EFM Pty Ltd v New Zealand Steel (Australia) Pty Ltd

SUPREME COURT OF VICTORIA

COMMERCIAL LIST Not restricted

F4840	No. 2087 of 1997
EFM PTY. LTD. (ACN 097 969 490)

Plaintiff

NEW ZEALAND STEEL (AUSTRALIA) PTY. LTD.

(ACN 007 017 174)

Defendant

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JUDGE	Chernov, J.
WHERE HELD	Melbourne
DATE OF HEARING	17-20, 26-27, 31 August; 1-2 September 1998
DATE OF JUDGMENT	17 December 1998
CASE MAY BE CITED AS	EFM Pty. Ltd. v New Zealand Steel (Australia) Pty. Ltd.
MEDIA NEUTRAL CITATION	[1998] VSC 194

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CONTRACT - Duress - Whether threat of physical harm - Whether mind and will overborne - Onus of proof - Standard of proof.

CONTRACT - Authority of agent - Actual authority - Express or implied - Question of fact - Ostensible authority - Nature and effect - Whether representation by principal that another person has authority to act on its behalf.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr C. Gunst, QC and	E.L. Richards & Co.
Mr S.G.R. Wilmoth
For the Defendant	Mr P.W. Collinson and	Holding Redlich
Mr M.N.C. Harvey

HIS HONOUR:

The proceeding

On 8 September 1997, the plaintiff, EFM Pty. Ltd., and the defendant, New Zealand Steel (Australia) Pty. Ltd., entered into a written supply agreement (Supply Agreement) pursuant to which the defendant appointed the plaintiff its exclusive freight forwarding agent in respect of steel products imported by it from New Zealand and landed principally at the wharves in Melbourne and Sydney. Shortly thereafter, the defendant repudiated the contract by letter dated 26 September 1997, before the plaintiff performed any aspect of it. The plaintiff has issued this proceeding in which it claims damages for breach of contract, being loss of profits in excess of $490,000. The defendant admits that its shipping and transport manager, Jeffrey Robert Allcock (Allcock), signed the Supply Agreement on 8 September 1997, purportedly on its behalf, but says that it is ineffective for the following reasons:
(a)        The document was signed by him under duress, which was constituted by threats of violence against him by a director of the plaintiff, Carlos Alberto Domingos (Domingos), and his brother-in-law, Cesare Schembari (Schembari), between 2 September 1997 and 8 September 1997.
(b)        Allcock did not have actual authority to sign the agreement without the approval of its general manager, Robert Page Howard (Howard), and no such approval was given.
(c)         The defendant also claims that the Supply Agreement is void for uncertainty, but this claim was not pursued at trial and I do not propose to say anything further about it.
The case was set down for hearing only on the issue of liability.
The parties

(i) The representatives of the plaintiff and Evergreen

Those on the plaintiff's side who were most concerned with the relevant events were Domingos, his wife Teodora Schembari (Mrs. Domingos), Schembari (who is the brother of Mrs. Domingos) and Frederick Reginald Carl (Carl). At the relevant time, each was employed by a freight forwarding company, Evergreen International Forwarding Pty. Ltd. (Evergreen). It is common ground that the controlling interest in the plaintiff was acquired by Domingos and Carl in about June 1997, for the purpose of entering into the Supply Agreement with the defendant. Its executive director at all relevant times was Domingos who has been involved in the freight forwarding business for over 23 years, principally as an executive director of Evergreen. In that context, he had a business association with the defendant through Allcock, pursuant to which his company carried out non-exclusive freight forwarding work for the defendant.
Mrs. Domingos was employed by Evergreen as its office manager and, as will be seen later, she had an involvement in the circumstances surrounding the execution of the Supply Agreement. So far as Schembari is concerned, he commenced work at Evergreen in about late June 1997 or early July 1997, as a shipping line clerk. For approximately ten years prior to that, he conducted his own business as a hairdresser.

(ii) The defendant, Allcock, Howard

The defendant was formed in 1988 for the purpose of marketing in Australia, steel products manufactured in New Zealand by its then parent company. Howard was appointed director at the time of its inception and remained in that position until he retired this year. In 1992, the majority interest in the New Zealand steel-making company was acquired by BHP Co. Ltd. (BHP) and on 31 May 1997, it became its wholly owned subsidiary.
Allcock, who is 56 years of age, has been the shipping and transport manager of the defendant since about mid-1989. At all relevant times, he was responsible for the control of the shipping and distribution of the defendant's steel products throughout Australia. I am satisfied on the evidence, that he was the person within the defendant's management who was most conversant with that aspect of the company's operations and his knowledge and experience in the area surpassed Howard’s, notwithstanding that the latter was, as general manager, Allcock's superior. His responsibilities included the co-ordination of the arrival of vessels from New Zealand which carried the defendant's products, liaising with local stevedoring companies to ensure the orderly discharge and distribution of those products and the co-ordination of the road transport carriers after the discharge of the steel at the various wharves throughout Australia, principally Fremantle, Brisbane, Adelaide, Sydney and Melbourne.
Between 1992 and 30 June 1998, Howard was the defendant's general manager and one of its directors. He was responsible for the whole of its operations in Australia which involved sales of approximately $60m per annum.

(iii) Carl

At the time Howard joined the defendant, Carl was employed by it as its administration officer. In 1993, the defendant commenced the adoption of a series of standards set by the International Standards Organisation which required a company to create and maintain accurate records of its business operations, including reducing its major contracts to writing. The defendant pursued this course so as to gain quality accreditation (QA) from that organisation. Howard said in his evidence, that this process required a formal review of the company's operations, its suppliers and its customers to ensure that they accorded with the standard of the international accreditation body. The process required the defendant to enter into written contracts with its road freight providers, with annual reviews. Up to that point, its arrangements with carriers were usually verbal and were relatively informal. In the context of pursuing this process, Carl was appointed by the defendant as its quality co-ordinator to pursue the QA certification and the implementation of the relevant requirements. According to Howard, Carl became an expert in the area of QA administration and was sought by others to upgrade their systems with a view to obtaining the apparently much sought after certification. In about 1994, Carl had formed his own business, specialising in QA consultancy work. He resigned from the defendant in February 1996, to pursue that business. Subsequently, the defendant engaged him to act as its QA consultant and he continued in that role until shortly after this proceeding was commenced.
Background
In order to determine what have turned out to be essentially factual areas of dispute, involving the credibility of witnesses, it is necessary to examine in a little detail, the background to or the context in respect of, the execution of the Supply Agreement by Allcock. I turn to those matters below.

(i) La-Trans

Prior to the relevant period, the defendant's practice had been to let its supply contracts for the road transport of its goods on an annual basis commencing 1 June and at the end of the 12 months' period, to re-negotiate the contracts. The transport contract in respect of the defendant's goods landed in Sydney and Melbourne for the 12 months' period from 1 June 1996, was held by La-Trans Transport Pty. Ltd. (La- Trans). It had, in fact, held that contract for the seven years prior to 1 June 1996, pursuant to verbal arrangements with Allcock.
The evidence shows that towards the end of 1996, La-Trans was experiencing financial problems. According to Domingos, Allcock discussed that situation with him as well as his concern that he might lose the service of the carrier due to its financial difficulties. Domingos said in evidence, that it was as a result of Allcock's suggestion, if not request, that he arranged for his company to lend La-Trans $55,000 to help it overcome what he then believed were temporary financial difficulties. I should say that Evergreen had a business relationship with La-Trans whereby La- Trans provided carrier services to Evergreen, as its sub-contractor. Although Allcock denied that he persuaded or sought to persuade Domingos to lend La-Trans any money, I prefer the evidence of Domingos on this issue.
Notwithstanding this loan from Domingos, the financial position of La-Trans deteriorated further during early 1997, and according to the evidence of Domingos, which I accept, Allcock was becoming progressively more concerned about the likelihood of the carrier going into liquidation and the defendant being left without a secure cartage supply contract. It was in that context, that discussions were held between Allcock and Domingos about the possibility of Evergreen entering into a supply agreement with the defendant. At about the same time, Allcock advised Domingos that it would improve his chances of obtaining such a contract (and that, in any event, it would be beneficial for his business) if Evergreen obtained a QA certification. He suggested that Domingos engage Carl to advise Evergreen on this and as a consequence, Evergreen engaged him first as a QA consultant and later, as an employee. This relationship with Carl evolved to a point where Domingos and Carl purchased the shares in the plaintiff for the purpose of using it as a joint venture vehicle for the provision of freight forwarding services to the defendant.

(ii) Bowtrans

By about late April 1997, La-Trans, which was under the effective control of Lorry Athanasi (Athanasi), was experiencing critical financial difficulties and was on the verge of collapse. At about that time, its business was acquired by Peter John Hewat (Hewat), who, as La-Trans, continued to provide cartage services to the defendant in accordance with the supply agreement which had been entered into almost 12 months' earlier. Allcock, however, had reservations as to the ability of Hewat to perform the contract to the required standard. If he did not have such a reservation, I am satisfied on the evidence, that he told Domingos that he had such a doubt and on that basis, continued to encourage Domingos to believe that there was a prospect that Evergreen would obtain the supply contract from the defendant. Such an approach, on the part of Allcock, in any event, made commercial sense. Allcock did not have any real proof that Hewat's team would be able to perform the cartage contract satisfactorily and, therefore, he was at some risk that he would be left without a satisfactory carrier, at least in the short term. La-Trans carried approximately 65% of all the defendant's steel products, so that it was important for Allcock to ensure that there be continuity in terms of carrier, should La-Trans fail for some reason or its services prove to be unsatisfactory. To have Evergreen available at short notice, would obviously be in the best interests of the defendant. Moreover, since the supply agreement was to be re-negotiated as at the end of May, having two freight forwarders competing for the contract would only be advantageous to the defendant. Allcock did not dispute that this was the position in about April 1997.
In July 1997, La-Trans changed its name to Bowtrans Metro Pty. Ltd. (Bowtrans Metro). Subsequently, as Bowtrans Transport Pty. Ltd. (Bowtrans), it signed a supply agreement with the defendant which is dated 1 June 1997. The evidence makes it clear, however, that the document was probably executed towards the end of August 1997, and was back-dated to 1 June 1997. By back-dating the agreement, the defendant was able to create the impression that it had a written contract for the carriage of its goods which operated immediately after the expiration of the earlier carriage agreement on 31 May 1997. Such continuous written transport arrangement satisfied the requirements of the QA standard with which the defendant was seeking to comply. A document which would have operated only from the end of August 1997, would have meant that the defendant had failed to comply with QA standards.

(iii) Plaintiff's expectation of Supply Agreement

I am satisfied on the evidence, that by April 1997 or May 1997, regular or at least frequent, meetings were held between Allcock and Domingos, during which the possibility of Evergreen taking over the La-Trans supply agreement or having a new supply agreement awarded to it by the defendant, was discussed. I am also satisfied that during those meetings, Allcock raised the expectations of Domingos of obtaining a supply agreement from the defendant. Indeed, matters progressed to a point where in early May 1997, Carl prepared a draft supply agreement which Domingos gave to Allcock for approval. The document was in part, based on material provided by Allcock in the form of a letter to the defendant from La-Trans of 23 October 1995, which showed cartage rates charged by it to the defendant under its supply agreement. Allcock told Domingos that his rates would have to be at least as attractive as those of La-Trans.
The next relevant draft supply agreement was prepared in late June 1997. For the purpose of the draft, Allcock gave Domingos a copy of a memorandum of 20 June 1996, from Howard to Allcock which, in turn, enclosed a copy of the La-Trans supply agreement. In that memorandum, Howard informed Allcock that the defendant's proposed supply agreement with La-Trans had been essentially approved by the defendant’s lawyers. The main purpose of giving the memorandum to Domingos was to ensure that the plaintiff's draft would match the La-Trans proposed agreement, particularly in relation to its QA aspects. Allcock kept stressing to Domingos that his company should concentrate on meeting the QA requirements (and not merely complying with the requirements of the lawyers).
The evidence shows that Allcock discussed the June 1997 draft with Howard, who dealt with it in his memorandum of 17 July 1997. In it, he expressed satisfaction with the progressing of the distribution contract; this was obviously a reference to Allcock's negotiations or discussions with Domingos and the draft supply agreement produced by him near the end of June 1997. Howard did, however, query in his memorandum, several aspects of the proposal and thought that some of the rates that were proposed by Domingos, were too high. Later, Allcock gave the memorandum to Domingos who, in turn, gave it to Carl to enable him to prepare contract documents which took into account Howard's views. As things turned out, however, Carl’s next draft of early September 1997 (with which I will deal later), did not accommodate some of the concerns set out in Howard's memorandum. For example, whereas in his memorandum, Howard said that the interstate rates proposed by Domingos were too high, the rates proposed in the draft of early September 1997, were not reduced. Domingos contended that notwithstanding that his proposed rates were not reduced by early September 1997, there was compliance with what Howard wanted in his memorandum, because since 17 July 1997, the industry had experienced an increase in cartage rates, so that the rates mentioned in the Howard memorandum were out of date. In my view, the plaintiff's failure in its later drafts to accommodate all of Howard's views is, in any event, consistent with the plaintiff's case that it did not consider that Howard's approval had to be obtained before it could be awarded the Supply Agreement. The plaintiff's case was that it believed that Allcock was, for all practical purposes, the defendant; he had authority to enter into the agreement. Not only did he tell Domingos that it would be up to him whether the supply contract would be awarded to the plaintiff, but he also told him what the acceptable level of cartage rates would be, what form the draft contract would take and other like matters. He was the only person from the defendant with whom Domingos dealt.
Since Evergreen did not own transport vehicles, it planned to sub-contract the cartage to various carriers in the event that it secured the supply agreement from the defendant. Allcock was well aware of that and in late July 1997, he suggested to Domingos that he should begin securing arrangements with Sydney sub-contractors for the purpose of transporting the defendant's steel. As a result, on 22 July 1997, Domingos and Carl held meetings in Sydney with a number of potential sub- contractors for the purpose of obtaining access to their services. In the course of those meetings, Hewat (who had no prior contact with Domingos) rang him on his mobile telephone (the number of which he obtained from Allcock) and accused him of seeking to disrupt his contract with the defendant. He told him, in effect, to stop talking to the Sydney drivers for the purpose, as he alleged, of disrupting his supply agreement with the defendant. He said that if Domingos continued with his attempt to obtain what he termed, "his contract", there would be trouble. Domingos responded by suggesting that they should meet at his office on the following day to discuss the matter.

(iv) Domingos/Hewat meeting 23 July 1997

Domingos' evidence was that on 23 July 1997, Hewat and another person who, he later learned, was known as "Nappy" (which is an abbreviation of Napoleon), virtually burst into his office and threatened to kill him if he interfered with Bowtrans’ supply agreement. Domingos said that in the course of making such threats, Hewat made a gesture towards him with one of his hands which formed a gun with his forefinger and thumb. Nappy also told him not to touch the contract because it belonged to Hewat and anyone who got in the way would be killed. He said that no-one else will get the contract after "we have been greasing Jeff all that time". This was obviously intended to convey that they had been paying Allcock secret commission in respect of their contract. At or near the conclusion of this short meeting, Hewat took hold of Domingos by his lapels and shook him and pushed him backwards onto the floor. Hewat then left saying he would go and see Allcock and tell him the same thing. Domingos said he was bewildered and frightened by the experience. If Domingos is to be believed about those events, then it is not surprising that he was frightened, bearing in mind that Hewat (who gave evidence) is a tall, burly, and no doubt, strong man who gives the impression of being capable of frightening someone, if he were minded to do so. The evidence also establishes that Nappy had a physique at least as large as that of Hewat. Not long after the Hewat visit, Domingos rang Allcock at the wharf and told him what had occurred and warned him that Hewat was on his way to see him.
To a significant extent, the evidence of Domingos is corroborated by the evidence of Leontee June Antonello (Antonello), who, on the day in question, worked for a company which rented the ground floor of the building in which Evergreen was located. She said, and I accept, that on 23 July 1997, she was upstairs on the first level of the premises in question, when two solidly built men stormed through the Evergreen front door and went quickly up the stairs. She remembers that one of them had a moustache and that one of them asked for Domingos in loud and aggressive terms. When they were told that Domingos was upstairs, the two men then proceeded quickly upstairs to his office. Antonello said in evidence, that she then heard a man's raised voice coming from Domingos' office which was not the voice of Domingos. She later heard a thumping sound as if someone or something had been pushed against a wall. Within a few minutes of that, Antonello saw the two men walk quickly down the stairs and leave the building. Domingos then walked down the stairs looking shaken and said that he had just been physically assaulted and threatened. Carl also corroborated Domingos' version of the events involving Hewat. He said that on 23 July 1997, he was at the premises of Evergreen when two big men entered and ultimately went to Domingos' office. He later heard movements from the office which were consistent with somebody falling over. After that the two men left.

In his witness statement as filed, Hewat said that he went alone to the premises of Evergreen on 23 July 1997, where he saw Domingos. Domingos had been cross- examined on the basis that Hewat came alone on 23 July 1997. After that cross- examination, during which Domingos insisted that Hewat was accompanied by Nappy on 23 July 1997, and just before he was to give evidence, Hewat altered his witness statement by stating that on the occasion in question, he was in fact, accompanied by Nappy. He also admitted that he had grabbed Domingos by the tie and pulled him towards him and then stood over him while he used abusive language addressed to Domingos. He claimed that he was provoked into doing this by Domingos' claim that he, Domingos, had the supply contract with the defendant (something which Domingos denies having said to Hewat). Hewat denied that he threatened to kill Domingos. He also claimed that he could not recall going to the wharf to see Allcock after his visit to Domingos, but in cross-examination, he accepted Allcock's evidence that he saw him at the wharf on that day. Hewat's explanation for not mentioning Nappy in his witness statement, was that he did not want to involve him. I accept Domingos' account of what transpired with Hewat on 23 July 1997.
In his evidence, Allcock confirmed that on 23 July 1997, Domingos rang and informed him that Hewat and Nappy had visited him, threatened him and told him to stay away from the cartage work in relation to the defendant's steel. Domingos told him that they were on their way to the wharf to see him. In his evidence, Allcock first said that they did come to the wharf, but later said that he was not sure if Hewat came alone. He claimed that although Hewat was angry at the prospect of losing the supply contract (to Domingos), when he saw Allcock at the wharf, the meeting between them was "affable". In all the circumstances, this description of their meeting is difficult to accept.

(v) Domingos’ report to police

On 24 July 1997, Domingos, Allcock and Schembari spoke with Collins, a policeman who was known to Domingos, about what had occurred the previous day. The meeting was in a coffee lounge. It is not necessary to summarise their discussions. Suffice it to say, that Allcock sought to dissuade Domingos from making a formal complaint to the police about Hewat or from pursuing the supply agreement, at least temporarily, on the basis that there may be no point in taking the matter further because if Bowtrans did not perform the supply contract to the required standard, it would go to the plaintiff in any event. There was no need, he said, to provoke Hewat and it was a matter of waiting and seeing how Bowtrans performed its contract. A similar discussion was held with Mrs. Domingos later that day, during which she urged her husband not to pursue the supply agreement, bearing in mind the threats made by Hewat and the fact that it was likely that they would obtain the contract in any event, since Allcock said that Bowtrans was unlikely to be able to perform its contract satisfactorily.
I am satisfied on the evidence, that Hewat threatened Domingos broadly in the way he, Domingos, described and that Domingos was frightened by those threats and was concerned that Hewat would resort to physical violence unless he desisted from pursuing the supply agreement with the defendant. I am also satisfied on the evidence, that Hewat made threats to Allcock on the wharves on 23 July 1997. Further, I am satisfied on the evidence, that because of Hewat's threats and Allcock's indication that Hewat was unlikely to be able to perform the contract satisfactorily, so that it would probably go to Domingos in due course, Domingos did not until much later, press Allcock to finalise the draft supply agreement of late June 1997.
Having summarised briefly the background to the events which are said to constitute duress, I now turn to examine this claim.
Duress claim
The onus of proof in respect of this allegation rests with the defendant. To make out the defence of duress, the defendant will have to establish that the will of Allcock in relation to his signing of the Supply Agreement was overborne by threats made to his physical well-being for the purpose of procuring the signature on the document (Barton v. Armstrong [1976] A.C. 104). Since the plaintiff concedes that the defence of duress as particularised, if proved, would constitute the defence in law, the only question that remains is whether the evidence establishes the requirements to which I have referred. The plaintiff submits that the standard of proof which the defendant must satisfy is the civil standard to the extent identified in Briginshaw v. Briginshaw (1938) 60 C.L.R. 336, 361-363. (See also Cuming Smith & Co. Ltd. v. Westralian Farmers Co-operative Ltd. [1979] V.R. 129, 147; Anderson v. Blashki [1993] 2 V.R. 89, 95 and G. v. H. (1994) 181 C.L.R. 387, 399.)
The defendant accepts that it has the onus of proof in this area and, in essence, acknowledges that its case depends on the acceptance by the Court of Allcock's claim that in light of the conversation and events between 2 September 1997 and 8 September 1997, he signed the Supply Agreement because he was so terrified or frightened of the threats by Domingos and Schembari to his life and health, that he executed the document against his will. That is the conclusion that Allcock seeks to have the Court draw from the events. Since the defendant's case is that the duress was effected during meetings between Allcock and Domingos and Schembari in early September 1997, I turn to summarise the evidence in relation to those meetings and surrounding events.

(i) September meetings

It is common ground that meetings took place between Allcock, Domingos and Schembari between 2 September 1997 and 5 September 1997 and on 8 September 1997. Mrs. Domingos and Carl were also present for part of the 8 September 1997 meeting. The respective parties, however, give markedly differing accounts as to what transpired at those meetings.
Before analysing the evidence, I should mention that the defendant's pleaded case was that the first relevant meeting between the parties occurred on 3 September 1997. That is also what Allcock told the police when he finally reported the matter to them at the end of December 1997. When he came to give his evidence, however, he changed the date of that first meeting to 2 September 1997, on the basis that he had discovered just before the trial started, copies of accounts and invoices which showed that he was in Sydney and returned to Melbourne on 2 September 1997, and not 3 September 1997. For some reason, the defendant did not seek to amend its Particulars on that point until after the trial had started, when the plaintiff's witnesses were giving evidence. After argument, I gave the defendant leave to amend its Particulars to allege that the first relevant meeting between them took place on 2 September 1997, and not on 3 September 1997.
It was common ground that generally, Allcock and Domingos met to discuss business matters at one or two of the hotels in the South Melbourne area, but mainly at an hotel called the Water Rat (the hotel). It was at that hotel where all the relevant meetings occurred in early September 1997. Allcock said in his evidence, that he met with Domingos and his brother-in-law at the hotel on 2 September 1997, and that during the meeting, they intimated to Allcock that they would use violence or threats of violence to shut down the whole of the operation of Bowtrans or at least so much of it as was concerned with the defendant's supply contract. According to Allcock, Domingos said that Bowtrans would not exist by the weekend and that he wanted the supply contract signed over to his company. Schembari also inferred that he would be prepared to use force if necessary to achieve that end. According to Allcock, he said that he had contacts with the Mafia and "Alphonse" and that he and Domingos were in a position to close down Bowtrans. They assured Allcock, however, that they were not threatening him. Allcock says that shortly after they left the hotel, Schembari accompanied him to his waiting taxi which was a short distance away from the hotel and when they reached it, he showed Allcock a small black barrelled hand gun and told him that everything was under control and that Allcock should go home and think about what was said at the meeting.
Domingos and Schembari agreed that there was a meeting with Allcock at the hotel in early September 1997, although they could not be precise about the date. They also agreed that at the conclusion of the meeting, Schembari walked with Allcock to his taxi. It seems clear enough that they and Allcock are speaking about the same meeting, namely, the one which Allcock says took place on 2 September 1997. Domingos and Schembari, however, denied Allcock's version of the conversation. They said in their evidence, that there were no threats made against Allcock or in relation to Bowtrans and that the discussion between them centred around the work that the defendant would be required to perform under the supply agreement. Domingos specifically denied that he said that the existing Bowtrans contract had to be signed over to his company. He said that in any event, he would not have used the words attributed to him by Allcock. Schembari said that Allcock told them that he was very nervous about Bowtrans and about the threats that Hewat had made. Schembari denied that he said he had contacts with the Mafia and "Alphonse". He said in his evidence, that he did not and does not in fact have any connection with the Mafia, nor does he know an "Alphonse". He said he did not then or does not now possess a firearm and did not have one on the day in question. He also denied showing a gun to Allcock after they left the hotel. As will be seen later, the defendant challenged Schembari's denials of those matters and led evidence in relation to them.
Domingos said that he remembered leaving the hotel with Schembari and Allcock and that Allcock walked up Park Street to his taxi accompanied by Schembari. Domingos said that he stood and waited for Schembari to come back. He said he could see the two men, but that he did not see Schembari take out a gun (something he would have observed had it occurred). He did, however, see Schembari open the door of the taxi for Allcock.
The plaintiff led evidence by way of tendering two facsimile transmissions that appear to have been sent by Schembari on 2 September 1997, from the offices of Evergreen at approximately 4.15 p.m. and 4.30 p.m. This material, said the plaintiff, showed that the meeting could not have taken place as Allcock would have it, namely, at 4.00 p.m., but probably took place at about 3.00 p.m. The defendant, however, pointed to other evidence which showed that the time imprint from the plaintiff's facsimile machine was out by an hour or so and for that and other reasons, the plaintiff's material does not establish the timing of the meeting as the plaintiff contends. In my view, this material goes only to the question of whether the meeting took place at 3.00 p.m. or, as Allcock insists, at approximately 4.00 p.m. The resolution of this may go to the credit of Allcock, but since there is more substantial and direct material going to that issue, I will assume that the meeting took place at 4.00 p.m., as claimed by Allcock.
According to Domingos and Schembari, by the end of the meeting of 2 September 1997, Allcock was intoxicated and became agitated at Domingos' relative indifference to the threats that had been made against him by Hewat. The plaintiff tendered in evidence, receipts for the purchase of liquor by Domingos and Schembari at the hotel between 2 September 1997 and 5 September 1997. They show and Allcock virtually agreed, that on each occasion that the parties met at the hotel during the period in question, Allcock drank double vodkas. On any view, the evidence shows that a significant amount of vodka was consumed by him during each of those meetings, over a relatively short period of time. According to the evidence of Domingos, Schembari, the licensee of the hotel and the tendered receipts, on 2 September 1997, Allcock drank approximately one-third of a litre of vodka in a period of less than one hour. When this was put to Allcock in cross- examination, he accepted it. I should mention for completion that during the September meetings, Domingos and Schembari drank whisky, but in smaller quantities when compared with Allcock's intake.
On 3 September 1997 and 4 September 1997, Domingos and Allcock had further face- to-face discussions at the hotel, as well as by telephone about the supply agreement. Allcock does not allege that any threats were made against him on those days. The evidence shows that a substantial amount of vodka was again consumed by Allcock during each of the two meetings. According to Nicholas Phillip Traill, the then assistant manager of the hotel, whose evidence was not challenged, the mood of the meetings between the parties on those dates (and on 5 September 1997), was friendly.
The critical meeting, being the one at which Allcock says he was threatened, was the one between himself, Domingos and Schembari that was held on 5 September 1997. In his evidence-in-chief, which was given by way of a witness statement, Allcock said this in relation to that meeting:
"I arrived at the [hotel] at approximately 2.45 p.m. [He was then offered a drink.] Chas [Schembari] at the time was seated on my left and Mr. Domingos was standing directly behind me. I felt slightly nervous and apart from being concerned, I was curious as to what their next step was going to be. Chas then said: “Cunt, where's the contract?” I said: “What are you talking about?” Chas further said:
“You must think we are stuffing around, if you don't get this bloody contract
signed you won't be going home tonight”. He was raising his voice and seemed very agitated. His palms were sweating and he was blowing into his right hand whilst ruffling his fingers. I believed he was trying to portray that he was someone I should be scared of. In his left hand at the time was a spent hand gun cartridge. I felt very intimidated, scared and very alone. Unlike the meeting on 2 September 1997, on this occasion the threats were directed to me rather than Bowtrans. At this meeting, Chas did much more talking than Mr. Domingos.
I stayed with Chas and Mr. Domingos for another drink only because of the fact that they were placing me under duress and I was concerned about what might happen if I did not appear to be going along with what they were saying. I felt, because the Hotel was empty, this was not time to try and be a hero. Chas then told me that I had 45 minutes to get back to my office to send Bowtrans a fax cancelling their existing contract. He also said that he wanted confirmation once the fax was sent as the contract with them had to be signed by 5.00 p.m. on Friday, 5 September 1997, or else. I was in a state of utter confusion and felt that the best thing to do was to comply with what was being said and to get the hell out of the Hotel.
I told them that I was leaving the Hotel and going to return to the office. I did not say what I was returning for but I needed to get back to sit down and to work out what was going on and if it was all true. I then left the Hotel on my own leaving both Mr. Domingos and Chas in the bar. I drove straight back to [the office]. Whilst in my vehicle, my mind was in turmoil and fear compounded by the fact that I could not believe that this was actually happening to me. After parking my vehicle in the car park provided, I endeavoured to regain my composure prior to entering our office. ....
Upon arriving at the office I proceeded to my own cubicle and sat at my desk thankful that no-one had appeared to notice anything different. I was shuffling papers as a distraction when at about 4.30 pm I was advised that I had a telephone call. I duly answered the phone and the caller was Chas. He was straight to the point calling me names like 'prick' and 'cunt' and demanding the fax be send immediately as I had to return and sign over the Bowtrans contract by 5.00 pm that day, 5 September 1997. He said words to the effect that if it was not done, I would not make it home that evening. I had no doubt as to what he meant by this. My fear of the situation was starting to get the better of me. I replied that the fax would be on its way shortly. I very quickly hand wrote a fax addressed to Bowtrans advising them of our dissatisfaction with their recent performance.
I sent this fax to the fax number of Evergreen as EFM did not have a fax. I did not send the fax to Bowtrans. As soon as I received confirmation from the fax machine that the fax had been transmitted and received at Evergreen, having stood at the machine and awaiting this, I returned to my office cubicle a few minutes later. The fax report sheet shows that the document was faxed twice to Evergreen. This occurred because there was no proof print out that came with the first fax. I therefore decided to send the fax again to be sure. On the second occasion there was a print out indicating that the fax had gone through.
There were not any “difficulties that have arisen within your organisation during the last 24/48 hrs” as stated in the Bowtrans fax. I made this statement up to give Mr. Domingos and Chas the impression that NZS was terminating the Bowtrans contract. Even if there were problems with Bowtrans I did not consider that I had any authority to terminate its contract without Bob Howard's approval. Of course, I did not obtain his approval prior to sending the fax.
I left the office shortly after sending the fax. My telephone records show that I telephoned Evergreen's offices at 5.31 pm. In the course of this telephone conversation Mr. Domingos insisted that I come around to Evergreen's offices to sign the contract. By way of excuse, I referred to the fact that I did not at the relevant time (and do not today) have a driving licence. I said to Mr. Domingos that I needed to drive home in the traffic because “you know my problem with a licence”. I believe he said words to the effect that he wanted the contract signed on Monday."
When cross-examined about their meeting, Allcock seemed a little confused. At first, he said that a gun was produced at it. He later said that no gun was in fact produced and that he was mistaken in his evidence as to that. The evidence of Domingos and Schembari about this meeting, is quite different from that of Allcock. Schembari and Domingos denied that Schembari had in his possession a handgun cartridge or any other cartridge or that they made the threats alleged by Allcock. Schembari's evidence was that the conversation between them was cordial and there was discussion about Allcock looking after Schembari at the wharf to make sure that he understood his function properly. Schembari said that although Allcock again appeared intoxicated, he was not as badly affected as he was after the meeting of 2 September 1997. Domingos said that during their meeting at the hotel, he asked Allcock to come to his office to read the contract which Carl had prepared (by 30 August 1997, prior to his departure for Malaysia) and to confirm that it was in order to sign. Allcock said he would first have to go back to his office "to make an appearance" and that he would send a fax to Bowtrans terminating its services and would then come to the offices of Evergreen to review and sign the contract. Domingos said that at one stage during the meeting, Allcock had expressed concern about going home after terminating the Bowtrans contract (because of his fear of Hewat) and even suggested that he might stay at Domingos' house. Domingos suggested that he might find him a room at the motel if he wished and would pay the costs, but in the end, nothing was done about Allcock's concern. According to Domingos, Allcock left to go to his office and later telephoned to say that a fax had been sent to Bowtrans and that it was too late for him to go to Evergreen because he needed to drive home in the traffic so as to avoid being apprehended for driving without a licence.

Allcock said in his evidence-in-chief, that on the way home on 5 September 1997, he telephoned Carl in Malaysia at approximately 5.45 p.m. Melbourne time. According to his telephone records, he spoke with Carl for just over seven minutes. He said that during that conversation, he told Carl that during "the last few days", Domingos and Schembari had pulled a gun on him, demanding that the supply contract (with Bowtrans) be signed over to them. Allcock said that Carl expressed surprise and told Allcock to ring him on 7 September 1997, when he would be back in Melbourne. In his evidence, Carl confirmed that Allcock had telephoned him on 5 September 1997, when he was in Malaysia and informed him that he had been threatened with a gun by Schembari. No mention, however, was made of Domingos making any threats. Carl noted that during their conversation on 5 September 1997, Allcock's speech sounded slurred. Because he was busy and did not really believe Allcock, he told him to ring him when he returned to Melbourne on 7 September 1997.
It is curious that Allcock did not mention during his conversation with Carl, what had occurred on 2 September 1997, and that although he claims to have felt threatened and intimidated on 5 September 1997, he did not relate to Carl his version of the meeting of 2 September 1997, but only that of the meeting of 5 September 1997. It should also be noted that although he said he felt intimidated on 5 September 1997, he did not report the incident to the police or to anyone at work until much later.
Allcock said in his evidence, that on 7 September 1997, he called Carl at his home and repeated to him the substance of what he had told him a few days earlier, but Carl merely told him that he had an unpleasant, delayed flight home and was tired and to ring him at Evergreen on Monday. Carl said in his evidence, that although Allcock had telephoned him on 7 September 1997, he had difficulty in believing what Allcock told him and that on the following day, he got caught up with his work and did not tell Domingos or Schembari about his conversations with Allcock during the preceding few days. In my view, one could draw the inference that Carl did not take Allcock's allegations seriously.
The contract which Domingos wanted to have Allcock sign on 5 September 1997, did not follow in form or incorporate all the suggestions or requirements of Howard, as detailed in his memorandum of 17 July 1997, to which I have already referred. It will be recalled that the proposed supply agreement was drafted by Carl before he departed for Malaysia. Carl said that he had deliberately rejected some of Howard's suggestions that were contained in his memorandum of 17 July 1998. He only included in the draft, provisions which his company wanted and as to which, Allcock's agreement was sought. In his evidence, Carl was adamant that Howard's note at the end of the memorandum, "may we discuss please", did not mean (to Carl) that the decision as to whether the defendant would let the contract to the plaintiff, had to be made in conjunction with Howard. He said that he took that note as reflecting no more than normal procedure, whereby Allcock would discuss the progress of the agreement with Howard. That would occur as a matter of course, but it did not mean that Howard's approval was required before Allcock could enter into the supply agreement on behalf of the defendant. He said that as he understood the situation, it was for Allcock ultimately to determine to whom the supply contract would be let.

(ii) Execution of contract 8 September 1997

Domingos signed the then proposed supply agreement on behalf of the plaintiff on 8 September 1997, but dated it 5 September 1997. He said in his evidence, that the reason why he did that was because it was to have been executed by the parties on the previous Friday, namely, 5 September 1997. He then asked Mrs. Domingos to take the contract to Allcock's office for signature.
Mrs. Domingos' evidence was that when she got to Allcock's office, she had to wait for him to complete a telephone call. She said that when Allcock came out of his room, he did not want to discuss matters in the reception area, but asked her to come outside with him into the carpark. He looked at the contract and said that it did not comply with the QA requirements. She said that she did not know what that meant, so she telephoned Carl on her mobile telephone and Allcock explained his difficulty to him. After his discussion with Carl, Allcock said that he would have to get a precedent of a supply agreement from his office and would take it to Evergreen.
In the context of this case, it is probably not surprising that Allcock's version of his meeting with Mrs. Domingos (and their subsequent dealings on that day) is significantly different from the evidence given by her. He said that when he was told that Mrs. Domingos was there to see him, he was confused as to why she should be there and said that he did not relate her visit to the events of the previous Friday. At one stage, he said he had regarded her as a "lacky" of Evergreen, who never became involved in any business or workplace discussions between himself and Domingos. Hence, he was surprised that she was at his office. He said that Mrs. Domingos told him that she was there to have the contract signed. Allcock said that he told her that he did not know what she was talking about and she responded by saying it was the contract that was meant to have been signed last Friday. According to him, it was Mrs. Domingos who suggested that they go to the carpark to discuss the matter. When he had read the draft, he told her that it did not conform with the QA requirements. He said that he had the QA clauses in his office. Mrs. Domingos told him that she would give him two minutes to get the documents and to follow her back to Evergreen but that he was not to use the telephone, "mobile or otherwise". At some stage during that conversation, according to Allcock, Mrs. Domingos told him that she was "with another accomplice who was sitting in a vehicle outside" and that if he did not do what was asked, there would be trouble. He said that he treated what Mrs. Domingos said to him as a threat and not as an instruction.
Allcock said that he "raced back" into his office, found the proforma supply contract and went out to the carpark where Mrs. Domingos told him she wanted him to drive to the Evergreen office and that he would be followed by her and her accomplice. She again told him not to use his car telephone. On the way to the Evergreen office and apparently notwithstanding Mrs. Domingos' alleged instructions about not using his car telephone, Allcock said that he made three telephone calls from his car. He explained that despite the fact that he felt threatened, he did not speak to anyone at his office about what was then taking place because he did not want "senior management" to think that he could not handle the situation.
When he arrived at the Evergreen offices, he was ushered upstairs to a boardroom, followed by Domingos and Mrs. Domingos. Allcock said that upon entering the office, he became very concerned. Although Carl was there, it was Mrs. Domingos who took control of the proceedings. At about that time, Schembari appeared in the doorway with a smirk on his face and leaned against the door jamb. This made Allcock uncomfortable. Mrs. Domingos then "once again" asked him why he did not sign the contract document presented to him earlier and he answered that Carl would understand why it was not in order. According to Allcock, Mrs. Domingos then instructed Carl "to pull his finger out and produce the proper document" on his computer. Allcock said that whilst Schembari was standing behind him he felt trapped and intimidated and the events of the previous week flashed through his mind. He said Mrs. Domingos refused to let him use the telephone and that he was told "by Schembari and by Mrs. Domingos" in no uncertain terms, that he was not going anywhere until the contract was signed.
Domingos and his wife, Carl and Schembari deny that anyone other than Carl was present with Allcock in the boardroom while they were settling the contract, except when Domingos called in for a few moments to say hello and Mrs. Domingos brought some coffee. Carl said that he incorporated the changes required into the supply agreement, the form of which was in his computer system and when he had printed out the contract and made copies, he took one copy to Domingos in his office for him to sign and another to the boardroom, where Allcock was seated. He left the contract for Allcock to sign and went downstairs.
Domingos said that after Allcock signed the Supply Agreement, he and his wife accompanied him out of the building. Once outside, Allcock told him that he had made a commitment and needed $1,000 cash. Domingos said that he told Allcock that he did not have $1,000 cash with him, but that notwithstanding this, Allcock insisted that he needed the money that day. Domingos said that he did not have it. Eventually, Allcock dropped the subject and, before leaving, told Domingos that he would be sending him the packing list for a vessel which was due to arrive shortly in Melbourne. Although this conversation was denied by Allcock, it was supported by the evidence of Mrs. Domingos. Carl was not present at the discussions with Allcock after he left the Evergreen premises on 8 September 1997, but he did give evidence of an earlier conversation that he had with Allcock about him being paid money in relation to the La-Trans contract. Carl said that in August 1997, Allcock informed him that he had been offered money in an envelope by Athanasi which he had accepted at the time, although Carl counselled him against that course of action.
Allcock denied that he sought any money from Domingos when he left his premises on 8 September 1997. He did, however, say in cross-examination that he had been offered money in connection with supply agreements on one or two occasions, but that he had refused to accept it because it would "go against his ethics". He claimed that one of the offers came from Domingos in May 1997 or June 1997, when Domingos offered him $1,000 if he would procure the supply agreement for him. This assertion, however, was not pursued in the cross-examination of Domingos, nor was it part of the defendant's case on the pleadings or evidence-in-chief.
Allcock said that later on 8 September 1997, Hewat contacted him and said that Domingos told him that he had the supply agreement. On Allcock's own evidence, he did not inform Hewat that that was the case, but merely asked to meet him on the following day. On 9 September 1997, Allcock showed Hewat the Supply Agreement that was executed on 8 September 1997, and related his version of what had occurred, essentially that he signed it under duress. Hewat told Allcock to report the matter to the police and to his superiors. Hewat said in his evidence, that Allcock was visibly upset and asked him to keep the contract documents, because he was in a mess and was in fear for his life. He "had the shakes" and could not drive. He also had tears in his eyes.
On the same day, that is to say, 9 September 1997, according to Domingos, Hewat telephoned him and threatened him in relation to the agreement. Hewat did not deny that he did so. He merely said he had no recollection of threatening Domingos on that day.
On about 12 September 1997, Allcock said that he received a telephone call from Domingos asking about the work to be carried out by the plaintiff (as the defendant's carrier) in relation to the transportation of its goods which were due to arrive at the Melbourne wharf on the "Iron Dampier" in a few days time. Allcock did not tell Domingos that he would not be transporting the defendant's goods. Instead, he told him that the "Iron Dampier" was not carrying any of the defendant's steel. Thereafter, Allcock refused to take any telephone calls from Domingos and by letter dated 26 September 1997, the defendant repudiated the Supply Agreement, but only on the ground that Allcock’s signature was procured under duress.

(iii) Schembari's denials

I now turn to some of the more specific attacks made on Schembari's credit. I have already mentioned that he denied that he told Allcock that he had contacts with the Mafia or that he knew "Alphonse". He said in his evidence, that he had first heard of a person called Alphonse, in early September 1997, when he read of him in a newspaper report as a person who was shot in a suspected Mafia or gangland killing. He also denied owning a gun. In his evidence, he said that apart from a shotgun that his father gave him when he was 17 years old and which he had surrendered during the amnesty period, he did not own a gun. It was put to him that he told a fellow employee, Richard McLean (McLean), that he owned or had possession of a gun. Schembari denied this. He also denied that he was engaged by Domingos to be his bodyguard or that he said this to McLean.
Against the objection of the plaintiff, I permitted the defendant to call McLean on the question of whether Schembari had told him in approximately late August 1997, that he possessed a gun and that one of his duties was to protect Domingos. I formed the view that this evidence went beyond the mere issue of Schembari's credit; it was relevant to the question of whether Schembari in fact owned a gun at the relevant time. This could, in turn, go to a further question in dispute between the parties, namely, whether Schembari showed a gun to Allcock on 2 September 1997. McLean was called to give evidence pursuant to a subpoena. He said that shortly before he left the employ of Evergreen in about August 1997, Schembari made an offhand remark to the effect that he was carrying a gun. He also said that one of his duties was to protect Domingos, although he did not say from whom or from what Domingos was to be protected. I gained the strong impression from his demeanour in the witness box and from his evidence, that although McLean did not have a detailed recollection of what Schembari had said as to those matters or of the circumstances in which they were raised, he was a disinterested witness who tried to give as accurate an account of those matters as he could.
In my view, it is likely that Schembari did say something to McLean about a gun and about him having or carrying one and that he did say something about protecting Domingos. But without knowing the context in which it was said, I do not take that evidence as contradicting Schembari's denial of gun ownership or his denial that he was, in effect, a bodyguard of Domingos. On the question of whether it is probable that Schembari was the protector of Domingos, there are other circumstances which point against him occupying that position. There is no suggestion in the evidence, that before 24 July 1997, Domingos received threats of physical violence such as to warrant him seeking the protection of a bodyguard. Hewat's threats were made on 24 July 1997. Schembari, however, commenced work at Evergreen well before that date, in late June 1997 or early July 1997. Moreover, although appearances are not everything in this area, he did not give the physical appearance of being a bodyguard. His background was that of a hairdresser of approximately ten years experience before joining Evergreen. He was quietly spoken, he is 31 years of age and in the witness box, had a quiet demeanour. When cross-examined, he addressed each question and sought to answer it to the best of his ability. He was not cross- examined as to credit in any real sense; it was never put to him for example, that his evidence contradicted that which the defendant proposed to lead, that he was mistaken or was untruthful.
Cathleen Maria Iavazzo (Iavazzo) was also called by the defendant in relation to matters arising out of Schembari's evidence, more particularly relating to his knowledge of Alphonse and Mafia contacts. She is a former employee of Evergreen who left its employ on or about 9 September 1997. She is the wife of Robert Iavazzo who was, at one stage, a partner of Hewat in the La-Trans business and who continued to work for him in the Bowtrans operations. Early in her evidence, Iavazzo said that because of her state of health, she had little or no memory of the events of late August 1997 and September 1997. It is sufficient if I say that, given her evidence about her memory and the look of fright, if not panic, that was present on her face when she was in the witness box and her almost incoherent responses to the few questions that she was asked by counsel, nothing she said has persuaded me to reject Schembari's evidence on the matters to which I have referred. I was concerned about her state of apparent physical and mental health while she was in the witness box and, given her so-called evidence, I wondered why she was called at all.

(iv) Analysis of evidence

The determination of the question whether Allcock executed the contract in question under duress, falls to be determined largely, if not wholly, by the acceptance or rejection of the version of the relevant events given by the witnesses for the plaintiff and the defendant. Put another way, the determination of this issue depends primarily on the acceptance or the rejection of Allcock's version of events. This exercise necessarily involves looking at the evidence of the other witnesses. It is convenient to analyse the evidence broadly along the lines put forward by counsel for the defendant in his final address. Mr. Collinson, who appeared for the defendant, very skillfully pointed to surrounding circumstances, including the lack of motive on the part of Allcock, as supporting his version of the events.
He pointed first to Schembari's false denials about his ownership of a gun, his position as bodyguard of Domingos and his knowledge of or about Alphonse. In the context of the first two matters, he pointed to the evidence of McLean. I have already said why I do not regard McLean's evidence as necessarily leading to the rejection of Schembari's denial of those matters. But even if it did, it would not necessarily follow that Schembari produced a gun on 2 September 1997, or that he had made the threats as alleged. It will be recalled that Allcock's evidence was that he was not threatened on 2 September 1997, when the gun was produced; the threats were made on 5 September 1997 and 8 September 1997. I have proceeded on the basis, however, that his case was that one of the reasons why he felt threatened on those two occasions was because on 2 September 1997, Schembari and Domingos made it clear that they would be prepared to use force and violence, including guns, against persons who stood in their way. On that occasion, it was Bowtrans that was threatened. I assume that it is Allcock’s contention, that the production of the gun and the threats against Bowtrans played a part in affecting his state of mind when he came to sign the Supply Agreement. As to Schembari's supposed reference to "Alphonse" on 2 September 1997, I have already said why I do not find the defendant's evidence on this point persuasive.
The next point made by Mr. Collinson, was that Allcock gave evidence that Bowtrans was performing its contractual obligations satisfactorily during August 1997, and that, therefore, he had no motive to agree voluntarily to a change of cartage contractors. I do not accept that evidence. First, for reasons that I give later, Allcock was not a witness of truth. In any event, there is other evidence which I accept, which is consistent with Allcock being concerned by August 1997, that Bowtrans was not performing its supply contract to the required standard. First, there is the evidence of Domingos that Allcock told him just that on a number of occasions in or about August 1997. Next, Allcock encouraged the plaintiff to prepare a draft supply agreement (which conformed with QA requirements) and negotiate rates with prospective sub-contractors. Such actions on the part of Allcock are consistent with his concerns about the reliability of Bowtrans and with a plan to substitute the plaintiff for Bowtrans. Moreover, the memorandum from Howard to the BHP legal department of 18 July 1997, shows that at that time, Allcock and Howard saw it as being necessary to change to a new cartage contractor and clearly, the plaintiff was being favourably considered in that context. Howard said as much in his evidence.

What motivated Allcock to agree to a change of cartage contractors must be, to some extent at least, speculation. If an explanation is required, the evidence makes it fairly clear that Allcock had serious reservations about Hewat's ability to perform the contract and that he was understandably concerned that the defendant may be left without a satisfactory cartage contractor, given its experience with Athanasi. He saw the plaintiff as a likely substitute, but Hewat would not give up the contract and Allcock probably boxed himself into a position where he ended up having two arrangements for cartage on his hands, one with Hewat and the other with the plaintiff. Ultimately, he preferred to incur the wrath of the plaintiff (which ultimately manifested itself through legal process) rather than that of Hewat (which had the potential of manifesting itself through physical violence). Although the evidence is not conclusive on this issue, it is likely that the possibility of a monetary reward from Domingos may have also influenced his thinking.
In any event, I do not have to come to any definite conclusion about Allcock's motives for acting as he did, and I do not do so for the purpose of coming to my ultimate conclusion on the question of duress. There are many factors that may have affected Allcock to act in the way in which he did and it does not matter which one or which combination of them, so affected him. In theory, of course, the question of the presence or absence of motive may have a bearing as to whether his evidence should be accepted or rejected. That would be so if one were to conclude that Allcock did not have or could not reasonably have had a motive so to act voluntarily. But as I have said, he could well have had one or more motives so to act, the most likely one being the necessity to reject one contractor in circumstances where such rejection would cause him less harm than the rejection of the other contractor.
I make a similar observation in relation to Mr. Collinson's rhetorical question, why did Allcock complain to Carl on 5 September 1997, that Schembari had "pulled" a gun and demanded that the contract be signed, if that did not happen. Mr. Collinson says that this is consistent with Schembari having exposed a gun to Allcock on 2 September 1997, and later threatening him if he did not sign the contract. Putting aside the fact that Allcock claims that he was threatened on 5 September 1997, when a gun was not produced, what Mr. Collinson says may well be consistent as a matter of logic, but it obviously does not establish that the event described by Allcock to Carl in fact occurred. It establishes no more than what Allcock told Carl.
The analysis of what motivated Allcock to tell Carl what he did on 5 September 1997, necessarily involves at least some amount of speculation. There may have been all sorts of reasons why Allcock told Carl about the "pulling" of the gun. It should be recalled that this was said during a conversation that lasted approximately seven minutes and the section now analysed appears to have formed only a small part of it. The context in which this was said or the remainder of the conversation is not known. But by 5 September 1997, Allcock must have realised that he had led Domingos to expect a supply agreement from the defendant; its execution had to be imminent and probably, if Hewat was not about, the contract would have been signed well before then. But Hewat was about in the relevant sense. Thus, by late Friday, 5 September 1997, Allcock was faced with this dilemma. As a figure of speech, one could say that Domingos was holding a gun to his head by expecting a signed contract from the defendant. It may be that this is what Allcock meant to convey when he spoke to Carl. But the evidence relating to this conversation is deficient in the sense that the full conversation between Allcock and Carl has not been given in evidence. It is equally possible that Allcock may have simply invented the story that he was pressed by threats of violence to come up with the contract in the hope that Carl would do something about it. It is also possible that Allcock's thinking about the whole matter was affected by the amount of alcohol he had consumed.
Next, Mr. Collinson pointed to Allcock's fax of 5 September 1997, addressed to Bowtrans, but which was never sent to it. It was, however, sent to Domingos. Mr. Collinson said that this fact and the fact that it was handwritten by Allcock, whereas all his other correspondence was typed, show that the document was probably not prepared by him in the ordinary course of business. It is said that this is consistent with Allcock's version of the events of 5 September 1997, and supports the accuracy of it. In my view, however, this fax is just as consistent with Allcock realising that he had to terminate the agreement with Hewat and in that context, he sought to set out in the fax, a reason for the termination, which included the expression in the letter "difficulties that have arisen within your organisation during the last 24/48 hours". He then lost his nerve and did not send it to Bowtrans (but sent it to Domingos so as to deceive him into thinking that he had terminated the arrangement with Bowtrans).
Mr. Collinson then turned to attack the credit of Domingos, Schembari and Carl. As to Domingos, Mr. Collinson pointed to passages in his evidence, which he said were either not credible or constituted contradictions of his earlier evidence. I will not mention here every matter to which Mr. Collinson has pointed in this context, but I do take all of them into account. Many of them amount to no more than Domingos' inability to be precise as to what was said and being able to state only the gist of conversations. Thus, for example, the fact that Domingos could not particularise the words used by Allcock in conveying his alleged assurance that within a maximum of two months, the contract would be granted to Domingos, does not necessarily mean that Domingos was untruthful or inaccurate about it. Similarly, there is no reason why Domingos should have heard about the sale to Hewat before some time in June 1997 or July 1997, notwithstanding Mr. Collinson's claims that this would have been known to him, given the regular meetings with Allcock and the plaintiff's long- standing interest in La-Trans. It will be recalled that Domingos lent $55,000 to La- Trans when it was under the control of Athanasi. But it is also clear on the evidence, in my view, that although he sought to investigate the possibility of buying into La- Trans, by about February 1997, he and his accountant eventually concluded that La- Trans may be financially doomed. Hence, Domingos did not have a "long-standing" interest in purchasing the La-Trans business, as Mr. Collinson claims.
It is true that Domingos exhibited some confusion in relation to the draft documentation prepared by Carl and whether it complied with the requirements of the Howard memorandum. But it must be recalled, that he was not the person on the plaintiff's side who was concerned with the drafting of the documents. That was a matter for Carl, so that in one sense, it was not surprising that he was less than precise or that he was even confused, about matters of detail pertaining to those documents. As to Domingos' denial that Schembari was hired to be his bodyguard or that he performed that role, I have already dealt with this issue.
Overall, I have found Domingos to be a credible witness. His demeanour in the witness box was consistent with that of a witness who sought to be accurate in what he said. Usually, he answered questions frankly, although at times he was somewhat longwinded, probably because of his personality and because he was keen, if not desperate, to give a full account of an event as he saw it, even if he was not asked for it. He was not evasive and was unshaken under cross-examination in many areas in respect of which he was pressed. For example, he was cross- examined at great length in relation to his loan of $55,000 to La-Trans, to which I have referred. The suggestion was pressed on him that it was a payment for shares in that company. In my view, he remained firm and unshaken in his evidence, that at the outset, the payment was a loan. On a number of occasions, he accepted propositions that were obviously put to him as being against his interest. For instance, he agreed that he was enthusiastic to secure the supply agreement, a proposition which was put to him no doubt for the purpose of establishing that he had a motive or a reason for taking the course which the defendant alleges he took, in order to secure the agreement. He also agreed with a similar suggestion that his interest in pursuing La-Trans was, in part, due to an opportunity to take over the supply agreement which it had with the defendant.
At one stage, the defendant sought to paint Domingos as a person who was prone to use threats of violence to accomplish his commercial ends and who in that context, had made reference to “Alphonse”. This was denied by Domingos. I mentioned earlier that on 22 July 1997, Domingos went to Sydney to discuss with various transport operators the prospect of him securing their services as his sub-contractors in relation to the defendant’s goods landed in Sydney. In that context, he spoke with Martin Raymond Harris (Harris), who was employed as marketing manager of P & O Ports at the time. The defendant called Harris as a witness, to prove that Domingos had threatened him during those discussions and in that context, referred to “Alphonse”. Given Harris’ medical condition, which he described as panic disorder and his poor recollection of events, and the sending of faxes by him to Domingos offering to perform cartage work for the plaintiff, notwithstanding the alleged threats against him, as well as his general demeanour in the witness box, I found his evidence unreliable. In the circumstances, I do not regard it as contradicting Domingos’ evidence that he did not know a person called Alphonse and did not mention it to Harris in Sydney.
I have already dealt with the credibility of Schembari. As to Carl, the defendant's principal attack on him was based on his refusal to acknowledge that he used Howard's memorandum to Allcock of 20 June 1996, as a basis for preparing the draft supply agreement. It will be recalled that this memorandum and a copy supply agreement were provided to Domingos so that the draft which was to be produced by Carl, had regard to the copy agreement. It is true, as Mr. Collinson has pointed out, that the words used in the Howard memorandum "governed by and constrained by" are reproduced in the 7 May 1997 draft supply agreement. Carl said that he probably took the words from his precedent books and not from Howard's memorandum. On the face of it, Mr. Collinson's point is compelling, but there is no reason to suppose that Carl could not have found those words elsewhere. But even if he did copy them from the Howard memorandum, in my view, it means no more than in the circumstances, he had forgotten or is just mistaken about that point. Generally, I have found Carl to be a credible witness. His demeanour in the witness box was consistent with a person who addressed each question and answered it to the best of his ability. This is notwithstanding that he gave his evidence in a matter- of-fact manner. The defendant also sought to discredit him by cross-examining him to show that while he was working for the defendant, he carried out consultancy work for La-Trans which was in conflict with his duties to the defendant. In my view, although he was, in effect, reprimanded by Alexander Benbow (Benbow), the company secretary and finance manager of the defendant, for doing this work for La-Trans, it is not clear on the evidence, whether he was, after the reprimand, prohibited from carrying out further QA consultancy work for La-Trans. Carl said that he believed that he was permitted to do such work for La-Trans and was only precluded from doing non-QA work for that company. In my view, it is probably unlikely that Carl would have continued with the QA consultancy work at La-Trans if he thought he was precluded from doing so. Benbow could have discovered that he was doing this work and if that had occurred, it would have caused him problems with the defendant. It should be said that the QA consultancy work carried out by Carl for La-Trans was, according to the evidence, mainly carried out at that company's premises at weekends.

(v) Allcock's credit

I found Allcock to be an unreliable witness and I do not accept his version of events where they conflict with that of Domingos and his wife, particularly in relation to the events of 2 September 1997 to 8 September 1997. His demeanour in the witness box was that of a witness who was hesitant in answering questions as if he had to think through the answer before giving it in case he was trapped or caught out in contradicting some other piece of evidence. Moreover, on a number of occasions he did contradict himself and he conceded in cross-examination that he was having difficulty remembering past events. His excuse was that he was very busy at work between September 1997 and December 1997, and that his work occupied all his attention. He said that he was also travelling a lot during that period and that he was drinking when entertaining which, as I gather, was part and parcel of his job.
His ability to remember with any accuracy the relevant events of 2 September 1997 and 5 September 1997, must have been affected by the large volume of alcohol he consumed on those occasions. This is notwithstanding that he regarded drinking one-third to one-half litre of vodka in an hour or so, as merely having "a few drinks". He is also a person who practised deceit. For example, he deceived his employer since 1990, in relation to his drinking habits and about the fact that he had his license taken away by the Court as a result of a conviction for exceeding 0.05% blood alcohol content. During his cross-examination, Allcock first did not admit to having been convicted of a criminal offence, but later said that he was convicted of an offence of exceeding 0.05% blood alcohol content which resulted in him losing his license and being fined in June 1990. He agreed, after much pressing, that his blood alcohol reading on that occasion was 0.155%, that he was fined $600 and that he had his license cancelled and was disqualified from seeking to have it reinstated for a period of 15 months. If he wished to regain the license, he was required to make an application to the Magistrates' Court. He said that since his conviction, he had made no application to be re-licensed. Notwithstanding the loss of his licence, he continued to drive. He agreed that he had deceived his employer by driving a company car when he was not licensed to do so and by keeping his conviction a secret from it. He also admitted to driving from time-to-time when his blood alcohol content was over 0.05%.
He also admitted that he lied to the defendant's solicitors about this matter. Initially, he denied it, but after being pressed in cross-examination, he admitted to deceiving those solicitors. He agreed that he lied to them during the period February 1998 to June 1998, when they were preparing the case for trial. The correspondence from the defendant's solicitors of 2 June 1998, in response to a letter from the plaintiff's solicitors of 27 May 1998, reflects this.
Further, there were parts of his evidence where he acknowledged that he contradicted his earlier evidence. For instance, Allcock said at first that Bowtrans performed work satisfactorily between April 1997 and July 1997, and that there was no need at that time to replace it. He was then shown the memorandum of Howard of 18 July 1997, in which Howard says "We need to change contractor". Upon seeing this memorandum, Allcock changed his answer and said that although the defendant recognised the need to change contractors as at July 1997, there was no such need in August 1997. He agreed that initially he gave a false answer on this topic and changed it after seeing a document which proved that his earlier evidence was untrue. I have already mentioned his initial evidence in cross-examination, that a gun was shown to him on 5 September 1997, which he later corrected.

(vi) Conclusion duress claim

Although I accept that merely because a person is confused or untruthful about one matter does not mean that he or she is unreliable or untruthful about all aspects of the evidence, I reject Allcock's claim that he was threatened in the way he says he was by Domingos, his wife and by Schembari in September 1997. But even if he was so threatened, I do not accept on the evidence, that such threat so overcame his will that he was compelled to sign the document in question. He claims that he signed the document at the premises of Evergreen where he was intimidated by Mrs. Domingos, something which I reject on the evidence. He is physically a large man who is about six foot three inches in height and who has been dealing with the shipping and transport industry for many years. He is obviously familiar with those aspects of the industry which leave little room for those who are not mentally and physically tough and where aggression and threats of violence are not entirely unknown. His claims that he was effectively intimidated by the five foot three inches tall Mrs. Domingos borders on the ridiculous and I reject it. It might be observed that if he was so frightened and concerned about his own well-being by the threats of Domingos, Schembari and Mrs. Domingos, that his mind and will were overborne in relation to the signing of the contract, it is most surprising that he did not make a complaint to his employer until some time after the supposed event. He did not report the matter to the police until almost the end of December 1997, notwithstanding that he was supported in this by his employer.
Authority of Allcock
Two questions arise in this area:
(a)        Did Allcock have actual authority to enter into this contract or contracts of this type, on behalf of the defendant?
(b)        Did Allcock have ostensible authority to enter into this contract or contracts of this type, on behalf of the defendant?
(i)         Actual authority
The question of whether Allcock had express or implied authority to sign supply agreements and in particular, the agreement in question, is a question of fact (Northside Developments Pty. Ltd. v. Registrar-General (1990) 170 C.L.R. 146, 158, 164- 166, 175, 185). Both parties relied on the defendant's internal documents to establish their respective contentions relating to Allcock's authority to enter into supply agreements on behalf of his company. Those documents included:
(a)        a "Position Description Questionnaire" completed by Howard, which formed part of the defendant's records and described Allcock's position and function within the company;
(b)        a document entitled "Job Description of the Shipping/Transport Manager;
(c)         a diagram, "Four Quadrant Leadership" and related documents which sought to identify which decisions could be implemented on behalf of the company by an officer without reference to his superior and those in respect of which approval was required.
In my view, an examination of those documents probably does not determine one way or another, whether Allcock had actual authority to enter into supply contracts on behalf of the company. Howard, for example, described Allcock's job or function as securing "prompt delivery from wharf to customers of steel products imported (by the defendant) by supervision of contract stevedores and transport operators. Employ risk management practices to minimise product loss or damage. To negotiate rates for on-shore handling and carriage." The document also speaks of Allcock negotiating rates for stevedoring and transport of the (defendant’s) products and authorising invoices for services. Similarly, within the Questionnaire relating to Allcock, there is a reference to a "delegated financial authority" of $1.3m. Moreover, the job description document makes no reference to the need for Allcock to obtain Howard's approval before entering into the transactions described in the document, which included discharging the defendant's products from ships and delivering them to its customers. The document speaks merely of Allcock reporting to the general manager. These descriptions, at the very least, suggest that Allcock might have had authority to enter on his company's behalf, agreements such as the Supply Agreement (up to an annual figure of $1.3m.).

On the other hand, in the Questionnaire, Howard wrote under the heading "Freedom to Act": "Secure distribution contracts within plan cost limits; Q3. Monitor these contracts; Q4. Employ contract resources to move cargo according to conditions, circumstances and priorities; Q4. Approve and authorise suppliers invoices for payment; Q4. Seek approval of marine claims of A$5K per item in conjunction with technical manager. Approval of terms/costs outside contractual agreements." The reference to Q3 in that passage is a reference to the Four Quadrant Leadership diagram which, in Quadrant 3, identifies decisions which could only be implemented consensually with Howard. Thus, the defendant contends, the securing of distribution contracts was a task in respect of which, Allcock had to obtain the approval of Howard.
As I have already mentioned, if one were to look solely at those documents, the position relating to Allcock's authority is somewhat equivocal. But in determining whether Allcock had the authority of the company to commit it to supply agreements, one has to have regard to how such contracts were in fact secured and the role that Allcock played in attaining them. I have already mentioned that it was not until 1996, that the defendant standardised its procedure in relation to supply contracts and required them to be in writing in accordance with QA requirements. Prior to that, such contracts were generally entered into by way of verbal arrangements. The evidence establishes that it was Allcock who secured all relevant supply contracts before and after 1996. It was he who came to the verbal arrangements with freight forwarders prior to 1996, and with La-Trans in particular, and it was also Allcock who signed all the relevant written agreements after that date. Thus, for example, the 1996 La-Trans contract was signed by Allcock on behalf of the defendant. After La-Trans was taken over by Hewat, it was Allcock who negotiated and agreed with him for the provision of freight services for the defendant during the period April 1997 to August 1997. He did this without any relevant reference to Howard. Similarly, the Bowtrans contract was signed on behalf of the defendant by Allcock in late August 1997 (and back-dated to 1 June 1997). At some stage after Hewat took over La-Trans, the freight services that were provided by that company, continued to be made available by Hewat, first through La-Trans, but a little later, through Bowtrans Metro. When the abovementioned contract was executed, the freight company was Bowtrans Transport Pty. Ltd. Although Howard did have some involvement in relation to the contract that was ultimately executed, he was, on his own evidence, unaware that there were two Bowtrans companies that were involved in the provision of freight services to the defendant.
It will be recalled that Carl worked for the defendant for a considerable period and was involved in its QA program, as well as with the drawing up of job descriptions for its relevant personnel. He was, therefore, familiar with the communication between the defendant's various officers and with their respective functions and authorities. He said in evidence, that it was expected within the company that its shipping and transport manager would be responsible for the drawing up and approval of freight contracts, notwithstanding that it would be normal practice for him to discuss this with the general manager and to keep him informed of the developments in this regard. That this was the position is not surprising bearing in mind, as was acknowledged by Howard, that between the two of them, Allcock had by far the more superior knowledge and experience in the letting of freight contracts. In fact, in the area of transportation, Howard generally deferred to Allcock's greater knowledge and experience. Carl said that during his time with the defendant, he had not heard Howard suggest that Allcock had no authority to commit the defendant to freight contracts without his approval.
Hewat, in effect, confirmed this position. He said that in all the negotiations and dealings he had with the defendant from early 1997, in relation to the supply agreement, he dealt only with Allcock.
Thus, when one looks at the evidence of what actually occurred in relation to the entry by the defendant into cartage contracts, it seems that although Allcock conferred with Howard in relation to them, in the sense of keeping him informed of developments as to negotiations and although he no doubt took Howard's advice on aspects of the proposed agreements, such contracts were generally entered into by Allcock without any approval process being first followed. This is not to suggest that Howard could not have instructed Allcock not to enter into a particular supply contract. That Allcock had the authority so to contract for the defendant is not surprising bearing in mind Allcock's greater depth of knowledge and experience in this area. As I have mentioned, Howard generally deferred to Allcock in respect of those areas of the shipping and transport industry. In my view, therefore, Allcock probably had implied authority to enter into 12 months' cartage contracts on behalf of the defendant and, therefore, had authority to enter into the Supply Agreement in question.

(ii) Ostensible authority

But if I am wrong in this conclusion, in my view, the evidence establishes that Allcock had ostensible or apparent authority to enter into the contract. The description of what constitutes such authority and the circumstances in which it may be said to exist, have been described in a number of relatively recent authorities. A convenient starting point is what Diplock, J. said in Freeman & Lockyer (a firm) v. Buckhurst Park Properties (Mangal) Ltd. [1964] 2 Q.B. 480, 503:
"An 'apparent' or 'ostensible' authority ... is a legal relationship between the principal and the contractor created by a representation, made by the principal to the contractor, intended to be and in fact acted upon by the contractor, that the agent has authority to enter on behalf of the principal into a contract of a kind within the scope of the 'apparent' authority, so as to render the principal liable to perform any obligations imposed upon him by such contract. To the relationship so created the agent is a stranger. He need not be (although he generally is) aware of the existence of the representation but he must not purport to make the agreement as principal himself. The representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract. It is irrelevant whether the agent had actual authority to enter into the contract."
Brennan, J. in Northside Developments Pty. Ltd. v. Registrar-General, supra, at 172, said that the foundation of ostensible authority is estoppel, as has been recognised by Diplock, J. in the passage to which I have referred and by Crabtree-Vickers Pty. Ltd. v. Australian Direct Mail Advertising Co. Pty. Ltd. (1975) 133 C.L.R. 72, 78. See also the decision of Lush, J. in Crabtree-Vickers (approved by the High Court), at [1975] V.R. 607, 614-617.
In Bowstead on Agency (15th ed.), it is stated, at 284:
"Where a person, by words or conduct, represents or permits it to be represented that another person has authority to act on his behalf, he is bound by the acts of such other person with respect to anyone dealing with him as an agent on the faith of any such representation, to the same extent as if such other person had the authority he was represented to have, even though he had no actual authority."
At 285, the learned author says that the representation "seems to occur in three main ways. It may be express (whether orally or in writing); or implied from a course of dealing; or it may be made ‘by conduct, that is, by permitting the agent to act in some way in the conduct of the principal's business with other persons’".
I am satisfied on the evidence, that Domingos believed that Allcock had the necessary authority to enter into the contract on behalf of the defendant. He believed that it was entirely up to Allcock whether the supply contract would be let to him. He knew that Allcock was the shipping and transport manager who was responsible for the road transport operations of the defendant. It was also Allcock who dealt with him in relation to the freight forwarding work that Domingos had carried out for the defendant previously and it was only Allcock who dealt with Athanasi and Hewat. It was well-known that Allcock was in charge of the defendant's wharf operations in the major ports throughout Australia.
By itself, the belief by Domingos as to Allcock's authority is not determinative of the issue that is now being considered. Similarly, what Allcock said to Domingos as to his own authority is not final. But what is relevant is that on the evidence, the defendant held out (and thereby represented to Domingos) that Allcock was solely in charge of the defendant's shipping and transport operations, including the letting of freight forwarding contracts.
Allcock’s title and his authority over the transport activities have already been mentioned. He was and was known to be the only one from the defendant who negotiated the supply contracts. Similarly, it was Allcock who was put forward as the signatory on all the written contracts and was the person who concluded the verbal contracts. That he was so held out was confirmed by Howard who said in his evidence, that Allcock signed all the written contracts on behalf of the defendant because he was the manager responsible for administration of those contracts and it would be sensible for him to sign them. He agreed that Allcock signed the contracts because he would thereby be seen as a person signing on behalf of the company and that would be seen to give him operating authority in the field. Thus, in my view, the company put Allcock forward as its shipping and transport manager who, as his title suggests, had authority to conduct that aspect of the company's affairs on its behalf, including the execution of cartage contracts.
I would have thought that the defendant’s senior management, particularly Howard, would have appreciated at or at least shortly after Allcock told them his version of events, that he had signed the Supply Agreement without authority and that this would have been conveyed to the plaintiff’s representatives at the earliest opportunity. Yet, no such point was taken by the defendant until much later. No claim that Allcock had entered the agreement without authority was made in response to the plaintiff's letter of demand of 19 September 1997. Howard wrote on 26 September 1997, saying that the contract was obtained by duress and was, therefore, not enforceable. No mention was made by him that Allcock lacked authority to sign the contract. The same thing occurred when the managing director of BHP New Zealand Steel responded to the plaintiff's complaint about the defendant's breach. In his response to the plaintiff in late November 1997, he did not suggest that Allcock lacked authority to sign the contract. The defence of lack of authority was only taken by the defendant on 5 February 1998. I mention also that notwithstanding the obvious and now admitted relevance of documents concerning Allcock's job description, the defendant persistently refused to make such documents available. The evidence makes it clear that this was the consequence of a deliberate decision on the part of Howard which was made in consultation with the defendant's lawyers. No document concerning Allcock's job description or authority was discovered by the defendant or made available to the plaintiff prior to the defendant's supplementary affidavit of documents which was sworn on 7 August 1998, less than two weeks before this trial commenced.
But even if one were to put those matters aside, I am satisfied on the evidence, that the defendant held Allcock out to the plaintiff as having authority to negotiate and conclude supply contracts on its behalf. There is no doubt that on the evidence, Domingos acted on that basis in the negotiations and committed himself and his company to the contract in that context.

(iii) Allcock’s alleged representations

Allcock said in his witness statement that in about May 1997, he informed Domingos (and probably Carl) that the ultimate decision whether to change contractor or to enter into a new contract with Evergreen or an associated company would be made by Howard. Allcock said that in conveying this information, he used words to the effect “as you know I have a say in this but I am obliged to discuss it with Bob”. Allcock is not specific about the precise date or time of this meeting or whether Carl was present at the meeting where the matter was discussed. Nor is it entirely clear where this meeting took place. It is pleaded that Allcock made the comments during a meeting at Bells Hotel in Moray Street, South Melbourne, but Allcock did not specify the location of the meeting in his witness statement.
When the above claims were put to him in cross-examination, Domingos repeatedly and emphatically denied that Allcock had informed him in either May 1997 or June 1997, that the ultimate decision in respect of the proposed contract between the plaintiff and the defendant, would be Howard’s. He further denied any knowledge, derived from statements made by Allcock or otherwise, that the draft contracts were passed on by Allcock for Howard’s approval. It was Domingos’ evidence, that throughout the negotiations culminating in the execution of the Supply Agreement on 8 September 1997, Allcock gave no indication, through words or conduct, that he did not have the proper authority to enter into the contract. On the contrary, according to Domingos, he often said that “the buck for that contract lay with him” and repeatedly used the expression, “you see this pen, that is the signature”. Both expressions were understood by Domingos, to mean that Allcock had the relevant authority.
As I mentioned earlier, it is my view that Allcock is an unreliable witness and where any inconsistency or contradiction arises as between the evidence of Domingos and that of Allcock, I prefer the evidence of Domingos. I am therefore, not satisfied that Allcock made any statement to Domingos (or Carl), to the effect that he lacked the authority to enter into the contract on behalf of the defendant. On the contrary, his authority was never an issue, at least so far as the plaintiff was concerned. It relied on, inter alia, the assurances of Allcock that he had the proper authority and otherwise conducted the negotiations for the contract (including, on the defendant’s case, exerting such pressure on Allcock that he signed the contract under duress) on the basis that he had such authority.
In any event, even if Allcock did inform the plaintiff’s representatives, as he said he did, that he lacked the authority to enter into the contract, that fact does not disturb my earlier finding that he did, in fact, have actual authority to do so. Moreover, the fact that the plaintiff accepted the signature of Allcock on behalf of the defendant, is not consistent with the defendant’s claim that the plaintiff’s representatives believed that Allcock did not have authority to enter into the contract on behalf of the defendant.

(iv) Conclusion on authority

In the circumstances, I am satisfied on the evidence, that Allcock had authority to execute the Supply Agreement on behalf of the defendant.
Conclusion
In light of my above findings, I conclude that by refusing to perform the Supply Agreement made between it and the plaintiff on 8 September 1997, the defendant has breached that contract and that the plaintiff is entitled to judgment with damages to be assessed.

[1998] VSC 194

17 December 1998