Hagicostas v Adelaide United Soccer Club (ACN 106 303 744) P/L T/A Adelaide United Football Club - [2008] SADC 178

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
HAGICOSTAS v ADELAIDE UNITED SOCCER CLUB (ACN 106 303 744) P/L T/A ADELAIDE UNITED FOOTBALL CLUB
[2008] SADC 178
Judgment of His Honour Judge Nicholson
23 December 2008
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - OFFER AND ACCEPTANCE - MATTERS NOT GIVING RISE TO BINDING CONTRACT
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS
DAMAGES - MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR BREACH OF CONTRACT - GENERAL
EMPLOYMENT LAW - THE CONTRACT OF SERVICE AND RIGHTS, DUTIES AND LIABILITIES AS BETWEEN EMPLOYER AND EMPLOYEE - DURATION AND TERMINATION OF EMPLOYMENT - TERMINABLE ON REASONABLE NOTICE
Plaintiff contractually engaged by defendant soccer club to provide services as sports conditioning manager - services terminated with no notice – held: contract was one of indefinite duration – implied term requiring defendant to give reasonable notice – in the circumstances reasonable notice found to be six months – plaintiff also claimed to be entitled to take leave from time to time on full pay if invited to work with the national Under 23 team – held: no such contractual entitlement or, in the alternative, no breach – assessment of damages.
Blatch v Archer (1774) 1 Cowp 63 at 65; 98 ER 969 at 970; Jones v Dunkel (1959) 101 CLR 298; O'Donnell v Reichard [1975] VR 916; Payne v Parker [1976] 1 NSWLR 191, particularly at 200-202 per Glass JA; Spence v Demasi (1988) 48 SASR 536 at 547-549; Frederick v State of South Australia (2006) 94 SASR 545 at [36] to [42]; York Air Conditioning and Refrigeration (A’sia) Pty Ltd v The Commonwealth (1949) 80 CLR 11; Placer Development Ltd v The Commonwealth (1969) 121 CLR 353; Sports Vision Australia Pty Ltd v Tollglen Pty Ltd (1998) 44 NSWLR 103 at 116; Magill v National Australia Bank Ltd [2001] NSWCA 221 at [50] – [53]; Commercial Capital v Durman NSWSC 869 at [38] – [41]; McLaren v Waikato Regional Council [1993] 1 NZLR 710 at 731; Hill v National Bank of New Zealand Ltd [1985] 1 NZLR 736 at 739; Ferguson v Dawson [1976] 3 All ER 817; Mears v Safecar Security Ltd [1983] 1 QB 54; Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567, 576-577, 580; Russell v Trustees of the Roman Catholic Church of the Archdiocese of Sydney (2007) 167 IR 121 at 159; Crawford Fitting Co. and Others v Sydney Valve and Fittings Pty Ltd and Another (1988) 14 NSWLR 438 at 444; Brookton Holdings No. 5 Pty Ltd v Kara Kar Holdings Pty Ltd (1994) 57 IR 288 at 290; Rankin v Marine Power International Pty Ltd [2001] VSC 150; Westfield Holdings v Adams (2001) 114 IR 241 at [138]; Hill v C.A. Parsons & Co Ltd (1971) 3 WLR 995 at 999; Lavings v Barclay Mowlem Construction (NSW) Ltd (1994) 99 IR 247 at 253; King v State Bank of New South Wales (No. 2) (2002) 126 IR 407 at 433-434; Grout v Gunnedah Shire Council (No. 1) (1994) 57 IR 243 at 250-251; Grout v Gunnedah Shire Council (No. 2) (1995) 58 IR 67 at 79; Dyer v Peverill (1979) 2 NTR 1 at 5-6; Thorpe v SA National Football League (1974) 10 SASR 17 at 36; Sanders v Snell (1998) 196 CLR 329 at 337-338; Industrial Plant Pty Ltd v Robert’s Queensland Pty Ltd (1963) 180 CLR 130 at 138; Lucy v The Commonwealth (1923) 33 CLR 229; Lavarack v Woods of Colchester Ltd [1967] 1 QB 278, considered.

HAGICOSTAS v ADELAIDE UNITED SOCCER CLUB (ACN 106 303 744) P/L T/A ADELAIDE UNITED FOOTBALL CLUB
[2008] SADC 178
The Dispute

The defendant is the owner of the Adelaide United Soccer Club. The plaintiff, Nik Hagicostas,[1] was engaged by the defendant to provide services as a sports conditioning manager during the period of September 2004 to June 2007. For the 2004/2005 A-League soccer season, the plaintiff provided these services pursuant to what has been described as “a rather loose arrangement” (T2, 30). At that time, the plaintiff was providing his services to the defendant on a part-time basis whilst being a full-time employee of the South Australian Sports Institute (“SASI”).
[1] Throughout these reasons, I will refer to the plaintiff as either the plaintiff or Mr Hagicostas.
In 2006 the plaintiff realised that the time required to perform his duties for the defendant had increased significantly as a result of which he was finding it difficult to provide appropriate services to the club whilst maintaining his commitments to SASI. The plaintiff at first approached a Mr John Kosmina who was the defendant’s senior coach at the time and discussed this problem with him. As a consequence, various negotiations took place between the plaintiff and a number of representatives of the defendant during the period April 2006 to December 2006 aimed at clarifying the nature of the plaintiff’s commitment to the club in terms of duties and hours of work, increasing the plaintiff’s remuneration and clarifying the contractual basis of the plaintiff’s engagement by the defendant.
It is the plaintiff’s case that in April 2006 following negotiations between him and a Mr Michael Petrillo, representing the defendant, an oral contract was entered into pursuant to which the plaintiff was to provide sports conditioning management services for 30 hours per week and was to be paid $60,000 per annum. This much is conceded by the defendant. The principal dispute between the parties concerns the claim by the plaintiff that at the time this initial contract was negotiated, the parties agreed that the plaintiff was to be retained for two seasons, that is the 2006/2007 season soon to commence and also the 2007/2008 season.[2]
[2] There is some imprecision in the plaintiff’s claim in this respect, both as pleaded and having regard to the plaintiff’s evidence, which I will discuss further later in these reasons.
The defendant at all times has denied any such agreement and maintains that the plaintiff was only ever engaged on a month to month basis. As events developed, the plaintiff’s services were terminated on 26 June 2007, that is, after the 2006/2007 season had ended but before the 2007/2008 season had begun in earnest. The plaintiff seeks damages for what he maintains was a wrongful termination of his services in breach of contract. In the alternative, the plaintiff has pleaded and argued at trial that if the agreement reached between the parties was not for a fixed term, equivalent to two soccer seasons, it was, on its proper construction, a contract of indefinite duration containing an implied term that the defendant would only be entitled to terminate the agreement upon giving reasonable notice or payment in lieu of reasonable notice. The plaintiff further maintains that, in the event of this alternative, any such reasonable notice, in all the circumstances, would be 12 months.
The defendant concedes that in the event that the arrangement reached between the parties is properly to be construed as a contract of indefinite duration, it would contain such an implied term. However, the defendant maintains that in all of the circumstances, reasonable notice would be one month.
This then is the primary dispute between the parties. It is complicated by the fact that the plaintiff was always of the view that 30 hours per week would not be sufficient to properly meet the requirements of the soccer club. In his view, the role of sports conditioning manager was a full-time role and required a commitment of at least 50 hours per week. As a consequence, he continued to negotiate his conditions of employment over the latter part of the 2006 year. This resulted in agreement being reached at a meeting on 22 December 2006 between the plaintiff and a Mr Dario Fontanarosa and a Mr Sam Settecasi, both representing the defendant, to the effect that the plaintiff, in fact, had been devoting and would continue to devote 50 hours per week. It was also agreed that the plaintiff’s remuneration would be increased to $92,650 per annum inclusive of a superannuation entitlement.
The plaintiff maintains that the arrangement reached in December 2006 was a variation to the contract entered into in April 2006 such that the term of two seasons duration previously agreed upon remained in place. The plaintiff asserts also that this term was reiterated and confirmed by Mr Fontanarosa, on behalf of the defendant, during the December 2006 meeting. However, the defendant maintains that during the December 2006 meeting, a new contract was entered into between the plaintiff and the defendant, pursuant to which the plaintiff’s hours and remuneration were increased, but that this contract was, again, terminable by either party on the giving of one month’s notice. The defendant says that there was no discussion during the December 2006 meeting of any fixed term.
The plaintiff also asserts that at the time of negotiating a variation to the April 2006 agreement during the meeting in December 2006, the parties agreed to an additional term. The plaintiff asserts that Mr Fontanarosa agreed that the plaintiff would be released from time to time and without loss of pay if and when he were to be invited by the Football Federation of Australia (“FFA”) to work with the national Under 23 soccer team. The plaintiff has alleged that the defendant refused to release the plaintiff for these purposes, as a result of which the plaintiff was deprived of the opportunity to work with the national Under 23 team and to obtain additional remuneration. The plaintiff seeks damages for this loss of opportunity.
The defendant not only denies that such a term was agreed too, but also puts in issue the allegation of breach and the quantum of any loss said to flow from any breach. This then is the second main issue that arises for determination.
Background to the Dispute
What follows under this heading are my findings based on aspects of the evidence that, unless otherwise indicated, were not seriously contested.
The plaintiff is and, at all material times, was qualified and experienced as a sports conditioning coach (T27-30). He first started working in this role in 1983 with the then National Soccer League Club of West Adelaide. He joined SASI in 2001. In or about September 2004, he was approached by a Mr Aurelio Vidmar who told him that a new A-League for senior soccer sides was in the process of being formed and that Mr Kosmina wanted to know whether the plaintiff would be interested in doing two or three months pre-season work with the Adelaide United Soccer Club. At this stage, the club was owned and financially supported by the Pickard group of companies.
The plaintiff met with Mr Kosmina and representatives of the owners. This lead to “a loose arrangement”, to use the plaintiff’s term (T30), where he did a number of pre-season training sessions per week. It was agreed that he would be paid a lump sum of $1500 for this work. However, it wasn’t long before the plaintiff negotiated an arrangement to work for the club for the 2005/2006 season. He was to provide part-time conditioning and sports medicine services, including the organisation and supervision of medical type services to be provided by doctors, physios, masseurs and the like.
His work, in this respect, commenced in February 2005 and continued throughout the 2005/2006 season. It was agreed that he would be paid the sum of $25,000 for this work, but this sum was also to cover the work that he had done in mid-September of 2004. In other words, the $1500 that he had been promised for that work was incorporated in and formed part of the $25,000 agreed to be paid for the 2005/2006 season.
When giving evidence about the negotiations for the September 2004 pre-season work, the plaintiff used a phrase that he used on a number of occasions throughout his evidence. He said, “It was pretty loose and I was happy to back myself in …” (T31).[3] By using this expression, I understood the plaintiff to be indicating that he was not overly concerned, at the particular time in question, to have a formal arrangement put in place then and there. Having obtained a foothold with the club and doing the work that he wanted to do and with people with whom he wanted to work, the plaintiff was confident that he would prove his worth to the club and that it would do the right thing in properly recognising and remunerating him for this work. Throughout his evidence, the plaintiff expressed great confidence in his own ability and as to the value he would bring to the defendant or to any other organisation that chose to employ his services.
[3] See also, for example, T54 in reference to discussions that took place in November 2006 and T58 with reference to the arrangement reached at the December 2006 Bianco Christmas function.
I interrupt this account of the background circumstances to discuss the notion of the soccer season, a concept of some potential significance in this matter. The A-League is a soccer competition. Various teams, located throughout the Commonwealth and New Zealand, participate in the competition. A home and away series followed by a finals series is played each season. The Adelaide United Soccer Club is a participant in the A-League. The playing season, itself, spans part of each of two calendar years. The competition games forming the home and away part of the season begin in or about August and conclude in or about the following January or February. If a team were to qualify for the finals series, its season would continue throughout February and perhaps March. Furthermore, two A-League teams are chosen to compete in the Asian Cup each year. During the period relevant to these proceedings, this usually took place in or about April and perhaps May. The two teams chosen were selected on the basis of their performance in the previous season. Thus, for example, the two teams chosen to compete in the Asian Cup held in April 2007, were selected on the basis of their performance in the domestic 2005/2006 season, not the domestic 2006/2007 season.
Of course, a significant amount of work is done prior to the commencement of the home and away series of games and so it might be said that any given season would start some months before the August commencement of the home and away series. It follows that whilst the playing season might correctly be described as running from August of one year to sometime in February, March, April or perhaps May of the following year, according to how successful a particular team is, this may not fairly describe the full ambit of the season.
The plaintiff performed services as required for the 2005/2006 season. According to the plaintiff’s recollection, he averaged about 30 hours per week. Notwithstanding that he had been promised, in effect, a lump sum of $25,000 for the 2005/2006 season, it was agreed that he was to invoice the club on a monthly basis and that the club would pay on receipt of an invoice. The plaintiff was working full-time with SASI at this stage. He was finding it very difficult, both physically and mentally, to work full-time for SASI whilst performing his part-time work at the Adelaide United Football Club.
At the end of the home and away season in February 2006, Mr Kosmina, the then head coach, approached the plaintiff to review the season. Mr Kosmina enquired whether the plaintiff was prepared to continue in a relationship with the club. The plaintiff indicated that this was something he would look forward to and that he saw a future within the organisation and, in particular, in working within the soccer code. He saw the fledgling A-League as potentially better than the old NSL (National Soccer League) which he thought had been “unorganised” and “very unprofessional”.
In his original discussions with Mr Kosmina, the plaintiff said that he thought his role needed to be full-time and warranted a remuneration significantly greater than that he had been paid to date. However, it became clear to the plaintiff at that initial meeting with Mr Kosmina that the club could not afford the sort of remuneration that the plaintiff thought people with his level of qualification and experience could command in other codes such as the NRL (National Rugby League) and AFL (Australian Football League).
As a result of this initial discussion with Mr Kosmina, a meeting was arranged with Mr Michael Petrillo, the then Chief Executive Officer of the defendant. That meeting was held in April 2006 and the negotiations that took place at that meeting are critical to the determination of the parties’ dispute. I will come back to that meeting later in these reasons.
At this stage, and still by way of background, I need to say something more about Mr Kosmina. He was the head coach during the period of the plaintiff’s involvement with the club until mid March 2007, some 3 months or so before the plaintiff’s services were terminated. Mr Kosmina’s services were terminated in mid March 2007 as part of a general review of the club, following a disastrous defeat in the grand final of the 2006/2007 season. Mr Kosmina was and remains a good friend of the plaintiff. My impression is that, at least in the early stages, he championed the plaintiff’s cause insofar as his conditions of employment with the club were concerned. Of some potential importance is the fact that Mr Kosmina was present at and participated in the critical meeting between the plaintiff and Mr Petrillo in April 2006. However, Mr Kosmina, whilst apparently available, was not called to give evidence. This is a matter to which I will need to give consideration in due course.
The Oral Evidence
The plaintiff called two witnesses, himself and a Mr Paul Scott. Mr Scott’s evidence is relevant only to the question of the quantum of any loss of chance suffered by the plaintiff in the event that he were to make good his claim for damages for breach of a term entitling him to provide services to the national Under 23 side. I will deal with Mr Scott’s evidence when I come to deal with that issue.
The plaintiff gave his evidence in a confident, if somewhat garrulous, manner. There is no doubt that he is both proud and confident of his abilities and achievements as he perceives them. He was keen, on a number of occasions, to provide the court with a full understanding of his abilities and achievements. He was not particularly rigorous in the way he answered questions, but rather tended from time to time to engage in a stream of consciousness. His answers at times were unresponsive or barely responsive to the questions asked. He also spoke in generalities or in terms of conclusions, particularly when asked about what was said during critical conversations.
I accept that Mr Hagicostas was trying to do his best to assist the court. I also accept much of Mr Hagicostas’s evidence, particularly as to the background to the dispute and as to the ongoing relationship between himself and the defendant and the defendant’s various representatives, generally, throughout the period he worked for the defendant. I do so essentially where it was either not inconsistent with other evidence or not challenged in cross-examination. However, insofar as the precise terms of the parties’ contractual relationship is concerned, I was left with the impression that Mr Hagicostas’s evidence contained elements of reconstruction. During his evidence, I noted quite long pauses when he was pressed, particularly in cross-examination, to attempt to recall the actual terms of conversations. The impression I was left with, from his evidence as a whole, was that in so doing, he was reconstructing the underlying conversations based on his genuine belief as to what the result of the conversations in his mind had become.
The defendant called Mr Petrillo. His evidence, in particular, that concerning his involvement at the April 2006 meeting with the plaintiff, is critical to the defence. The defendant also called Mr Fontanarosa. At all material times, he was the chairman of the Board of Directors for the club and also the Chief Executive Officer of the Bianco group of companies which, in April 2006, purchased the club from the Pickard group of companies. Mr Fontanarosa’s evidence also is important to the defence. He had a meeting alone with the plaintiff in about October 2006, the discussions at which meeting initiated a reassessment of the plaintiff’s role and his remuneration. Subsequently Mr Fontanarosa, together with others, met with the plaintiff on 6 November after which Mr Fontanarosa, together with Mr Settecasi, met with the plaintiff on 22 December 2006 at the Bianco Christmas party. It was during this last meeting that Mr Fontanarosa, on behalf of the defendant, renegotiated and agreed to improved terms of remuneration for the plaintiff.

In contrast to my impressions of the plaintiff’s evidence, I was not left with the same concerns about the evidence given by Mr Petrillo, particularly insofar as the April 2006 meeting is concerned, or by the evidence given by Mr Fontanarosa, particularly insofar as the December 2006 meeting is concerned. I found both of these witnesses to give their evidence in a straightforward manner. They both candidly acknowledged that they could not remember things, but were clear about what they could recall. It is true that Mr Fontanarosa did assume a quieter and more defensive manner when under cross examination. Nevertheless, I was left with the impression that he had made a distinction in his mind between what he confidently could recall and what he could not and that this formed the basis of his evidence. On the critical issues, that is, the conversations and conduct directly relevant to the terms of the contractual arrangement between the parties, I prefer the evidence of Mr Petrillo over that of the plaintiff, insofar as the meeting of April 2006 is concerned, and that of Mr Fontanarosa over that of the plaintiff, insofar as the December 2006 meeting is concerned.
I have reached this conclusion based on my impression of these three witnesses when they gave their evidence, together with the following additional considerations.
(i) Insofar as the meeting of April 2006 is concerned, the failure of the defendant to call Mr Kosmina is, in my view, significant. I elaborate on this issue further below.
(ii) The content of an e-mail sent by the plaintiff to Mr Petrillo on 3 January 2007 (exhibit P7), and the circumstances of the sending of that e-mail are also, in my view, significant. I elaborate on these issues further below.
The defendant also adduced evidence from Mr Glen Dods who started out as a physiotherapist with the club but from April 2006 was a member of the Board of Directors and from late 2006, for a period of 5 months, was the interim Director of Football. The evidence of Mr Dods is relevant essentially to the question of whether or not the defendant breached its contract with the plaintiff by refusing to release him for national Under 23 duties and I will deal with Mr Dods’ evidence in that context.
Finally, the plaintiff called Mr Settecasi, also a member of the Board of Directors. Mr Settecasi was at the meeting between Mr Fontanarosa and the plaintiff in December 2006 and I will deal with his evidence when I come to consider that meeting.
The Failure to Call John Kosmina
Before dealing in more detail with the evidence about the critical meetings and other events which informed the nature of the parties’ contractual relationship I need to say something about the failure to call Mr Kosmina.
In Blatch v Archer,[4] Lord Mansfield CJ said:
It is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced and in the power of the other to have contradicted.
[4] (1774) 1 Cowp 63 at 65; 98 ER 969 at 970.
Comprehensive discussions of this principle and illustrations of its application in civil trials are to be found in Jones v Dunkel,[5] O’Donnell v Reichard[6] and Payne v Parker.[7] The leading discussion in South Australia still would appear to be that of Cox J in Spence v Demasi,[8] although a helpful discussion can also be found in Frederick v State of South Australia.[9]
[5] (1959) 101 CLR 298.
[6] [1975] VR 916.
[7] [1976] 1 NSWLR 191, particularly at 200-202 per Glass JA.
[8] (1988) 48 SASR 536 at 547-549.
[9] (2006) 94 SASR 545 at [36] to [42].
For present purposes, I set out and adopt, with respect, a number of the propositions arrived at, following a review of the then available authorities, by Glass JA in Payne v Parker[10] (citations omitted):
1. The rule [known in Australia as the rule in Jones v Dunkel] is a principle of the law of evidence whereby a particular form of reasoning is authorised.
2. The reasoning which is permissible involves the treatment of a failure to adduce evidence as a reason for increasing the weight of the proofs of the opposite party or reducing the weight of the proofs of the party in default. The principle may be invoked for a deficiency in the evidence either of a party bearing the legal onus of proving an issue, or of a party bearing the evidentiary burden only. If the failure is of the latter kind, the direct evidence of the party with the onus of proof can be more readily accepted, and inferences in his favour may be more confidently drawn. If the failure is of the former kind, a consonant formulation would be that the direct evidence of the party carrying the onus may be more readily rejected, and the inferences for which he contends may be treated with greater reserve. The default “brings a great slur on his cause”.
3. …
4. …
5. Whether the principal can be applied is a question of law, which admits of only one answer. No exercise of discretion is involved. …
6. Whether the principal can or should be applied depends upon whether the conditions for its operation exist. These conditions are three in number: (a) the missing witness would be expected to be called by one party rather than the other, (b) his evidence would elucidate a particular matter, (c) his absence is unexplained.
[10] [1976] 1 NSWLR 191 at 201.
I find that Mr Kosmina was at all material times, including at the time of trial, a good friend of the plaintiff (T77, 150). It was Mr Kosmina who assisted the plaintiff to become involved initially with the defendant soccer club and to increase the level of his involvement with the club. Furthermore, after both had left in 2007, the plaintiff and Mr Kosmina worked together again at the Sydney Football Club (T150). Mr Kosmina was in Adelaide during the week of the trial and was in Adelaide at the request of Mr Hagicostas (T150). In addition, Mr Kosmina’s contract, as head coach, with the defendant was prematurely terminated in March 2007 following a heavy loss in the grand final. This was a period of significant turmoil for the club with allegations of bad sportsmanship having been levelled against club players and Mr Kosmina (T141). Mr Kosmina’s contract with the club was due to expire in the ordinary course on 30 April 2008 and it is common ground that he left the club early under a cloud. In all of the circumstances, I am not able to find that there would have been any expectation that Mr Kosmina would be called to give evidence by the defendant. On the contrary, I find that if he were to have given evidence in the trial, the expectation is that he would have been called by the plaintiff.
Mr Kosmina was involved in various aspects of the parties’ relationship. However, of particular note is that he was the third person at the critical meeting between the plaintiff and Mr Petrillo held in April 2006. Indeed, according to the evidence of both Mr Petrillo (T241) and the plaintiff (T38) Mr Kosmina played an active role in that three way meeting. Critical to my ultimate decision in this matter is whether I accept the account of the plaintiff or the account of Mr Petrillo with respect to the issue of what was said and ultimately agreed upon, if anything, at that meeting about the period of the plaintiff’s engagement with the club. This is a matter that I expect Mr Kosmina would have been able to elucidate.
Mr Kosmina’s absence from the witness box has not been explained, although as I have already noted, he was available in Adelaide having come from Sydney at the request of the plaintiff. In all of the circumstances, I find that the pre-conditions for the operation of the principle in Jones v Dunkel have been satisfied. In these circumstances the direct evidence of the plaintiff (on whom the onus rests) about what was said during the April 2006 meeting on the topic of the length of the contractual term may be more readily rejected.
Critical Events
I turn now to consider in more detail the critical events which informed the nature of the parties’ relationship.
The Meeting in April 2006
In April 2006, a meeting initiated by Mr Kosmina was held between the plaintiff, Mr Kosmina, and Mr Petrillo. The meeting was held one evening after training at the Liquid Coffee Shop, also known as Lily’s, being the name of its proprietor. According to the plaintiff, Mr Kosmina had told him that he would speak to the Board and to Mr Petrillo “about the mixture of staff for the following year”. Some time after this discussion with Mr Kosmina, “Michael Petrillo approached [the plaintiff] in early April 2006 to organise a meeting to discuss [the plaintiff’s] ongoing commitment to the Adelaide United Football Club for the following season” (T37). According to Mr Petrillo, Mr Kosmina had asked Mr Petrillo to meet with both him and the plaintiff to discuss the plaintiff’s payment terms (T238). At this stage, there had been no discussion as to the length of any future involvement the plaintiff might have with the club.
According to the plaintiff, there was a three way conversation between him, Mr Kosmina and Mr Petrillo. At the meeting, he was told that “they” were happy with his involvement and Mr Petrillo said words to the effect:
The Board had met and … were looking forward to putting people in place for the 2006/2007 season and beyond and that they certainly believe that stabilising the off field staff was a critical part of the success of the Adelaide United Football Club.
Mr Petrillo then said:
Look, we want to tie you up for the same period of time that both John Kosmina and AurelioVidmar[11] are tied. In that way, we have the three key personnel in the organisation linked together.
The plaintiff was then asked whether that statement of Mr Petrillo’s had “some meaning” to him at the time. He said that it did and then said this:
I knew from my conversations from John and Aurelio, their contracts would end at the end of the season or 30 June, I can’t remember, it was one of those, 2008. It was either the end of the season 2008 or 30 June 2008.
When asked what he meant in this answer by the phrase “the end of the season 2008”, the plaintiff clarified that he was referring to a season commencing August 2007 through to March 2008 (T39).
[11] Aurelio Vidmar was the assistant coach and John Kosmina was the head coach at this time.
In re-examination (T151-152) the plaintiff said that he had had separate conversations with both Mr Kosmina and Aurelio Vidmar prior to the April meeting in the coffee shop and they had told him that their contracts were to end at the end of the 2008 season or June 30^th – he could not now recall which. It was an agreed fact in the trial, conveyed to the court after the conclusion of the plaintiff’s re-examination (T157) that the defendant’s contracts with Mr Kosmina and Mr Vidmar were each for a period up to and including 30 April 2008.
At the April 2006 meeting, the plaintiff and Mr Petrillo went on to discuss the level of the plaintiff’s proposed commitment or involvement and his remuneration. According to the plaintiff, Mr Petrillo originally offered a remuneration package of $50,000. This was not satisfactory to the plaintiff and some discussion followed at the end of which Mr Petrillo said, “Would you be happy with $60,000?” to which the plaintiff said he responded, “Look Michael, I believe this role is a full-time role, you guys are not in a position to offer me that, so I would be happy to offer my services at 30 hours a week at $60,000” (T39). Mr Petrillo then said he was happy with that response, but that he would need clarification from the Board before he could agree to it, because he had only been asked by the Board to offer $50,000 (T40).
In cross-examination, the plaintiff gave a slightly different account. He again said, consistently with his evidence in chief, that Mr Petrillo told him that the Board had asked Mr Petrillo to arrange a meeting “with me to continue my involvement with Adelaide United for the forthcoming season”. However, when pressed about this answer, the following exchange occurred (T116-117):
Q. Continue your involvement with Adelaide United for a forthcoming season, that would have been 2006/2007.
A.Sorry – Michael Petrillo approached me at the coffee shop and said that the Board had approached him to approach me because John Kosmina had wanted to continue my services. At that point in time, he did not mention the length of time of the –
Q.When you said just then that he did mention a season, you were wrong, weren’t you?
A.I was wrong, yes.
He then reiterated that the effect of what Mr Petrillo had told him was that the defendant wanted to tie him up for the same period of time that John Kosmina and Aurelio Vidmar were tied up. He said that, at the time of this conversation, the plaintiff knew that to be the end of the season 2008. However, when pressed further, the plaintiff gave a different account of what Mr Petrillo is said to have actually told him.
His words were “You will be contracted to the same period of time as Aurelio Vidmar and John Kosmina to the end of the season 2008” (T118)
The plaintiff’s case is that when he left the meeting, the only issue still to be agreed to by the defendant was the proposal that the plaintiff would work 30 hours per week for which he would be paid $60,000. There is no dispute that at all times the parties’ discussions were on the basis that any annual or annualised income figure was to be regarded as inclusive of any superannuation contribution, but exclusive of GST. However, as far as the plaintiff is concerned, what had been agreed to was that the plaintiff’s contract of engagement was for a period to expire at the same time as the contracts of engagement with Mr Vidmar and Mr Kosmina were due to expire. According to the plaintiff, the parties had agreed to this external standard.
There is no doubt that on the plaintiff’s evidence there is a measure of confusion on this point, that is, whether in fact the agreement reached was 30 June 2008, the “end of season 2008”, or the actual termination date of the Vidmar/Kosmina contracts, that is 30 April 2008. As I understand the plaintiff’s evidence, he says that he was led to believe that his contract was to line up, in fact, with those of Messrs Vidmar and Kosmina, and that the mention of either the end of season 2008 or 30 June 2008[12] was used by way of positioning or illustrating what the parties then thought that external standard was. If so, no uncertainty would affect this potential contractual term, it being well accepted that provided an external standard is capable of being clearly and accurately identified, parties may fix a contractual obligation by reference to that external standard.[13]
[12] The plaintiff at one point in his evidence said that he could not recall which of these expressions had been employed by Mr Petrillo.
[13] York Air Conditioning and Refrigeration (A’sia) Pty Ltd v The Commonwealth (1949) 80 CLR 11, Placer Development Ltd v The Commonwealth (1969) 121 CLR 353.
In final submissions, counsel for the plaintiff put the plaintiff’s case on this issue in the following way (T337):
Your Honour will approach the finding as to what constituted the terms of the contact and how those terms were agreed by having regard to the whole matrix of facts that surround the negotiations. It is plain that the agreement as to a salary of $60,000 wasn’t concluded until that subsequent conversation, but other terms were clearly agreed during the structure (sic) in the meeting at the coffee shop and all that was left to be concluded was this term as to the amount of the salary. The fact that nothing else was discussed in that conversation reflects the fact that everything else had already been agreed.
The plaintiff submitted (T332) that the proposition as to length of term was put or proposed by Mr Petrillo at the meeting and was adopted by the plaintiff or acceded to by the plaintiff, in effect, by his silence in that he then went on without further discussion of the length of term to discuss his proposed hours of commitment and proposed remuneration. All that occurred some two or so weeks after the Liquid Coffee Shop meeting was that Mr Petrillo came back to the plaintiff and agreed to pay the sum of $60,000. The plaintiff commenced to invoice the defendant for this amount on a monthly basis whilst he continued to perform his duties.
In these circumstances, the plaintiff maintains that the defendant’s offer of a contract of engagement to expire, as it turns out, on 30 April 2008, involving a commitment of 30 hours per week and a remuneration of $60,000 per annum was accepted by the plaintiff by virtue of the plaintiff’s words and conduct during and following the April 2006 meeting.
Of course, this analysis depends upon a finding that the plaintiff has accurately portrayed Mr Petrillo’s involvement in this process. Mr Petrillo gave a different account of what took place at the April 2006 meeting. He said that at the meeting he told the plaintiff that he was happy to offer $50,000 per annum, but that he would need to go away and check the budget and think about whether he could offer $60,000 per annum. Mr Petrillo said that it was not necessary to have referred that decision to the Board (T239). He said that, as Chief Executive Officer for the club, he had full control of hiring staff at that time, although, he would from time to time refer large expense items, including the coaching staff salaries, in particular, the head coach, to the board (T237).
Mr Petrillo said that, during the meeting, the plaintiff told him he was working somewhere between 40 to 50 hours a week but that, for the money that the club was offering, that is, $50,000, he should be doing only about 30 hours a week (T240). Mr Petrillo said he thought he spoke again to the plaintiff within about two weeks of the meeting and told him that the club had agreed to pay him $60,000, that is $5,000 a month (T241). At the time he conveyed this information to the plaintiff, he made no reference to any other issues or terms. He understood that the plaintiff was reasonably satisfied with this whereupon the change in the plaintiff’s remuneration was then implemented (T241).
Mr Petrillo said there was no discussion during the April 2006 meeting as to the term of the plaintiff’s engagement. The following exchange occurred during his evidence in chief (T239-240):
Q.    Was there any discussion as to the term of his employment.
A.    No.
Q.    The term of his engagement.
A.    No. Certainly we were discussing that coming season.
Q.Was there any actual discussion with Mr Hagicostas. Did Mr Hagicostas say anything in respect of the coming season.
A.Well, the coming season was the 06/07 season which was about to commence, but that was the only discussion we were having regarding the season that was about to start.
Q.When you say the 06/07 season was about to commence, this is about in April, when would the season commence.
A.Pre-season cup would commence in July, and the season proper would start in August.
Q.When would the season typically end.
A.January if you weren’t participating in finals. February if you were participating in finals.
Q.What about if you were participating in the Asian Cup.
A.Then the season would be extended until the end of May.
In cross examination, Mr Petrillo denied that prior to the April 2006 meeting Mr Kosmina had been urging the club to secure the services of the plaintiff for the same period for which both he and Aurelio Vidmar had been engaged (T261-262). Mr Petrillo said he wasn’t convinced that the plaintiff’s hours had increased to the extent the plaintiff had said, or that the plaintiff was necessarily the right person for the job (T256). He refused to concede that he held the plaintiff in high regard or that the job required the sort of hours that Mr Hagicostas was either putting in or suggesting needed to be put in (T263-265). Mr Petrillo said he agreed to increase the fee to $60,000 per annum plus GST because John Kosmina had insisted to Mr Petrillo that the plaintiff was worth more then he was presently being paid. Mr Petrillo said that every discussion with the plaintiff was for the coming season and that there was never any discussion about anything other than the coming season (T273).

Later in cross-examination, the following exchange occurred (T275-276):
Q.You’re not challenging the proposition that he was as much a part of the club as Mr Kosmina or Mr Vidmar.
A. Yes, I am, yes. He was certainly not a permanent staff member.
Q.Well, if he wasn’t a permanent staff member, why are you entering into negotiations with him for an annual salary.
A.For the season? It’s a bit hard to go into a season not knowing who are going to be the people involved in your club.
Q.So you say that the contract period was just for the season 06/07.
A.That’s correct.
Q.And when was that term entered into.
A.It was not a term that was entered into, it was a discussion that we had in – at Liquid – regarding the 06/07 season and discussion with the coach going forward for that season.
Q.What was said to indicate that this was just for the 06/07 – this was an arrangement just for the 06/07 season.
A.Um.
Q.You didn’t give this evidence yesterday when you were asked about what happened in this – what was said in this conversation.
A.Sorry?
Q.You didn’t say anything about this when you were asked by your counsel yesterday what was said during the course of the discussions at the coffee shop.
A.I don’t recall exactly what was said yesterday, but certainly our discussion at that coffee shop was regarding the 06/07 season.
Q.What was said to indicate that this was an arrangement just for the 06/07 season.
A.Because we were talking about the coming season.
Q.Well, you might have been talking about the coming season but what was said to indicate that this was an arrangement just for the 06/07 season.
A.Discussions regarding the coming 06/07 season.
Q.You keep saying that. I’m asking you what was said to indicate that the arrangement that was being made was an arrangement that was limited to the 06/07 season.
A.Well, all of our general discussion regarding the 06/07 season.
HIS HONOUR
Q.What words were used, I think Mr Stanley’s asking.
A.Well, we had general discussions. I don’t think we actually said anything specific, but it was general discussion regarding the 06/07 season.
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Q.So there was nothing specifically said to indicate this was an arrangement just for the 06/07 season.
A.I think it was quite clear that all of our discussions were regarding the 06/07 season.
Q.Is that the basis upon which you say that you understood when you read exhibit P7[14] - and I don’t want to labour this point, but that’s the basis upon which you assert that when you read in the second paragraph the reference to the contract period, you understand that to be a reference to the 2006/2007 season.
A.That’s correct.
[14] Exhibit P7 is an e-mail dated 3 January 2007 sent by the plaintiff to Mr Petrillo. The relevance of this e-mail to the issue of what was in fact agreed at the Liquid Coffee Shop April 2006 meeting is dealt with later in these reasons.
Meeting at the Bianco Offices in or about October 2006
According to the plaintiff, he was always of the view that 30 hours per week was not sufficient for him to properly perform the role of sports conditioning coach for the team. He, in fact, usually worked more than 30 hours per week and this remained so notwithstanding that the renegotiation of his remuneration package in the April 2006 meeting was arrived at on the basis of a 30 hour week.
According to the plaintiff, he attempted to have further discussions about his terms of engagement with Mr Petrillo during and after June of that year. However, he experienced difficulty in being able to involve Mr Petrillo in discussions on this topic and this led to him becoming quite frustrated. Mr Petrillo, in his evidence (T243), said that he recalled no other discussions with the plaintiff about remuneration or conditions prior to his receipt from the plaintiff of the e-mail of 3 January 2007 (exhibit P7). There is little doubt, on the evidence of both of these men, that they had regular contact with one another, at times after training sessions. I accept that the plaintiff did try to engage Mr Petrillo in further discussions from time to time, and without success. I also accept that Mr Petrillo now has no recollection of this. Ultimately, the plaintiff decided to, in effect, go over Mr Petrillo’s head and approach Mr Fontanarosa directly in order to pursue his concerns.
A meeting was arranged and held sometime during October 2006 at the Bianco Offices in Newton. The meeting was attended by the plaintiff and Mr Fontanarosa. The evidence of both the plaintiff and Mr Fontanarosa as to what took place at this meeting is tolerably consistent.
According to the plaintiff, he expressed to Mr Fontanarosa his concerns about the number of hours he was working, the responsibilities he had assumed, his desire to take on the position full-time and his frustration at not obtaining any suitable responses from Mr Petrillo with respect to these concerns. Mr Fontanarosa appeared to accept that the plaintiff had genuine concerns which had not been properly dealt with by Mr Petrillo and said that he would arrange for a meeting to take place involving Mr Petrillo. It would also be an occasion when the plaintiff could put forward his proposal for how the medical staff he had been supervising should be paid, having regard to the contributions they were making (T50-51).
Mr Fontanarosa described the plaintiff at this meeting in October as being unhappy with the medical staff structure, in particular, the way in which they were being treated and paid by the club and said that the plaintiff had suggested there needed to be a reconsideration of these matters. He recalled that the plaintiff had also spoken to him about the plaintiff’s own remuneration but Mr Fontanarosa could not recall, when giving his evidence, whether this initial conversation with him concerning the plaintiff’s own remuneration took place in the October 2006 meeting or at some other meeting.
Meeting on 6 November 2006 at Hindmarsh Stadium
In due course, a meeting took place at the Hindmarsh Soccer Stadium on 6 November 2006. According to both Mr Fontanarosa and the plaintiff, the persons who attended were the plaintiff, Mr Fontanarosa, Mr Petrillo and Mr Kosmina. However, Mr Petrillo when giving his evidence had no recollection of this meeting. Whilst he did not deny that it occurred, he was not prepared to concede that it occurred or that he attended it until confronted, in cross examination, with an e-mail sent by the plaintiff to Mr Petrillo and others, dated 8 November 2006, referring to the meeting of 6 November 2006 (exhibit P6). The following exchange occurred (at T283):
Q.    I put my question again: do you accept that you were at this meeting?
A.    By that e-mail, yes, but I don’t recall the meeting.
Q.Do you accept that if you were at this meeting, you have entirely forgotten about it?
A.    Yes.
Q.Do you accept that if you have entirely forgotten about a meeting that you attended on a matter of some moment to the club, on 6 November 2006, you might have forgotten some of what was said in the meeting at the Liquid Coffee Shop in April 2006.
A.No, I don’t agree with that.
Mr Fontanarosa said that, at this meeting, he expressed surprise and disappointment at the honoraria being paid to the volunteer medical staff. He agreed with the plaintiff to increase these honoraria. Mr Fontanarosa said that some time after that meeting, the plaintiff spoke to him about the fact that he had been working at SASI and felt compelled to leave SASI because of the demands made upon his time by the soccer club. He told Mr Fontanarosa that he deserved to be paid more money. He also told Mr Fontanarosa that he could go to the Sydney Swans Football Club and earn $220,000. Mr Fontanarosa said that he told the plaintiff during this discussion that, for that sort of money, he should take up the option to go to the Sydney Swans. Mr Fontanarosa, either on this or a later occasion, agreed to see what he could do about the plaintiff’s remuneration (T169).
The plaintiff said that he told Mr Fontanarosa at this meeting that he had had to leave SASI on 31 August 2006 because he was working 50 or more hours a week with the club and that he was still being paid only $60,000. He said that Mr Fontanarosa agreed with him that $60,000 was not appropriate for these hours and with his qualifications (T55). The plaintiff asked Mr Fontanarosa at this meeting for his remuneration to be increased to $85,000 plus superannuation, whereupon Mr Fontanarosa said that he would get back to the plaintiff some time in December.
Meeting on 22 December 2006 at the Bianco Christmas Function
Mr Fontanarosa said that he had a rough idea as to what he thought the plaintiff was expecting to get in terms of increased remuneration arising from the conversations he had had with the plaintiff on this topic in October and/or November 2006. He had told the plaintiff that he would speak to him about his salary at the Christmas break up (T170). A meeting occurred in the boardroom of the Bianco Offices during the Bianco Group Christmas function. The meeting was between the plaintiff, Mr Fontanarosa and Mr Settecasi.
According to the plaintiff, the meeting opened with flattering comments being offered on both sides. Mr Fontanarosa then got down to business and told the plaintiff that the defendant was pleased to agree to put him on $85,000 plus superannuation plus GST, and that this would be backdated to the time that he left SASI on 31 August 2006. The plaintiff responded (T58):
Dario, I’m very – thank you very much for sorting this problem out. It had taken a long time, but I have been patient and I have backed myself in and I knew the club would do the right thing.
The meeting then moved to a discussion of the plaintiff’s potential involvement with the national teams and I will deal with the plaintiff’s evidence on this topic later in these reasons.
The plaintiff said that, at some stage during the meeting, he told Mr Fontanarosa that the only other position he might seek “in my next two years at Adelaide United” would be a full-time position with the National Socceroos as a Sports Science Co-ordinator and that if this position were to arise, the plaintiff would like the club to release him on one month’s notice. The plaintiff was asked, during examination in chief, whether Mr Fontanarosa said anything in response to this. His response appeared to conflate things he asserted that Mr Fontanarosa had said with conclusions that the plaintiff had drawn with respect to his term of engagement (T59-61). The following exchange occurred:
Q.    Did Dario say anything in response.
A.He said ‘Nik, we would never stop you from doing that but obviously we want you to stay on beyond your contract term’ which was the end of the season or June 30, 2008.
Q.    Was anything said about that, about the term or your contract.
A.Yes, well Dario said to me that, just prior to ‘We want you on beyond that 2008’, he said to me that ‘We want you at the club beyond your contract period’ which was end of season 2008 or June 30. I can’t remember –
HIS HONOUR:     That evidence is very unclear, Mr Stanley, as to what’s been said.
MR STANLEY:    Yes, I will try and clarify it.
XN
Q.There might be some confusion at the moment as to what might have been known and might have been understood and what was said. I just want you to concentrate on what was said during the course of this meeting about the topic of your contract period.
A.When Dario identified the 85,000, plus super, plus GST, he also stated that I would be contracted through – and I can’t remember whether we used the term ‘end of season 2008’ or ‘June 30th’, I can’t recall, because at that stage, the season finishes in April but we were in the mix to make the Asian championships. If that was the case we would finish some time late May early June.
OBJECTION: MR MANUEL OBJECTS
MR MANUEL:     The pleadings assert that there was an agreement back in April 2006 for a fixed term contract for obviously a finite period and in the 22 December meeting there was merely a confirmation by Mr Fontanarosa of that pre-existing term. What is being put, it seems to me, by the plaintiff, is asserting within the contractual structure a further term that’s not pleaded.
QUESTION ALLOWED
XN
Q.We might have to go back. The question is: what was said in this meeting about the term of your contract and who said it.
A.Dario said that my contract would end, end of season 2008, or 30 June. The term ‘end of season’ or ’30 June’, I cannot recall which one was said, it was one of the two.
Q.Did he say anything else about that.
A.Yes, he then went on and said ‘But we want you to –‘ – Sam and Dario both said in unison ‘But we want you here longer than that period because we are a family company and we want people to be here and be happy and it’s important that we have stable staff’.
Q.Did you respond to that.
A.I said ‘Having seen the board, Dario, and seen the number of people that have worked for your organisation in excess of 15, 20 years, that indicates to me that you guys know how to look after your staff very well’. And that was an important part for me; I was a family man. I said to Dario ‘I’m a family man with young kids, I want some stability in my life’.
During cross-examination, the plaintiff gave this evidence (at T126):
Q.As at the meeting of 22 December, your evidence is that you already had a fixed term contract, wasn’t it.
A.Yes.
Q.Why did you need to confirm it with Mr Fontanarosa.
A.We were just confirming all the arrangements of the contract.
Q.An important term for you, the fixed term.
A.Yes, it was.
Q.But when you say he confirmed the fixed term, he didn’t mention a date either, did he.
A.The term that was used was to the end of season 2008 or June 30th, and again that – the term, it’s one or the other. I can’t recall specifically.
Q.Mr Petrillo and Dario in the separate meetings, one in April 2006 and one on 22 December 2006, used either of those terms but you can’t remember which.
A.Correct.
Q.Did each of them use the same term.
A.I can’t recall.
I do not accept that the plaintiff has provided an accurate account of the conversations, if any, relating to the terms of the contract that took place at the 22 December 2006 meeting. The plaintiff’s evidence is confused, self-serving and has hallmarks of reconstruction. As I have already indicated, I prefer the evidence of Mr Fontanarosa on this topic.
Mr Fontanarosa said that he had worked out, prior to this meeting, that a $20,000 increase was roughly what the plaintiff was expecting. He rounded this up to $25,000 and offered him $85,000. After some further discussion, the amount of $92,500 was agreed upon, being in effect the $85,000 first mentioned plus a contribution towards superannuation. Mr Fontanarosa offered to backdate the increase to the day that the plaintiff had left SASI (T171). There was no discussion about invoicing. However, the plaintiff thereafter continued to do as he always had done, which was invoice on a monthly basis.
Mr Fontanarosa said that there was no discussion as to a fixed term contract and that, prior to the meeting, it had not been suggested to him by anyone that the plaintiff was on a fixed term contract (T172). Also, according to Mr Fontanarosa, there was no discussion about any period of notice that the plaintiff would have to give if he wished to resign. However, Mr Fontanarosa did recall a discussion at an earlier meeting when the plaintiff told him that the only job he might be offered or might take up was one in Sydney (T174).
During cross-examination, Mr Fontanarosa did not depart from this evidence about what took place during the meeting at the Bianco Christmas function. However, he was frank about not being able to remember the details of meetings or at which meeting particular things might have been said. However, as far as Mr Fontanarosa was concerned, the issue with the plaintiff was only ever one of him being required to work longer hours than expected, giving rise to an expectation that he should be properly paid for this. However, Mr Fontanarosa did agree in cross-examination that he only ever negotiated in terms of an annual or an annualised salary and at no time were discussions held by reference to a monthly salary (T186-188).
Mr Settecasi also attended at the Bianco Christmas function meeting. He said that he could not recall any discussions at board level concerning the plaintiff during the period April to May 2006 (T215). As far as the meeting on 22 December 2006 was concerned, his evidence was broadly consistent with that of Mr Fontanarosa (T216-217). He also said that there was no reference to a fixed term contract during the discussions or to the plaintiff being entitled to be employed for any certain period of time (T220). In cross-examination, Mr Settecasi conceded that he and Dario Fontanarosa had discussions about what took place at the December 2006 meeting as recently as the week before the trial. However, he said that they did not talk about what was said at the meeting in terms of any detail. He did say though that they had discussed certain points about the case, including that there was “not a contracted term because there was never discussions about a contracted term” (T222). An attempt to explore precisely what was discussed between Mr Fontanarosa and Mr Settecasi about the December 2006 meeting was made in cross-examination (T221-225). At the end of this, Mr Settecasi’s evidence on this issue was left in a somewhat confused state.
Nevertheless, for present purposes, I accept that there was a discussion between the two men about what occurred at the December 2006 meeting and that this discussion went so far as to compare notes, as it were, as to what each understood the position to have been. I have taken this into account when considering whether, in all of the circumstances, I should accept Mr Fontanarosa’s account of what took place in that meeting.
Exhibit P7 – The e-mail from the plaintiff to Michael Petrillo dated 3 January 2007
The terms of this e-mail and the fact that it was sent some 12 days after the meeting on 22 December 2006 are significant. The formal parts and the opening paragraphs of that e-mail are as follows:
Nik Hagicostas
From:  Nik Hagicostas [[email protected]]
Sent:  Wednesday, 3 January 2007 10:41 PM
To:  Michael. Petrillo
Cc:  Sam Settecasi – Bianco; Dario Fontanarosa
Subject:  Renegotiating Nik Hagicostas contract 2006-2007 season with AUFC
Dear Michael
Thank you for your help with renegotiating my new contract with Adelaide United F C
for season 2006-2007.
In summary the main points are
Initially discussions with yourself & John Kosmina held in April 2006 agreed to Sum of
$60 K + GST of $6 K
This was on the assumption that I would still have employment as SASI part –time , and
that renegotiating would be considered later in the year if funds were available, an
the expected increase in work load
As it turned out my time involved at Adelaide United increased substantially
immediately. This made employment as SASI not   an option and the hours would
considerably compromise & place me in a very difficult position with the department.
Considering this I choose not to continue at SASI
The discussions which were held in December agreed to an annual income of $85K + Super
of 9% which totalled $92650 which would be paid as a sub – contractor equally over the
course of the contract period.
.   .   .   .
Regards
Nik Hagicostas
P7 was tendered and admitted on the basis that it was relevant to the question of the plaintiff’s credibility on the issue of whether or not, during both the April 2006 and December 2006 negotiations, a contracted period until the end of the 2008 season or something similar had in fact been discussed and agreed to. At the time exhibit P7 was admitted, it was accepted by both parties that this was its only relevance. In particular, it was accepted that it was not relevant to any question of construction of the terms of any contractual arrangement entered into prior to the preparation of the e-mail (T61-66).[15] I have since given the matter further thought. There is another line of authority that needs to be considered in this context. In this respect there is a distinction between post-contractual communications and conduct by one party alone which might, at best, go to the issue of credibility and post-contractual communications and conduct of both parties capable of demonstrating a common intention which might go further and provide evidence as to the fact that a contract was entered into orally and as to its terms.
[15] For a discussion of the authorities leading to the proposition that, in general, the subsequent conduct of a party or parties to a contract is not admissible as an aid to construing a written contract, see Bryson J in Sports Vision Australia Pty Ltd v Tollglen Pty Ltd (1998) 44 NSWLR 103 at 116. There would appear to be some exceptions to this proposition insofar as the common law of contract in Australia is concerned and, in this respect, the law has been described as “unsettled”, see generally Cross On Evidence 6^th Australian Edition at [39290]. For more recent discussions of this issue, see Magill v National Australia Bank Ltd [2001] NSWCA 221 at [50] – [53] Ipp AJA with whom both Meagher and Heydon JJA agreed and Commercial Capital v Durman [2007] NSWSC 869 at [38] – [41], Macready Ass J.

The distinction to be drawn, relevant to the present case, is well explained by Fisher J in McLaren v Waikato Regional Council[16] (citations omitted):
It seems clear that a distinction must be drawn between establishing the contractual communications which passed between the parties and placing the correct construction upon those communications once they have been ascertained. If the contract is comprehensively recorded in a formal written document, there is no room for doubt over the contractual communications but the position may be different if the contract was wholly or partly oral or if all or some of the relevant documentation has disappeared. Whether something was stated during contractual negotiations is a pure question of fact. As with all questions of fact, there is the potential for an issue of credibility. If credibility is an issue, the subsequent conduct of the parties may be relevant. In that context, it will be helpful to know whether the post contract conduct of the party was consistent or inconsistent with an alleged recollection that a certain term had been communicated between the parties. But as I see it, the use of post contract conduct for that purpose has nothing to do with the construction of the contract. Cases such as Mears v Safecar Security Ltd … and Hill v National Bank of New Zealand Ltd do not involve resorting to evidence of post contract conduct as an aid to construction. They are concerned with the resolution of simple questions of fact. As Stevenson LJ said in Mears … “We are concerned with the search for a term that was not written down, and there is nothing in [the] authorities which prevents the court from looking at the way the parties acted for the purpose of ascertaining what that term was. Common sense suggests that their subsequent conduct is the best evidence of what they had agreed orally, but not reduced to writing, though it is not evidence of what any written terms mean …”
The construction of a contract is a different subject entirely. It requires a purely objective assessment of whatever had been communicated as the express terms of the contract. It is fundamental to the law of contract that what the parties privately thought about the matter then and subsequently is irrelevant. Further, the contract is to be construed as at the date upon which it was made. Short of a valid variation of the original contract, its proper construction would not be changed by subsequent conduct. Since the subjective intentions of the parties – whether before or after the date of the contract – are irrelevant, general principle would exclude the post contract conduct of either or both parties as a legitimate aid to construction.[17]
[16] [1993] 1 NZLR 710 at 731.
[17] See also Hill v National Bank of New Zealand Ltd [1985] 1 NZLR 736 at 739, Ferguson v Dawson [1976] 3 All ER 817, and Mears v Safecar Security Ltd [1983] 1 QB 54.
In this case, I am looking to decide whether or not the parties communicated one to the other and agreed upon a contractual term that their arrangement would endure until the end of the 2008 season or such like. This is a question of fact.[18] Credibility, in the sense of whether or not each of the protagonists can be said to have had an accurate and reliable recollection of what was said as at the time they gave their evidence, is clearly in issue. The terms of the e-mail in P7 written by the plaintiff only 12 days after the 22 December 2006 meeting are relevant to this issue of the plaintiff’s credibility. I will come to the terms of the e-mail in a moment but, in critical respects, they are inconsistent with the evidence given by the plaintiff in court. In addition, the sending of this e-mail by the plaintiff and its receipt and effective adoption by Mr Petrillo, as being in accordance with his understanding of the agreed position, at least insofar as the negotiations he conducted in April 2006 are concerned, demonstrates a consistency of conduct between the plaintiff and Mr Petrillo, in this respect, which “is the best evidence of what they have agreed orally but not reduced to writing”.[19]
[18] That is, leaving aside any issue as to what precisely the parties intended by any terminology they may be found to have employed, for example the use of words intended to indicate a tie up with the Vidmar/Kosmina contract termination dates or use of an expression “season 2008” etc.
[19] McClaren at 731.
To my mind, the e-mail is relevant in both these respects. The e-mail contains the subject heading “Renegotiating Nik Hagicostas contract 2006-2007 season with AUFC”, the opening line “Dear Michael, thank you for your help with renegotiating my new contract with Adelaide United F C for season 2006-2007” and the sentence which reads “The discussions which were held in December agreed . . . which would be paid as a sub – contractor equally over the course of the contract period” (emphasis in each case supplied by me).
This e-mail is consistent with the evidence given by Mr Petrillo to the effect that, at no time, did he agree to the contract period expiring at the end of the 2008 season and that all discussions were in the context of the forthcoming 2006/2007 season. The terms of the e-mail are inconsistent with the plaintiff’s evidence and the plaintiff’s case on this point. It is not as if the plaintiff simply said nothing in this e-mail about the term of the contract that he maintained had been negotiated and renegotiated. On the contrary, the plaintiff specifically addressed the issue and on two separate occasions in the e-mail referred to a more limited contract period. In my view, this tells against the reliability of the plaintiff’s evidence given in court on this topic and it is a factor that I have taken into account in ultimately rejecting the plaintiff’s evidence and accepting that of Mr Fontanarosa and Mr Petrillo on this topic.
Furthermore, Mr Petrillo responded to the plaintiff’s e-mail in P7 the next day, 4 January 2007. In P7, the plaintiff also set out his calculation of what he was owed and what should be paid to him in the future, having regard to the increase agreed to and the fact that it was to be backdated. He proposed a means by which the calculated shortfall could be paid as part of the next three monthly invoices. In his reply,[20] Mr Petrillo said this:
Hi Nik, I have spoken to Dario and he believes the agreement to backdate was from the time your position with SASI ended. Can you backdate from then and recalculate. Any queries please call me. Cheers, Michael.
[20] Exhibit D17.
It can be inferred that Mr Petrillo, at this time, had no disagreement with the notion that the new contract arrangements were to relate to the 2006/2007 season; indeed his e-mail contains the same subject heading “Renegotiating Nik Hagicostas contract 2006-2007 season with AUFC”.[21] The only matter with which Mr Petrillo took issue was the plaintiff’s calculations having regard to Mr Petrillo’s understanding, obtained from Mr Fontanarosa, of the date agreed to for the backdating exercise.
[21] I appreciate that commonly an e-mail recipient will press the “reply” icon rather than create a “new” e-mail when responding to an e-mail and that this automatically will format the reply e-mail with the original e-mail’s subject heading. Nevertheless, it offered Mr Petrillo a further opportunity to observe and, if thought necessary, correct the assertion implied by the subject heading.
Again, Mr Petrillo’s response is consistent with at least an understanding on his part that the arrangements entered into, originally and as varied in the conversation with Mr Fontanarosa, related to the then current season.
Curiously, the plaintiff’s original calculations, as set out in exhibit P7, purported to backdate his entitlement to the increased remuneration of $92,650[22] per annum exclusive of GST to the beginning of April 2006, that is, the time of the original meeting in the Liquid Coffee Shop with Mr Petrillo. This is surprising given that this e-mail was written only 12 days after the December 2006 meeting and given that both the plaintiff and Mr Fontanarosa were clear in their evidence that the new amount was to be backdated to the day the plaintiff left SASI, that is, 31 August 2006. How this error by the plaintiff might have come about was not put to him either in chief or in cross-examination, and as such I am in no position to take the matter any further.
[22] In his evidence, Mr Hagicostas insisted that a global figure was not referred to in his discussions with Mr Fontanarosa at the Christmas break up meeting “it was $85,000 plus super plus GST … they were the exact words” (T125). I note that 9% of $85,000 by way of superannuation contributions leads to a total amount of $92,650, the amount included by the plaintiff in his e-mail, P7, and accepted by the defendant, whereas Mr Fontanarosa, in evidence, used the figure of $95,500. I do not see the discrepancy here to be of any significance.
The plaintiff was asked during his evidence in chief to explain why he referred in the e-mail to the 2006/2007 season. He said “because that’s the season we’re currently in” (T66). His attention was then drawn to the expression at the end of the second paragraph “the contract period” and he was asked what was “the contract period” to which he was referring. He answered “contract period is from April 2006 through to end of season 2008/June 30th and it’s one of those terms – ” before I intervened and brought to an end that answer (T67). Counsel then approached this issue in a different way and asked “At the time that you wrote this e-mail, what was your understanding as to ‘the contract period’ that you referred to in that paragraph”. The plaintiff responded “My understanding of ‘the contract period’ was to the end of season 2008 or June 30th” (T67).
I found this evidence also to be self serving and unpersuasive. The plaintiff did not adequately explain why he used the term “my new contract … for season 2006-2007” in an e-mail which in the very next line purported to set out a “summary [of] the main points”.[23] He also did not provide a satisfactory explanation of why his use of the term “contract period” was not a reference back to the phrase “my new contract … for season 2006-2007”.
[23] See also the exchange in cross-examination on this topic at T127-128.
Mr Petrillo said that he had no recollection of having any discussions with the plaintiff following the April 2006 meeting (T243). He said that he was not aware of the meeting that Mr Fontanarosa had organised for 22 December 2006. He only became aware that there had been a meeting in December pursuant to which agreement had been reached as to an increase in the plaintiff’s remuneration when he received the e-mail of 3 January 2007 (P7). Mr Petrillo had a recollection of receiving that e-mail and said that after he received it he raised the matter with Mr Fontanarosa in order to confirm that the discussions had taken place and that Mr Fontanarosa was happy for arrangements to be made to implement what was set out in the e-mail (T245). It was Mr Petrillo’s task to facillitate payment of the back pay by forwarding the details to the relevant person who was handling payroll at the time. At no time prior to 3 January 2007 had Mr Petrillo been told by the plaintiff or anyone else that the plaintiff had a fixed term contract with the club. Mr Petrillo expressed surprise that he had not been involved in the December 2006 discussions.
In cross-examination, Mr Petrillo also was asked for his “understanding”, at the time he received the e-mail P7, of the expression “the contract period” as used in the e-mail. He said “up until the end of that current season” and gave as his basis[24] for this answer “‘cause every discussion we’ve had with Nik was for the coming season. We certainly never discussed anything other than the coming season” (T273). Shortly after giving this evidence Mr Petrillo restated his position, “…I was of the understanding it was for that “current season” (T273.32). I understood Mr Petrillo, at this stage of his evidence, to be using the words “coming” and “current” interchangeably; at the time of his discussions with the plaintiff in April 2006 the subject matter was the coming season and at the time of receiving the e-mail in P7, that had become the current season.
[24] Of course, Mr Petrillo’s “understanding” per se is not relevant to the question of what the parties, objectively, agreed to. However, the basis of his “understanding” - what was said in discussions - is so relevant.
I accept, having regard both to Mr Petrillo’s evidence on this topic and his response to P7 in his e-mail at D17, that Mr Petrillo was not at all surprised by the plaintiff’s assertion in P7 that his engagement with the club, for the remuneration as renegotiated, was for the 06/07 season then in progress. Whether or not the parties agreed to a contractual term to this effect is a different issue and one which I address later in these reasons.
The E-mail from the Plaintiff to Glen Dods of 21 April 2007 (Exhibit P9) and Subsequent Events
In January 2007, a dispute arose between the plaintiff and Mr Glen Dods, the then Football Operations Manager for the club, as to whether the plaintiff could accept an invitation to be involved with the Australian Under 23 team during a full-time camp in Canberra. Ultimately, the plaintiff was able to take up that opportunity but that was the last time he worked for a national team whilst he was engaged by the defendant. I will come back to this issue in more detail later in these reasons when I discuss the plaintiff’s claim for damages based on the allegation that the defendant, in breach of contract, refused to release him for national duties. However, shortly after this event and still sometime in January 2007, Mr Dods, in his role as Football Operations Manager, asked the plaintiff to prepare job descriptions for himself and for all of the staff for whom he was responsible being the medical and related staff (T71). The plaintiff prepared documentation to meet this request over the next 3 months.
The next event of significance was that the Adelaide United soccer team finished second in the home and away series for the 2006/2007 season but lost the grand final 6 – nil in early March 2007. Ten days or so later the contract with the club’s senior coach, Mr Kosmina, was terminated. This caused the plaintiff some concern – “I was concerned that I could be one of – I was concerned that I could certainly be terminated as well” (T77). The plaintiff continued in his evidence in chief:
I had a very strong – a very close relationship with John and my experience in other clubs when there is a change of coach sometimes there’s a change of other personnel, his supporting personnel.
The plaintiff said that he didn’t have an opportunity to speak to Glen Dods until about 3 or 4 days later at which time he approached him and said “Look, where do I stand? I am concerned about my position”. According to the plaintiff, Glen Dods gave a reassuring response (T77).
Aurelio Vidmar was appointed interim coach and, in due course, was appointed as senior coach in or about May 2007. In the meantime, Mr Dods had sent the plaintiff an e-mail dated 21 April 2007 (exhibit P8) dealing with two issues. First, he sought clarification as to the plaintiff’s terms of remuneration and the manner in which they had been varied during 2006. Second, Mr Dods pressed the plaintiff with a request that the job description documents in final form be made available within the next 6 days or so. It would appear that this type of information sought by Mr Dods was part of a general review of the club and its performance that had been instituted following the poor result in the grand final.
The plaintiff responded to Mr Dods’ e-mail on the same day, that is, 21 April 2007 (exhibit P9). This e-mail is of potential significance because of the assertion in it that the plaintiff had a contract with the club until June 30, 2008. The e-mail contains the following passage:
I initially made arrangement with both Kossi and Michael P (in March 2006) that I would be paid $60K exclusive of GST. When I had to eventually give up SASI, I was still on the same remuneration. I approached Michael with the fact that the job required more time and resources that (sic) was initially agreed to (timesheet average well over 50 hours per week). After four months a new contract was agreed with Dario and Sam (had this not been agreed I would certainly had (sic) taken up other options). At the time, the agreement also included that I could be released to do Australian Under 23 commitments as long as the head coach agreed without any deduction in pay. Therefore the agreed new pay arrangements were decided with all these facts in place. It was also agreed that the contract term would finish June 30 2008, and that if I agreed to leave prior to this date I had to give one month’s notice. I have included the maths on sums paid …
I make a number of observations about this e-mail. First, insofar as it refers to a contract term to finish June 30, 2008, it would appear to be inconsistent with the reference in exhibit P7 to the plaintiff’s contract being for the 2006/2007 season. Second, it is significant to my mind that the plaintiff has fixed upon the date June 30th 2008. The plaintiff’s evidence in court with respect to both the April 2006 meeting and the December 2006 meeting was that the club representative concerned wanted the plaintiff’s contract to tie in with that of Vidmar and Kosmina which we now know to have been 30 April 2008. However, the plaintiff said that as at the April 2006 meeting he knew, from discussions he had had with both Mr Vidmar and Mr Kosmina, that their contracts were to end at either the end of the season 2008 or 30 June 2008 (T39). At best, the P9 e-mail, in this respect, contains no more than a prior statement by the plaintiff consistent with his evidence in court. It carries no evidentiary weight in support of the plaintiff’s case.
In any event, this e-mail was written at a time when the plaintiff clearly was anxious about his future with the club and, in my view, is to be regarded as self-serving. I place little or no weight on the fact that Mr Dods did not immediately respond in writing challenging the assertion that there was a contract in place until 30th June 2008. Mr Dods had not been directly privy to any of the discussions involving the negotiation and renegotiation of the plaintiff’s arrangement with the club. His interest in this exchange of communications was in clarifying the plaintiff’s remuneration conditions (T211).
It follows that I do not regard exhibit P9 in the same way and as having the same probative force as the earlier e-mail, exhibit P7, written in circumstances where the plaintiff had no motive other than to set out, as best as he could recall, the effect of the discussions 12 days before at the Bianco Christmas function meeting.
Conclusion on the Issue of whether or not the Plaintiff’s Contract was for a Fixed Term expiring at the end of the 2007/2008 Season or Similar
For the reasons I have set out above, I reject the plaintiff’s account of the discussions held at the Liquid Café in April 2006 insofar as he has asserted that Mr Petrillo agreed on behalf of the defendant that the plaintiff’s contract with the defendant was to be for a fixed term, expiring either 30 June 2008 or end of season 2008, or so as to tie in with the Vidmar/Kosmina contractual terms. I find that no such term was agreed to by the defendant on that occasion. I also reject the plaintiff’s account, given in evidence, to the effect that Mr Fontanarosa confirmed the existence of such a contractual term during his negotiations with the plaintiff at the December 2006 Bianco Christmas function meeting.
It follows, that I do not have to address the issue of whether or not the contractual term asserted by the plaintiff was bedevilled by uncertainty or if so, how any such uncertainty might be resolved.
What was Agreed Upon as to Duration

This is not a case where the plaintiff gave up long-term, secure, full-time employment to come and work for the defendant. The plaintiff’s employment with SASI was full-time but there is no evidence as to how secure it was at the time he started to work part-time for the defendant nor is there any evidence as to his SASI remuneration and other conditions. However, it is plain that the plaintiff was becoming increasingly dissatisfied with a number of aspects of his SASI work. What is also clear is that the plaintiff was actively seeking full-time employment with the defendant (T35-36), was confident that he could “back himself in” and was prepared to leave his SASI position at a time (August 2006) well before he had secured full-time employment with the defendant.
After considering the tests set out above in the context of the circumstances identified above, I have come to the conclusion that a reasonable period of notice in this case is six months expiring 25 December 2007. The defendant offered the plaintiff four weeks payment on an ex gratia basis which was rejected. It follows that subject to questions of mitigation, the plaintiff is entitled to damages in an amount based on 6 months lost remuneration at the rate of $92,650 (exclusive of GST) per annum.
Involvement with the Under 23 National Team
I will come to the issue of mitigation later in these reasons. I turn first to the question of whether or not the parties’ contract contained a term that the plaintiff would be released on full pay whenever invited to work with the national Under 23 team. According to the plaintiff, this issue only arose during the negotiations with Mr Fontanarosa at the December 2006 meeting.
Mr Fontanarosa said in evidence that, as at the 22 December meeting, he was aware that the plaintiff had been selected to work with the national Under 23 team for a particular event. He told the plaintiff that “they” were proud when anyone in the club was picked for a national team. He said that the club would continue to pay the plaintiff for the week or so that he was expected to be away (T172-173). He said that there was no further discussion about involvement with the Under 23 team at that meeting. Mr Fontanarosa did say that he gave (but did not indicate when) the plaintiff an undertaking that he could attend Under 23 matches. However, when asked what was the nature of that undertaking, his response was a qualified one:
Well, I made it quite clear with anyone in our club, you get picked for the national team, excellent, we are proud and we will do what we can to support you, including players.
Later during his examination in chief Mr Fontanarosa described the club’s practice with respect to national team selections; “we always give out the green light as long as the coach is comfortable with it” (T176).
According to the plaintiff, Mr Fontanarosa said how honoured the management was to have Kosmina, Vidmar and the plaintiff involved with national sides and “we would never stop anybody from going or representing their country. It gives the club great kudos … [It] helps us as a club” (T58-59).
In cross-examination, the plaintiff agreed that there was a qualification in that he would need to get the head coach’s approval to any involvement with the national team (T129).[44] In addition, according to the plaintiff, as at 22 December, he knew that he had a commitment of three weeks in January/February 2007. However, anything after that was “up in the air” and depended on whether or not the Under 23 team won in February. He said that Mr Fontanarosa said nothing in the meeting to the effect that his permission to work with the national team was confined to these three weeks (T154).
[44] That any such contractual term was so qualified was conceded by the plaintiff in final submissions (T319-320).
I have only set out a brief summary of the evidence on this topic. It was given at a very general level.
As a practical matter, it makes sense that the involvement of a central member of the coaching staff, such as the plaintiff, in national duties would be subject to club demands – particularly at busy times of the year such as near the end of the home and away series and the commencement of the finals. Mr Hagicostas conceded as much when he agreed that the head coach’s approval would be needed.
I do not accept that Mr Hagicostas understood Mr Fontanarosa, during the 22 December meeting, to be offering any form of guarantee that Mr Hagicostas would be released on full pay to undertake national Under 23 team duties in all circumstances. I find that Mr Fontanarosa did not have the intention, nor did the plaintiff understand him to have the intention, to enter into a contractually binding obligation to this effect.
I find that a more qualified assurance was discussed. However, I do not accept that the parties intended to enter into a contractually binding obligation to this effect.
At the time of the December discussion, Mr Fontanarosa was aware of one impending commitment with the Under 23 team and of the likelihood that the plaintiff would be offered further work with the Under 23 team. However, the plaintiff did not indicate to Mr Fontanarosa the full extent of possible involvement.[45] As events turned out, this potential involvement exceeded 100 days over the ten month period, February to October 2007. In any event, the language of the assurance given by Mr Fontanarosa, whether his account or the plaintiff’s account be accepted as accurate, was in the most general terms and the plaintiff clearly understood that the needs of the club would always come first. In addition, it was at the December 2006 meeting that the defendant had agreed to a substantial increase in remuneration based on the plaintiff’s assurance that his job required a 50 hour per week commitment. In these circumstances, I am not persuaded that Mr Fontanarosa intended to give a contractually binding undertaking at all as opposed to an assurance that any requests for absence on full pay would be favourably considered. I also am not persuaded that a reasonable person in Mr Hagicostas’ position would have understood Mr Fontanarosa to have intended a contractually binding undertaking.
[45] As was set out in the e-mail dated 16/12/06 from Gary Moretti in P11.
If I am wrong, then any contractual entitlement was, at most, subject to approval on each occasion by the head coach. I do not accept that Mr Hagicostas understood this qualification to be restricted literally to the decision of the head coach. It was understood that leave of absence for any particular period of time would be subject to the football performance needs of the team at that time; in other words, that the person or persons responsible for the on field performance of the team and to whom the plaintiff reported would have power to veto any extended absences. If Mr Fontanarosa, when re-negotiating the plaintiff’s contractual terms, did give a contractual undertaking, then it was to this effect.
I turn now to consider whether or not, on this assumption, the defendant breached any such contractual undertaking. In January 2007, both the plaintiff and Mr Vidmar spoke to Mr Dods. They had been invited to assist with the national Under 23 team in February at a full-time camp. At first, Mr Dods refused to allow them to go given the proximity of the impending finals. Mr Kosmina, the then head coach, and who was also present, told the plaintiff that Mr Dods, as Director of Football, was the person to whom they were both accountable.
After further discussion, Mr Dods agreed that one of either the plaintiff or Mr Vidmar could go to the camp. The plaintiff went and Mr Vidmar did not. However, according to the plaintiff, Mr Dods issued a directive that he was to have no further involvement with the Under 23 side at least to the extent that it would involve any absence from Adelaide (T71, 103). Thereafter the plaintiff had no further involvement with the Under 23 side up to and until he stopped working for the defendant in June 2007. He said that he did not seek any further permissions because of Mr Dods’ “directive”.
The plaintiff said that, at the time of this conversation, Mr Dods was “fairly agitated”. The plaintiff thought that it would be better to pick another time and place to discuss the issue - “I just let it go” (T136-137). The plaintiff agreed that notwithstanding Mr Fontanarosa’s “open door policy” and the fact that he had received the undertaking from him only a couple of weeks earlier, he did not complain to or seek clarification from Mr Fontanarosa (T135).
Mr Dods, in his evidence, said that the involvement of Mr Kosmina, Mr Vidmar and the plaintiff in national duties was a positive thing for the club and something it would encourage (T197). As far as the discussions about the February 2007 camp were concerned, Mr Dods said that it was always assumed that Mr Hagicostas and the others would be released if it didn’t conflict with the needs of the club and this had been the club practice (T197-198). However, on this occasion, it was coming up to the finals and the team’s form had not been good. Mr Dods was also concerned that this time there had not been a timely request or notification by the Football Federation of Australia. In his view, it was not in the best interests of the club at this time and he said so. He told the court that the plaintiff agreed to this. Mr Dods had no recollection of issuing an instruction that Mr Hagicostas was to cease all activities with the Under 23s.
At the time of the February camp with the Under 23s, there was no breach of contract by the defendant; the plaintiff ultimately attended to those Under 23s duties and remained on full pay with the defendant.
The question arises as to whether or not the conduct of Mr Dods during the January conversation with the plaintiff gave rise to a breach of any contractual undertaking given by Mr Fontanarosa on behalf of the defendant that the plaintiff would be released for Under 23 national team duties subject to the approval of the head coach.
I am not persuaded that the position as to the future, if any, put to the plaintiff by Mr Dods was the categorical refusal, that is, repudiation of the undertaking, that the plaintiff has suggested. I was impressed with Mr Dods. He gave his evidence in a straightforward manner and, in my view, according to the best of his recollection. He was frank about his initial refusal to allow the plaintiff to participate in the Under 23 team camp in February, the reasons for this and as to his ultimate decision to allow one of either the plaintiff or Mr Vidmar to go. He had no recollection of issuing such a directive as to the future. However, he made it plain that the club strongly supported national team involvement provided it didn’t conflict with the needs of the club.
It makes little sense for Mr Dods to have issued such a directive for the future when each proposed period of absence would need to be considered having regard to the club circumstances as known at the time of any request. In addition, I have already found Mr Hagicostas’ evidence, in other critical respects, to be the product, in part, of reconstruction and unreliable.
Of course, Mr Vidmar was involved in these conversations with Mr Dods and may have been in a position to assist with what Mr Dods actually said. He was not called to give evidence. At the time, he was the assistant coach and shortly afterwards became the head coach. As at the trial, Mr Vidmar was still involved with the defendant. However, the plaintiff said that he and Mr Vidmar “are extremely close friends” (T78). In these circumstances, I am not in a position to conclude that one party rather than the other would have been expected to call Mr Vidmar. For this reason, I take the failure to hear from Mr Vidmar on this topic no further.
Whatever Mr Dods may have said regarding future involvements, I do not accept that Mr Hagicostas perceived it to be the defendant’s final or irrevocable position. He was prepared to bide his time – to pick the right time to approach the issue again. He did not see the need to revisit the topic with Mr Fontanarosa. I am not persuaded that the words and/or conduct of Mr Dods comprised an unequivocal expression of an intention, on behalf of the defendant, not to observe the contractual undertaking asserted and relied upon by the plaintiff.
In any event, the terms of the undertaking relied upon by the plaintiff are such as to entitle the “head coach” – whether or not that be the Director of Football[46] (Mr Dods), Mr Kosmina (until March 2007) or Mr Vidmar (thereafter) – to assess the circumstances relevant to each proposed absence. The plaintiff made no further requests and received no further refusals. For this reason, the defendant cannot be said to have breached the undertaking given on its behalf by Mr Fontanarosa. The plaintiff was not entitled to a blanket guarantee as to the future. For whatever reason and as events developed during the first half of 2007, the plaintiff did not make any further requests. In order for the defendant to have breached the undertaking it would need to have received a request for leave over a specified period and to have refused that request for reasons other than the “head coach” being satisfied that it was not in the best interests of the club. This did not happen.
[46] The plaintiff acknowledged that from late December 2007 or early January 2008 he reported directly to Mr Dods rather than the head coach, T77.
If I am wrong and the actions of Mr Dods did give rise to a breach of contract by the defendant, it would be necessary to assess the plaintiff’s damages caused by such a breach. Both parties accepted that this would involve an assessment of the value of Mr Hagicostas’ loss of opportunity to receive additional remuneration for working with the national Under 23 team throughout the balance of his contract period.
In this respect, any loss suffered by the plaintiff is to be assessed on the basis that he was deprived of opportunities to work for the Under 23 side between February (that is after the last camp the plaintiff went on) and December 2007. I have found that the plaintiff was entitled to reasonable notice expiring on 25 December. The plaintiff was entitled to have worked for the defendant throughout that notice period under his usually applicable terms and conditions.[47]
[47] Sanders v Snell (1998) 196 CLR 329 at 337-338.
By e-mail dated 16 December 2006 (P11) Mr Gary Moretti, on behalf of the FFA, provided the plaintiff with a draft programme of matches and training camps for the national Under 23 team over the period February to October 2007. In exhibit D2 the plaintiff has provided a chart setting out the days during that period which the plaintiff says would have been available for him to work with the Under 23 team.
Exhibit P3 comprises the invoices rendered by Mr Paul Scott for work he in fact did for the Under 23 team during this period. Mr Scott started working as a masseur with the Under 23 team in late 2006. He said that the plaintiff’s main role was to provide the players with strengthening and conditioning services but also to assist Mr Scott with the massaging work. After the plaintiff stopped working with the Under 23 team, in or about February 2007, Mr Scott and another man, Mr Darren Burgess, increased their involvement. They started to perform the strengthening and conditioning role.
Having considered the Moretti e-mail in P11, D2 and P3 and the evidence of Mr Scott and the plaintiff I find, on a balance of probabilities, that exhibit D2 sets out the opportunities available for work with the Under 23 team during February to October 2007 but not enjoyed by the plaintiff. As such, I am satisfied that if the defendant were found to have breached its contract by refusing to allow the plaintiff to work with the Under 23 team, such a breach would have caused the plaintiff a loss of opportunity to earn further income.
According to exhibit P3, Mr Scott worked 107 days and was paid $27,249, that is, an average of $254 per day. Of the 107 days in fact worked by Mr Scott, the plaintiff claims that he could have worked 90. The plaintiff has claimed an additional 14 days, forming part of the Under 23 programme, that Mr Scott did not work, making a total of 104 days claimed by the plaintiff.
I accept, based on Mr Scott’s evidence of his rates of pay and the evidence of the plaintiff, that an appropriate average daily rate of pay, had the plaintiff worked for these 104 days, would have been $250.
The plaintiff’s claim is for the loss of a commercial opportunity, that is, the loss of a chance.[48] Once I am satisfied, on the balance of probabilities, that he has been caused this loss of chance – as I am – I must then assess its value by having regard to the possibilities that it would have been realised. If it was a certainty that all of these days would have been taken up, the plaintiff’s loss would be 104 days at $250 per day, that is, $26,000.
[48] This was accepted by both parties during final submissions; see generally Carter and Harland, Contract Law in Australia 4^th ed at [2163] – [2164].
However, in my view, there was no such certainty. I accept that the plaintiff was in favour with the FFA; according to the Moretti e-mail the plaintiff was listed as “conditioner/masseur” for the first three camps.[49] It is highly likely that the plaintiff would have been offered work throughout the period. However, much of the work available was, in fact, performed by Mr Scott and others and there is no reason to think it was not done satisfactorily. I am unable to find that, had the plaintiff been available throughout the period, he would have been offered all of the work available to the exclusion of Mr Scott and others.
[49] The later camps had not, as at December 2006, been planned to this level of detail.
Furthermore, the plaintiff claims that he would have worked 104 days of the 260 or so working days in the February to October period.[50] The plaintiff was working 50 hours per week for the defendant. I cannot accept, having regard to the qualified nature of the defendant’s assurance, that the defendant would have been willing to release the plaintiff for anything like the full 104 days.
[50] This is based on a six day working week. On the basis of a five day working week there would only be 215 working days.
For these reasons, I do not accept that the plaintiff necessarily would have been offered all of the available work or would have been in a position to accept all of the available work. Doing the best I can on the evidence available, I find that the probability of the plaintiff being offered and in a position to accept the available 104 days work to be of the order of 60%. Another, and perhaps simpler, way of looking at the matter is to estimate, using a broad axe, that the plaintiff has been deprived of say 62 days work with the Under 23 team.
I therefore assess the plaintiff’s (notional)[51] loss to be $15,600 (0.6 x $26,000) exclusive of GST.
[51] I have already found that there was no contractual term as relied on by the plaintiff nor any breach.
Mitigation of Loss
I return to the question of mitigation of the plaintiff’s loss. I have found that the reasonable notice to which the plaintiff was entitled amounted to six months. In breach of contract the defendant did not provide that reasonable notice and prima facie the plaintiff has suffered loss and damage, as a consequence, equal to six months salary. However, the plaintiff had a duty to take such steps as were reasonable in the circumstances in an effort to mitigate this loss.
The onus rests with the defendant to identify and prove a failure by the plaintiff to mitigate.[52] The defendant launched a modest attack on the plaintiff in this regard. However, the defendant did not allege in its pleadings any specific steps which the plaintiff failed to take and which, if taken, would have lessened the plaintiff’s loss. The plaintiff gave evidence, albeit quite limited, of the steps he did take in attempting to acquire replacement employment. He managed to obtain some part-time consulting type work during the period between leaving the defendant (June 2007) and finally commencing work on a full-time basis with the Sydney Football Club (May 2008).
[52] Industrial Plant Pty Ltd v Robert’s Queensland Pty Ltd (1963) 180 CLR 130 at 138.

As I have said, the evidence on this issue is quite limited. However, bearing in mind the difficulties, outlined above, that confronted the plaintiff in attempting to find comparable replacement work and the fact that ultimately the burden of proof here lies with the defendant, I am not persuaded that the plaintiff failed to take reasonable steps in attempting to mitigate his loss.
Nevertheless, the steps the plaintiff in fact took did bear some fruit. When assessing his damages, account must be taken of replacement income in fact earned during the six month notice period, after allowing for expenses properly incurred in earning that income provided that the replacement income arose as a consequence of the breach and was not an entirely collateral benefit. [53]
[53] Lucy v The Commonwealth (1923) 33 CLR 229, Lavarack v Woods of Colchester Ltd [1967] 1 QB 278.
The evidence of the plaintiff (T88ff) as to his earnings during the six months after 26 June 2007 was essentially uncontested by the defendant. In total, he earned $6,856.37 (ex GST). This was made up of two lots of $2,800 (ex GST) received from Football Federation of Australia[54] together with fees received for four smaller consultancies.[55]
[54] These two amounts related to work with the Australian under 20 team in July/August 2007 and work with the Australian Socceroos in September 2007 respectively.
[55] In September, October and December of 2007 and as listed on the first page of exhibit P11.
The plaintiff earned other income as recorded in exhibit P11 and identified in the plaintiff’s oral evidence. However, this additional income accrued to the plaintiff in the first half of the 2008 calendar year, that is, outside the six month notice period. There is one amount of $1,000 that the plaintiff spoke of (T91) and which he received for work done for the International Athletics Federation. However, this was paid in cash and the plaintiff did not say when he earned this money. There is nothing in the evidence[56] which enables me to infer that it was earned during rather than outside the six month notice period. I therefore propose to ignore this amount of $1,000 when assessing the plaintiff’s damages.
[56] Exhibit P13 contains an e-mail dated 24 January 2008 which refers to a lecture obligation for “the IAAF” to take place in March 2008 and for which the plaintiff expected to be paid approximately $US1,000. If this is the $1,000 referred to by the plaintiff in his evidence then it does fall outside the six month notice period and is to be ignored.
Mr Hagicostas also incurred work related expenses in the six months following 26 June 2007. His evidence about most of these expenses (T93ff) is conveniently summarised in MFI P1. Expenses also were incurred in the first half of the 2008 calendar year but I will ignore them for present purposes. The expenses incurred during the six month notice period were in the order of:
(i)     lap top computer and related hard and soft ware (0.5 x $1200[57])     $600
(ii)   telephone (0.6 x $2,000[58])  $1,200
(iii) coach association fees (0.5 x $179[59])  $90
(iv)   car expenses (0.6 x $3,300[60])  $1,980
(v)    coaching expenses (0.5 x $500[61])  $250
(vi)   special clothing (0.5 x $450[62])  $225
[57] The figure of $1,200 included in MFI P1 was a figure suggested by the plaintiff’s accountant as apparently representing an estimated annual depreciation expense.
[58] The figure of $2,000 was derived from information provided to the plaintiff by his accountant for the purpose of his annual taxation return. It represents estimated business use for the 10 months July 2007 to April 2008.
[59] This was an annual cost claimed in the plaintiff’s taxation return.
[60] The figure of $3,300 was derived from information provided to the plaintiff by his accountant for the purpose of his annual taxation return. The figure of $3,300 represents estimated business use for the 10 months July 2007 to April 2008.
[61] $500 was the plaintiff’s estimate of the cost of small items of coaching equipment over the 2007/2008 year.
[62] $450 was the plaintiff’s estimate of the cost of tracksuits, runner shoes and the like over the 2007/2008 year.
The total of the expenses identified by the plaintiff as summarised in exhibit MFI P1 and incurred during the six month notice period (on the assumption that they were incurred evenly across the financial year 2007/2008[63]) is $3,745.
[63] This assumption is unlikely to be accurate, for example, car expenses may have been incurred at some times of the year but not others.
In addition to the expenses as summarised in MFI P1 the plaintiff said he also incurred food and other living expenses when in Sydney whilst either working or applying for positions during the relevant period in the amount of $203.90. This evidence was not challenged. After rounding up, the plaintiff claims that approximately $4,000 by way of expenses was incurred in earning the amount of $6,856.37 or whilst attempting to find replacement work during the six month notice period.
Some of the evidence, as to the amount of the expenses claimed, was hearsay.[64] Nevertheless and based on the plaintiff’s evidence I do not doubt that expense items of the nature put forward were incurred and that the actual amounts claimed are relatively modest. Another difficulty here is that the evidence does not enable me to determine which of these expense items, if any, would have been incurred by the plaintiff and not reimbursed by the defendant, in any event, had the plaintiff remained working for it during the six month period. To the extent that any of the expenses fall into this category, the plaintiff should not be entitled to have such amounts deducted from his actual earnings that are to be offset against his damages. Whilst there was little evidence on the topic, it appears that when rendering his monthly invoices the plaintiff would include, from time to time, a claim for expenses which would be met by the defendant.[65]
[64] The accountant who provided the estimates was not called nor was documentary support for all of the claimed expense items made available.
[65] At T126 the plaintiff said that his phone bill was a recoverable expense and that there might be occasions when he would be reimbursed for other purchases made and see also T42.
There is insufficient evidence to enable me to make precise findings as to the types of expenses (or the proportion of any phone bill) that the plaintiff had a contractual entitlement (if any) to have reimbursed or (as is more likely to be the case) that the defendant, as a matter of practice, was prepared to reimburse.
In these circumstances, I can only take a broad axe approach. For the purpose of assessing the plaintiff’s damages for the defendant’s failure to give six months notice, I find that the plaintiff should give credit for $3,500 of income earned during the six month notice period after allowing for expenses incurred in earning that income.[66]
[66] Given that the amounts are so small there is unlikely to have been any taxation consequences of significance, if any, and I have ignored this in my calculations.
Conclusion
The plaintiff is entitled to a judgment in his favour for damages based on six months lost income after allowing for $3,500 income earned during the period of notice of which he was deprived. I wish to hear from the parties as to whether there are any income tax or GST issues that ought to be taken into account before fixing the amount of those damages. I also will hear from the parties as to interest and costs. I will adjourn the matter for further consideration of these issues.
I direct the plaintiff to provide draft minutes of orders, consistent with these reasons, and which he submits should be made on the next occasion.