an unrealistic expectation, inconsistent with the protection of that “superior smartness in dealing” of which Barton J wrote in W Scott, Fell & Co Ltd v Lloyd, that people who hold things back for their own profit are to be regarded as engaging in misleading or deceptive conduct. As Burchett J observed in Poseidon Ltd v Adelaide Petroleum NL, s 52 does not strike at the traditional secretiveness and obliquity of the bargaining process. But his Honour went on to remark that the bargaining process is not to be seen as a licence to deceive, and gave the example of a bargainer who had no intention of contracting on the terms discussed and whose silence was to achieve some undisclosed and ulterior purpose harmful to a competitor.

22    However, as a general proposition, s 52 does not require a party to commercial negotiations to volunteer information which will be of assistance to the decision-making of the other party. A fortiori it does not impose on a party an obligation to volunteer information in order to avoid the consequences of the careless disregard, for its own interests, of another party of equal bargaining power and competence. Yet that appears to have been, in practical effect, the character of the obligation said to have rested upon Miller in this case.

(Footnotes omitted).

53    Accordingly, where commercial parties are engaged in commercial negotiations, being parties which are sophisticated, legally represented and have conflicting interests, no obligation of disclosure arises absent any positive inducement. As submitted by HRI, the mere fact that parties are negotiating in a commercial context does not require any party to reveal their hand or positively provide information, which, were the other side labouring under some misapprehension, justified or otherwise.

Whether the alleged representations were made (issue 1)

54    The question to be determined is whether HRI, by its conduct, represented to Professor Jackson that his employment contract would be extended for five years, and that HRI would finalise and enter into a collaboration agreement with ThromBio or HRI’s conduct, otherwise had an objective tendency to lead Professor Jackson into error about these matters.

55    Professor Jackson submits that each of the representations was relevantly misleading or deceptive because, in all the circumstances, they induced or were capable of inducing or otherwise had a tendency to lead him into error or gave rise to him having a reasonable expectation that, should the represented facts change, that would be disclosed to him; and the representations did, in fact, lead him into error because, in reliance on those representations, Professor Jackson did not immediately attempt entering into a new employment contract and pursue alternate opportunities.

Did HRI engage in the alleged conduct said to give rise to the representations?

56    As can be seen from the description of Professor Jackson’s pleaded case, it is imprecise in what the alleged “conduct” said to give rise to the allegations were. It is in part based on the content of conversations as between Professor Jackson and Professor Coats and Mr McGauran and in part based on other conduct.

57    To set the scene giving rise to the alleged misleading and deceptive conduct, it is worth noting the following undisputed matters.

58    Professor Jackson’s employment with HRI commenced 1 October 2013 and continued through to 30 June 2024. Professor Jackson held a number of positions: From on or about 1 October 2013 to 30 June 2021 as HRI’s Scientific Director, then, from 1 July 2021 until 30 June 2024, as HRI’s Director of CV Research and the head of its TRG. The terms of Professor Jackson’s employment were governed by a series of successive maximum term contracts of employment:

(a)    a contract dated 19 December 2013 for a maximum term commencing from 1 October 2013 until 31 December 2019;

(b)    a contract for a maximum term dated 20 December 2019 commencing 1 January 2020 until 31 December 2020;

(c)    a contract dated 24 December 2020 for a maximum term commencing from 1 January 2021 to 30 June 2021; and

(d)    a contract dated 1 July 2021 for a maximum term commencing from 1 July 2021 until 30 June 2024.

59    Relevantly, the last, and applicable employment contract, contained a clause, which had the potential to shorten the life of its term earlier than 30 June 2024. Clause 11.1(d) provided that the employment contract could be terminated by either party after 31 December 2021 by giving 4 weeks’ notice if the collaboration agreement was not entered into by 1 December 2021. The deadline to that clause had been extended a number of times. Soon after Mr McGauran became involved in the negotiations, it was agreed that HRI would waive the 4 weeks’ termination provision.

The alleged conduct

60    The relevant conduct pleaded to give rise to these representations (identified as being ASOC [17]–[25]), included the surrounding circumstances:

Initial discussions

61    Professor Jackson and Mr McGauran first met in June 2022 at a meeting with Professor Ben Freedman (HRI’s Director of External Affairs). There was no material dispute between them as to the substance of the conversation. It may be accepted, consistent with Professor Jackson’s pleaded case and as deposed by Mr McGauran, that Mr McGauran said that he wanted to get a new employment contract for Professor Jackson and the collaboration agreement with ThromBio sorted out. To the extent that it is relevant, and where it did not ultimately seem to loom large in Professor Jackson’s case, I find that Mr McGauran said to Professor Jackson that he had authority to engage with him regarding his current and future employment. Professor Jackson gave evidence that during the meeting, he communicated to Mr McGauran his feelings of being aggrieved by the former Chair’s behaviour in removing him as Scientific Director. It was apparent that Professor Jackson was not happy about having been denied what he perceived as an adequate opportunity to negotiate his 2021 Contract.

August to October 2022 negotiations of the collaboration agreement and the employment contract

62    Mr Bush was responsible for driving the process for the negotiation of the collaboration agreement—that was what he was employed to do. It was the evidence of Professor Jackson, Mr McGauran and Professor Coats, that as at August 2022, they understood that the key terms of the draft collaboration agreement had been largely agreed (and, with respect to Mr McGauran and Professor Coats, prior to their involvement). The evidence revealed that both Mr McGauran and Professor Coats had misgivings about the terms of this agreement as early as August 2022. In a text exchange, on 18 August 2022, Mr McGauran shared a text from Professor Jackson with Professor Coats. Professor Jackson asserted that he was happy to hear Professor Coat’s views about the terms of the agreement, but they would not be renegotiating at this stage (given effectively the deal was done) and it would tip Mr Bush over the edge and damage the ThromBio–HRI relationship. In response to Mr McGauran, Professor Coats says “Let’s see” and in response Mr McGauran refers to the view of their “legal advisor” that the agreement reached in principle was “severely detrimental to [HRI’s] interest.

63    It was Mr McGauran’s evidence, which I accept, that from August 2022, until the meetings in November and December 2022, he was involved in “relationship building” with Professor Jackson. It was his evidence that he “deferred” to Professor Coats, and as Chairman it was not appropriate for him to negotiate directly. It was his evidence that he wanted Professor Coats (not himself) to negotiate, but that Professor Jackson was trying to draw him in in late 2022. I find that this was what was happening. It was evident that Mr McGauran saw Professor Jackson and his work as an enormous asset for HRI and was keen to keep him. It was evident that Mr McGauran was the main proponent, at HRI, for Professor Jackson. It was also evident from the evidence that Professor Coats did not have the same level of enthusiasm. Professor Coats was interested in securing his own tenure and his own position (above that of Professor Jackson). He did this during this relevant period: on 21 November 2022, the Board resolved to amend Professor Coats’ title from Interim Scientific Director to Scientific Director and CEO. Professor Coats gave oral evidence that he could not remember whether he received a new contract, but that, the Board’s resolution changed his title, he was given more responsibilities, but there was no change in his working conditions or pay. On 15 June 2023, Professor Coats’ employment was then made full-time and extended for a further 12-month period. It appears that the HRI Board was already thinking Professor Coats was a longer-term proposition. (which was not known by Professor Jackson).

11 August discussion

64    On 11 August 2022, Professor Jackson deposed that he had a telephone conversation with Mr McGauran, in which Mr McGauran had said words to the effect of “I apologise for the delay, but I want to get you a new five year contract sorted as soon as possible. I am personally going to take control of the situation and hopefully that will help finalise negotiations very soon”. Against this, Mr McGauran did not recall having a conversation on this date, believed Professor Jackson may have been referring to another conversation the following day, but denied saying “in any telephone conversation in August 2022” that he wanted to get a new five-year contract sorted as soon as possible. He maintained this denial under cross-examination.

65    I do not accept Mr McGauran’s evidence entirely in this regard. It was clear from what Mr McGauran had said in June that he wanted to get a new employment contract for Professor Jackson and the collaboration agreement with ThromBio sorted out as soon as possible. This position remained throughout 2022. It is my view that it is likely that he would have said that he wanted to get Professor Jackson’s contract sorted out as soon as possible and he was taking control of the situation. However, I do not accept that Professor Jackson has established that Mr McGauran described the contract as a “new five year contract”. None of the contemporaneous documents reveal that there was discussion at that stage as between Mr McGauran, Professor Coats and Professor Jackson about the length of the term of the contract. When questioned about his recollection that a five year term was discussed, Professor Jackson said that he had always been on five year contracts and that he explained that to Mr McGauran and he was happy with that. Professor Jackson’s evidence in chief about this representation does not reveal that, within the context of Professor Jackson explaining that he was always on five year contracts, Mr McGauran said he was happy with that (and in effect made the representation he is alleging). It is my view that Professor Jackson believed this was said because that was the contractual term he had always been on rather than because it was in fact said.

66    I accept that the proposed collaboration agreement between HRI and ThromBio, as provided to Professor Jackson, in October 2022, proposed a five year term. However, as at August 2022, the evidence reveals that while Mr McGauran was expressing positive sentiments, he was not across the detail at all of either the proposed collaboration agreement (which had not been drafted by Corrs) nor of a new employment contract. Further, this view is consistent with Mr McGauran’s reporting back to the Board in an email on 13 August 2022. In that email, the focus is the collaboration agreement and the issue of extending then current Professor Jackson’s contract, to negotiate it.

67    On 19 August 2022, there were a series of text message exchanges between Professor Jackson and Mr McGauran regarding the negotiation of the collaboration agreement and the frustration Professor Jackson and Mr Bush were experiencing because of the failure to progress the agreement. Mr McGauran responded that this was a “complex negotiation” of which Professor Coats was “the key to settling” it and that he needed time to meet with the Board’s commercialisation committee. Consistent with Mr McGauran’s email to the Board, of 13 August 2022, the focus was the collaboration agreement.

68    However, while HRI’s focus was the collaboration agreement, it was clear that Professor Jackson was increasingly seeking to intertwine in the negotiations, the negotiation of his employment contract. This is apparent from the conversation between Professor Jackson and Mr McGauran on 11 August 2022 regarding his employment contract and Professor Jackson’s reference, in his text of 18 August 2022, to “one outstanding issue” that needs resolution.

69    Professor Coats gave evidence about a discussion with Professor Jackson on 19 August 2022 on a Microsoft Teams Call. Professor Jackson disagreed that during the discussion Professor Coats expressed his view that Professor Jackson’s role should be exclusively as a research group leader at HRI in charge of the TRG. Ultimately, reliance was not placed, in closing submission, on this aspect of the discussion by either party. To the extent that Professor Coats gave evidence, under cross-examination, of Professor Jackson giving him “inconsistent” information during this meeting, Professor Coats gave no evidence of what the “inconsistent” information was, either in his evidence in chief or in his oral testimony. Accordingly, it is not apparent what can be gained by HRI of this ambiguous evidence anyway (noting that they did not seek to rely upon it).

70    However, what was telling in this aspect of Professor Coats’ oral testimony, was what he said about the positive emails that were sent between the parties on 22 August 2022.

22 August discussion

71    On 22 August 2022, Professor Jackson wrote to Mr McGauran and Professor Coats, copying in Mr Bush, indicating that he had asked Mr Bush to document the negotiations and to provide them with “constructive feedback” to better understand their challenges in reaching an agreement. Professor Jackson stated that they “remain[ed] committed to getting this agreement finalised ASAP and look forward to further discussions soon”. On the same day, Mr Bush replied that he “echo[’s] Shaun’s point about being committed to a long term and mutually beneficial partnership”. Mr McGauran wrote “This is a welcome expression of commitment” and indicates HRI is in a position to make a decision on the draft collaboration agreement at its next meeting on 19 September. Mr McGauran concluded “you have our goodwill and firm intent to conclude the negotiations in a fair and balanced way which sets us up for a long term future together”. Professor Coats also replied “I support the wish to work on this as quickly as is possible to convert the agreed heads of terms in a formal legal agreement based on the Corrs worked up version.” Professor Jackson then replied that he proposed the next step is for HRI to share with him and Mr Bush the draft agreement from Corrs.

72    Professor Coats denied in evidence, contrary to what he said in his email, that the next step was for HRI to share the Corrs draft collaboration agreement with Professor Jackson. Rather, he said that the email was just him “being nice”. It was his evidence, under cross-examination, and not as contained in his evidence, that despite what he had said in that email, his view, as at 22 August 2022, was that the next step in the negotiation process, was to “sort out the nexus between Shaun accepting his new contract and the collaboration agreement”. When pressed, he stated that he:

…knew that there was a bigger issue. It wasn’t just getting the final agreement, is that [sic] there was no point in getting a final agreement until Professor Jackson agreed his contract because nothing was going anywhere. …I had enough briefing to know that nothing would be finished until the contract was agreed.

73    When asked how this was “being nice”, his response was:

I was being nice and going along with the sense that all we need is this, but I was very hesitant that that was, in fact, the truth. I didn’t want to say “No, Professor Jackson. You’re the obstruction.” I did not want to be so rude.

74    Professor Coats’ evidence continued (when pressed as to whether he had formed a view that Professor Jackson was a problem):

I had already formed a view that something that was very simple had taken over a year and that when I investigated – I wasn’t saying that Professor Jackson was a problem. I’m just saying that Professor Jackson had linked the two things that created a complexity that could only be sorted if both were addressed at the same time.

So when you say were just being nice – or you were being nice, what do you mean by that?— I – I hardly – I had been in the post for a few days. I had not really met Professor Jackson. I didn’t want to accuse him of things by email, text message. You know, I wanted to see if we could work it out. I knew that the issue was not getting a long-form document. The issue was could we agree employment terms with Professor Jackson. I knew that was the issue.

75    Ultimately, Professor Jackson submitted that Professor Coats’ evidence regarding “being nice” demonstrated a penchant to be misleading or untruthful with Professor Jackson and with respect to matters concerning Professor Jackson when it suited him.

76    I find that the evidence revealed that Professor Coats was loathe to confront Professor Jackson and was much more circumspect about the terms of the collaboration agreement and the need for the resolution of the employment contract negotiations than anyone else. It is clear from his communications with Mr McGauran that he was not so starry-eyed.

77    It is my view that, from the beginning, Professor Coats, did want to enter these two contracts, he was being asked to negotiate them, but he wanted them to be on terms (as best they could) that suited what he understood to be in HRI’s interest (and in his interest). I do not accept that he was not a witness of credit or that he was necessarily untruthful in his evidence. But I do accept that he was not forthcoming and up-front with Professor Jackson as to his views. However, regardless of Professor Coats’ view about the importance of the employment contract, the focus of the discussions was the collaboration agreement.

78    On 25 August 2022, Mr McGauran wrote to Mr Bush, copying in Professor Coats and Professor Jackson, stating that he could not give any new information at this time, but to reassure them “that [HRI] are working on progressing and finalizing the Collaboration Agreement as soon as possible” but that a number of issues have been raised internally at HRI and that further time is needed for consideration and Board approval. He stated that he would call once HRI has reached a fully settled position but that they are working on progressing and finalising the agreement as soon as possible. Mr McGauran concluded that he knew this would be “highly unsatisfactory to Mr Bush and Professor Jackson but that together with other directors, [he] must discharge [his] statutory and fiduciary obligations”.

79    Then, on 1 September 2022, Mr McGauran and Professor Jackson exchanged text messages about Mr McGauran being unable to meet Professor Jackson that day. The exchange is given in the following terms:

Mr McGauran:        Hi Shaun. The inevitable happened and I am caught up with Crown today. Anytime tomorrow no matter how early or late suits me as I have no appointments at all. Even if it’s a drink at your neighbourhood pub. All good otherwise, Ashurst will give you comfort on your contract, we have discussions today with Corrs and the $100,000 payment approved and paper work underway. Again, apologises for the short notice. My life isn’t my own at the moment. Thanks.

Professor Jackson:    No problems Peter. Thanks for letting me know. I’m away tomorrow, so we will probably need to catch up next week. Thanks for following on my contract and for sorting out the ongoing funding for ThromBio. One less thing to worry about. Take care Shaun

80    Mr McGauran deposed that the reference to Ashurst was a reference to Ashurst providing confirmation as to the basis upon which Professor Jackson’s employment contract could now be terminated during the term; it had nothing to do with a new employment contract, and, that the $100,000 was a reference to the grant requested by Professor Jackson from the Jackson lab Funds to ThromBio, which had been approved.

81    On 2 September 2022, Ms Dwyer, wrote to Professor Jackson confirming that his employment was subject to a maximum term and would expire on 30 June 2024 unless terminated earlier in accordance with the terms of the agreement (namely by the provision of 6 months’ written notice).

The 12/13 September 2022 meeting between Mr McGauran and Professor Jackson

82    There was no dispute between the parties that Mr McGauran met with Professor Jackson (though the date is disputed) on either 12 or 13 September 2022 (where nothing material arises from this dispute). Mr McGauran accepted that they discussed in general terms that they both wanted to get a new employment contract agreed and get the collaboration agreement finalised. To the extent that anything turns on the difference, from the way that Mr McGauran expressed himself in writing and when giving his evidence, I am persuaded that he reassured Professor Jackson that he was committed to helping him finalise a new contract and resolve the remaining issues related to the collaboration agreement. Mr McGauran, in effect, accepted the same under cross-examination.

83    On 14 September 2022, Professor Jackson wrote to Mr McGauran in the following terms:

I need to get a clearer understanding on what you think is possible, what Andrew is looking for, and how we develop a structure that works and delivers on shared objectives.

The Balmoral dinner (29 September 2022)

84    On 29 September 2022, Professor Jackson attended a dinner at the Bathers Pavilion restaurant with Mr McGauran and Professor Coats. During the dinner, it was accepted that the attendees discussed, amongst other things, the collaboration agreement and the extension of Professor Jackson’s employment.

85    It was Professor Jackson’s evidence that both Professor Coats and Mr McGauran were keen to make sure that HRI had the strongest scientific standing during the merger negotiations and saw his reappointment for a further five years as a strong endorsement of Professor Jackson’s value. Professor Jackson gave this impressionistic understanding of what was said rather than in direct speech. Professor Jackson thereafter deposed that during the conversation they discussed contracts for himself, other key members of TRG, and Professor Coats said words to Professor Jackson to the effect of “I would like to have the contracts finalised by Christmas”.

86    Under cross-examination, Professor Jackson accepted, his understanding was that, as between himself, Professor Coats and Mr McGauran, the parties were to negotiate in good faith to reach this aspirational outcome but denied that the substance of the discussion was aspirational and was adamant that they represented to him at the dinner that he would be employed by HRI under a new contract.

87    By contrast, Professor Coats deposed, that during the dinner, there was discussion regarding renewing Professor Jackson’s contract until 2027, being a three-year period following the expiration of his current employment contract, terminating on 30 June 2024. Professor Coats denied discussing a renewal of Professor Jackson’s contract for a further five year period. Professor Coats also denied discussing the employment contracts of other key members of the TRG during the dinner or saying words to the effect of that he would like to have the contracts “finalised by Christmas”. During the dinner, the only discussion was Professor Jackson’s employment contract and intention to have it finalised by Christmas.

88    Under cross-examination, Professor Coats explained that the discussion at the dinner was predominately focused on Professor Jackson’s employment contract. Professor Coats gave evidence that he saw Professor Jackson’s contract as a three year extension of his existing contract. He gave evidence that he recalled Professor Jackson telling him he wanted a dual reporting line to maintain continuity as far as his employment was concerned.

89    Mr McGauran also deposed to having attended the dinner. Mr McGauran said that, they discussed at the dinner the HRI and Centenary Institute merger, that Professor Coats did not see a permanent role for himself in the merged entity, and that Mr McGauran would likely remain on the new merged entity Board but not as Chairman. Also discussed was Professor Jackson’s desire to get a new employment contract in for himself, which Professor Coats said he would like to have finalised by Christmas. Mr McGauran also recalled that both he and Professor Coats acknowledged that Professor Jackson was important to HRI’s reputation. Like Professor Coats, Mr McGauran denied that, they discussed contracts for other key members of the Thrombosis group with Professor Jackson, and denied Professor Coats saying he wanted to have “the contracts” finalised by Christmas; also, that Professor Coats or himself said that Professor Jackson’s reappointment for a further five years was linked to the merger discussions; and, that HRI would reappoint him for a further five year period as a strong endorsement of his value and importance to HRI.

90    Under cross-examination, Mr McGauran accepted that he had a discussion with Professor Jackson about the opportunities and challenges of merging the HRI with the Centenary Institute, a keenness to negotiate a new contract with Professor Jackson, to reset the relationship with the HRI Board. He also recalled that Professor Coats expressed a view he did not see a permanent role for himself in the newly merged HRI Centenary Institute, and that he would remain a board member of the new Institute but not as Chair. He did not accept that discussed was a five year contract nor contracts for other key members of the TRG.

91    Following the dinner, Professor Jackson emailed Mr McGauran and Professor Coats, stating that “No doubt, there are some tricky things to negotiate through to get a win-win for us all, not least what my job description looks like, now, and post-Andrew’s tenure at the HRI.” In addition, Professor Jackson stated that “ThromBio … adds a bit more spice” to the “tricky things to negotiate through”.

92    I accept the evidence of Mr McGauran and Professor Coats over that of Professor Jackson regarding the two material disputed aspects of the conversation at the dinner. As to the first disputed matter, I am not satisfied that they discussed his reappointment for a five year term. I do accept the evidence of Mr McGauran that Professor Coats did indicate that he would like to have Professor Jackson’s contract renewed by Christmas. I do not accept Professor Jackson’s recollection on the basis there was no discussion, with any degree of granularity as to the terms of his contract, until November 2022. It is clear from the contemporaneous documents (and, indeed, other submissions made on Professor Jackson’s behalf) that the discussions at this stage were at a high level but also, given Professor Coats’ misgivings, I do not accept, despite him wanting “to be nice”, that he would have a broad assurance about a specific term at this stage. I accept his evidence that he had only recently been employed and was just getting up to speed on the issue. Also, it is clear that he was a shrewd negotiator and slowing things down until he had worked out the lie of the land.

93    Further, on the second disputed aspect, I do not accept the likelihood of Professor Coats expressing a particular desire regarding the finalisation of the contracts of the other key members. Whilst Professor Jackson mentions them in his email the following day, no confirmation of the desire for renewal is extended to them by Professor Coats. Again, the hesitancy in Professor Coats (and the way he communicated) goes against this.

94    The same is confirmed by the email of Professor Jackson the following day, 30 September 2022. No mention is made by him of the contractual term. Professor Coats replied that he is “happy to support peter as he works with you on your contract, which we all want renewed”.

95    Under cross-examination, Professor Jackson was pressed on the contents of these emails. It was put to him that the email suggested an aspiration to achieve renewal—a “want” to renew. To the extent that this was a matter for Professor Jackson to accept, he appeared to accept this, but said, in the context of the follow up email stating “we would like it finalised”, indicated that they were to get it finalised by Christmas. It was repeatedly put to him that the tenor of the discussion and follow up emails were conveying mutual aspiration as opposed to a guarantee of finalisation by Christmas. Professor Jackson appeared to accept this, but in the context of mutual aspiration on those terms in dispute, and that otherwise, the contract would be finalised by the end of the year.

96    Regardless of his view, the evidence does no more than establish a desire to achieve agreement. I do not accept that the evidence establishes, by conduct, that it was represented to him, either that his contract would be extended by a period of five years or that HRI would finalise and enter into a collaboration agreement. The evidence was, up until this point, that HRI wanted to renew his contract and to enter a collaboration agreement. On Professor Jackson’s pleaded case, the height of the allegation, was that Professor Coats said that he “would like” to have the contracts finalised by Christmas. Even if I am wrong, and I accepted Professor Jackson’s evidence, at its highest regarding the Balmoral discussion, I do not accept that the evidence up until this point establishes the claimed representations (though, I accept that ultimately, I am required to consider the entirety of the pleaded conduct as a whole).

6 October email

97    On 6 October 2022, Mr McGauran wrote to Professor Jackson, copying in Professor Coats and Mr Bush, stating that HRI was in the final stages of “settling” the collaboration agreement and it would be shared within a fortnight (ASOC [17G]).

98    As a result of a suggestion by Professor Jackson, weekly catch ups commenced, from on or about 11 October 2022, as between Mr Bush and Professor Coats.

The delay in providing the Corrs draft of the collaboration agreement

99    On 26 October 2022, Professor Jackson sent a text message to Mr McGauran, in which he conveyed to Mr McGauran what he perceived to be an important issue of the “sensitivity around good Governance around the merger discussions.” The exchange was in the following terms:

Professor Jackson:    Hi Peter,

Just letting you know that I’ll dial in to our midday meeting today. Unfortunately, I’m still recovering from surgery and need to take it a little easier, so I’d prefer to not attend in person.

One important issue I wanted to bring to your attention is the sensitivity around good Governance around the merger discussions. I think it would be preferable that the scientists can talk openly and not be constrained by the presence of conflicted Governors. As you know there is currently a lot of sensitivity between HRI group leaders, USyd and RPA. I think many of the scientists would prefer to have frank discussions with the independent Governors, independent of USyd or Hospital-aligned Governors.

I look forward to constructive discussions toddy.

All the best,

Shaun

Mr McGauran:        Hi Shaun. I’m not surprised that you are still on the mend. You’re doing well to even be up and mobile. I take your point on the issue of aligned directors. I’ll take advice on the extent to which I can exclude them. USYD is acting in a reprehensibly [sic] in regard to Freda, Anna and John. Appallingly so. Your contribution was most welcome today. You were right in all aspects, except the 2 years. I’ll do it in 1! Best, Peter

100    On 27 October 2022, Professor Coats emailed Professor Jackson, Mr Bush and Dr Gainsford attaching the “proposed Affiliation [collaboration] agreement and shareholders deed”. Professor Coats wrote “perhaps we could discuss next Tuesday, cheers, Andrew”.

101    Both Mr Bush and Professor Jackson gave evidence of recalling receipt of the draft collaboration agreement on 27 October 2022 by email. Professor Jackson recalled the key terms of the collaboration agreement. It was his evidence that a very significant issue was apparent for Mr Bush and ThromBio, namely the funding of his lab, and that the “long form of the agreement” did not “reflect what was discussed with Rob McInnes and Stephen Hollings”.

102    It was Professor Coats’ evidence that he continued to have weekly meetings following this email, where Mr Bush provided Professor Coats with feedback in relation to the agreement.

Events prior to the 21 November 2022 board meeting

103    What is curious about the weekly meetings as between Professor Coats and Mr Bush, is that there are no contemporaneous records of what was discussed. However, there was no real dispute in this regard. Mr Bush gave evidence that he did not recall whether he raised in those meetings ambiguous parts of the collaboration agreement which caused him concern. Professor Jackson recalled those weekly meetings partly centred around the STARS trial, but also the collaboration agreement. Although, it was Professor Jackson’s evidence that he did not go to some of those meetings, so that Mr Bush could have a full, frank discussion with Professor Coats and not feel that he was “complicating it”. Professor Coats gave evidence that the “more important thing” was the conduct of the STARS trial, as opposed to focusing on the partnership with ThromBio, and the collaboration agreement. However, Professor Coats gave evidence that during those weekly meetings, Mr Bush provided feedback in relation to the collaboration agreement, and there was discussion on terms.

104    On 11 November 2022, Professor Jackson emailed Professor Coats and Mr Bush, copying in Mr McGauran. In his email, Professor Jackson thanked Professor Coats and Mr Bush for their collective input the previous Tuesday about finalising various agreements “to give comfort to HRI, ThromBio and my lab”. Professor Jackson shared his view that he felt their discussions were “progressing well”, and there was “good alignment” on what they sought to achieve. He noted that they had agreed a deadline by the end of November 2022, and he was happy to meet more frequently to meet that deadline. He expressed the view that the next step was to agree on major outstanding issues and address these the following Tuesday. Professor Jackson asked in that email that Professor Coats provide him in dot point form, a list of points “collectively agreed on my role at HRI moving forward on my authority, budget, reporting lines, etc.”.

105    It was Mr McGauran’s evidence that despite receiving the email, he was not present at that previous meeting referred to and accepted that he no longer had much involvement insofar as the employment contract discussions were concerned.

106    Professor Coats did not share Professor Jackson’s view about there having been good progress and good alignment.

107    On 17 November 2022, there was a text exchange between Professor Jackson and Mr McGauran where Professor Jackson stated:

…

You and I need to have a face-to-face meeting first to make sure we have alignment in our thinking. If not, there is little chance we will come to an agreement over my future role and the commercialisation. I need (and must have) a transparent and trusting relationship with the Chair. It’s the only way we will move this forward constructively.

As I explained to Andrew on Tues, I have been totally honest and sincere in what information I have shared with you both. I can see that I have been telling you things that you may not want to hear, but in the end, it’s better we have a clear understanding of each other’s position on some very tricky issues.

Let me know when we can meet?

108    This text message is telling in a number of respects. It reveals that Professor Jackson wanted to get the Chair, Mr McGauran, on board. This appeared to be so, because of the apparent divide between himself and Professor Coats and also where he could see, based on the (then) negotiations, that they were not there yet, indeed, a deal on both agreements might not even get there.

109    Professor Coats provided the requested “dot point” list by email on 18 November 2022, copying in Mr McGauran. That email was in the following terms:

Dear Shaun, thank you for the discussions on Tuesday after our regular Thrombio call. You will remember I had asked you to consider 4 headline items {title, salary, responsibility, support budget) so we could work on a renewed contract for you and you stated you preferred me to look at you old contracts and revert to you, having done that. I have done that and discussed the situation with Peter. We both desire you to stay in a senior position at HRI and to be as proud of working with HRI as we are of having you. Your contracts were initially as Scientific Director and thereafter as Director of CV Research, and you have moved from full-time to 0.8.

I attach a summary of your contracts at HRI (if there are any errors please do let us know) and separately our proposed lead terms for an extended and renewed contract.

As I discussed on Tuesday there are reasons why we would like a revised title for your role which is intended to be as good as the old title, we can be flexible on this matter if you have preferred wording. The matters that are not so flexible are the level of remuneration for 0.8 in this role and the formal reporting lines of the post.

We have a meeting scheduled next Wednesday for Peter and I to meet you.

Have a great week-end and I hope we can settle this matter soon so we can work together on a great future for HRI.

With my best wishes,

Andrew

110    The attachment included the previous (and proposed) term, titles, reporting lines, location and salary. Upon his reverting, it appeared that Professor Coats was stating that the proposed:

(a)    term, was from 2023–2027 (“31/12/2027, within 6 months of the end date parties will enter into negotiations for a new contract, with no obligation on either party to agree such a new agreement”);

(b)    title, was “Director of HRI Research at CPC”, but where the contract is only valid if “contemporaneous with signed Collaboration Agreement”;

(c)    reporting line, was to “HRI CEO and CPC-Academic Director”;

(d)    location, was at the CPC;

(e)    FTE, was “0.8 (28/35 hours)”;

(f)    gross salary of $603,197; and

(g)    research group supports to be “as per HRI regulations and specific support for SS [Associate Professor Simone Schoenwaelder], YY [Dr Yuping Yuan] and IA [Ms Imala Alwis] as stated in existing contract”.

111    With respect to this evidence, Professor Coats gave oral evidence to the following effect. He understood that remuneration may have been in issue, although he accepted that Professor Jackson had not requested a higher figure. Professor Coats believed that title was a major issue for Professor Jackson. Professor Coats accepted that, by the terms contained in the spreadsheet, he was proposing for Professor Jackson to hold the title of Director of HRI Research at CPC for a term until 31 December 2027, and agreed he had, by that time, modified his position, and was content for an extension of his contract for a period of five years, provided it was signed by the end of the year. Professor Coats agreed he did not say anywhere in his proposal that it needed to be signed by the end of the year.

112    I do not accept that the fact of the inclusion in this document (the first documentary evidence of a five year term), meant that it ought be accepted that Mr McGauran had “promised” a five year term previously, contrary to Professor Jackson’s closing submission. It is a proposition put by Professor Coats to Mr McGauran and then from Professor Coats to Professor Jackson.

113    Prior to sending this email to Professor Jackson, Professor Coats wrote to Mr McGauran, expressing his view that Professor Jackson continued to “avoid stating his requirements” and his belief that “his expectations are unrealistic”. Professor Coats’ email to Mr McGauran attached the summary of past key terms and what he proposed and said:

… They are at the top end of comparable positions within Australia for an institute Director role and therefore above any role that is below director level. I do not believe he has a serious offer from anywhere else and I absolutely believe he will never get the level of support elsewhere for his commercial interests that he gets from us, so is is on a very good wicket at HRI, which he will not put at risk, so I believe we should offer something but not too much – ie no more [and] no less than his present contract, and stick with it, no matter how much he blusters and huffs and puffs.

…

Negotiation points for us:

1.    It is very generous

2.    He is being asked only to work 28 hours per week

3.    Thrombio is allowed to operate within HRI supported areas

4.    He is being paid the same (or more) than in prior roles where he was full-time with more responsibilities

…

I think if you get a chance to have a quick look at these and we speak tonight you will be better armed for your 1:1 with Shaun on Monday. He will try to negotiate with you behind my back.

114    In response, Mr McGauran, amongst other things said:

I know what Shaun is up to and will support you to the hilt because you are entirely right. Importantly, I have told him that I can’t carry the board on any contract renewal which doesn’t have your approval.

I suspect that he is beginning to fear that a merged institute would be of such a scale as to not feel the impact of him leaving as little HRI would.

115    On 20 November 2022, Professor Jackson responded to Professor Coats’ email by letter. In this letter, critically Professor Jackson stated that he does not want his current contractual arrangements to roll over for a further period. Rather, he stated that he was seeking to change some material terms in the contract because he did not want “more of the same”. In particular, he expressed the view that:

My current job has limited authority, minimal operational and scientific support, and no designated budget to build on all the positive outcomes that I have initiated and developed at HRI and the CPC over the last 7 years.

116    Professor Coats gave evidence, which I accept, that, as at 20 November 2022, he understood that Professor Jackson was not interested in a contract extension. Professor Coats gave evidence that, whilst Professor Jackson said in this letter that he was being courted by some of the most prestigious medical research institutes in Australia, Professor Coats doubted whether this was true.

117    Professor Jackson did not clearly spell out in this letter what his position was regarding what he envisaged to be the new terms of his contract (responding to each of the proposals that Professor Coats made) but stated, amongst other things:

I have provided you with my thoughts on what an appropriate role would look lie. I need to have authority at the CPC, a budget, enhanced operational and scientific support staff (likely a mix of dedicated and shared support across CPC and Eliza St). Currently, few of these things are in place and this is having a major negative impact on the CPC scientists. The head count for these support positions will be relatively small, however given the strategic importance of the CPC to the future growth and success of HRI, this deficiency needs to be resolved soon. There are obviously lots of details to discuss and work through together, but leaving the CPC in limbo, is not in my view, a viable option.

Reporting lines are critical and given there will be changes over the coming 12 months, in terms of scientific leadership and a possible merger, we need to work out how to maintain continuity and certainty beyond the next 12 months. Given that Andrew’s role is interim, I will need a dual reporting line to both Andrew and Peter. …

118    Professor Coats accepted that, Professor Jackson was asking for a dual reporting line to both himself and Mr McGauran and this was a term Professor Jackson had raised at the Balmoral dinner. Professor Coats accepted that, up until that point, Professor Jackson had understood that Professor Coats was only appointed interim Scientific Director, and had not said anything to persuade him otherwise. Curiously, despite the Board resolving on 21 November 2022 to amend Professor Coats’ title to omit the words “interim”, no attempt was made by Professor Coats to disabuse Professor Jackson of his understanding as to the limit of Professor Coats’ tenure. It was apparent however, that Professor Coats had his own ambitions. They were forming over this period. His ambitions did intersect with those of Professor Jackson.

119    As at this time, it was reported to the Board by Mr McGauran and Professor Coats that: (a) the collaboration agreement had not “yet been finalised, with Professor Jackson not having provided a response to the draft for six weeks”; (b) that Professor Jackson had concerns around his position, title and responsibility; and (c) that Professor Jackson continued “to draw funds from his group discretionary account to cover Ardena invoices for the costs of drug manufacturing”. I accept that it was inaccurate to suggest that Professor Jackson had failed to provide a response. The evidence was that there were weekly meetings between Mr Bush and Professor Coats and others regarding the collaboration agreement.

120    Professor Coats deposed in his affidavit to telling the Board that it was his view Professor Jackson was “intentionally ‘stringing out’ negotiations for the Collaboration Agreement to secure better terms for his contract renewal”. I accept that he told the Board this. Despite, apparent urging by Professor Jackson, I do not consider that I need to determine whether this was deceptive. What the evidence reveals is that Professor Coats, did not give the Board a complete account of what was happening. Professor Coats had been appointed, amongst other things, to sort out this contractual negotiation. It is my view that he wanted to paint his own efforts in this regard to the Board in the light that reflected best on him. However, at the same time, I accept that it was Professor Coats’ view that Professor Jackson was stringing out the negotiations of the collaboration agreement so as to secure better terms for his own employment contract. It also revealed Professor Coats’ view in 2022 of Professor Jackson. This tells against aspects of Professor Jackson’s evidence and case theory as to what occurred in 2023 of there being an alleged about turn after Professor Coats is alleged to have become aware of a possible disclosure.

23 November 2022 employment contract meeting

121    The meeting on 23 November 2022, was the first time there was any real engagement between Professor Coats, Mr McGauran and Professor Jackson about the possible terms of Professor Jackson’s employment contract. Curiously, Professor Jackson did not even refer to it in his first affidavit and says almost nothing about it in his evidence in reply.

122    The recollections of Professor Coats and Mr McGauran as to the tenor and degree of agreement reached at this meeting differ greatly from Professor Jackson. This impressionistic disjunct continues throughout the evidence, it follows through the negotiations from August 2022 to February 2023. I do not accept that it comes from the fact that the witnesses are being untruthful as to their recollections on either side. Rather, it stems from the fact that Mr McGauran was reassuring and positive in his dealings with Professor Jackson—He wanted a deal to be reached on both agreements. Professor Coats was more guarded and whilst he wanted a deal, he was not prepared to negotiate a position beyond what was necessary. What was clear from his email to Mr McGauran on 18 November 2022, was that he had determined that Professor Jackson was on a very good wicket, and they should hold firm on what they wanted from there on in. This was never communicated to Professor Jackson in these stark terms. I do not accept that absence of frankness arose from any intention to mislead (no submission was made to this effect nor could be) nor that it had this effect. Rather, it was part-and-parcel of the negotiation. I find that all parties at this stage did want to reach agreement (but, on favourable terms as each of them saw them).

123    Whilst neither party sought any specific findings regarding what occurred at the meeting on 23 November 2022 (nor referred to it in their closing submissions), it is a good illustration of the very different perspectives each of the parties held at this time. It was Professor Coats’ evidence that, at this meeting, Professor Jackson spent much of the time talking, and he firmly told Mr McGauran and Professor Coats that he was essential to the future of HRI and that only he could provide the scientific leadership that was needed. It was Professor Coats’ recollection that Professor Jackson said that Professor Coats was only an interim Scientific Director and did not have the basic science experience he had and, as a result, could only be a short-term option for HRI. In reply, Professor Coats said he told Professor Jackson that he disagreed with him; that there was a need for scientific leadership at HRI and HRI would seek to find new senior recruits to provide this; and that HRI was looking to recruit a new Scientific Director who would be responsible for ongoing scientific leadership at HRI. He told Professor Jackson that HRI wanted him to focus exclusively on leading the TRG. According to Professor Coats, there was very little agreement achieved at this meeting. The meeting concluded with Professor Coats asking Professor Jackson to send a list only setting out his essential requests in relation to his new employment contract.

124    Professor Jackson’s recollection was that Professor Coats did not indicate that he wanted Professor Jackson to focus exclusively on the TRG and he denied that there was very little agreement between them. He deposed, without specificity, that “the majority of the contract terms presented to [him] by Professor Coats on 18 November 2022 were acceptable” and he was confident that “with further negotiations, flexibility and goodwill that the remaining outstanding issues would be resolved”. In his oral evidence, he conceded that there was discussion about each of, and the respective relation between, Professor Coats’ and Professor Jackson’s roles. He further effectively conceded that the meeting did not advance the four points of contention (identified in Professor Coats’ 18 November email). It was his evidence that, at the meeting, there was only one point discussed (not agreed) regarding his authority and budget.

125    On 27 November 2022, Professor Jackson sent an email to Professor Coats and Mr McGauran, which was in the following terms:

Dear Peter and Andrew,

Thanks for taking the time last Weds to discuss my future contract and job description. Not an easy situation that we all find ourselves in, but with good communication and a clear outline of what we are collectively aiming to achieve, hopefully we can find a sensible way forward.

As discussed, please find attached an electronic record of the letter from Stephen Garton to me, sent October 2020. The HRI Board was supposed to follow up on this with Stephen Garton, but I don't believe they did.

I have also provided you with an updated copy of the letter regarding the requirements of my future contract at HRI.

I look forward to further discussions.

…

126    The email, on its terms, tells against Professor Jackson’s case theory. He speaks of it not being “an easy situation” and the hope of a “sensible way forward”.

127    The email attached two documents, one titled “An updated copy of the letter regarding the requirements of my future contract at HRI” and a letter dated 21 October 2020 from Professor Stephen Garton (Garton Letter), which concerned a performance review conducted by the University of Sydney of Professor Jackson’s performance in his role as Director of CV Research at CPC in October 2020. Professor Coats deposed that “Professor Jackson had sent us the Garton Letter along with the 27 November letter because it had been discussed during our meeting on 23 November 2022”. The 27 November letter repeats the contents of the 20 November letter but sets out additional terms for Professor Jackson. As to the first, Professor Jackson stated that the “essential features of the appointment” included (a) salary support for Associate Professor Schoenwaelder, Mr Alwis and Dr Yuan; (b) maintaining the financial research support for the lab he was seeking; (c) that he be Director of CV Research; (d) dual reporting lines to Professor Coats and Mr McGauran; (e) there be a scientific executive, of which he would be a member; (e) that the CPC group leaders report to him; (f) that he have oversight of the scientific operations at the CPC; (g) that he have a discretionary budget of $2 million a year; (h) that he would assist Professor Coats with the HRI science budget; and (i) he would have oversight of microscopy at HRI.

128    He described the “Discussion points of [the] overarching contract” (from Professor Coats’ email of 18 November 2022) as including the five year contract but where the remuneration was to be negotiated and agreed) with an additional option to extend the contract for three years. He does not specifically address each of the discussion points, but raises additional issues.

5 December 2022 text exchange

129    The text exchanges between Professor Coats and Mr McGauran on 5 December 2022 are instructive. They are extracted as follows:

Mr McGauran:         Hi Andrew. Text below from Peter Bush today. In conjunction with Shaun’s text on Friday, they are obviously struggling. We can discuss our response tomorrow when we meet. Thanks.

Hi Peter, its Peter from ThromBio here. I hope you are well. Shaun mentioned that Tim had carriage of the $100k grant required to keep ThromBio solvent, but I understand that he is on annual leave (his phone was off when I contacted him today). Would it make sense for me to work with Hana directly on this? I appreciate your ongoing support. Regards, Peter.

Professor Coats:    Hi Peter. I’ve already asked Hana to fix this straight away.

Separately it’s time for some polite but firm home truths to be put to Shaun – diplomatically put of course but stating:

1.     It is a very high salary offer as it does not come with the extensive management responsibilities and time commitments of his original role

2.     There is a welcoming environment for ThromBio that would be hard to match elsewhere and

3.     We are happy to promote his role as a major one within HRI but would prefer one different to Director of CV research by at CPC which given the contents of Steven Garton’s letter may be untenable from 2023

What we are not prepared to continue with is extensive replaying of the past or prolonged negotiations. We agreed some points at our last meeting and will not move substantially any further, in particular no supervisory roles that undermine those of the new scientific director and no separate budget under his control other than that due because of his grant success through standard HRI schemes of which he is well aware.

Speak tomorrow. Andrew.

Mr McGauran:        Totally agree. It’s just a question of whether we write to him in those terms or respond when he next remembers to return to the issue. Probably the latter but happy to go with the former if you think it strategically a better option.

Professor Coats:    He has written recently so it’s our turn. Will discuss tomorrow.

Mr McGauran:        Thanks

130    Consistent with the 18 November 2022 email, the exchange reveals that they wanted Professor Jackson to remain and to enter the collaboration agreement but did not believe that Professor Jackson was going elsewhere and was not a flight risk and therefore they could stand firm on the issue of title, authority, and the budget. It is also clear that they both had formed firm views about their own bargaining position (and that somethings they were firm on) in the December and February meeting, but it does not appear from the Minutes (and their own predilections) that they would be so direct with Professor Jackson. There was a politeness or indirectness in their approaches.

131    It did seem though undoubtedly the case in December, that whilst they had all hoped to have agreed both agreements by then, they could not.

132    Mr McGauran accepted under cross-examination, that what appeared to be “non-negotiable” terms on HRI’s side (as evident from the above text exchange), being no supervisory roles that undermined those of the new Scientific Director and no separate budget, were communicated to Professor Jackson. In the result, Mr McGauran accepted that, while the text exchange suggests that he would write to Professor Jackson about these issues, this did not occur.

133    Whilst Mr McGauran wrote to Professor Jackson on 19 December 2022, stating that he was looking forward to concluding discussions on a contract renewal that Wednesday, he did not tell him, in advance or at the meeting, what were non-negotiables. It was Mr McGauran’s evidence that it would have been unwise to send to Professor Jackson HRI’s “non-negotiables” and areas for negotiation, because there was a meeting imminent and did not want to “burn bridges, particular not before another negotiation session”.

134    It was Mr McGauran’s evidence that whilst they did not, in the negotiations, use the word “non-negotiable”, in reality they put their point of view firmly and rejected Professor Jackson’s demands. It was his evidence that Professor Jackson was a smart man, and there was “no need to bludgeon him with non-negotiable or similar like-minded threats”. Professor Coats also gave evidence under cross-examination that, as at December 2022, he did not communicate a separate budget nor a supervisory role, as being non-negotiable, but rather, it was the tone of the meeting. Professor Coats says that he had not told Professor Jackson that HRI was stopping negotiations, but that he was “asking him to respond with revised demands, and [stated that he] … got increased demands as a response”. Professor Coats was insistent that, he had in an earlier meeting stated that a support budget outside the standard procedure was not on offer. Professor Coats’ evidence was, with respect to his notation “SJ response: not interested in a more of the same contract”, that he understood Professor Jackson was asking for more than just changes to the scope of his role. Professor Coats’ evidence was that the parties were apart on title, as Professor Jackson wanted Director of CV Research at CPC, which Professor Coats considered would undermine his authority. Professor Coats was adamant that the document did not contain “non-negotiables”, but that “a large part of it needed to be accepted by Professor Jackson”. However, he conceded that it was open to him to tell Professor Jackson in respect of his request for “2 million “under his control”’ that this would never be agreed. Professor Coats’ evidence was that he offered an alternative research group support in lieu of a $2 million a year budget. Professor Coats stated that his intent was to reach a final agreement at the time of that 19 December 2022 correspondence.

135    Regardless, however, Professor Coats did send to Professor Jackson an email, attaching a spreadsheet, on 19 December 2022 (two days before the meeting), in which he set out what he understood to be the parties’ positions at the time concerning the issues he had identified but not addressing all of the issues Professor Jackson had raised.

21 December 2022 meeting

136    On 21 December 2022, Professor Jackson met with Mr McGauran and Professor Coats. It appears undisputed that what Professor Jackson relies upon, as occurring during this meeting, in his pleaded claim, occurred, namely, that the parties discussed the terms of a new five year contract for Professor Jackson, that Professor Jackson was of the view that he should report to HRI’s CEO and Chairman; and, that Professor Coats said that Professor Jackson’s current title may not be appropriate moving forward as it may be seen to undermine his authority.

137    Professor Coats described in his evidence, not disputed by Professor Jackson, that there remained a number of key terms in dispute between Professor Jackson and HRI, including Professor Jackson’s role and his authority; his requirement for financial independence (including a separate annual budget of $2 million); and his request for a guaranteed, substantial level of top-up payments to be made to TRG by HRI. It was Professor Coats’ evidence that he explained that HRI would not be able to agree to number of the terms that Professor Jackson requested, and he listed them in his evidence, at paragraph [101]. Professor Jackson did not dispute the existence of disagreement, but says either it was narrower in scope or he had room to move, or in his perception, a particular item was not a deal-breaker. Regardless, even accepting Professor Jackson’s evidence as to the meeting, it revealed that all parties must have known that there was substantial disagreement on what Professor Jackson appeared to consider very important, him having a new role with increased authority and autonomy and a significant budget.

138    It was Professor Coats’ evidence that he asked Professor Jackson to tell them whether he was willing to compromise because HRI wanted to finalise his contract renewal as soon as possible so the collaboration agreement could be signed. However, it was his evidence that Professor Jackson was unwilling to offer any significant compromises. Professor Coats said that he told Professor Jackson that his unwillingness to negotiate on key terms was not appropriate and if that continued to be the case, he could not see them reaching an agreement. Professor Jackson only denied an aspect of what Professor Coats claims he says in paragraph [102], namely, that Professor Coats indicated that he believed he could not see them reaching an agreement and that it was up to Professor Jackson to come up with an offer containing meaningful compromises. Mr McGauran did not give evidence that Professor Coats was so emphatic in his delivery. He said nothing in his evidence regarding Professor Coats being unwilling to negotiate key terms and if that continued agreement could not be reached and it was up to Professor Jackson to come back with an offer. Rather, he expected Professor Jackson would come back with a revised position. However, he did recall that both he and Professor Coats had made clear that they did not agree with the requested terms regarding dual reporting, increased authority, autonomy and budget and independence in selection of staff.

139    I am of the view that Professor Coats was not as direct as he suggests in his evidence, and I prefer the evidence of Professor Jackson and Mr McGauran in this regard.

140    On the undisputed evidence, in any event, the discussion included substantial disagreement on key issues. I accept that it is likely at this meeting the five year term may have been discussed, given it had in any event by then been agreed. By this, it had been agreed to be a term that formed part of the new contract. However, there were other substantial issues that remained unresolved.

30 January 2023 meeting

141    Professor Jackson claimed that at the meeting between himself and Mr McGauran on 30 January 2023, that Mr McGauran told him that he was committed to keeping him at HRI and working through a new five year contract, that he would organise a meeting for them with Professor Coats, himself and Professor Ben Freedman, and that Professor Jackson said he appreciated the support and positive attitude.

142    It was Professor Jackson’s evidence that Mr McGauran said “I am committed to keeping you at HRI and will work through the terms of a new five-year contract”. By contrast, it was Mr McGauran’s evidence that he did say he was committed to keeping Professor Jackson at HRI but denied that he said he would work through the terms of new five year contract. Rather, it was his evidence that he said he wanted to work with Professor Jackson to get a new contract in place.

143    I accept Mr McGauran’s evidence. It is my view that the fact of a five year term was not a disputed issue. I do not think either party was focusing on an agreed issue (regarding the length of contract) but rather on what was in dispute. There is nothing in the contemporaneous correspondence to suggest that he or anyone else was describing the contract as a “new five-year contract”. Mr McGauran accepted, under cross-examination, that up until the point of the 30 January 2023 meeting, the parties had been negotiating on the basis of a five year term and that he understood that Professor Jackson understood that a term of the new contract was going to be for five years.

144    Professor Jackson’s oral evidence in this regard is supportive of this view, when asked under cross-examination about the conversation, Professor Jackson said that the issue of the five year contract was not a negotiating point (at that stage). It was Professor Jackson’s evidence that they discussed a five year contract because it was relevant to the contracts for support associates. I do not accept his evidence. Whilst they may have discussed the other contracts, I do not, for the above reasons, accept that Mr McGauran said what Professor Jackson alleges he said.

3 February 2023 meeting

145    Professor Jackson pleaded that at the meeting on 3 February 2023 (attended by himself, Professor Coats, Mr McGauran, Professor Freedman and Dr Gainsford), the terms and conditions of a new five year employment contract were discussed, as well as the extension of the contracts for the researchers and scientists who worked at TRG (given those contracts’ terms aligned temporarily with Professor Jackson’s contract).

146    Ultimately, there was no dispute that the minutes of the meeting attached to Mr Bush’s evidence (at CB 1146) were an accurate account of what was discussed in the meeting. What those notes reveal, is that the meeting on 3 February 2023 involved a detailed discussion of many areas of dispute between the parties. Whilst it may be accepted that there was some agreement regarding Professor Jackson’s title and reporting line, there really was no agreement regarding the critical issues—Professor Jackson’s authority and the budget. From these issues, stemmed multiple sub-issues that were yet to be determined. For example, they included Professor Jackson seeking top-up support at 30%, which Professor Coats had said was “off the table” and there was a dispute regarding the level of discretionary funding Professor Jackson would receive. HRI’s position was that it could not afford to fund what Professor Jackson was seeking. As a consequence, in this meeting, Professor Jackson and Mr Bush requested (and it was agreed) that they be able to review the HRI finances after the completion of the February 2023 audit. This was the evidence of all parties. Further, Professor Jackson conceded under cross-examination, that he “started to understand that there must be significant budget concerns at the Institute”.

147    The evidence also revealed that Professor Coats expressed his frustration in the meeting. Mr Bush described him as becoming agitated a number of times. I accept it is likely that he behaved in this way, given the protracted negotiations before this time, and the fact that there did not appear be any substantial movement in the negotiations.

148    According to Professor Jackson, the states of mind of Mr McGauran and Professor Coats, as at the end of the 3 February 2023 discussion, were critical insofar as it will determine whether the Court upholds either the ACL or whistleblowing claim by reason of, either:

(a)    Mr McGauran and Professor Coats were open minded, at that stage, about the continued employment contract negotiations and, fundamentally, the only thing that changed was the perception that Professor Jackson had, could, or may make a whistleblower complaint; or

(b)    Mr McGauran and Professor Coats had determined that negotiations were at an end but then engaged in conduct that was misleading and deceptive as set out below.

149    It was Mr McGauran’s evidence, which I accept, that as at the end of the meeting, that at that point, there was clearly an impasse between the parties. His evidence was in the following terms:

And you accepted, didn’t you, that insofar as the 3 February 2023 meeting, that the parties had made progress in terms of agreeing to some issues, correct?---I did say earlier on, Mr Mahendra, that those minutes are clinical. They don’t capture the divide between the two parties, nor the tenor of the robust exchange. And worse still, the minutes don’t capture that the same issues that were unresolved were unresolved in November, they were unresolved in December, and then they were unresolved in February. We were at a true impasse.

150    And then later:

Right. And you accept, don’t you, that – you accept, don’t you, that at the 3 February 2023 meeting there was no impasse. Things were left open for continuing negotiations. Correct?---No. I believe the 3 February meeting revealed the gulf between the parties. The minutes that you rely heavily on, if I – I may respectfully suggest, are a summary document. They are clinical, and they’re an attempt to build goodwill or to continue the good faith discussions.

151    This is consistent with the observation of Mr Bush about the meeting: “there were a lot of open issues, as raised in that … meeting, which were frankly going nowhere”. However, it is clear, that it was also not Mr McGauran’s view as at 3 February 2023, that any further negotiations thereafter would be futile. It is clear from what he says about the purpose of the minutes that it was proposed “to build goodwill or to continue the good faith discussions”. Further, in April 2023, despite the parties having become distracted by other matters, as will be seen below, Mr McGauran states that he wants to move past those issues and get back to negotiating the contracts.

152    It is my view, also, that it would have been apparent to Professor Jackson that the parties were still nowhere near any agreement. There was clear, substantial disagreement. It remained Professor Jackson’s position, consistent with what he had indicated in November 2022, that he did not want more of the same. It was submitted by Professor Jackson that the Court should find that at this meeting, Professor Jackson indicated that he was flexible and wanted a mutually beneficial outcome. It may be that Professor Jackson said this. However, regardless, the minutes speak for themselves. There was substantial disagreement. The Court was asked to find that Professor Coats and Mr McGauran understood that Professor Jackson was not being inflexible and was willing to compromise. To the extent that it is necessary to decide this, for the reasons already given, I do not accept that this was their view. This would be inconsistent with their evidence which I accept and where there is nothing in the contemporaneous evidence to suggest otherwise.

153    As to Professor Coats’ state of mind as at the end of the meeting on 3 February, it was his evidence that very little progress had been made in the negotiation of Professor Jackson’s new employment contract. I accept that this was how he perceived the outcome of the meeting. Professor Jackson relied upon a purported disjunct between Professor Coats’ view and the content of the report-back to the Board on 20 February 2023. Under the heading “Update on Thrombio”, “Andrew and I are continuing to meet with Peter Bush and Shaun Jackson; these meetings are going well and are very productive” (Exhibit A12). This positivity appeared to be a description of meetings progressing well regarding the collaboration agreement (which was effectively agreed). This is so because the report-back also included the following regarding the employment contract (and separately):

All the necessary agreements have been signed to allow Thrombio to carry out their clinical trial. The collaboration agreement between Thrombio and HRI is the only outstanding item. One frustration is the need to link it with a contract renewal for Shaun Jackson, and we are reviewing how we can safely de-link these elements.

(Emphasis in original.)

154    It revealed optimism about the negotiations as a whole but not the contract renewal. It was Professor Coats’ evidence that the discussions regarding the collaboration agreement had stalled because, on Professor Coats’ evidence, they could not discuss the collaboration agreement until Professor Jackson’s contract had been finalised. However, it was his view, despite his pessimism regarding Professor Jackson’s contract, that discussions regarding other matters were progressing well.

155    In addition, the 20 February minute must be considered in the context of the other evidence as to the discussion at the meeting. It was Mr McGauran’s evidence that Professor Coats informed the Board, at this meeting on 20 February 2023, that the negotiations for a new employment contract were at an impasse and that Professor Jackson did not appear to appear to be willing to compromise on key areas in dispute and that Professor Jackson wanted the employment agreement finalised before signing the collaboration agreement. I find that this occurred.

156    However, I do not find that HRI was thereafter resigned (or, that the negotiations were futile), but there was evidence from both Professor Coats and Mr McGauran that, by 3 February, they each had serious doubts about whether a new employment agreement could be agreed and given it was tied to the collaboration agreement, then the collaboration agreement could not be agreed.

157    During the meeting of 20 February 2023, the minutes from the Board meeting record that, each of Mr McGauran, Professor Coats and Dr Gainsford provided the Board with a verbal update on the progress of the negotiations with Professor Jackson, noting that the collaboration agreement had not yet been finalised, “with Professor Jackson wishing to see the audited financials for 2022 first”. This is not accurate. As seen above, Professor Jackson was wishing to see the financials in the context of the negotiation of his contract for the purpose of the budget and top-up funding he was seeking.

158    Dr Gainsford also started to get the financial material together regarding what he described as “Shaun’s funds” and provided them to Professor Coats on 24 February 2023. In that material reference was made to concerns about whether Professor Jackson had significantly overspent the MRFF budget on drug manufacture.

159    Then at the meeting on 10 March 2023, the following notation was made:

The Board noted concerns about the state of the “Jackson funds”, which appear to be heavily depleted, with Professor Jackson now also indicating that interest should have been applied to his 2 million balance of funds brought over to HRI from Monash University.

…

It was noted that the true position of the Jackson funds would be shared with the Board once Dr Gainsford and Dr Krskova finalise the review of all the past file notes and expenditures incurred by Professor Jackson to date.

The Board noted that while there has been no progress recently with the finalisation of the Collaboration Agreement, there were not many issues that remained to be resolved.

160    It is fair to say that what then followed is all negotiating parties became completely distracted by the perceived overspend on the drug manufacturing, the viability of the STARS trial (and who had foot the bill—HRI or ThromBio) and then the dispute over whether Professor Jackson had breached his delegated authority by committing HRI to the drug manufacture overspend. According to Mr McGauran, after receiving the 29 March 2023 paper, the financial issues were “keeping him awake at night”.

Headhunting evidence

161    The fact of other opportunities being available to Professor Jackson is relied upon by him both as to the circumstances giving rise to the representative conduct and it being misleading, but secondly, for the purposes of damages. It is necessary to consider how it was pleaded and argued. Notably, one can see from the submissions that almost nothing but passing reference is made to the fact of these opportunities and what was known by others. Further, there was no proper analysis as to why, by virtue of the conduct it was said to firstly, contribute to the representations, secondly, contribute to them being misleading or deceptive, and nothing was said for the purposes of damages (though there was no need to determine this in this case). To the extent necessary, for the purposes of liability, to determine the relevant facts surrounding these issues, the evidence revealed that Professor Jackson was having embryonic discussions with two institutes, no actual offers had been made (it is not even clear whether Professor Jackson made formal applications for the positions). Further, there is a complete lacuna as to what happened with both sets of discussions and how they ended.

162    Professor Jackson deposed that, in late 2022, he was headhunted by recruiters for roles as Scientific Director at the Baker Institute and at the South Australian Health and Medical Research Institute. He deposes that, between October 2022 and February 2023, he engaged in email correspondence and phone calls with the recruiters. He gave evidence that, on 16 January 2023, he sent a text message to Mr McGauran which said “It is probably a good time for me to update you on my discussions with two other MRIs who have approached me as a potential future Scientific Director.”. He also gave evidence that, on 30 January 2023, he met with Mr McGauran at CPC, and said words to the effect of “It is probably a good time for me to update you on my discussions with two other MRIs who have approached me as a potential future Scientific Director.” He gave evidence that, if he was unable to agree to a maximum five year term with HRI, he would have pursued those opportunities.

163    Ultimately, Counsel for Professor Jackson accepted that the evidence rises no higher than Professor Jackson having deposed that between October 2022 and February 2023 he engaged in correspondence with recruiters, and then, “I told Mr McGauran and Professor Coats about these opportunities”. I accept that the evidence rose no higher than this.

164    Professor Jackson further deposed that his intention of notifying Mr McGauran and Professor Coats about the opportunities with SAHMRI and the Baker Institute was to be honest and transparent. He denied that he was trying to impress Professor Coats or leverage a better offer from HRI. It was his evidence that he was in a unique situation at the time, whereby, he was being reassured by Professor Coats and Mr McGauran that he could continue his scientific leadership roles at the CPC, continue to oversee the clinical trials involving TBO-309 and work with Mr Bush to successfully commercialise the new therapeutics that his laboratory was developing. In the result, he says that he did not pursue these opportunities further because it was represented to him that his contract would be extended by a period of five years and HRI would finalise and enter into a collaboration agreement with ThromBio.

165    Professor Jackson, in closing submissions, appeared to effectively be suggesting that his informing Professor Coats and Mr McGauran of these “employment opportunities” at the Baker Institute and SAHMI was evidence of being misled or deceived, in that, those representations induced him not to “pursue the opportunities”. Professor Jackson asked this Court to reject HRI’s contention that there was no connection between these employment opportunities and the representations. Counsel for Professor Jackson submitted that the last email concerning the issue was 21 February 2023, and that “this all ceased in around February 2023”. It would appear that Professor Jackson was asking this Court to make the finding that because of the representations, he was induced not to pursue those alternative employment opportunities, which is evidenced by the fact that the last email, in evidence, was on 21 February 2023. It was also submitted that the representations were made “in that context” of Professor Jackson informing Professor Coats and Mr McGauran of the employment opportunities. Professor Jackson submitted that, in the alternative s 18 claim, that if HRI was considering not abiding by the representations pleaded, that it would tell Professor Jackson, being representations made in circumstances where Professor Jackson had alternate employment opportunities and where the representations had been made and had clear continuing effect. Professor Jackson was therefore entitled, given the course of negotiations, to expect that the representations would continue to operate.

166    The Court finds that Professor Jackson failed to establish on the evidence that he did not pursue these “employment opportunities” because of the representations. On the contrary, on his own evidence, from late February 2023, Professor Jackson is attempting to solicit further meetings and express interest in the employment opportunities. That is, rather than those representations inducing him to cease pursuing, it is clear that he continued to do so. It is also clear on the evidence that Professor Jackson misrepresented to Professor Coats and Mr McGauran the nature of these “employment opportunities”. The Court finds that the correspondence with the recruiters rises no higher than an invitation to express interest and apply to be considered, and/or to refer to Professor Jackson’s colleagues.

167    As to the correspondence with Mr Mazin Almaimani of Perrett Laver for the Baker Institute, the email chain begins on 19 December 2022, with a brochure and a request to discuss, or alternatively, if Professor Jackson had “any recommendations” for persons for the role. The correspondence continues, and, on 9 January 2023, Professor Jackson responded to Mr Almaimani’s request for a CV with a cover letter, which Professor Jackson provides on 11 January 2023. The last correspondence exhibited to Professor Jackson’s affidavit is an email from Mr Almaimani to Professor Jackson dated 30 January 2023 requesting a time to video conference with himself, Professor Jackson and a colleague of Mr Almaimani. The email chain does not include any reply from Professor Jackson.

168    As to the correspondence with the other recruiter, Ms Kylie Taylor of Odgers Berndston for the South Australian Health & Medical Research Institute, it begins on 11 October 2022 with an email from Ms Taylor attaching an information booklet for additional details, an invitation to discuss and a request for “any suggestions you may have of people in your network for whom this would be an excellent opportunity”. On 9 January 2023, Professor Jackson provided a CV to Ms Taylor. On 14 February 2023, some days after the meeting of 3 February 2032, Ms Taylor writes to Professor Jackson asking him “where you are at in terms of your thinking about SAHMRI? Is it something you wish to submit an application for or are there still things you would like clarified?”. Critically, then, on 15 February, Professor Jackson replies, stating that he “had a good chat with Justin Beilby and Ben Kile and we agreed that the next important step was a visit to Adelaide to meet some of the key stakeholders” and enquiring as to the deadline to make a formal application. Professor Jackson was clearly then continuing to pursue these employment opportunities beyond the time it was said that he was labouring under the misapprehension that HRI were still abiding by their supposed representations to a five year contract renewal and that it would enter into an agreement with ThromBio. He continued to follow up on 21 February 2023 indicating his availability to visit Adelaide. The final correspondence is from Ms Taylor on 21 February 2023 for Professor Jackson to “get something to us over that weekend”.

169    The evidence before the Court is peculiar: Professor Jackson continues to express interest in the SAMHRI position well beyond 3 February 2023, going so far as to propose a time to travel down to Adelaide and visit, in circumstances where the correspondence with the recruiter for the Baker Institute ends abruptly on 30 January 2023 with a request from the recruiter for a meeting with him and his colleague. It is hard to understand why, assuming there was no further correspondence, Professor Jackson does nothing with the recruiter’s email, not even to acknowledge or decline the interview. Similarly, if the correspondence with Ms Taylor on 21 February 2023 is the last, it is strange that Professor Jackson proposed a time to fly down to Adelaide, but did not furnish a reply to Ms Taylor declining to continue or otherwise acknowledge receipt.

170    In closing, HRI submitted that the correspondence indicates nothing more than an approach made to Professor Jackson, with Professor Jackson expressing interest and some discussion taking place. Further, the correspondence continues beyond 3 February 2023, such that, it indicates Professor Jackson was not relying upon the representations in any way. I accept this submission.

171    Ultimately, based on this evidence, the Court cannot find that Professor Jackson has established, by this evidence, that the alleged representations were made nor that he did not pursue the opportunities because of the alleged representations. On the contrary, on his own evidence, Professor Jackson was prepared to and did pursue these alternative employment opportunities. The Court is furnished only with email correspondence that appears to have had no communicated closure.

Conclusions regarding the alleged representations

172    For the reasons outlined above, the representations in fact, as pleaded, were not made.

173    On the evidence, HRI did not ever offer a five year extension of the existing contract. This is unsurprising because Professor Jackson had always stated that he did not want more of the same, he wanted a new employment contract on very different terms. Plainly, the new employment would bear a different character: a different title, a different focus, in part by its relation with the ThromBio undertaking and different hours.

174    On the evidence, even if the claim, as pleaded, was that Professor Jackson’s contract (on different terms) would be extended for five years, there was no evidence to establish this. For the reasons given above, it is my view that to the extent that part of the conduct said to give rise to the misleading conduct arises from what Mr McGauran or Professor Coats said, I generally prefer each of their evidence over that of Professor Jackson. However, even if I had accepted Professor Jackson’s evidence, I would not, by reason of the entirety of the evidence, have found the representations were made in any event.

175    This is confirmed by Professor Jackson’s own conduct.

176    No representation was made to Professor Jackson to the effect that Professor Coats or Mr McGauran told him that HRI would extend his contract for five years. Five events were relied upon by Professor Jackson in closing as to how the representation was made out. First, reliance was placed on the reference in the spreadsheet provided by Professor Coats to Professor Jackson on 18 November 2022. The evidence must be understood in context. As at this time, there had been no detailed discussion at all between the parties as to the terms of any new contract with Professor Jackson. However, Professor Jackson was to make it very clear that he did not want more of the same. This was not a case of contractual renewal on the same terms simpliciter. This was a case where Professor Jackson was seeking materially new (and different) terms. In order to focus the discussion, Professor Coats sent Professor Jackson an email (attaching this spreadsheet) where he refers to having already asked Professor Jackson to consider the four “headline items” (title, salary, responsibility and support budget) in response to Professor Jackson asking HRI to look at his former contracts and revert to him. The spreadsheet included proposed terms, nothing more. Secondly, reliance was placed on the repetition, in the further spreadsheet sent by Professor Coats on 19 December 2022 (two days before the parties were to meet). Again, however, the reference is to one of many matters that remained in dispute. Thirdly, reliance was placed on the conversation during the meeting on 21 December 2022. To the extent that Professor Jackson is claiming that it was represented to him that they would agree to a five year contract on new (undefined and not yet agreed) terms, it is unclear how that could be the case from HRI’s conduct and from what Professor Jackson himself did and knew. As found above, Professor Coats’ undisputed evidence revealed that during the meeting on 21 December 2022, there remained a number of key terms in dispute between Professor Jackson and HRI, including Professor Jackson’s role and his authority; his requirement for financial independence (including a separate annual budget of $2 million); and his request for a guaranteed, substantial level of top-up payments to be made to TRG by HRI. As found above, on the undisputed evidence, the discussion revealed substantial disagreement on key issues. As I have found, I accept that it is likely at this meeting the five year term may have been discussed, all that meant, by all the parties’ conduct, was that it had been agreed to be a term that would form part of the new contract if agreement was reached. There were other substantial issues that remained unresolved and were never in fact resolved.

177    Fourthly, reliance was placed on an earlier conversation with Mr McGauran on 11 August 2022. However, even if Professor Jackson’s evidence was accepted (noting my finding that Mr McGauran did not say he wanted to enter a “five year contract”), all Mr McGauran did during that discussion, was express a desire to enter into a new five year contract as soon as possible. In, and of itself, that conduct could not give rise to the alleged representation and nothing thereafter changes the position for Professor Jackson. Fifthly, Professor Jackson pointed to the alleged representation of Mr McGauran on 30 January 2023. The high point being the allegation that Mr McGauran said that he was committed to keeping Professor Jackson at HRI and would “work through the terms of a new five year contract”. Even on its terms, if one accepted Professor Jackson’s evidence (which, for the reasons set out above, I do not accept and I prefer Mr McGauran’s evidence), the commitment is to attempt to reach an outcome.

178    All the statements relied upon are aspirational in nature and reflect a commitment to a process to try to get to an agreement. They did not constitute a guarantee or secure an outcome, ultimately, as an endpoint.

179    It was clear from all of the evidence above, that it would have been apparent to all of the parties before or after 3 February 2023 that the parties remained in disagreement regarding substantial terms in the agreement. Professor Jackson’s contemporaneous communications demonstrated he understood this. It was Professor Jackson’s evidence that there had been past protracted, less than satisfactory negotiations regarding previous employment contracts. Professor Jackson saw the entry of Mr McGauran and Professor Coats as new negotiators on HRI’s part as an opportunity to reset the dial and achieve what he had not achieved previously. On 14 September 2022, Professor Jackson sought to understand from Mr McGauran a “clearer understanding of what [he thought was] … possible”. After the Balmoral dinner, Professor Jackson, by email, acknowledged that there are “tricky things to negotiate through to get a win win” for them both. Professor Coats replied that he was happy to “support” Mr McGauran as he worked with him on the contract. On 17 November 2022, Professor Jackson in a text message to Mr McGauran referred to the possibility of them not being able to reach agreement if they do not have alignment in their thinking. In an email on 20 November 2022, Professor Jackson expressly stated that he did not want more of the same and expressed his dissatisfaction with his current terms. On 27 November 2022, after the first proper meeting HRI and Professor Jackson had had regarding possible terms in the new contract, he wrote to Mr McGauran and Professor Coats, describing the situation as not being an easy one and one where “hopefully” they could find a sensible way forward.

180    By 3 February 2023, the parties were still nowhere near agreement. There were then no meaningful discussions about Professor Jackson’s contract before 24 July 2023, with Professor Jackson texting Mr McGauran on 12 April 2023 that he wanted to hold off on a further meeting with Professor Coats until they had resolved the issues around the funding of the STARS trial.

181    For these reasons, I find that HRI, did not ever represent to Professor Jackson that his employment contract would be extended for five years or that any statements or conduct concerning his employment contract had an objective tendency to lead Professor Jackson into error.

No representation about the collaboration agreement

182    By reason of the above factual findings, I do not accept that Professor Jackson has made out the alleged representation that HRI would finalise and enter into a collaboration agreement with ThromBio.

183    There was no allegation, nor evidence, that any person within HRI told Professor Jackson that they would finalise and enter into a collaboration agreement with ThromBio. In a similar way in which HRI approached the negotiations of the future employment contract, the height of Professor Jackson’s evidence, as submitted by HRI (which I accept), is that HRI expressed a desire to work towards finalising a collaboration agreement.

184    In closing, Professor Jackson gave prominence in closing to five matters. First, the alleged representation made by Mr McGauran on 11 August 2022; secondly, the fact that Professor Coats stated in his email of 22 August 2022, that it was his intention to finalise a collaboration agreement quickly; thirdly, that Mr McGauran stated in his email on 25 August 2022 that he was working on progressing and finalising such an agreement; fourthly, the email from Mr McGauran, on 6 October 2022, that he was in the final stages of settling the collaboration agreement; and fifthly, the fact of Professor Jackson’s receipt of the draft collaboration agreement on 27 October 2022.

185    There is an air of entire unreality to this allegation. It was always, and remained always, Professor Jackon’s view that any negotiation of the collaboration agreement required the concomitant settling of terms with respect to the new employment contract. As I have found above, it was clear that Professor Jackson was increasingly seeking to intertwine in the negotiations, the negotiation of his contract. On 12 April 2023, Professor Jackson sent a text message to Mr McGauran asking to “hold off” on the meeting with Professor Coats, and noted that “Discussions regarding my contract, my lab and ThromBio can run in parallel”.

186    As to the alleged representation made by Mr McGauran on 11 August 2022, the height of it, even on Professor Jackon’s account, referred to the employment contract and as could be inferred otherwise with respect to the collaboration agreement, concerned his willingness to help finalise negotiations. Similarly, Professor Coats’ email of 22 August 2022 was in generalised, aspirational terms, and where he wanted to work to convert the agreed heads of terms into a formal legal agreement. Again, the need to settle terms and formalise the agreement is the focus. Nothing of substance is to be gained from a one-line reference in Mr McGauran’s email of 25 August 2022 that HRI was working on progressing and finalising such an agreement. The email went on to state that despite wanting to finalise such an agreement, a number of issues had been raised internally at HRI and that further time was needed for consideration and Board approval. He stated that he would call once HRI had reached a fully settled position but that they are working on progressing and finalising the agreement as soon as possible. This was consistent with what Mr McGauran had reported, on 19 August 2022, when he texted Professor Jackson, namely, that the process relating to the collaboration agreement was a “complex negotiation”, that “[t]here’s internal processes that a Chairman cannot bypass”, and that it was necessary to have “the key HRI board members and advisers in unison”. Indeed, Professor Jackson himself recognised that in his email after the Bathers’ Pavilion meeting that “ThromBio … adds a bit more spice” to the “tricky things to negotiate through”.

187    As to Mr McGauran’s email of 6 October 2022, that he was in the final stages of settling the collaboration agreement, it is worthwhile again understanding the context. It was not the case that, when the draft agreement was provided on 27 October 2022, the parties were essentially in agreement. What followed was weekly catchups between Mr Bush and Professor Coats. It was Professor Jackson’s evidence, as set out above, that the long form agreement did not reflect what had previously been discussed by former HRI negotiators. What followed, as apparently instigated by Professor Jackson, was a shifting of the negotiation to reaching agreement on his role at HRI moving forward, when it was the evidence of all parties that the terms of the collaboration agreement had not been bedded down.

188    Furthermore, as submitted by HRI, the evidence of the surrounding circumstances is also inconsistent with a conclusion that, by reason of all the alleged conduct, such a representation was made. HRI had been negotiating with Professor Jackson and, later, Mr Bush on behalf of ThromBio towards a collaboration agreement since at least late 2020. On 18 August 2022, Professor Jackson texted Mr McGauran that while the terms of the collaboration agreement had largely been negotiated, there was “one outstanding issue” that needed to be resolved with discussions between Professor Jackson and Mr McGauran. That issue was Professor Jackson’s employment, and how that intersected with the collaboration agreement.

189    The evidence revealed that the collaboration agreement remained the subject of ongoing negotiation. This was known to all parties. I find that HRI did not represent that it would finalise and enter into a commercialisation agreement with ThromBio nor did it by what was said or its conduct, have an objective tendency to lead Professor Jackson to believe that this would occur.

If I am wrong and the representations were made, where they misleading or deceptive?

190    If contrary, to what I have concluded, the representations (as pleaded) were in fact made, I note that no pleading or submission was made relying on them as being about future matters. The only basis to emerge from the pleading as to why they were said to be misleading or deceptive or likely to mislead or deceive, was that those representations would have led a person in Professor Jackson’s position into the error of believing that his contract would be extended by a period of five years and would enter into a collaboration agreement. Professor Jackson pleaded that the detriment suffered was that he did not insist on entering into a new contract immediately, and did not pursue the opportunities intimated by recruiters for roles at other institutions. Notably, in Professor Jackson’s closing submissions, he appeared to try to depart from his pleaded case and submit that the representations would have led a person in his position into the error thinking that the negotiations would continue, in circumstances where HRI had, by 3 February 2023, formed the view that the negotiations were at an end and were futile.

191    I note that, Professor Jackson submitted that the representations were misleading or deceptive because, assessed objectively, they had a tendency to lead Professor Jackson into error, that error being following the meeting of 3 February 2023, not appreciating that the negotiations for the new employment contract and therefore collaboration agreement were nearly at an end and futile. Professor Jackson submitted that a person in his position would have been led into error (or, one assumes, that the negotiations for employment were not futile) by the representations, particularly given his history of having his contracts renewed. I do not agree that the evidence establishes this.

192    Professor Jackson is a very intelligent, sophisticated operator within the medical research sector. He had negotiated many agreements over his time. Further, the history of the negotiation of his previous contracts, reveals that he did not routinely get what he wanted. His evidence revealed a path of disappointment that had led to the most recent negotiations.

193    Further, on any view, time was of the essence (given the expiry of his maximum term contract). Professor Jackson knew that. This was why he had been putting pressure on HRI since 2022 to renegotiate terms and knew that Mr Bush was a flight risk.

194    Further, Professor Jackson’s discussion with the South Australian Health and Medical Research Institute and the Baker Institute between October 2022 and February 2023 indicates he knew that there was no certainty regarding ongoing employment with HRI.

195    The evidence did not establish, for the reasons outlined above, that HRI (through Professor Coats and Mr McGauran) determined at the end of the 3 February meeting that the negotiations on the agreements were at an end or futile. Rather, the evidence established that there remained substantial disagreement, the negotiations were continuing but thereafter HRI became distracted by other issues.

196    This is evident from how the meeting ended on 3 February 2023. It was proposed that further action be taken. This included the exchange of information. It is also clear from what the Board was told (and not told) on 20 February 2023. The Board was told that negotiations (at least with respect to the collaboration agreement, were continuing, and there were attempts to de-link the employment contract from that agreement). The Board was not told that they would not be renegotiating a new employment agreement. Further, Mr McGauran referred in the 12 April 2023 text to wanting to get the contracts finalised.

197    Further, even if the negotiations were futile, I do not accept that there was an obligation to disclose any departure from representation because it arose in the context of Professor Jackson being keenly aware that the negotiations had not reached an agreement. The allegation of an expectation of renewal makes no logical sense where Professor Jackson was attempting to negotiate a whole new deal. Taking the representations at their highest, Professor Jackson was only misled into thinking that the negotiations would continue. It is hard to see how objectively, in commercial negotiations, it should be accepted that a person in his position would have been led into error: The error, at its highest, was not that he would be employed, but that the negotiations would continue.

198    It can be inferred that Professor Jackson, given his commercial acumen, would have known that the negotiations may, at any time, fall through. Commercial parties should not be required to show their hand.

199    Professor Jackson’s loss was a loss of negotiating opportunity. It is not pleaded that his loss is loss of employment. It was entirely unclear how this step could be taken. Professor Jackson was a commercial party should have known, in the throws of negotiation, not to have not pursued other offers. At any rate, they were not offers but expressions of interests. His loss, taken at its highest, is a loss of having made some further enquiry with a chance of receiving some alternative employment. His loss of insisting on entering into a new contract immediately does not sound in reinstatement—there was no offer on the table for him to enforce. His failure to pursue other opportunities does not sound in damages – as a commercial bargaining party, he should have known that the negotiations could have fallen over despite positive representations.

Whether there was misleading or deceptive conduct by non-disclosure (issues 4 and 5)

200    If I am wrong and the representations were made but were not misleading and deceptive, in order for Professor Jackson to succeed on this claim, he needs to establish two additional factual propositions: (a) that there was a change in position (that HRI “may no longer” extend Professor Jackson’s contract by five years or finalise and enter into the collaboration agreement); and (b) that there was no disclosure of the same to Professor Jackson. Professor Jackson’s claim was that, in the period between 3 February and 15 August 2023, despite having formed a view in about late March or early April 2023, that HRI “may not abide” by the terms of the representations to Professor Jackson, HRI did not inform Professor Jackson of the same.

201    The difficulty here is that, by reason of the nature of the conduct, that there was a complete artificiality to Professor Jackson’s thesis regarding the representations. It was not that the negotiations were regarding renewal of his employment contract and entry into the collaboration agreement simpliciter. The evidence revealed the negotiations concerned the terms of each of those agreements. As a consequence, it is not possible, given it would be entirely artificial to go on, and make conclusions about an alternative case in the circumstances and unscramble the egg. It is not possible to determine the alternative, that there was a change in position.

202    This alternative basis for the ACL claim was formulated in the following way. Following a meeting with Mr McGauran at the CPC on 30 March 2023, the representations and circumstances gave rise to a reasonable expectation of disclosure that if HRI was, at any time, considering that it may not abide by the terms of its representations to Professor Jackson, it would inform Professor Jackson of the same. The failure to disclose that HRI was not proposing to make good on their representations was in circumstances where Professor Jackson had alternate employment opportunities and where the representations had been made and had clear continuing effect. Professor Jackson was entitled, given the course of negotiations, to expect that the representations would continue to operate. This was bolstered by the fact that, previously, Professor Jackson’s contracts had always been renewed. It was manifestly unreasonable that he was not disabused of them and there was a clear expectation and requirement that HRI disclose its altered position.

203    On 30 March 2023, Professor Jackson met with Mr McGauran at the CPC. At that meeting, it was undisputed that Professor Jackson indicated to Mr McGauran that Mr Bush was increasingly concerned about delays associated with finalising the collaboration agreement. It is accepted that Mr McGauran raised concerns he had regarding the funding of the STARS trial and regarding the drug manufacturing cost. In response, Professor Jackson said that there was plenty of funding for the STARS trial. Professor Jackson also expressed his concerns about the slow progress on the renewal of his contract, despite being told that this will be finalised by the end of 2022.

204    Despite this meeting’s prominence in the pleading, Professor Jackson made no reference to it in his closing submission. The meeting must be understood in context. By reason of the findings already made, it was clear to all parties that there was still significant disagreement as at 3 February 2023. There was an impasse but I do not accept that HRI had given up or were not willing to continue negotiating. Rather they became sidetracked by other matters. From the beginning of February 2023, HRI became concerned about its own finances and also, at the same time, about Professor Jackson’s authorisation of the August 2022 SoW (for $744,995) and about funding. It was Mr McGauran’s evidence that HRI senior management became aware of the SoW on or around 23 February 2023. There was an informal Board discussion on 10 March 2023 and then a meeting with Mr Bush on 22 March 2023.

205    I do not accept that HRI engaged in misleading or deceptive conduct by not disclosing to Professor Jackson that it did not intend to enter into a further employment contract with him or finalise the collaboration agreement. First, there could be no reasonable expectation of disclosure to Professor Jackson on Professor Jackson’s part. The evidence established that Professor Jackson was a participant in ongoing negotiations with respect to both agreements and, where it was obvious the negotiations (as he himself acknowledged in his own communications with HRI) may, or may not, result in agreement. As submitted by HRI, which I accept, there could be no reasonable expectation for HRI to alert Professor Jackson to the obvious possibility that they might not reach agreement. This was particularly so in this case. The parties were sophisticated, experienced negotiators, engaged in commercial negotiations, and where it was evident that they had conflicting interests. Professor Jackson was experienced in conducting contractual negotiations. Further, it could be inferred, from the troubled and protracted negotiations in relation to his earlier contracts and indeed with the negotiations of these two contracts, that he was acutely aware that agreement may not be reached.

206    Secondly, it could not be disputed that Professor Jackson was well aware that the negotiations had not concluded, given the parties were apart on key issues as adverted to above. This was obvious throughout the negotiation (and particularly at the end of the 3 February 2023 meeting). Further, it was evident that Professor Jackson himself understood that negotiations had to be stalled when the parties were trying to understand the extent of the Jackson Lab funds. It was Professor Jackson who wanted to defer further discussions regarding the contracts until this was resolved. In this context, any silence on HRI’s part could not be found to have a tendency to lead Professor Jackson into error.

207    Thirdly, as evident from my findings above and below, the relevant decision-makers in HRI had not formed a concluded view that the negotiations for a further employment contract with Professor Jackson or the collaboration agreement, would not proceed until the Board meeting on 24 July 2023. Further and again, on Professor Jackson’s own case, the contract negotiations were paused from 3 February 2023 while the financial status of his lab was clarified.

208    For these reasons, the misleading and deceptive conduct case must fail.

The whistleblowing claim

209    There is some factual overlap between the facts giving rise to the two claims which will be dealt with shortly, however, it is useful to consider this claim, as pleaded and in its legislative context first, before considering and determining the material facts and resolving the issues that require resolution.

210    By this claim, Professor Jackson contends that HRI contravened s 1317AD(1), contained within the whistleblowing protections of Pt 9.4AAA of the Corporations Act, by subjecting Professor Jackson to a “detriment” in determining not to renew Professor Jackson’s employment contract on 24 July 2023 by a resolution of the Board, where HRI believed or suspected that Professor Jackson proposed to make or could make a disclosure that qualified for protection under Pt 9.4AAA.

211    Part 9.4AAA of the Corporations Act contains a suite of provisions to protect a particular class of persons described as “eligible whistleblowers”.

212    Substantial amendments were made to Pt 9.4AAA by the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth), which came into effect on 1 July 2019. There has been recent consideration of these provisions and their legislative history by this Court: Mount v Dover Castle Metals Pty Ltd [2025] FCA 101 and Reiche v Neometals Ltd (No 2) [2025] FCA 125. However, it is evident that neither of these judges were informed of the recent Full Court decision in Watson v Greenwoods & Herbert Smith Freehills Pty Ltd [2023] FCAFC 132; 413 ALR 227 which itself explains the legislative history and, of particular significance, the effect of the Amendment Act. I am bound by the Full Court’s reasoning.

213    It is worthwhile, placing in stark relief, the effect of the Amendment Act, as it explains why the provisions are to be construed in a particular way. In Watson, the Full Court summarised the material changes brought about by the Amendment Act, (at [15]):

15    These new provisions effected material changes which included, without being exhaustive: (1) the widening of the scope of what disclosures qualify for protection: s 1317AA; (2) orders for compensation can now be made without any contravention of the offence provision being established: s 1317AD; (3) it is now sufficient to establish that detrimental conduct occurred because the wrongdoer “believes or suspects” that the whistleblower or any other person “made, may have made, proposes to make or could make a disclosure”, rather than needing to establish that the conduct occurred because of the disclosure: s 1317AC(1)(c); accordingly, the whistleblower need not have made a disclosure before the detrimental conduct occurred, but rather the detrimental conduct may have occurred because the wrongdoer believes or suspects the whistleblower “may have made, proposes to make or could make” a disclosure; (4) the burden of proof applicable to compensation orders has been modified such that the whistleblower need only adduce evidence that suggests a “reasonable possibility” that the detrimental conduct occurred, at which point the wrongdoer assumes an onus to negative the claim: s 1317AD(2B); and (5) failure to comply with s 1312AC gives rise to civil penalties where previously non-compliance constituted an offence (see s 1311(1)) (as it still does) but did not give rise to a civil penalty.

214    The third material change, identified by the Full Court, is of some significance. By operation of either ss 1317AC or 1317AD, it is sufficient to establish that detrimental conduct occurred because the wrongdoer (alleged to be HRI in this case) “believes or suspects” that the whistleblower (here, Professor Jackson) “made, may have made, proposes to make or could make a disclosure”, rather than needing to establish that the conduct occurred because a disclosure had in fact been made or that the person was in fact an “eligible whistleblower”. The focus is upon the belief or suspicion of the alleged wrongdoer.

215    Where the person seeks compensation or other relief under s 1317AE, the elements of s 1317AD must be satisfied.

216    Section 1317AD provides:

1317AD Compensation and other remedies—circumstances in which an order may be made

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

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

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

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

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

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

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

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

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

(c)    the first person:

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

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

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

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

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

(a)    another person (the third person) engages in conduct (detrimental conduct) that:

(i)    causes any detriment to a person (the second person) other than the first person or the third person; or

(ii)    constitutes the making of a threat to cause any such detriment to a person (the second person) other than the first person or the third person; and

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

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

(d)    the first person is under a duty to prevent the third person engaging in the detrimental conduct, or a duty to take reasonable steps to ensure that the third person does not engage in the detrimental conduct; and

(e)    the first person fails in part or whole to fulfil that duty.

Burden of proof

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

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

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

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

(iii)    if subsection (2A) of this section applies—paragraphs (2A)(a) and (d); and

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

Threats

(3)    For the purposes of this section, a threat may be:

(a)    express or implied; or

(b)    conditional or unconditional.

(4)    In proceedings for the purposes of section 1317AE, it is not necessary to prove that the person threatened actually feared that the threat would be carried out.

217    Accordingly, in order to be eligible for relief under s 1317AE, it must be proved:

(a)    that HRI engaged in conduct which either:

(i)    caused a detriment to Professor Jackson (s 1317AD(1)(a)), where the alleged “detriment” satisfies the terms of definition in s 1317ADA; or

(ii)    constituted the making of a threat to cause any such detriment to Professor Jackson (not pleaded in this case); and

(b)    when HRI engaged in the detrimental conduct, HRI believed or suspected that Professor Jackson may have made, proposes to make or could make a disclosure that qualifies for protection under Pt 9.4AAA (that is, s 1317AA, and does fall within an exception under the Part, for example, s 1317AADA (where the disclosure concerns a personal work-related grievance)); and

(c)    that belief or suspicion was the reason, or part of the reason, for the detrimental conduct.

218    On the question of onus under s 1317AD(2B), Professor Jackson bears the onus of adducing or pointing to evidence that suggests a reasonable possibility that HRI engaged in conduct that (relevantly) caused detriment to him within the meaning of s 1317AD(1)(a): s 1317AD(2B)(a)(i). If Professor Jackson has done this, HRI bears the onus of proving that the elements of s 1317AD(1) are not made out: s 1317AD(2B)(b). That is, HRI bears the onus of showing, when it engaged in the detrimental conduct, it did not believe or suspect that Professor Jackson may have made, proposes to make or could make a disclosure qualifying for protection, and that the belief or suspicion did not form the reason or part of the reason, for the detrimental conduct: s 1317AD(1)(b)–(c).

219    The assessment of whether there is the requisite belief or suspicion is directed to a factual circumstance or state of affairs, that the prospective victim has made, may make, proposes to make or could make a disclosure of a particular kind. As observed by Feutrill J in Reiche at [84], it will be difficult to discharge the onus without direct evidence as to the absence of the alleged belief or suspicion, however, the existence of the same, does not mean that the alleged wrongdoer will have discharged the onus it bears under s 1317AD(2B).

220    By operation of s 1317AD(1)(b), the relevant inquiry involves determining whether HRI, who engaged in the detrimental conduct, believed or suspected that Professor Jackson subjectively possessed grounds for having the requisite suspicion of the matters set out in s 1317AA(4) or s 1317AA(5) and if so, whether those grounds objectively would be reasonable grounds for that suspicion: Reiche at [86]–[87].

221    Section 1317AA(4) and (5) provide:

Disclosable matters

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

(a)     the regulated entity; or

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

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

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

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

has engaged in conduct that:

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

(i)     this Act;

(ii)     the ASIC Act;

(iii)     the Banking Act 1959;

(iiia)     the Financial Accountability Regime Act 2023;

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

(v)     the Insurance Act 1973;

(vi)     the Life Insurance Act 1995;

(vii)     the National Consumer Credit Protection Act 2009;

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

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

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

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

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

Note:     There is no requirement for a discloser to identify himself or herself in order for a disclosure to qualify for protection under this Part.

222    As observed by Feutrill J in Reiche (at [87]):

That inquiry is informed, in part, by the nature of the information subjectively possessed and the extent to which it obviously and readily concerns the matters described in s 1317AA(4) or s 1317AA(5). The outcome of the relevant inquiry is of relevance to determining the question of whether the person who engaged in detrimental conduct could have or was likely to have believed or suspected that Mr Reiche had made, may have made, proposed to make or could make a disclosure of information that would qualify for protection under Pt 9.4AAA.

223    There is no reason or basis for construing s 1317AD(1)(b) as requiring that the person engaging in the conduct appreciate the legal quality or character of the disclosure. All they need believe or suspect is that a disclosure about, relevantly, misconduct or an improper state of affairs or circumstances, has been, may, is proposed to be made, or could be made. It is not necessary for them to appreciate the legal significance of the disclosure or potential disclosure or have any familiarity with, or appreciation of, Pt 9.4AAA.

224    The question is then what “information” would constitute “misconduct or an improper state of affairs or circumstances” within the meaning of Part 9.4AAA. I agree with the observations made in both Mount and Reiche which have the following combined effect:

(a)    To the extent that the “information” believed or suspected to be in the possession of the putative whistleblower, concerns “misconduct”, that includes information concerning “fraud, negligence, default, breach of trust and breach of duty”, by picking up the definition of “misconduct” in s 9 the Corporations Act (Reiche at [88]; Mount at [129]);

(b)    To the extent that the “information” concerns “improper state of affairs or circumstances” (Reiche at [88]; Mount at [129]):

(i)    the terms are not defined in the Corporations Act and it ought be inferred that they be given their ordinary meaning;

(ii)    “Improper” is a term of broad import which includes, by adoption of its ordinary meaning, as not in accordance with truth, fact, reason or rule; abnormal, irregular, incorrect, inaccurate, erroneous, wrong;

(iii)    the terms “improper state of affairs or circumstances” may include conduct in relation to a regulated entity, which, whilst not unlawful, may indicate a systemic issue that would assist the relevant regulator in performing its functions given that the underlying purpose of Part 9.4AAA is to encourage whistleblowing to aid or improve compliance with the law (Mount at [90]–[91]); and

(iv)    the terms may include, but is not limited to, information that indicates a danger to the public or a danger to the financial system is also a disclosable matter (Mount at [90]–[91]).

225    Accordingly, as observed by Feutrill J in Reiche at [93], where, on the putative whistleblower’s case, the alleged “information” does not obviously or readily engage or assist the regulatory functions (compliance, enforcement and (or) discipline) of ASIC, APRA or another Commonwealth authority in relation to the regulated entity (or a related body corporate), the person who caused to detriment may plausibly not have reason to believe or suspect that disclosure of that information by the whistleblower would qualify for protection under Pt 9.4AAA.

226    In this case, Professor Jackson does not claim that he had made a disclosure already, but that there was a belief or suspicion that he could, proposes to, or may make a disclosure qualifying for protection under Pt 9.4AAA.

227    Notably, in order to be satisfied, that the alleged wrongdoer had the requisite belief or suspicion, referred to in ss 1317AC(1)(c) or 1317AD(1)(c), that belief or suspicion may be the reason or part of the reason for the detrimental conduct. I note that Justice Feutrill considered whether the prohibited reason, albeit not the sole reason but a part of it, had to be a substantial and operative factor: Reiche at [95]–[100]. I concur with and adopt his Honour’s reasons and conclusion that the part of the reason must be the substantial and operative factor.

228    HRI contends that this claim fails because: First, HRI did not engage in conduct that caused detriment to Professor Jackson; secondly, the relevant decision-makers, being the directors who voted on the resolution, did not hold a proscribed belief or suspicion (nor, in any event, did Professor Coats or anyone else material to the decision-making process); and thirdly, no proscribed belief or suspicion was a reason for the relevant decision-makers voting in favour of that decision.

229    Accordingly, the main areas of dispute concern:

(a)    whether the decision to renew, could in any event, constitute a “detriment” within the meaning of s 1317ADA, such that this requisite criterion, under s 1317AD(1)(a) could not be met; and

(b)    whether HRI had the requisite or suspicion belief, under s 1317AD(1)(b), which was the reason, or part of the reason for the detrimental conduct. This included consideration of whose minds comprised HRI’s state of mind, the voting directors or others who made material contribution to the decision-making process.

230    I will deal with the relevant organising principles informing the determination of each of these two issues in context below.

Did the decision not to renew constitute HRI engaging in conduct which caused a ‘detriment’ to Professor Jackson for the purposes of s 1317ADA(b) and/or (j) of the Corporations Act? (issue 8)

231    Turning to the first issue, Professor Jackson must establish that HRI “engaged in conduct” which caused a “detriment” to him within the meaning of s 1317ADA. The term “detriment” is not defined in the Corporations Act other than by non-exhaustive illustration. Section 1317ADA provides:

1317ADA Meaning of detriment

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

(a)    dismissal of an employee;

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

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

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

(e)    harassment or intimidation of a person;

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

(g)    damage to a person’s property;

(h)    damage to a person’s reputation;

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

(j)    any other damage to a person.

232    I concur with recent authority that the term is a broad one and intended to capture any disadvantage: Mount at [148]; Reiche at [75]. It is not limited to a loss of legal entitlement: Reiche at [81].

233    Professor Jackson claims that the alleged “detriment” was the decision not to renew his contract, falling within either of the non-exhaustive examples, being an “injury in his employment” (s 1317ADA(b)) or “any other damage to a person” (s 1317ADA(j)); ASOC [52].

234    On 24 July 2023, HRI, by resolution of the Board, determined “not to renew Professor Jackson’s employment contract”. However, for the reasons which follow, what this in fact meant is not as it seems. Professor Jackson picked up the language of the resolution in his pleading and claimed that the decision not to renew his contract constituted a “detriment”.

235    It is necessary to be precise about what informed and arose from this resolution. It did not cause the 2021 Contract to come to an end: the contract expired according to its own terms, by the effluxion of time, on 30 June 2024. Therefore, it cannot be said that HRI determined that Professor Jackson’s contract would end: There was no option to renew within the contract. Further, for the reasons set out below, the parties were not negotiating a “renewal” of the existing contract on the same terms. Rather, the parties were negotiating a new contract on different terms (where there remained substantial disagreement). I do not accept that HRI caused Professor Jackson to suffer a detriment by failing to enter a new contract. The making of a contract requires the meeting of the minds of the parties on essential terms. Neither party was required to accede to the demands of the other.

236    However, I do not accept that the substance of the Board’s decision was nothing more than to allow a natural event to occur (the expiry of the contract’s term). It is my view, by reason of the facts and circumstances, identified in both the ACL and whistleblowing claim, that the decision made by the Board on 24 July 2024, was also to not progress any further discussions with Professor Jackson about any further employment after the expiry of the 2021 Contract’s term.

237    This is clear from the content of the report given to the Board on 21 July 2023, the content of the discussion during the meeting on 24 July 2024, the concerns of Professor Coats, the reasons of the Board members and the content of the letter on 15 August 2023.

238    The report, prepared by Dr Gainsford and Ms Dwyer, which is tabled at the meeting on 24 July 2023, identifies the three concerns regarding Professor Jackson’s conduct and the circumstances, and proposes that a meeting be held with him to advise him of those concerns, and “that on the basis of the above concerns HRI does not intend to offer him a further contract of employment when his current contract expires in June 2024”, The concerns raised by Professor Coats, include (and have been stated previously) that, little progress had been achieved in relation to the negotiation of the two agreements with Professor Jackson. The Board minutes, on this issue, commence with a discussion about the absence of progress in the negotiation of the new agreements. A large number of the voting directors reasoned that their decision to support the resolution was the fact that the protracted negotiations had not resulted in agreement. The 15 August 2023 letter to Professor Jackson, informing him of HRI’s concerns, stated that:

HRI is very concerned about the matters set [out] (sic) above. As such HRI is not proposing to continue discussions with you about any further employment after the expiry of the Term.

239    Accordingly, I do not accept that there was no detriment caused by what was the Board’s resolution, it was not simply to allow, by effluxion of time, the contract to expire, rather the resolution caused the cessation in further discussions with Professor Jackson regarding further employment.

240    This was the purported “detriment”, whilst unfortunately pleaded imprecisely. The imprecision appears to arise from the Board’s wording of the resolution. A loss of a chance to negotiate a further contract, even if there is no contractual right to so engage, may comprise a “detriment” within the meaning of s 1317ADA(b) or (j) or otherwise more broadly within the definition of detriment, as it comprises a disadvantage. The absence of a contractual right of renewal does not mean that the decision not to renew could not constitute a detriment: Reiche at [81]. However, of course, as to whether it is, is fact dependent. Whilst, a “detriment” may include action or omission and is broadly defined, it must be established that a real and valuable opportunity to negotiate was lost in the circumstances of this case.

241    It is my view, in the circumstances of this case, by reason of the circumstances addressed in the ACL claim and in the whistleblowing claim, that Professor Jackson did not in fact lose a real and valuable opportunity to negotiate a further contract by reason of what had transpired up until this point in time. The evidence establishes that the parties were apart on key issues as at 3 February 2023 and the negotiation of a new employment contract “paused”. Thereafter, there were substantive intervening events, including a belief by HRI that Professor Jackson had breached the delegation policy, a concern as to the viability of the STARS trial and the ability of HRI to fund ongoing commitments it had to the trial.

242    By reason of so finding that no detriment has been established, Professor Jackson’s whistleblowing claim fails. However, to the extent that I am wrong, and Professor Jackson were able to establish that HRI caused him to suffer a “detriment”, for the following reasons, I find that HRI has discharged its onus and satisfied me that it did not believe or suspect that he proposed to make or could make a qualified disclosure and the purported belief or suspicion was the reason, or part of the reason for the detrimental conduct.

243    It is worthwhile to first consider the pleaded claim and the events said to give rise to the alleged belief or suspicion.

Pleaded claim regarding the alleged circumstances giving rise to Professor Jackson’s assertion that HRI believed or suspected that Professor Jackson would or may make a protected disclosure

244    As pleaded, Professor Jackson claimed that by reason of events that occurred between 30 March 2023 and 15 August 2023, HRI had believed or suspected that Professor Jackson would or may make a protected disclosure.

245    However, in closing, Professor Jackson expanded out the time period over which HRI’s conduct was the subject of scrutiny with respect this ground, with substantial overlap with events that are relied upon with respect to the misleading and deceptive conduct claim. This included conduct from August 2022 onwards.

246    I agree with the criticism made by Counsel for HRI, in closing, that Professor Jackson’s case was a moving feast and that it could not be alleged against it that it had failed to discharge its onus with respect to matters which were never pleaded as having bearing on this cause of action. However, in any event, for the reasons which follow, I do not accept that, by reason of the expanded chronology, Professor Jackson has established that (a) HRI believed or suspected that Professor Jackson would or may make a protected disclosure; and (b) that it was motivated by that belief or suspicion.

The events of 2022 – whilst providing some context for the alleged detrimental conduct in 2023 – ultimately were in no way dispositive of the allegations

247    For the reasons which follow, it is my view that nothing of significance may be gleaned from the events in 2022 which go to establish Professor Jackson’s whistleblowing case, rather, those events assist in proving the contrary.

248    I rely on the factual findings I made with respect to the contract negotiations when dealing with the ACL claim above.

249    It may be accepted that in August 2022, Mr McGauran, Professor Coats and Professor Jackson exchanged positive emails regarding the progressing of the negotiations for the collaboration agreement. It may also be accepted that in the 12/13 September 2022 meeting that Mr McGauran had said that he was committed to helping Professor Jackson finalise a new employment contract and resolve remaining issues regarding the collaboration agreement. The same may be said for the discussion at the meeting at Bathers Pavillion.

250    To the extent that the alleged positivity is said to be contrasted with the conduct of Mr McGauran and Professor Coats in May 2023, after it is alleged that they came to believe or suspect that Professor Jackson had or would make a protected disclosure, the circumstances of 2022 are not so stark.

251    It is evident that, for whatever reason, Mr McGauran and Professor Coats had concerns about the efficacy of the collaboration agreement. It is also evident that HRI took a long time to get to Professor Jackson the draft collaboration agreement and Professor Coats had started describing Professor Jackson in a negative light to the Board in 2022. This was evident from the 21 November 2022 Board minute, when, it does appear inaccurately, Professor Coats reported that Professor Jackson had not “provided a response to the draft for six weeks”. This was submitted by Professor Jackson to be a “misrepresentation” and to demonstrate a propensity to mislead the Board about matters material to Professor Jackson.

252    Whilst, there were a number of occasions where Professor Coats did not accurately describe the negotiations and inaccurately placed Professor Jackson in a poor light, for the reasons which follow, I am of the view that Professor Coats’ motivations, after 11 May 2023 (when it is argued that Professor Coats became aware of, and or came to suspect, Professor Jackson may make a protected disclosure) and thereafter advocated for and was involved in the Board’s decision not to renew Professor Jackson’s contract, did not include any alleged unlawful belief or suspicion as alleged by Professor Jackson. Rather, his conduct remained consistent with what it had been before his alleged impermissible belief or suspicion. The evidence established that Professor Coats was always circumspect about the efficacy of the proposed agreements. Whilst his optimism for (or, willingness for) the agreements waned in 2023, that waning accumulated as time went on (and new challenges, strains or tensions between the parties arose), not by reason of any prohibited belief or suspicion. They included HRI becoming aware of problems with its own finances, having concerns about whether Professor Jackson had overcommitted HRI to Ardena and whether the STARS trial was viable.

19 September 2022 Board Meeting

253    Whilst it is true that the 19 September 2022 Board meeting minute noted the (then) current payments to Ardena were being processed against Professor Jackson’s group discretionary account and therefore the Board were aware of the Ardena drug manufacturing contract, there was no claim at hearing that, by reason of this email, the Board (or, relevant HRI officers) were at this time aware of the August 2022 SoW and that, therefore, the concerns in 2023 about whether there had been an unauthorised overcommitment, were not genuine.

Events prior to and including the 21 November 2022 Board Meeting

254    As found above, there were discussions as between Professor Jackson and Mr McGauran as to their attempts to reach agreement on the two agreements. However, it is clear that, as at 17 November 2022, Professor Jackson could see that there was an apparent divide between the parties and that an outcome may be that they do not reach agreement regarding his future role and the collaboration agreement. The exchanges between Professor Coats (providing dot points on 18 November) and Professor Jackson (20 November) reveal that the parties did not, in any detailed way, reveal their positions, and thereafter discuss the terms of a new contract. It is also clear that, from then on, as found above, there were substantial areas of disagreement.

255    To the extent that reliance was placed by Professor Jackson, of Professor Coats’ making misleading or inaccurate statements to the Board as to the progress of negotiations and the purported absence of a response from Professor Jackson, I do not accept that these allegations assist Professor Jackson’s whistleblowing case, but rather go against it. This is alleged adverse conduct occurred five months before it is alleged that Professor Coats became aware of the possible disclosure.

256    To the extent that it was submitted that Professor Coats’ representations at the 21 November 2022 meeting illustrates that Professor Coats was willing to mislead the Board about material matters concerning Professor Jackson (being conduct that continued up to and including 24 July 2023), does not evince, by inference or an accumulation of the circumstances referred to below, the prohibited belief or suspicion.

257    However, it is noteworthy that Professor Coats gave (unchallenged) evidence that, at the Board meeting, he told the Board that he thought Professor Jackson was intentionally “stringing out” negotiations for the collaboration agreement to secure better terms for his own contract renewal. In addition, he also noted that Professor Jackson had now raised concerns around his position and responsibilities. Lastly, Professor Coats told the Board that he thought that what Professor Jackson envisaged for his new role would be unaffordable for HRI and would undermine the authority of any Scientific Director after him. As will be apparent from the below, part of the reasoning of certain of the voting directors for non-renewal was their perception that Professor Jackson was stringing out the negotiations of the collaboration agreement. To the extent that any person relied upon this perception (whether correct or not), it is apparent that its source, could not have been tainted by any later unlawful reason, as the perception pre-dated any such alleged belief or suspicion.

Events between 18 November 2022 and 30 January 2023

258    I accept, as Professor Jackson submits, that the evidence reveals that, as at 18 November 2022, HRI was contemplating that Professor Jackson’s employment contract, would be for a five year period from 2023 until 2027. However, I do not accept, that this position, as at 2022, ultimately has any great bearing on the motivations of those that determined not to renew Professor Jackson’s employment, the evidence revealed that there were many, many intervening events thereafter.

259    Further, I accept, as Professor Jackson submits, that Exhibit A7, reveals numerous interactions between Professor Coats and Mr McGauran and them forming their own position in early December 2022, as to contractual terms within Professor Jackson’s contract, which they said were “non-negotiables”. I also accept that they did not disclose this position to Professor Jackson. However, I do not think that this evidentiary strand assists Professor Jackson’s case. Rather, I think it confirms that there was no prohibited motivation that infected the decision-making process which led to the non-renewal of Professor Jackson’s employment. There were instead many forces at play, the negotiations had drawn out for a long time, and ultimately, for a number of reasons (not infected by any prohibited ones) a decision was made to not renew the contract.

260    As found earlier, the meeting on 21 December 2022 reinforced that there remained disagreement on key issues, including Professor Jackson’s authority and the budget. The meeting on 30 January 2023 did not narrow the divide. Further, the meeting on 3 February 2023 revealed that there remained significant areas of disagreement.

261    It was submitted by Professor Jackson, as being supportive of his whistleblowing case, that as at 3 February 2023, Mr McGauran and Professor Coats, were open minded, at this stage, about the continued contract negotiations and, fundamentally, the only thing that changed was the perception that Professor Jackson had, could, or may make a whistleblowing complaint.

262    However, this submission is flawed for a number of reasons. It is notable that Professor Jackson submitted that HRI became aware of the possibility that Professor Jackson could or may make a whistleblowing complaint on 11 May 2023.

263    Professor Jackson’s submission, then, in effect, assumes that nothing happened, in the period between 3 February and 11 May 2023 from which it could be inferred that there was any material change of circumstances, such as to change their views which were “open minded” about the continued contract negotiations.

264    However, the following evidence reveals a different story.

The circumstances leading up to the identification of shortfalls and the alleged “misconduct or improper state of affairs or circumstances”

265    The alleged “misconduct or improper state of affairs or circumstances” in relation to HRI, which HRI was alleged to have believed or suspected that Professor Jackson may have had information from which he proposed to make or could make a disclosure about, was submitted in closing to be the failure to provide top-ups in 2013 and 2014 as well as the Jackson lab incurring expenses which HRI ought to have incurred (namely, the ledger of expenses for TGI).

266    This purported information as to “misconduct or improper state of affairs or circumstances” came to the knowledge of Professor Jackson, Mr Bush and HRI in 2023, when HRI started to become concerned about commitments Professor Jackson’s lab had made in 2022 for drug manufacture costs for which there was a concern that there would be insufficient funds to cover their costs.

267    The unchallenged evidence revealed a very significant matter, which loomed, at large - HRI’s increasing concerns about its own financial position over the relevant period. On 19 September 2022, the ARFC updated the Board as to HRI finances being impacted by poor performing investments. Similar concerns regarding the impact on HRI’s investments arising from movement in the stock market were raised in November 2022.

268    On or around 20 February 2023, Dr Krskova told Professor Coats and Dr Gainsford about the August SoW for EUR476,600 and expressed that she was “very concerned about the amount of the August SoW and where the funding for these costs would come from given the total expenditure to date on Ardena drug manufacturing costs” and would make further enquiries. It appears that Dr Krskova formed the view there would be costs overrun and communicated this to Professor Coats and Dr Gainsford on 23 February 2023. Dr Krskova then arranged a meeting with Mr Bush and Dr Gainsford on 20 March 2023 to discuss what was perceived to be costs overrun.

269    At the board meeting on the same day, it is evident that the Board was updated as to the status of the negotiation of both the collaboration agreement and also Professor Jackson’s employment contract. In this context, the Board Minutes reveal that, Professor Jackson was wishing to see the audited “financials for 2022” but also noted how costs of the drug manufacturing were being funded. An extract from these Minutes, is set out as follows:

5    Jackson Commercialisation Update

Mr McGauran, Professor Coats and Dr Gainsford provided the Board with a verbal on the progress of the negotiations with Professor Jackson, noting that the Collaboration Agreement had not yet been finalised, with Professor Jackson wishing to see the audited financials for 2022 first.

The Board noted details of Professor Jackson’s remuneration, with the current contract being in place till the middle of 2024.

The Board also noted that Professor Jackson continued to draw funds from his group discretionary account to cover Ardena invoices for the costs of drug manufacturing and for other commitments.

6    Thrombio Status

The Board noted that Professor Coats and Dr Gainsford were having weekly meetings with Professor Jackson and Thrombio’s CEO Peter Bush.

Concerns were raised around a clause in the draft contract about the impact of Professor Jackson leaving HRI on equity/IP.

The Board also noted that the funds of 2 million from Monash University (the Jackson funds) continued to be applied towards the activities of Jackson's lab to help ThromBio with research.

270    As already found above, this report to the Board was inaccurate, Professor Jackson wished to see the audited financials for 2022 for the purpose of the negotiation of his employment contract, not the collaboration agreement.

271    At this meeting, Professor Coats also advised the Board that the negotiations for a new employment contract were at an impasse and that Professor Jackson did not appear to be willing to compromise on key areas in dispute and that Professor Jackson wanted the employment agreement finalised before signing the collaboration agreement.

272    As to the latter, this was consistent with the recollection of Professor Sleigh. She gave evidence that, at the meeting on 20 February 2023, “Dr McInnes reported to me that Mr Bush had told him he considered the Collaboration Agreement to be reasonable and generally acceptable but with some matters still to be finalised. However, there appeared to be no further progress on signing the Collaboration Agreement”. Further, she deposed that she “understood from the Board briefings that Professor Jackson’s focus was on his employment contract and that he had deferred discussion on the Collaboration Agreement until that was sorted out.”

273    Also at this Board meeting on 20 February 2023, Mr Rassi raised with the Board, as Chair of the ARFC, that the deficit results were not sustainable long term. The issue of HRI’s own financial position was clearly before the Board.

Dr Krskova raises concerns about HRI commitments to cover the drug manufacturing costs

274    On 23 February 2023, Dr Krskova sent an email to Professor Coats and Dr Gainsford, attaching a number of spreadsheets addressing an updated summary of commercialisation costs in relation to Professor Jackson. The email identified that the total of the Jackson Funds was $2,036,000 and the funds were located in the discretionary TRG account. That, as at 31 December 2022, the balance of that account was $825,460, then noting other salary expenditure, that the balance was even lower. Dr Krskova stated that the MRFF grant funds could no longer assist with covering any Ardena invoices. She further noted that HRI had been committed to paying approximately $652,000, for which Board approval should have been sought, where the total Ardena cost which HRI is required to cover was currently $1,396,750.

24 February 2023 email

275    On 24 February 2023, Dr Gainsford emailed Professor Coats, stating, among other things, that Professor Jackson had significantly overspent the MRFF budget on drug manufacture and did not have sufficient funds to cover this and raised other financial risks.

276    On the same day, Professor Coats replied:

Ok, we’re making progress. We need to see what has come into his discretionary accounts and what was spent each year since 2019 to see the evolution from what was 1.271M in 2019 (his discretionary account) to what it is now.

This is very complex and I believe it is best we go through it carefully ourselves getting agreed narrative and documentation fully agreed between ourselves and then plan to go through it with Shaun and/or Peter Bush before we make any statements, as it is likely to be vigorously disputed whatever we say. I cannot imagine we can get all our ducks lined up in less than a few weeks; ie lets get our story water tight first even if that takes a few meetings, cheers, Andrew

277    Professor Coats was cross-examined about this email and agreed that he understood the assertion by Dr Gainsford to be significant overspend on drug manufacturing that would have to be covered by MRFF Funds. Professor Coats’ evidence was that he wanted to do his own analysis, at least initially, without consulting Professor Jackson or Mr Bush, and then to consult with them before making any statement about where the funds were up to.

10 March 2023 meeting

278    At a Board meeting on 10 March 2023, Professor Coats and/or Dr Gainsford informed the Board that the Jackson funds appeared to be heavily depleted. The “true position” of the Jackson funds was said in the minutes to be something that would be shared with the Board once Dr Gainsford and Dr Krskova had conducted their review.

279    On 20 March 2023, Mr Bush met with Dr Gainsford and Dr Krskova, and they discussed the Ardena cost overrun and the funds that had been committed to payments to Ardena. They reviewed an excel spreadsheet Dr Krskova had created which identified a summary of the costs for the STARS trial and the MRFF grant budget. Following the meeting on that day, Mr Bush received an email from Dr Krskova in which she asked him to confirm how much funding had been committed for Ardena between 2019 and 2023, and beyond. Dr Krskova also attached a copy of the excel spreadsheet. There were further email exchanges.

22 March 2023

280    Two days after this meeting, on 22 March 2023, Mr Bush met with Mr McGauran. At that meeting, Mr Bush stated that the reason for the funding issue arose from what he understood as a shortfall in the funding for the STARS trial because HRI had not provided the expected top-ups to the discretionary fund. Mr Bush was of the view at this meeting that HRI’s figures were incorrect and there were “savings” which had not been identified in figures. There were subsequent exchanges with Mr Bush asking him to provide details of the savings he had been referring to and to provide, amongst other things, information regarding Ardena and HRI’s role with respect to it.

281    On 24 March 2023, Professor Coats identified in an email to Mr Bush what he understood to be a shortfall or deficit in respect to a MRFF study in respect to the Ardena and George Institute and sought Mr Bush’s opinion on how the deficit should be paid.

29 March 2023

282    On 29 March 2023, Dr Gainsford prepared a report for HRI’s Audit, Risk and Finance Committee. In this report, Dr Gainsford stated that a huge amount of work had been done to untangle (what they understood to be the financial picture) and to establish what had been committed in the past and what was not. The report stated, amongst other things, that Professor Jackson’s discretionary funds were in deficit of $1 million (if other funds are not identified by Professor Jackson or ThromBio).

283    Also in this report, an important issue was raised for the first time, namely a belief that Professor Jackson had authorised work (and committed HRI to funding it) beyond his delegated authority.

284    As to actions that the ARFC was seeking from the Board, they included retrospective approval of the August 2022 SoW for $744,995 (on the basis that there was no tangible benefit in holding the trial up at this stage), asking the HRI Board and management to work with ThromBio to understand how the projected $1 million deficit will be covered by ThromBio, whether HRI would contribute, with a possibility of this being in exchange for extra equity in ThromBio, and for HRI to provide advice as to whether expenses can continue to be charged to the discretionary fund that is in a projected deficit (being expenses that include but not limited to staff salary and scientific charges).

285    What is clear is that, by this stage, persons within management and Board members (such as Mr Pollitt) believed that Professor Jackson had breached his delegated authority without the issue being raised with him. Ultimately, the Court was not asked to, and could not on the evidence, decide whether there had been such a breach at all. However, this is a big issue that ultimately loomed large in the minds of a number of directors by the time that they made their decision not renew his contract. It is one of the issues that accumulated in the collective HRI mind that was instrumental in the decision to not renew.

3 April 2023 Board meeting

286    At the Board meeting on 3 April 2023, the Board was informed of the shortfall in funding, Professor Jackson’s assertion regarding HRI top-up practice and his alleged breach of the delegation policy. The report of what occurred at that meeting, in these respects, is set out as follows:

6    ThromBio Issues

a)     Funding shortfall of MRFF grant

The Thrombio Update Report, circulated as Appendix C1, was taken as read.

Professor Coats updated the Board on the progress of the preparation of a quite extensive financial reconciliation of costs incurred by HRI on behalf of Thrombio to date with the aim to ascertain the remaining balance of the Jackson Funds available to Professor Jackson for further support of his trials.

The Board noted that the funds of $2 million from Monash University (the Jackson funds) continued to be applied towards the activities of Jackson's lab to help ThromBio with research. It was further noted that the costs of the trial were proving to be higher than the MRFF grant funding awarded, with the latest version of the reconciliation indicating that there might be a projected deficit when all commitments are accounted for. The Board noted that in the lead up to the Board meeting, payments for additional invoices had been paused.

The Board revisited that Professor Jackson assertion that the 20c/30c in a dollar top-up for Category 1and Category 2 income was a common practice at HRI. It was agreed that such practice was not a Board approved policy. The understanding of the Board was that top ups were approved, when they were affordable by the Institute's budget. It was further noted that under Professor Jackson's leadership, top-ups were awarded only to some groups.

The Board furthermore noted that the Monash Funds, brought over to HRI by Professor Jackson in 2014, were not placed into an interest bearing account till December 2019, when the funds were included in the Russell Investments balance.

b)     Ardena Statement of Works SL-3506-220606

The Ardena SOW SL-3506-220606, circulated as Appendix C2, was taken as read.

The Board noted that Professor Jackson breached his delegated authority and committed HRI to $744k AUD worth of additional manufacturing costs. It was further noted that this additional expenditure was in addition to the $664k AUD provided for manufacturing costs in the MRFF grant. Noting that the Ardena Master Agreement was signed with HRI and not Thrombio, the Board also noted the conflict of interest of Professor Jackson signing the Ardena statement of work as there is a private benefit involved in the contracted services.

It was agreed that the SOW would remain unsigned, until such time that the final balance of the Jackson funds is confirmed. In the meantime, to ensure that the trial is not delayed, it was agreed to pay Ardena approximately 121k EUR.

It was further agreed that should the total expenditure in relation to the trials be greater than the funds available in the combined pool of the MRFF grant funding / $2Mil Jackson Funds/ THRG Discretionary account, the additional Ardena Statement of Works (SL-3506-220606) would be offset by additional equity in Thrombio.

Noting that no HRI staff can be allowed to act beyond one's authorised authority and to commit HRI to expenditure above one's delegated authority (without receiving prior Board approval to do so), it was also agreed that once the current balance of funds available to Professor Jackson is confirmed, steps would be taken to address the breach of delegation of authority by Professor Jackson.

7    Professor Jackson Contract Renewal

Mr McGauran, Professor Coats and Dr Gainsford provided the Board with a verbal update on the progress of the negotiations with Professor Jackson, noting that the Collaboration Agreement had not yet been finalised, with Professor Jackson wishing to see the audited financials for 2022 first.

The Board revisited that the fact that despite the delays in the Collaboration Agreement execution, Professor Jackson continued to draw funds from his group discretionary account to cover Ardena invoices for the costs of drug manufacturing and for other commitments.

287    It was accepted by Mr McGauran, under cross-examination, that he understood at this time that both the collaboration agreement and the employment agreement were to be signed at the same time. Mr McGauran accepted that it was not reflected in the minutes that he had told the Board the delay in negotiating Professor Jackson’s employment was because the parties were undertaking this analysis about the Jackson lab.

11 April 2023 text exchange

288    Proximate to these Board deliberations was a text exchange between Mr McGauran and Professor Jackson on 11 April 2023 in the following terms:

Professor Jackson:    Hi Peter,

I hope all is going well for you.

Sorry to harass you straight after Easter, but I’m increasingly concerned about Peter Bush.

I left a message on your phone. Peter Bush indicated that there are ongoing issues with the Board around the funding of the STARS trial. Not sure why. I thought we had resolved these issues when we last met. Happy to bring Ben Freedman into these discussions if you need any independent validation of what I explained to you.

The real concern is giving Peter Bush comfort over his contract. He’s a serious flight risk. He feels really let down by HRI. You and I need to find a solution very quickly.

Thanks for your ongoing help and support.

Shaun

Mr McGauran:    Hi Shaun. I’m worried for sure at the prospect of Peter leaving. It’s not in anyone’s interests. The board feels blindsided by the top up and are aggrieved at you exceeding your approval limit to such an extent. However, the board is prepared to pay the top up subject to two conditions which I think are reasonable: consideration of how HRI can be recompensed for its expenditure of approx $700,000, and an undertaking that you do not in future commit HRI without prior approval. I’ll set up a meeting with Andrew for us to settle the top up issue as a matter of urgency. Thanks, Peter

Professor Jackson:    Hi Peter,

Thanks for the explanation. This is very helpful. On both counts the Board has been misled.

The top-up was HRI policy, approved by the Board. There was no blindside. You can confirm this when Ben Freedman and Stephen Hollings.

Regarding authorisation of invoices. I have to sign the invoice, as I am the CIA in the grant. In the NHMRC/MRFF system, the CIA is ultimately responsible for the expenditure on the grant. The problem was the co-signatories, which is a management error. All major expenditure involving HRI invoices needs multiple authorisations. That is standard policy. The reality was there was no agreed policy in the management team. When Peter Bush pointed this out to Hana, the penny finally dropped. You should talk to Peter to confirm.

This should never have been a Board issue. It was a failure of management and lack of understanding as to how grant funding should be managed.

The dangers of a management team too distant from the scientists without a clear understanding of how the organisation should work.

Happy to discuss further when you have the time.

Thanks for clarifying.

Shaun.

289    In response, Mr McGauran replied, “Andrew will set up a meeting without delay. Would be good to settle this matter and move on to contract discussions.” Thereafter, it was Mr McGauran’s evidence that he asked Professor Jackson for the policy which Professor Jackson thereafter could not find. Thereafter, Professor Jackson asked that they hold off on the meeting with Professor Coats until they have gotten to the bottom of funding of the STARS trial. It was Mr McGauran’s view that Professor Jackson had breached the delegations policy based on a review of the SoWs, he did not think the exchange with Professor Jackson on 11 April (by text) changed that view, but rather he was “surprised” and “shocked”, and thought that Professor Jackson was seeking to deflect responsibility.

290    However, it was Mr McGauran’s evidence, under cross-examination, that there were intervening events beginning to occur that were “beginning to overshadow the contractual negotiations”.

291    I find that, at this stage, the issue of the alleged funding shortfall and the issue of breach of delegated authority were occupying HRI and were overshadowing the contract negotiations.

17 April 2023 emails

292    On 17 April 2023, Professor Coats wrote to Professor Jackson, copying in Mr McGauran, Dr Gainsford, Dr Krskova and Mr Bush, stating:

[W]e have paid the most aged Ardena invoices, but the finance team has flagged up that the total of Jackson Lab funds and MRFF grant amounts, even combined, appear insufficient to cover all the commitments that have made to date. It has been a very complex process to understand fully all prior transactions around the funds that came from Monash when you commenced at HRI, subsequent discretionary funds built up within your lab account and recent grants, principally the MRFF grant focussed on the STARS trial.

293    In response, Professor Jackson, regarding the Jackson lab funds and MRFF commitments, explained that this was the first time he had heard about a “potential funding shortfall with the Jackson discretionary funds”, he went on to flag that, once Mr Bush and Dr Krskova were “comfortable with the accounting treatments”, he needed to better understand, among other things, the ongoing policies regarding the grants administered by the University of Sydney as against HRI, the principles behind the allocation of fundraising income and the top-ups that are to be applied to successful grants. Professor Coats responded on the same day that Dr Krskova was due back on 24 April 2023 and that they should “schedule a sit down shortly thereafter”.

18 April 2023 email between McGauran and Professor Coats

294    Then, the following day, Dr Gainsford raised with Professor Coats another Ardena invoice which “Shaun has signed again for $31,500”. Professor Coats suggested to Mr McGauran a form of words back to Professor Jackson raising the breach of delegation issue, in the following terms:

Dear Peter, see the attached.

Do you think I should write the following:

Dear Shaun, the HRI Delegation of Authority Policy (last amended Feb 2023) limits your authority to approve a statement of work or similar to AUD10,000. Please inform Ardena accordingly so that any new request which comes to you is directed to the appropriate person with authority for sign-off, which depending on the quantum would be Tim (up to AUD100,000) or me (up to AUD500,000) or the Board (anything higher). You can forward any request with an indication it is within budget and which account can cover it, with your recommendation for approval if this is what you support,

OR would you prefer we write something harsher or you to write? Cheers, Andrew

295    Mr McGauran then replied:

Hi Andrew

This is a good draft but let’s sit on it until next week. We’ve got Shaun in a good place so let’s not over load him.

Thanks

Peter

296    Under cross-examination, it was put to Professor Coats that Mr McGauran’s reference to “We’ve got Shaun in a good place, so let’s no overload him” meant that negotiations were actually progressing well at that point, and he did not want to upset Professor Jackson. It was Professor Coats’ evidence that he had not reached a conclusion regarding the contractual negotiations and was waiting for Professor Jackson to modify his demands. Ultimately, the evidence was unclear as to the motivation for delay, but it is consistent with Mr McGauran’s non-confrontational approach with Professor Jackson throughout their dealings. Further, it is indicative of Professor Coats, at this stage prior to having any purported suspicion or belief, having a view about how the delegations policy operated and infers that he believed Professor Jackson had breached that policy.

297    It is apparent that the negotiations regarding the two agreements were essentially put to one side while the funding issue was being worked through.

19 April 2023

298    Interestingly, however, Mr McGauran appears to be continuing (despite being awake at night) to try and work with Professor Jackson. On 19 April 2023, he sent Professor Jackson the following positive text:

Hi Shaun. Great letter to Andrew on the finances. I have been assuring the board and management of your preparedness to constructively engage and work with us to sort out the unholy financial mess. So I was delighted by your fulsome reply. I’m returning to Sydney from Melbourne today after an endoscopy yesterday. Happy to come out to CPC tomorrow at 3pm if convenient. Best, Peter

20 April 2023

299    On 20 April 2023, Professor Jackson and Mr Bush met with Mr McGauran at the CPC. It appeared to a generally positive meeting in which Mr Bush told Mr McGauran that he would work with Dr Gainsford and Professor Coats to reconcile the funding available for the STARS trial and he stated he was confident there were sufficient funds to cover the costs of the drug manufacture.

300    After this meeting, Professor Jackson sent Mr McGauran a text message in which he asked “Is it possible that someone on the Board, who is not tainted by historical events, could spend more time with the institute to help us out? I haven’t met Merrick [Mr Howes], but I’m told he is quite smart. Thanks for considering this.” Mr McGauran attempted to facilitate a discussion between Professor Jackson and Mr Howes, but it did not go ahead because of Mr Howes’ work commitments.

1 May 2023 meeting

301    After the exchange of information as between Dr Krskova and Mr Bush, Dr Krskova prepared a PowerPoint presentation which collated information concerning the financial status of the Jackson lab, including information she had received from Dr Gainsford. The presentation identified that the TRG Discretionary Account had a projected deficit of $849,636. Dr Krskova went through this presentation with Mr Bush on 1 May 2023.

302    Mr Bush deposed that he told Dr Krskova that her analysis was based on a major incorrect financial assumption and the Board had been presented with an erroneous, inflated deficit.

303    Following this meeting, on 1 May 2023, Dr Krskova emailed Professor Coats that her projected deficit of $849,000 (noting, that her email of 3 April 2023 to Professor Coats and Dr Gainsford had a projected deficit of $959,464) could in fact turn into a surplus of $500,000. Professor Coats accepted under cross-examination that Dr Krskova was telling him that the deficit could turn into a surplus of approximately $500,000. Dr Krskova’s email says that this surplus is based on the provision of $425,000 in top-ups to be provided to Professor Jackson by HRI. Professor Coats appears to accept that the top-ups to be provided to Professor Jackson by HRI was a “conditional factor”.

304    Between 2 and 10 May 2023, there was a continuous email exchange between Dr Krskova and Mr Bush.

305    Following receipt of further information from Dr Krskova, Mr Bush, on 8 May 2023, provided Dr Krskova with his updated reconciliation, which: (a) attached his latest financial reconciliation which had resulted in a positive impact on the funds for Professor Jackson’s lab; and (b) stated that Professor Jackson had “many questions around the allocations of expenses to Jackson funds, and this includes the details of the $1,221,151 ‘Monash’ adjustment (which seems to have been allocated in Dec 2020, within the review period scope), commercial cost and wages - all topics we agreed we would park until the first pass STARS commitment and remaining balance was agreed upon”.

306    There were further detailed exchanges between them on 9 and 11 May 2023 regarding the reconciliations. They reveal that a lot of work was being done on both sides to understand previous financial reconciliations and their respective positions. It was a detailed and transparent dialogue. It wards against any later allegation of an about turn by reason of any belief or suspicion. Rather, there was an overshadowing of the contractual negotiations by a very real issue (HRI’s and the Jackson’s lab’s current and protected financial picture) and where both sides are coming from darkness. One issue, however, is that from the Court’s perspective, this deep dive into the historical and current financial picture is never completed and the Court is not able, and was not asked to, decipher what the true picture was—that is, whether there was a surplus or deficit in Jackson lab funds and by how much and what the true state of HRI’s own finances were. There was only scant (often indecipherable or illegible) evidence.

8 May 2023 – Halstead email

307    At the same time, Mr Halstead, a very experienced legal practitioner and an HRI director, having held this position since 2017, and having been involved with it since its inception in 1988, including being responsible for its incorporation, independently turned his mind to the contractual negotiations and the STARS trial.

308    Unprompted, Mr Halstead wrote, on 8 May 2023, to Mr McGauran, Professor Coats, Dr Gainsford, Mr Pollitt, Professor Sleigh, and Mr Howes, in terms which identified the documentary foundation for each of the proposed agreements and the current form of the draft collaboration agreement and Professor Jackson’s current employment contract.

309    As to his motivation for taking this step, under cross-examination, Mr Halstead stated that, after the 3 April meeting, he was concerned that Professor Jackson was placing large orders with Ardena which would involve significant financial commitments without having confirmed that there was funding available to meet them. The issue, in his mind, was whether there was going to be enough funding for the trial. He gave evidence that, prior to 8 May, he had no recollection as to whether he was told there was a possibility the funds were actually in surplus. Mr Halstead said that his concern in sending the email of 8 May, was that there were discussions that were likely to be occurring shortly with Mr Bush and Professor Jackson, and he thought it was important that the HRI is properly prepared and ready for those discussions to deal with whatever the outcome might be. Those discussions he thought were going to occur with Professor Jackson and Mr Bush he had assumed were related to funding. He accepts the assumption he made in his email was that there had been an overspend in the STARS trial. He accepts that his concern was that if these trials were not financially viable, what obligations and rights HRI had to bring Professor Jackson’s employment to an end. It was not his expectation or thought at that time, that that would occur. I accept this, it is consistent with what is apparent from the email when read in full and his reasons for sending the email.

310    As to next steps, Mr Halstead proposed a number of things. It is useful to extract them in their entirety because they put, in context, what is said to be the pivotal point, as at 11 May email, three days later (dealt with below):

…

Next steps

I am happy to prepare a brief and to contribute to the strategic discussions in relation to these matters, however HRI will need to take legal advice and it would not be appropriate for me to provide that from the boardroom as it were. I will come back to that later.

I think that the next step in preparing the brief is to understand the circumstances which have resulted in the overspend in relation to the STARS trial and in particular how the payment of those funds was authorised. Perhaps the best way to do that would be for Hana to brief me and provide the relevant materials, however I understand that further work may be required before that can be done. Andrew mentioned last Thursday that this might take up to three weeks.

Legal advice

Historically HRI has instructed two different law firms to advise in relation to Prof Jackson's Employment Agreement and the Collaboration Agreement, being Ashurst in the former case and Corrs in the latter. Clearly if we seek legal advice we should place that in the hands of one law firm with the other being consulted if required. Corrs were retained by Stephen Hollings to prepare the Collaboration Agreement because of the relevant partner's IP expertise, however I have not had experience with their employment lawyers or litigators Ashurst have had experience in dealing with Shaun in the past in relation to his employment and there is a strong litigation partner at Ashurst who should be able to assist if required.

HRI has been paying legal fees incurred by Prof Jackson in relation to Clayton Utz advice to him in relation to his Employment Agreement. My recollection is that this was agreed to because of a past record of difficulty in getting Shaun to focus on an employment agreement and prior to the decision not to renew his appointment as Scientific Director and the entry into of his present Employment Agreement. A clayton (sic) Utz partner had been recommended to Shaun . I am not familiar with the terms agreed with Shaun relating to the payment of fees. My assumption is that HRI would not be paying his or Thrombio's legal expenses in relation to the Collaboration Agreement nor in relation to the discussions which are likely to arise in the near future.

Approach to discussions and termination rights

We need to determine the strategy to be adopted in approaching these issues with Shaun/Thrombio. Presumably the starting point is the overspend on the STARS trial particularly:

- The steps which have to be taken to remedy that, and what is to occur if it is not remedied.

- The circumstances which has led to the overspend and the actions of Shaun and/or the members of his staff

- Shaun's position generally including for example the suspension of his accreditation with the SLHD and Sydney University.

Presumably consideration needs to be given as to the continuing viability of the STARS trial and the HRl's obligations with respect to continuing to support the trials having regard to the agreements which the HRI has entered into in relation to the trials. Whilst clause 3(a)(i) of the draft Collaboration Agreement obliges the HRI to provide the services of Prof Shaun Jackson as an employee of HRI, clause 3(c) provides that these obligations cease, if Shaun Jackson's employment with HRI ceases. The combination of these two events may lead to the conclusion that the obligations under the Collaboration Agreement come to an end, but we will need to take advice on that. Finally we will need to ascertain whether the conditions precedent to that agreement have been satisfied .

Under clause 11.4 of the Employment Agreement, Shaun's employment may be terminated by the Institute without notice if he:

- is guilty of serious misconduct, or

- breaches any material provision of this Employment Agreement.

Under clause 11.1 before the Expiry Date, the employment agreement may be terminated:

(c) by the Institute giving six months written notice to the Employee.

Under clause 11.2 the Institute may pay the Employee in lieu of notice and under clause 11.3 the Institute may direct the employee not to perform any duties for part or all of the notice period and may require the employee to remain away from the Institute's premises and make any other necessary changes.

I have not at this stage looked into the employment agreements relating to Simone and the other senior members of Shaun's lab.

11 May email – Is this the pivotal point?

311    On 11 May 2023, Dr Krskova emailed Professor Coats and Dr Gainsford attaching a document titled “19.07.17 ARFC – Proposed transfer of Jackson funds”. The email in its terms read as follows:

Hi Andrew and Tim,

Just flagging that the ARFC paper did not answer Shaun’s query about a comment in an old file in relation to 2014, and “the mystery around the origin and reason for allocation of this amount remains”.

Hana

P.S. I remain equally puzzled about why this matter has not been queried in between the years of 2014 and 2021/2022, and it is only coming up in 2023 (when there is nobody at HRI from that period to shed light on this comment).

312    Professor Jackson submitted in closing that, based on this correspondence, Professor Coats was motivated by Professor Jackson raising HRI’s failure to provide top-ups in 2013 and 2014 and that the conduct on the part of HRI “really escalates from there”. It was also submitted that Professor Coats, Mr McGauran and Dr Gainsford became aware of the possibility of disclosure around 11 May 2023. It was said that HRI’s conduct escalates thereafter because up until that time, there had been no proposals put to the Board to cease Professor Jackson’s employment, and that only after 11 May 2023 it becomes a real feature of Board discussions.

313    I accept Professor Coats’ evidence as to his state of knowledge on 11 May 2023. Professor Coats gives evidence under cross-examination that he recalled the email of 11 May 2023, and the notation in that email by Dr Krskova that “I remain equally puzzled about why this matter has not been queried in between the years of 2014 and 2021–22, and it’s only coming up in 2023”. Professor Coats did not accept that he understood at that time that this was in relation to top-ups concerning funds in 2014. He accepted that it had to do with the management of funds insofar as the year 2014 was concerned: “I knew it was something going back to 2014, I didn’t know what – what exactly was being questioned”.

314    Also, on the same day, at 12.28pm, Dr Krskova emailed Mr Bush, copying in Professor Jackson, attaching the “ARFC paper from 2019” upon Mr Bush’s request (and after Professor Coats had given permission) of the day prior, where he wrote to Dr Krskova asking for Professor Jackson to be sent the file note “that was made in 2020 (from memory) around the discretionary fund allocations”. That email is in the following terms:

Good afternoon Peter and Shaun,

Thank you for your email.

As requested, please find attached the ARFC paper from 2019 confirming that discretionary account balance as at April 2019.

As Andrew would have noted in his message to you Peter, this document is provided in confidence and should not be shared further without prior approval.

Hana

P.S. Also, just an update – I will be sending through the updated excel file to you later this afternoon, after my meetings.

315    A careful review of the email communications and meetings which precede the 11 May email, and the content of the attachment to the 11 May email, show that there was a myriad of issues being discussed, but no clear crystallisation of the top-up issue. It is, as a result of this review, and a consideration of Professor Coats’ evidence, that I am of the view that his evidence should be accepted. In addition, it is relevant that it was Dr Krskova who was across the detail, not Professor Coats. This was unsurprising, she had been charged with getting to the bottom of the issues. Further, it was her evidence that she did not recall, as at early May 2023, Professor Jackson or Mr Bush raising top-ups from 2013 and 2014

316    It was Dr Krskova’s evidence that, in May 2023, she was in discussions with Mr Bush as to the status of the Jackson lab funds being in surplus. Dr Krskova expressly rejected that, during her discussions with Mr Bush in early May 2023, she recalled an issuing arising about HRI failing to allocate or to make discretionary payments to the Jackson lab in 2013 and 2014. In the context of her discussions with Mr Bush in early May 2023, Dr Krskova’s evidence was that Mr Bush had hoped to see the ARFC paper to explain the Monash adjustment and whether the MRFF grant would cover the entire cost of the George Institute’s contract for the STARS trial. Accordingly, I am of the view that, around this time, Dr Krskova’s state of mind was directed to understanding whether the Jackson lab was in surplus or deficit. It follows that it is inherently unlikely that Professor Coats would have had knowledge of Professor Jackson raising issues with top-ups in relation to the years 2013 and 2014 based on Dr Krskova’s email, when she herself did not understand with any specificity what the allegation was. I therefore accept Professor Coats’ evidence that, in respect of Dr Krskova’s notation “I remain equally puzzled about why this matter has not been queried in between the years of 2014 and 2021–22, and it’s only coming up in 2023.” He did not know exactly what was being questioned.

317    For these reasons, I accept both Dr Krskova’s and Professor Coats’ evidence in this regard.

318    Further, and notably, I accept Professor Coats’ evidence, that between April and the start of May 2023, he understood Dr Krskova and Mr Bush met regularly to discuss the financial deficit of the STARS trial and the balance of the discretionary fund. At the time, according to his evidence, he thought there were two possible reasons for this request by Mr Bush and Professor Jackson: (a) they were trying to identify potential issues that could justify an argument that the balance of the discretionary fund should be higher and thereby give Professor Jackson additional funds for the STARS trial; or (b) they wanted to compare the financial management of HRI during the time Professor Jackson was Scientific Director with the financial management of HRI today, to try to prove that HRI's current financial state was worse off. For these reasons, Professor Coats says he did not think that Mr Bush or Professor Jackson had genuine concerns regarding the previous treatment of HRI funds. It was his view that these requests might have been a tactic to distract Dr Krskova and himself from the fact that the STARS trial costs were not adequately covered. However, he was not following the specific details of this process and left it to Dr Krskova to investigate. This was Professor Coats’ consistent testimony. I accept it. His scepticism as to the raising of issues, whether there was a foundation for them and whether they comprised a negotiation tactic, had been long held.

What can be said about Professor Coats, Mr McGauran’s and Dr Gainsford’s states of mind after here?

319    After the 11 May email, according to Professor Jackson, in his closing oral submissions, Professor Coats became antagonistic and that “things start to escalate from this point” where the inference is said to be because of Professor Coats’ suspicion or belief that Professor Jackson may make a disclosure.

320    This is said to so by reason of a number of subsequent events.

321    Professor Jackson asserts the email communication from Professor Coats on 15 May 2023 is indicative of the same.

322    In that email, Dr Krskova reported to Professor Coats and Dr Gainsford that the current balance was in fact a surplus of $340,000 (based on the information received from Mr Bush). In response, Professor Coats said that he remained sceptical about how they could have moved so far from an existing deficit of $1 million to a proposed surplus at the end of 2023, based mainly on Mr Bush’s assurances. He then went on to say that there was a need to “forensically examine all his assumptions and reassurances”. I do not consider this an about turn or “escalating” or indicative of a marked change of behaviour on the part of Professor Coats. It appears entirely consistent with the way that Professor Coats had dealt with all previous interactions and issues relating to Professor Jackson. He was circumspect and not prepared to accept things at face value. There was a deal of complexity regarding the past and current status of the trial’s funding. It involved many moving parts and assumptions. I do not accept that this response indicated any mala fides.

22 May 2023 Board Meeting

323    Professor Jackson further asserted that subsequent to the crystallisation of the purported belief or suspicion, at the Board meeting on 22 May 2023, it was suggested that there was no indication to the Board of there being a surplus.

324    I do not accept this was the case. Despite the possible surplus not being referred to in the Board minutes, Mr Pollitt recorded in his notes of the meeting, HRI’s then position as to a surplus of $73,000 and ThromBio’s position of it being $849,000 with the exact figures making up that amount.

325    It is true that the 22 May Board meeting minute does not accurately reflect the status of Professor Jackson’s contract renewal discussions: Rather than the fact that negotiations had stalled because of other issues, it appeared to just repeat the previous view held by Professor Coats that the delays in the negotiation of the collaboration agreement were caused by Professor Jackson wanting to secure favourable terms in the new employment contract.

326    Further, I do not accept that Mr McGauran’s evidence that he did not know about the possibility of the funds being in surplus, in the light of the Pollitt notes, means that the Court should have significant scepticism about him as a witness. He was not recalled for cross-examination after these notes came to light. There was a lot going on at this time and it is not outside the realm of possibility that he would not remember this detail.

327    It is true, as submitted by Professor Jackson, that Professor Sleigh’s detailed notes of this meeting reveal that she recorded other parts of the discussion (not about the possible surplus). She notes discussion about the fact that Professor Jackson’s ongoing employment was considered to be “risky” and “too expensive” with the risk being “too high”. This included stating, in a fragmentary way, that there was a belief that it was not in the interests of HRI to continue to have Professor Jackson and the “worst case” could including paying him out $500,000 to $1 million and that there was a need to engage “top strategist” Ms Belinda Harding, and employment lawyer (who was engaged as HRI’s lawyer) to provide advice.

328    Further, and notably, it was Professor Sleigh’s unchallenged evidence that each of these matters were opinions expressed by people at the meeting and did not lead to any conclusion at the meeting.

329    Similarly, it was Professor Sleigh’s evidence the notation that “Jackson funds expire. Are we obligated to keep funding with STARS/Shaun”, reflected a question that was asked at the 22 May meeting. Also discussed was the option to “accelerate activities” or to speed up the process of coming to some conclusion on Professor Jackson’s contract. In respect of this final point, Professor Sleigh was uncertain as to whether it was in respect of the 22 May or 7 June meeting.

330    What this reveals is that there was a general discussion which included consideration of options (including non-renewal) and the obtaining of advice. I do not find that there was a consensus or a collective view held by the Board that it was not in HRI’s interests to have Professor Jackson continue post-30 June 2024, contrary to Professor Jackson’s submission, but that it was a view expressed by one of the participants in the meeting. Further, the evidence does not establish that the Board determined on this occasion that legal advice should be obtained, but it was floated as an option.

331    The evidence, also does not establish that, by 22 May 2023, the Board had determined to move to “termination”, as submitted by Professor Jackson in circumstances where both Professor Jackson and Mr Bush were raising concerns about discretionary funding in 2013 and 2014. I am satisfied that HRI’s evidence establishes this. I accept the evidence of Professor Sleigh. I also accept the evidence of Mr Pollitt. His contemporaneous note refers to the issue of deficit and surplus. It is my view that if there had been such a determination of termination at this stage, he would have not only recalled it but more particularly recorded it.

332    However, what it reveals is that the issue of the possibility of the termination of Professor Jackson’s employment was being discussed, but not as a result of any conduct of Professor Coats, Mr McGauran or Dr Gainsford, but rather the unprompted review and concerns raised by Mr Halstead. It is important to place this fact within the wider history of Mr Halstead’s involvement with HRI. Mr Halstead joined HRI as Governor of the Board on 24 May 2017. Mr Halstead’s evidence was that he had dealings with Professor Jackson over a number of years prior to having joined the Board. Mr Halstead’s unchallenged evidence was that he had been involved in discussions about the renewal of Professor Jackson’s contract in his capacity as a member of the Remuneration Committee in 2019. Mr Halstead recalled being advised by Dr Hollings that it was very difficult to get Professor Jackson to sign this contract. It appeared from Mr Halstead’s account, that his history of dealings with Professor Jackson, and his perception as to difficulty with settling employment contracts with him, had an effect on his concerns.

333    However, it may be accepted that, to the extent that the Board minute said that Mr Bush and Professor Jackson had not sent a response clarifying particular elements of the STARS trial funding is not a true reflection of the circumstances. The evidence revealed many, many exchanges, provision of information, asking of questions and giving responses on both the side of Dr Krskova and of Mr Bush in May 2023. However, it did remain, as at the time of the May meeting, that there were issues that remained for Mr Bush to clarify.

334    Professor Coats gave evidence under cross-examination that, at this point, the collaboration agreement had been largely agreed. He accepted that the assertion he made to the Board was “little progress had been made since the last board meeting, as Professor Jackson continued to slow down the contract renewal process”. He rejected that he understood that delays to the collaboration agreement had been caused by the analysis insofar as lab costs were concerned. This was curious. The issue was not explored with him. I am not persuaded that it takes the fundamental issues very far. I accept that there were a number of occasions where the Board minutes were inaccurate and blamed Professor Jackson for delays or stalling which were not a true reflection of the complexity of the issues being dealt with. I do think that Professor Coats was keen to project his actions (before the Board) in the best possible light. This may have been the reason. But I do not accept that from these inaccuracies, unlawfulness could be inferred.

The other plans – Professor McMullen

335    The evidence establishes that for a long time Professor Coats appeared to have other plans which informed his thinking regarding Professor Jackson and his involvement with HRI. At the end of 2022, Professor Coats wanted to recruit Professor McMullen.

336    It was Professor Coats’ evidence, which was not disputed, that he initially intended to recruit Professor McMullen for the role of Deputy Scientific Director and Director of Research at HRI (noting the latter was put forward to Professor Jackson). Professor Coats then, after a few meetings, resolved that she was the ideal candidate to replace him as Scientific Director at HRI “in the future”. Professor Coats gave evidence that, between February to May 2023, he had several meetings with Professor McMullen, noting that she “stipulated her conditions for joining HRI”, included that “she would not join HRI while Professor Jackson was at HRI.

337    Professor Coats deposed that, at each of the Board meetings on 20 February, 3 April and 22 May 2023, he updated the Board on the progress of his negotiations with Professor McMullen, including her conditions for joining HRI. His further unchallenged evidence was that, during the 31 May Board meeting, he raised the fact that Professor McMullen would only join HRI if Professor Jackson’s employment had ended. Professor Coats deposed that:

I told the Board that Professor McMullen had now received support from the University of Sydney to join HRI and that HRI was applying on her behalf to receive a prestigious 'NSW Health Research Leadership grant' worth $2.5 million over five years, which would help her transition to Sydney. I also told the Board, that the only apparent roadblock now to Professor McMullen joining HRI was Professor Jackson.

338    Further, the Board Meeting minutes of 22 June 2023, contain the following item concerning Professor McMullen:

Professor Coats updated the Board on the progress of discussions with Professor Julie McMullen about the possibility of her joining the HRI in a senior scientific role, noting, in particular, the possibility of a Fellowship Scheme with the NSW Government for the value of $2.5 million over 5 years assisting with Professor McMullen's transition to Sydney. The Board also noted the support of the University of Sydney for the recruitment of Professor McMullen.

339    From these meetings, the voting directors were aware of Professor McMullen and Professor Coats’ plans with respect to her.

340    Professor Sleigh gave oral evidence, which was not challenged, in respect of her notes for the Board Meeting of 22 June 2023, that the reference to “New South Wales Health fellowship looks positive” was:

A:    This was in relation to the employment of Julie McMullen, that she was applying for a fellowship through the New South Wales Government to support her at HRI - - -

Q:    I understand?

A:    if she were to join.

341    Professor Sleigh’s note, of this meeting contained the following “Andrew Julie McMullen SD” and “No Shaun” next to it.

342    Furthermore, Mr Halstead gave the following unchallenged affidavit evidence regarding Professor McMullen:

I do not think it would be feasible for HRI to re-employ Professor Jackson. HRI’s strategy is now one of rebuilding and rejuvenation. Professor Coats has worked hard to rebuild HRI’s position with the University of Sydney and SLHD and to recruit great new researchers who are receiving a lot of support and have good relationships with the University executive, such as Professor Julie McMullen. Professor Jackson’s employment would jeopardise this work because of his poor relationships with the University and SLHD.

343    Further, contained in the Board Meeting minutes of 24 July 2023, item 3:

The Board also revisited the progress of discussions around potential additional appointments of senior scientists, such as Dr Carmine Gentile and Professor Julie McMullen.

344    Finally, with respect to Professor Jackson’s reinstatement, Professor Coats deposed that Professor McMullen’s team (from September 2024) would occupy the previous ThromBio space at CPC:

HRI would need to identify and rent new office and laboratory space for the Thrombosis Group. Medical laboratory spaces near the University of Sydney are at a premium and finding an appropriate space for the Thrombosis Group would likely be a lengthy and difficult process. The space that the Thrombosis Group previously occupied at CPC is now committed to other HRI researchers. As part of this, Professor McMullen (who commenced employment with HRI in July 2024) and her team, the Heart Muscle Group, is planning to move into the CPC in September 2024.

345    Whilst this evidence is, in part out of sequence with respect to rest of the evidence, the collation of this evidence together is important, both to place in context Professor Coats’ plans regarding Professor McMullen, as they pre-dated any allegation of a prohibited suspicion or belief on his part, and how his plans (and those of the Board) evolved over the relevant period with respect to and how those plans influenced both Professor Coats’ and the voting directors’ thinking with respect to Professor Jackson. This matter will be returned to when the voting directors’ reasons are considered later.

31 May 2023 Jackson funds meeting

346    On 31 May 2023, Dr Krskova met with Professor Coats and Dr Gainsford to discuss the most up to date reconciliation of the available funding. During this meeting, Dr Krskova provided an updated version of the PowerPoint presentation (from the 1 May 2023 meeting with Mr Bush). This presentation included her recalculation of the forecasted balance of the TRG Discretionary Fund, as at 31 December 2023, being in surplus in the amount of $73,895. It was Dr Krskova’s evidence that, despite the surplus, given that staffing costs came out of the TRG Discretionary Fund, this amount would have been expended by Professor Jackson within two months. Dr Krskova recalled both Mr McGauran and Professor Coats expressed concern about the viability of the trial.

5 June 2023

347    It is important to contrast the positions of the parties as at 5 June 2023. It is evident from the above, that the Board had serious concerns about the viability of the trial and were starting to question the longevity of Professor Jackson’s engagement. No concluded view had been reached but consideration was being given to obtaining advice as to their options.

348    At the same time, a text message from Professor Jackson to Mr McGauran on 5 June 2023 is revealing as to his positivity regarding the STARS budget and Jackson lab finances:

Hi Peter,

Just wanted to follow up with you on the next instalment for ThromBio Holdings that we discussed last Friday. Things are going. to ramp up with our engagement with the Big Pharma companies and we continue to need a funding source for the company, prior to a successful capital raising. Naturally, partnering with a Big Pharma would be a game changer for ThromBio and HRI, so we are keen to pursue these opportunities vigorously. Peter Bush has reassured me about the STARS budget and my lab’s finances. I would encourage you to follow up with him separately. We will also keep Andrew in the loop.

Hope you’re having fun with all your other activities.

Take care

Shaun

349    In combination with the above findings, I do not accept that Professor Coats understood that Professor Jackson was raising issues regarding historical transactions or the issue of top-ups in May 2023. It was Professor Coats’ evidence, which I accept, that he only learned about the top-up issues in June. Professor Coats could not recall whether he became aware of it before Mr McGauran decided to seek legal advice about Professor Jackson’s employment.

350    Mr McGauran rejected the proposition that he knew by 22 May 2023 that Professor Jackson had been raising issues about not receiving top-ups in respect of 2013 and 2014 funds. I accept his evidence. For similar reasons to those stated above, it was not clear at this stage what Professor Jackson was saying about this issue. It was not clear in any contemporaneous information, and it was Dr Krskova that was charged with trying to understand the financial issues.

7 June 2023 Board Meeting

351    At the 7 June Board meeting, Professor Coats provided a verbal update about which there was discussion concerning Professor Jackson’s contract renewal. The minutes recorded that he stated there had been little progress, given Professor Jackson’s reluctance to finalise the negotiations. This was not the case. Professor Coats referred to the fact that there might be a possibility of the STARS trial being underfunded. I accept that this was Professor Coats’ view at this stage (as will be evident below, the parties never completed this task to come to a concluded view about the viability of the trial). He noted that Professor Jackson continued to increase the scope of the work on the trial without prior notification. In addition, Professor Coats referred to the fact that the University of Sydney rejected the administration of Professor Jackson’s grant applications. Importantly, he referred to advice now being sought from MinterEllison regarding his employment. In addition, the following matters were raised:

A concern was raised around the financial viability of the STARs trial if it cannot be funded from Professor Jackson's available funds. It was also noted that for the trials to continue, the IP generated at HRI was needed.

The impact of this continued matter on staff morale was also discussed, as were the ongoing commitments of the STARS trial (as the contracts were executed in HRI's name).

The Board further noted that an announcement – by Professor Jackson or Thrombio – of the first patient in the STARS trial being dosed was imminent.

No other business was raised.

352    Much was made by Professor Jackson of aspects of Professor Sleigh’s notes of the meeting and, in particular, her reference to discussions about developing a strategy with MinterEllison and accelerating activities to speed up the conclusion on Professor Jackson’s contract (referred to above). I find that this option was raised, as part of a much wider discussion of all the issues and options available. Given the number of issues being raised at this time, I do not accept that it conveys that HRI’s witnesses sought in their affidavit evidence to not disclose matters that were adverse to its case.

353    Professor Jackson submitted that, by this point, neither Professor Coats nor Dr Krskova had reported to the Board that if Professor Jackson was correct about the discretionary funds having been wrongly not paid in 2014 by HRI, that there would be a surplus of the Jackson funds. This is true, however, I do not accept that this failure by Professor Coats confirmed Professor Jackson’s theory that Professor Coats had any concern about these matters or of the Board finding out it may have been misled by Dr Gainsford and Professor Coats in April 2023. It is clear from both Dr Krskova’s email of 14 June to Mr Bush and the meeting with Professor Coats on 20 June 2023, that both sides were still trying to work out their positions. I do not accept that Professor Coats had any belief that he had misled the Board that he was seeking to cover up.

354    In her 14 June 2023 email, Dr Krskova chased up queries she had raised with Mr Bush on 12 May 2023, and also raising additional matters, including how storage costs of the drugs were to be covered, and how salaries were to be budgeted for.

355    On 20 June 2023, Mr Bush met with Professor Coats to discuss his review of the finances of Professor Jackson’s lab. Mr Bush recalled at that meeting they again discussed the same kinds of issues raised in the 3 February and 22 March 2023 meetings. Professor Coats recalled that, during their regular ThromBio meeting on that day, he reiterated to Mr Bush that Professor Jackson needed to get back to HRI with a revised proposal about the terms for his contract, as his previous demands were unacceptable and unrealistic.

22 June 2023 Board meeting

356    Two days after this meeting, there was another board meeting, again the minutes record and it appears undisputed that Professor Coats gave a verbal update regarding the various matters involving Professor Jackson. They included that, in relation to Professor Jackson’s contract renewal, he was “now querying discretionary funding transaction from 2014, further delaying the contract renewal” and that it was “noted that Minter Ellison was being engaged to advise on his employment” and that:

It was agreed that advice from Minter Ellison should be sought as soon as possible to accelerate the progress of this matter, with the advice and the proposal regarding the next steps to be presented to the Board for approval in due course.

357    Professor Sleigh’s notes of this meeting reveal that the fact of Professor Jackson entering the last year of his contract was discussed, that they were exploring “MinterEllison options” (but where those options had not been provided yet), and there was a question mark as to what HRI’s liability would be if Professor Jackson left. Her notes contain a notation “main concern taking actions because he complained”. It was her evidence, under cross-examination, that there had been some discussion with MinterEllison where they had raised a concern that Professor Jackson might be taking, or could potentially take, action because he had complained. Therefore, to the extent that there was a concern raised, it was one raised by MinterEllison, not HRI. Professor Sleigh’s evidence was that there was no clarification about what he had complained about, if he had or what he had the potential to complain about. It was her view that he complained about a lot of things. I accept her evidence about the providence of her main concern, being the view held by MinterEllison and what it was about. Accordingly, Professor Jackson’s submission that Mr Rassi’s and Mr McGauran’s denials regarding the general, ambiguous questions put to them about this issue (which do not accord with Professor Sleigh’s evidence) cannot be accepted.

358    Professor Sleigh’s notes, also in this context, refer to the “need to be clear on reasons – affordability – is not managing work appropriately”. As to the latter, it was her recollection that it related Professor Jackson’s disregard for the delegation limits.

359    Much was made by Professor Jackson of Mr McGauran’s purported “denial” that the issue of the need for there to be clear reasons in any decision was discussed at the meeting on 22 June 2023. This was said to be inconsistent with Professor Sleigh’s notes. However, I do not accept that there was a denial simpliciter by Mr McGauran. It is my view that he was answering a much more loaded question. It was the last question that was put to him in cross-examination. However, there had been earlier questioning of him about this issue having been raised at the meeting on 24 July 2023, not at the meeting on 22 June 2023 (by reason of Counsel error). The issue was first (erroneously put to Mr McGauran), that there had been discussion in the meeting on 24 July 2023, about Professor Jackson’s complaints in respect of discretionary funding not being provided to Professor Jackson in 2013 and 2014 and that these complaints “should not form part of the recorded reason for his termination”. This was vehemently denied by Mr McGauran, and he said that if he had heard that discussion, during the meeting, he would have repudiated it. He was then asked by Counsel for Professor Jackson at the end of his cross-examination to recall these earlier questions that were asked of him about it being discussed “that Professor Jackson had made a complaint about discretionary funding and there was a discussion that that should not form part of the reasons recorded for ceasing his employment”.

360    Mr McGauran was told by Counsel that Counsel had made a mistake in his earlier questioning and should have directed Mr McGauran’s attention to what had happened at the 22 June board meeting (not the 24 July 2023 meeting). The assumptions in the questions thereafter asked of him do not accord with the evidence. Further, to the extent that it was put to Mr McGauran that “HRI need to be clear as to the reasons it recorded for Professor Jackson’s non-renewal”, it was in this context that Mr McGauran said that he denied this happened, because it went to his chairmanship of the meeting. It was clear from the line of questioning and Mr McGauran’s answer that he understood that the question being asked was in line with what he had been asked (earlier and erroneously) about the 24 July meeting, that there was a discussion about manufacturing the recording of HRI’s reasons, hence his reference to his chairmanship. I do not accept his evidence was inconsistent with Professor Sleigh’s account and goes against his credit.

361    It is clear that Professor Coats raised Professor Jackson’s querying of discretionary funding but as being a basis for the further delaying of the contract renewal. I do not accept that the statement was misleading. To the extent that the negotiations were paused, they were paused because of the number of intervening issues, including the issue of the viability of the STARS trial. Part of the determination of its viability now involved the claim of past discretionary funding.

Mr Bush’s 6 July 2023 paper

362    On 6 July 2023, Mr Bush responded to the request made by Dr Krskova from 14 June 2023 and provided an “open issues paper”. In that paper, Mr Bush provided his assessment of a range of matters concerning the Jackson lab. This included his assertion that HRI had failed to provide agreed financial support to be allocated to the Jackson discretionary account in 2013 and 2014, amounting to a shortfall of $606,267. No response was provided by HRI to this email, until April 2024.

363    It was Dr Krskova’s evidence that she recalled discussing the matters in the 6 July paper with Professor Coats and Dr Gainsford. It was her evidence that she told them that she had only looked at the period from 2019 onwards and that up until 2021, Professor Jackson was the Scientific Director and was responsible for the accuracy of the audited financials each year. It was her evidence that she asked Professor Coats if he wanted her to look into the paper and “he said not at this stage”. Dr Krskova denied , which I accept, that she suspected or believed that any of the matters in the 6 July paper or any other matters that Mr Bush and she had discussed, amounted to “anything improper…done by HRI”, nor that Professor Jackson or Mr Bush believed that anything improper was going on at HRI, including in relation to the management of Professor Jackson’s funding or finances.

364    Professor Coats did not provide a copy of Mr Bush’s 6 July 2023 document to the Board. This is unsurprising. The Board had never been given any of the past communications between Mr Bush and Dr Krskova. There was no evidence (nor allegation) that the Board members were ever made aware of the amount of the alleged shortfall of $606,267 before the voting directors made their decision to not renew Professor Jackson’s employment contract.

365    Professor Coats gave evidence under cross-examination that upon receiving the 6 July paper from Mr Bush, he was not concerned about whether what he had conveyed to the Board was correct in respect of the Jackson lab funds being in deficit. It was further put to Professor Coats that his misleading the Board was a motivation for seeking to cease Professor Jackson’s employment. Professor Coats gave evidence that his understanding was that Mr McGauran was aware of the issues that Professor Jackson had raised about 2013 and 2014 top-up funding was “very superficial, if at all”, and that he was only aware after “they got a note from Mr Bush on 6 July, which a quick scan of showed that it was extremely unlikely to be a serious claim”. He rejected the proposition that he understood at the time that what was being raised were serious issues.

366    I accept that HRI has established that no inference should be drawn from the fact that Professor Coats did not provide this “open issues” document to the Board at this time. It could be inferred that, by this stage, Professor Coats did not accept (without HRI verification) any of the figures (or assumptions) that Mr Bush relied upon. This was consistent with Professor Coats’ previous approach to Mr Bush’s assurances.

367    It was Professor Coats’ evidence, which I accept, that he spoke to Dr Krskova and asked her to review the paper and provide her opinion with respect to it. It was his belief, after receipt of her advice, that Mr Bush’s allegations, in that paper, were without foundation. I accept this evidence. I also accept his evidence that he saw the issue of the historical transactions as a distracting sideshow which formed, more of the same, in protracting their ability to progress negotiations.

Becoming side tracked by SoW discrepancies

368    It was evident also at this time that HRI was becoming concerned about Professor Jackson’s April 2023 SoWs. It was Dr Krskova’s evidence that in the week after receiving the 6 July paper from Mr Bush, she was asked by Professor Coats to arrange for two Ardena invoices from April 2023 to be paid. In the course of considering these invoices, it was Dr Krskova’s evidence that she was concerned that for one of the invoices there were two versions and Professor Jackson had approved both versions of them without presenting them for approval to HRI. Further, she noted that with another invoice, of which there were three versions, Professor Jackson and Associate Professor Schoenwaelder had arranged for only the first version of the invoice to be signed by Professor Coats on 27 January 2023, whereas the latter two versions, which contained additional expenditure, were only signed by Professor Jackson. She raised these and other concerns relating to invoicing with Professor Coats in an email dated 19 July 2023. Professor Coats asked her to double check her findings which she did on 20 July 2023.

The formation of the subcommittee and its meeting on 19 July 2023

369    A subcommittee was formed to consider Professor Jackson’s employment. It was an agreed fact that the subcommittee consisted of Mr McGauran, Professor Coats, Mr Howes, Mr Pollitt, Mr Rassi and Mr Halstead.

370    The 11 July 2023 MinterEllison Options Paper provided four options for consideration. As to the first option (non-renewal on expiry of current contract), one of the “cons” of this approach, was that if this option was taken, (as opposed to, for example, immediate termination or termination by redundancy) it was likely that Professor Jackson would “… seek additional time to respond and will probably raise historical matters. Would likely need to be back and forth correspondence with SJ (or his legal representative) for some time (potentially weeks). SJ could seek that the dispute be mediated”. It is clear from the face of the document and how the voting directors respond to the option (as evidenced below), that the issue of “historical matters” is raised as having the effect of delay (not any fear of exposure). It is also clear from the advice, on its face that, by taking a number of the options, the raising of historical matters would not be stultified but rather may be fuelled and will need to be dealt with.

371    On 13 July 2023, Dr Gainsford circulated to the subcommittee members a copy of the Options Paper. On 17 July 2023, Professor Coats, Ms Dwyer, Dr Krskova and Dr Gainsford met with Ms Harding of MinterEllison to talk through the document before they met with the committee on 19 July 2024.

372    There was a dispute between the parties as to whether Dr Gainsford was a “member” of this subcommittee. This was relevant to determining whether he made a material contribution to the ultimate decision not to renew Professor Jackson’s contract. Whether he was a “member” or not, the evidence established that he attended the meeting on 17 July 2023, he circulated the Options Paper on 13 July 2023 and attended the meeting on 19 July 2023. In addition, he co-authored a report of 21 July 2023 (with Ms Dwyer) which was distributed to the board members in advance of the meeting on 24 July 2023.

373    On 19 July 2023, the subcommittee met. The committee considered the four options that had been identified in the Options Paper and there was a common view that Professor Jackson’s ongoing employment with HRI was not tenable Two options were discussed at the meeting about ceasing Professor Jackson’s employment: (a) non-renewal on the expiry of the current contract; and (b) immediate termination. The sub-committee resolved to recommend the non-renewal option to the Board. Accordingly, it may be inferred, even though the sub-committee knew (based on MinterEllison’s advice) that this option (like certain of the other options) might lead to Professor Jackson raising “historical matters”, the sub-committee opted for this course.

The 21 July 2023 Gainsford/Dwyer advice

374    On 21 July 2023, Ms Dwyer and Dr Gainsford prepared a short report for the Board detailing the option “non-renewal on expiry of current contract”. As part of this report, they replicated part of the Options Paper regarding the benefits and disadvantages of this approach including, that a consequence would be, amongst others, Professor Jackson seeking additional time to respond and will probably raise historical matters which would lead to back and forth correspondence for some time (potentially weeks) and could lead for the dispute to be mediated. Ultimately, despite this possibility being raised with the Board, the Board resolved to go down this path.

The 24 July 2023 non-renewal decision

375    On 24 July 2023, the Board resolved not to renew Professor Jackson’s contract when the contract expired (in 2024). As referred to above, this is the purported detrimental conduct said to have been taken because HRI believed or suspected that Professor Jackson may or could make a protected disclosure.

376    Therefore, the focus becomes, whether the purported detrimental conduct was taken, because HRI believed or suspected that Professor Jackson may or proposed to make or could make a disclosure that qualifies for protection and that belief is the reason or a part of the reason for the detrimental conduct.

377    It is worthwhile, given their prominence, to refer to and extract, the minutes for the 24 July 2023 meeting record regarding the resolution not to renew Professor Jackson’s contract:

4     Thrombio Issues & 5 Professor Jackson Contract Renewal

Professor Coats provided a verbal update on the two interlinked matters of Professor Jackson's contract renewal and the Thrombio Collaboration Agreement, noting that little progress was made since the last Board meeting as Professor Jackson continued to slow down the contract renewal process. Given that the employment contract has an impact on the Thrombio Collaboration Agreement, there, in turn, have also been further delays with the Collaboration Agreement, as the preference of Professor Jackson is to execute it only after the employment contract is finalised.

Professor Coats also provided a verbal update about the progress of the STARS trial, and the recent publicity the project received in the media, with the Board noting that the first patient was yet to be recruited into the trial.

The Board noted that Professor Jackson was now querying historical transactions in his Thrombosis Discretionary Account from ten years ago, further delaying management's efforts to ascertain the balance of the available funding to fund the STARS trials.

The Board noted again that despite numerous attempts by Management to seek clarification from Peter Bush and Professor Jackson about which particular elements of the STARS trials were to be funded from the MRFF grant funding, and how the potential gap in the available funding and the STARS commitments (across the life of the project) would be funded, a response was yet to be received.

Referring to the recently circulated report with respect to advice from Minter Ellison, Dr Gainsford updated the Board on the advice received in relation to Professor Jackson's employment.

RESOLUTION A14/23: The Board resolved not to renew the contract of Professor Shaun Jackson when the contract expires, and to authorise Professor Andrew Coats (the Scientific Director and CEO), Mr Peter McGauran (the Chair of the Board), Dr Tim Gainsford (COO) and Ms Elissa Dwyer (Director of HR) to notify Professor Jackson accordingly and implement the Board's decision.

378    Professor Jackson made a number of submissions regarding the perceived inaccuracies in the way that Professor Coats described the negotiation processes. For the reasons already given and set out below, the evidence revealed that Professor Coats painted the picture he wanted for the Board. I am of the view that Professor Coats did believe that Professor Jackson had slowed down the negotiation of the collaboration agreement so as to ensure that his own contract was renegotiated. I also accept Professor Coats was of the view that the querying of historical transactions was a stalling tactic which was delaying HRI’s ability to ascertain the balance for (and viability of) the STARS trial. As evident from the reasons above, these beliefs are entirely consistent with the views Professor Coats had expressed (or formed) over the last 12 months of the negotiations.

379    Professor Coats told the Board that he had enormous difficulties managing Professor Jackson, that there were risks and increasing costs with the STARS trial and that Professor Jackson had breached his delegated authority. He also said that Professor Jackson had not been undertaking the broader aspects of his role.

What was HRI required to believe or suspect?

380    In assessing whether HRI believed or suspected that Professor Jackson had reasonable grounds for a suspicion as to misconduct or an improper state of affairs or circumstances, it was sufficient for HRI to have believed or suspected that Professor Jackson had grounds which, objectively, would have induced the requisite suspicion in the mind of a reasonable person. It is not necessary for HRI also to have believed or suspected that those grounds had the objective (or legal) characterisation of being reasonable. However, the assessment must be made based on the grounds that HRI believed or suspected Professor Jackson to have, in the factual context known to them. The grounds that Professor Jackson actually had for his suspicion are irrelevant if they are not grounds the decision-makers in HRI believed or suspected.

381    An issue arose as to what was the alleged “misconduct or improper state of affairs or circumstances”.

382    In closing, Professor Jackson submitted that the misconduct or improper state of affairs or circumstances constituted (a) a failure by HRI to provide top-ups to Professor Jackson’s lab in 2013 and 2014, and (b) HRI taking Jackson lab funds to pay expenses which HRI ought to have incurred itself. However, this was not Professor Jackson’s pleaded case—there was no such precision in his pleading, nor in his written submissions. Further, and problematically, this formulation of the belief or suspicion did not appear to inform how Professor Jackson’s counsel cross-examined the witnesses. Whilst, the onus was on HRI is to prove that it did not engage in the detrimental conduct because of, or in part because of, the prohibited belief or suspicion, it was incumbent upon Professor Jackson to identify, with precision, the alleged misconduct or improper state of affairs or circumstances.

383    A review of the cross-examination of each of the voting directors reveals that, to the extent that it was put to the voting director (which did not happen with all the directors) that they decided not to renew Professor Jackson’s contract for a prohibited belief or suspicion, that belief or suspicion was not articulated in a uniform way (and certainly not in the way that Professor Jackson submitted in closing comprised the alleged information as to misconduct or improper state of affairs or circumstances). Rather, the reason was said to be that HRI had not managed (unspecified) historical financial matters from 2013 and 2014 appropriately or not managed discretionary funding appropriately. It was variously put to certain witnesses that they were aware Professor Jackson was “querying” historical funding. As Katzmann J concluded at [248] in Mount, “For a start, requests for reports or information do not constitute disclosures of information”. It would appear Professor Jackson’s case regarding the alleged historical matters only truly crystallised in Mr Bush’s 6 July 2023 paper, namely, that HRI had failed to provide agreed financial support to Professor Jackson’s discretionary account in 2013 and 2014, amounting to a shortfall of $606,267 (said to be owed by HRI to Professor Jackson’s lab). Before then, there was no allegation of the quantum of the alleged historical discrepancy in funding.

384    Professor Jackson expanded out the time period over which HRI’s conduct was the subject of scrutiny with respect this ground, with substantial overlap with events that are relied upon with respect to the misleading and deceptive conduct claim. This included conduct from August 2022 onwards.

385    I agree with the criticism made by Counsel for HRI, in closing, that Professor Jackson’s case was a moving feast and that it could not be alleged against it that it had failed to discharge its onus with respect to matters which were never pleaded as having bearing on this cause of action. However, in any event, for the reasons which follow, I do not accept that, by reason of the expanded chronology, Professor Jackson has established that HRI believed or suspected that Professor Jackson had reasonable grounds to suspect that there was information concerning HRI had engaged in or was engaged in misconduct or an improper state of affairs or circumstances and that Professor Jackson proposed to make or may make a protected disclosure.

386    I repeat my reasons above regarding the meaning to be given to “misconduct or improper state of affairs or circumstances”.

387    The absence of precision as to the alleged “misconduct or improper state of affairs or circumstances” from inception of the proceeding then meant that the Court was left with the difficult conundrum of trying to work out what was the alleged information concerning the alleged conduct of HRI that fell within the meaning of “misconduct” or an “improper state of affairs or circumstances”. If it was, as put to the voting directors, the inappropriate management of funding or discretionary funding in 2013 and 2014, that lack of precision calls into question whether Professor Jackson has satisfied the Court that it was “misconduct” or an “improper state of affairs or circumstances” within the meaning of s 1317AA(4). It may be that conduct that is a one-off or small-scale issue, or a mistake, error or other deficiency which is remedied through a proper process, would not reach the threshold of being misconduct or an improper state of affairs or circumstances.

388    However, it is my view, that the allegation of a misallocation or inappropriate management of discretionary funding (over a year or two years, involving hundreds of thousands of dollars) falls within the scope of “an improper state of affairs or circumstance” within the meaning of s 1317AA(4), as do the more refined descriptors given in closing, namely, a failure by HRI to provide top-ups to Professor Jackson’s lab in 2013 and 2014, and HRI taking Jackson lab funds to pay expenses which HRI ought to have incurred itself. Whilst, the allegation involved a discretion, the terms are of broad import. The allegation was that there had been a practice to provide this level of funding (which was not insignificant) over of period of some length.

Whose state(s) of mind?

389    By operation of s 1317AD(1), HRI must have held the proscribed belief or suspicion when engaging in the alleged detrimental conduct. Professor Jackson submitted that HRI’s state of mind, included not only those voting directors who made the decision not to renew but those who made material contributions to that decision (by the voting directors relying upon and being influenced by, in their decision-making) (namely, Professor Coats and Dr Gainsford).

390    By contrast, HRI submitted, for the purpose of assessing whether HRI held the proscribed belief or suspicion, it was the Board members who voted on the resolution at the 24 July 2023 Board meeting and not others, namely, not Professor Coats and Dr Gainsford. It was without dispute that the voting directors comprised Professor Boyle, Mr Pollitt, Professor Sleigh, Mr Halstead, Mr Rassi, Dr McBride and Mr McGauran. They did not include Professor Coats, whose unchallenged evidence was that he did not vote on the resolution nor Dr Gainsford, who was not a member of the Board.

391    HRI contended that its state of mind could not be so expanded to include these others. HRI disputed that the line of authorities cited by Professor Jackson could be applied, given they arose in a different statutory test. HRI submitted that there was no reason why the purported ordinary approach to identifying the corporate mind should not be applied to s 1317AD(1)(b), especially given it is a provision of the Corporations Act. According to HRI, there is authority in that context that, where a decision is made by the directors of the company acting as such, they constitute the directing mind and will of the company even if someone else may have had “de-facto directorship or apparent power over” them. In this respect, HRI cited two authorities, Beach Petroleum NL v Abbott Tout Russell Kennedy [1999] NSWCA 408; 48 NSWLR 1 at [468] (Spigelman CJ, Sheller and Stein JJA), applied in Australian Securities and Investments Commission v Mariner Corporation Ltd [2015] FCA 589; 241 FCR 502 at [338] (Beach J).

392    I am of the view, contrary to what appeared on the first blush of HRI’s submission, that there is no such a distinction as HRI suggested regarding how, under corporations law, state of mind is determined. There is no hard line that where a Board passes a resolution, that an infected directing will of another cannot infect their will. This was in fact clear from the reasoning in Mariner. The determination always comes down to an assessment of the factors which affected the state of mind of each of the Board members – there is an assessment of their internal mental states and external factors. HRI submitted that there was no assessment of external factors in Mariner. I reject that submission. It is clear from the manner in which Beach J approached the issue, that consideration was given to their internal mental states and external factors.

393    As observed by Feutrill J in Reiche, with which I agree and adopt (at [104]–[105]):

104     … For the purposes of s 1317AD(1)(a), the conduct of a company that causes detriment to a whistleblower is conduct that is attributed to the company under the primary rules of attribution or ordinary rules of agency. For the purposes of s 1317AD(1)(b), the belief or suspicion is the state of mind of the organ of the company or the natural person whose conduct is attributed to the company for the purposes of s 1317AD(1)(a). For the purposes of s 1317AD(1)(c), the reasons or part of the reasons for the detrimental conduct are the reasons of the organ of the company or the natural person whose conduct and state of mind is attributed to the company for the purposes of s 1317AD(1)(a) and s 1317AD(1)(b).

105    It follows that where the applicable rule attributes the conduct of an individual natural person to [a company], to discharge the onus of proof cast on it under s 1317AD(2B) [the company] must prove that the natural person’s reason for the detrimental conduct was not his or her belief or suspicion of an actual or potential whistleblower disclosure by [the putative whistleblower]. However, a more difficult question arises in circumstances where the detrimental conduct may be attributed to more than one person or to the board of directors as an organ of the company.

(Emphasis added).

394    His Honour does not decide the question, but observed that the alleged wrongdoer bears the onus of proving that none of the directors believed or suspected that the putative whistleblower made, may have made, proposed to make or could make a disclosure (at [108]) and recognised that the relevant conduct could include the conduct of another person which was a material cause for the decision of the board or agent (at [109]). I concur with these observations.

Whether the voting directors’ evidence should be accepted

395    The parties accept that HRI’s state of mind necessarily included the members of the Board who voted in favour of the resolution not to renew.

396    Each of the voting directors denied that they believed or suspected that Professor Jackson believed, suspected or had information concerning anything that could be regarded as misconduct or an improper state of affairs or circumstances in relation to HRI, including in relation to the funding of Professor Jackson’s lab, or that Professor Jackson might otherwise make a disclosure that qualified for protection under Pt 9.4AAA. Each voting director also denied that any such belief or suspicion formed part of their reasons for voting in favour of the resolution to not renew Professor Jackson’s employment contract.

397    Each of the directors was required for cross-examination and their evidence was tested. It is worthwhile considering each of their evidence in turn.

Professor Boyle

398    Professor Boyle has been a Governor (director) of HRI since 2018, Professor of Cardiovascular Medicine at the University of Newcastle, an interventional Cardiologist at John Hunter Hospital, and Clinical Dean of the Hunter Clinical School (which is a collaboration between the University of Newcastle and Hunter New England Local Health District for delivering clinical training to medical students). It was Professor Boyle’s evidence that he has had limited dealings with Professor Jackson and only met him when he attended Board meetings as a member of the HRI board and on one other occasion.

399    It was Professor Boyle’s evidence that, over time, with the progressive discussion, at the Board level, that the negotiation of each of Professor Jackson’s previous contracts had been protracted and he formed the view that Professor Jackson would deploy a tactic of stalling negotiations for his employment contract “so it would come at the eleventh hour and HRI would be forced to give him what he wanted”.

400    His evidence was telling regarding what he recalled about what had occurred at the 3 April 2023 Board meeting:

In relation to the “financial reconciliation of costs incurred by HRI on behalf of Thrombio to date”, and the other matters referred to in the second and third paragraphs under item 6(a) in the minutes:

(a)     I recall there being an issue around Professor Jackson spending HRI funds to pay for drug manufacturing for the STARS clinical trial which ThromBio had an interest in because ThromBio was going to be involved in commercialising any successful drug. This was an issue to my mind because there was not yet any agreement in place between HRI and ThromBio about the management of their relationship and their respective interests, including as to rights arising from commercialisation, intellectual property, confidential information, and who would be funding what.

(b)     I considered that a collaboration agreement between HRI and ThromBio should have been finalised before HRI paid money for the manufacture of drugs in which ThromBio had an interest. I understood that HRI was paying invoices for the drug manufacturing by Ardena because of a perceived level of urgency in progressing the clinical trial (based on communications by Professor Jackson) and in good faith on the basis that a collaboration agreement with ThromBio would be signed.

(c)     As I perceived it, this issue of HRI funding work in which ThromBio had an interest without a finalised collaboration agreement was a constant source of tension at HRI, and was regularly raised at Board meetings.

(d)     As I understood it, the purpose of the financial reconciliation referred to in this item was to tease out which money was being spent on what, to make sure enough funds were available to cover the work being committed and that the appropriate funds could be spent in the appropriate places.

(e)     I recall having the understanding that, based on the work that HRI had been able to do, it seemed that the costs of the clinical trial were or would be more than the funds available from Professor Jackson's grants, and that this was connected with the Ardena issue referred to in item 6b).

401    This is evidence of a Board member, about concerns they had, before there is any allegation of HRI having an unlawful belief or suspicion, through Professor Coats.

402    As to the meeting on 22 June 2023, Professor Boyle understood that Professor Coats told the Board that Professor Jackson was now (since the last meeting) querying 2013 and 2014 discretionary funding transactions. Professor Boyle said that he had no idea what the transactions related to but assumed they related to the Monash funds. It was his evidence, which I accept, that he did not assume that Professor Jackson was implying or asserting that HRI had not managed discretionary funding transactions appropriately.

403    As to the Report of 21 July 2023, he understood that the notation “SJ likely to seek additional time to respond and will probably raise historical matters”, was a “discussion point” and it did not cause him to think that Professor Jackson might make a complaint or assertion to HRI that he thought it had not managed its 2014 discretionary funding appropriately. It was his evidence, which I accept, that he did not vote in favour of the resolution, or for a reason that included, because Professor Jackson was querying historical financial matters.

404    Rather, it was his evidence, which I accept, that he thought Professor Jackson’s behaviours were a reputational risk for HRI, including its relationship with the University of Sydney and SLHD and other HRI researchers. He perceived Professor Jackson to be a financial risk for HRI on the basis that he believed Professor Jackson to be prepared to commit HRI funds without proper authority (by exceeding his delegation).

405    I do not accept that his vote to not renew was motivated by, in whole or in part, a prohibited belief or suspicion.

Mr Pollitt

406    Mr Pollitt is a chartered accountant and a Governor of HRI. Mr Pollitt was first appointed to as a replacement Governor on 28 July 2021, and later, elected to that position on 23 May 2022. For the 12-month period preceding his appointment as a Governor of HRI, Mr Pollitt was a member of the HRI ARFC. He remains a member of that Committee.

407    It was evident from Mr Pollitt’s evidence that he was an earnest, careful person. He was nervous in the witness box, but it was obvious from his evidence that he did his best to recall what he could and could not recall from the various Board Meetings and Audit Meetings he attended. He struck me as being truthful and honest. This was particularly so by virtue of his preparedness to make concessions and also to maintain positions which he was aware would lead to challenges to his evidence.

408    Mr Pollitt’s evidence was that, by virtue of his involvement on the HRI Audit, Risk and Finance Committee, in the period before March 2023, he had significant concerns about a collaboration agreement not being signed because Professor Jackson was benefiting from HRI funding and its employees and ThromBio was the beneficiary. It was Mr Pollitt’s evidence, which I accept, that he did not recall being told anything specific about queries raised by Professor Jackson, including anything about “top-ups” or specific distributions. Rather, it was Mr Pollitt’s impression that Professor Jackson would not provide detail or information to substantiate what he said was wrong but rather would just say that the numbers were wrong. Mr Pollitt believed this to be consistent with his understanding of how Professor Jackson had previously behaved towards Mr Scott Martin, HRI’s previous finance director. When Mr Pollitt received the Options Paper, it was his understanding that the reference to “probably raise historical matters” meant there was a risk that if Professor Jackson was advised of his non-renewal, he might seek additional time to respond and was likely to raise matters about the ongoing financial reconciliation.

409    As at 22 June 2023, it was Mr Pollitt’s understanding “querying discretionary funding transactions from 2014” meant that Professor Jackson was querying the reconciliation between what the balance of the Jackson funds, the discretionary funds and the MRFF funding and the costs of the trial”. However, it was Mr Pollitt’s evidence, which I accept, that he did not understand that these queries concerned HRI not providing him with funding he said he was entitled to in 2013 and 2014. This was because, according to Mr Pollitt, Professor Jackson, had “run” the Institute at that point in time. There was no challenge to this aspect of Mr Pollitt’s evidence, and it was consistently his evidence.

410    Mr Pollitt’s reasons for supporting the resolution not to renew Professor Jackson’s contract were: (a) HRI had been on a long, protracted road with Professor Jackson to try to get a contract renewal, and a collaboration agreement with ThromBio, without success; (b) It was his view that Professor Jackson had an ongoing conflict of interest in relation to ThromBio; (c) HRI had been making losses, with significant deficits over the last few years, and there were significant costs associated with Professor Jackson and his team; (d) It was his belief that Professor Jackson’s breach of delegation of authority meant “he was a law unto himself”; (e) Professor Jackson appeared to have disengaged with staff at HRI outside his own lab; and (f) there had been a deterioration in the relationship between Professor Jackson and the University of Sydney, which created issues for HRI.

411    Mr Pollitt denied that his reasons for supporting non-renewal, included the alleged prohibited belief. Professor Jackson submitted that Mr Pollitt’s evidence ought to be rejected because his contemporaneous notes of the meeting on 24 July 2023 record, amongst other things, “Dispute over 10 years of top up expenditure”. This notation is said to make clear that this was a matter of significance.

412    A careful review of his written and oral testimony reveals that the bases upon which he claimed to be the reasons were matters that had some history, had been referred to by the Board at numerous meetings or arose from a history developed in his evidence (which was not challenged). The notes he wrote down for each meeting were not as to his impressions or thoughts or reasons, but rather, of matters that were raised at the meetings. Accordingly, to the extent that he was challenged on his positive evidence that he did not have the purported belief or suspicion, it was on the erroneous assumption that the matters identified in his notes accurately reflected his reasons for supporting the resolution not to renew. I do not accept this was the case for all the reasons I have set out above.

Professor Sleigh

413    Professor Sleigh was appointed a Governor of HRI on 25 October 2021, though she had first become involved with the Institute some years before through a collaborative research project she conducted at HRI while working as a scientist. Professor Sleigh’s evidence was that she had extensive experience working as a director, senior executive and advisor of biotechnology and science-based companies and research institutes. Among other qualifications, Professor Sleigh holds a PhD in Molecular Biology.

414    Professor Sleigh’s demeanour was one to be expected of her profession and experience. She answered questions directly, paused to recollect and gave truthful evidence, explaining her Board Meeting notes. There was no basis upon which it could be said that she was not being truthful. I note that I have already made certain findings with respect to her evidence and why it should be accepted.

415    It was her evidence, that as a result of a meeting she had with Professor Jackson in late 2021, that Professor Jackson was not well-versed in the usual arrangements between research institutes and staff whose work has commercial prospects, for example, when a company is established to further the commercial development of a research project (a startup, spin-off or spin-out company). In addition, she also understood that Professor Jackson had higher expectations about what support HRI should provide to ThromBio than would be usual in her experience. In addition, it was her evidence that as early as February 2022, a view was expressed to the Board regarding the insufficiency of grant funds covering the drug manufacturing costs.

416    It was Professor Sleigh’s evidence that, as at 22 May 2023, she had a general awareness that Professor Jackson disagreed with certain aspects regarding the financial analysis which was being undertaken but that she did not know the details. It was her evidence, which I accept, that she did not believe or suspect that there was any issue of misconduct or impropriety in relation the allocation of funding to Professor Jackson’s lab, or that Professor Jackson or Mr Bush might raise an allegation of that kind. At the meeting on 22 June 2023, Professor Sleigh recalled that the reference to “querying discretionary transactions” was about top-ups but that it was only briefly adverted to and that it was more in the context of the querying delaying finalising the outstanding matters in relation to Professor Jackson’s contract. This evidence was consistent with the evidence Professor Sleigh gave under cross-examination. Under cross-examination, it was Professor Sleigh’s evidence that she did not understand that Professor Jackson was complaining about or raised that HRI had failed to make payments to his lab. I accept her evidence. Her evidence is also fortified by the way the reference to “historical matters” appears in the Options Paper. The purported “con” was the protracted effect the raising of historical matters would have: It would lead to having to engage in the dispute and correspond about it. It was also her evidence that she understood the reference in the Options Paper, to the possibility in the first three options of Professor Jackson raising “historical matters” that it included the decision not to continue him in the role of Scientific Director, the collaboration agreement negotiations or past payments of top-ups and expenses. However, Professor Sleigh did not accept that those matters were included in her thinking or decision-making in any way. Professor Sleigh denied having the requisite belief or suspicion that Professor Jackson may or could make protected disclosures. I accept her evidence.

417    For the reasons set out above, I do not accept that any aspect of Professor Sleigh’s notes is inconsistent with her testimony regarding any alleged suspicion or belief nor against her reasons for supporting the resolution.

418    Her reasons for not supporting the resolution, were four-fold: (a) no agreement had been reached with Professor Jackson despite long negotiations on both the collaboration agreement (still unresolved since at least 2021) and his employment contract (after many months of discussions), and she was not convinced they could ever reach an agreement with him that was reasonable and fair to HRI; (b) he had signed contracts in the name of HRI and thereby committed HRI to expenditure without a clear knowledge of remaining funds available to his project; (c) he had exceeded his signing and delegated authority showing disregard for HRI’s policies and the authority of its executives; and (d) she felt that his strongly-held expectations of HRI in respect of both his employment contract and the collaboration agreement were beyond what was reasonable relative to expectations of other HRI scientists. Also, it appeared to her, that Professor Jackson was not carrying out all of the aspects of the role on which his remuneration had been based but he was unwilling to receive a reduced salary, even despite Professor Jackson devoting a considerable proportion of his time to commercial activity.

419    It was never squarely put to Professor Sleigh that her reason for voting in favour of the resolution on 24 July 2023 included a prohibited belief or suspicion. No submission was made in closing as to why I should not accept her evidence. In any event, it is my view that HRI established that her evidence ought to be accepted.

Mr Halstead

420    As has been referred to earlier in these reasons, Mr Halstead’s involvement with HRI extends back to 1988 when he was responsible for the Institute’s incorporation as a partner at the law firm Mallesons Stephens Jacques. Over the years, he has provided legal advice and other legal services to HRI on a pro bono basis.

421    Mr Halstead had a number of dealings with Professor Jackson over the years prior to him joining the Board in 2017, and was involved in the discussions about the previous renewal of Professor Jackson’s contract in 2019. Mr Halstead was thereafter part of a special committee in 2021 to seek legal advice as to the options around the renewal of Professor Jackson’s contract. The special committee met with Professor Jackson in 2021. Mr Halstead, after December 2021, was involved in the negotiation of the collaboration agreement. Accordingly, Mr Halstead, over a period well prior to the negotiation by Professor Coats and Mr McGauran of the agreements, had dealings with Professor Jackson regarding the negotiation of contracts.

422    For the reasons set out above, Mr Halstead’s evidence must be understood in the context of the wider role he had with HRI over many years and his prior history of dealings with Professor Jackson. In addition, his email of 8 May 2023, is critical. It illustrates his own concerns regarding the protracted negotiation history and regarding the STARS trial before any allegation of any suspicion or belief on HRI’s part, let alone his part.

423    Mr Halstead gave unchallenged evidence regarding the University of Sydney’s rejection of Professor Jackson’s grant applications, around the 7 June 2023 meeting and the wider issues this raised for HRI. This again is evidence of wider concerns attending the mind of a director.

424    It was Mr Halstead’s evidence, that, as at 22 June 2023, he understood that there was a difference of opinion with Professor Jackson regarding the available funding for the STARS trial. It was his evidence that he had no knowledge or thought in his mind that Professor Jackson or Mr Bush had any information regarding misconduct or any improper state of affairs or circumstances by or regarding HRI, including any misallocation of funding or discretionary funding for his lab, or that they had any belief or suspicion about those matters. This was not a bald assertion but rather arose, according to Mr Halstead’s evidence, based on his understanding of the quality of the work undertaken by Dr Krskova and the finance team and that the accounts and their preparation were scrutinised by Mr Rassi and Mr Howes. It was Mr Halstead’s evidence that he had no reason to believe there was any financial misconduct or impropriety, or that Professor Jackson or Mr Bush knew, believed or suspected there was information regarding the same. Thereafter, it was Mr Halstead’s evidence, that the reference in the Options Paper, to the probability of Professor Jackson raising historical matters, he understood to be a reference to the decision not to renew his role of Scientific Director in 2021 or debate about matters such as payment of top-ups. It was his evidence, which I accept, that these issues had no bearing on the view he formed about Professor Jackson’s employment.

425    It was Mr Halstead’s evidence that his reasons for supporting the non-renewal, did not include the purported prohibited reason but were four-fold: (a) Professor Jackson had incurred expenses for the Ardena drug manufacturing work relating to the STARS trial without authority or regard to how they would be funded; (b) Professor Jackson staying at HRI was not consistent with what he regarded as the appropriate future strategic direction of HRI, particularly rebuilding HRI’s relationships with the University of Sydney and SLHD; (c) Professor Jackson was expensive for what he was doing. He was focussed on his own research and not making the broader contribution to HRI that he expected of a senior researcher including monitoring and supporting scientists, particularly young scientist outside his particular group; and (d) the inability to reach agreement with Professor Jackson about a new employment contract and the collaboration agreement in circumstances where Professor Jackson continued to incur significant costs on behalf of HRI.

426    Mr Halstead gave clear, considered, concise responses to the questions asked of him. There was ultimately no direct challenge of his evidence as to his reasons for supporting the non-renewal, nor any submission by Professor Jackson in closing as to why his evidence should not be accepted, save for a generalised submission that the contemporaneous notes of the meeting taken by Mr Pollitt should be preferred over other voting directors’ evidence. I accept Mr Halstead’s evidence.

Mr Rassi

427    Mr Rassi is the Chair of the HRI ARFC, a position he has held since shortly after his appointment as a Governor of HRI on 26 September 2018. He is a chartered accountant and serves as a member of the professional conduct Appeals Tribunal of Chartered Accountants Australia and New Zealand.

428    Accordingly, like others, Mr Rassi has been a director of the Board for some time and therefore privy from his attendance at Board meetings to the negotiation of previous contracts with Professor Jackson. It was his evidence that, in early 2021, he became concerned about the potential conflict of interest between Professor Jackson’s role as Scientific Director and his personal commercial interest in the drug development. It was his view, as time passed, that the inability to finalise the collaboration agreement became a significant issue: He was concerned that Professor Jackson continued to incur costs in relation to the development and commercialisation of the drug where there was no signed agreement in place. This concern was exacerbated in March 2023 by him becoming aware of the large expenditure that had been committed in August 2022. This evidence was logical and compelling. It is consistent, mounting concerns arising well before any purported knowledge of a protected disclosure.

429    It was Mr Rassi’s evidence that he understood, as at 3 April 2023, that the payment, by HRI of top-ups was discretionary and was only paid when HRI was in a financial position to be able to do so. As at 22 June 2023, Mr Rassi understood that Professor Jackson was asserting that he should have been provided with additional top-ups in 2014 and that if this money was credited to his group’s discretionary fund then the deficiency in the funding for the STARS trial would not look so large. However, it was Mr Rassi’s evidence, which I accept, that he did not think this query had any substance or related to any improper conduct by HRI. Given that, at this time, HRI had not been provided with any detailed information, documentation or a detailed financial account of how this assertion could be made out, I accept Mr Rassi’s evidence. Further, I accept it was his belief that the entitlement was only ever discretionary. As to the reference in the Options Paper, regarding the probability of Professor Jackson raising historical matters, that would involve Professor Jackson wanting time to respond to the performance concerns and was likely to raise payment of top-ups or the financial reconciliation. I also accept that this remained his belief, and it did not influence his decision to support the resolution for the reasons outlined below.

430    Ultimately, Mr Rassi denied his support for the resolution included the purported belief or suspicion, but was rather because: (a) despite protracted negotiations, no agreement had been reached with Professor Jackson on the collaboration agreement. This meant that there was no certainty as to who would pay for what in relation to the research into TBO-309 in the future and Professor Jackson’s assumption appeared to be that HRI would keep paying; (b) Professor Jackson had signed contracts (SoWs) with Ardena on behalf of HRI that he had no authority to sign, and in breach of HRI’s Delegated Authority Policy. It was his evidence that he had no confidence that going forward Professor Jackson would comply with HRI’s policies as he appeared not to acknowledge he was subject to any oversight by HRI; (c) It was his belief that Professor Jackson was not performing his broader responsibilities across HRI, such as attend CPC Executive meetings whilst receiving a significant salary from HRI; and (d) Professor Jackson's overall poor financial management of the STARS trial which had resulted in HRI being continually surprised by costs that had been incurred by Professor Jackson and in circumstances where HRI had no visibility on what costs were on the horizon.

431    Professor Jackson submitted that Mr Rassi’s denial should not be accepted because he “volunteered”, when asked about what had occurred during the meeting on 24 July 2023, that the fact of Professor Jackson disputing 10 years of top-up expenditure, was not factored into his decision. I do not agree. A known premise of Professor Jackson’s case was this allegation and Mr Rassi had put on specific evidence about this. It followed logically that he would explain this. Further, I do not accept that his evidence should not be accepted because of the fact that he knew that Professor Jackson was querying historical financial matters and raising issues about the payment of top-ups. It was clear that many of the reasons for why he concluded that the resolution ought be passed were long-held. There was no evidence that Mr Rassi knew anything about the quantum of the alleged shortfall in funding was, but merely the fact of Professor Jackson querying the funds. Further, the voting directors had been told, from the 21 July report, that a possible consequence of voting in favour of Option 1, would be that Professor Jackson would raise these issues, and there would be a need to engage with him about them in correspondence and this could involve a mediation. What the voting directors knew was not just that he was raising these issues but rather that they would have to engage with him about them.

Dr McBride

432    Dr McBride was appointed as a Governor of HRI on 23 February 2022 as the Sydney Local Health District Nominee, a position that was previously held by Dr Anderson.

433    Between January 2014 and March 2023, Dr McBride was the inaugural director of the Institute of Academic Surgery at the Royal Prince Alfred Hospital, which is a collaboration between Sydney Local Health District and the University of Sydney. Currently, Dr McBride is the Director of Operations, Surgical Program for the Sydney Local Health District. A position she has held since March 2023. Previously, she had been acting in that position from March 2021 (though at that time it was called Director, Surgical Program & Academia).

434    Dr McBride was softly spoken and endeavoured to answer the questions that were asked of her. She had no prior experience with, nor other involvement with, HRI, other than on the Board. To the extent that she made decisions, they were made on the basis of the information that was presented to her. It was her evidence, which I accept, that she had a very limited understanding of the assertions Professor Jackson was making regarding financial matters. She did not understand by Professor Jackson’s assertions that he was making a complaint. Dr McBride understood the reference in the Options Paper to the probability of Professor Jackson raising “historical matters” to be regarding him having previously been stood down as Scientific Director and the fact that he did not receive “top-ups” in 2023. It was her belief that Professor Jackson was stalling or delaying negotiations based on what she was told. Dr McBride understood the reference in the Options Paper to the probability of Professor Jackson raising “historical matters” to be regarding him having previously been stood down as Scientific Director and the fact that he did not receive “top-ups” in 2023. It was her belief that Professor Jackson was stalling or delaying negotiations based on what she was told.

435    I am satisfied that HRI has discharged its onus, and that Dr McBride did not have the requisite belief or suspicion. In addition, Dr McBride denied that she was motivated not to renew Professor Jackson’s contract by reason of any complaint he had made (his querying of the historical arrangements or HRI’s management of discretionary funds appropriately). She was cross-examined about this. However, ultimately, no submission was made in closing about why her evidence specifically should not be accepted in the generalised way I have already described above.

436    Her reasons for not supporting the resolution were articulated in the following way: (a) there was no resolution on the ThromBio situation (that is, a collaboration agreement with ThromBio), or on how the funding of the STARS trial would work in terms of what HRI’s funding responsibilities would be, and what interest it would have in the end result of Professor Jackson’s research; (b) she was concerned about financial risk where she perceived Professor Jackson was acting outside his delegated authority and the “murkiness” around what the financial cost of the STARS trial was going to be for HRI. In addition, she was concerned about the effect the decision not to renew would mean for the STARS trial. These reasons are clear, logical and arise from her consideration of the issues around Professor Jackson over many months. I am of the view that her evidence should be accepted. I do not think that the contemporaneous documents cast any doubt over her evidence.

Mr McGauran

437    I have already made, when dealing with the ACL claim, a number of findings as to why I accept Mr McGauran’s evidence. I found him to be a witness that was fulsome in his account. He made numerous concessions as to what Professor Jackson asserted were inaccuracies in the Board minutes. It was my impression that he was Professor Jackson’s primary backer over the relevant period. He had genuine admiration and respect for Professor Jackson and his work. It was evident that he wanted to reach agreement with Professor Jackson in 2022 and worked with him and Professor Coats to try and achieve this. While it is evident that he became more concerned in 2023 about many matters, even in April 2023, it was apparent that he was trying to move things forward and get the contracts signed.

438    The above chronological facts reveal that Mr McGauran had conversations with Professor Jackson directly about the delegation and funding issues from March 2023. He was copied into relevant email exchanges between Professor Coats and Professor Jackson about the Jackson lab Funds and MRFF commitments. Mr McGauran met with Professor Jackson and Mr Bush on 20 April 2023. After that meeting, the email exchange between Professor Jackson and Mr McGauran was an open one, Professor Jackson was seeking to speak with someone directly on the Board. These exchanges in April reveal a continued preparedness by Mr McGauran to try and work with Professor Jackson to resolve the issues regarding finances and delegation. Mr McGauran gave evidence about the receipt of Mr Halstead’s email, dated 8 May 2023, and the need to develop a strategy regarding the approach to issues relating to Professor Jackson’s employment and the proposed next steps.

439    It was Mr McGauran’s evidence that he voted in favour of the resolution for four reasons: First, because of concerns that were raised before the Board regarding Professor Jackson not performing significant parts of his role; secondly, the impasse in the negotiations to make a new contract; thirdly, Professor Jackson’s demands for an increased role and autonomy would have the effect of undermining Professor Coats’ role; fourthly, Professor Jackson acting beyond his delegated authority without approval and the possibility of there being insufficient funds to cover the costs of the STARS trial.

440    Mr McGauran denied that his reasons included the prohibited belief or suspicion. It was Mr McGauran’s evidence that, by 24 July 2023, he understood that Professor Jackson had made complaints that he had not received discretionary funding he said he was entitled to in 2013 and 2014. Mr McGauran understood that Professor Jackson was essentially complaining about mismanagement of funding. However, it was Mr McGauran’s evidence (which was not the subject of challenge) that he did not believe or suspect that Professor Jackson or Mr Bush may make or could make a disclosure that HRI had engaged in misconduct or that an improper state of affairs existed in relation to HRI. It was Mr McGauran’s evidence also that he denied that this alleged belief, or suspicion formed a part of his decision to vote in favour of the resolution. His evidence was not challenged directly in either of these regards. However, a number of submissions were made as to why his denial ought not be accepted by reference to matters that do not have a rational bearing on the question of whether Mr McGauran held the proscribed belief or suspicion.

441    It was submitted that Mr McGauran was plainly aware of the issues being raised by Professor Jackson and Mr Bush about historical financial management. It may be accepted that his evidence establishes this in a general sense, but it does not go far. It was submitted that “he was alive to the misleading representations made to the Board by Professor Coats”. I do not accept this in its terms. He conceded under cross-examination that, in certain instances, the description in the Board minutes regarding the negotiations with Professor Jackson was not accurate, but I do not accept that it follows that he was alive to this at the time. To the extent that it was suggested that Mr McGauran “was the moving party in engaging MinterEllison to move to cease Professor Jackson’s employment”. I do not accept this. No reference to evidence is made in support of this assertion and I do not accept, from the findings that I have already made, that it can be made out.

442    It was said that Mr McGauran’s evidence on this issue ought not be accepted for other reasons arising from other aspects of his evidence. For example, it was suggested that he denied being authorised by the Board to negotiate the terms of employment. I do not accept that his evidence was inconsistent. In his affidavit evidence, he stated that he had been given authority to “engage” with Professor Jackson, he did not say that he had authority to negotiate the terms of the employment contract. It could be inferred from Mr McGauran’s evidence that “engage” meant have discussions and build the relationship. I accept his evidence. A submission was made about his “volunteering” of evidence about a five year contract. I do not imply from this that his credit should not be accepted generally and that he was motivated to give evidence that was in the HRI’s interest. Further, a submission was made about Mr McGauran’s oral evidence concerning the 21 December 2022 meeting and that it should not be accepted because he did not include in his affidavit that he had indicated to Professor Jackson that there were matters on which HRI was not willing to compromise. I do not accept this. Mr McGauran explained, in answer to a number of questions, how it was “implied” from the way that the discussion unfolded and by reason of Professor Jackson being a smart man that he would have understood HRI’s position. In any event, it is my view that, even if this was incorrect, and should not be accepted, it would not lead me, for all the other reasons given, to attend to his evidence with such doubt as to not accept this evidence on critical matters. Lastly, for the reasons given with respect to Mr McGauran’s evidence concerning the ACL claim, I do not accept that Mr McGauran’s evidence regarding there being an “impasse” in the negotiations as at 3 February 2023 ought not be accepted.

Conclusions as to the voting directors

443    For the reasons given above, I am satisfied that each of the voting directors gave honest and genuine recollections as to their states of mind at the time of the 24 July 2023 decision. As can be seen from their evidence, each of them are independent (non-executive) directors. There was no evidence relied upon, nor any submission made, that any of them had a vested interest in the outcome of the proceeding. Each of them gave different, considered reasons for why they made the decision. The evidence was logical and consistent when challenged.

444    Each of the voting directors’ evidence about their lack of a relevant belief or suspicion is consistent with their level of knowledge as to the “issues” Professor Jackson was said to be raising about the funding of his lab. As submitted by HRI, the only references to such matters at the Board level were at the 22 June 2023 meeting, where the minutes record, in the context of an update by Professor Coats about the negotiations for Professor Jackson’s contract renewal, that Professor Jackon “was now querying discretionary funding transactions from 2014, further delaying the contract renewal”; and, at the 24 July 2023 meeting, where the minutes record the Board noting that Professor Jackson “was now querying historical transactions in his Thrombosis Discretionary Account from ten years ago, further delaying management’s efforts to ascertain the balance of the available funding to fund the STARS trials”.

445    HRI established that none of the voting directors recalled being given any detail about Professor Jackson’s queries. This is critical. The voting directors had no awareness of the amount of the alleged shortfall in discretionary funding. Further, it is telling that the information the voting directors had received from the 21 July report, was that a potential consequence of voting in favour of non-renewal, would mean that Professor Jackson would probably raise these historical issues, there would be a need to engage with him about them in correspondence and this could involve a mediation. There was no suggestion that there was any concern about the fact of his raising these issues. It was not the case that the voting directors knew that Professor Jackson was just raising these issues but rather that they would possibly have to engage with him about them. They voted in favour of the course that would potentially provide a forum for him to raise them rather than stultify them.

446    For all of these reasons, I accept also that none of the voting directors voted in favour of the resolution for a reason, or part of a reason, which included the prohibited belief or suspicion.

What was Dr Gainsford’s contribution to HRI’s decision not to renew Professor Jackson’s contract?

447    Professor Jackson claimed that Dr Gainsford, by his involvement in the matter, made a material contribution to HRI’s decision not to renew Professor Jackson’s contract.

448    For the reasons which follow, I am not persuaded that Dr Gainsford made a material contribution or had a material effect on the Board’s decision on 24 July 2023. I accept HRI’s characterisation of Professor Jackson’s submission, at its highest, was that Dr Gainsford was “an important cog in the decision-making process” because the Board relied on matters “relayed” to them by Dr Gainsford. That goes no higher than to say that Dr Gainsford was a conduit of information to the Board. This is not sufficient to establish material contribution for the above reasons, and also, when considering each of Professor Jackson’s submissions below.

449    First, Professor Jackson alleges Dr Gainsford was intimately involved in the allegations that were made about the breach of delegated authority, he “asserted and provided advice on the alleged breach of delegated authority by” Professor Jackson. This is a reference to the “Thrombio Update” Board paper dated 29 March 2023 (referred to above). The paper communicated a concern raised by Dr Krskova about the breach of delegated authority and facts appearing on the face of documents. The relevant SoW was attached to the Board paper. The evidence revealed (as a result of the evidence of a number of directors under cross-examination) that they specifically recalled seeing this document. Similarly, the statement in the paper as to Professor Jackson’s level of delegation was said to be derived from HRI’s Delegation of Authority policy, which was a published document. Further, the paper overstated the extent of Professor Jackson’s financial delegation, which was corrected at the Board meeting, being indicative of the directors giving the issue independent consideration.

450    Secondly, Professor Jackson alleges Dr Gainsford compiled data and information and provided advice relating to a deficit of funds in Professor Jackson’s lab, again, apparently referrable to the March Board paper. However, as submitted by HRI, Dr Krskova’s unchallenged evidence was that she provided the financial information for this paper, and what Dr Gainsford conveyed to the ARFC on that topic contained the financial information Dr Krskova had provided to Dr Gainsford. In addition, Professor Coats also made material changes to this paper. Subsequent reports to the Board were also based on Dr Krskova’s substantive work. I accept HRI’s submission that this is consistent with the contemporaneous documents annexed to Dr Krskova’s affidavit and tendered by Professor Jackson. It cannot be disputed that Dr Krskova was charged with and did the financial reconciliation work, not Dr Gainsford. The reports were factual and did not involve an evaluative assessment of Professor Jackson’s actions or contain advice or recommendations regarding his employment.

451    Thirdly, Professor Jackson alleges Dr Gainsford performed an “important role” on the Board sub-committee that was established to consider options in relation to Professor Jackson’s employment. I accept what Dr Gainsford did was to engage with MinterEllison and pass information to and from the sub-committee and MinterEllison. Again, the evidence establishes that his function is that of a conduit. I accept HRI’s submission that there is no evidence that Dr Gainsford had any evaluative or conscious role in interpreting the MinterEllison information or opining as to the contents of the advice.

452    Fourthly, Professor Jackson alleges Dr Gainsford reported to the Board at the 24 July 2023 meeting ahead of the resolution not to renew Professor Jackson’s contract. It was asserted by Professor Jackson that Dr Gainsford “in fact, prepared the recommendation,” on 19 July 2023. However, a comparison of the relevant part of the Options Paper prepared by MinterEllison and this report, is that this report did nothing more, in substance, than replicate option 1 of the MinterEllison paper with some additional points regarding process matters. Therefore, to the extent that the report was co-authored by Dr Gainsford, it is that of a conduit of information. I accept HRI’s submission, that there was no evidence or reason to think that Dr Gainsford’s verbal update at the meeting went any further: Mr Pollitt’s contemporaneous notes of the meeting simply record the effect of the MinterEllison advice on “option 1”.

453    Each of the directors gave evidence that they had no recollection of Dr Gainsford speaking at or making a material contribution in the meetings of the sub-committee and on the Board meeting of 24 July 2023.

454    Further, a review of the transcript references given to the Court as said to comprise the “Governors’ reliance on representations by Professor Coats, Dr Gainsford and/or Dr Krskova”, reveals no separate identification as to each of these alleged contributors. It is not clear why Dr Krskova is referred to because it was not submitted that she was a material contributor. To the extent that the Court was able to decipher from considering all of the transcript references, and trying to work out for itself which purported contribution was made by Dr Gainsford, consistent with the above, it is evident that the contribution was one of passing on information. If the transcript reference relied upon related to funding and top-ups, often the evidence was elicited from a double-barreled question and was based on information from both Dr Krskova and Dr Gainsford. To the extent that there was acceptance by a director that they relied upon a report prepared by Dr Gainsford, I repeat my earlier observations as to what can be gleaned from those reports about the nature of the contribution being made.

455    Fifthly, Professor Jackson makes a number of allegations about why Professor Sleigh’s evidence in chief that Dr Gainsford “said nothing of substance to her” should not be accepted. I reject this submission. Professor Sleigh gave direct, cogent evidence. She made comprehensive, contemporaneous notes. Professor Sleigh’s evidence that she did not recall what Dr Gainsford said at that meeting, was consistent with the other directors. There was no challenge made to her evidence in this regard on the basis of any of her notes of the meeting. Counsel for Professor Jackson did not put to Professor Sleigh that she was being untruthful about Dr Gainsford’s role.

456    For these reasons, I do not accept that the evidence establishes that Dr Gainsford’s state of mind is relevant in determining whether HRI had the proscribed belief or suspicion. Given the same, I do not accept that the Court also should draw any other adverse inference from HRI not calling Dr Gainsford. This is so because in order for a Jones v Dunkel [1959] HCA 8; 101 CLR 298 inference to be drawn, there must be something that a party is required to explain or contradict. Here, the fact requiring an answer is HRI’s belief or suspicion that Professor Jackson proposed to make a disclosure that qualifies for protection. However, I do not consider that Dr Gainsford was a witness, that in the circumstances, for the reasons given above, could have been expected to be called, nor that his evidence would elucidate a particular matter. In any event, such an inference only permits the Court to infer that the uncalled witnesses would not have assisted that party’s case, not that the witness would have been positively adverse to that party. A Jones v Dunkel inference can only be used to strengthen an inference that is available on some existing factual substratum and not to bolster conjecture.

457    Even if I am wrong about this, it is my view that, even if I were satisfied that an inference could be drawn, I would still be satisfied on the basis of all the other evidence relied upon by HRI that HRI has discharged its onus.

Professor Coats’ state of mind

458    Given that Professor Coats did not vote with respect to the resolution, an issue, like that with respect to Dr Gainsford, arises as to whether despite this, he nonetheless made a material contribution in HRI’s decision-making process. Ultimately, it was HRI’s submission, that even if his state of mind is relevant, the Court would not conclude, that on 24 July 2023, Professor Coats held a belief or suspicion that Professor Jackson proposed to, may, or could make, a protected disclosure. I find that Professor Coats, at no stage, prior to 24 July 2023, held a belief or suspicion that Professor Jackson proposed to, may, or could make a protected disclosure.

459    Professor Coats gave repeated, consistent, evidence denying having any such belief or suspicion. For the reasons stated above, it is clear that Professor Coats was a shrewd negotiator and had from 2022 onwards, formed views about what was in HRI’s and his interest (which was different from Professor Jackson). To the extent that his reporting to the Board was not always accurate, as found above, it was for purposes to achieve Professor Coats’ interests – not for an unlawful purpose. He had done this in 2022, well before any purported knowledge of a protected disclosure. The evidence established that, as at 3 February 2023, negotiations were not progressing well and the parties were well apart on material issues. I do not accept, for the reasons set out above, that Professor Coats came to believe or suspect Professor Jackson would make a disclosure on or about 11 May 2023 and thereafter everything “accelerated” to decide not to renew because of a reason that included this belief or suspicion (in part based on Professor Coats’ conduct). The evidence established that, by March 2023, concerns were being raised about the viability of the STARS trial and whether Professor Jackson had breached the delegation policy. At the same time, it was Professor Coats’ unchallenged evidence that, at the ARFC meeting, the Committee noted that there was a loss of over $5 million for the 2022 financial year and the need to take immediate steps to mitigate losses going forward.

460    In May 2023, there was a concern of a very large projected deficit. On 8 May 2023, Mr Halstead (not Professor Coats), sought to review and understand the status of the contractual negotiations with Professor Jackson and the possible need to seek legal advice regarding all options. It was Professor Coats’ view, after reading this email, that this email would likely lead to a shift in opinion of Board members towards considering options to cease Professor Jackson’s employments. It is this advice together with the fact of the many issues that were now materialising and accumulating that led to the seeking of advice from MinterEllison. As at the end of May 2023, it is clear that Professor Coats, like others, was concerned as to financial liability for HRI of Professor Jackson-related financial commitments. This was a logical concern, particularly in light of HRI’s financial position. It was clear that by the end of May, Professor Coats had formed views about the viability of Professor Jackson’s ongoing employment and his preference for Professor McMullen (who he had been seeking to recruit since late 2022). This all occurred before his knowledge of Professor Jackson raising the 2013 and 2014 discretionary account issue. Further, Professor Coats understood that the allocation of top-ups was discretionary and that Professor Jackson was responsible for approving the allocation at that time because he was then the Scientific Director. I do not accept that the evidence establishes any change in pattern of behaviour by him from this point from which it could be inferred that he had the requisite belief or suspicion.

461    Professor Coats gave evidence of the matters he informed the Board about at the meeting on 24 July 2023, including him having enormous difficulties managing Professor Jackson, the little progress that had been achieved in relation to the negotiation of the two agreements with Professor Jackson, his belief that HRI was continuing to identify increasing costs associated with the STARS trial and the breach of delegated authority and his belief that Professor Jackson was not undertaking broader aspects of his role with HRI. It was also his undisputed evidence that he told the Board that Professor McMullen had now obtained the support of the University of Sydney to join HRI. It was also his undisputed evidence that he told the Board that Professor McMullen had now obtained the support of the University of Sydney to join HRI.

462    It was Professor Coats’ evidence that he told the Board these concerns, not because of, or for a reason which included any belief or suspicion that Professor Jackson could, proposed to or may make a protected disclosure. Professor Coats did not believe that Professor Jackson or Mr Bush had a genuine concern about HRI’s management of the discretionary funding because (a) he had already informed Professor Jackson and Mr Bush that the allocation of top-ups was discretionary and the total amount of top-ups was approved by the Board on a year to year basis; (b) Professor Jackson was himself responsible for approving the allocation and annual sign off on HRI’s annual financial statements during his time as Scientific Director; and (c) top-funding did not roll over multiple years and could be reclaimed if the Scientific Director felt there was a better use of the money. He was not directly challenged on this evidence. In any event, I do not believe that Professor Coats believed that the alleged concerns were genuinely held. This is consistent with the way that he described them to the Board, as only now being raised and in the context of delay and protracted negotiations. For all of the reasons above, I accept that Professor Coats did hold the concerns he expressed to the Board. It is also evident that he was motivated to bring in Professor McMullen.

463    Professor Jackson made a range of criticisms of Professor Coats’ evidence. To the extent that allegations related to his evidence with respect to the negotiation of the employment contract and the collaboration agreement, I rely on my above findings. Three additional matters, raised in the closing submissions, related to his alleged conduct the subsequent year after the determination of non-renewal in 2023. In addition, criticism was made of his evidence that he denied that he had made the allegation that Professor Jackson had exceeded delegated authority. But no evidence is relied upon by Professor Jackson to prove why his denial was incorrect. Lastly, it was asserted that his evidence relating to a conversation with Professor Jackson in November 2022 ought not be accepted.

464    For all of the reasons given above, I accept Professor Coats’ evidence as to the absence of a belief or suspicion. I accept that he did not always accurately account to the Board about matters relating to the funding of Professor Jackson’s lab and contractual negotiations. However, for the reasons I have previously stated, I am not satisfied that, these inaccuracies stemmed from a prohibited belief or suspicion. I accept HRI’s submission that this case theory is illogical because much of Professor Coats’ alleged misleading conduct (at the Board meetings in November 2022 and February, April and May 2023) pre-dated the issue of historical transactions being raised in June 2023. Further, and fundamentally, there was no evidence that HRI had any awareness of how much these transactions were worth until after receiving Mr Bush’s paper on 6 July 2023. This thesis ignores the fact that the Board’s concerns regarding Professor Jackon’s employment began around April 2023 but was brought to the fore by the Halstead email in May.

Additional matters raised by Professor Jackson

465    For the reasons given above, I do not accept that by reason of HRI not calling evidence of legal advice given by Ms Harding and positively asserting privilege over that advice, HRI has failed to discharge its onus. It is open for HRI to maintain a claim of privilege over communications with its legal advisors.

466    Further, by reason of the reasons given above, I do not accept, that each of the denials of HRI’s witnesses concerning their reasons for supporting the decision not to renew Professor Jackson’s contract, ought not be accepted by reason of the claimed unchallenged evidence and contemporaneous documentary material relied upon by Professor Jackson.

467    Additionally, Professor Jackson claimed the 15 August 2023 letter from HRI to Professor Jackson was indicative of a flawed human resources process that ought to call into question HRI’s conduct and motives. By letter dated 15 August 2023, Mr McGauran, in his capacity as Chairman of the Board, wrote to Professor Jackson expressing concerns that over the period of the preceding six months, he had not been performing significant parts of his role and that in the course of a financial audit of the STARS trial, it came to light that he had been authorising various expenditures that were beyond the applicable $10,000 of delegated authority that Professor Jackson held. The letter also stated “HRI is not proposing to continue discussions with you about any further employment after the expiry of the Term”, cautioned that if the expressed “concerns are borne out” then his employment for the balance of the term “may be untenable” and requested a written response within 10 calendar days.

468    It is clear that the Board considered, and resolved, not to renew Professor Jackson’s employment, or more accurately, as already found, not to continue with the negotiation of a new contract. It was clear from the sequence of events, and the content of the 15 August 2023 letter, that the intention of that letter, was to allow Professor Jackson the opportunity to respond to the concerns before HRI made any decision to terminate his employment before the expiry of the contract’s term. I am of the view that, despite this less than orthodox human resources approach, it does not support the adverse inference Professor Jackson submitted should be made.

Whether the claim qualified for protection because it related to personal work-related grievances (issues 12 and 15)

469    A disclosure is not protected, under Part 9.4AAA, if the information disclosed “concerns a personal work-related grievance of the discloser” and does not concern a contravention, or an alleged contravention, of s 1317AC that involves detriment caused to the discloser or a threat made to the discloser: s 1317AADA(1).

470    Accordingly, even if it were accepted that the voting directors or Professor Coats believed or suspected that Professor Jackson may or could make a disclosure about historical discretionary transactions, or otherwise about the funding of his lab, the disclosure would not qualify for protection if it constituted a “personal work-related grievance” within the meaning of s 1317AADA.

471    For the information disclosed to constitute the exception, and be a personal work-related grievance, it must fall within the descriptors prescribed in s 1317AADA(2).

472    That is:

1317AADA Personal work-related grievances

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

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

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

Note:    A disclosure concerning a personal work-related grievance that is made to a legal practitioner may qualify for protection under this Part under subsection1317AA(3).

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

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

(b)    the information:

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

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

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

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

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

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

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

473    HRI contended (and had pleaded) that the information disclosed fell within this exception because Professor Jackson’s and Mr Bush’s querying discretionary funding transactions occurred in the context of the negotiations of Professor Jackson’s employment contract and where issues had been raised with him about concerns Professor Jackson was exceeding his delegated authority.

474    Ultimately, in closing, there was very little submitted by either party with respect to this issue. By reason of the findings already made, there is no necessity for the Court to decide this issue. Given the limited ventilation of the issue, the Court is loathe to chart new territory on this issue. HRI proceeded on the basis that this issue was determined through the prism of what HRI believed rather than as a matter of fact whether it was established that the information disclosed fell within the exception. No submission was made by Professor Jackson in this respect.

475    The difficulty, without assistance, is what HRI and Professor Jackson both say based on the evidence was known to HRI relevant to the issue of HRI’s state of mind. The evidence established that the voting directors had different states of knowledge as to what the allegation of the historical transactions meant. Further, the evidence established that they had no knowledge of the quantum of the alleged shortfall. The only person who knew that was Professor Coats. No submission was made by the parties, which assisted the Court in determining, how based on these facts, the Court could be satisfied that HRI believed that the information did or did not have significant implications for HRI.

476    If it were required that the issue be decided on the objective facts, the Court would accept, on the basis of the above findings, that s 1317AADA(2)(a) was established, that is, the information concerned a grievance about a matter in relation to Professor Jackson’s employment. However, the Court was not assisted as to how, as a matter of fact, it was not information that has significant implications for the regulated entity: s 1317AADA(2)(b)(i). The allegation, as crystallised in Mr Bush’s 6 July 2023 paper, was that HRI had failed to provide agreed financial support to be allocated to Professor Jackson’s discretionary account in 2013 and 2014, amounting to a shortfall of $606,267. The Court was not asked to, nor could determine on the evidence, what the financial status of Professor Jackson’s lab was at the relevant time. Accordingly, it is unclear as to how the Court could come to any concluded view on this issue.

HRI did not hold the belief or suspicion

477    For the above reasons, HRI has discharged its onus in establishing that none of the voting directors nor Professor Coats held the alleged belief or suspicion.

HRI did not act for a proscribed reason (issue 13)

478    Further, to the extent that it is necessary, HRI has discharged its onus of establishing that HRI did not act for the prohibited reason.

479    First, HRI has proven that none of the voting directors nor Professor Coats held the alleged belief or suspicion.

480    Secondly, for the above reasons, I am of the view that the evidence establishes that Dr Gainsford did not make a material contribution or had a material effect on the Board’s decision on 24 July 2023. I do not accept that the evidence establishes that Dr Gainsford’s state of mind is relevant in determining whether HRI had the proscribed belief or suspicion. Given the same, I do not accept that the Court also should draw any other adverse inference from HRI not calling Dr Gainsford. Even if I were wrong about this, it is my view that even if I were satisfied that an inference could be drawn, I would still be satisfied on the basis of all the other evidence relied upon by HRI that HRI has discharged its onus.

481    Thirdly, each of the voting directors gave consistent, cogent evidence of their reasons for voting for the 24 July 2023 resolution. As is evident from an assessment of each of their evidence – their reasons differed from one another and reflected their own history of involvement with Professor Jackson, their own expertise and their own differing knowledge and perspectives of the events leading up to the resolution.

482    Fourthly, for the reasons set out above, I accept Professor Coats’ evidence as to his motivations.

483    Fifthly, the chronology of events fortifies the evidence of the voting directors and Professor Coats. I do not accept that there was a pivotal point after 11 May 2023 that led to a calculated escalation of matters by a purported contrast to the period before. All was not rosy as at 3 February 2023 – the parties remained in disagreement on material matters concerning Professor Jackson’s future contract. Significant material issues had come to light after 3 February 2023 – the viability of the STARS trial, purported overcommitment of HRI funds to the drug manufacture (where HRI had its own financial strain) and alleged breaches of delegation. On any rational review of the circumstances, the viability of Professor Jackson’s ongoing position, was an issue that needed to be considered from this point on.

484    The evidence established that the momentum had been building for a very long time as to the viability of Professor Jackson’s further employment. It is evident that the protracted negotiations regarding his future employment had been an issue for the Board in 2022. Professor Coats had his own ambitions and had been interested in getting Professor McMullen from late 2022 (in the knowledge that she would not work with Professor Jackson).

485    Consistent with this chronology of events, it was evident that many of the voting directors (including Mr McGauran) and Professor Coats had material concerns (which formed part of their reasons) well before any allegation of the prohibited suspicion or belief purportedly becoming known.

486    This was evident not only from Board minutes but also was illustrated in the unsolicited correspondence Mr Halstead sent to the Board on 8 May 2023 (where there is no allegation of any purported belief or suspicion on the part of HRI at this time).

487    Sixthly, to the extent that there was any knowledge, by some of the directors about Professor Jackson querying discretionary funding, it is clear that none of the voting directors knew, as at 24 July 2023, what the alleged shortfall was in dollar terms. It was only ever articulated in Mr Bush’s 6 July 2023 to Professor Coats which the voting directors did not receive.

488    Seventhly, the content of the Options Paper is telling. The potential for Professor Jackson raising historical matters was raised with the Board as a potential consequence of option 1. The evidence reveals that the voting directors had different understandings of what the reference to “historical matters” meant. Regardless, the advice was that there was a potential that by resolving not to renew Professor Jackson’s contract, it would lead to back and forth correspondence for some time (potentially weeks) and could lead to a mediation of the dispute. This illustrated the concern about the consequence of Professor Jackson raising historical matters – further protracted communications and having to deal with the historical matters. Despite this possibility being raised with the Board, the Board resolved to go down a path which would not quell this controversy but would potentially lead to a forum in which it had to be dealt with.

Reasons regarding the privilege claim

489    Unfortunately, just prior to the start of the hearing, Professor Jackson filed an application for production to inspect certain privileged documents that had been identified in HRI’s verified list of discovery. The application was not brought to the Court’s attention until effectively two and half business days before the hearing was to commence and where Professor Jackson had not filed any submissions in support of that application such that it could not be dealt with other than mid-hearing the next week. The application was then required to be determined in a short period, mid-stream (as it were) so as not to lose the limited time available to complete the evidence. Whilst Professor Jackson accepted that the documents were privileged communications, he claims that that privilege had been waived. The application was heard and Professor Jackson’s application was dismissed on 27 September 2024, where the parties agreed reasons could be given in the final disposition of the matter. These are the short reasons why Professor Jackson’s application failed.

490    The preservation of legal professional privilege is fundamental to the administration of justice: It promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisors given the law is a complex and complicated disciple and ensuring that clients will make full and frank disclosures to their legal advisers: Grant v Downs [1976] HCA 63; 135 CLR 674 at 685 per Stephen, Mason and Murphy JJ; Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67; 201 CLR 49 at [35] per Gleeson CJ, Gaudron and Gummow JJ. Legal professional privilege protects the confidentiality in the communication. However, a person may assert there has been a waiver of that privilege. The onus lies on the person asserting waiver to establish it has occurred: New South Wales v Betfair Pty Ltd [2009] FCAFC 160; 180 FCR 543 at [54]. The question of waiver is determined by identifying whether there has been conduct by the privilege holder inconsistent with the maintenance of the confidentiality: Mann v Carnell [1999] HCA 66; 201 CLR 1 at [23], [29] per Gleeson CJ, Gaudron, Gummow and Callinan JJ.

491    The question therefore to be determined is whether HRI (the privilege holder) made an assertion as part of its case that lays open the privileged documents to scrutiny, because an inconsistency arises between the making of the assertion and the maintenance of the privilege.

492    The disputed privileged documents fall into three categories:

(a)    the notes of Ms Harding (solicitor), Ms Dwyer, Dr Gainsford and Dr Krskova of a meeting between MinterEllison and those persons on 5 July 2023 in relation to Professor Jackson’s employment (Documents 1–4);

(a)    the notes of Ms Dwyer, Dr Gainsford, Dr Krskova and Mr Halstead of a meeting between MinterEllison and those persons on 17 July 2023 in relation to the Options Table (Documents 5–8); and

(b)    an email from Ms Song of MinterEllison to Ms Harding, copying Mr Fox, regarding a file note of the meeting between the Heart Research Institute and MinterEllison on 17 July 2023 in relation to the Options Table.

493    Professor Jackson placed reliance upon the following parts of HRI’s evidence, [205]–[222] of Professor Coats’ affidavit affirmed 29 August 2024, [52]–[58] of Mr Boyle’s affidavit affirmed 28 August 2024, [41]–[53] of Mr Pollitt’s affidavit affirmed 28 August 2024, [111]–[112], [117], [119] and [125] of Mr McGauran’s affidavit affirmed 2 September 2024. HRI relied upon the affidavit of Professor Coats affirmed on 20 September 2024.

494    The determination of whether there has been waiver is highly fact dependent. The Court is required to consider the conduct and determine whether that particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. The starting point must be an analysis of the disclosures or other acts or omissions of the party claiming privilege that are said to be inconsistent with the maintenance of confidentiality in the privileged material: Federal Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86; 151 FCR 341 at [45].

495    Here, the particular conduct is the reference, by HRI, in order to discharge its onus, to the Options Paper it had received before making its decision (referred to in these reasons above). The relevant portions of HRI’s evidence relied upon by Professor Jackson revealed the following. In early June 2023, Mr McGauran engaged MinterEllison to provide advice as to options in relation to Professor Jackson’s employment. On 13 July 2023, the Options Paper was sent to members of a sub-committee. The sub-committee had been formed to discuss the Options Paper and report back to the Board. A meeting of the sub-committee was held on 19 July 2023. On 19 July 2023, Dr Krskova sent an email to the Board members attaching the Options Paper. On 21 July 2023, all Board members were sent the short report prepared by Ms Dwyer and Dr Gainsford. Professor Boyle, Mr Pollitt and Mr McGauran all gave evidence of receipt of the Options Paper and their views why they voted for the first proposed option to be taken. However, it was clear from the evidence that they each brought their own experience, history of dealings with Professor Jackson and expertise to bear in the determination of the issue and gave different reasons for their decision.

496    The documents in issue concern notes taken at two meetings between HRI representatives and MinterEllison on 5 and 17 July 2023 as well as an email from an employee of MinterEllison to Ms Harding, copying a MinterEllison partner, attaching a file note of the meeting on 17 July 2023. Only one of the voting directors, Mr Halstead, was in attendance at one of the meetings (on 17 July 2023).

497    Professor Jackson submitted that HRI, having put its state of mind in issue in submitting that none of its reasons for its decision to not renew Professor Jackson’s contract of employment were for the proscribed (prohibited) ones alleged by Professor Jackson, and, having voluntarily disclosed privilege materials to support that state of mind, cannot otherwise assert privilege over confidential communications associated with the disclosed privileged material. Professor Jackson argued that, HRI was effectively choosing to “cherry-pick” particular privileged documents which do not represent the whole of the material relevant to the issue. It was said that HRI, having disclosed some documents containing legal advice, it will be inconsistent for it to maintain privilege over documents and information considered or provided in formulating, or which underpinned or influenced that advice.

498    The Court is concerned with the identification of inconsistency with the maintenance of confidentiality which effects a waiver of privilege; not a question of fairness at large. It is not enough that a privileged communication may be relevant to an issue in the proceedings. Here, it is not a case of HRI putting its state of mind in issue, rather HRI has furnished evidence to discharge its onus. It is not enough to say the HRI having disclosed privileged documents in support of its submission as to the reasons of the Board in not renewing Professor Jackson’s contract, that the result is a wholesale inconsistent act of maintaining privilege over the totality of the communications and advice from MinterEllison. Furthermore, as I have stated, I do not consider that any selective forensic ploy has been adopted here at all.

499    I accept HRI’s submission, that the relevant inconsistency is between the conduct of the client and maintaining confidentiality in the communications in question. This requires careful consideration of the actual conduct of the client. Here, where the relevant conduct was HRI’s reliance on legal advice in its evidence in this proceeding; it is necessary to consider, the purpose for which HRI is relying upon or seeking to use the advice in its evidence in this case. It is then a question of whether the purpose for which it relies on that advice, is inconsistent with maintaining confidentiality in the other documents. Inconsistency may arise if HRI, by that conduct, is making an express or implied assertion about the contents of those other communications, or laying those other communications open to scrutiny. However, this is not what has happened here.

500    Professor Jackson relied upon a number of authorities where privilege was waived with respect to associated material. However, it is my view that they may be each distinguished from this case. In this case, HRI relies the receipt of the advice as contained in the Options Paper, not with respect to any communications on 5 or 17 July 2023. None of HRI’s witnesses, aside from Professor Coats, rely upon at all, or even refer to the meetings, on 5 or 7 July 2023 about which the file notes are being sought. To the extent that Professor Coats makes reference to the meeting on 17 July 2023, it is for the purpose of describing the occasion of the privilege and does not disclose expressly or impliedly the content of the communications. The Options Paper is not relied upon as if it were an expert report, and where HRI was seeking to maintain privilege over instructions or material influencing that report. HRI’s conduct, is that it relied upon the advice, as contained in that paper, on its face and that was the only purpose for which HRI relied upon that advice. It is my view, that given that purpose, there is no inconsistency between HRI’s conduct and maintaining confidentiality over material or information that may have underpinned that advice as a matter of substance.

501    In AWB Ltd v Cole (No 5) [2006] FCA 1234; 155 FCR 30, the legal advice (said to waive associated documents) concerned its claim that it had not breached trade sanctions. The advice was deployed for the purpose of defending the Board from allegations that they had breached trade sanctions in various contexts including in investigations that were being conducted and in communications and discussions with representatives of the Australian Government. The substance or merit of the advice was relied upon to defend the allegations and to foreclose further legal proceedings against them. In that context, the Court reached the conclusion that deploying advice for that purpose was inconsistent with maintaining confidentiality over the material that was taken into account in formulating the advice. This is because it would be inconsistent to ask the Court to accept an opinion, but seek to maintain confidentiality over the material that the expert took into account.

502    Furthermore, the circumstances here are very different from Thomas v New South Wales [2006] NSWSC 380 (also relied upon by Professor Jackson). That case concerned whether a malicious prosecution proceeding should be transferred from the District Court to the Supreme Court, and the resolution of that substantive issue, depended on whether the amount to be awarded to the plaintiff if successful would exceed a certain monetary threshold (such that the District Court did not have jurisdiction). The plaintiff applied to transfer the proceeding from the District Court to the Supreme Court and in support of that application, put on an affidavit from his solicitor which attached an advice from counsel on quantum. Again, the substance or merit of the advice was being relied upon and was capable of being tested. In that case, it would be inconsistent with relying on the advice for that purpose to maintain confidentiality over the material that gave rise to that advice.

503    The circumstances of McKenzie v Cash Converters International Ltd [2017] FCA 1564 (one of the authorities relied upon by Professor Jackson) were very different. In McKenzie, the legal advice concerned whether the supplier and the service recipient had acted in good faith in an unconscionable conduct case. Cash Converters sought to rely on numerous advices received from Senior Counsel. Those advices were generated as a result of numerous questions being asked of Senior Counsel by Cash Converters after each received and then answered in further advice. Cash Converters sought to rely on those advices to prove a defence (arising under s 12CC(1) of the Australian Securities and Investments Commission Act 2001 (Cth) that they had acted in good faith because of the receipt of positive opinions about the legality of two aspects of their loan brokerage model. The only purpose for which HRI relies on the legal advice, concerns not its state of mind, rather HRI has furnished evidence to discharge its onus and not the broader question of good faith.

504    Additionally, it may be noted, though not relevant to the determination of waiver, but which is otherwise relevant to the overall dispute, the fact of the advice, and where it fitted within the evidence, was peripheral to the overall determination of the issues required to be determined in the case. It was not the case that HRI was seeking to rely on the advice to justify the decision it had made – that is, that HRI had received legal advice that it should decide not renew Professor Jackson’s employment. Rather it was given an Options Paper that professed no view as to which outcome should be taken. Furthermore, the voting directors were not privy to the circumstances (save for Mr Halstead, to the extent that he, attended the meeting on 17 July) that had led to its generation and therefore, such that limited reliance could be placed on it per se. None of the voting directors were challenged as to their reasons by reference to any undisclosed legal advice nor the Options Paper (save for Mr Rassi). In that regard, the extent of the challenge, was by reference to an aspect of the Options Paper which appeared on the face of the document. Mr Halstead was not cross-examined at all regarding the meeting on 17 July 2023. Further, it is unclear how the 17 July meeting would have been relevant, when the Options Paper was circulated before then. Indeed, as is evident from the above reasons, each voting director had independent reasons for why they chose to vote in the way that each of them did. Their reasons were largely unchallenged. It is my view, that this was not a case where a party was seeking to deploy, with forensic advantage, a part of an advice. Rather, it appears that HRI’s lawyers have acted responsibly and disclosed this Options Paper, not because it had any great utility in the case, but because it was before the voting directors at the time they made their decision.

Conclusion

505    Given Professor Jackson has not succeeded with respect to each of his claims, there is no need for me to consider the one aspect of relief that was to be considered together with liability, reinstatement.

506    For all of the above reasons, Professor Jackson’s application must be dismissed. It is not known whether there will be any application for costs, given the operation of s 1317AH of the Corporations Act. Orders will be made to deal with any such application if made.

Associate:

Dated:    2 April 2025