Absolute Analogue Inc v Sundance Resources Ltd - [2015] WASCA 168

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: ABSOLUTE ANALOGUE INC -v- SUNDANCE RESOURCES LTD [2015] WASCA 168

CORAM: McLURE P
BUSS JA
MAZZA JA

HEARD: 22 & 23 JUNE 2015

DELIVERED : 28 AUGUST 2015

FILE NO/S: CACV 98 of 2014

BETWEEN: ABSOLUTE ANALOGUE INC
First Appellant
DAVID PORTER
Second Appellant
AND
SUNDANCE RESOURCES LTD
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :LE MIERE J
Citation  :ABSOLUTE ANALOGUE INC -v- SUNDANCE RESOURCES LTD [No 3] [2014] WASC 283
File No  :CIV 1773 of 2007

Catchwords:

Contract - Challenge to factual findings - General credibility findings - Turns on own facts

Legislation:

Nil

Result:

Appeal allowed
Orders made by trial judge set aside
Retrial ordered

Category: B

Representation:

Counsel:

First Appellant               :     Mr D E J Ryan SC & Mr M J Feutrill
Second Appellant          :     Mr D E J Ryan SC & Mr M J Feutrill
Respondent:     Mr G R Donaldson SC & Ms S E Russell

Solicitors:

First Appellant               :     Tottle Partners
Second Appellant          :     Tottle Partners
Respondent:     Clyde & Co Australia

Case(s) referred to in judgment(s):

Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622
CSR Ltd v Della Maddalena [2006] HCA 1; (2006) 80 ALJR 458
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353

McLURE P: The central issue in this appeal is whether the trial judge, Le Miere J, erred in holding that the respondent, Sundance Resources Ltd (Sundance), was not contractually obliged to issue 30 million options in Sundance to the second appellant, David Porter.
The alleged contract was oral and made in 2006 between Porter on behalf of the appellants, and John Corr and Adam Rankine‑Wilson on behalf of Sundance. At the start of his reasons the trial judge made adverse general credibility findings against Porter. As a result, the trial judge did not accept Porter's uncorroborated evidence where it was contradicted by other evidence or was unlikely, having regard to other evidence: [20], [29]. The general creditability findings are challenged in the appeal. I will return to them after setting the scene.

Uncontested background, trial judge's reasons and findings

In 2004 Porter became aware of hematite iron ore mineralisation at Mbalam in southeast Cameroon near the frontier with the Congo. Porter caused Cam Iron SA (Cam Iron) to be registered in Cameroon. With the assistance of Roger Bogne acting as its local agent, Cam Iron applied for and was granted an exploration permit over 875 square kilometres of land at Mbalam (the exploration permit).
Initially Porter and his wife and later his private company, DP Prospecting Services Pty Ltd (DP Prospecting), held 102 of the 120 shares issued in Cam Iron. Bogne was a director of Cam Iron and held 18 Cam Iron shares for himself and other local Cameroon shareholders, including Serge Asso'o (the local Cam Iron shareholders).
In December 2005 Porter signed a mandate with a private company controlled by Stephen Miller for the company to act as agent to sell Cam Iron into an ASX listed company. Miller asked Porter what his ongoing involvement with the ASX listed company would be and Porter said he would assist in the short term but did not want to take a managerial or director role.
In January 2006 Miller told Porter, who resided in Cape Town, South Africa, that he was meeting with a group in Australia regarding the sale of Cam Iron to Sundance. An agreement between Cam Iron and Sundance was negotiated between Miller, Miller's associate Wayne Loxton, Rankine‑Wilson and Corr.
Rankine‑Wilson was Sundance's largest shareholder at the time and Corr its executive chairman. The other directors of Sundance were Michael Frayne and Steven Dobson, both of whom were based in the United Kingdom.
Rankine‑Wilson was the executive chairman, director and driving force of Capital Investment Partners Pty Ltd (CIP), a corporate advisory services provider. Rankine‑Wilson had known Porter for approximately 20 years. Corr was also a director of CIP. In February 2006 Sundance appointed CIP as its corporate adviser in relation to the acquisition of Cam Iron.
Rankine‑Wilson died before the trial which was conducted in November 2013, more than six years after the commencement of the action. The delay is unfortunate. His signed but unsworn witness statement dated 4 November 2011 was in evidence at trial.
On 2 February 2006 Miller sent Porter an email attaching a draft consultancy agreement between Sundance and DP Prospecting. The draft consultancy agreement was in the form of a letter from Porter to Sundance stating that DP Prospecting was prepared to provide to Sundance the technical and executive services of Porter (the Miller draft). The Miller draft said DP Prospecting would charge a fee of $20,000 per month. The Miller draft further stated:
[DP Prospecting] will be granted xxx million options on such terms and conditions as agreed by way of an Incentive Agreement. It is proposed that these options be structured according to technical milestones associated with the Mbalam project that the parties agree on.
Porter forwarded the Miller draft to Gilbert Rodgers, Cam Iron's company secretary. Porter asked Rodgers to incorporate the main features of the Miller draft into a draft consultancy agreement in accordance with a template he had used for other projects.
On 3 February 2006 Porter received an email from Rodgers attaching a revised draft consultancy agreement between Sundance and DP Prospecting (the Rodgers draft agreement). Clause 5 of the Rodgers draft agreement related to options and was in the same terms as the provision in the Miller draft.
Commencing on 7 February 2006 there were email communications between Corr and Porter. On 14 February 2006 Porter had a telephone conversation with Miller about a 12‑month contract that Rankine‑Wilson and Corr were prepared to offer Porter on behalf of Sundance. Miller informed Porter that Sundance was prepared to offer Porter $US25,000 per month plus 50 million options: 15 million exercisable at 5 cents, 15 million exercisable at 7.5 cents and 20 million exercisable at 10 cents.
In telephone conversations with Rankine‑Wilson and Corr on 15 February 2006 Porter expressed reservations about their proposition that he be managing director of Sundance. Corr advised of his intention to come to Cape Town on 17 February 2006 in order to meet with Porter to discuss the Mbalam project in detail.
Porter and Corr met in Cape Town on 18 February 2006. Corr explained the transactions by which Sundance would acquire Cam Iron and said Sundance wanted Porter to be its managing director. Porter said he would do it in the short term to get them established in Cameroon and to get the resource part of the work started but believed that, long term, they needed an engineer as managing director. Porter said he had other things to do and did not need to work for Sundance but if they wanted him to be managing director, he wanted 50 million options and a consultancy fee of $20,000 per month for a 12‑month contract.
At dinner that evening Corr told Porter he had spoken to Rankine‑Wilson and said Porter would receive 50 million options, 30 million at an exercise price of 10 cents with a three year term and a further 20 million at an exercise price of 50 cents with a three year term, and a $20,000 per month consultancy fee. Corr said they would both call Rankine‑Wilson the following day to confirm the arrangement.
The next day, 19 February 2006, Porter and Corr spoke by telephone with Rankine‑Wilson. Each of Porter, Corr and Rankine‑Wilson's account of the content of the telephone conversation differed in the detail.
The trial judge accepted that immediately after Corr's visit to Cape Town there was broad consensus between Porter, Corr and Rankine‑Wilson that Porter would be appointed managing director of Sundance and would receive 50 million options, 30 million at an exercise price of 10 cents with a three‑year term and 20 million at an exercise price of 50 cents with a three‑year term. However, Porter had not committed to becoming managing director and there was no concluded agreement [46].
Draft ASX announcements by Sundance of the purchase of Cam Iron and related matters were prepared following Corr's visit to Cape Town. Events between the initial drafts of the ASX announcement and the ASX announcement made on 3 March 2006 were in dispute.
The draft ASX announcement underwent a number of iterations and the trial judge was unable to identify the first draft. The first draft in evidence announced the proposed appointment of Porter as managing director of Sundance and that he would be granted 50 million options on the agreed terms, subject to required approvals.
Porter's evidence was that, on 27 February 2006, he spoke to Loxton and Corr by telephone and told each of them he did not want the position of managing director and would work as a project manager for 12 months provided he got at least 30 million options. Porter said no agreement was reached in that call. It is common ground that Sundance could have issued the options to Porter without shareholder approval.
An amended draft ASX announcement dated 2 March 2006 contains an announcement of the proposed appointment of Porter 'as Managing Director to oversee exploration and further assessment of Mbalam including the completion of a scoping study to determine the economic viability of Mbalam'. The announcement also states that Porter would be granted 30 million options exercisable at 10 cents each on or before 31 March 2009, and 20 million options exercisable at 50 cents each on or before 30 April 2009, subject to required approvals. It appears this draft was sent by email to Porter on 1 March 2006. Based on this evidence, the trial judge said it was unlikely that Porter informed Corr of the fact that he did not want the position of managing director on 27 February 2006, or if he did, Corr continued to believe Porter would agree to become managing director notwithstanding what Porter had said [48].
Porter said he had a telephone conversation with Corr on 2 March 2006 in which they discussed the draft ASX release and the 30 million options Porter had sought for agreeing to be project manager. Porter's diary note of his conversation with Corr on 2 March 2006 says 'still arguing'.
Corr's evidence was that he received a call from Loxton, who said Porter required references to him being appointed managing director removed from the ASX announcement.
By written agreement dated 1 March 2006 between Ajana Holdings Pty Ltd (Ajana), DP Prospecting, Bogne and other vendor shareholders, Ajana agreed to acquire all the issued shares in Cam Iron for 100 million fully paid ordinary shares in the capital of Sundance at an issue price of 2.5 cents per share plus a cash payment of $250,000 (the Ajana agreement). The Ajana agreement was conditional on, inter alia, the vendors of the shares entering into an agreement with Cam Iron whereby they would retain a 5% free carried interest in the exploration permit up to the completion of a bankable feasibility study. Ajana was a company associated with Miller.
By written agreement dated 2 March 2006, Ajana and Sundance entered into a put and call option for Sundance to acquire all the issued shares in Cam Iron from Ajana. The put purchase price was 140 million shares in Sundance at a deemed price of 2.5 cents per share plus a cash payment of $250,000. Sundance would also grant to the local Cam Iron shareholders a 5% free carried interest in the exploration permit up to the completion of a bankable feasibility study (the Sundance agreement). Ajana received the additional 40 million shares for Miller's and Loxton's services in negotiating the sale of Cam Iron shares to Sundance.
Both before and after entry into these agreements in early March 2006, Porter was undertaking work to advance the Mbalam project.
On 3 March 2006 Sundance made an ASX announcement that it had entered into an agreement to acquire the shares in Cam Iron. The ASX announcement made no reference to Porter. Rankine‑Wilson said at that stage he and Corr had not been able to conclude a suitable agreement with Porter for consideration by the Sundance board. However, Rankine‑Wilson recalled discussions with Porter in which Porter said he did not want to be managing director of Sundance.
The trial judge found that at the time of the ASX announcement on 3 March 2006 no agreement had been made between Sundance and Porter that Sundance would engage Porter in any agreed capacity and no agreement had been made that Sundance would issue any options to Porter. Porter was doing work to facilitate the Mbalam project because he was to acquire Sundance shares in the transaction by which Sundance acquired the shares in Cam Iron and therefore had a continuing interest in the Mbalam project, and also because he expected that an agreement would be reached between him and Sundance to remunerate him for his work [52].
Other transaction costs associated with Sundance's purchase of Cam Iron identified in the 3 March 2006 ASX announcement included the issue of options to a range of persons as follows:
Pursuant to an engagement mandate entered into between Sundance and Mainglade Holdings Pty Ltd ('Mainglade') … Mainglade is to be issued with 155 million Sundance shares for its corporate services, including engagement fee, facilitation and transaction fee in respect of organising and managing the Cam [Iron] acquisition together with a total of 100 million options. [Twenty] million of the options will be granted to Capital Investment Partners Pty Ltd (CIP), a company associated with Messrs John Corr and Steve Dobson, subject to required approvals. The 100 million options are exercisable at 3 cents on or before 30 June 2008. Messrs Corr and Dobson, or their nominees, will also be granted 10 million options each, exercisable at 3 cents each on or before 30 June 2008.
Porter gave evidence of a telephone conversation with Rankine‑Wilson in mid‑March 2006. According to Porter, Rankine‑Wilson told him that Corr was unhappy about the level of options Porter was seeking compared to the 10 million options Corr was to receive as executive chairman; Porter said he and Corr had discussed the options for a few weeks and he had put forward a compromise proposal that he would reduce the number of options from 50 million to 30 million; Porter said he would not work for Sundance for a salary alone; Rankine‑Wilson said words to the effect that it should be right and he would ring Corr.
Porter accepted in cross‑examination that no agreement was reached with Rankine‑Wilson in that conversation; they were still negotiating. Rankine‑Wilson said he did not recall having a conversation with Porter to that effect [53].
Porter said he had several telephone conversations with Corr between 31 March and 15 April 2006 during one of which Corr said he agreed to Porter's proposal that he get 30 million options for being project manager but would run it past Rankine‑Wilson. Porter said after that conversation but prior to mid‑April 2006 he had a joint telephone conversation with Corr and Rankine‑Wilson in which they said they agreed that Porter would get 30 million options for being a project manager, 20 million exercisable at 10 cents and 10 million exercisable at 20 cents.
Corr agreed that he had a number of conversations with Porter around this time but did not recall a conversation with Porter and Rankine‑Wilson in April 2006 in which the issue of Porter getting 30 million options for being project manager was discussed, but did not deny it had occurred [55]. Rankine‑Wilson did not recall the conversation. Rankine‑Wilson said that when Porter subsequently raised the question of getting options at the meeting on 8 June 2006 he was surprised [55].
The trial judge found that Corr and Rankine‑Wilson did not agree in March or April 2006 with Porter that he would receive options for working as project manager [56]. The trial judge relied on the following for that conclusion: the absence of any reference to options in Porter's diary notes during the period; emails between Corr and Porter in March, April and May 2006 made no reference to options; the Sundance notice of general meeting dated 7 April 2006 gave notice of a meeting on 19 May 2006 to pass a resolution to, inter alia, issue options to CIP, Corr and Dobson but no options to Porter; and the terms of an email on 15 May 2006 from Porter to Colin Seah, who provided corporate services in Malaysia, set out below [56].
The trial judge found that:
[I]n April [2006] Porter discussed with Corr receiving 30 million options for being project manager but no concluded or binding agreement had been reached between Porter on the one hand and Rankine-Wilson and Corr on the other hand by 7 April 2006 [57].
I infer the date of 7 April 2006 is selected because it is the date of the notice of the Sundance general meeting to approve the Cam Iron transaction.
On 15 May 2006 Porter emailed Seah in Malaysia concerning a corporate entity to contract with Sundance for Porter's services. He said:
I will be entering into a service contract with Sundance … after approval of the transaction by Sundance shareholders on 19 May 2006. The contract is for 12 months at AUS$20,000 per month. I would like to invoice this work through one of your service companies in Labuan as I am not resident in Australia (and the work is not performed there) and I do not want the money to come into South Africa as it is for work performed outside of this country. The service company would need to enter into a service contract with Sundance to provide my services for work performed on the Mbalam iron ore project in Cameroon. Is it possible to provide me with a company name so that I can set up the contract? I would like to start the contract from 22 May 2006.
On 19 May 2006 a general meeting of Sundance's shareholders approved Sundance's purchase of all the shares in Cam Iron. Porter's evidence was that soon after the general meeting he had a telephone conversation with Corr in which Corr said Porter should use 19 May 2006 as the start of the term of his consultancy with Sundance [58]. From September 2006 Absolute Analogue Inc (Absolute) submitted monthly invoices to Sundance for Porter's fees and expenses for his services rendered in relation to the Mbalam project between 21 May 2006 and 19 May 2007. Sundance failed to pay the invoices for the period December 2006 to May 2007 until just prior to trial. The late payment was made without admission of liability.
The call option was exercised by notice dated 30 March 2006 and settlement of the sale and purchase of all the shares in Cam Iron under the Sundance agreement occurred on 1 June 2006.
Porter, Corr and Rankine‑Wilson went to Cameroon in early June 2006. They had a series of meetings in the capital, Yaounde, and on site at Mbalam.
On 8 June 2006, there was a board meeting of Cam Iron in Yaounde. Porter, Corr, Rankine‑Wilson, Bogne and Asso'o were present. Porter, Corr and Rankine‑Wilson had a different recollection of what was said at that meeting about Porter's engagement as project manager. Bogne and Asso'o did not give evidence.
The trial judge's summary of Porter's evidence is as follows. Rankine‑Wilson raised the subject of Porter's position as project manager and the 30 million options. Rankine‑Wilson said Porter was no longer entitled to the options as he was not going to be managing director of Sundance. Porter became angry because Rankine‑Wilson and Corr had agreed that 30 million options would remain for his role of helping Sundance get established in Cameroon and for doing their resource work. Porter left the room. A few minutes later Rankine‑Wilson came to speak to Porter. Rankine‑Wilson said words to the effect that he had discussed it with Corr and Porter would get the options. They returned to the meeting and then had a break around the pool area. The board meeting resumed at 1.50 pm. Porter had a draft contract with him and gave it to Corr. Porter said he was going to use a company called Absolute in Malaysia to invoice Sundance for the monthly fee that was payable for Porter's services. Porter said to Corr words to the effect he wanted the options issued to him personally under the Corporations Act placement facility. Corr said words to the effect that he agreed with those things.

The draft contract to which the trial judge refers is the Rodgers draft agreement with Porter's handwritten annotation adjacent to cl 5 in terms '50M 30M @ 10c 20M at 50c'. Further, Porter's evidence was that his very angry response to Rankine‑Wilson's statement that he was not entitled to options because he was not going to be managing director was because he hated people who went back on their word and that if he did not get the 30 million options 'I will not do the work in Cameroon for Sundance and I'm out of here'.
Rankine‑Wilson says in his statement that towards the end of the 8 June 2006 meeting Porter raised with him the issue of getting options. He was surprised that Porter was raising options again as the last time he had raised that matter was when they were talking about his possible appointment as managing director of Sundance in about February 2006. As far as Rankine‑Wilson was aware, Porter was not interested in being managing director of Sundance. Rankine‑Wilson said to Porter something like, 'What are you going to do to get the options? You do not want to be managing director or an executive director'. Porter said he wanted to discuss a possible consultancy arrangement whereby he would provide 70% of his time to the project as a consultant, but that would not mean spending 70% of his time in Cameroon because he was not prepared to move there and would appoint someone else to do that work. Rankine‑Wilson said that would not be acceptable to Sundance and Porter would be required to provide a full‑time commitment to the Mbalam project if he was to be paid as a consultant; if Porter was not prepared to do the work and go to Cameroon, Sundance would appoint someone who was prepared to do that. Porter said something like, 'That is fine. I am going to do the best I can given my major shareholding. I want the company to succeed'. Rankine‑Wilson said it appeared to him that Porter accepted the position of not getting options.
The trial judge's summary of Corr's account of the meeting is as follows. Porter's role was discussed. Rankine‑Wilson said that the 50 million options proposed by Porter for the managing director role was too much and proposed 20 million options with an exercise price of 10 cents and 10 million options with an exercise price of 20 cents. Porter said he would be happy with that. Porter then said he was not keen on being the managing director but would stay involved to progress the exploration programme. They then discussed a consultancy arrangement with Porter under which he would be paid $20,000 per month. Either at the meeting or later Porter asked about getting options as a consultant. Corr said he would only get options as managing director and not as a consultant. Porter said he would provide a draft consultancy agreement to Corr on Corr's return to Australia. Porter did not show Corr any draft agreement during those discussions.
The trial judge said:
For the reasons I have stated earlier I do not accept Porter's evidence which is contradicted by both Corr and Rankine-Wilson and is unsupported by any document or other evidence [64].
The 'reasons stated earlier' is a reference to the trial judge's adverse credibility findings against Porter. Further, the trial judge identified three aspects of Porter's evidence which he characterised as implausible or at least gave rise to a doubt about the reliability of Porter's account of the meeting. These matters are challenged in the appeal and I will return to them later.
The trial judge said aspects of Corr's evidence were not plausible, that his evidence was confused and that his recollection of the discussions on 8 June 2006 were unreliable [67].
The trial judge's findings as to the discussions at the 8 June 2006 meeting are as follows:
I find that Rankine-Wilson said words to the effect that Porter would not receive options because he was not going to be managing director. That is the evidence of Porter and Rankine-Wilson and broadly consistent with the evidence of Corr. I find that Rankine-Wilson did not agree that Sundance would issue 30 million options to Porter to act as project manager. That may have been discussed but no concluded or binding agreement was made. I make that finding because Porter's evidence to that effect is contradicted by Corr and Rankine-Wilson, is unsupported by any other evidence and because of the aspects of Porter's evidence which give rise to doubt about the reliability of his account of the meeting to which I have referred. I find the most reliable guide to what, if anything, was agreed at the meeting to be the events and documents which followed it. Those matters, to which I will now turn, lead me to find that no concluded or binding agreement was made at the 8 June meeting [68].
On 18 June 2006 Porter emailed Seah a copy of a draft consultancy agreement between Sundance and Absolute (the Absolute draft consultancy agreement) which is in substance in the same terms as the Rodgers draft agreement but without the cl 5 option provision. Porter is not a party to that agreement.
On 2 July 2006 Porter emailed to Corr a copy of the Absolute draft consultancy agreement. The email said:
Attached is my service agreement with Sundance. Could you go through it and see if it is acceptable to you. I have taken the section with the options out of it as they are linked to the directorship.
After noting Porter's evidence that the options were more important to him than the salary, the trial judge said:
If an agreement had been made on 8 June that Porter was to receive 30 million options for working as a consultant it is unlikely that he would have forwarded to Corr a draft service agreement and said that he had taken out the section with the options because they were linked to the directorship without saying anything about the options being issued to him personally and when and on what terms [73].
Corr underwent emergency heart surgery on 7 July 2006. Corr said he was largely out of contact for the rest of July and August 2006 although he may have taken some telephone calls and signed some papers during that time.
In Corr's absence another CIP director, Alec Pismiris, undertook managerial activities on behalf of Sundance. In addition, Ian Whiteley was appointed Sundance's operations manager of the Mbalam project.
On 13 July 2006 Porter sent by email to Pismiris a copy of the Absolute draft consultancy agreement that he had sent to Corr on 2 July 2006. On 17 July 2006 Porter sent an email to Pismiris asking, inter alia, how his work contract was going but made no reference to the issue of any options or any agreement for the issue of options. The email also attached draft minutes of the Cam Iron board meeting on 8 June 2006.
The trial judge regarded it as significant that these draft board minutes refer to the approval of a success fee of options for Porter, Bogne and Asso'o, subject to the satisfaction of the Sundance board, in relation to a proposal to acquire new areas for iron ore in the Congo (the Congo options) but made no reference to the issue of any options to Porter in relation to the Mbalam project [76].
On 24 July 2006 Porter sent to Pismiris comments on a discussion paper. One comment is headed 'Review terms of consultancy - David Porter'. It says:
I have supplied the Consultancy Agreement based on discussions with John Corr and Adam [Rankine‑Wilson] … It would be nice to resolve this by the end of July.
There was no reference in the comments to the issue of any options to Porter. By email dated 25 July 2006 to Porter, Pismiris advised that he was 'currently drafting a services agreement for you incorporating terms agreed by Corr'. The trial judge also noted the absence of any reference to options in that email.
At the end of July 2006 there was a problem with the local Cam Iron shareholders who wanted an additional 5% free carried interest in Cam Iron and an additional 100 million ordinary shares in Sundance. There was a possibility that the exploration licence could be cancelled.
Porter's evidence was that on 31 July 2006 he telephoned Rankine‑Wilson and told him of the local Cam Iron shareholder problem. Porter said he also asked Rankine‑Wilson about his options and Rankine‑Wilson responded that this had been delayed because of Corr's health problems but he would ask Pismiris to deal with it.
Rankine‑Wilson said that after the 8 June 2006 meeting he did not have any further discussions with Porter about the terms on which he would provide consultancy services to Sundance until very late in 2006 or early in 2007.
Porter said he had a conference call with Corr and Pismiris on 31 July 2006 concerning the dispute with the local Cam Iron shareholders during which they also discussed his options. Corr and Pismiris said the number of options that Porter was to get should be reduced because he was not becoming managing director. Porter refused to accept any reduction and said everything was already agreed and there had already been a reduction from 50 million to 30 million options and he was not prepared to reduce his options further. Corr and Pismiris replied with words to the effect that that was fine. Porter says Corr did various things and had conversations to deal with the problem with the local Cam Iron shareholders.
Corr said he had no recollection of any such telephone conversation and would not have spoken to Porter on 31 July 2006 as that was shortly after his heart surgery and he was not doing any work at that time. According to Corr, he did not have any involvement in the problems with the local Cam Iron shareholders until October 2006.
Pismiris said he did not recall having a conference call with Porter around 31 July 2006 and he was not directly involved in dealing with the dispute with the local Cam Iron shareholders. He also said he did not have any discussion with Porter about options on 31 July 2006.
Porter's diary note of 31 July 2006 contains words and figures which appear to relate to the dispute with the local Cam Iron shareholders. It also contains the names of Corr and Pismiris but does not say that Porter had any conversation with them. The note makes no reference to Porter's options.
The trial judge was not persuaded that Porter had any conversation with Corr and Pismiris on 31 July 2006. He did not accept that Corr and Pismiris said that the issue of 30 million options to Porter was agreed [82].
At Rankine‑Wilson's request, Porter travelled to Perth on 1 September 2006 to attend meetings with the local Cam Iron shareholders.
Porter said he met with Pismiris on 4 September 2006 and when he asked about his consultancy agreement, Pismiris printed out a draft copy. Porter scanned the document and asked some questions of Pismiris. The remuneration clause included a provision for the consultant to be granted executive options but no numbers had been filled in. Porter said he would take the draft agreement away, fill in some gaps, and bring it back.
Porter says he met with Pismiris on 8 September 2006 in Pismiris' office at Sundance and handed back the draft consultancy agreement he had been given on 4 September 2006 with his suggested amendments. Porter says they went through the amendments. Porter said words to the effect 'how do you want to treat the options?' Pismiris replied with words to the effect 'they are three year options?' and then Pismiris wrote, without any prompting from Porter, '20 mill @ 10 c 3 years expiry; 10 mill @ 20 c 3 yr expiry'. At the end of the meeting Pismiris said words to the effect that everything was now agreed and Porter replied, 'yes'. Porter left his copy of the draft consultancy agreement with Pismiris. Pismiris said he would instruct Steinepreis Paganin, Sundance's lawyers, to make the necessary amendments and send the final back to Porter for execution.
Pismiris' evidence was that he did not believe he gave Porter a copy of the draft agreement on 4 September 2006 but does recall meeting with Porter and discussing the draft agreement with him. Pismiris said Steinepreis Paganin had prepared a draft agreement between Sundance and Whiteley, that he used a copy of Whiteley's draft agreement as a template for Porter's draft agreement, and that the executive option definition was a hangover from Whiteley's draft which he had overlooked removing from the Porter draft agreement. Pismiris said Porter said something to the effect that he wanted options if Whiteley was having them. Pismiris said he did not know how many options Porter wanted and believed he would have written down the number and exercise price at Porter's suggestion. Pismiris said he did not say to Porter that everything was agreed.
The trial judge accepted Pismiris' evidence. His reasons for doing so were that in September 2006 Pismiris knew that George Jones was prepared to become chairman of Sundance and had issued specific instructions that the directors were not to make any significant commitments or changes to the operations before he became chairman, and Pismiris' role was not to negotiate or make any agreement with Porter but to prepare a consultancy agreement for the consideration of the board [86].
On 24 October 2006 Pismiris sent a further draft consultancy agreement to Porter for his review which contained a clause providing for 30 million options (20 million at 10 cents and 10 million at 20 cents) to be granted to Absolute or its nominee, subject to shareholder approval (the October consultancy agreement). The trial judge said that the inclusion of the option clause in the October consultancy agreement was contrary to Porter's explanation for saying to Corr in his email of 2 July 2006 that the options were to be removed from the consultancy agreement, and that the requirement for shareholder approval was contrary to Porter's account of the agreement made on 8 June 2006.
In May 2006 Rankine‑Wilson had commenced discussions with Jones about joining the Sundance board. Jones was appointed as a director and non‑executive chairman of Sundance in November 2006. Donald Lewis joined the Sundance board at the same time.
On 14 November 2006 Sundance made an ASX announcement titled 'Sundance accelerates iron ore strategy with key appointments and $20 million placement'. The announcement was of the appointment of Jones, Lewis and John Saunders to the Sundance board and stated that the senior management team included Whiteley as project manager and Porter as exploration manager. The announcement referred to a proposal to issue options to the three incoming directors, Pismiris and other (unnamed) consultants and executives of Sundance. There are two categories of options, one with an exercise price of 10 cents and the other with an exercise price of 20 cents. Jones and Lewis were to receive 10 million 10 cent options and 20 million 20 cent options, a less favourable allocation than the provision made for Porter in the October consultancy agreement. The options are stated to have a five‑year expiry and be subject to shareholder approval. The trial judge noted that both terms were contrary to the agreement Porter claimed to have with Rankine‑Wilson and Corr [87].
On 29 November 2006 Porter had a meeting with Lewis in Perth. Porter said Lewis said words to the effect that Rankine‑Wilson had advised him that Sundance would not be executing the October consultancy agreement or issuing Porter with the options. Lewis said he would discuss the issue with Jones.
On 5 December 2006 Porter met with Rankine‑Wilson. Porter said Rankine‑Wilson said words to the effect that Jones would not have joined the Sundance board if Rankine‑Wilson had given Porter his options.
Rankine‑Wilson said he had a discussion with Porter after Jones had been appointed to the board of Sundance. Porter raised the issue of options and Rankine‑Wilson said it was a matter for Jones.
Porter and Rankine‑Wilson had subsequent discussions on the subject. Porter's evidence was that Rankine‑Wilson made admissions as to Sundance's existing obligation to issue options, which Rankine‑Wilson denied.
The trial judge concluded there was no agreement. He said:
I find that no concluded binding agreement was made at the 8 June 2006 meeting, or at any time, that Sundance would issue 30 million options to Porter as part of his remuneration for acting as a consultant on the Mbalam project. There were discussions and negotiations over a protracted period but they never resulted in a concluded binding agreement [95].
It should be noted that Sundance had pleaded that Porter provided his services to Sundance pursuant to an agreement, partly oral and partly by conduct, between Porter and Sundance. Insofar as the agreement was oral, it was said to comprise of discussions in the period between February to June 2006. The terms of the agreement were that Porter would provide full‑time consultancy services on the Mbalam project for which he would be paid a fee of $20,000 per month and his expenses.

Credibility findings

The trial judge accepted Sundance's attack on the general credit of Porter. The trial judge said:
I find that Porter's evidence in relation to his tax arrangements was at times evasive. He went to some trouble to minimise his tax obligations and thereby maximise his personal gain. Porter acquiesced in payments to associates he considered to be extortion because otherwise the deal would not have been done. Porter concealed from the other directors and shareholders of Cam Iron that he was negotiating an engagement and issue of options by Sundance at the time he was negotiating commercial arrangements between Sundance and Cam Iron. Those findings reflect poorly on Porter's honesty and integrity. In cross-examination Porter did not accept that that behaviour was inappropriate. Porter's behaviour, and his rejection that it was inappropriate, reflect a 'whatever it takes' attitude to getting the deal done. These matters reflect poorly on Porter's honesty and integrity. That is a reason for carefully scrutinising the evidence of Porter [15].
On the objective probabilities, the trial judge said:
I find that it is inherently unlikely that Porter would not have drafted any document providing for the issue of options to him or an agreement to do so, made any email or other written request for the issue of options, or made any reference in an email or other document to an agreement to grant him options if such an agreement had been made. That is especially so in circumstances where Porter prepared draft written agreements in relation to a management fee and refers to the written agreement in a number of emails and documents [18].
As to Porter's evidence of the 8 June 2006 meeting, the trial judge makes findings by reference to submissions put on behalf of Sundance by its counsel, Mr Donaldson SC, as follows:
Mr Donaldson characterised Mr Porter's evidence of the 8 June 2006 meeting as astonishing and not believable, fantastic and preposterous. It was astonishing and not believable that Rankine-Wilson would say to Porter 'you're not getting any options because the options related to you being appointed managing director and you're not managing director', and then a couple of minutes later 'I've discussed it with [Corr] and everything is OK, you'll still get the options'. It was fantastic and preposterous that after Rankine-Wilson and Corr discussed giving options to Porter in front of Bogne and Asso'o, from whom Porter had concealed the negotiation, Bogne's only response was concern for Mr Porter and that they should go off to another meeting without Rankine-Wilson. Porter's evidence that at the meeting he gave Corr a draft consultancy agreement with markings about options which did not reflect Porter's understanding of the agreement was ridiculous. I do not agree that Mr Porter's evidence of the 8 June 2006 meeting was astonishing, fantastic or preposterous. However, the matters referred to by Mr Donaldson do give rise to doubt about the credibility and reliability of Porter's evidence.
The matters to which I have referred give rise to doubts about the credibility and reliability of Porter's evidence. I do not accept Porter's uncorroborated evidence where it is contradicted by other evidence, or is unlikely having regard to other evidence [19] ‑ [20].

As to Rankine‑Wilson, the trial judge took into account the evidence in his statement in making his findings of fact but said the weight to be given to it was necessarily diminished by the fact that it was not made on oath and was not subject to cross‑examination [23].
The trial judge characterised Corr's evidence concerning events at the meeting of 8 June 2006 as more reconstruction than recollection. He said:
I find that Corr did not have a recollection of some of the details about which he was questioned and he gave evidence based on his reconstruction and belief of what must have happened in light of his impression of the outcome of meetings and discussions. For that reason, Corr's evidence must be carefully scrutinised. I do not rely on Corr's evidence where it is contradicted by other evidence or objective circumstances [27].
The trial judge did not accept the evidence of Porter or Corr concerning crucial conversations where their evidence was contradicted by another witness or was unlikely having regard to objective circumstances and documents, including subsequent conduct and documents [29]. He reached that conclusion in relation to Porter for four reasons. First, the conversations occurred some years ago and Porter's recollection of crucial conversations was not assisted by any contemporaneous document. Second, Porter had reason to tailor his evidence as he had a huge stake in the outcome of the matter. Third, Porter's arrangement of his business affairs and his dealings with business associates cast doubt on his frankness and integrity. Fourth, some of Porter's responses in cross‑examination were implausible or unconvincing [29].
There is no reference in the trial judge's reasons to Porter's evidence that he prepared most of his witness statement in the second half of 2007 (ts 114 ‑ 115).
He reached the same conclusion in relation to Corr for three reasons. First, the conversations occurred some years ago and Corr's recollection was not assisted by any contemporaneous document. Second, Corr's evidence that during the 8 June 2006 meeting Porter first agreed to accept options for being managing director and then said he did not want to be managing director was implausible. Third, Corr gave inconsistent evidence about Porter agreeing at the 8 June 2006 meeting to receive 30 million options rather than 50 million options for being managing director. In particular, Corr's evidence that he was surprised when Porter agreed is inconsistent with his earlier evidence that the 30 million options were more favourable than the 50 million options because of the lower exercise price [30].

Grounds of appeal

The umbrella claim is to the effect that the trial judge's failure to accept Porter's evidence concerning crucial conversations was against the weight of the evidence and the compelling inferences in the case (ground 4(e)).
There are also challenges to individual findings of fact. In particular, Porter claims the trial judge erred in fact in finding that:
(1)Porter's arrangement of his business affairs and his dealings with business associates reflected poorly and cast doubt on his honesty and integrity (ground 4(c));
(2)Porter's recollection was not assisted or supported by contemporaneous documents (grounds 1(d), 2(c), 4(a));
(3)Porter's stake in the outcome of the action gave reason for him to tailor his evidence (ground 4(b));
(4)some of Porter's responses in cross‑examination were implausible or unconvincing, there being no identification of which answers or why they were implausible or unconvincing (ground 4(d));
(5)aspects of Porter's evidence as to the meeting on 8 June 2006 were implausible or gave rise to a doubt about its reliability (ground 2);
(6)Porter's evidence concerning the meeting on 8 June 2006 was contradicted by Corr and Rankine‑Wilson and unsupported by other evidence (grounds 1 and 3).
Finally, the appellants claim the trial judge erred in fact in failing to find, and it should be found, that on or by 8 June 2006 there was a binding and enforceable agreement between Porter, Absolute and Sundance for Porter to provide consultancy/project management services to Sundance for a period of one year at a monthly fee of $20,000 payable to Absolute and for Sundance to issue Porter 30 million options over shares in Sundance, 20 million exercisable at 10 cents and 10 million at 20 cents, with all options to have an expiry period of three years from the date of issue (ground 5).

Adverse credit findings (ground 4(c))

The trial judge made five findings that he said reflected poorly on Porter's honesty and integrity. The first is that Porter's evidence on his tax arrangement was 'at times' evasive. This finding is challenged. The trial judge does not identify Porter's evidence on the subject or where and why it was evasive. We are left to speculate.
In Sundance's closing submissions, Mr Donaldson said:
[Porter's] evidence in relation to [his taxation arrangements] … was at best evasive and, your Honour, his evidence, at pages 122 to 124, shows that he was being untruthful in relation to this matter (ts 327).
Mr Donaldson did not descend to particulars. I have read the transcript of Porter's evidence in relation to his taxation arrangements. At ts 122 and following Porter sought to elaborate on his taxation arrangements because, he said, Mr Donaldson had made some inaccurate comments in his cross‑examination. I infer the elaboration was prompted by Mr Donaldson's suggestion to Porter in cross‑examination that Porter had engaged in tax fraud (ts 92). There was no evidentiary foundation for a finding of illegality or other wrongful conduct by Porter. It is little wonder Porter wished to elaborate. Moreover, I am unable to discern any foundation for a finding that Mr Porter's evidence was evasive on the subject of his taxation arrangements.
There is no challenge to the second finding, which is that Porter went to some trouble to minimise his tax obligations and thereby maximise his personal gain. Porter's evidence was that, at the relevant times, he had a tax ruling that he was a non‑resident for tax purposes in Australia; he became domiciled in Malaysia in around September 2004 and intended to go and live there in 2007, having been granted a 10‑year visa; he resided in South Africa under a temporary residence visa which did not permit him to earn money in South Africa; he had South African legal and accounting tax advice that, because he was domiciled in Malaysia, he was not liable to pay tax in South Africa until he reached a certain threshold of days living there; under Malaysian law, Absolute was not liable to pay tax on the consulting fees under the proposed service contract with Sundance.
Sundance makes no claim in the appeal that Porter's taxation arrangements were illegal or otherwise contrary to the law of any country. Its submission is that arranging for income to be paid in a jurisdiction completely unrelated to the services being provided for the purpose of rendering the income non‑taxable was morally wrong and adversely reflected on his honesty and integrity.
The first limb of that submission is to the effect that, in addition to legal obligations enforceable by sovereign States, there is a moral obligation which is superimposed on a person not to organise his affairs in order to reduce, in whole or in part, the person's legal liability to pay tax in Australia or elsewhere. The second limb is that a breach of the moral obligation reflects poorly and casts doubt on the honesty and integrity of the person who effected the arrangement. I am not persuaded of the correctness of either limb of the submission.
If a transaction or arrangement is lawful and unimpeachable under the taxation laws of a sovereign State, then there is no scope for superimposing a moral obligation. The lawful and otherwise unimpeachable minimisation of taxation is both a widespread and widely accepted practice in Australia, reflecting a tolerated libertarian attitude. That is so notwithstanding that the opportunities for and the size of the benefits of such conduct favour the wealthy and exacerbate the ever widening inequality that is a feature of our times. Globalisation has increased the opportunities for tax minimisation, a matter known by governments but which has yet to be fully addressed by the legislature. I accept that conduct may be of such a nature or degree that it reduces the esteem or respect in which a person is held by right thinking members of the community. However, it does not necessarily follow that it justifies an adverse finding as to the taxpayer's general credibility as a witness under oath. In any event, the evidence relating to Porter's taxation arrangements falls well short of supporting an adverse general credibility finding against him. There is no arguable breach of any moral obligation to pay tax in Australia. There is insufficient information to make a moral judgment in relation to the foreign jurisdictions in question.
The third finding is that Porter acquiesced in payments to associates that he considered to be extortion. The issue concerns the manner in which the cash component ($250,000) of the consideration for the sale of the shares in Cam Iron was to be divided among the vendor shareholders. The cash consideration was intended by Porter for the repayment of shareholder loans. However, Porter agreed to a minority shareholder's demand for $200,000 of that sum. Porter explained in cross‑examination:
It was a requirement for [Asso'o] for doing the deal. To complete the deal, I needed the signature of every shareholder. And without $200,000 ‑ which was really repayment of loans for Cam Iron ‑ he would not do the deal.
So what? He held you over a barrel, did he?---Yes, I think it's called extortion.
All right. Well, I'm happy with that word. So you were ‑ you were content to go along with this extortionate demand?---It was either that or there wouldn't have been a deal (ts 76 ‑ 77).
The evidence establishes that the distribution of the cash component was negotiated between the vendor shareholders of Cam Iron prior to the execution of the Ajana agreement and Sundance agreement in early March 2006. It is apparent that Porter was using the term 'extortion' in a non‑technical sense. He was not suggesting that Asso'o was committing, or that he was the victim of, a crime. Porter was complaining of being greenmailed. The evidence is incapable of reflecting adversely on Porter's honesty or integrity.
The fourth finding is that Porter concealed from the directors and shareholders of Cam Iron that he was negotiating an engagement for the issue of options by Sundance at the time he was negotiating commercial arrangements between Sundance and Cam Iron. The evidence establishes that Porter did not conceal from the other directors and shareholders of Cam Iron the fact that he was negotiating an engagement with Sundance; rather, he did not disclose to them the details of the negotiations (ts 113).
The only relevant period is prior to the execution of the Ajana agreement and Sundance agreement. There is no suggestion Porter used or attempted to use the proposed share sale as leverage to advance his personal interests at the expense of the interests of the other directors or shareholders or at all. Counsel for Sundance was unable to identify a breach of any legal or equitable duty owed by Porter to Cam Iron or its shareholders. Mr Donaldson did not press the submission he made at trial that the local Cam Iron shareholders were Porter's partners. There is no evidence or finding to that effect. No breach of any duty was identified by the trial judge nor any explanation proffered for his finding that the conduct reflected poorly and cast doubt on Porter's honesty and integrity. It does not.
The fifth finding is that Porter's rejection in cross‑examination of the inappropriateness of the conduct the subject of the first four findings was itself inappropriate and demonstrated a 'whatever it takes' attitude to achieving an end. This finding falls with the others. The trial judge's reason for having to carefully scrutinise Porter's evidence also disappears.
The trial judge's finding that Porter's arrangement of his business affairs and his dealings with his business associates reflected poorly and cast doubt on his honesty and integrity was not rationally or reasonably open on the evidence. This was the third reason given by the trial judge for not accepting Porter's evidence where it was contradicted by another witness or objectively unlikely. I would uphold ground 4(c).

Supporting contemporaneous documents (grounds 1(d), (2)(c), 4(a))

The appellants challenge the trial judge's findings that Porter's recollection of crucial conversations was not assisted by any contemporaneous document [29] and that not a single document which came into existence after the 8 June 2006 meeting made any reference to Sundance having agreed to give Porter 30 million options for working as a consultant or project manager [66].
The finding in [66] is the third aspect of Porter's evidence relating to the 8 June 2006 meeting which the trial judge said gave rise to a doubt about the reliability of his account [64].
The appellants rely on the following series of documents. First, an email from Pismiris to Porter on 25 July 2006 which refers to Pismiris 'currently drafting a services agreement for you incorporating terms agreed by J Corr'.
Second, in September 2006 Sundance provided to Porter a draft consultancy agreement prepared by Steinepreis Paganin. It was a tri‑partite agreement between Sundance, an unidentified 'Consultant' and an unidentified 'Nominated Person' and provided for the issue of options to the Consultant or its nominee. It was incomplete in that the names of the counter‑parties, the monthly fee, and the number of executive options were blank (exhibit 267). These omissions were completed in handwriting at a meeting or meetings between Porter and Pismiris in September 2006. Porter filled in the name of the Consultant (Absolute) and the Nominated Person (Porter). Pismiris filled in the consultancy fee and the number, exercise price and period of the options. The executive option provision (cl 5.4), as amended in handwriting, provided that the Consultant or its nominee would be granted executive options on execution of the agreement. I infer the options would be issued to Porter as Absolute's nominee.
Third, a draft agreement between Absolute, Porter and Sundance was prepared by Steinepreis Paganin in September 2006 on instructions from Pismiris. It was consistent with exhibit 267 as amended in handwriting save that the grant of options was subject to shareholder approval. Pismiris sent that draft to Porter by email dated 24 October 2006 for his review and comment (the October draft consultancy agreement).
The appellants submit that the inclusion of terms that varied from what Porter said were agreed on 8 June 2006 is not an indication that in September and October 2006 Porter was negotiating to make an agreement. The inclusion of the terms was consistent with an immediately binding oral agreement made on 8 June 2006 which was to be replaced with a formal written agreement which may have contained, by agreement, additional or varied terms: Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622, 628; Masters v Cameron (1954) 91 CLR 353, 361.
Fourth, Sundance's 14 November 2006 ASX announcement identified Porter as its exploration manager and said the company proposed to issue options to, inter alia, consultants and executives of Sundance as part of their remuneration packages. The terms of the announced options were, except for an expiry period of five not three years, consistent with Porter's options in the draft agreement forwarded to him on 24 October 2006. The appellants submit that the fact Sundance was prepared to issue options to directors, consultants and executives on terms more favourable than the Porter options in the October draft consultancy agreement does not give rise to an inference that the issue of options to Porter was not contemplated by the ASX announcement. Porter and Sundance were free to agree to vary the terms of the options.
Finally, a facsimile letter dated 22 November 2006 from Pismiris to Absolute informing it of the recent board restructure, including a new chairman (Jones) and managing director (Lewis). The letter continues:
As a consequence of this Board restructure, the directors of Sundance were not prepared to execute any new agreements.
The new Managing Director is currently undertaking a thorough review of all commitments. Mr Porter will be in Perth shortly and I would expect the Service Agreement will be executed whilst David is in Perth.
That letter was in response to a facsimile dated 20 November 2006 from Absolute asking whether the service agreement for execution by Porter had been sent and, if not, when it could be expected. Pismiris did not give evidence about this letter (exhibit 348) and the trial judge made no reference to it in his reasons.
Having regard to the fact that Pismiris knew that Porter had been supplying services to Sundance for some time, there is no reason to think that the word 'commitments' is not to be understood in its natural and ordinary meaning. The import of the facsimile is that the managing director would review the nature and extent of existing commitments before approving the execution of a written contract. Further, it is clear that Pismiris' expectation was that the proposed written agreement with Porter was consistent with Sundance's existing commitments to him.
It is the case that there is no document which in terms expressly confirms or refers to an agreement for Sundance to issue 30 million options to Porter in partial consideration of the provision of his services as a consultant or project manager. However, the same is true of the related agreement with Absolute in relation to the cash component of the consideration for Porter's services and associated matters. The email of 2 July 2006 does not refer to the agreement relating to the cash component of the consideration and other agreed terms. The Absolute aspect of the alleged 8 June 2006 agreement is largely ignored by the trial judge because of Sundance's payment of the outstanding balance of the cash component of the consideration prior to trial.
The documents on which the appellants rely are capable of supporting Porter's evidence relating to the events at the 8 July 2006 meeting. They are also consistent with Sundance, under the direction of its new board, walking away from its commitment to Porter. I would uphold grounds 1(d), 2(c) and 4(a).

Stake in the outcome (ground 4(b))

The second reason given by the trial judge for not accepting Porter's evidence where it was contradicted by another witness or objectively unlikely was because 'Porter had reason to tailor his evidence as he had a huge stake in the outcome of the matter'.
The appellants submit that in the absence of a finding based upon the trial judge's observations of Porter as a witness that he was tailoring his evidence, Porter's interest in the outcome is an insignificant consideration. The fact that a plaintiff has a significant financial interest in the outcome of proceedings (which is ordinarily the case in Supreme Court proceedings) is not itself a rational reason for refusing to accept the evidence of a witness where it is contradicted by another witness. It may carry some limited weight in circumstances where the evidence is objectively unlikely. However, I infer this figured in the trial judge's reasoning as a result of his finding that Porter's arrangement of his business affairs and his dealings with his business associates reflected poorly and cast doubt on his frankness and integrity and his finding that Porter had a 'whatever it takes' attitude to achieving an end. Because of that connection, I would uphold ground 4(b).

Porter's answers in cross‑examination - (ground 4(d))

The fourth reason given by the trial judge for not accepting the evidence of Porter where it was contradicted by another witness or was objectively unlikely was that some of Porter's responses in cross‑examination were implausible or unconvincing. The trial judge does not identify the responses on which he relies. Having regard to his reasons as a whole, they must be confined to the three aspects of Porter's evidence relating to the 8 June 2006 meeting. Thus this ground stands or falls with ground 2.

Porter's evidence of 8 June 2006 meeting - implausibility/unreliability (ground 2)

In addition to the credibility basis for not accepting Porter's evidence relating to the 8 June 2006 meeting, the trial judge relies on three aspects of Porter's evidence relating to that meeting which he characterises as implausible or at least gave rise to a doubt about the reliability of Porter's account.
First, the trial judge said it would be surprising if, in the couple of minutes after Porter had stormed out of the 8 June 2006 meeting before Rankine‑Wilson joined him, Rankine‑Wilson had had a discussion with Corr in the presence of Bogne and Asso'o and reversed the position which Rankine‑Wilson had firmly stated, which was that Porter was not going to get any options because he was not going to be managing director [64].
Porter did not give evidence to the effect that there was a conversation between Rankine‑Wilson and Corr about Porter's options in the presence of Bogne and Asso'o. Rankine‑Wilson said he had discussed the matter with Corr but did not say it was in the presence, or within the hearing, of Bogne and Asso'o. In any event, both Porter and Corr say Rankine‑Wilson first raised the subject of Porter's options.
Further, having regard to the trial judge's findings that Rankine‑Wilson knew before the 8 June 2006 meeting that Porter would not accept the position of managing director and that in April 2006 Porter discussed with Corr receiving 30 million options for being project manager, another available inference is that Rankine‑Wilson and Corr went to the 8 June 2006 meeting with an agreed negotiating strategy and a fall-back position on the subject. It is reasonable to expect that Corr and Rankine‑Wilson would have anticipated, and been prepared to deal with, the finalisation of Porter's remuneration package during their June 2006 visit to Cameroon.
It was also plausible that Rankine‑Wilson would have changed his position on the subject of options, if that indeed is what occurred. The probabilities on that topic are informed by the opinions of Corr and Rankine‑Wilson as to the importance of Porter to the preservation and progress of the Mbalam project.
Rankine‑Wilson said in his statement (exhibit 701) that in February 2006 it was important for Sundance to get relevant people on board to begin processing the exploration programme in Cameroon; he drove the process of locating and selecting the required directors and senior management; he knew Porter had a good reputation as a geologist, had experience working in Africa and knowledge of the background to the Mbalam project; in early March 2006 he discussed with Corr Porter's reluctance to join the Sundance board; he told Corr it was unlikely Porter would consider the managing director position or join the board at all; Corr shared those reservations but his priority was in getting the exploration programme running, which Porter was then working on, and he would discuss the matter with Porter in due course; at the time of the 8 June 2006 meeting, Rankine‑Wilson was aware that Porter was assisting to progress the exploration programme on an informal basis (exhibit 701 [14] ‑ [75], [34] ‑ [35], [41] ‑ [42]).
Corr's evidence (exhibit 702) is that in February 2006 he believed that in order to get the Mbalam exploration programme up and running Sundance would need to appoint a number of key operational and project management personnel in Cameroon who could report back to the Sundance board in Perth; he believed Porter was a geologist with a number of years' experience with knowledge of both the Mbalam iron ore province and undertaking projects in Africa; given the need to get the exploration project in Cameroon up and running as soon as possible after settlement of the acquisition, it seemed sensible to him to try and get Porter involved in the project on an ongoing basis; the required work could be done quickly because of Porter's knowledge and experience of the Mbalam area and the project (exhibit 702 [14] ‑ [17]);
Indeed, Corr wanted Porter to join Sundance as its managing director because Sundance needed someone competent who understood the Mbalam project on the ground (exhibit 702 [28]). In June 2006 Corr regarded Porter as 'an extremely important person and someone who we thought would do a very good job' (ts 242). Corr had no objection in principle to granting options to Porter as managing director because Sundance's share price was 3 cents in February 2006 so there was a considerable incentive for Porter to work hard to advance the exploration programme in order to increase the share price (exhibit 702 [40]). Even as managing director, it was intended in June 2006 that Porter run the exploration programme and the Mbalam project, including spending time at the site in Cameroon to undertake the geological and other field work (exhibit 702 [42]; ts 247). At that time, Sundance had no executive management personnel other than Corr and Dobson.
The evidence establishes that Sundance's object of securing Porter's services had not changed by 8 June 2006. Indeed, the threat posed to the exploration permit by the conduct of the local Cameroon shareholders that emerged in the second half of 2006 underscored his importance to Sundance.
Further, Porter was seeking both cash and options for his services to Sundance both before and after the prospect of him being managing director was first floated and then rejected by Porter. It is apparent that the granting of options by Sundance was part of its currency for rewarding directors and non‑directors for services provided, or to be provided, to it.
In summary, Sundance pursued Porter because of his knowledge and experience of the Mbalam project and Africa generally; Porter's proposed duties as managing director overlapped very significantly with those actually performed by him as a consultant; the correlation is reflected in the fact that all of the undisputed terms of Porter's package remained the same (including the fee and the term); it was common for Sundance to issue options to non‑executive directors, consultants and others at least prior to the board changes in November 2006. The evidence as a whole does not support a positive finding that Rankine‑Wilson's change of position (if that is what it was) was implausible.
The second aspect of Porter's evidence said to be implausible or at least to give rise to a doubt about its reliability related to the draft agreement discussed at the 8 June 2006 meeting. The trial judge said it was unreliable because Porter said he wrote the number of options he was to receive personally on the Rodgers draft agreement [64].
Porter's evidence was that after the discussions with Corr and Rankine‑Wilson on 18 and 19 February 2006 he wrote in handwriting on the Rodgers draft agreement what had been agreed relating to the 50 million options ‑ 30 million at 10 cents and 20 million at 50 cents for the managing director role (ts 133). When it was put to Porter that his evidence was that he handed over a draft document with markings on it that did not reflect his understanding of the agreement on 8 June 2006, he said:
No, I said to John Corr, I said, '[t]hese options under clause 5 relate to the managing director's role. I'm going to cross them out', which I did in handwriting, and I said I wanted the 30 million issued directly to me (ts 133).
The trial judge said:
It is hard to understand how Porter could have come to write in on a draft consultancy agreement between Sundance and a company that was to provide Porter's services for that consultancy company to receive 30 million or 50 million options because, on Porter's evidence, the options were always to go to him personally [66].
The trial judge is wrong to say the 50 million options were always to go to Porter personally. Both the Miller draft and the Rodgers draft agreement provided for the options to be granted to the nominated company, DP Prospecting. There is no foundation for the trial judge's finding that on Porter's evidence the managing director options were to go to him personally. On Porter's evidence, it was only the 30 million options for being project manager that were to be granted to him personally rather than to the corporate entity to which the cash component was payable. Further, Porter did not handwrite on the Rodgers draft agreement the 30 million options he was to receive personally for the role of project manager, as found by the trial judge. The handwritten annotations on the Rodgers draft agreement are consistent with Porter's evidence.
Further, the trial judge erred in finding that Porter did not show Corr any draft document during their discussions on 8 June 2006 [63]. The trial judge failed to take into account Corr's evidence in cross‑examination that he and Porter had discussed a draft agreement at the meeting (ts 256 ‑ 257), which is confirmed in Porter's email to Seah on 18 June 2006 attaching the amended version of the Rodgers draft agreement.
The third aspect of Porter's evidence about the 8 June 2006 meeting which the trial judge said gave rise to a doubt about the reliability of his account was his finding that no single document which came into existence after the 8 June 2006 meeting made any reference to Sundance having agreed to give Porter 30 million options for working as a consultant or project manager [64]. I have dealt with that aspect above.
I would uphold grounds 4(d) and 2.

Whether Porter's evidence concerning the 8 June 2006 meeting is contradicted by Corr and Rankine‑Wilson (grounds 1 and 3)

The appellants contend that Porter's evidence to the effect that a binding oral agreement was made on 8 June 2006, which included a term that Porter was to be issued 30 million options, was not contradicted by Corr or Rankine‑Wilson. They contend the trial judge erroneously disregarded significant evidence that was consistent with Porter's evidence and misapprehended other evidence that was consistent with the appellants' case.
Before Corr and Rankine‑Wilson travelled to Cameroon in June 2006 it was clear Porter would not agree to an appointment as managing director of Sundance. Porter's evidence on the subject is supported by the evidence of Rankine‑Wilson, Sundance's ASX announcement on 3 March 2006 and the trial judge's finding that in April 2006 Corr and Porter had discussed Porter receiving 30 million options for the role of project manager [57].
Porter's evidence was that after he and Rankine‑Wilson had spoken about the options on 8 June 2006, Porter and Corr discussed the Rodgers draft agreement and the terms upon which Porter would provide services to Sundance which included, in addition to the options, the monthly fee, the use of Absolute as a service company and that a formal written agreement would be prepared (exhibit 602 [70]).
Rankine‑Wilson's statement is a partial account of the 8 June 2006 meeting. It does not specifically address the question whether there was any discussion at that meeting of Porter receiving 30 million options for the role of project manager or consultant.
Corr's evidence at trial about the 8 June 2006 meeting is to the following effect: there was discussion about Porter's role with Sundance, including the nature of that role and the terms on which he would be appointed; Corr and Rankine‑Wilson put to Porter an offer that Porter accept 30 million options to serve as managing director and Porter said he would be happy with 30 million options; Corr said to Porter that he would only get options as managing director not as a consultant; there was a time when Rankine‑Wilson and Porter had a discussion between themselves without Corr present; Porter presented a draft consultancy document which Corr discussed with Porter at the meeting; there were discussions about the other terms of the agreement, including the payment of $20,000 per month, the use of Absolute as a service company and the preparation of a draft consultancy agreement after the meeting; after the June meeting Corr returned to Perth thinking he had a deal with Porter (exhibit 702 [70] ‑ [74]; ts 248 ‑ 251, 256 ‑ 262).
At the time of giving evidence, Corr was of the (mistaken) opinion that the offer of 30 million options was better financially for Porter than the offer of 50 million options previously agreed (ts 249 ‑ 254).
The cross‑examination included the following:
But you are telling this court that you left Cameroon, after this meeting and the other meetings you had … you came back to Perth thinking now you had a deal, you had an agreement with Porter that he would be managing director. He would be paid $20,000 a month, reimbursement of expenses, and get 30 million options?‑‑‑That was my recollection, yes (ts 249 ‑ 250).
…
You are very, very clear and confident that in the course of this meeting on 8 June the topic of Mr Porter getting 30 million options, not 50, was discussed and there was agreement ‑ assent by both sides that he would get 30 million options?---Yes, I'm - - -
You're sure that that occurred, that a discussion occurred about 30 million, not 50, and you were putting it and he agreed?---Yes. Yes, I do, yes (ts 254).
Corr also agreed in cross‑examination that the agreement on 30 million options made sense if it related to a consultancy agreement rather than for the role of managing director (ts 255).
In re‑examination, Corr referred to the discussions between Rankine‑Wilson, Porter and himself about options for Porter, acknowledged he may not have been present at all the discussions, and continued:
I was somewhat surprised when they [Rankine‑Wilson and Porter] said 'we have agreed to 30 million options' (ts 267).
Corr was very clear and confident that in the course of the meeting on 8 June 2006 the topic of Porter getting 30 million options, not 50 million options, was discussed and there was agreement and assent by both sides that Porter would receive 30 million options, albeit for the role of managing director of Sundance.
Corr's evidence that Porter accepted 30 million options for the role of managing director is implausible. Porter had been offered 50 million options for the managing director's role. To the knowledge of Corr and Rankine‑Wilson, Porter had not accepted the position of managing director. Porter and Corr had discussed a proposal to issue Porter 30 million options for the position of project manager in April 2006. The trial judge rejected Corr's explanation for why Porter allegedly accepted 30 million options for the role of managing director [67].
However, the trial judge did not address the extensive overlap or (to use the appellants' term) congruence in the evidence of Corr and Porter because of his adverse credibility assessments. The only significant conflict in their evidence relates to the role Porter was to play, not the terms and conditions of his remuneration. It is clear the trial judge rejected all of Corr's evidence of the 8 June 2006 meeting, including that which supported Porter's evidence and which was not on all fours with Rankine‑Wilson's evidence. Because of the adverse credibility findings, Rankine‑Wilson's unsworn, out of court statement trumped the evidence of both Porter and Corr.
The errors undermining the credibility findings informed the trial judge's conclusion that Porter's evidence was contradicted by Corr. I would uphold grounds 1 and 3.

The weight of the evidence (ground 5)

The trial judge's finding that there was no concluded or binding agreement at the 8 June 2006 meeting for the issue of 30 million options to Porter has two bases. The first (already dealt with) is that Porter's evidence on the subject is contradicted by Corr and Rankine‑Wilson, is unsupported by other evidence and is unreliable in the ways described. The second is wholly objective, being in effect that Porter had not expressly referred to or confirmed such an agreement in his communications in writing to Corr and Pismiris in July 2006.
The first communication was an email from Porter to Corr on 2 July 2006 in which he said:
Attached is my service agreement with Sundance. Could you go through it and see if it is acceptable to you. I have taken the section with the options out of it as they are linked to the directorship (exhibit 200 [70]).
The trial judge found that the natural and ordinary meaning of that email in its context was that Porter had removed the section of the draft agreement dealing with options because the options went with the position of managing director and as he was not going to be managing director he was not going to receive the options [71].
I am not persuaded that is the natural and ordinary meaning of the email in its context. As noted above, the service agreement attached with the email is the Absolute draft consultancy agreement to which Porter was not a party. Moreover, the Rodgers draft agreement discussed with Corr at the meeting of 8 June 2006 had the handwritten annotation referring (only) to the 50 million options Porter was to receive as managing director.
The context informing the trial judge's construction of the email includes his erroneous conclusion that the 50 million options were always to go to Porter personally and his erroneous finding that the Rodgers draft agreement had a handwritten annotation by Porter referring to 30 million options he was to receive personally for the role of project manager. Further, the weight of the evidence is that the Rodgers draft agreement was discussed with Corr at the 8 June 2006 meeting.
The trial judge also found that if it was agreed on 8 June 2006 that Porter was to be issued 30 million options, it was unlikely Porter would have written to Corr on 2 July 2006 without mentioning the options because, on Porter's evidence, they were more important than the salary ($20,000 per month) [73].
Porter's evidence was that he would not work for Sundance for 12 months for a salary alone (ts 108). However, in cross‑examination on the email of 2 July 2006 he also said the 30 million options were part of the incentive to make him stay for 12 months (ts 142) but were not especially significant because they were 'well out of the money' at the time (ts 110). These options were exercisable at 10 cents and 20 cents at a time when Sundance's share price was about 3 cents (ts 248). Further, Porter's evidence was to the effect that he expected the board of Sundance to act on what had been agreed without the need for a written agreement (ts 142 ‑ 143).
The second communications relate to the draft minutes of the Cam Iron board meeting on 8 June 2006. On 17 July 2006 Porter sent an email to Pismiris attaching the draft minutes of the Cam Iron board meeting on 8 June 2006 and inquired how the work contracts for Bogne, Asso'o and himself were going. There was no reference to his options in the email. The minutes, drafted by Porter, referred to the approval of the Congo options but made no reference to the issue of options to Porter in relation to the Mbalam project. The trial judge regarded that omission as significant [76].
Porter subsequently added further comments to the draft minutes attached to an email to Pismiris on 20 July 2006. The trial judge said 'Porter asked how the directors of Cam Iron could approve an issue of options by Sundance' [76]. However, that comment is in red and Porter's comments are in blue and are to the effect that the issue of options was approved by John Corr with Rankine‑Wilson's knowledge at the 8 June 2006 meeting and was the basis for Bogne and Asso'o being in the Congo acquiring licences. However, Porter's comment makes no reference to his Mbalam options. I note that the Sundance board (Corr, Pismiris and Dobson) ratified the issue of the Congo options in October 2006 before the new board was installed. There is nothing to suggest the existence of a formal written agreement in connection with the Congo options.

The email of 17 July 2006 refers to the Absolute draft consultancy agreement to which Porter is not a party. Porter said he made no reference to his options in the draft minutes because they related to the affairs of Cam Iron not Sundance (ts 121 ‑ 123). The Congo options referred to in the minutes related to Cam Iron's possible acquisition of additional tenements and thus was a Cam Iron affair. Further, Porter said the work contracts of Bogne and Asso'o were to be with Cam Iron. The appellants claim it is unremarkable that there was no reference to options to be issued to Porter by Sundance for services to be performed for Sundance in the draft minutes of a board meeting of Cam Iron.
The third communications relate to the discussion paper the subject of emails between Porter and Pismiris in July 2006. On 24 July 2006 Porter sent to Pismiris comments on the discussion paper in which he referred to his consultancy agreement but not his options. The trial judge also relies on the fact that there was no reference to any options in Pismiris' email to Porter on 25 July 2006 to the effect that he was currently drafting a services agreement for Porter incorporating terms

agreed by Corr [77]. I have dealt with this letter above. It is relied on by the appellants as supporting their case.

I am not satisfied that the failure to refer to the agreement at the 8 June 2006 meeting relating to, inter alia, the issue of 30 million options in the July 2006 communications is itself determinative on the question whether there was a binding and concluded agreement at the meeting. In particular, I am satisfied that the errors made by the trial judge, in particular the errors in, and flowing from, the adverse assessment of the credibility (honesty and reliability) of Porter's evidence, have the capacity to alter the weight attributed to the July 2006 communications. The nature and extent of the errors require that the judgment be set aside.
However, the trial judge's findings on the myriad of factual issues in contention are not in the main inferences based on facts that are undisputed. The credibility of the main witnesses (Porter, Corr and Pismiris) is crucial to the outcome. Without making judgments as to the credibility of the witnesses, I am unable to confidently determine where the weight of the evidence lies. There are too few incontrovertible facts and too little uncontested testimony to reverse the result. Thus the issues are not matters which can be equally validly redetermined by an appellate court. See Fox v Percy (2003) 214 CLR 118; CSR Ltd v Della Maddalena (2006) 80 ALJR 458.
Accordingly, I would dismiss ground 5, set aside the orders made by the trial judge and order a retrial before a different judge.

Conclusion

I would uphold grounds of appeal 1 to 4, allow the appeal, set aside the orders made by the trial judge and order a retrial before a different judge.
BUSS JA: I agree with McLure P.
MAZZA JA: I agree with McLure P.