Silver v Dome Resources NL - [2007] NSWSC 455

No judgment structure available for this case.

Reported Decision:
62 ACSR 539
(2007) Aust Contract Reports 90-258

New South Wales

Supreme Court

CITATION: Silver v Dome Resources NL [2007] NSWSC 455

HEARING DATE(S): 4 – 8, 11 - 15 April, 3 & 5 May and 12 – 14 September 2005, 9, 13 & 22 June, 26 October and 6 December 2006 and 2 May 2007

JUDGMENT DATE :
9 May 2007

JURISDICTION: Equity

JUDGMENT OF: Hamilton J

DECISION: That the first plaintiff is entitled to orders for specific performance to enforce the payment of benefits upon his retirement as a director to a company associated with him against both the company from which he retired and its holding company as guarantor.

CATCHWORDS: CONTRACTS [45], [87] – General contractual principles – Parties – Rights and liabilities of third parties – Enforcement by non party beneficiary – Consideration – What amounts to consideration – Other cases – Practical benefit or disbenefit - CORPORATIONS [1228], [1241] – Management and administration – Officers of corporation – Director – Remuneration – Responsibility for fixing – Authority, rights and powers of officers of corporation – Termination payments – Entitlements on resignation – Statutory caps on quantum – Time of operation of provision prohibiting excessive entitlements - EQUITY [379] – Equitable remedies – Specific performance – The jurisdiction in general – General principles – No longer limited by particular categories – Available at suit of party to contract to enforce payment of monetary sum to non party - GUARANTEE AND INDEMNITY [20] – Discharge of surety – Departure from terms of contract with surety – Whether total failure of consideration.

LEGISLATION CITED: Corporations (New South Wales) Act 1990 s 7
Corporations Act 1989 (Cth) s 82
Corporations Law ss 9, 124, 125, 127, 128, 129, Part 2D.2 Division 2, 200A(1)(b), 200B(1), 200D(1), 200G(1)(b), 200G(2)(b), 237 and 251A(6)
Corporations Act 2001 (Cth) ss 9, 124, 125, 127, 128, 129, Part 2D.2 Division 2, 200A(1)(b), 200B(1), 200D(1), 200G(1)(b), 200G(2)(b) and 251A(6)
Trade Practices Act 1974 (Cth) s 52

CASES CITED: Ajax Cooke Pty Ltd v Nugent SCV Phillips J 29 November 1993 unreported
Anangel Atlas Compania Naviera SA v Ishikawajima-Harima Heavy Industries Co Ltd (No. 2) [1990] 2 Lloyd’s LR 526
Barroora Pty Ltd v Provincial Insurance Ltd (1992) 26 NSWLR 170
Berry v Federal Commissioner of Taxation (1953) 89 CLR 653
Beswick v Beswick [1968] AC 58
Chan v Cresdon Pty Ltd (1989) 168 CLR 242
Chappell & Co Ltd v Nestlé Co Ltd [1960] AC 87
Claremont Petroleum NL v Cummings (1992) 110 ALR 239
Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280
Co-operative Bulk Handling Ltd v Jennings Industries Ltd (1996) 17 WAR 257
Coulls v Bagot’s Executor & Trustee Co Ltd (1967) 119 CLR 460
Fox v GIO Australia Ltd (2002) 56 NSWLR 512
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1
Gobblers Inc Pty Ltd v Stevens (1993) 6 BPR 13,591
Haddad v R W Jordan Pty Limited FCA 20 August 1997 unreported
Jefferys v Jefferys (1841) Cr & Ph 138; 41 ER 443
Lee v GEC Plessey Telecommunications [1993] IRLR 383
Lilley v Midland Brick Co Pty Ltd (1992) 9 WAR 339
Mizzi v Reliance Financial Services Pty Ltd [2007] NSWSC 37
Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723
Orrong Strategies Pty Ltd v Village Roadshow Limited [2007] VSC 1
Pao On v Lau Yiu Long [1980] AC 614
Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266
Re Heaney; Ex parte Flint v Nexus Minerals NL WASC Full Court 26 February 1997 unreported
Sali v SPC Ltd (1991) 9 ACLC 1511
Scott v Forster Pastoral Co Pty Ltd (2000) 35 ACSR 294
Stilk v Myrick (1809) 2 Camp 317; 170 ER 1168
Thomas v Thomas (1842) 2 QB 851; 114 ER 851
Tinyow v Lee [2006] NSWCA 80
Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107
Whitlam v Insurance Australia Group Limited (2005) 52 ACSR 470
Wigan v Edwards (1973) 47 ALJR 586
Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1
Wilson v Northampton and Banbury Junction Railway Co (1874) LR 9 Ch App 279
Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 WLR 277
Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741
Woodside Petroleum Development Pty Ltd v H&R-E&W Ltd (1997) 18 WAR 539
Accounting Standard AASB 1017 of February 1997
Accounting Standard AASB 1046 of January 2004
Carter, Peden and Tolhurst, Contract Law in Australia (5th ed, 2007) [6-23], [6-27], [6-41], [6-44], [6-48]
Macquarie Dictionary (4th ed, 2005)
Meagher, Gummow and Lehane, Equity: Doctrines and Remedies (4th ed, 2002) [20-025], [20-030], [20-050]
O’Donovan and Phillips, The Modern Contract of Guarantee (looseleaf) [2.1000], [2.1050], [2.1100]
Rowlatt on Principal and Surety (5th ed, 1999) [2 01], [2-11]
Shorter Oxford English Dictionary (5th ed, 2002)

PARTIES: Michael Bernard Silver (P1 & XD1)
Fair Choice Limited (P2 & XD2)
Dome Resources NL (D1 & XC1)
Durban Roodepoort Deep Limited (D2 & XC2)

FILE NUMBER(S): SC 2586/01

COUNSEL: J E Thomson & M J Watts (Ps)
T G R Parker SC (Ds)

SOLICITORS: Bull, Son & Schmidt (Ps)
Allens Arthur Robinson (Ds)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

WEDNESDAY, 9 MAY 2007

2586/01 MICHAEL BERNARD SILVER & ANOR v DOME RESOURCES NL & ANOR

JUDGMENT

Item	Par
Introduction	1,2
The facts	3 – 49
Witness credit	50 – 54
The corporations legislation	55
Contentions	56, 57
1 Authority of directors	58 – 77
1.1 Resolution authorising retirement variation deed	59 – 65
1.2 Authority of Dome directors re retirement deed	66 – 70
1.3 Authority of Dome directors re retirement variation deed	71 - 73
1.4 Operation of corporations legislation ss 124, 125	74, 75
1.5 Operation of corporations legislation ss 128, 129	76, 77
2 Interpretation of restrictions on retirement benefits: what is prohibited and when	78 – 109
2.1 The relevant legislative provisions	79 – 81
2.2 Time of operation of Part 2D.2 Division 2	82 – 87
2.3 Are the payment obligations prohibited by s 200B(1)	88
2.4 Does the exception to the prohibition in s 200G(1)(b) apply?	89 – 108
2.4.1 Is payment “for past services”?	89
2.4.2 Would payment exceed payment limit in the Corporations Act 2001 (Cth) s 200G(2)(b)?	90 – 108
2.5 Whether, if the payment limit is exceeded, the varied retirement deed may be read down so as to oblige payment of an amount equal to the payment limit	109
3 Entitlement of the plaintiffs to recover a judgment at law	110 – 116
4 Possibility of relief by way of specific performance	117 – 148
4.1 Specific performance of an obligation to pay money	118 – 120
4.2 Entitlement to specific performance against Dome	121 – 138
4.3 Entitlement to specific performance against DRD	139 – 148
5 Estoppel	149
6 The claims under the Trade Practices Act 1974 (Cth)	150
Conclusion	151

Introduction

1 These proceedings are brought, as first plaintiff, by a former director (“Mr Silver”) of a company (the first defendant) and, as second plaintiff, by a company associated with Mr Silver (“Fair Choice”). They are brought to enforce payment promised upon Mr Silver’s retirement as a director under a retirement deed (“the retirement deed”) executed by the first defendant (“Dome”). The retirement deed was varied by a deed of variation (“the retirement variation deed”), which inserted new provisions in the retirement deed and also provided a guarantee by the second defendant (“DRD”) of Dome’s obligations. The retirement deed as varied by the retirement variation deed is referred to as “the varied retirement deed”. The obligations to pay under the varied retirement deed are referred to as “the payment obligations”. Dome was a company listed on the Australian Stock Exchange until it was taken over by DRD. DRD is a South African company, which was and is listed on the Johannesburg Stock Exchange. It was on 15 February 1999 registered as a foreign company under Part 5B.2 Division 2 of the corporations legislation and has continued so registered.

2 The defendants resist these claims upon various grounds. Those grounds include grounds relating to the signatories’ authority to execute the deeds; that the payments were prohibited by provisions of the corporations legislation limiting termination payments to company directors except with the approval of a general meeting or general meetings; that neither the first defendant nor the second defendant is entitled to recover a judgment at law in respect of the failure to pay the retirement payments; and that the plaintiffs are not entitled to specific performance of the payment obligations because of lack of consideration for those obligations.

The Facts

3 The facts set out under this heading appear from the evidence and, except as appears otherwise in this judgment, I find that they are established.

4 Mr Silver has, as a professional engineer, been involved in mining and the development of gold mines in both Australia and overseas since about 1970. His involvement has been through his own companies and as a director of or consultant to other companies.

5 In 1987, Mr Silver met Vincent Yu (“Mr Yu”), who lived in Hong Kong and thereafter assisted Mr Silver in dealings he had there. In early 1992, Mr Silver had a conversation with Mr Yu as follows:

6 In about September 1992, Mr Silver was appointed a director of Goldspark Pty Limited (“Goldspark”) and Mr Yu was the other director. Shares in Goldspark were issued to Mr Yu to be held on Mr Silver’s behalf. In about 1994, further shares in Goldspark were issued, some in favour of parties unrelated to Mr Silver. After this, about 60% of the shares in Goldspark were held on behalf of Mr Silver.

7 On 6 April 1993 Mr Silver on behalf of Goldspark wrote a letter to John Boyer (“Mr Boyer”) of Dome. The letter relevantly stated as follows:

8 At about that time Mr Silver had a conversation with Mr Yu to the following effect:

“Mr Silver: ‘Vincent, I have arranged for the payment of a consulting fee of $6,000.00 in connection with the Tolukuma Gold Mine to be paid to Goldspark. I would like to access part of those funds from time to time for consulting services provided by me and expenses incurred by me. The balance of the funds would remain with Goldspark.’

9 So far as the evidence goes, there was no further written arrangement as to the provision of Mr Silver’s services to Dome until the letter from Dome of 3 May 1999 referred to in [17] below.

10 From April 1993 Goldspark commenced to send invoices for work done by Mr Silver. The invoices were initially sent to Ballymore No 56 Pty Ltd, which was a subsidiary of Dome, then to Dome Resources (PNG) Pty Ltd, another subsidiary. The invoiced amount was variously described as for management services or consulting fees.

11 The services provided to Dome related primarily to the investigation, establishment, development and operation of a gold mine in Papua New Guinea (“PNG”) at Tolukuma in the foothills of the Owen Stanley Ranges approximately 100 kilometres north of Port Moresby (“the Tolukuma project”). The services initially included arranging seed funding and initial equity participation in the Tolukuma project; coordinating consultants investigating the feasibility of mining at the Tolukuma site; negotiating with the PNG Government; dealing with the local PNG landowners and assisting in connection with the implementation of a landowners’ compensation package; assisting with obtaining the necessary project finance; supervising prospecting services; and attending meetings of the “Tolukuma review committee”. After the grant of the mining lease in mid 1994, the services included services relating to the retaining of contractors for and supervision of the design and construction of the mine plant leading up to the commissioning of the mine (“the Tolukuma mine”) and commencement of operations in about December 1995. Once operations commenced, the consulting services included services relating to ongoing technical issues, liaison with landowners and operating staff, promotion of the mine overseas and the settlement of disputes.

12 As a result of the provision of these services, Mr Silver acquired a large body of knowledge, experience and contacts relevant to the Tolukuma project and the Tolukuma mine.

13 On 26 June 1998, Mr Silver was appointed a director of Dome. His appointment was announced to the Australian Stock Exchange as the appointment of a non executive director. Mr Silver deposed that from 26 June 1998 he served as an executive director of Dome. There was, of course, in force at that time an agreement between Dome and Goldspark concerning the provision of Mr Silver’s consulting services to Dome. On the evidence, it does not seem that Mr Silver was at this time appointed as an executive director of the company under the provisions of the Constitution set out in [49] below. However, it is to be noted that he did from 26 June 1998 become an executive director of the company within the defined meaning contained in the retirement deed as set out in [22] below.

14 From about mid 1998 Mr Silver formed the view that his remuneration for his services to Dome was inadequate. He indicated in conversations with Mr Boyer, then the Executive Chairman of Dome, that he was not prepared to continue devoting significant time and effort as a consultant to Dome unless remuneration arrangements were improved.

15 Late in 1998, Mr Silver and Mr Boyer met at Dome’s office in Sydney. During that meeting there was conversation to the following effect:

“Mr Boyer: ‘I intend to propose that the board approve an agreement where all the executive directors will receive a retirement benefit.’

Mr Silver: ‘What type of benefit would it be?’

16 In March or April 1999 there was a further conversation between Mr Silver and Mr Boyer as follows:

“Mr Silver: ‘I believe that the fee arrangement should change and that Dome should pay an additional monthly fee of $10,000.00 for my services, especially given the investment opportunities I have been working on and introducing to Dome.’

17 On 3 May 1999 Michael Hutt (“Mr Hutt”), a director of Dome, wrote to Goldspark care of Mr Silver as follows:

“I am writing to confirm the Agreement between Dome Resources NL (Dome) and Goldspark Limited (Goldspark) for the provision of consulting services.

18 From about May 1999 to about May 2000 Dome paid $20,000.00 per month in connection with the consultancy services Mr Silver provided. The last payment made was $13,170 on 16 May 2000.

19 Some time after the discussion between Mr Silver and Mr Boyer about a retirement benefit set out in [15] above, Mr Silver received from Mr Hutt a document titled “Retirement Deed”. At about that time, Mr Silver had a conversation with Mr Hutt to the following effect:

“Mr Hutt: ‘Michael, I have had discussions with John [Boyer] and Minter Ellison. I understand that it is agreed that all directors’ fees paid to you and all payments made to Goldspark for your services for the three year period prior to your retirement will be taken into account in calculating the payment to be made on your retirement.’

.

20 Before the directors met to resolve to execute the retirement deed Mr Silver had a conversation with Mr Hutt in words to the following effect:

“Hutt: ‘Michael I have had advice from Minter Ellison that the board of directors can approve the payment to be made under the retirement deeds. However, only the independent directors vote on the resolution to enter into the retirement deeds and this will require you, John Boyer and I to leave the meeting because we have an interest. I am advised by Minter Ellison that this course will avoid Dome incurring the costs of holding a shareholders meeting’.”

21 At a meeting on 31 May 1999, the board of Dome, in Mr Silver’s absence, approved the execution of the retirement deed, as recorded in minutes of a meeting of that date. The retirement deed bears date 31 May 1999. Mr Silver executed the retirement deed at about that time. He did not instruct lawyers to act for him in relation to it. Minter Ellison acted only for Dome. The affixing of Dome’s common seal to the deed was witnessed by Mr Boyer and by Philip Kelso (“Mr Kelso”), who was also a director of Dome.

22 The retirement deed recited that Mr Silver was an executive director of the company. The deed in clause 1 defined “executive director” as “a director who spends a substantial part of his working time on the business of the company and who is remunerated by the company either directly or indirectly in addition to receiving director’s fees”. By clause 3 the retirement deed provided for the payment to Goldspark, on retirement of the director in circumstances which are no longer relevant because superseded by the provisions of the retirement variation deed, of an amount equal to “the total emoluments of the director during the period of three years ending on the date of his retirement … calculated in accordance with the formula in s 237(6)(b)(ii) of the Corporations Law …”.

23 Mr Silver has deposed that he believed that Mr Kelso and Mr Boyer had been properly authorised to execute the retirement deed on behalf of Dome and that he had no reason to believe otherwise. He has also deposed that he did not at any time believe or understand that shareholders’ approval was required before Dome could make a payment pursuant to the retirement deed.

24 Mr Silver has deposed that it was in reliance on his understanding of the retirement deed and on his discussions with Mr Boyer and Mr Hutt set out above that he remained as a director of Dome after 31 May 1999. He said that, if he had been of the view that the retirement deed did not secure a retirement payment calculated as represented to him by both Mr Boyer and Mr Hutt, he would have sought to put in place different arrangements with Dome. He believed that, because Dome was then anxious to secure his services, it would have been prepared to engage him to provide consulting services directly to it and would have been prepared to make the retirement payment under the deed payable to him and not to Goldspark.

25 Mr Silver has deposed that between 31 May 1999 and 26 May 2000 he provided consulting services to Dome. These services included advising upon the ongoing technical aspects of the operation and development of the Tolukuma mine; providing general ongoing technical support, including giving directions as to metallurgical work and metal trading; liaising with the local PNG land owners; attending meetings and making presentations in Australia, the UK and PNG to bankers lending in respect of the Tolukuma project; making presentations to brokers in connection with the promotion of the Tolukuma project; participating in personnel selection and attending meetings with Tolukuma mine personnel; attending discussions and meetings with suppliers to the mine; and attending meetings with consultants and other parties in relation to the exploration and expansion of the mine generally.

26 In mid September 1999 DRD acquired 19.91% of the shares and became a substantial shareholder in Dome.

27 On 27 September 1999 Mr Boyer retired as a director of Dome, Mr Silver was appointed managing director of Dome and Charles Mostert (“Mr Mostert”) and John Stratton (“Mr Stratton”) were appointed directors of Dome. Mr Mostert was at that time chief financial officer and a director of DRD.

28 In about November 1999 Mr Silver ceased to be a director of Goldspark and all of the shares in Goldspark including those held by him and by Mr Yu on his behalf were sold. At about that time he had a conversation with Mr Yu as follows:

“Mr Silver: ‘In view of the fact that we have disposed of Goldspark, I think that in order to continue to pursue investment opportunities overseas, that [sic] we should use another Hong Kong company to replace Goldspark.’

Mr Yu: ‘Yes I have another company in Hong Kong called Fair Choice which could be used. I am a director of this company together with a colleague of mine, Mr Ting Chan. My company, Wellwin Nominees Limited, is the secretary of Fair Choice.’

“Mr Yu: ‘… The same arrangements as before can apply. You are permitted to issue invoices on behalf of Fair Choice to Dome.’”

29 Mr Silver has deposed that, after these conversations with Mr Yu, he was able to access part of the funds of Fair Choice that flowed from his consulting efforts for the services provided by him and expenses incurred by him and that from time to time he received payment from Fair Choice of part of the funds paid to it by Dome in connection with the consulting services provided by him under the arrangements with Fair Choice.

30 Shortly after Mr Silver made the above arrangements with Fair Choice, he had a conversation with Mr Mostert at Dome’s office in Sydney as follows:

“Mr Mostert: ‘Michael, I would like you to maintain an association with Dome and remain as a non-executive director. Your knowledge of Dome's business affairs is seen as important.’

Mr Silver: ‘Yes, I am prepared to continue as a director but this will require a change to my retirement deed, so that the retirement benefit will still be paid if I resign as a non-executive director for any reason. Also, like the present position, the retirement payment must be calculated by taking into account the fees paid to me as a director and the fees Dome has paid in relation to my consultancy services for the three years preceding the date of my retirement. That means payments to both Goldspark and Fair Choice must be taken into account. ’

31 Shortly after that conversation, Mr Silver had a telephone conversation with Mr Yu to the following effect:

“Mr Silver: ‘Arrangements are now being made with Dome to change the retirement payment arrangement. Fair Choice will become the beneficiary rather than Goldspark. Once the payment is received do you agree that I will be entitled to invoice Fair Choice for the same amount? If you agree with this, I agree to assist Fair Choice in examining the feasibility of any Chinese projects as well as the one in Henan Province you are now investigating .’

Mr Yu: ‘Okay Michael.’

32 After the conversation with Mr Mostert set out in [30] above, Mr Silver had a telephone conversation with Mr Hutt as follows:

“Mr Hutt: ‘I have been asked by Charles Mostert to make arrangements to have your Retirement Deed amended. I will arrange for Minter Ellison to make the necessary changes and I will then let you know when this has been done.’

‘

33 Early in 2000 and before entering into the retirement variation deed, Mr Silver had a conversation with Mr Hutt at Dome’s office in Sydney as follows:

“Mr Hutt: ‘Michael, Minter Ellison have prepared a variation deed and I understand from Minter Ellison that the variation will ensure that fees paid to Fair Choice as well as Goldspark plus your directors fees during the three year period prior to your retirement will be taken up in the calculation of your retirement benefit’.

34 On 13 March 2000 DRD made a takeover offer for Dome. In May 2000 DRD’s takeover offer proceeded and DRD acquired approximately 97% of the shares in Dome. DRD subsequently exercised its statutory right to acquire compulsorily the outstanding shares in Dome and Dome is now a wholly owned subsidiary of DRD.

35 At about this time, Mr Hutt showed Mr Silver a calculation which he had prepared for Mr Mostert showing Mr Silver’s retirement benefits as at 30 April 2000 as $450,855.00.

36 Before the board meeting mentioned below, Minter Ellison sent to Mr Hutt a draft deed titled “Retirement Variation Deed” in the form in which it was subsequently executed.

37 Mr Silver deposed that the entry into the retirement variation deed by Dome was considered at a board meeting held on 9 May 2000. That meeting was in fact held by conference telephone link between Mr Silver as chairman and Mr Hutt in Sydney, Mr Mostert and Mr Stratton in Johannesburg and Mr Barry Bolitho (“Mr Bolitho”) in Perth. It was at that meeting that Mr Silver resigned as managing director, but continued as a non executive director of Dome. The minutes of that meeting, signed by Mr Silver as chairman, record the approval of Dome’s entry into the retirement variation deed in Mr Silver’s absence in the following terms:

“DIRECTORS RETIREMENT VARIATION DEEDS:

At this point, Mr Silver and Mr Hutt disclosed an interest in the matter about to be discussed and left the Board Room, leaving the conference telephone connected to DRD’s Johannesburg office.

After being advised by a telephone call on Mr Silver’s mobile phone to return to the Board Room and the conference telephone call, Mr Silver and Mr Hutt were informed by Mr Mostert that the other directors had discussed the Retirement Variation Deeds and had RESOLVED to execute them.

38 Mr Silver also deposed that, upon Mr Silver rejoining the meeting after the board’s discussion of the retirement variation deeds, Mr Mostert said words to the following effect:

“The board has approved the entry into the retirement variation deeds.”

39 It should be recorded at once that it was hotly contested whether a resolution approving the retirement variation deed was passed at that meeting and the decision of that issue was one of the most difficult in the course of resolving these proceedings. I shall return to it below.

40 An announcement to the Stock Exchange by Dome on 10 May 2000 included the following in relation to Mr Silver:

“Mr Michael Silver has resigned as Managing Director, however Mr Silver will remain on the Board as a non-executive Director. It was Mr Silver who brought the Tolukuma Project to Dome in 1993, and he has been intimately involved with the development and operations of Tolukuma since that date, both as Principal Consultant and as a Director and since September of last year, Managing Director.”

41 The retirement variation deed was executed on about 26 May 2000. It states that it was executed as a deed. It was executed on behalf of Dome by Mr Mostert as a director and by Mr Stratton as director/company secretary. It was executed on behalf of DRD by Mr Mostert as a director of DRD and also by M J Prinsloo (“Mr Prinsloo”) as director/company secretary of DRD. Mr Silver did not instruct lawyers to act for him in relation to the retirement variation deed. At the time of his executing it Mr Silver’s understanding of its effect was based upon his reading of it, the conversations he had had with Mr Mostert and Mr Hutt and the calculation made by Mr Hutt and referred to in his memorandum.

42 The retirement variation deed recited that DRD was the ultimate holding company of Dome and provided for the insertion in the retirement deed of new clauses 7 and 8 in the following form:

“ 7 Continuation as Non-Executive Director

7.2 Payment made in accordance with clause 7.1 will be in substitution for any other payment to which the Director might otherwise have been entitled under this Deed in respect of his ceasing to hold office as a director of the Company.

8 Guarantee

43 Mr Silver deposed that it was in reliance upon his discussions with Mr Mostert and Mr Hutt, the calculation he was shown referred to in [35] above, and his understanding of the intent and effect of the retirement variation deed, that he remained as a director of Dome from May 2000 and rendered services to it until his resignation on 31 August 2000. Mr Silver said that, had he been of the view that the retirement variation deed did not secure a retirement payment as represented to him by Mr Mostert and Mr Hutt, he would have sought to put in place different arrangements with Dome. He believed that, because Dome then wished to secure his services, it would have been prepared to engage him to provide consulting services to it directly. He also believed that Dome would have been prepared to make the termination payment under the retirement variation deed payable to him and not to Fair Choice. Because of his belief as to the effect of the retirement variation deed, he deferred the opportunity to pursue other investment and consultancy opportunities and continued to devote his services to Dome.

44 Mr Silver has deposed that he believed that Mr Stratton and Mr Mostert had been properly authorised to execute the retirement variation deed on behalf of Dome and that Mr Mostert and Mr Prinsloo had been properly authorised to execute the retirement variation deed on behalf of DRD. He said that he had no reason to believe otherwise. He has also deposed that at no time did he believe or understand that the approval of Dome’s shareholders was required before Dome could make a payment pursuant to the retirement variation deed.

45 During the period between 26 May 2000 and 31 August 2000 Mr Silver continued as a director of Dome. He deposed that he rendered services to Dome for its benefit during that time.

46 At the request of Mr Mostert in June 2000 he took a trip to South Africa to present a plan to DRD concerning the recapitalisation of Dome and to discuss other opportunities available in PNG. No consulting fee was charged in relation to that trip.

47 When providing services to Dome in Australia, Mr Silver usually worked from its Sydney office. On about 16 June 2000 Dome relocated its principal office from Sydney to South Perth. Mr Silver deposed that in August 2000 he considered it appropriate and timely for him to resign as a director of Dome in view of the relocation of the office to Western Australia and the fact that DRD had acquired 97% of the shares in Dome. On 25 August 2000 Mr Silver resigned as a director of Dome effective 31 August 2000.

48 In August 2000 Mr Silver began to correspond with the directors of DRD and Dome in relation to his termination payment. In this correspondence there was some contention as to the execution of the retirement variation deed by Dome, arising from an inability to locate a fully executed copy of that deed. On 10 October 2000 Mark Wellesley-Wood (“Mr Wellesley-Wood”), then chairman of DRD, stated the following in a facsimile to Mr Silver:

“Despite the absence of a duly signed copy of your Retirement Variation Deed, I acknowledge that the Minute of the Dome Board Meeting of 9 May 2000 together with the affidavits signed by Directors present at the meeting, establishes an obligation for payment on behalf of Dome.

“As discussed I have reviewed your retirement deed and the consulting invoices to support your claim. Based on this I agree the amount (as indicated in your letter 22nd September 2000) is A$444,255.

You have indicated in correspondence to Mark Wellesley-Wood that you would consider scheduling the payment of this amount. I would therefore like to suggest an initial payment of 20% and the balance over four months from that date.

49 The following clauses of Dome’s Constitution (“the Constitution”) are relevant to the arguments that have been put:

“10.7 Remuneration. The Directors must be paid out of the funds of the Company, by way of remuneration for their services as Directors, a sum not exceeding such fixed sum per annum as may be determined by the Company in general meeting, to be divided among the Directors and [sic] in default of agreement then in equal shares. The remuneration of the Directors must not be increased except pursuant to a resolution passed at a general meeting of the Company where notice of the amount of the suggested increase and the maximum sum that may be paid has been given to Shareholders in the notice convening the meeting. No non-executive Director may be paid as part or whole of his remuneration a commission on or a percentage of profits or a commission or a percentage of operating revenue, and no executive Director may be paid as whole or part of his remuneration a commission on or percentage of operating revenue. The remuneration of a Director accrues from day to day.
……

11.1 Management of the Company. Subject to the Corporations Law and to any other provision of this Constitution, the business of the Company must be managed by the Directors, who may pay all expenses incurred in promoting and forming the Company, and may exercise all such powers of the Company as are not, by the Corporations Law or by this Constitution, required to be exercised by the Company in general meeting.
……

11.5 Retirement benefits for Directors. The Directors may at any time adopt any scheme or plan which they consider to be in the interests of the Company and which is designed to provide retiring or superannuation benefits for both present and future non-executive Directors, and they may from time to time vary any such scheme or plan. Any scheme or plan may be effected by agreements entered into by the Company with individual Directors, or by the establishment of a separate trust or fund, or in such other manner as the Directors consider proper. The Directors may attach such terms and conditions to any entitlement under any such scheme or plan as they think fit, including, without limitation, a minimum period of service by a Director before the accrual of any entitlement and the acceptance by the Directors of a prescribed retiring age. No such scheme or plan may operate to confer upon any Director or on any dependants of any Director any benefits not permitted by Section 237 of the Corporations Law.
……

14.1 Appointment. Subject to clause 14.4, the Directors may from time to time appoint one or more of their number to the office of managing director ( Managing Director ) of the Company or to any other office, except that of auditor, of employment under the Company, either for a fixed term or at will, but not for life and, subject to the terms of any agreement entered into in a particular case, may revoke any such appointment. A Director other than a Managing Director so appointed is referred to in this Constitution as an “Executive Director”. The appointment of a Managing Director or Executive Director so appointed automatically terminates if he ceases for any reason to be a Director.

Witness credit

50 The witness whose credit was principally under challenge was Mr Silver. He was extensively cross examined. He has been criticised by Mr T G R Parker, of Senior Counsel for the defendants, as a witness of poor credit, whose evidence should only be relied on when corroborated by reliable evidence.

51 I do not accept this view of Mr Silver’s evidence. It is the case that his evidence was not wholly consistent or wholly satisfactory. The criticism of his evidence is recorded in detail in the defendants’ written submissions and need not be repeated here. Two areas in which he was particularly criticised were his answers as to whether he regarded himself as an executive director or a non executive director of Dome at particular times. Another area was as to his understanding of the terms “consultant” and “executive” and whether work was done by him as a consultant or as an executive. It was submitted that the confusion in these answers should be taken as showing that he was concerned to give evidence which he believed best suited his case at any given time, rather than to give evidence that reflected his honest recollection of the relevant circumstances.

52 In my view, this submission does not allow for the considerable degree of semantic confusion relating to these two subject matters. For example, “executive director” is itself a term of indefinite connotation. Furthermore, it is used in two different ways in relevant documents, one being the relevant clauses of Dome’s Constitution (see [49] above) and the other being the retirement deed, where it is the subject of a definition (see [22] above) not necessarily coextensive with the use of the term in the Constitution. These definitions could lead to different results. “Consultant” and “management” are likewise terms of wide, uncertain and probably overlapping connotation. In my view, it does not follow that some confusion in answers concerning these matters leads to a conclusion of dishonest intent, taking into account the uncertainty of the subject matter and all the surrounding circumstances, including the witness’ demeanour. Contrary to the defendants’ submission, neither does the witness’ demeanour itself lead me to the conclusion that he was a dishonest witness. I should add that some of his answers as to his state of mind at the time in 1999 of the presentation to him of the retirement deed during his cross examination by video link from London are not at all satisfactory but neither does that fact lead me to the conclusion that he was a witness who was dishonest or trying to mislead the court. One must also bear in mind the length and intensity of his cross examination by Mr Parker. Equally, one must remember that the matters he was being cross examined about go back many years, in some instances as far back as 1994.

53 Overall I remained, at the end, of the view that he was a witness who was generally trying to give the Court an accurate account of events and states of mind as he recalled them. I relied, among other things, in forming this assessment on his demeanour generally, his answers in cross examination, and the inherent probability of much of what he said. I have the view that his version of all matters should be approached with some caution, but should be taken into account with the other available material as a possibly correct version of events and of his state of mind. I certainly do not come to the conclusion that he should be regarded as a witness whose word cannot be accepted unless corroborated by credible material. Acceptance of evidence he has given has played a large part in my acceptance of the material I have set out under the heading “The Facts”, including my conclusion that he engaged in conversations that were in substance as set out above. I note that there was no evidence contradicting Mr Silver’s version of the conversations and little cross examination concerning them. The cross examination as to the conversation in [33] was in my view to little effect. Insofar as it was suggested that this conversation was an invention because it appeared in a later affidavit, I do not accept that.

54 There was one answer in Mr Silver’s cross examination by video link that, on one interpretation, could be taken as inconsistent with his earlier evidence. That was to the effect that he was not aware that the retirement variation deed had been the subject of a resolution by the directors of Dome in a directors’ meeting at the time he came to sign the retirement variation deed. I should record that in my view this answer was aberrant, equivocal and unclear. I say that because of its context, its conflict with other evidence and the fact that that conflict was not put to him in cross examination to clarify the matter. Furthermore, counsel for the defendants expressly eschewed reliance on this answer as going to the witness’ credit.

The corporations legislation

55 As so often these days, companies litigation is bedevilled by the frequent changes to the relevant legislation. In general terms, the legislation that was current from 1 January 1991 until 15 July 2001 was, by virtue of s 7 of the Corporations (New South Wales) Act 1990, the Corporations Law set out in s 82 of the Corporations Act 1989 (Cth) as in force for the time being (“the CL”). As of 15 July 2001, the Corporations Act 2001 (Cth) (“the CA”) commenced and replaced the CL. There are further complications arising from intermediate amendments, particularly to the provisions relating to termination payments to directors. These are discussed at [79] and [87] below.

Contentions

56 The plaintiffs contended that they are entitled to judgment against both Dome and DRD in respect of the payment obligations or are entitled to relief under the provisions of the Trade Practices Act 1974 (Cth) (“the TPA”).

57 The contentions of the defendants that the plaintiffs are not entitled to relief fall under the following heads:

1 Authority of directors of Dome to enter into retirement deed and retirement variation deed

58 The particular questions that arose in this area are as follows:

1.1 Whether there was in fact a resolution of the directors of Dome authorising the execution of the retirement variation deed.
1.2 Whether the directors of Dome lacked authority to commit Dome to an agreement in terms of the retirement deed.
1.3 Whether the directors of Dome lacked authority to commit Dome to an agreement in terms of the retirement variation deed.
1.4 If there were such lack of authority, whether the plaintiffs are assisted by ss 124 or 125 of the CA.
1.5 If there were such lack of authority, whether Dome is prevented from relying on such lack of authority by ss 128 and 129 of the CA.

59 The defendants did not contend that there was not a resolution of the directors of Dome authorising Dome to enter into the retirement deed. Nor did the defendants contend that the directors of DRD were not authorised to enter into the retirement variation deed. However, the defendants did contend that the retirement deed as executed did not correspond with the retirement deed as approved. They also contended that, in relation to the retirement variation deed, there was no resolution passed and that the directors of Dome did not in fact authorise the execution of the retirement variation deed. This was hotly contested, as has already been noted at [39] above.

60 The need to consider the argument arising from the alleged variation between the retirement deed as authorised and the retirement deed as executed is obviated by my conclusion at [71] below. The plaintiffs did not rely on any provision of the retirement deed as operative, but relied only on provisions inserted into the varied retirement deed by the retirement variation deed. The parties, by executing the retirement variation deed, confirmed in operation as part of the varied retirement deed the continuing portions of the retirement deed.

61 As to the retirement variation deed, there is an apparently regular minute of the directors’ meeting of Dome of 9 May 2000 recording a resolution to the requisite effect: see [37] above. By s 251A(6) of the CA (which is identical to s 251A(6) of the CL) it is provided that a minute recorded and signed as provided for by that section is evidence of the resolution to which it relates unless the contrary is proved. In relation to this resolution, the defendants sought to prove the contrary by statements by Mr Bolitho, who attended that meeting by telephone link from Perth and was appointed a director at the meeting. Mr Bolitho was not called to give evidence. His statements were contained in a letter written by him to the Chairman of Dome on 22 December 2000. The statements in the letter were admitted into evidence on the basis that the letter was a business record of Dome. The body of the letter was as follows:

“I have recently read a copy of the minutes that proport [sic] to record the Dome directors meeting held on May 9th 1999 [sic].

The minutes are incorrect in that the Retirement Variation Deed for Michael Silver was not discussed. Charles Mostert advised the meeting that a duly authorised Retirement Deed for Silver was legally binding and he recommended that the board acknowledge the deed. No deeds were tabled.

62 It is to be noted that that letter acknowledges that there was at the meeting discussion of Mr Silver’s retirement payment; that that letter was written more than six months after the meeting; and that, so far as the evidence goes, no correction was made to the May 2000 minutes at a meeting in January 2001 or at any other time. Against this, the minute is apparently regular and records not only the resolution but the fact that Mr Mostert informed Mr Silver of it on Mr Silver’s return to the meeting. There is also Mr Silver’s sworn evidence that he was informed by Mr Mostert that the resolution had been passed. It is to be noted that the deed was executed on behalf of DRD by directors, including Mr Mostert who was present at the Dome directors’ meeting. The authorisation by DRD of the execution of the deed by those directors is not contested. It would be very curious if Mr Mostert executed on behalf of the guarantor company if the execution by Dome was not to his knowledge authorised, he being a director of both companies.

63 There is thus a clear and unaltered minute on the one hand. There is the execution by Mr Mostert of both documents. On the other hand, the pieces of evidence to the contrary are uncertain and unclear. On this material, I am not prepared to find that it is proved that the resolution was not passed as set out in the minute. Indeed, I find that it was passed. The execution of the retirement variation deed on behalf of Dome was therefore authorised by a resolution of the board.

64 It was also objected on behalf of the defendants that the retirement variation deed was not tabled at the meeting and that that either rendered invalid a resolution approving its execution or should lead the Court to conclude that the resolution was not passed as set out in the minute. Although documents to be approved for execution by a company are often tabled at the relevant directors’ meeting, the tabling of a particular document is not a prerequisite to approval of its execution if the document is identified. Indeed, it is difficult to see how one “tables” a document at a directors’ meeting spread over three sites in two continents. Evidence led by the defendants themselves established that the retirement variation deed was in existence in its final form at the time of the Dome directors’ meeting and had been sent to at least one director. That this was the document referred to was attested by the reference in the recorded resolution to “Retirement Variation Deeds”. This is not a standard or generic reference to documents, but was the title of the documents in relation to the relevant directors, including Mr Silver. The lack of a tabled document does not detract from my conclusion about the passing of the resolution.

65 I should add that the defendants’ counsel also specifically eschewed reliance on the apparent admission referred to in [54] above concerning Mr Silver’s state of mind when he executed the retirement variation deed on the question as to whether there was in fact a resolution of Dome authorising the execution of the retirement variation deed.

66 In view of my conclusion in [71] below, I do not propose to deal with this at great length. However, although I have had some doubts about this, I record my conclusion that the directors of Dome did have authority to enter into the retirement deed. The challenge to their authority is based in part on the dicta of Ormiston J in Sali v SPC Ltd (1991) 9 ACLC 1511 at 1521 – 1522:

“Consequently, in a conventional kind of company, public or private, of which the defendant SPC is but an example, it is the members in general meeting who are responsible for the appointment of the ordinary directors of the company, and it is they who are, directly or indirectly, responsible for the terms upon which those directors act, including their rights to remuneration and any other payments in respect of their services. The company in general meeting either fixes the amount of remuneration pursuant to the articles or delegates, by and pursuant to the articles, the power to make specific payments. So in the usual case (and excepting executive directors) the essential terms upon which the directors serve are set out exclusively in the articles of association, even if details may be delegated to the board. It is for the company in general meeting to determine whether those terms are to be added to or varied, such determination being given effect to by amendment of the articles of association. These conclusions follow as a matter of analysis from general principle and from the nature and corporate structure of the ordinary limited liability company, and they are implicit from the reasoning of House of Lords in [ Guinness Plc v Saunders [1990] 2 AC 663] which places heavy emphasis on the fiduciary obligations of the members of the board of directors: see esp per Lord Templeman at pp 689 - 696.

67 Those statements are in fact obiter dicta, as Mr Parker has pointed out, because his Honour decided the case on the basis that contractual relations between the retired director and the company were not established. However, his Honour explicitly expressed the view that a general management article in much the same terms as cl 10.7 of Dome’s Constitution did not, in the face of the principles that his Honour stated, authorise directors to grant retirement benefits to non executive directors.

68 However, that is not the end of the matter. The plaintiffs alternatively submitted that, at least in the case of the subject Constitution, cl 10.7 did not apply to the remuneration of executive directors in respect of their executive duties, but only to the remuneration of directors as non executive directors.

69 I find the relevant provisions of the Constitution convoluted and very hard to construe sensibly together. It is true that executive directors are mentioned in cl 10.7 and that cl 10.7 is mentioned in cl 14.2. Nevertheless, as best as I can construe the provisions, I am of the view that all that is committed to the decision of the general meeting is the total sum payable to directors as remuneration for their non executive duties as directors. The appointment of both managing directors and executive directors is committed by cl 14.1 to the board, which it is contemplated will enter into agreements with them. Clause 14.2 commits the remuneration of managing directors, though not in terms executive directors, to the board. However, it is the board that appoints and enters into agreements with executive directors as well as managing directors. It would seem strange, if not unworkable, that a general meeting, as well as the board, had to approve every adjustment to executive directors’ remuneration, rather than simply fixing annually the global sum to be paid to directors for their non executive duties. It is therefore my view that it was within the purview of the directors, at the time of the execution of the retirement deed, to fix the remuneration for executive duties of an executive director, or a director performing executive duties, as Mr Silver then was, including the provision, if thought fit, of retirement benefits.

70 The defendants also submitted that the remuneration was not of Mr Silver, but of Goldspark or Fair Choice. As to this argument, see [101] below.

71 Although I have deemed it appropriate to express the view set out in [66] above, it is not in my view operative in the determination of this case. That is because the payment obligations that are now called upon do not emanate from the retirement deed, but solely from provisions inserted by the retirement variation deed into the varied retirement deed. That means that the now operative obligations are imposed upon both Dome and DRD by their execution of the retirement variation deed. Their validity, in my view, depends upon the validity of that deed rather than the validity of the original retirement deed. At the time of the approval of the execution of the retirement variation deed, Mr Silver was about to revert to the role of non executive director of Dome and it was in this capacity that cl 7 of the varied retirement deed was to apply to him. Whatever is unclear about the provisions of the Constitution, cl 11.5 reasonably clearly confers power on the directors to make provision for retirement benefits for non executive directors. (The absence of a similar provision in respect of executive directors may well reflect the view of the draftsman that this subject matter was already committed to the board by the Constitution, along with executive directors’ remuneration generally.) In the case of non executive directors, the constitutional power is expressly and, in my view, validly conferred on the board. The dicta in Sali’s case are not to the contrary, since the articles in Sali did not contain a provision corresponding to cl 11.5.

147 The consideration for the guarantee stated in the retirement variation deed, and thus inserted in the varied retirement deed, is Mr Silver’s promise to enter into the retirement variation deed, which was in fact carried out. It may be that this is sufficient consideration given by Mr Silver for the retirement variation deed. However, I do not need to determine whether or not the consideration provided by this promise should be characterised as illusory. The promisee may prove that consideration was given for a written guarantee other than that stated in the document. I have found that Mr Silver did promise to continue as a director and to provide services to Dome and that this operated as sufficient consideration for the promises made by Dome. DRD, as Dome’s holding company, had the same interest as Dome in securing the continuation of Mr Silver’s services as a director of Dome and otherwise. The promises to continue those services are not expressed in the retirement variation deed as consideration for it. But that does not matter. I find that those promises were made as consideration for entry into the deed by both Dome and DRD. Furthermore, Mr Silver did in fact for some months continue in office and act as a director of Dome and made various endeavours on Dome’s behalf during that period. There is thus no question of the consideration being illusory or there being a total failure of consideration.

148 I find that there was sufficient consideration for the giving of the guarantee. I am therefore of the view that the guarantee may be enforced by an order for specific performance against DRD.

5 Whether the defendants are estopped from denying the validity of the payment obligations

149 In view of my determinations in paragraphs [138] and [148] above, I do not propose to determine the estoppel claims. To do so would be “to put a fifth wheel on the coach”. It would not be desirable to determine a claim that the defendants are estopped from denying the validity of the payment obligations, when I have held that the payment obligations are valid and enforceable.

6 Whether the plaintiffs are entitled to succeed under the provisions of the Trade Practices Act 1974 (Cth)

150 In view of my determination that the first plaintiff is entitled to specific performance of the payment obligations against both Dome and DRD, I do not propose to determine this question. In my view, there are grave difficulties in the way of the plaintiffs getting meaningful relief under the TPA. It may be that they could establish that there was misleading or deceptive conduct within the meaning of s 52, by which they suffered loss, although even this proposition faces difficulties. If they surmounted these hurdles, they would face difficulties in obtaining meaningful relief because, despite a deal of judicial discussion, the law remains that they are not entitled to damages for the non fulfilment of the misrepresentation made: Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1.

Conclusion

151 In the result Mr Silver is entitled to orders against both Dome and DRD for the specific performance of the payment obligations. The cross claim should be dismissed. Short minutes should be brought in to give effect to this decision. At that time there can be raised any questions as to:

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Citations

Silver v Dome Resources NL [2007] NSWSC 455

Most Recent Citation

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Statutory Material Cited

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CITATION:	Silver v Dome Resources NL [2007] NSWSC 455
HEARING DATE(S):	4 – 8, 11 - 15 April, 3 & 5 May and 12 – 14 September 2005, 9, 13 & 22 June, 26 October and 6 December 2006 and 2 May 2007
JUDGMENT DATE :	9 May 2007
JURISDICTION:	Equity
JUDGMENT OF:	Hamilton J
DECISION:	That the first plaintiff is entitled to orders for specific performance to enforce the payment of benefits upon his retirement as a director to a company associated with him against both the company from which he retired and its holding company as guarantor.
CATCHWORDS:	CONTRACTS [45], [87] – General contractual principles – Parties – Rights and liabilities of third parties – Enforcement by non party beneficiary – Consideration – What amounts to consideration – Other cases – Practical benefit or disbenefit - CORPORATIONS [1228], [1241] – Management and administration – Officers of corporation – Director – Remuneration – Responsibility for fixing – Authority, rights and powers of officers of corporation – Termination payments – Entitlements on resignation – Statutory caps on quantum – Time of operation of provision prohibiting excessive entitlements - EQUITY [379] – Equitable remedies – Specific performance – The jurisdiction in general – General principles – No longer limited by particular categories – Available at suit of party to contract to enforce payment of monetary sum to non party - GUARANTEE AND INDEMNITY [20] – Discharge of surety – Departure from terms of contract with surety – Whether total failure of consideration.
LEGISLATION CITED:	Corporations (New South Wales) Act 1990 s 7 Corporations Act 1989 (Cth) s 82 Corporations Law ss 9, 124, 125, 127, 128, 129, Part 2D.2 Division 2, 200A(1)(b), 200B(1), 200D(1), 200G(1)(b), 200G(2)(b), 237 and 251A(6) Corporations Act 2001 (Cth) ss 9, 124, 125, 127, 128, 129, Part 2D.2 Division 2, 200A(1)(b), 200B(1), 200D(1), 200G(1)(b), 200G(2)(b) and 251A(6) Trade Practices Act 1974 (Cth) s 52
CASES CITED:	Ajax Cooke Pty Ltd v Nugent SCV Phillips J 29 November 1993 unreported Anangel Atlas Compania Naviera SA v Ishikawajima-Harima Heavy Industries Co Ltd (No. 2) [1990] 2 Lloyd’s LR 526 Barroora Pty Ltd v Provincial Insurance Ltd (1992) 26 NSWLR 170 Berry v Federal Commissioner of Taxation (1953) 89 CLR 653 Beswick v Beswick [1968] AC 58 Chan v Cresdon Pty Ltd (1989) 168 CLR 242 Chappell & Co Ltd v Nestlé Co Ltd [1960] AC 87 Claremont Petroleum NL v Cummings (1992) 110 ALR 239 Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 Co-operative Bulk Handling Ltd v Jennings Industries Ltd (1996) 17 WAR 257 Coulls v Bagot’s Executor & Trustee Co Ltd (1967) 119 CLR 460 Fox v GIO Australia Ltd (2002) 56 NSWLR 512 Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 Gobblers Inc Pty Ltd v Stevens (1993) 6 BPR 13,591 Haddad v R W Jordan Pty Limited FCA 20 August 1997 unreported Jefferys v Jefferys (1841) Cr & Ph 138; 41 ER 443 Lee v GEC Plessey Telecommunications [1993] IRLR 383 Lilley v Midland Brick Co Pty Ltd (1992) 9 WAR 339 Mizzi v Reliance Financial Services Pty Ltd [2007] NSWSC 37 Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 Orrong Strategies Pty Ltd v Village Roadshow Limited [2007] VSC 1 Pao On v Lau Yiu Long [1980] AC 614 Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266 Re Heaney; Ex parte Flint v Nexus Minerals NL WASC Full Court 26 February 1997 unreported Sali v SPC Ltd (1991) 9 ACLC 1511 Scott v Forster Pastoral Co Pty Ltd (2000) 35 ACSR 294 Stilk v Myrick (1809) 2 Camp 317; 170 ER 1168 Thomas v Thomas (1842) 2 QB 851; 114 ER 851 Tinyow v Lee [2006] NSWCA 80 Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 Whitlam v Insurance Australia Group Limited (2005) 52 ACSR 470 Wigan v Edwards (1973) 47 ALJR 586 Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 Wilson v Northampton and Banbury Junction Railway Co (1874) LR 9 Ch App 279 Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 WLR 277 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741 Woodside Petroleum Development Pty Ltd v H&R-E&W Ltd (1997) 18 WAR 539 Accounting Standard AASB 1017 of February 1997 Accounting Standard AASB 1046 of January 2004 Carter, Peden and Tolhurst, Contract Law in Australia (5th ed, 2007) [6-23], [6-27], [6-41], [6-44], [6-48] Macquarie Dictionary (4th ed, 2005) Meagher, Gummow and Lehane, Equity: Doctrines and Remedies (4th ed, 2002) [20-025], [20-030], [20-050] O’Donovan and Phillips, The Modern Contract of Guarantee (looseleaf) [2.1000], [2.1050], [2.1100] Rowlatt on Principal and Surety (5th ed, 1999) [2 01], [2-11] Shorter Oxford English Dictionary (5th ed, 2002)
PARTIES:	Michael Bernard Silver (P1 & XD1) Fair Choice Limited (P2 & XD2) Dome Resources NL (D1 & XC1) Durban Roodepoort Deep Limited (D2 & XC2)
FILE NUMBER(S):	SC 2586/01
COUNSEL:	J E Thomson & M J Watts (Ps) T G R Parker SC (Ds)
SOLICITORS:	Bull, Son & Schmidt (Ps) Allens Arthur Robinson (Ds)