Gundrum v Iama Island Council

[2007] QDC 310

DISTRICT COURT OF QUEENSLAND

CITATION:

Gundrum v. Iama Island Council [2007] QDC 310

PARTIES:

JOSEPH GUNDRUM
Plaintiff
v
IAMA ISLAND COUNCIL
Defendant

FILE NO:

60/2006

DIVISION:

Civil

PROCEEDING:

ORIGINATING COURT:

District Court

DELIVERED ON:

22 November 2007

DELIVERED AT:

Brisbane

HEARING DATE:

10 – 11 September 2007

JUDGE:

Skoien SJDC

ORDER:

Judgment for the defendant.

CATCHWORDS:

Contract of employment; no agreement reached; extrinsic evidence to vary written minutes of meeting.

COUNSEL:

Mr J Jacobs for plaintiff

Mr M A Jonsson for defendant

SOLICITORS:

The Law Office for plaintiff

MacDonnells Law for defendant                   

1. Mr Gundrum’s claim is for money allegedly due to him from the council under a contract of employment.  The council denies that a concluded contract came into existence.

Background

1. Iama (commonly called “Yam”) Island is part of Australia, lying in the Torres Strait. It is populated by some 400 Torres Strait Islanders. A council, consisting of a chairman, a deputy chairman and one councillor, has the functions of local government of the Island (Community Services (Torres Strait) Act 1984, “the Act”). See s 45. Section 40(1) incorporates the council, which has an official seal (s 40(3)).

1. Mr Gundrum, a licensed plumber and gas fitter, was employed by the council on Yam Island in the position of essential services manager (ESM) commencing on about 3 July 2001 and continuing for some years.  Written contracts for that employment exist for the financial years 2001/2, 2002/3 and 2003/4.  Although he continued to perform the functions of ESM for the financial year 2004/5 no written contract was entered into for that year.

1. The first contract was executed under seal by the council and signed by Mr Gundrum on 4 and 5 July 2001 (respectively) and the term was specified to be from 3 July 2001 to 3 July 2002.  The second was similarly executed by both on 4 October 2002 and the term was expressed to be from 2 July 2002 to 2 July 2003.  The third was similarly executed by both on 14 October 2003 and the term was expressed to be from 3 July 2003 to 3 July 2004.  Although a considerable period elapsed between date of commencement of the term and the date of execution of the second and third contracts, Mr Gundrum exercised the functions of ESM during the interim and received the proper remuneration.  This also occurred during the whole year 2004/5 when there was no contract at all.

1. Mr Gundrum continued to work on Yam Island for the period commencing 4 July 2005 to 9 November 2005, another period for which no executed written contract exists.

1. The statement of claim alleges that on 27 August 2005 the council agreed with Mr Gundrum to re-employ him as ESM, and gives the following particulars:-

   (a)        That the agreement was made by the council’s chairman, Mr Mackie, on behalf of the council;

   (b)        It was made at Mr Gundrum’s home;

   (c)        Its essential terms were contained in a draft contract to which Mr Gundrum and Mr Mackie made handwritten notations before Mr Mackie took it away to have it typed in its final form.

2. It is further alleged that the agreement contained these terms:-

   (a)        A base salary of $97,760 per annum;

   (b)        Term of employment of 3 years;

   (c)        A commencement date of 4 July 2005;

   (d)        Superannuation of 10% of gross base salary;

   (e)        Four return trips to Cairns, valued at $8,000;

   (f)        Time in lieu entitlement of 150 hours per annum.

3. It is alleged that this agreement was confirmed at a special meeting of the Yam Island council on 28 September 2005.

1. The defence denies that any concluded agreement was ever reached and in particular denies that Mr Mackie held any actual or ostensible authority to enter into such an agreement.  The defence also sets up, in the alternative, that if any agreement was reached it was conditional upon the execution of a written contract and in the further alternative sets up the provisions of s 49 of the Act and s 12(2) of the Community Services (Island Council) Accounting Standard 2002 (“the Accounting Standard”)

The Evidence

1. As might be expected when people give evidence, relying mostly on memory, of discussions which took place some considerable time before, no witness in this matter gave evidence which I am prepared to accept unequivocally. Mr Gundrum left Yam on 9 November 2005 and the claim was issued on 28 March 2006. I assume that he saw his solicitors during that period and I assume that his solicitors took a careful statement from him in that time. However there was no mention made of the keeping by him of any diary or the making of contemporaneous notes so I conclude that in general he had to rely on his memory for the details of discussions when he made his statement. However he did write some letters contemporaneously with relevant events and I have found them useful.

1. Similar comments might be made of the defence witnesses Mr Mackie and Ms Moffatt, the CEO of the council. Again, neither seemed to have made contemporaneous notes of any important conversation or event (Ms Moffatt made some notes of negotiations discussed on 9 August 2005, exhibit 8) and I think it likely that they did not give statements to solicitors until some time between the date of the statement of claim and the date of the defence (24 May 2006).

1. It was put to Ms Moffatt that she did not like Mr Gundrum. I saw no evidence of any such dislike and my impression of her was that she was doing her best to give accurate evidence. In fact her evidence contained nothing of critical importance, partly because Mr Gundrum asked that she be excluded from meetings which took place in late August and September. He evidently did not like her.

1. Mr Mackie presented as a thoughtful, gentle, honest but rather naïve man. The evidence showed that such things as the Consumer Price Index and Fringe Benefit Tax were beyond his ken. I accept, however, that he believed that he alone could not enter into contracts on behalf of the council of the type under discussion with Mr Gundrum, that any terms negotiated (even if he had expressed his own satisfaction with them) had to be put to the council and that then a written contract containing those terms had to be executed under seal. That was not just because it is laid down by the Accounting Standards (and here I ignore the purpose behind that provision and the legal effect of it), but it had been the process followed in the past as the evidence of the Reverend Mr Liu established.

1. I consider that Mr Gundrum attempted to give an accurate, truthful account of relevant matters. However, I also considered that he is an emotional man (his evidence was that the negotiations “stressed him out”) and was inclined to act precipitately, as letters he wrote indicated. He is so close to his case that there is the real risk that his desire to achieve what he considers to be his just rewards would tend to colour his belief, even his contemporaneous belief, of the effect of what was said or done. 

The Facts

1. As I have said, Mr Gundrum worked as ESM on Yam Island during the whole of the financial year 2004/5 despite the lack of an executed contract. There was some attempt to have one prepared rather late in that year but nothing eventuated and the attention of the parties became directed towards producing a formal contract for the period commencing in early July 2005.

1. It is not necessary to detail the early negotiations between Mr Gundrum, and Ms Moffatt, the CEO of the council. The first discussions of consequence occurred either in late July or on 9 August 2005 between Mr Gundrum and, for the council, its chairman Mr Mackie, Ms David (a councillor) and Ms Moffatt. Mr Gundrum’s evidence was that it occurred in late July, Mr Mackie and Ms Moffatt said it was the later date. In the upshot, while I do not think it matters much, I consider that the first formal meeting was on 9 August although there could have been an informal meeting in late July. This is partly because the council had prepared a draft contract, exhibit 7, which bore the date 1 August 2005, which contained provisions which Mr Gundrum objected to, and, I consider, would have led him to confer with council officials.

1. One major matter of concern to Mr Gundrum was the omission of any mention of the $15,000 “remote allowance” which had been paid to him in past years, the income tax on which had been paid by the council. The first writing to incorporate this arrangement was exhibit 6, an unexecuted contract for 2004/5.

1. At the meeting, that omission was debated. Mr Gundrum was also concerned that his air fare allowance for the year was to be reduced by $2,000. The hourly rate offered was $45 for 80 hours per fortnight. Mt Gundrum wanted $47, complaining that a tradesman subordinate to him was being paid $45.

1. The council representatives’ attitude to the tax free distance allowance was that the $15,000 was to be included in the total base salary on which Mr Gundrum would have to pay the tax. According to Ms Moffatt, the tax rules had changed making it impossible for the council to pay the tax. Mr Gundrum’s concern was that his tax liability, together with the loss of $2,000 travel allowance would cause him to be some $6,000 per year worse off, largely because his income would be within a higher tax bracket.

1. The meeting broke up acrimoniously and it is common ground that no agreement on the disputed terms was achieved. One salient point which emerges from the meeting was that Mr Mackie said in Mr Gundrum’s presence that he did not understand such concepts as fringe benefit tax and the consumer price index. In evidence Ms Moffatt agreed that he was ignorant of such things.

1. Immediately following this meeting, Mr Gundrum wrote to Mr Mackie a letter dated 9/08/05 in which he tendered his resignation, giving four weeks notice. This letter was delivered either that day or the following day. A further meeting took place, probably on 10 August, when Mr Gundrum said that he was completely “stressed out”. Mr Mackie suggested he take a fortnight’s stress leave, which he accepted.

1. On 27 August 2005, on his return to Yam Island, Mr Mackie called at Mr Gundrum’s house and they talked about their differences concerning the proposed contract. This is the occasion relied on by Mr Gundrum in his claim (see para [6] above). Mr Gundrum produced the draft agreement, exhibit 7. There must have been a second copy because exhibit 7, tendered by Mr Gundrum’s counsel, did not contain all of the alterations which Mr Gundrum said he made to the draft in the presence of Mr Mackie. His evidence was that he and Mr Mackie agreed the essential terms which he (Mr Gundrum) endorsed by writing amendments on a copy of exhibit 7.

1. The first critical question in this case is whether at that meeting Mr Mackie and Mr Gundrum agreed on the essential terms of the agreement proposed to commence at the beginning of the financial year 2005. It can of course be taken that Mr Gundrum and the council were in agreement on those terms contained in exhibit 7 which he considered to be acceptable and did not alter.

1. Mr Gundrum did not always express himself clearly when giving evidence. For example, the draft contract exhibit 7 contains some handwritten alterations rejecting provisions which he did not accept. But did not say whether those alterations were also made to the copy which he said Mr Mackie took away with him “to have typed up”. If these alterations were important enough to mark on the tendered copy of exhibit 7, I can only conclude that they would have been important enough to put to Mr Mackie for his agreement and therefore to have endorsed on the copy to be typed up. These were:-

   (a)        the alteration in the schedule of the concluding date for his appointment from 2008 to 2006, which I take to be obviously an essential term of the agreement; and

   (b)        the alteration of his unspecified job description in paragraph 4.1 to that of “plumber, drainer, gas fitter” which I also take to be obviously an essential term.

2. Mr Gundrum’s evidence of the meeting with Mr Mackie on 27 August 2005 made no reference to those two terms and thus there was no evidence that Mr Mackie purported to agree to them. His evidence of such agreement was restricted to:-

   (a)        in the schedule altering the commencement date of the employment from 1 August 2005 to 4 July 2005;

   (b)        in the schedule altering the base salary from $93,600 to $97,760 (calculated on an hourly pay of $47);

   (c)        agreeing to the already altered travel entitlement of $8,000;

   (d)        altering the superannuation from $9,360 to $9,776;

   (e)        agreeing that time in lieu of 150 hours should be included as it had been (see exhibit 6, para 4).

3. Mr Gundrum’s evidence was that Mr Mackie agreed to each of the matters listed in para [25] and left, taking with him the copy containing those alterations to have these alterations “typed up” in a new contract. So that copy obviously differed from exhibit 7. He did not say that the altered terms in exhibit 7 which are listed in para [24] were agreed. Nor did he give evidence that there was any real discussion about his increased liability to tax because of the inclusion in salary of the $15,000 remote allowance. He said he was more interested in the superannuation.

1. The fate of the copy of exhibit 7 with the handwritten alterations, which Mr Gundrum said Mr Mackie took away is a mystery. I am satisfied that Mr Mackie would have recognised the importance of such a document and taken it to Ms Moffatt to discuss it with her, particularly as he was not up on the finer points of economics. There is no evidence that Ms Moffatt ever saw it. However, I see nothing very material, or sinister, it its absence. It did not contain anything which was not sworn to by Mr Gundrum and what he said about the alterations was not denied by Mr Mackie. He acknowledged that he was given a document with some handwritten figures on it. He also said he was given, and took away, exhibit 24, a page of the Cairns Post newspaper. He was clearly wrong on that, as exhibit 24 is dated 26 September 2005. Again I see nothing sinister in his making such an obvious error.

1. Did Mr Mackie agree with the proposed terms put to him by Mr Gundrum? I do not accept that he did. In my opinion he listened patiently, acknowledging that Mr Gundrum was making his requirements known, but not expressing his personal reaction to them. In his cross-examination this appears:-

   “No. Well, at the end of those discussions, you said to Mr Gundrum that you would take that document away to get it typed up?—No, I can’t recall that I----

   It’s possible?—No.

   Is it possible?—No.

   Why not?—Well, I think what I’ve said, as I’ve always said, it’s – will be based on council decision which are to be done through the right way, through council meetings.

   Well----?—I can only bring it to the fore.

   Sure. But there’s no reason that you couldn’t take that document away, is there?—No.

   So is it possible you could have taken it away to put it to the council?—No.

   Why not?—Well, I believe all documents should be handled by the CEO and not individual council.

   You had spent some time there discussing these various conditions in the schedule with Mr Gundrum, hadn’t you?--- Yes.

   And he had made various changes with your agreement, hadn’t he?—He made changes to – yeah, I was more there listening to what he was saying.

   HIS HONOUR: When he made changes, did you say, “Well, I agree to that”?—No, I don’t specifically said that.

   Did you indicate one way or the other how you felt about the changes he was suggestion?—Well, my gut feeling was to try to resolve that in a sort of fair way to both parties----

   Yes?-- -----and that’s weighed – it’s weighed light and at the end of the day, it will be a council decision, I respect that.

   MR JACOBS: Your Honour, I’m just going to put a question to this witness. I get the impression he was answering my questions in the way that I’d put to – them accurately and truthfully. Are you saying, Mr Mackie, that the questions that I’ve put to you this afternoon, about the changes which were made to this schedule, were or were not made with your agreement?—I would acknowledge – I wouldn’t say it was an agreement, but I would acknowledge what was made, what changes were made.

   HIS HONOUR: Now, I don’t know that I exactly understood that. You’re acknowledging what?—I was more or less looking at Mr Gundrum while he was doing these changes. As I started, it’s – we’re talking about the same issue that was – we tried to resolve.

   Yes?—Yes.

   But it was it your view that you were resolving?—It’s a view that I had to take back to the council to be resolved.

   All right.

   MR JACOBS: As Mr Gundrum was making these changes he was making them because you and he, at that time, had agreed to make those changes, wasn’t he?—I can’t really recall having an agreement.

   Mr Mackie, you’ve been giving evidence this afternoon for quite some time to specific questions that I’ve put to you as to whether or not you had sat there with Mr Gundrum and made these changes and you have been answering “Yes”. Now, do you tell his Honour truthfully that when these changes were made by Mr Gundrum, in your presence, they were made with your consent, weren’t they?—I couldn’t say yes or no.”

2. Other passages in cross-examination in which Mr Mackie might, on a strict reading of the words, be taken to have conceded that he, or the council, reached agreement with Mr Gundrum were, I think, related to his lack of sophistication rather than a concession that his earlier evidence was untrue. I refer to T 124/40:

   “So far as you were concerned it’s true, is it not, that the purpose of this meeting was to ratify the agreement or the discussions that you had had with Mr Gundrum at his house on the 27^th August?—I believe so.”

And to T 125/ 10-30:

“Over the page, you see about the middle there is a resolution, “The council has come to an agreement on Mr Gundrum contract for 2 July ’05 to date it and sign.” Do you see that?—Yes.

Now, what that resolution really meant is that the council had agreed to ratify and to execute the contract between the council and Mr Gundrum to be dated from the 2^nd of July 2005 as the commencement date. Is that correct?—Yes.

I want you now to look please at the last page of that document which is another resolution. You see it says, “Council resolve; agree to on the $90,000 and tax to be taken out of council.” What that resolution really means is that the council agreed to ratify the agreement you made that Mr Gundrum would receive the higher salary of $97,000 and that council would pay super on the higher amount?—That could be true.

1. Contrary to the proposition that Mr Mackie and Mr Gundrum reached agreement on 27 August 2005, there are aspects of the evidence which seem to me to cast doubts on the making of any such agreement, doubts so severe as to lead me to reject the proposition.

1. On 9 August 2005, following the meeting on that date (para [16]) Mr Gundrum wrote the following letter (exhibit 9) to Mr Mackie:-

   “Dear Mr Mackie,

   It is with deep regret that I am tendering my resignation as of today, for the following reasons:-

   1) no advice was given to me written or verbal, that Council could no longer pay the fringe benefit tax on the $15,000 remote allowance and air fare allowance that I have been receiving for the last four years and that Council without my knowledge has added this to my gross income on my last years Group Certificate leaving me the liability of paying tax for these amounts.

   2) Council has without a Doctors Certificate or any other kind of evidence of non-attendance, deducted from my income one week’s sick leave when I have documented evidence of attendance for the period in question. As per my contract under Sickness Leave 7(f) it states Unused sickness Leave will accumulate over the Contract Term and any balance at the agreed Termination Date shall be valued at the then current rates and paid to the employee in the same manner as outstanding holiday entitlement upon termination.

   3) I have been content for the last 4 years with the terms and conditions of my contract but the new contract offered to me by the Council shows no recognition for the efforts and extra duties performed e.g. the daily runnings of the carpentry department due to no Builder or Carpenter on the island for approximately 9 months and being asked to stand in as an Acting CEO on occasions as well as applying for funding from Government agencies for various projects.

   4) Although I have not received any salary increase for the last 2 years, I offered to accept a training package (Builders Ticket – which was discussed previously) rather than asking for a salary increase. In the meeting held today when I asked about the Builders Ticket, it was stated that it should be offered to the new Carpenter rather than myself. I have taken this as a personal insult that Council is prepared to offer a new employee this training instead of an employee who has shown commitment and loyalty to the Council and the community over the last 4 years.

   As my contract states, I am giving 4 weeks notice as of today.

   Yours sincerely,

   Joe Gundrum”

1. On 3 September 2005, he wrote to Mr Mackie as follows:-

   “Dear Mr Mackie,

   I am willing to withdraw my resignation if there is sensible resolve to the new contract offered to me.

   A probationary period of three (3) months is requested as in Item 3 of the new contract. This term is requested due to the incompetent actions taken by Council management regarding my previous contract placing the Council in the position of breach of contract.

   1) as per item 1 in my letter of resignation to the Council – please note that current pay slip still clearly states that I am receiving this allowance that is apparently not allowed.

   (2) as per item 2 in my letter of resignation to the Council which I acknowledge has since been rectified.

   Council has offered a salary sacrifice package which I would accept if an agreed amount can be placed into my superannuation fund.

   Yours sincerely,

   Joe Gundrum”

2. The introductory paragraph is not consistent with an agreement having been reached with Mr Mackie only a week earlier. Had that been the case, there would then be in place a “sensible resolve” to the new contract. Then, the request for his insistence on a three month probationary period, and the expressed reason for it, is hardly consistent with an agreement for further employment having been reached. The proposed probationary period in para 2 of the unexecuted exhibit 6 (which I think he probably was referring to) substantially alters the rights and liabilities of the parties as set out in previous contracts which contained no period of probation. As he wanted this period, it was obviously of importance to him. Then his reference to item 1 of his letter of resignation seems to suggest that this matter, of clear importance to him, is yet to be resolved. Finally, the reference to salary sacrifice suggests the continuation of negotiations.

1. There is then the extraordinary “minutes” (exhibit 13) of a council meeting, held on 28 September 2005. Although the minutes have not been signed as a correct record in accordance with proper practice, they were tendered by consent as the minutes of the meeting.

1. Of these minutes it must first be said that they are, to say the least, confused and difficult to follow, but a general reading of them clearly establishes that at this meeting, Mr Gundrum and the councillors were negotiating the terms of the proposed contract for 2005/6. These resolutions are recorded:

   “(1) Resolved: Councillor David replied that any extra hours will have to be approved by Council.

   (2) Resolved: The Council has come to agreement on Mr Gundrum contract for 2/7/05 to dated and signed. Back pay on 75 hrs @ $47 until 28/9/05, then paid on 11/10/05 as $47 @ 80 hrs and his position to be as an Essential Manager.

   (3) Resolved: Council agree to on the $90,000 and tax to be taken out of Council.”

2. Resolution (1) is meaningless. Resolution (2) refers, possibly, to a contract dated 2/7/05 (or to start on 2/7/05) which I cannot identify. Furthermore the specified terms do not accord with those discussed in the evidence. Resolutions (2) and (3) cannot be taken as resolutions for a contract of employment in the terms pleaded (see paras [6] and [7] above). They do not confirm any of those terms. I am quite unable to accept that these resolutions confirmed the “agreement” of 27 August 2005, as alleged in the statement of claim.

1. At T 71 / 10-2, in the evidence in chief of Mr Gundrum this appears:-

   MR JACOBS: Do you recollect, Mr Gundrum, that before the special meeting of the council on the 28^th of September 2005 whether you had a conversation with Mr Mackie about the production of the contract?—Mr Mackie has asked about holding off the signing of the contract until Roy Kebisu came back on the island, so that meeting of the 28^th is just – I just thought it would be just to go in and sign the contract. I didn’t know I was going to have to go through the re-negotiation and all the rest of the stuff again. (My emphasis).

2. What I find mystifying is that in the letter of 3/9/05, (para [32] above), Mr Gundrum does not say, (and in the minutes of 29/9/05 he is not recorded as saying) words to the effect of “What is all this discussion and negotiation about? The terms of the contract have already been agreed between Mr Mackie and me on 27 August 2005, as per the draft contract, exhibit 7 with some amendments”. That is the effect of his pleading. His failure to do that leads me to conclude that no such agreement (assuming Mr Mackie had the necessary authority) occurred.

1. On 27 October 2005 the council produced for Mr Gundrum a written contract which differed materially from the one which he said had been agreed on 27 August 2005 or which might conceivably reflect the “resolutions” of 28 September 2005. Notably, it was to run for three years instead of one and the base salary plus superannuation had reverted to $93,600 from the $97,760 which he said had been agreed. In consequence he resigned his position, “due to ongoing failure to resolve issues surrounding (his) contract” (T 93 / 30). His letter of resignation was as follows:-

   “Dear Mr Mackie,

   On Friday 28^th October, I informed the Council that I was terminating my employment with the Council due to the ongoing failure to resolve the issues surrounding my contract. (My emphasis).

   Although Council and myself had agreed to the terms and conditions of a contract offered to me at the last meeting we had together, the contract that was then offered to me on the 27^th October was not what we all had agreed on.

   Therefore I will be leaving the island on Wednesday 9^th November. The airfares that had already been booked and paid for by myself for the Christmas period have now had to be amended and I request council to re-imburse me for these travel arrangements.

   Up until the day I leave the island I will be using up my time in lieu that I have accrued for work done on Yam Island and Warraber Island.  

   All holiday leave, sickness leave and any other entitlements that are owed to me should be deposited into my account prior to my departure.

   Yours sincerely,

   Joseph Gundrum.

2. It is significant that this letter recites, not the failure of the council to ratify the agreement which he said was made on 27 August 2005 with Mr Mackie, but its alleged breach of an agreement concluded at the council meeting on 28 September 2005.

Statement by Mr Kebisu

1. At the trial counsel for Mr Gundrum sought to tender a statement by Mr Kebisu, the deputy chairman of the council. I heard argument and reserved my decision on the point. Mr Gundrum had a copy of the minutes of the council meeting of 28 September 2005 (exhibit 13). On 27 July 2006, hearing of the availability of Mr Kebisu, he had his wife type a document (exhibit A) which he dictated to her, which read:

   ”To whom it may concern:

   This is to confirm that as per Council minutes dated 28^th September 2006 (sic) regarding the finalization of Joe Gundrums contract, the following points were agreed upon by all present at the meeting.

   ·Joe Gundrum was to receive $47 per hour as Essential services manager for 80 hours per fortnight.

   ·The employer contribution to Joe Gundrums super fund was to be 10% on his gross income of $97,760 prior to any salary sacrificing arrangement. The salary sacrifice arrangement was to be $37,760 placed into the superannuation fund, leaving $60,000 as personal income.

   ·Council agreed that time in lieu would stay the same (maximum of 150 hours per year) as in previous contracts.

   ·The council would pay any tax liability relating to my 2004/05 tax return due to the $15,000 remote allowance being placed in my gross income without my knowledge.

   Mr Roy Kebisu
   Deputy Chairman – Yam Island Community Council.”

2. A few days later he called on Mr Kebisu and showed him exhibit A. He put each of the four points to him (by way of leading questions it must be said – “do you agree that…”) and he said Mr Kebisu agreed with each of them and signed the document.

1. Council for Mr Gundrum supported the tender of the document on two grounds:-

(a)         As an admission against interest;

(b)         As an explanation of the confusing minutes.

1. Counsel for the council argued that:-

(a)         Mr Kebisu was not shown to have the authority to make admissions;

(b)         The minutes (imperfect as they may be) having been tendered in evidence, their interpretation is a matter for me, not for secondary evidence.

1. On the first point, Fraser Henleins Pty Ltd v Cody (1945) 70 CLR 100 was relied on by counsel for Mr Gundrum. That case relates to prosecutions of Henleins and its managing director, Crowther, for the offence of black marketing. At pp. 110 Latham CJ noted that Crowther managed the company and that he actually made the offending sale. At pp. 112-3 of Latham CJ’s judgment, this appears:-

   “2. Admissibility of evidence. The next objection on behalf of the appellant is that the statement made by Crowther, a director and the manager of the company, were not admissible in evidence as against the company. It was argued that his authority in relation to past transactions related only to the carrying out of those transactions, and not to making admissions in respect of them after they were completed. But Crowther, as the manager of the company, must be regarded as having authority to deal with any inquiry into the affairs of the company in relation to a possible breach of the law by the company. He was the person who would naturally represent the company if any inquiry were made into such matters. See Kirkstall Brewery Co v Furness Railway Co, where it was suspected that a railway porter had stolen a parcel which was in the custody of the railway company. The stationmaster who had the sole management of the station from which the parcel was stolen made statements to a police officer who was inquiring into the matter, and it was held that his authority extended to putting the police in motion in order to secure the stolen goods; and because he had this authority the statements made by him to the police were admissible in evidence against the company. In the present case, the authority of Crowther was more extensive that the authority of the stationmaster in relation to the company and was more extensive than that of a person who held only the position of director of a company. He was also the general manager of the business of the company. He was not an agent whose authority in relation to a past transaction  was limited to the carrying out of that transaction; he had general authority to act in and in relation to the business of the company, and therefore to deal with investigating officers in any matter concerning that business. In Ex parte Gerard & Co Pty Ltd; Re Craig, upon which the appellant company relied, it was held that when a director was answering questions under compulsion he was not acting in the usual course of business of the company or in the course of a business transaction of the company. In the present case, the questions were not answered on compulsion and the director was also the manager of the whole business of the company. If he could not bind the company by an admission, no-one could do so. It has never been held that only a formal act by the board of a company can bind the company by way of admission. In my opinion, the objection to the admissibility of the evidence fails.”

At pp. 128-9 Dixon J said:-

“The appellants, however, contend that, even so, there is no sufficient admissible evidence to establish that the appellant company contravened the clause. The contention depends upon the admissibility against the company, and the effect, of some statements which the other appellant, its managing director, was proved to have made to officers of the Commonwealth Prices Commission. It was said that the evidence of these statements should have been rejected because they were not made in the course of the company’s business but to officers investigating a transaction, passed and closed, with the view of putting penal laws in motion against the company. To make admissions on behalf of a corporate body in these circumstances, it was argued, fell outside the province even of a managing director. I do not take that view. The conduct of the business of a trading company involves, in the conditions now prevailing, a continual or, at all events, a frequent necessity of communicating with departments of government about compliance with regulations, orders and other forms of control, and a readiness to deal with inquires as to the company’s transacting its business in conformity with them. The managing director and his wife appear to be the only directors of the company. The authority of the former is enough to cover everything incidental to the conduct of the business of the company. A perusal of the evidence shows that the admissions were made while investigating officers were conducting the completing a thorough examination of the company’s transactions. I think that to answer their questions was not outside the scope of the authority of the managing director.”

1. The evidence here discloses nothing about the authority, duties and activities of Mr Kebisu in relation to his position of deputy chairman of the council. He obviously had a duty to attend council meetings. I infer that in the absence of the chairman he had authority to exercise the chairman’s functions but that situation did not exist here. He was merely a participant at the meeting and a person entitled to vote. Those facts are in sharp contrast with the facts about Crowther in Henleins, and with the facts concerning the stationmaster in Kirkstall and with those in Re Craig.

1. The decision of Franki J in Trade Practices Commission v TNT Management Pty Ltd & Ors (1984) 56 ALR 647 at 661-2 turned on the fact that the document which was under review had been signed by the chairman and managing director of the company against whom they were tendered, although strictly, the document was of that company’s holding company. Again I see that case as clearly distinguishable.

1. As to the second point, the submission on behalf of the council is correct. I see the question as being substantially the same as the inadmissibility of parol evidence to vary a written contract, where the general rule is stated in the well known passage in Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 347 per Mason J. This is not the case of evidence being given to explain the meaning by popular usage of a particular term (Hodgson and Anor v Morella Pastoral Co (1975) 13 SASR 51). Nor can it be to supply terms agreed upon at the council meeting but, for some reason not recorded in the minutes, because exhibit A expressly says that it confirms what is in the minutes. But it clearly does not do so. Indeed if further evidence of non agreement at the meeting were needed exhibit A would supply it.

1. While not expressly adverted to it seemed clear to me that both counsel accepted that, if tendered simply to prove what was agreed at the meeting exhibit A would offend the hearsay rule.

1. I reject the tender of exhibit A.

End of Employment

1. When Mr Gundrum departed Yam Island on 9 November 2005 there was no agreement, written or otherwise, of employment for the period commencing on or about the beginning of July 2005.  However it was accepted that he was paid a proper wage for his work during this period.  His claim thus fails.

Conclusion

1. It is unnecessary for me to deal with the interesting alternative arguments relating to ostensible authority, conditional agreement, the effect of the Act and of the Accounting Standards.  They involve purely points of law and in my view I have made all necessary findings of fact.   Mr Gundrum’s damages, assessed on different possible findings in his favour, have been agreed.

1. I give judgment for the defendant.