Newton Heath Pty Ltd v 3AW Southern Cross Radio Pty Ltd
[2000] VSC 103
•30 March 2000
| SUPREME COURT OF VICTORIA |
| Not Restricted |
No. 13830 of 1991
| NEWTON HEATH PTY LTD AND DENIS CONNELL | Plaintiffs |
| V | |
| 3AW SOUTHERN CROSS RADIO PTY LTD | Defendant |
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JUDGE: | Eames J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 10, 14-17 March 2000 | |
DATE OF JUDGMENT: | 30 March 2000 | |
CASE MAY BE CITED AS: | Newton Heath Pty Ltd and Anor v 3AW | |
MEDIUM NEUTRAL CITATION: | [2000] VSC 103 | |
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Contract – offer and acceptance – whether offer contained in unexecuted written agreement was expressly accepted by oral acceptance – whether acceptance to be inferred from conduct of parties.
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APPEARANCES: | Counsel | Solicitors |
For the Plaintiffs | Mr. G.A.A. Nettle QC | Clements Hutchins & Co |
| For the Defendant | Mr D.Collins | Corrs Chambers Westgarth |
HIS HONOUR:
For some four years, until about 1988, the plaintiff, Denis Connell, and a person who was then a friend, Ross Campbell, conducted a radio program on community radio station 3RRR. The program, after a time, became known by the title "Lawyers, Guns and Money". Connell was a barrister and Campbell a solicitor. Both appeared on the program under pseudonyms; Connell called himself Denis Donoghue and Campbell was called Ross Stevenson. They were not paid for their work on the program. The program on 3RRR gained some notoriety and an audience. In due course, a commercial radio station, 3AK, offered a contract to them to bring the program to 3AK where they were to perform each Saturday morning. The two presenters were paid a total of $1000 per program, out of which all expenses, including payment for contributors, had to be met before any sum remained for themselves.
In late 1989, whilst the contract with 3AK had approximately a year to run, radio station 3AW made an offer to Connell and Campbell, through its general manager, Denis O’Kane, which they subsequently accepted. The program on 3AW was to be a breakfast program conducted five days a week between 6.30 am and 8.30 am. The negotiations for the contract with 3AW were conducted on behalf of both Connell and Campbell by their agent, David Robb. It was agreed that they would be paid $125,000 each, although they had accepted the offer in the mistaken belief that that sum was to be divided equally between them. Connell said that from the outset it was made clear by 3AW that they would be asked to sign a written agreement, and at or about the time when their first program was due to be aired a written contract was presented to each of them.
The written contract identified the parties as being Tricom Radio (3AW) Pty Ltd (the former name of the present defendant) and Six to Eight Grand Whippy Pty Ltd. The latter company was a unit trustee company the units of which were held as to half each by two private companies controlled respectively by Connell and Campbell. Connell's company was Newton Heath Pty Ltd. Having received the contract Connell read it but neither he nor Campbell bothered to have the contract executed by their company, and did not append their own signatures to the contract. Connell told me that although it was suggested by 3AW that they should execute the agreement, they continued to present the program without there being any executed written contract.
In 1990 O’Kane left 3AW, and was replaced as General Manager by Anthony Bell. Bell discovered that the contract had never been executed. He spoke to Connell and Campbell about the need to sign the agreement and, towards the end of 1990, the agreement was executed. Both Connell and Campbell appended their signatures to the agreement, as directors of Six to Eight Grand Whippy Pty Ltd, but the company seal was never affixed to the agreement. Connell said that they had been presenting the program for about a year before the contract was executed. During that period Connell, Campbell and 3AW, conducted themselves as though the contract had been formally executed.
The contract with Six to Eight Grand Whippy Pty Ltd provided that it was that company which would provide program packages, as they were called, to 3AW, featuring the characters Donoghue and Stevenson, the pseudonyms adopted by Connell and Campbell. The contract specified that it was the company which had exclusive right to the use of the name "Lawyers, Guns and Money". The contract provided for a base rate payment of $125,000 per annum for each performer. In addition, the monthly payments were to increase according to a percentage calculated by reference to the increase in the percentage share of the audience as determined by ratings over the course of the contract. The contract required the performer’s company to give undertakings, among which were that the performers would comply with all reasonable directions given by the management of 3AW. The contract, by its terms, was deemed to have commenced on 1 January 1990 and was to continue until 31 December 1992.
The ratings gradually increased, which led to pay increases to Connell and Campbell, and the prospects for Connell and the program appeared very good. As a result of the survey conducted in the third quarter of 1990 - which disclosed a ratings percentage of 10.6 percent – the annual salary rose from a base of $125,000 to $146,000 for each of Connell and Campbell. By the fourth survey of 1990 the audience share had risen to 13.1 percent and their pay had risen to $150,000 each.
Connell said that during 1990 he did not have any difficulties with the management of the station, but difficulties in the relationship between Campbell and Connell had arisen, seemingly involving both professional and personal issues. They continued to work together on air and sought to present an harmonious appearance to the audience.
In 1991 difficulties also arose between Connell and other employees, as well as management, of 3AW. In 1991 Connell had a confrontation with another presenter at 3AW, Neil Mitchell. Mitchell's program followed the Breakfast Show and it was the practice that shortly prior to the closing of the breakfast program he would join the Breakfast Show personnel in their studio, in order to do an on-air promotion for his own program.
In March 1991 whilst conducting an on-air program promotion, in the studio with Campbell and Connell, Mitchell referred the audience to the fact that according to the daily Law List, published in a daily newspaper, a person by the name of Denis Connell was listed to appear before the Barristers' Disciplinary Tribunal. In fact, the name Connell was not broadcast, because a program producer took advantage of an on-air delay button which prevented the name being broadcast. The audience would have heard, however, that the Law List showed a case before the disciplinary tribunal. Although he appeared on the program under the pseudonym of Denis Donoghue, Connell, believing his real name had been broadcast, was incensed with the conduct of Mitchell and made disparaging remarks about Mitchell, on air, the following day during the breakfast program.
The disciplinary proceedings had been referred to the Tribunal by Connell himself, and I was told that he was exonerated in the inquiry. Why Mitchell chose to address the issue, at all, I do not know, and the reason is not relevant to the case before me, although the subsequent reaction of 3AW, Connell and Mitchell has indirect relevance.
Steve Price, then the program manager, and a close friend, at that time, of Mitchell, spoke to Connell and deprecated the comments which Connell had made.
On 5 March 1991, which was shortly after Connell made his on-air comments about Mitchell, the general manager, Bell, delivered a memorandum to Connell which expressed concern as to what he said was the damage that Connell had inflicted on 3AW and to Mitchell and to himself - that is, Connell - and noted that it was a breach of the agreement with the company. It was not entirely clear to me just what it was that Connell had said about Mitchell on air. His own recollection related to events which took place on a different occasion. Whatever had been said, Bell described it in the memo as being potentially damaging to Mitchell’s reputation and credibility, being unsourced information that was both malicious and inaccurate. Bell required an apology to be given, off air, and requested a guarantee of compliance with what he said was an agreement which had been earlier made between them that there would be no on-air references to colleagues of a contentious kind.
Bell told me that prior to his joining the station the previous management had not discouraged on-air abuse between presenters, it being the perceived wisdom that such banter was good for the ratings. Bell did not agree with that philosophy, and Connell agreed in his evidence that Bell’s motive in giving the memorandum to him was his desire that there be harmonious relations between all staff at 3AW. Connell told me that he agreed to abide by the terms of the memo, but said he did not recall that he made an apology, as had been requested.
In July 1991 Price wrote a memo to Connell complaining that he had let down a team of people who were trying to improve the program. The complaint, apparently, was that Connell had failed to attend when required, and then to contribute to a production meeting. In his evidence, Connell denied having received that memo, and denied, too, that he had failed to contribute to the program in the manner suggested.
In October 1991, at a time when - according to Connell - the breakfast team was harmonious, Connell was arrested on charges of driving while exceeding the .05% alcohol limit and giving a false name and address. His arrest and subsequent conviction were prominently highlighted in the print media. Connell did not appear at court for sentence but his counsel made submissions on his behalf, which also received prominent publicity. The thrust of the submissions to the court, as reported in one weekly newspaper, was that the offences occurred because Connell, having been away from his home for some days, had suddenly realised that his cat had not been fed and, although he had been drinking, was compelled to drive his vehicle to obtain cat food. That submission was treated with derision in the article in the weekly newspaper, being characterised as a “cat mercy dash” plea.
Following the court case Connell had spoken on-air about his convictions, apparently in response to the issue being raised by others on the program. On the same day, 8 October 1991, Mitchell broadcast a program in which he expressed outrage that, as he said, Connell had treated his convictions as a joke. He read to the audience the full text of the weekly newspaper article, which was a somewhat contemptuous account of the court proceedings, and of the submission which had been made on behalf of Connell. He then took talk-back phone calls on the topic. Connell did not hear the broadcast, but was informed by others of the gist of what had been said.
The following day, on air, Connell launched a lengthy response to Mitchell’s criticism. He accused Mitchell of having published an unsigned note on the studio notice board intimating that Connell had been arrested for “drunk driving”. He also referred to the incident in March when the Barrister’s Disciplinary Tribunal proceedings had been mentioned by Mitchell. In responding to Mitchell’s criticism Connell employed extravagant and intemperate language and made a personal attack on Mitchell’s character. Among other criticisms, he accused Mitchell of hypocrisy and cowardice.
After the program Connell was confronted by Price, who announced that he was suspended from on-air performances. Bell told me, and I accept, that Price was acting on Bell's instructions when he stood down Connell. Connell remained off the air for some 10 days, although he attended 3AW each day and was paid during that period. At the end of that period Bell spoke to Connell and the latter returned to on-air duties.
At or about the time that Connell was to re-commence on-air duties, Bell posted a letter to Connell’s agent, dated 17 October 1991. That purported to be a notice under clauses 8(3)(a) and (b) and (c) of the agreement with Six to Eight Grand Whippy Pty Ltd. It was directed both to Connell and to Six to Eight Grand Whippy Pty Ltd. The document gave notice of 3AW’s intention to terminate the agreement for conduct by Connell in breach of the agreement, and gave seven days to remedy the breaches of the agreement. A similar document, but dated 18 October 1991, was sent to Six to Eight Grand Whippy Pty Ltd in its sole name, care of the performers’ agent.
The conduct which was said to constitute serious misconduct and disobedience and/or neglect to carry out reasonable directions, as required under the contract, was identified as being the convictions, as well as on-air discussions of management policy, the continuation of negative comments about Mitchell (despite directions to cease), the creation of disharmony around the program, the suggestion that Connell’s conduct prejudiced his own reputation, and a complaint that Connell had, without permission, made a statement in the media concerning his suspension from the program. Connell and the company were given seven days “to remedy the aforementioned acts or conduct”.
The notice of termination of the contract was part of a strategy which Bell had decided to adopt in order to achieve greater control by 3AW over Connell’s behaviour. He had instructed the 3AW solicitors to take steps to replace the existing contract with two new contracts, whereby Connell and Campbell would be separately contracted to 3AW. The contract with Connell was to contain clauses directed to achieving the desired measure of control over Connell.
Connell said that he did not, at the time, understand what the termination of contract letter meant, because he did not see how he could “remedy” a factual matter, such as having been convicted.
In October 1991, after Connell had re-commenced broadcasting, Bell handed a proposed new agreement to Connell. Unlike the previous contract, this one was in Connell’s name and that of his trust company, Newton Heath Pty Ltd. That company had been the recipient of cheques for salary paid out under the Six to Eight Grand Whippy contract. Bell told Connell that it had been decided that there should be separate contracts between 3AW and each of Connell and Campbell. Connell told me that this was the first he had heard of any suggestion that the previous contract, which had covered both Connell’s and Campbell’s interests through the Grand Whippy company, was to be replaced by separate contracts between 3AW and Connell, on the one hand, and 3AW and Campbell, on the other. However, there is very little dispute between the parties as to what was said when this contract was handed to Connell. In handing over the contract, Bell invited Connell to have a look at it, and Connell said that he would do so. Connell does not suggest that he there and then accepted the agreement which had been proffered.
Connell said that he later looked at the contract, and was happy with it, because the remuneration was the same as under the old contract and, so far as he could see, the only substantial difference from the previous contract was that it would last a year longer than the old contract would have done. Although happy with the contract Connell did not sign it, nor have his company execute it.
The dispute between the parties in this case ultimately turns on the terms of a subsequent conversation, which occurred between Bell and Connell, either in about Cup week, or, perhaps, in about mid-November 1991. According to Connell, Bell approached him at the breakfast program’s studio entrance and, in sincere and jubilant terms, complimented the team on their program. On Connell’s version of the conversation, Bell asked Connell: “Do you have any troubles with the contract?”, to which Connell said he replied: “No, I’m happy with the deal”. If that version of the conversation is accepted, then, as counsel for 3AW agrees (subject to one qualification which I will later address), there has been acceptance of the new agreement, and Connell’s subsequent dismissal was in breach of that agreement. On neither version of this conversation was any other person present when the conversation occurred between Bell and Connell.
According to Connell, neither at the time of delivery of the contract, nor at the later time when he was asked if he had any problems with its terms, did Bell ask or require that Connell sign the agreement. He agreed that when he handed the new contract to Connell, Bell said that he would like Connell to consider it. Connell said that he continued to conduct the breakfast program without the contract having been signed, and without any suggestion from Bell that he needed to do so. Had Bell asked him to sign the agreement, after Connell had read it, then, so Connell told me, he would have done so, at once.
Campbell had also been offered a separate contract, which he and his trust company executed on 19 November 1991. He had had no discussion with Connell about the matter. Although there were differences in the terms of the agreements offered to Connell and Campbell, they both had in common a provision which stipulated that commencement of the new agreement was conditional on the old contract being terminated.
It is clear that at a time which was probably during Connell’s suspension in October 1991 Campbell had told either Bell or Price that he insisted on having a separate contract, if Connell was to remain part of the breakfast team. Bell told me that although when he had offered the new agreement to Connell he had been happy and, indeed, anxious that Connell accept it, his attitude changed over the following weeks, when he perceived that disharmony within the breakfast team was increasing. He considered that it was Connell who was causing that situation. Since he also considered that Connell was the least important member of the breakfast team, he decided that he would prefer to have Connell leave the station. He was reluctant to act to terminate Connell’s position, however, unless and until he knew that Campbell would be willing to continue with the program without Connell. At some time late in November, Bell learned that Campbell was, indeed, willing to continue in the absence of Connell. Bell said he decided, then, to remove Connell.
On 4 December 1991 Connell was called into Bell’s office, where he found Price was also present. Bell had asked Price to attend as a witness to what was to be Connell’s dismissal as a performer at 3AW. As I have said, it is agreed between the parties that the question whether the agreement had been accepted by Connell falls to be determined by reference to what was said at the earlier meeting, which Connell said occurred in Cup Week and Bell said occurred in about mid-November 1991. The events which took place at the time of Connell’s dismissal on 4 December 1991 are, however, of importance in my assessment of where the truth lies as to the competing versions of what was said at the November conversation between Bell and Connell.
Bell handed Connell a letter dated 3 December 1991, which read as follows:
“Dear Denis,
Please be advised that 3AW is not longer desirous of employing the services of yourself or alternatively Newton Heath Pty Limited or you as its performer.
In our opinion, Lawyers Guns and Money in its present form has peaked and an injection of new programme elements is essential for an increase in ratings success. Next year, breakfast will be enhanced by additional segments in an effort to substantially lift the pace of the programme.
I know you will find this news disappointing even though you were not denied an opportunity of entering into a new contract, however in the meantime the station has changed direction.
Thank you for services over the past two years and we wish you the best for the future.
Yours sincerely,
Tony Bell
General Manager”
Connell said that he could not recall whether Bell said anything at all, apart from something like “You’re sacked; here’s a letter to confirm it”. He was in shock. The dismissal came as a complete surprise to him.
Connell contends that the letter of dismissal was a mere sham, and was intended to mask the fact that he had been the victim of a conspiracy to effect his dismissal, and to terminate the agreement to which he had signalled his acceptance. He pointed to the suggestion that the breakfast program had “peaked”, as one illustration of the sham. Only a matter of days after his dismissal, the new ratings for the year were announced, and the 3AW breakfast program was named the top rated breakfast program in the city.
The contention that there was a conspiracy against Connell, although obviously a continuing and dominating concern for Connell, has little relevance to this case, save to the extent that the question, and their responses to the allegation, may bear upon the credit of the accounts generally given by Bell and Price. Even if his dismissal had indeed been the result of a conspiracy the issue would remain whether Connell had accepted the new contract prior to his dismissal. I stress that the question of a conspiracy was not an issue before me; I neither heard nor saw any evidence which would establish, either way, whether a conspiracy had existed or was just a product of Connell’s imagination.
After his termination a cheque for $32,325.81, payable to Newton Heath Pty Ltd was sent to Connell and the letter in which it was delivered was addressed both to himself and also to Newton Heath Pty Ltd. The figure was broken down into sums referrable to leave and salary for periods both before and after the new contract had been offered. Connell contends that the reference to Newton Heath Pty Ltd demonstrated that 3AW knew that Connell and Newton Heath Pty Ltd had accepted the new contract. I will deal with that contention later.
Connell wrote to Bell on 12 December 1991 complaining about the “wrongful termination” of his contract, and claiming “the $350,000 or so due under the balance of the contract”, which suggests that it was the new contract to which he was referring, since the earlier contract, had it still been in operation, would have had only one year to run, whereas the new agreement was stipulated to continue until 31 December 1993.
Connell moved swiftly to issue proceedings against 3AW. The Writ was issued on 13 December 1991, and contained a statement of claim signed by Queen’s Counsel and junior counsel. Soon after it was issued, Connell, with a sense of the dramatic, attended (presumably, uninvited) at the 3AW Christmas party, and there personally served the writ on management.
The version of events offered by Bell as to the critical meetings is very different to that of Connell. For convenience, I will identify the critical discussions as being “the contract delivery conversation”, “the acceptance conversation” and “the dismissal conversation”.
The competing versions of the contract delivery conversation
Bell said that in late October or early November 1991 he had instructed the 3AW solicitors to prepare new and separate contracts for Connell and Campbell, and to have included in Connell’s contract some new terms and conditions. Clause 6(i) provided that without approval by 3AW Connell could not publish on 3AW itself, or any other medium, any material that was contrary to the interests of 3AW. Clause 6(j) provided that at all times he was to act “harmoniously and courteously with 3AW personnel, particularly those associated with the presentation and direction of the programme”. Bell said that he had required those clauses be inserted because he had concerns about Connell’s attitude to other staff members, especially those concerned with the breakfast program, and he also feared that Connell might broadcast material harmful to the interests of 3AW.
Bell agreed that he handed the proposed new contract to Connell in late October or early November 1991. Bell told me that when he did so he said to Connell words to the effect that there were clauses in it that he might not like. Connell denies that any such statement was made by Bell.
Bell also gave evidence that, although he could not recall the exact words which he used, he had also said to Connell, on that occasion, in substance, that 3AW would continue to employ Connell on an interim basis. Bell himself doubted that he used the words “interim basis”. Connell flatly denies that anything, at all, was said, in any form of words, to the effect that he was being paid or employed on a temporary or an interim basis (whether by reference to the Six to Eight Grand Whippy Pty Ltd contract, or on any other basis), while he considered the new contract.
The competing versions of the acceptance conversation
Bell said that he next spoke to Connell on the matter at about the time Campbell signed his own contract with 3AW, namely, in mid November 1991. This is the critical conversation, upon which Connell relies, in his claim that he accepted the new contract which had been offered. Bell said that he saw Connell in the studio block (which is the same location at which Connell said the conversation took place although Connell believed that the conversation occurred earlier, in Cup Week, November 1991) and asked Connell whether he had signed the contract. Connell replied “no” and Bell said he asked him why not. According to Bell, Connell replied that “it was in the hands of his legal people, or words to that effect”.
It was only a couple of weeks after this conversation that Bell resolved to withdraw the offer made by the new contract. Connell denied that words had been said by him to the effect claimed by Bell. Connell suggested that it was improbable that he would have said what was suggested because he did not, in fact, have solicitors who were advising him on the contract, and at no time had he sought legal advice on the new contract. As noted above, according to Connell what he did say to Bell in response to Bell's query whether he had any problems with the contract was that he was happy with the contract, thereby indicating his acceptance.
The competing versions of the dismissal conversation
Bell’s account of the meeting of 4 December 1991, at which Connell was dismissed, also differs sharply from that of Connell, in one respect. Bell said that he could not recall the exact words which were used, but that having handed the termination letter to Connell he asked him, towards the end of their short meeting, why he had not signed the agreement. According to Bell, Connell replied that “it was his legal advice not to do so”. Connell denied that he had been asked that question or had given that answer.
Price, who was the third person present at this meeting, gave evidence that confirmed Bell’s account as to the conversation which took place at the end of the dismissal meeting.
The issue to be resolved: was the contract accepted by Connell?
On Bell's account, at no time after delivering the new agreement to Connell did Connell say that he was happy with the deal which had been offered in the agreement, nor, in any terms, did he state his acceptance of the agreement. Bell said that, to the contrary, he believed that Connell was not happy with the added clauses.
As may be seen, the dispute between the parties is very clear, and the area of dispute is quite narrow. Connell carries the onus of proof.
The case was presented, on both sides, on the basis that as a matter of reality, were I to accept Connell’s version of the ”acceptance” conversation, then Connell’s claim for breach of contract would succeed. On both sides there were “fall back” positions, however, so that neither side conceded that the claim must necessarily stand or fall on my finding of fact as to the relevant conversation.
On behalf of Connell, Mr Nettle QC submitted that should I reject Connell’s claim that he stated to Bell that he was happy with the contract - thereby expressly signalling his acceptance of it - I could nonetheless draw an inference from Connell’s conduct that he had, indeed, accepted the contract, even if he had not said so to Bell.
On behalf of 3AW, Mr Collins submitted that should I accept that Connell had signalled that he was happy with the contract, that might only mean that he was happy with its terms, but that he would not be bound by the agreement unless and until the agreement had been executed.
As I have said, those were, very much, secondary positions on both sides, and the case was fought on the basis that if Connell satisfied me, on the balance of probabilities, that by his words to Bell he had signalled that he was happy with the new agreement and accepted it, then his claim would probably succeed.
Questions of credibility
Connell’s version of the conversations was strongly challenged by counsel for 3AW. Connell was not an impressive witness. His answers frequently were given in a barely muted tone of anger. Notwithstanding his experience as a barrister, he was an argumentative and, frequently, an unresponsive witness. He made concessions rarely, and usually reluctantly, and for the most part (and not always then, either) only when confronted by clear evidence that his account was demonstrably wrong on an issue. The greatest difficulty confronting Connell in having his account of the critical conversation accepted is that, unlike the account put forward by Bell, it was a version which had never previously been put forward in any of the relevant court documents over the nine years which elapsed between the issue of proceedings and the commencement of the trial.
The Statement of Claim was delivered less than 10 days after Connell’s dismissal, and was prepared after Connell had had a conference with senior and junior counsel and his solicitor. It pleaded the breach of an agreement in writing, that being the new contract, which Bell had delivered. It pleaded that pursuant to that agreement the plaintiffs had provided their services to 3AW. The Statement of Claim pleaded that at the time of Connell’s dismissal the plaintiffs were ready, willing and able to perform their obligations under the agreement.
The Statement of Claim did not specify the manner or circumstances in which the offer contained in the agreement had been accepted. It was not pleaded that the agreement was, in part, made orally, by virtue of a conversation signalling acceptance by Connell, such as he now asserts had occurred in Cup Week, November 1991.
On 30 January 1992, 3AW delivered its Defence. Given that the contention put to Bell in cross examination was that, insofar as his version of conversations differed from that of Connell, his account was a fabrication, the written Defence constitutes a significant rebuttal of any suggestion of recent invention on the part of Bell. In the Defence, 3AW pleaded that the Six to Eight Grand Whippy agreement had been terminated by notice on 18 October 1991. It pleaded that the draft of the new agreement had been delivered to Connell shortly after 25 October 1991. It was expressly pleaded in the particulars of paragraph 3.3 that at the time when he handed the contract to Connell: “Bell told him that there were clauses in it he may not like”. In his evidence before me, Connell denied that such a comment had been made.
In paragraph 3.5 of the Defence it was pleaded that shortly prior to 19 November 1991 “Bell asked Connell why the draft contract had not been commented upon or signed by the plaintiffs”, and that, in response, Connell had replied, words to the effect, that “it was in the hands of his legal people”. As to the dismissal meeting, it was pleaded that after advising Connell that 3AW did not want to enter into any contract with the plaintiffs, Bell asked Connell why he had not signed the draft contract, and Connell had replied that he had legal advice not to do so.
There was no Reply filed by the plaintiffs in response to the Defence.
By notice dated 29 January 1992 the solicitors for 3AW delivered a Request for Further and Better Particulars of Connell’s claim. Remarkably, those particulars were not supplied until 16 June 1997, over five and a half years later! Connell had been requested to provide the usual particulars of the agreement which he said had been broken: in other words, he was asked to particularise the agreement, insofar as it was constituted by writing, was oral or was to be inferred.
With respect to the agreement being constituted by any written document Connell’s response identified the new written agreement which Bell had handed to him. Insofar as the agreement was partly an oral one Connell, by his particulars, identified the discussion with Bell "in or about November 1991" when he was handed the written contract, in Bell's office - that is, what I have called the contract delivery conversation. The only terms of that conversation which Connell referred to in the further particulars document was Bell's request that Connell “review the document”, in response to which Connell “agreed to do so”. The Further and Better Particulars made no reference, whatsoever, to any later conversation during which, as he now says, Connell signalled his acceptance of the contract by saying that he was happy with it.
Given that Connell had been a barrister since 1980, and given that his version of what occurred at that second ("acceptance"), conversation is now the linchpin on which his case primarily depends for its success, the omission of reference to that conversation in the Further and Better Particulars is extraordinary. (Particulars of the second conversation which is now alleged were filed in a “Further and Better Particulars” document filed on 9 March 2000 , two days before the trial commenced).
On 19 June 1998, a year after Connell delivered his Further and Better Particular's document, 3AW delivered interrogatories for Connell’s examination, and he delivered sworn answers on 13 August 1998. In answer to a question seeking particulars of the agreement under which he claimed that he supplied his services from early November 1991, Connell adopted the Further and Better Particulars which had been filed the previous year. He was asked, by Interrogatory 7, whether shortly prior to 19 November 1991 he had a conversation with Bell about the written agreement document. He answered: “I am unable to recall with certainty if I had a conversation on or about 19 November, 1991 with Mr Bell.” He was then asked whether during that conversation Bell had asked why there had been no comments made about the agreement, and why it had not been signed. He was further asked whether he had said words to the effect that he had not commented on it or signed the agreement “because it was in the hand’s of the plaintiff’s lawyers”. Connell answered those last two question by employing the phrase “I refer to my answer to interrogatory 7 herein”. He was also asked to set out the substance of the discussions at the dismissal meeting. He replied: “I was handed a letter dated 3 December 1991 by Tony Bell but I do not recall the substance of my discussion”.
The failure to give an answer supplying details of the acceptance conversation, as it is now advanced, could be explained by the fact that the drafting of Interrogatory 7, by relating the question to a time “shortly prior to 19 November”, allowed an evasive or non-responsive answer to be given. In any event, a summons was not taken out seeking a further and better answer to that interrogatory, or the interrogatories which followed it, and which depended upon an affirmative answer to it. In part, Connell’s explanation for failing to mention the critical conversation in his answers to interrogatories was, indeed, that he could not identify conversations by reference to a date, as the question required. However, he also said that neither he nor his solicitors were focussing on the conversations as having been important to his case.
Connell sought to explain the omission from the court documents of any reference to the "acceptance" conversation. He said that he had not considered the “acceptance” conversation to have been as important as his present counsel have now told him it was. He said he had never turned his mind to the importance of that conversation. He said that he did not understand “the nuances” of what contracts were all about. In 1991 he did not have a view that this conversation was important. So far as he was concerned, there was always a contractual arrangement on foot and he continued to work for the station as part of a “continuum” of agreements. The only term that was materially different from the original contract, in his view, was that it applied for an extra year. As to the Statement of Claim, it was drawn on his instructions; he read it but he was not a contract lawyer and did not have an appreciation of what had to be pleaded to constitute an allegation of breach of contract, in these circumstances.
Connell said he was given a copy of the Defence and that he provided instructions to his solicitors concerning it. In reading the Defence he noted Bell’s assertion of conversations which Connell denied had taken place, and he gave instructions to his solicitor as to that. On reading the Defence he thought that Bell’s assertion that he had said to Connell, at the time of delivering the contract, that there were clauses that Connell might not like, was “rather humorous”. He told me that he thought at the time that: “Tony is being jocular, or he thinks that I would have somehow handed the contract to someone else.”
As to the Request for Further and Better Particulars, he could not recall when he first saw that document but believed that he would have seen it at the time. He did not really consider the document, and was unsure whether his solicitors had sought instructions, specifically, about it.
As to his answers to interrogatories, Connell saw the onus of ensuring accuracy as having fallen more on his solicitors than on himself. He said that his solicitor prepared the answers and he was told by his solicitor what was in his answers, and that they were accurate. He read them and they appeared to be true and “I had satisfied myself as best I could on instructions from (my solicitor)”. He said he was not careful in checking his answers when he read them through before swearing them. Insofar as his answers referred to another document – i.e. the Further and Better Particulars, delivered the previous year - he did not check that document before swearing his answers.
Connell gave two explanations for his failure to mention the now critical “acceptance” conversation in his answers to interrogatories. In effect, he identified the deficiencies in the questions as one factor, but also he said that when the answers to interrogatories were prepared and sworn neither he nor his then solicitor had appropriately focussed on the conversations as being of importance in the claim. He said it was only when he changed solicitors in late 1999 that it was pointed out to him that an offer contained in a written contract could be accepted by a verbal assent.
Comparison of the Credibility of Accounts
I found Bell’s evidence as to the disputed conversations much more credible than Connell’s account. I doubt that Connell does have much, if any, actual recollection of what was said at the time of those conversations. In my opinion, he has simply reconstructed the conversations and is now thoroughly convinced as to the accuracy of his recollection. Not only did I find Bell a more credible witness - one willing to make concessions when appropriate, and willing to concede the possibility of error in recollection – but, for the most part, his account carries its own inherent plausibility. For example, at the time when the contract was handed to Connell, Bell said that he stated to Connell that there were clauses in it he might not like. Connell rejected the contention that such a matter had been mentioned by Bell. Connell said “I don’t recall that”, and added that he did not really entertain seriously the proposition that Bell had made that comment because there were no clauses in the contract that he, Connell, did not like. He went further, and asserted that the new contract was basically the same as the old contract.
Connell’s response to this issue is illustrative of his approach, generally, to his evidence. Having locked himself into denying the conversation on the basis that there were no conditions that Bell might have thought Connell would not like, Connell then sought to dispute that there was any factual basis, at all, as to Connell's conduct which Bell might have thought (rightly or wrongly) justified the new conditions. Thus, Connell felt compelled to dispute the propositions that he had published comments on 3AW which the management might have thought justified the insertion of the new clause 6(i) and, likewise, the proposition addressed in new clause 6(j) (which required that at all times he act harmoniously and courteously towards 3AW personnel). Given that he had received a written notice purporting to terminate the original agreement on the basis of complaints about just such conduct, and given that he admitted that his relationship with Mitchell was non-existent and with Campbell barely one of on-air tolerance, the denial is absurd. Indeed, Connell would not even accept that his on-air attack on Mitchell might have been regarded by management as contrary to 3AW interests. He said that many people at the station would have regarded it as having been in 3AW’s interests for him to have attacked Mitchell; a view apparently not shared by Price and Bell, who stood him down because of his comments.
In my view, it is very plausible that when he handed the new contract to Connell, Bell would have made the comment to Connell that he might not like some of the clauses. Bell had the clauses inserted precisely because he considered it essential for 3AW to strengthen its control over Connell’s behaviour. I am satisfied that Bell’s account as to this conversation is accurate, and Connell’s account is deficient.
Before turning to the disputed “acceptance” conversation, I move forward to the disputed conversation which Bell said occurred at the time of Connell’s dismissal. Connell denies that he was asked why he had not signed the contract, and that he said that he had had legal advice not to do so. Bell and Price both claim that those things were said. Bell and Price were the subject of substantial cross examination as to this evidence. It is correct that neither could offer much else in the way of detail about the conversation, nor as to the events of the short meeting when Connell was sacked, but then neither could Connell, who said that he was in a state of shock when he was told, at the outset, that he had completed his last shift with the station. Bell's account of this conversation was given, in substance, in the Defence filed by 3AW in January 1992. It is not a recent invention.
Mr Nettle submitted that Bell’s account of this conversation made no sense. It was improbable, he submitted, that Bell would have asked a question which might have provoked Connell there and then to sign the contract in his presence. Given that Connell did not have any lawyers advising him on the contract, and given that Connell very much wanted to continue at 3AW, it was also improbable, Mr Nettle submitted, that Connell would have said that his lawyers advised him not to sign the contract.
Price was present when Connell was dismissed. His evidence, therefore, is important, if accepted. Price agreed that in the course of 3AW's preparation for the trial he had attended a conference with counsel in 1999, at which Bell was present. It was suggested, and he denied, that he had first heard at that time what Bell intended to say and had simply adopted Bell’s account. Price agreed that, although he had been asked by Bell to attend the dismissal meeting as a witness, he had not made a note at the time, nor since, of what had transpired. He agreed, too, that he was first asked to recall the conversation of December 1991 when asked by the 3AW lawyers in late 1999. It was submitted that Price was not a reliable witness.
Connell regarded Price as having been in Mitchell’s camp, and hostile to Connell. He contended that Price had, in effect, plotted with others to have Connell removed. Much was made of a memo which Price wrote, privately, to Bell during the period of Connell’s suspension from broadcasting. That memo, I am satisfied, was a summary of discussions which had taken place between Bell and Price. In the memo Price noted that Campbell was insistent that if Connell was to return to the program Campbell should have a separate contract with 3AW to that of Connell.
The terms of the memo did not demonstrate that Price wanted to have Connell removed from 3AW. A fair reading of the memo supports Price’s contention that, however difficult he found Connell to be to deal with, when he wrote the memo he wanted Connell to continue with the program. The memo did suggest the need for Connell to be brought under greater control so as to ensure harmonious working relations with other staff, and to avoid the problems to which the new clauses in the contract were later to be directed. In the memo, Price wrote that Connell must be left in no doubt that he had serious problems in his off-air co-operation with workmates. He added, of Connell: “He will never be a team player but he must be told that the damage he is doing from within is causing us great pain. He must understand there is no conspiracy (and) that my only objective is the success of the on-air product across the day. My relationship with Neil is as a program director who happens to be a friend. My relationship with Denis is as a program director who wants his program to succeed.”
I am satisfied that the accounts of Bell and Price as to the dismissal conversation are to be preferred to that of Connell. I believe that they both do have the recollection that they attest to having, even if it is possible that Price’s memory of that conversation was jogged by hearing Bell’s account at a conference with 3AW legal advisers. Price did not believe that was the case, and he did not say, specifically, whether he actually heard Bell give his account, or whether if he did, he had already given his own account to the lawyers. The dismissal event was a sufficiently unusual one for Price to have been involved in at that time that there is nothing extraordinary in the fact that he might have remembered such a conversation, which, on any version, must have been almost the only conversation that took place during the course of the short meeting. In making that comment I make allowance for the fact that the standing down of Connell was also a unique exercise for Price and yet he had no recollection of what had been said on that occasion. The stand down, however, was not a matter which was the subject of the writ, nor was it an occasion where he had been asked to attend, specifically, as a witness.
This brings us to the disputed “acceptance” conversation.
Connell said that it is more probable that he said he was happy with the contract - rather than that he said it was in the hands of his lawyers – because, in the first place, he did not have any lawyers looking at the contract. Furthermore, it was the fact that he was happy with the new contract. He called evidence from broadcaster, John Hindle, who said that he had conversations with Connell after he received the new contract. Hindle's evidence offers some limited confirmation of Connell's satisfaction with the contract, although it did not go so far as to demonstrate explicitly that Connell had said he was happy with the terms of the contract. Rather, he said that he had asked Connell whether he was worried about the fact that he had not got the contract signed. Connell replied: “No, it’s alright”.
Bell was challenged about his account that Connell had said the contract was with his lawyers. Bell conceded that in a statement made prior to trial he had recorded that Connell had said, during this conversation, that he had been advised not to sign it. Bell said that he had not noted that mistake in his statement. It should have recorded that at this conversation Connell had merely said the contract was in the hands of his lawyers. To an extent, Bell compounded the error by giving evidence that Connell had “refused” to sign the contract, whereas he later explained that he meant that although Connell had merely said that it was in the hands of his lawyers, it was from that statement that Bell had concluded that Connell was not willing to sign the contract. I have given careful consideration to this evidence of Bell, but I am satisfied with his explanation for the discrepancy between his evidence and the earlier statement.
Bell was challenged about the speed at which he acted to dismiss Connell once he knew that Campbell was prepared to work without Connell. It was put to Bell that he moved swiftly because he was fearful that Connell might sign the contract before he could be dismissed. If that was why he acted then, so it was suggested, it would have been inconsistent with Bell’s evidence that Connell had signalled to Bell (by saying the contract was with his lawyers, in response to being asked whether he was happy with its terms) that he was not willing to sign the contract. Bell denied that he had acted swiftly for that reason. He said that he knew at the time that the contract could have been accepted by a verbal statement, and it was not a concern about the contract being signed that motivated him to act swiftly.
Given that Bell told me that had Connell produced an executed copy of the agreement (even as late as at the dismissal meeting) he would have regarded 3AW as being bound by the agreement, it seems to me highly probable that, notwithstanding his rejection of the proposition, the possibility of the contract being signed must have been a factor in his decision to move quickly to terminate Connell’s services. It must have been obvious at the time that had Connell sought to contend that the agreement had been accepted, and that it was in effect, and had 3AW sought to deny that to be so, Connell’s position would have been much stronger if he could show that he had delivered an executed contract to 3AW before the station purported to withdraw its offer.
If Bell’s explanation about why he moved quickly is not correct that, however, neither means that Bell was lying when he gave that answer, nor would the true situation - as I conclude it to have been - be necessarily inconsistent with Bell’s evidence that Connell had earlier said, when asked about the contract, that it was in the hands of his lawyers. I do not regard the answer by Bell as demonstrating that he was deliberately seeking to mislead the court on this matter, but as showing that his memory of the motivations for various actions taken by him at a time nine years ago, is deficient in this respect. Indeed, he acknowledged that he had difficulty remembering what factors motivated him at the time of various actions taken in 1991.
It was submitted by counsel for Connell that the termination letter written by Bell did not accord with the account of events given by him in evidence. Bell agreed that the letter was not completely frank, in that it did not mention one consideration which was important to the decision to dismiss Connell, namely, the disharmony caused among the breakfast team by his conduct. Bell said he did not consider it necessary to state that. He agreed, too, that the statement that the ratings had peaked conveyed the impression that Bell was concerned about the ratings of the program, whereas he was not. He did, however, believe at that time that the program could be improved, and would be improved by the departure of Connell.
It was put to Bell that he would not have written that he knew that Connell would be “disappointed” by the decision, if he had believed from what Connell had earlier told him, that Connell was not willing to sign the contract. Bell said that he knew that Connell would have liked to continue with 3AW for another two years, so he knew that he would be disappointed not to do so, but the fact remained that he had been offered the contract and had not accepted its terms before it was withdrawn, and that was what he meant in the letter, about Connell’s disappointment.
Having considered his evidence about the terms in which he wrote his dismissal letter I do not consider that it casts doubt on the veracity of Bell’s account as to the various conversations of which he gave evidence. Bell said, and I believe it was the case, that he felt deeply for Connell at the meeting, and appreciated how difficult it was for Connell to receive the news of his dismissal. Bell said he was himself nervous during the meeting. It was submitted that it was improbable that at the very moment of dismissing Connell, Bell would have inquired why he had not signed the contract. Bell agreed that the question might have conveyed to Connell that had he signed the contract 3AW would have considered itself bound by its terms, and would have had to either pay him out or continue with Connell. That was, indeed, Bell’s belief.
I consider that Bell was an honest witness, who did his best to give accurate evidence, and for the most part did so, but was sometimes uncertain of the details of events due to the very long delay between their happening and the trial of this action. The omissions in the dismissal letter I consider are explicable by the fact that Bell was sympathetic to Connell’s situation, notwithstanding the fact that he had formed an assessment that Connell was expendable from the program. Bell agreed with a proposition put by Connell’s counsel that he had had a fairly satisfactory working relationship with Connell and had socialised with him on some occasions. Although he did not suggest that he and Connell were particularly close, Bell considered himself a friend of Connell to the extent that I do not consider it likely that he would have written a termination letter in terms which were unnecessarily brutal. It was unnecessary for Bell to refer in the dismissal letter to the impact of Connell’s behaviour on the team. Connell, in his evidence, acknowledged that his association with Bell, for the most part, was more friendly than with many others at the station, certainly more so than with Price.
I believe Bell’s evidence that when he asked Connell why he had not signed the agreement the question was genuinely asked out of curiosity. It was, perhaps, a question asked in an atmosphere of some awkwardness. I accept that it was not intended to be offensive or insensitive. He could see how upset Connell was at the news. Connell’s reply to Bell’s question was, indeed, odd, given that he had not received any legal advice not to sign the agreement. It is perhaps explicable as a comment made in shock, while trying to maintain some dignity in a stressful situation, or perhaps as a comment made seeking to deflect attention from his own folly. A response which was not based on fact would not be wholly at odds with Connell’s personality. Whatever may be the explanation for the answer, I am satisfied that it was said by Connell. I found Bell’s evidence as to these matters to be thoroughly plausible.
As to Bell’s account of the “acceptance” conversation, that too was substantially advanced as early as January 1992. Connell’s account, by contrast, has all the hallmarks of recent invention. Although he said that he had fully instructed his solicitor and barristers, from the outset, of his conversations and dealings with Bell, his account of this conversation never emerged in the court documents. None of his lawyers was called to rebut the suggestion of recent invention. Counsel for Connell submitted that it would be unreasonable to draw any adverse inference against Connell on this issue by virtue of the absence of the lawyers. Mr Nettle submitted that other explanations were open, for example, that the former solicitor was now in apparent dispute with Connell, and, secondly, that given the length of time since instructions were provided by Connell it would be unlikely that the lawyers could now remember what Connell had said about these conversations. I find neither answer persuasive.
I deal with the first of those proffered explanations. To explain why his case took so long to be brought to court if, as he asserted, he considered that he had a strong case, Connell blamed his then solicitors and said that their tardiness led him to eventually sack them in 1999. He was later forced to concede, when confronted with relevant documents, that his solicitors had applied to be taken off the court record. They sacked him, in other words. Connell admitted having received a facsimile from his then solicitor prior to his solicitor’s application to be taken off the court record, in which his solicitor complained that Connell had failed to respond to seven letters requesting instructions, sent to Connell between February and June 1999. I do not consider, as was submitted, that Connell was lying when he was first questioned about this matter. It is, however, illustrative of the careless manner which he frequently adopted in response to questioning. The fact that his former solicitor had ceased to act for Connell in those circumstances does not, in my opinion, constitute an acceptable explanation why, under subpoena if necessary, that solicitor could not have attended court to give evidence and produce any documents recording the fact that Connell had earlier given instructions as to the acceptance conversation.
The other proffered explanation, for the absence of evidence to rebut the suggestion of recent invention, was that Connell’s former legal practitioners would be unlikely to now remember what instructions Connell had given them. On Connell’s own account, as someone who did not know contract law, did not appreciate the importance of the conversations, and did not know that a written offer might be accepted by a verbal statement, it would be more likely that the lawyers had not been told by him of the conversation rather than that they had, and yet, having been told of the acceptance conversation, had failed to refer to it in any of the court documents they drew. The explanation that Connell had failed to inform his lawyers of the conversation is to be preferred to the explanation that the lawyers - having been instructed on the matter - might now, between the three of them, simply have no recollection of the instructions, nor any record of them.
I draw the conclusion that had they been called Connell’s former legal advisers would not have assisted Connell’s case as to his contention that he had earlier told them his account of the “acceptance” conversation.
As I have said, Connell placed importance on the fact that he did not, in fact, have lawyers acting for him either at the time of the acceptance conversation or at the time of the dismissal conversation. In my opinion, it is entirely in keeping with Connell’s personality, as it emerged in the hearing, that he might have said of the contract “it’s with my lawyers” even if he had no lawyers, and even if he thought the contract was satisfactory. It would have appealed to his sense of self-importance to have appeared to be undecided whether to respond favourably to the 3AW offer, and it would be consistent with his acknowledged casual approach to contract matters, and his perception of his bargaining position, that he would put off signing the contract. The possibility that Connell may have made a reference to “my lawyers” gains some additional support by the fact that although Connell denied that he had any lawyer advising him on the contract - and I accept that that was so - he had had contact with a solicitor at about this time.
I heard evidence from a solicitor, John Armstrong, of the firm Blake Dawson Waldron. He had given legal advice to Campbell and Connell in 1989 concerning the establishment of the unit trust arrangement. He was also asked to advise on the 3AK contract, in 1989. He said that on or about 23 October 1991 he was given instructions either by Connell directly or through an employee of Blake Dawson Waldron, who was a friend of Connell. He was asked to advise as to the termination notice from 3AW which was dated 17 October. He wrote to Bell asking to see a copy of the original contract (ie the Grand Whippy contract), but he did no further work on the matter, and did not give any advice to Connell either as to the old contract or the new one.
I conclude that the plaintiffs' claims should be dismissed. It is unnecessary, therefore, that I consider the question of damages.
I will hear counsel for the parties as to costs.
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