RCR Tomlinson Ltd V Russell
[2015] WASCA 154
•7/08/15
RCR TOMLINSON LTD -v- RUSSELL [2015] WASCA 154
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASCA 154 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:110/2013 | 9 MARCH 2015 | |
| Coram: | BUSS JA MURPHY JA BEECH J | 7/08/15 | |
| 33 | Judgment Part: | 1 of 1 | |
| Result: | Appeal upheld | ||
| B | |||
| PDF Version |
| Parties: | RCR TOMLINSON LTD DAVID WILLIAM RUSSELL |
Catchwords: | Equity Rectification Whether open to trial judge to find common intention was established by clear and convincing proof Turns on own facts |
Legislation: | Nil |
Case References: | Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1 Browne v Dunn (1893) 6 R 67 City of Stirling v Tremeer [2006] WASCA 73; (2006) 32 WAR 155 Clarke v BHP Billiton Direct Reduced Iron Pty Ltd [2009] WASCA 134 Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329 CSR Ltd v Della Maddalena [2006] HCA 1 Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603 Hamod v State of New South Wales [2011] NSWCA 375 Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361 Lackovic v Insurance Commission of Western Australia [2006] WASCA 38; (2006) 31 WAR 460 Mander Ltd v Clements [2005] WASCA 67; (2005) 30 WAR 46 Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336 Poricanin v Australian Consolidated Industries Ltd [1979] 2 NSWLR 419 Pukallus v Cameron (1982) 180 CLR 447 R v Birks (1990) 19 NSWLR 677 Russell v RCR Tomlinson Ltd [2012] WASC 405 Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 Technomin Australia Pty Ltd v Xstrata Nickel Australasia Operations Pty Ltd [2014] WASCA 164 The Bell Group Limited (In Liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1 Tipperary Developments Pty Ltd v The State of Western Australia [2009] WASCA 126; (2009) 38 WAR 488 Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21; (2015) 47 WAR 547 Waterways Authority v Fitzgibbon [2005] HCA 57; (2005) 79 ALJR 1816 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : RCR TOMLINSON LTD -v- RUSSELL [2015] WASCA 154 CORAM : BUSS JA
- MURPHY JA
BEECH J
- Appellant
AND
DAVID WILLIAM RUSSELL
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : PRITCHARD J
Citation : RUSSELL -v- RCR TOMLINSON LTD [2012] WASC 405
File No : CIV 1229 of 2010
Catchwords:
Equity - Rectification - Whether open to trial judge to find common intention was established by clear and convincing proof - Turns on own facts
Legislation:
Nil
Result:
Appeal upheld
Category: B
Representation:
Counsel:
Appellant : Mr J N West QC & Mr J L Snaden
Respondent : Mr A J Power
Solicitors:
Appellant : Clayton Utz
Respondent : King & Wood Mallesons
Case(s) referred to in judgment(s):
Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1
Browne v Dunn (1893) 6 R 67
City of Stirling v Tremeer [2006] WASCA 73; (2006) 32 WAR 155
Clarke v BHP Billiton Direct Reduced Iron Pty Ltd [2009] WASCA 134
Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337
Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329
CSR Ltd v Della Maddalena [2006] HCA 1
Ellis v Wallsend District Hospital (1989) 17 NSWLR 553
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603
Hamod v State of New South Wales [2011] NSWCA 375
Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361
Lackovic v Insurance Commission of Western Australia [2006] WASCA 38; (2006) 31 WAR 460
Mander Ltd v Clements [2005] WASCA 67; (2005) 30 WAR 46
Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336
Poricanin v Australian Consolidated Industries Ltd [1979] 2 NSWLR 419
Pukallus v Cameron (1982) 180 CLR 447
R v Birks (1990) 19 NSWLR 677
Russell v RCR Tomlinson Ltd [2012] WASC 405
Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603
Technomin Australia Pty Ltd v Xstrata Nickel Australasia Operations Pty Ltd [2014] WASCA 164
The Bell Group Limited (In Liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1
Tipperary Developments Pty Ltd v The State of Western Australia [2009] WASCA 126; (2009) 38 WAR 488
Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21; (2015) 47 WAR 547
Waterways Authority v Fitzgibbon [2005] HCA 57; (2005) 79 ALJR 1816
- JUDGMENT OF THE COURT:
Introduction
1 This is an appeal against the trial judge's decision1 to rectify the provisions of an employment contract regulating the circumstances in which a retirement benefit of the equivalent of one year's salary was payable by the employer to the employee.
2 The grounds of appeal complain of errors in the fact-finding process at trial. For the reasons that follow, we would uphold the appeal.
The Contract
3 On 9 March 2009, Mr Russell commenced employment with RCR Tomlinson Ltd (RCR) in the position of Executive General Manager (EGM) of RCR Positron Pty Ltd (Positron). Mr Russell's employment was governed by a written contract of employment executed on 4 March 2009 (the Contract).
4 Clauses 7 and 11 of the Contract provided, relevantly, as follows ('Company' refers to RCR):
7 Retirement benefit
7.1 Calculation of benefit
Upon Retirement, provided that the Retirement Date is after the fifth anniversary of the Commencement Date, the Executive General Manager is entitled to receive a payment in cash from the Company calculated on the following basis:
• one (1.0) times the total amount of Salary and superannuation payable to the Executive General Manager as at the Retirement Date.
7.3 Operation
This cl 7 continues to operate and have effect after termination of this Agreement.
…
11. Termination
11.1 Grounds for termination
The Company at its sole discretion may terminate the Employment of the Executive General Manager in the manner specified in cl 11.2 if at any time the Executive General Manager is or becomes:
(a) incapacitated by illness or injury of any kind which prevents the Executive General Manager from performing the duties specified …;
(b) guilty of wilful misconduct …;
(c) is [sic] charged with any criminal offence …;
(d) of unsound mind …;
(e) bankrupt …;
(f) continually or significantly neglectful of his duties …;
(g) refusing or neglecting to comply with any lawful, reasonable direction or order given to him by the Company …
11.2 Notice of termination
Where the Company decides to terminate the Employment for a reason specified in cl 11.1 it shall do so in the following manner:
(a) for a reason specified in cl 11.1(a) by giving the Executive General Manager not less than one month's written notice or by paying one month's Salary in lieu thereof; or
(b) for any reason specified in cl 11.1(b), (c), (d), (f) or (g) by giving the Executive General Manager notice effective immediately and without payment of any salary other than the Salary and any other entitlements accrued to the date of the termination.
11.3 Executive General Manager and Company to give notice
(a) The Executive General Manager may terminate the Employment by giving the Company no less than three months' written notice. If the written notice is dated prior to March 2014 the Company shall not be obliged to pay any Retirement Benefit.
(b) Otherwise than as specified in this cl 11, the Company may terminate the Employment by giving the Executive General Manager no less than one month's written notice or by paying no less than one month's Salary in lieu thereof as well as paying the retirement benefits as per cl 7.
6 Clause 13.3 restrained Mr Russell from competing with RCR after termination for a period of five years, or alternative lesser periods in the event that the five-year restraint was unenforceable.
Mr Russell's employment is terminated
7 Mr Russell's employment was terminated by RCR under cl 11.3(b) of the Contract on 16 December 2009. Upon termination, he was paid an amount comprising his entitlements for salary and annual leave and the equivalent of three months' salary in lieu of notice.
Mr Russell's claims
8 Mr Russell sued RCR for the sum of $297,500, being his Retirement Benefit calculated in accordance with cl 7.1. Mr Russell's case at trial was put on three bases. First, he contended that on a proper construction of the Contract, in the case of termination under cl 11.3(b), the Retirement Benefit was payable regardless of how long he had been working for RCR. Secondly, in the alternative, he contended that the Contract should be rectified to reflect what Mr Russell alleged was the parties' common intention - that, in the event that his employment was terminated under cl 11.3(b), the Retirement Benefit would be payable regardless of how long he had worked for RCR. Thirdly, Mr Russell made a claim for damages for misleading or deceptive conduct.
9 The trial judge rejected Mr Russell's contractual construction argument and misleading and deceptive conduct claim, but upheld his rectification claim.
10 RCR appeals against the upholding of the rectification claim. There is no challenge to the rejection of Mr Russell's other claims.
The trial judge's reasons
11 The trial judge commenced with a factual overview, none of which is controversial.
12 From 10 March 2008 until 8 March 2009, Mr Russell was employed by RCR as a project manager for Positron. In February 2009, at the end of the project on which he had been working, Mr Russell tendered his resignation. A few days after that, the Chief Executive Officer of RCR, Mr John Noordhoek offered Mr Russell the position of EGM for Positron.2
13 In February 2009, Mr Noordhoek provided a draft EGM services agreement to Mr Russell.3
14 In the same month, Mr Phillip Crighton, Chief Financial Officer and Company Secretary for RCR and its subsidiaries, had a conversation with Mr Noordhoek about the terms on which the EGM position should be offered to Mr Russell.4
15 Mr Russell and Mr Noordhoek had a telephone conversation on 2 March 2009.5 On 4 March 2009, Mr Russell came to RCR's head office and met with Mr Noordhoek and Ms Charmaine Higgins, RCR's General Manager of Corporate Human Resources. Ms Higgins gave Mr Russell a letter dated 3 March 2009 formally offering him the position of EGM and attaching a copy of the Contract.6 There was a discussion between Mr Russell and Mr Noordhoek about the terms of the Contract.7 Ms Higgins was present for some, but not all, of that discussion.8 At the end of the discussion, Mr Russell said he was willing to enter into the Contract. He signed the Contract, witnessed by Ms Higgins.9
16 The substance of the discussions on 2 and 4 March 2009 was a central issue at the trial, and was dealt with in detail later in the trial judge's reasons.
17 In August 2009, Mr Russell discussed the terms of the Contract with Mr Crighton. He recorded the essence of that discussion in an email that he sent to his wife on 20 August 2009.10
18 In early December 2009, the new CEO of RCR, Mr Paul Dalgleish, decided that Mr Russell's employment should be terminated. That occurred on 16 December 2009.11
19 After reviewing the facts, the trial judge considered and rejected Mr Russell's contractual construction claim. Her Honour held that the words 'as per cl 7' in cl 11.3(b) meant 'in accordance with cl 7', with the result that payment of the Retirement Benefit under cl 11.3(b) was subject to the qualifying period specified in cl 7.12
20 Her Honour then set out the principles relating to rectification of contracts.13 Neither party takes any issue with her Honour's statement of these principles, the appellant, RCR, characterising it as succinct and accurate.14
21 For the purposes of this appeal, the crucial part of the trial judge's reasons relates to the question of whether the parties had a common intention that Mr Russell would be paid the Retirement Benefit if dismissed pursuant to cl 11.3(b) before he had completed five years of service as the EGM for Positron.15
22 Her Honour began this part of her reasons by outlining Mr Russell's evidence of what was said in the telephone conversation on 2 March 2009 and at the meeting on 4 March 2009.16 We will come back to this evidence later in these reasons.
23 Her Honour then considered whether Mr Russell's evidence should be accepted.17 Her Honour referred to the need for caution given the risk that with the benefit of hindsight a party may, even subconsciously, recast events in a way that is self-serving.18 Her Honour concluded that, having considered the content of Mr Russell's evidence and the manner in which he gave it (his demeanour), and having considered his evidence within the context of the evidence as a whole, her Honour accepted Mr Russell's evidence as to the conversations he had with Mr Noordhoek on 2 and 4 March 2009. Her Honour observed that Mr Russell impressed her as a truthful witness who gave evidence frankly, who was willing to accept that he had been wrong in the past, but who, in cross-examination, consistently maintained his recollection of the events in question.19
24 Her Honour observed that Mr Noordhoek's absence from giving evidence meant that there was no direct evidence of his conversations with Mr Russell other than the evidence given by Mr Russell.20
25 By ground 1, the appellant challenges this observation, contending that Ms Higgins gave evidence of a conversation between Mr Noordhoek and Mr Russell that took place at the meeting on 4 March 2009.
26 The trial judge observed that Mr Russell's evidence was consistent with other evidence that provided an indication of his intentions and understanding of the Contract, and of Mr Noordhoek's intentions and understanding of the Contract.21
27 Her Honour then dealt with the reasons advanced by RCR as to why Mr Russell's evidence should not be accepted.22
28 Her Honour found that there was other evidence supporting the conclusion that Mr Noordhoek intended that the terms of the Contract would be that Mr Russell would be paid the Retirement Benefit if his employment was terminated by RCR other than for cause, irrespective of whether he had served as the EGM of Positron for five years. Her Honour referred to the evidence of Mr Crighton that in the course of a conversation with him:
(a) Mr Noordhoek said words to the effect that the remuneration package offered to Mr Russell would need to be attractive because Mr Russell had already expressed some reluctance to accept the EGM position; and
(b) Mr Noordhoek agreed with Mr Crighton that Mr Russell should be offered the same retirement benefits enjoyed by Mr Crighton and other senior managers on the same level; he would be entitled to receive a retirement benefit equivalent to one year's salary and superannuation in the event that his employment was terminated by RCR, other than for cause, at any time.23
29 Mr Crighton also gave evidence that Mr Noordhoek later told him that Mr Noordhoek had prepared the Contract with the intention that it would provide for Mr Russell to be paid the Retirement Benefit if his employment was terminated by RCR at any time, other than for cause.24
30 The trial judge made the following findings as to the parties' intentions and understanding of the Contract:
Having regard to the evidence to which I have referred, I find that Mr Russell's intention, from 2 March 2009 until the execution of the Contract on 4 March 2009, was that the Contract would include a term making clear that he would be entitled to payment of the Retirement Benefit, irrespective of the duration of his service, if his employment as the EGM of Positron was terminated by RCR other than for cause. I further find that Mr Russell understood that the terms of the Contract which he executed on 4 March 2009 had that meaning.
I also find that in formulating the terms of the Contract, it was Mr Noordhoek's intention that the Contract would include a term making clear that Mr Russell would be entitled to payment of the Retirement Benefit, irrespective of the duration of his service, if his employment as the EGM of Positron was terminated by RCR other than for cause. I find that Mr Noordhoek's intention continued until he executed the Contract on 4 March 2009. I further find that when they executed the Contract, both Mr Russell and Mr Noordhoek understood that cl 11.3(b) of the Contract had this meaning.
I find that both Mr Russell and Mr Noordhoek conveyed their intentions and understanding of the Contract to each other.
For the same reasons, I find that the evidence to which I have referred establishes objectively that Mr Russell and Mr Noordhoek had a common intention that the Contract would contain a term to the effect that Mr Russell would be paid the Retirement Benefit if RCR terminated his employment as EGM without cause, irrespective of the period of Mr Russell's service, and that that common intention continued up until the execution of the Contract, and that at the time of their execution of the Contract, both Mr Russell and Mr Noordhoek understood that cl 11.3(b) had this meaning.25
31 Her Honour found that the Contract should be rectified to read as follows:
Cl 11.3(b) should be amended to read:
Otherwise than as specified in this cl 11, the Company may terminate the Employment by giving the Executive General Manager no less than one month's written notice or by paying no less than one month's Salary in lieu thereof as well as paying the retirement benefits as per cl 7 Retirement Benefit calculated in accordance with cl 7.1 and in the manner provided for in cl 7 .2 regardless of the date on which Retirement occurs.
Cl 7 .1 should be amended to read:
Upon retirement, provided that the Retirement Date is after the fifth anniversary of the Commencement Date save and except for Retirement pursuant to cl 11.3(b), the Executive General Manager is entitled to receive a payment in cash from the Company calculated on the following basis:
• One (1.0) times the total amount of Salary and superannuation payable to the Executive General Manager as at the Retirement Date.'26
Grounds of appeal
32 There are two grounds of appeal, the substance of which is as follows:
(1) The trial judge erred in finding at [77] that 'there was no direct evidence of [Mr Noordhoek's conversations with Mr Russell about the Contract] on 4 March 2009 other than the evidence given by Mr Russell', in that Ms Higgins gave evidence about a conversation between Mr Noordhoek and Mr Russell about the Contract that took place in her presence on 4 March 2009.
(2) Her Honour erred in law and fact in making the findings in relation to the parties' intentions and understanding of the Contract at [93] and [95], set out earlier in these reasons, in that those findings were:
(a) contrary to Ms Higgins' evidence, which had not been the subject of cross-examination;
(b) not supported by evidence of the requisite standard; and
(c) not open to be made on the evidence before the court.
Outline of the evidence
Mr Russell's evidence
34 Mr Russell said that he received a draft copy of the contract from Mr Noordhoek in February 2009.27 He made 'handwritten remarks' on it, the nature or effect of which he did not state and could not, it appears, recall without seeing that version of the draft which had since been destroyed.28
35 According to Mr Russell, there was then a telephone conversation with Mr Noordhoek on 2 March 2009.
36 The trial judge accurately outlined the effect of Mr Russell's evidence in that regard as follows:
Mr Russell's evidence was that he discussed the draft Contract and his proposed amendments to it with Mr Noordhoek by telephone on 2 March 2009. In the course of that conversation Mr Russell expressed his concerns about accepting the EGM position, particularly with regard to the likely restructure of Positron that he expected would be initiated by the incoming CEO, and having regard to the term of the restraint period referred to in the draft Contract. Mr Russell's evidence was that:
'Mr Noordhoek used words to the effect that "in the event of my employment being terminated by RCR as part of a restructure, then RCR would not seek to enforce the restraint period for more than 12 months". He further stated words to the effect that I would be appropriately reimbursed during the restraint period because I would be paid a retirement benefit equivalent to one year's salary and superannuation if my employment was terminated at any time by RCR other than for cause'.
Mr Russell's evidence was that Mr Noordhoek told him that 'RCR would prepare [the Contract] to ensure that [Mr Russell] would be paid the Retirement Benefit on these terms'.
37 Mr Russell then gave evidence of a meeting with Mr Noordhoek on 4 March 2009. As her Honour observed:
Mr Russell's evidence was that on 4 March 2009 he met with Ms Higgins and then Mr Noordhoek at RCR's premises in Welshpool. Ms Higgins provided Mr Russell with a copy of the proposed contract under cover of a letter from RCR dated 3 March 2009 formally offering him the EGM position. Mr Russell said that he then met with Mr Noordhoek. Mr Russell was still concerned about the security of his employment if he accepted the EGM position and about the terms of the Contract in relation to his entitlement to the Retirement Benefit. His evidence was that he sought assurances from Mr Noordhoek that in the event that his employment was terminated (other than for cause) he would still be paid the Retirement Benefit even if he had not completed the five years of service referred to in cl 7.1 of the Contract.
38 Mr Russell prefaced this part of his evidence with a statement to the effect that the discussion proceeded by reference to the relevant terms of the draft agreement which was 'open in front' of them.29
39 Her Honour continued:
Mr Russell's evidence was that in the course of his discussion with Mr Noordhoek on 4 March 2009, Mr Noordhoek told him on three separate occasions that if his employment was terminated by RCR (other than for cause) he would be paid the Retirement Benefit, irrespective of whether Mr Russell had completed five years of service for RCR. Mr Russell's evidence was that when he first sought assurances in relation to the payment of the Retirement Benefit:
Mr Noordhoek responded by stating words to the effect that:
(a) If RCR terminated my employment, other than for cause, then I would be paid the retirement benefit … regardless of when my employment was terminated.
(b) The clauses in [the Contract] that dealt with my Retirement Benefit were common to the services agreements of other executives at RCR and were intended to protect senior personnel from a take-over of RCR, a major restructure or management change that occurred prior to the completion of a contract period.
(c) Those other EGMs on services agreements with the same terms as mine, who had left before the completion of their contract period, had been paid the full amount of their retirement benefit.30 (footnotes omitted)
41 Mr Russell said that the discussion on 4 March 2009 continued in a manner which her Honour accurately summarised as follows:
Mr Russell said that at the same meeting he also asked Mr Noordhoek why the restraint period in his contract was for a period of up to five years, when, in his conversation with Mr Noordhoek on 2 March 2009, Mr Russell had queried the period of the restraint. Mr Russell's evidence was that he had requested an amendment to the restraint clause, and that that had not been made. Mr Russell's evidence was that Mr Noordhoek then said words to the effect that:
'RCR would not seek to enforce the restraint period in clause 11.3 [sic] of my [Contract] for more than 12 months and that part of the purpose behind paying the Retirement Benefit was to appropriately reimburse executives for the period for which they were restrained from working for a company in competition with RCR. Mr Noordhoek again stated words to the effect that I would be entitled to payment of the Retirement Benefit equal to one year's salary and superannuation no matter when RCR terminated my employment provided that my employment was not terminated for cause'.
Mr Russell said that he and Mr Noordhoek then discussed the likely attitude of the incoming CEO, Mr Dalgleish, to Mr Russell's appointment to the EGM position. Mr Russell said that
'Mr Noordhoek … stated words to the effect that in the event that Mr Dalgleish did not wish to continue my employment as EGM of Positron, or if my employment was otherwise terminated by RCR except for cause, then I would be paid the Retirement Benefit in cl 7.1 of [the Contract] in addition to any other entitlements I might have'.
Mr Russell's evidence was that
'[A]t the conclusion of my meeting with Mr Noordhoek, I was left in no doubt that, under the terms of [the Contract] I would receive a retirement benefit equivalent to one year's salary and superannuation if RCR terminated my employment, other than for cause, regardless of whether I had been employed in the position of EGM for five years at that time'.32 (footnotes omitted)
(a) The only discussion he recalled having with Mr Noordhoek regarding Mr Noordhoek's intention to offer the EGM position to Mr Russell occurred when Mr Noordhoek asked Mr Crighton for advice on the remuneration package that Mr Russell should be offered.33
(b) Mr Noordhoek said words to the effect that the remuneration package offered to Mr Russell would need to be attractive because Mr Russell was being paid a considerable salary as Project Manager for Positron and because Mr Russell had already expressed some reluctance in accepting the EGM position.34
(c) Mr Noordhoek and Mr Crighton agreed that Mr Russell should be offered the same retirement benefits that Mr Crighton and the other senior managers on the same level at RCR enjoyed; namely, that Mr Russell would be entitled to receive a retirement benefit equivalent to one year's salary and superannuation in the event that his employment was terminated by RCR, other than for cause, at any time.35
(d) Mr Noordhoek told Mr Crighton that he had prepared the Contract based on the current EGM service agreement, with some consultation from Ms Higgins, and with the intention that it would provide for Mr Russell to be paid the Retirement Benefit if his employment was terminated by RCR at any time, other than for cause.36
43 In cross-examination, it was put to Mr Crighton that what he was saying in [15] of his statement was that it was agreed between him and Mr Noordhoek that Mr Russell should get what other executives got, to which Mr Crighton agreed.37 He was then asked whether the discussion between him and Mr Noordhoek 'descended into the detail' or was a more general observation that Mr Russell should get what everyone gets, to which Mr Crighton said it was 'more general'.38 With reference to what was said in [13] of his witness statement, Mr Crighton was asked whether there was only one conversation between him and Mr Noordhoek. In response, Mr Crighton said that there was 'probably only one if I can't recall any other conversations'.39
RCR's evidence
44 RCR called one witness, Ms Higgins. Ms Higgins' evidence-in-chief about events before the meeting of 4 March 2009 was to the following effect:
(a) In late February or early March 2009 Ms Higgins had discussions with Mr Noordhoek about Mr Noordhoek's intention to offer Mr Russell the position of EGM of Positron, and the need for a service agreement to be prepared.40
(b) Ms Higgins arranged for a draft contract to be prepared by an administrative assistant, and provided it to Mr Noordhoek.41
(c) When providing the draft contract to Mr Noordhoek, Ms Higgins told him that Mr Russell's five-year qualifying period for the Retirement Benefit was different to those of other RCR executives, whose qualifying periods were shorter. In response, Mr Noordhoek said that he would discuss this matter with Mr Russell.42
(d) Later, Mr Noordhoek returned the draft contract with handwritten amendments that Ms Higgins understood had been made by Mr Russell.43
(e) Ms Higgins' memory of the amendments was not specific, but she remembered them as being minor in nature. They did not relate to the Retirement Benefit provision.44
(f) By the time of the meeting of 4 March 2009, the handwritten requested changes had been made.45
45 Ms Higgins' evidence as to what occurred at the meeting on 4 March 2009 was to the following effect:
(a) Present at the meeting were Mr Russell, Mr Noordhoek and Ms Higgins, although she left 'for a short period' at the end of the meeting to get the Contract printed and ready for signing.46
(b) At the meeting, Mr Noordhoek and Mr Russell discussed the short-term and long-term incentive plans set out in the draft contract and Mr Russell said that he agreed to participate in those incentives.47
(c) Mr Russell 'asked [Mr] Noordhoek about the number of years of service that he would have to be employed with RCR before he was entitled (upon the termination of his employment) to be paid the [R]etirement [B]enefit (which was provided for in cl 7 of the [Contract])'.48
(d) In response, Mr Noordhoek said words to the following effect:
The [R]etirement [B]enefit was put in place by our previous Chief Executive Officer, John Linden and each Executive General Manager has a different [R]etirement [B]enefit entitlement depending on their years of service with the company. In this case, as you have only been employed by RCR for a short period of time, it is necessary for you to be employed for 5 years before you are entitled to your [R]etirement [B]enefit.49
(e) Mr Russell did not say anything further about the application of the Retirement Benefit clause (cl 7 of the Contract) and he and Mr Noordhoek discussed other unrelated matters. Mr Russell did not request that changes be made to the requirement in the Contract for him to complete five years of service with RCR before becoming entitled to the Retirement Benefit. The Retirement Benefit was not discussed any further in Ms Higgins' presence.50
(f) The meeting did not last long; Ms Higgins estimated 15 minutes. Once it became clear that Mr Russell accepted the role and its terms she left the meeting to arrange for a copy of the Contract to be printed without the draft watermark and to prepare it for signing.51
46 In cross-examination Ms Higgins gave the following evidence:
(a) She did not take any notes of the discussion on 4 March 2009.52
(b) Ms Higgins was asked to explain why she had signed her statement in a form which, by the time she gave evidence, she considered was inaccurate and needed amendment. She said that she was satisfied that her statement was accurate when she signed it, but that when she re-read it shortly before giving evidence she realised that it needed to be amended.53
(c) In [20] of Ms Higgins' statement when she referred to the '[R]etirement [B]enefit provision' she was referring to cl 7, as she was in [25] and [26] of her statement.54
(d) In the first two lines of [26], when Ms Higgins said that Mr Russell did not say anything further about the application of the Retirement Benefit clause, cl 7, she meant that he did not say anything further about the application of that clause in her presence.55
(e) Ms Higgins was invited to read [23] and following of Mr Russell's statement. She agreed with counsel that she disputed that Mr Noordhoek said words to the effect in [23(a)], namely that if RCR terminated Mr Russell's employment other than for cause he would be paid the Retirement Benefit as described in the Contract regardless of when his employment was terminated.56
(f) As to the other discussions referred to in Mr Russell's statement, Ms Higgins' evidence was that, at the meeting she attended, 'the only matter that was set out was in relation to the [R]etirement [B]enefit'.57
(g) Ms Higgins agreed that she was not present for the whole of the time that Mr Russell and Mr Noordhoek were together on 4 March 2009, in that she left the office 'at some point'.58
(h) Ms Higgins agreed, with reference to [25] of her statement, that the description she gave of what was said on 4 March 2009 was a discussion about when the Retirement Benefit was put in place, about each EGM having a different Retirement Benefit, and why Mr Russell's qualifying period was set at five years.59
47 None of the draft agreements referred to by the witnesses were in evidence.60
Rectification: legal principles
48 The legal principles applicable to a claim for rectification are not in dispute. Both parties accept the trial judge's statement of these principles as accurate.61 We respectfully share that view. The statement of principles that follows does not materially differ from what her Honour said.
49 The equitable doctrine of rectification enables a court to rectify an instrument if it does not reflect the intention of the party or parties to it.62 The parties' intention refers to what the parties intend to be given effect to by the instrument.63 The object of rectification is to reform the instrument so that it reflects the true agreement of the parties or the intention of the sole party.64
50 A claim for rectification requires proof of disconformity between the common intention of the parties, continuing to the time of execution of the instrument, and the terms of the instrument.65
51 Disconformity between the continuing common intention and the instrument may result from a mistake in recording the parties' common intention, or from a mistake about the meaning or effect of words deliberately chosen. In either case, rectification is available.66
52 Courts begin with the presumption that an instrument reflects the true agreement of the parties to it. A party seeking rectification must displace that presumption by demonstrating that the instrument does not reflect the true agreement of the parties.67 The need to displace that presumption is often said to require that the party seeking rectification must establish the parties' common intention by clear and convincing proof.68
53 The parties' common intention refers to the actual subjective intention of the parties.69 However, in order to constitute a common intention the intention of the parties must have been disclosed in some way, although not necessarily by a direct communication that gives rise to an outward expression of accord between them.70
54 The parties' common intention must be clear and well-defined enough to be stated in words that can be incorporated into the instrument.71
Appellate review of trial judge's fact-finding: legal principles
55 RCR's grounds of appeal, especially ground two, complain of errors by the trial judge in making findings of fact. Those findings were based on the trial judge's evaluation of the credibility of witnesses. The principles outlined below make it clear that an appellant who seeks to overturn credibility-based findings of fact faces a high hurdle.
56 The approach of an appellate court in determining an appeal against findings of fact was outlined by Buss JA (Steytler P & Pullin JA agreeing) in Lackovic v Insurance Commission of Western Australia72 as follows:
The requirements and limitations of a rehearing of the kind which occurs before this Court were described by Kirby J in CSR Ltd v Della Maddalena [2006] HCA 1 at [16] - [17]. His Honour said:
'The form of rehearing so provided "shapes the requirements, and limitations, of such an appeal". The relevant "requirements" are that the appellate court is obliged to conduct a thorough examination of the record and a real rehearing. It is not confined to reconsideration of the record in order to correct errors of law, although that will certainly be encompassed in such an appeal. It is required to consider suggested errors of fact-finding. Experience teaches that many errors of this kind arise at first instance, more perhaps than errors of law. Having conducted a rehearing as so described, the appellate court is obliged to "give the judgment which in its opinion ought to have been given in the first instance". This involves, where, as here, there is no jury, conducting a thorough review of the primary judge's reasons and engaging in the tasks of "weighing conflicting evidence and drawing ... inferences and conclusions".
The "limitations" introduced into the rehearing based on the record of the trial are those necessarily involved in that form of appellate procedure. Such limitations include those occasioned by the resolution of any conflicts at trial about witness credibility based on factors such as the demeanour or impression of witnesses; any disadvantages that may derive from considerations not adequately reflected in the recorded transcript of the trial; and matters arising from the advantages that a primary judge may enjoy in the opportunity to consider, and reflect upon, the entirety of the evidence as it is received at trial and to draw conclusions from that evidence, viewed as a whole.'
It is necessary to distinguish between the reasoning of a trial Judge which is based on a credibility determination on the one hand, and the reasoning of a trial Judge which is based on inferences drawn from facts that were undisputed or found by the trial Judge on the other. See Fox v Percy at 146 [88]. As Kirby J observed in CSR at [21] - [22]:
'Even in the case of expressed credibility findings, the statutory duty to conduct a real "rehearing" remains. It may sometimes justify reversal of a decision by a primary judge who has "failed to use or has palpably misused his advantage" or where "incontrovertible facts or uncontested testimony" demonstrates the findings to be erroneous; or where they are "glaringly improbable" and "contrary to compelling inferences".
However, where the conclusion of the primary judge depends on inferences drawn from undisputed facts or facts that have been found but can equally be redetermined by the appellate court, without relevant disadvantage, the duty of the appellate court is clear. It derives from the parliamentary enactment. It "will give respect and weight to the conclusion of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it".'
The 'rehearing' does not involve a completely fresh hearing by the appellate court of all the evidence. That court proceeds on the basis of the record and any fresh evidence that, exceptionally, it admits …
The foregoing procedure shapes the requirements, and limitations, of such an appeal. On the one hand, the appellate court is obliged to 'give the judgment which in its opinion ought to have been given in the first instance'. On the other, it must, of necessity, observe the 'natural limitations' that exist in the case of any appellate court proceeding wholly or substantially on the record. These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the 'feeling' of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole. (footnotes omitted)
58 Generally, therefore, a trial judge's credibility-based conclusions will not be reversed on appeal unless it is demonstrated that such conclusions are flawed by reference to incontrovertible facts or uncontested testimony, or are glaringly improbable or contrary to compelling inferences, or the trial judge has failed to use, or has palpably misused, their advantage as trial judge.74
Ground 1: disposition
59 Read in isolation, the trial judge's statement that the failure to call Mr Noordhoek 'meant that there was no direct evidence of his conversations with Mr Russell other than the evidence given by Mr Russell'75 might be thought to be incorrect, in that Ms Higgins did give evidence as to Mr Noordhoek's conversation with Mr Russell on 4 March 2009. On the other hand, her Honour may have been saying that, apart from Mr Russell, no one else gave evidence of the conversation recounted by Mr Russell in which Mr Noordhoek allegedly said, in effect, that Mr Russell would be paid the Retirement Benefit if his employment was terminated without cause, irrespective of its term. Earlier in the trial judge's reasons, at [21], her Honour expressly noted that Ms Higgins was present for some of the discussion between Mr Russell and Mr Noordhoek on 4 March 2009. The trial judge also referred to Ms Higgins' evidence in relation to part of that discussion, for which she was present, in [79].
60 When the trial judge's reasons are read as a whole, her Honour's finding at [77] is not to be read in the manner alleged by RCR. Her Honour was not saying that, apart from Mr Russell's evidence, there was no direct evidence of the conversations between Mr Noordhoek and Mr Russell on the topic of the Contract. Rather, she was saying that Mr Russell was the only witness who gave evidence of the conversations on the aspect of that topic that was crucial to his case.
61 For these reasons, ground 1 fails.
Ground 2: disposition
62 Ground 2 must be considered in light of the principle that rectification can be granted only when the parties' common intention, differing from the instrument, is established by clear and convincing proof. The ground must also be determined in a way that recognises the advantages of the trial judge in finding the facts after having seen and heard the witnesses, and the challenges for any appellant complaining about credibility-based factual findings.
63 One central plank of RCR's appeal is its contention that Ms Higgins' evidence, not challenged in cross-examination, was irreconcilable with the evidence of Mr Russell, or rendered it 'utterly improbable'76, and that the trial judge's findings overlooked or did not accommodate that.
64 The view taken by the trial judge of Ms Higgins' evidence is, in part at least, apparent from what her Honour said in [79] of her reasons. In the context of considering a submission by RCR as to why Mr Russell's evidence should not be accepted on grounds of inconsistency, her Honour said as follows:
Counsel for RCR submitted that Mr Russell's evidence should not be accepted for three reasons. First, counsel submitted that Mr Russell's evidence was inconsistent in a number of respects. Counsel pointed out that it was accepted by Mr Russell in cross-examination that, at their meeting on 4 March 2009, Mr Noordhoek told him that the Retirement Benefit was subject to a five-year qualifying period. However, that evidence was entirely consistent with the evidence-in-chief given by Mr Russell, which was that, in his meeting with Mr Noordhoek on 4 March 2009, Mr Russell queried why the qualifying period for the Retirement Benefit under cl 7.1 of the Contract was five years, when Mr Russell was aware that the contracts of other RCR executives specified qualifying periods of three years. Mr Russell's evidence-in-chief was that Mr Noordhoek advised him that the change in the qualifying period to five years was in accordance with a decision of the Board. Mr Russell's evidence was also consistent with Ms Higgins' evidence in relation to this part of the conversation between Mr Russell and Mr Noordhoek, for which she was present. (footnotes omitted)
65 It is clear from what her Honour there said, and from what she said earlier at [21], that her Honour accepted Ms Higgins' evidence that she was present, and thus rejected Mr Russell's evidence that she was not present, during the meeting between Mr Russell and Mr Noordhoek. That is not surprising in circumstances where Ms Higgins' evidence in this respect was not challenged in cross-examination, and where Mr Russell had made earlier inconsistent statements in which he alleged that Ms Higgins was present at the meeting with Mr Noordhoek in March 2009.
66 When Mr Russell wrote an email of demand to RCR on 8 January 2010, less than a month after his termination, he asserted that at the time he entered into the Contract he discussed the provision about his Retirement Benefit with both Ms Higgins and Mr Noordhoek.77 That was confirmed in Mr Russell's pleadings which shortly followed. The statement of claim filed in the action in February 2010 asserted that both Mr Noordhoek and Ms Higgins expressly represented to Mr Russell at a meeting in March 2009 prior to entering into the Contract, that Mr Russell would be entitled to a retirement benefit of one year's salary and superannuation benefits whether or not termination occurred within the first five years of his employment, unless the termination was for cause.78 It was alleged that Mr Russell acted in reliance on, and was induced by, the express representations made by Mr Noordhoek and Ms Higgins at this meeting. That position was maintained for about a year and a half. In July 2011, the statement of claim was amended to delete the reference to Ms Higgins.
67 Mr Russell's oral evidence acknowledged that the statements in the email of 8 January 2010 and in the statement of claim were wrong, and did not offer any explanation for having made the earlier inconsistent statement in the statement of claim.79 Mr Russell said that the statement of claim was amended '[t]o clarify the situation'.80 He gave no explanation for why in his statement of claim he had alleged that Ms Higgins was not only present, but had made express representations, when his current evidence was that she was not even present at the meeting.
68 The trial judge found that Ms Higgins' evidence was consistent with Mr Russell's evidence that Mr Noordhoek told him that the minimum period for qualifying for the Retirement Benefit under cl 7.1 of the Contract was five years, not the shorter period that applied to other RCR executives.81 On appeal, RCR criticised that finding, pointing out that Mr Russell's evidence82 and Ms Higgins' evidence83 were expressed in materially different terms. While that is true, in our view in light of the way in which the evidence in Ms Higgins' witness statement was expressed, and taking into account her evidence in cross-examination,84 this finding does not, in itself, reveal error.
69 The trial judge did not make any other findings about the evidence of Ms Higgins in relation to the meeting of 4 March 2009. In particular, she did not expressly reject any part of this evidence. In circumstances where the accuracy and reliability of Ms Higgins' evidence in important respects about the meeting of 4 March 2009 was not challenged in cross-examination or in closing address, we would proceed on the basis that her evidence in those respects was accepted by the trial judge, unless her Honour otherwise specified.
70 If a trial judge concludes that there has been a breach of the rule in Browne v Dunn,85 the court has a broad discretion about how to respond to the breach. The proper response to a failure to observe the rule in Browne v Dunn will vary according to the circumstances of the case, but will usually be related to the central object of the rule, which is to secure fairness.86 Like Owen J in Bell Group v Westpac,87we would adopt what Hunt J said in Allied Pastoral Holdings Pty Ltdv The Federal Commissioner of Taxation.88 There his Honour said that non-compliance with the rule in Browne v Dunn does not mean that the court is obliged to accept the evidence of the witness in question.89 Among the situations where the court might not accept evidence notwithstanding the absence of cross-examination are where the evidence is inherently illogical or unreliable, or where the opposing party calls evidence of a substantial nature directly contradicting the evidence on which there was no cross-examination.90 However, in many cases it would be wrong, unreasonable or even perverse to reject evidence upon which there has been no relevant cross-examination.91
71 If the rule in Browne v Dunn would be breached by a submission by a party inviting a particular finding about a witness' evidence, in circumstances where no such submission is made, a finding to that effect by the trial judge may be precluded.92 At the least, if the trial judge declines to accept unchallenged evidence, that should be stated expressly, and something said to explain why.
72 If the learned trial judge did not accept part of Ms Higgins' evidence, in circumstances where that part of her evidence was not challenged in cross-examination and where counsel for Mr Russell did not submit in closing that it should be rejected, in our respectful view it was incumbent on the trial judge to say so, and to explain why that was so. That not having occurred, we proceed on the basis that the trial judge accepted Ms Higgins' evidence.
73 Objectively, Ms Higgins' unchallenged evidence, if accepted, makes the version of events advanced by Mr Russell extremely unlikely. According to Mr Russell, at the meeting on 4 March 2009 'we had my Services Agreement open in front of us and we discussed the relevant portions of it in terms of my concerns or queries I had. I sought assurances that, in the event that my employment was terminated … other than for cause, then I would still be paid the retirement benefit described in clause 7.1 … even if this occurred before the completion of the five year period referred to in that clause'.93
74 On Ms Higgins' evidence:
(a) Mr Noordhoek told Mr Russell that the minimum number of years of service for qualifying for the Retirement Benefit was five years;94
(b) Mr Russell did not say anything further about the application of the Retirement Benefit clause in Ms Higgins' presence and, thereafter, he and Mr Noordhoek discussed other unrelated matters;95
(c) Mr Noordhoek did not, in Ms Higgins' presence, say that if RCR terminated Mr Russell's employment, other than for cause, he would be paid the Retirement Benefit regardless of when the termination occurred;96
(d) Ms Higgins left the meeting 'for a short period';97
(e) she left the meeting '[o]nce it became clear that [Mr Russell] accepted the role and its terms';98
(f) she left the meeting 'to arrange for a copy of the [Contract] to be printed without the "Draft" watermark and to ensure it was correctly formatted so that it could be signed';99 and
(g) she returned to Mr Noordhoek's office a short time later and Mr Russell signed the Contract.100
75 None of this evidence was challenged in any way in the course of cross-examination. The burden of the cross-examination was, relevantly, simply to emphasise that Ms Higgins accepted that 'at some point' she left Mr Russell and Mr Noordhoek.101
76 On Mr Russell's evidence, accepted by the trial judge:
(a) Mr Russell was concerned to ensure that if he accepted the EGM position he would be provided with adequate recompense if his employment was terminated by RCR;102
(b) he sought assurances that in the event that his employment was terminated within five years other than for cause he would still be paid his Retirement Benefit;103
(c) Mr Noordhoek told Mr Russell on three separate occasions at the meeting on 4 March 2009, in the course of the exchanges detailed in Mr Russell's statement,104 that if his employment was terminated by RCR other than for cause, Mr Russell would be paid the Retirement Benefit irrespective of whether he had completed five years of service for RCR.105
77 Ms Higgins was the person with responsibility for having the draft contract that was discussed at the meeting printed in a form suitable for execution by the parties. On Ms Higgins' evidence she was at the meeting from the outset, and the discussion about the terms of the Contract reached the point where she left the meeting to have the draft contract put into a form suitable for execution. Up to that point in the meeting, Mr Russell did not raise any concern about his entitlement to the Retirement Benefit if RCR terminated his employment other than for cause within five years, and nothing was said about that matter. That was so notwithstanding that there had been discussion of the topic of retirement, in connection with the question of the qualifying period for the Retirement Benefit. The ordinary inference would be that any discussion of retirement would involve (on Mr Russell's case), first and foremost, a discussion about the position regarding the Retirement Benefit if within five years RCR terminated Mr Russell's employment other than for cause.
78 Leaving the discussion of such an important aspect of the Contract (from Mr Russell's point of view) until after the terms had otherwise been agreed, and the document was ready to print, might perhaps be explicable by reference to a deliberate decision by Mr Russell to leave the matter for discussion with Mr Noordhoek in the absence of Ms Higgins. The only other explanation might be earlier inadvertence at the meeting while Ms Higgins was present, followed by, in effect, an 'afterthought' by Mr Russell, whilst she was out of the room getting the Contract printed. Neither possible explanation is satisfactory. The first, a deliberate decision to leave the matter for discussion until after Ms Higgins had left the room, would require some evidence from Mr Russell in that regard, but there was none. His evidence was that Ms Higgins was not present at all. His original pleaded case was that she was there when the representations were made, and made some of them. The second, inadvertence, is implausible on Mr Russell's case.
79 On Mr Russell's evidence, the question of ensuring adequate compensation if his employment was terminated by RCR was his primary concern. He was not satisfied with the assurances Mr Noordhoek gave him on 2 March 2009. Objectively, it is unlikely in the extreme that he would have advertently or inadvertently permitted the discussion on 4 March 2009 to reach the point where the person responsible for having the Contract put into its final form for execution left the meeting for that purpose, without him having raised the question of his entitlement to the Retirement Benefit if RCR terminated his employment other than for cause within five years.
80 Further, if the evidence of both Mr Russell and Ms Higgins is accepted, in the short time that Ms Higgins was absent, Mr Noordhoek gave the assurance referred to by Mr Russell three times.
81 It is true, as Mr Russell's submissions on the appeal emphasise,106 that in coming to her conclusions, the trial judge relied on other evidence. First, the trial judge accepted Mr Russell's evidence as to his telephone conversation with Mr Noordhoek on 2 March 2009. That evidence was not challenged. Secondly, the trial judge accepted Mr Crighton's evidence about his conversation with Mr Noordhoek107 and concluded that this evidence provided significant support for Mr Russell's case.108 We accept Mr Russell's submissions in these respects. While, in light of the cross-examination of Mr Crighton, a different view of his evidence might have been taken, given the limited scope of the cross-examination we think it was open to the trial judge to accept Mr Crighton's evidence in the respects that she did, and to find that it provided some significant support for Mr Russell's case.
82 Nevertheless, in our view, the position remains that Ms Higgins' evidence, if accepted, rendered Mr Russell's evidence of the meeting of 4 March 2009 highly improbable. Mr Russell's evidence of the meeting of 4 March 2009 was an important element of his case for rectification.
83 It would appear that the trial judge drew an inference that after Ms Higgins left the meeting, Mr Russell and Mr Noordhoek had the conversation described by Mr Russell. We describe that as an inference, because it was not supported by any direct evidence. Despite his earlier statements (in correspondence and in his pleading) to the contrary, in his evidence at trial Mr Russell was, as the trial judge found,109 adamant that Ms Higgins had not been present when he met with Mr Noordhoek on 4 March 2009.110 In those circumstances, Mr Russell could not and did not give any evidence to explain why he had only raised his concerns about his entitlement to the Retirement Benefit after Ms Higgins had left to have the Contract printed in a form suitable for execution. There was no other evidence that could explain why, given his concerns, Mr Russell would have acted in that way.
84 At trial, Mr Russell's ultimate pleaded case, and his evidence (in chief and in cross-examination), was that his discussions on 4 March 2009 were with Mr Noordhoek only. However, counsel for Mr Russell did not put that case in cross-examination of Ms Higgins. Nor was it advanced in closing submissions. It was not put to Ms Higgins that she was not present at all during Mr Russell's discussions with Mr Noordhoek on 4 March 2009; rather, counsel simply put that there was some part of those discussions at which she had not been present.111
85 In closing submissions at trial, counsel for Mr Russell submitted that:
(a) the evidence of Mr Russell and Ms Higgins was not irreconcilable;112
(b) it was open to find that Mr Noordhoek gave the assurances about the Retirement Benefit 'at a point in time when Ms Higgins was not present';113
(c) given Mr Russell's clear and 'unshaken' evidence about the assurances given to him, there was 'every possibility' that Ms Higgins was not present on 4 March 2009 when the assurances were given.114
86 Counsel for Mr Russell made submissions to the trial judge about the reliability of the detail in certain paragraphs of Ms Higgins' evidence,115 but did not mention [24] or [27] of Ms Higgins' statement. In those paragraphs, Ms Higgins says, among other things, that she was at the meeting from the beginning, and left the meeting in order to print the final version of the Contract for execution. If counsel had made a submission that Ms Higgins' evidence to that effect should not be accepted, given that it was unchallenged in cross-examination, a question would have arisen as to whether that submission involved a breach of the rule in Browne v Dunn.116
87 At trial, counsel for RCR, whose submissions preceded those made on behalf of Mr Russell, did not make any submissions as to whether and how Mr Russell's evidence about the meeting of 4 March 2009 and Ms Higgins' evidence about that meeting could be reconciled. Counsel for RCR referred in a general way to the 'textbook conflict'117 between the evidence of Mr Russell and the evidence of Ms Higgins. He advanced a number of reasons as to why Mr Russell's evidence should not be accepted. When counsel for RCR referred to Ms Higgins' evidence about the meeting of 4 March 2009, the trial judge observed that Ms Higgins was not there for the entirety of the conversation.118 Counsel agreed, and did not say anything more in that respect.119
88 Neither counsel drew her Honour's attention to Ms Higgins' unchallenged evidence that she attended the meeting from the start, and left in order to have the Contract printed for execution. Further, neither counsel drew to her Honour's attention that this evidence raised questions as to how Mr Russell's evidence could be reconciled with it, consistently with the objective probabilities. That may explain why her Honour's reasons do not refer to any such question, or to that aspect of Ms Higgins' evidence.
89 The question is whether, in light of all the evidence, including the evidence of Mr Crighton, it was open to the trial judge to infer that Mr Russell did not raise the key point on the topic of retirement from his perspective until after Ms Higgins left the room to get the Contract printed out in final form. In our view, the unexplained (and, on Mr Russell's case, involving the entire absence of Ms Higgins from the meeting, the essentially inexplicable) improbability of events unfolding in that way militated strongly against any such inference. The trial judge rejected Mr Russell's adamant evidence that Ms Higgins was not at the meeting on 4 March 2009. Mr Russell had made unexplained previous inconsistent statements, much closer in time to the events in question and on important occasions, about whether Ms Higgins had been present. Taking those three matters into account, and making full allowance for the advantage of the trial judge in seeing and hearing the witnesses, in our respectful opinion it was not open to the trial judge to conclude that Mr Russell's evidence of the conversation at the meeting on 4 March 2009 materially assisted him in establishing a case for rectification on clear and convincing proof.
90 For these reasons, we would uphold ground 2.
Conclusion
91 For the reasons we have given, we would uphold the appeal.
92 The trial judge effectively decided the case in favour of Mr Russell on the basis of:
(a) Mr Russell's evidence as to the telephone conversation with Mr Noordhoek on 2 March 2009;
(b) Mr Crighton's evidence about his conversations with Mr Noordhoek; and
(c) Mr Russell's evidence of the conversation with Mr Noordhoek at the meeting on 4 March 2009.
93 As we have observed, the 'process of fact finding',120 in relation to the meeting of 4 March 2009, miscarried. It miscarried because, in effect, the judge's conclusion that the conversation occurred as alleged by Mr Russell is essentially inconsistent with her Honour's acceptance of Ms Higgins' evidence, and her Honour failed to address the inconsistency in her reasons. If her Honour had addressed the inconsistency, her findings on that issue may well have affected her assessment of Mr Russell's evidence about the telephone conversation with Mr Noordhoek on 2 March 2009.
94 The trial judge accordingly failed to evaluate properly the strength of Mr Russell's rectification claim as a whole. Having regard to the 'natural limitations'121 which exist in any appellate review by this court, this court is not in a position to evaluate the strength of the other oral evidence relied upon by the trial judge, in order to determine whether or not the parties had the common intention alleged by Mr Russell.
95 After some equivocation, counsel for RCR ultimately accepted that this appeal raised issues of witness credibility and reliability.122 These are issues that this court cannot resolve on the written record of evidence in this case. In light of our reasons for upholding the appeal, this court is not in a position to give judgment in the action, and there must be an order for a re-trial before a different judge.
96 We would hear from the parties as to the precise orders to be made, and as to costs.
1Russell v RCR Tomlinson Ltd [2012] WASC 405.
2 Trial judge's reasons [13].
3 Trial judge's reasons [14].
4 Trial judge's reasons [15].
5 Trial judge's reasons [17].
6 Trial judge's reasons [20].
7 Trial judge's reasons [21].
8 Trial judge's reasons [21].
9 Trial judge's reasons [22].
10 Trial judge's reasons [25].
11 Trial judge's reasons [26].
12 Trial judge's reasons [36].
13 Trial judge's reasons [58] - [68].
14 Appellant's submissions dated 27 November 2013 [4.1].
15 Trial judge's reasons [69] - [95].
16 Trial judge's reasons [69] - [74].
17 Trial judge's reasons [76] - [87].
18 Trial judge's reasons [76].
19 Trial judge's reasons [76].
20 Trial judge's reasons [77].
21 Trial judge's reasons [78].
22 Trial judge's reasons [79] - [87].
23 Trial judge's reasons [88].
24 Trial judge's reasons [89].
25 Trial judge's reasons [92] - [95].
26 Trial judge's reasons [100], [103].
27 Witness statement of David William Russell dated 22 November 2011 [10].
28 Witness statement of David William Russell dated 22 November 2011 [18].
29 Witness statement of David William Russell dated 22 November 2011 [22].
30 Trial judge's reasons [69] - [72].
31 Witness statement of David William Russell dated 22 November 2011 [24].
32 Trial judge's reasons [73] - [75].
33 Witness statement of Phillip John Crighton dated 29 November 2011 [13].
34 Witness statement of Phillip John Crighton dated 29 November 2011 [14].
35 Witness statement of Phillip John Crighton dated 29 November 2011 [15].
36 Witness statement of Phillip John Crighton dated 29 November 2011 [16].
37 Trial ts 55.
38 Trial ts 55.
39 Trial ts 55.
40 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [9].
41 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [12] - [13].
42 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [14].
43 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [17].
44 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [20].
45 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [21].
46 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [24], [27].
47 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [24].
48 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [25].
49 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [25].
50 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [26].
51 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [27].
52 Trial ts 69.
53 Trial ts 71 - 73.
54 Trial ts 77.
55 Trial ts 77.
56 Trial ts 79.
57 Trial ts 79.58 Trial ts 79.
59 Trial ts 79 - 80.
60 Trial judge's reasons [19].
61 Appellant's submissions dated 27 November 2013 [4.1]; respondent's submissions dated 11 February 2014 [78].
62Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336, 350 (Mason J, Menzies J agreeing); Tipperary Developments Pty Ltd v The State of Western Australia [2009] WASCA 126; (2009) 38 WAR 488 [278] (McLure JA, Wheeler & Newnes JJA agreeing); Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21; (2015) 47 WAR 547 [164] (Buss JA, McLure P & Newnes JA agreeing).
63Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329, 331 - 332 (Mahoney AP); Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 [125] - [126] (Tobias JA, Mason P & Campbell JA agreeing).
64Maralinga (350) (Mason J, Menzies J agreeing); Mander Ltd v Clements [2005] WASCA 67; (2005) 30 WAR 46 [11] (Murray J), [67] (McKechnie J), [84] (McLure J); Vantage Systems [165].
65Mander v Clements [12] - [14] (Murray J), [49] - [52] (McKechnie J), [85] (McLure J); Tipperary Developments [281] (McLure JA, Wheeler & Newnes JJA agreeing).
66Tipperary Developments [282] - [283] (McLure JA, Wheeler & Newnes JJA agreeing); Carlenka (340 - 344) (Sheller JA, Mahoney AP & McLelland AJA agreeing).
67Maralinga (350 - 351) (Mason J, Menzies J agreeing); Carlenka (339 - 340) (Sheller JA, Mahoney AP & McLelland AJA agreeing); Mander v Clements [12] (Murray J).
68Pukallus v Cameron (1982) 180 CLR 447, 452 (Wilson J, Gibbs CJ agreeing); Carlenka (345) (Sheller JA, Mahoney AP & McLelland AJA agreeing); Mander v Clements [11] (Murray J); Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603 [451] (Campbell JA, Allsop P & Giles JA agreeing).
69Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337, 346, 352 (Mason J, Stephen & Wilson JJ agreeing); Carlenka (332) (Mahoney AP); Ryledar v Euphoric [126], [180] - [182] (Tobias JA, Mason P & Campbell JA agreeing), [267] - [272] (Campbell JA, Mason P & Tobias JA agreeing); Franklins v Metcash [445], [448] (Campbell JA, Allsop P & Giles JA agreeing); Technomin Australia Pty Ltd v Xstrata Nickel Australasia Operations Pty Ltd [2014] WASCA 164 [132] - [134] (McLure P, Newnes JA agreeing).
70Ryledar v Euphoric [273] - [316], esp [281], [316] (Campbell JA, Mason P & Tobias JA agreeing).
71Maralinga (349) (Mason J, Menzies J agreeing); Franklins v Metcash [446] - [447] (Mahoney AP).
72Lackovic v Insurance Commission of Western Australia [2006] WASCA 38; (2006) 31 WAR 460 [66] - [67].
73Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 [22] - [23].
74CSR Ltd v Della Maddalena [2006] HCA 1 [21] (Kirby J, Gleeson CJ agreeing); City of Stirling v Tremeer [2006] WASCA 73; (2006) 32 WAR 155 [33] (McLure JA, Steytler P & Roberts-Smith JA agreeing); Clarke v BHP Billiton Direct Reduced Iron Pty Ltd [2009] WASCA 134 [86] - [87] (Buss JA, Pullin & Newnes JJA agreeing).
75 Trial judge's reasons [77].
76 Appellant's submissions dated 27 November 2013 [11.6].
77 Exhibit 15.
78 Trial ts 37; exhibit 20 [14].
79 Trial ts 37 - 39, 47.
80 Trial ts 47.
81 Trial judge's reasons [79].
82 Witness statement of David William Russell dated 22 November 2011 [24].
83 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [25].
84 Trial ts 77, 79 - 80.
85Browne v Dunn (1893) 6 R 67.
86 R v Birks (1990) 19 NSWLR 677, 689 (Gleeson CJ, McInerney J agreeing); The Bell Group Limited (In Liq) v Westpac Banking Corporation[No 9] [2008] WASC 239; (2008) 39 WAR 1 [1036] (Owen J).
87Bell Group v Westpac [1037] (Owen J).
88Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1, 26.
89 See also Poricanin v Australian Consolidated Industries Ltd [1979] 2 NSWLR 419, 426 (Hope & Glass JJA); Ellis v Wallsend District Hospital (1989) 17 NSWLR 553, 586 - 588 (Samuels JA, Meagher JA agreeing); Hamod v State of New South Wales [2011] NSWCA 375 [337] - [340].
90Hamod v State of New South Wales [338] - [340].
91Allied Pastoral Holdings (26) (Hunt J); Bell Group v Westpac [1037] (Owen J).
92Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361 [72] - [75] (Heydon, Crennan & Bell JJ).
93 Witness statement of David William Russell dated 22 November 2011 [22].
94 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [25].
95 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [26].
96 Trial ts 79, referring to the witness statement of David William Russell dated 22 November 2011 [23(a)].
97 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [24].
98 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [27].
99 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [27].
100 Witness statement of Charmaine Kerri-Ann Higgins dated 13 February 2012 [28].
101 Trial ts 79.
102 Witness statement of David William Russell dated 22 November 2011 [17]; trial judge's reasons [71].
103 Witness statement of David William Russell dated 22 November 2011 [22]; trial judge's reasons [71].
104 Witness statement of David William Russell dated 22 November 2011 [23] - [32].
105 Trial judge's reasons [72] - [75].
106 Respondent's submissions dated 11 February 2014 [80].
107 See [42] above.
108 See [28] and [29] above.
109 Trial judge's reasons [80].
110 Witness statement of David William Russell dated 22 November 2011 [21]; trial ts 35.
111 Trial ts 77 - 79.
112 Trial ts 123.
113 Trial ts 124.
114 Trial ts 125.
115 Trial ts 121 - 124.
116Browne v Dunn (1893) 6 R 67; see [70] above.
117 Trial ts 91.
118 Trial ts 94.
119 Trial ts 94.
120Waterways Authority v Fitzgibbon [2005] HCA 57; (2005) 79 ALJR 1816 [131].
121Fox [23]; Waterways [113].
122 Appeal ts 24.
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