Bell and Berg v Macquarie Bank Ltd and Another

Industrial Relations Commission of New South Wales in Court Session

CITATION : Bell and Berg v Macquarie Bank Ltd and Another [2002] NSWIRComm 235 Matter Number IRC 6973 of 1997 ___________________________________________

APPLICANT: Michael Charles Bell

FIRST RESPONDENT: Macquarie Bank Ltd ACN 008 583 542

SECOND RESPONDENT: Macquarie International Capital Markets Ltd

PARTIES : Matter Number IRC 6974 of 1997 ___________________________________________

APPLICANT: Charles Joseph Berg

FIRST RESPONDENT: Macquarie Bank Ltd ACN 008 583 542

SECOND RESPONDENT: Macquarie International Capital Markets Ltd

FILE NUMBER: IRC 6973 and 6974 of 1997 CORAM: Schmidt J CATCHWORDS : Unfair contract - contracts of employment - banking industry - jurisdiction - taping of conversations - no repudiation - no constructive dismissal - one employee resigned - claimed basis of employment not made out on evidence - alleged representations not made out on evidence - share options - bonus scheme - retention elements - no unfairness found - respondents' conduct not unfair - one employee dismissed - no failure to give notice of termination - period of notice not unfair - respondents' conduct not unfair - failure to adhere to applicable administrative procedure on termination - contract not unfair as result - claim also precluded by s109A - claims dismissed - costs Abboud v The State of New South Wales (NSW Department of School Education) (1999) 92 IR 32 Adams v Westfield Holdings Ltd (2000) 99 IR 382 Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia (1999) 90 IR 211 Allison v Bega Valley Council (1995) 63 IR 68 Antonakopolous v State Bank of New South Wales (1999) 91 IR 385 Beahan v Bush Boake Allen Australia Limited (1999) 93 IR 1 Bell and Anor v Macquarie Bank Ltd and Anor (1998) 83 IR 431 Bell and Anor v Macquarie Bank Ltd and Anor (1999) 93 IR 161 Bell and Anor v Macquarie Bank Ltd and Anor (1999) 87 IR 126 Bell and Anor v Macquarie Bank Ltd and Anor (1999) 93 IR 191 CASES CITED : Bell v Macquarie Bank Ltd and Anor (2001) 106 IR 421 Bourke Air Charter v Easton (2001) 109 IR 443 Canizales v Microsoft Corporation & Ors (2000) 99 IR 426 Burgess & Ors v Mt Thorley Operations Limited [2002] NSWIRComm 106 Chrysler Jeep Automotive Distributors Australia Pty Limited v Canberra Star Motors Pty Limited and Others (1997) 79 IR 452 Hairman v FileNET Corporation Pty Limited [2001] NSWIRComm 318 Perrott v Xcellenet Australia Limited and Others (1998) 84 IR 255 Savage v Digital (unreported, Glynn, Hungerford and Schmidt JJ, 17 May 1999) Vision Publishing Pty Ltd v PK Lane Holdings Pty Limited & Ors (1998) 84 IR 277 Westfield Holdings v Adams [2001] NSWIRComm 293 Westfield Ltd v Helprin (1997) 82 IR 411 HEARING DATES: 07/16/2001; 07/17/2001; 07/18/2001; 07/19/2001; 07/20/2001; 07/23/2001; 07/24/2001; 07/25/2001; 07/26/2001; 07/27/2001; 07/30/2001; 07/31/2001; 08/01/2001; 08/02/2001; 08/03/2001; 08/20/2001; 04/15/2002; 04/16/2002; 06/04/2002; 06/21/2002; 08/01/2002 DATE OF JUDGMENT: 09/12/2002

APPLICANTS: Mr SC Rothman SC with Mr RA Dalgleish of counsel SOLICITORS: Maurice Blackburn Cashman LEGAL REPRESENTATIVES: RESPONDENTS: Mr RM Goot AM SC with Mr IM Neil of counsel SOLICITORS: Abbott Tout

JUDGMENT: - 125 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

DATE: 12 September 2002 Matter Number IRC 6973 of 1997

MICHAEL CHARLES BELL v MACQUARIE BANK LTD & ANOR Application under section 106 of the Industrial Relations Act 1996

CHARLES JOSEPH BERG v MACQUARIE BANK LTD & ANOR Application under section 106 of the Industrial Relations Act 1996

1 These claims were brought under s106 of the Industrial Relations Act 1996 ('the Act') in December 1997. They concern the former employment of Mr Bell and Mr Berg by the two respondents. The matters were heard together. The claims were the subject of interlocutory applications dealt with by his Honour Justice Marks in judgments of 17 August 1998 ((1998) 83 IR 431) and 9 July 1999 ((1999) 93 IR 161). There was an appeal from each decision. Judgment in the first was given by the Full Court on 12 March 1999 ((1999) 87 IR 126) and the second on 17 December 1999 ((1999) 93 IR 191). 2 In his first judgment Marks J rejected an argument that the claims then advanced constituted an abuse of process, given that the applicants had also instituted proceedings in the Federal Court against the respondents under the Trade Practices Act 1974 (Cth). His Honour also determined that he would consider, as a preliminary matter, whether the Court had jurisdiction to entertain the claims made before this Court. The Full Court overturned that decision on appeal. 3 In his second judgment, Marks J considered questions of service of the claim upon the second respondent, Macquarie International Capital Markets Limited ('MICML'), a Hong Kong registered company. It had been served overseas and had not entered an appearance in the proceedings. MICML was a wholly owned subsidiary of Macquarie Bank Limited ('Macquarie'), the first respondent. Both had entered contracts of employment with the applicants. His Honour also considered whether leave to proceed against MICML should be given and whether there was a good arguable case on jurisdiction, in relation to the claims made against that company. Amongst other things, His Honour concluded that there was no such good arguable case and declined leave to proceed against the second respondent. Again the Full Court upheld the appeal. 4 The Full Court concluded that there was a 'good arguable case' that the contracts between the applicants and MICML 'constituted related collateral arrangements to the contract or arrangements entered into' by the applicants with Macquarie (at p36). The Full Court further concluded, at p37, that a 'good arguable case' had been established that the arrangements between the parties exhibited the relevant territorial connection with New South Wales, so as to justify leave to proceed against MICML. 5 The evidence led at the later hearing before me showed that while the applicants were employed by MICML, they worked and were treated as if they were Macquarie employees. They represented Macquarie in negotiations with potential joint venturers in various Asian countries and reported to more senior Macquarie employees, who made the relevant decisions about their work and employment. MICML was a vehicle used for particular purposes in the overall arrangement between the parties. Before the termination of the applicants' employment, Macquarie and Mr Bell were discussing whether it was even required any longer for those purposes. Nothing however came of that discussion. 6 After the second appeal the matters were remitted for conciliation in accordance with s109 of the Act and when the conciliation failed to deliver an agreement between the parties, the matter was re-allocated for hearing. The hearing was then delayed for some time, while other proceedings before other courts were pursued by the parties. There were also various other interlocutory applications, which I dealt with before the hearing commenced. Both initiating summonses were amended in a number of respects, both before and during the hearing. The end result was that the claims and relief sought which now fall to be considered, are different to those which were considered in the earlier judgments. 7 The final position which emerged was that there were no arguments pressed by the respondents as to jurisdiction. Given the cases finally advanced, this is a matter upon which I will later make some short comments. 8 I finally note that judgment in the matter was delayed for some time, as the result of a further motion filed by the respondents, after judgment had been reserved. Consent orders had earlier been made as to a claim for security for costs, which had not been complied with by Mr Berg. Eventually, further consent orders were made as to the matters raised in the motion, following upon negotiations between the parties.

The relief claimed 9 The amended summonses finally pressed claimed the following relief: Mr Bell

A declaration that the contract and/or arrangement made on or about 9 December 1994 between the Applicant and the First Respondent ("the Contract") is unfair, harsh or unconscionable.

A declaration that the arrangement made between the Applicant and the First Respondent whereby the Applicant was also employed by the Second Respondent on or about 26 September 1995, with effect from 1 September 1995, ("the Arrangement") is unfair, harsh or unconscionable.

Further, and in the alternative to paragraph 2 above, a declaration that the employment relationship entered into or about 26 September 1995, with effect from 1 September 1995, between the Applicant and the Second Respondent was a collateral arrangement and/or a related condition to the contract or arrangement identified in paragraph 1 above ("the Collateral Arrangement") and is unfair, harsh or unconscionable.

A declaration that, notwithstanding that the Applicant is no longer employed by either of the Respondents, the Applicant is entitled to receive from the First Respondent bonuses for a period of 2 years from 29 August 1997, based on the amounts paid by way of bonus by the First Respondent and its related companies to comparable executives in the Treasury and Commodities Division, namely a Divisional Director who is later promoted to become an Executive Director ; and a declaration that the Contract, Arrangement and Collateral Arrangement be so varied with effect form 1 January 1997.

An order pursuant to s106(1) Industrial Relations Act 1996 varying ab initio the Contract, the Arrangement and the Collateral Arrangement to include in each the following terms: (a) Business Proposal Bell shall be employed to implement the business proposal he submitted to the First Respondent in September 1994, as varied from time to time by agreement. The Bank shall facilitate the implementation of that proposal.

(i) Provided that the Bank continues to make profits sufficient to provide a minimum return to its shareholders, in respect of each year ending 31 March a bonus will be paid to Bell based on the performance of the Treasury & Commodities Division of the First Respondent and the performance of Bell in setting up and managing joint ventures in Asia .

ii) Once the return on shareholders funds reaches the Target Earnings Rate for the particular year, the profits of the Bank will be distributed 50/50 between staff and shareholders and a substantially higher bonus than that referred to in (i) above will be available for distribution to Bell in the Treasury & Commodities Asia bonus pool. (iii) In addition, Bell will be eligible for cross-Divisional bonuses from Groups in the Bank other than the Treasury & Commodities Group.

(c) Management and Control (i) If one or more joint ventures are established in Asia, Bell shall control and manage all such joint ventures for their duration, within the framework of the general practices and systems of the Bank.

(ii) If one or more joint ventures are established in Asia, Bell is to have the power to select senior staff who are to work in the operation of the joint venture or ventures, the power to hire staff from outside the Bank and the power to determine the role that such staff are to play in the joint ventures.

(iii) Berg shall report to and be responsible to the Applicant, who in turn will report to the Head of the Treasury & Commodities Group of the Bank.

(iv) If the Bank does not allow Bell to control and manage the joint ventures that are set up or changes the above reporting lines without the consent of the Applicant, this will amount to a repudiation by the Bank of Bell's contract of employment, whereupon Bell shall be entitle to cease employment with the Bank and the second respondent, but continue to receive bonuses after the date on which he so ceases employment.

(d) Risk Management Systems If one or more joint ventures are established in Asia, the Bank shall supply to the joint venture or ventures suitable risk management systems, computer systems and support.

(e) Executive Director If the businesses for which Bell is directly responsible earn profits of A$5 million per annum in 3 years or A$8 million in one year, Bell will be promoted to become an Executive Director of the Bank, whereupon he shall be eligible to be awarded under the separate bonus scheme available to Executive Directors.

(i) If the degree of management participation in and control of the joint ventures afforded to Bell by the Bank should be reduced substantially below the level referred to in (c)(i) and (ii) above, such conduct by the Bank shall amount to a constructive dismissal of Bell from his employment.

(ii) A failure by the Bank to substantially fulfil its obligations under (d) above shall amount to a constructive dismissal of Bell from his employment.

(i) For the purpose of this clause "termination" shall include termination of the employment by the Bank for any reason other than serious and wilful misconduct by Bell. Without limiting the foregoing, termination shall include constructive dismissal as referred to in (f) above.

(ii) Upon termination of Bell he shall be entitled to 2 years remuneration, plus the total amount of bonus awarded to Bell by retained by the Bank and all share options that had not yet vested in him, in addition to bonus payments for that period, based on those paid to comparable executives.

(iii) Termination shall not be harsh, unjust or unreasonable.

(h) Discrimination In respect of senior and managerial positions in the Asian joint ventures, the Bank will not discriminate against Bell, Charles Berg or any of the staff hired by Bell from outside the Bank by comparison with other employees of the Bank.

An order that the bonuses retained by the Respondents from the Applicant in respect of the years ended 31 March 1996 and 31 March 1997 be paid to the Applicant forthwith.

An order that all share options granted by the First Respondent to the Applicant be deemed to be vested in the Applicant forthwith and the applicant is entitled to exercise the remaining 22,500 options within 60 days of the date of the judgment in these proceedings.

An order that the First Respondent grant to the Applicant 100,000 share options exercisable at A$6.86 which shall vest forthwith.

An order pursuant to s.106(5) that the First Respondent pay the Applicant an amount of A$5,246,892 or, in the alternative, A$4,646,892 + HKD$3,545,400.

10 The monetary sums were calculated as: A$ Loss of future salary for 2 years 600,000

Loss of retention out of 31.3.96 bonus - 25% of $100,000 25,000

Loss of retention out of 31.3.97 bonus - 25% of $287,830 71,957

On basis that last actual bonus was A$287,750 and an estimate that annual bonus would be 100% of salary: A$ 3000,000 x 2 years 600,000

Loss of prospect of promotion to Executive Director, with additional bonuses in excess of that claimed above for 1997/98 and 1998/9 (or in the alternative HKD 3,580,505) 725,290 Loss of benefit of share options under Macquarie Bank employee Share Option Plan - 75% of the 30,000options allotted to the Applicant will not vest - exercise price $6.86 per option (22,500 current market value at $38.65 per share.) $31.179 x 22,500: 715,275

Loss of grant of future MBL share options 30,000 options granted in May 1998 exercisable at A$14.29 Assuming current price of A$38.65, profit would have been 730,800

Sub total A$ 3,468,322

Interest on A$3,468,322 @ 10% pa x 4 years to 31 August 2001 1,387,328 ------------- Total A$ 4,855,650

Loss of prospect of promotion to Executive Director, with increased salary and bonus.

(a) Salary Bonus 1996/7 M. Bell HKD 1,772,700 (=A$300,000) A$287,750 (MB 80) 1997/8 M. Bell Only 2 mths (ended 31.8.97) ED "A" A$250,000 A$497,300 ED "B" A$275,000 A$801,000 1998/9 ED "A" A$250,000 A$552,281 ED "B" A$310,000 A$800,000

A declaration that the contract and/or arrangement made on or about 9 December 1994 between the Applicant and the First Respondent ("the Contract") is unfair, harsh or unconscionable.

A declaration that the arrangement made between the Applicant and the First Respondent whereby the Applicant was also employed by the Second Respondent on or about 25 October 1995, with effect from 1 September 1995 ("the Arrangement") is unfair, harsh or unconscionable.

Further, and in the alternative to paragraph 2 above, a declaration that the employment relationship entered into on or about 25 October 1995, with effect from 1 September 1995, between the Applicant and the Second Respondent was a collateral arrangement and/or a related condition to the contract or arrangement identified in paragraph 1 above ("the Collateral Arrangement") and is unfair, harsh or unconscionable.

A declaration that, notwithstanding that the Applicant is no longer employed by either of the Respondents, the Applicant is entitled to receive from the First Respondent bonuses for the period of 2 years after his termination on 30 June 1997 in an amount that the Applicant would have received had his employment not been terminated and a declaration that the Contract, Arrangement and Collateral Arrangement be so varied with effect from 1 January 1997.

An order pursuant to s.106(1) Industrial Relations Act 1996 varying ab initio the Contract, the Arrangement and the Collateral Arrangement to include in each the following terms:

Berg shall be employed to implement the business proposal Michael Charles Bell submitted to the First Respondent in September 1994, as varied from time to time by agreement. The Bank shall facilitate the implementation of that proposal.

(i) Provided that the Bank continues to make profits sufficient to provide a minimum return to it shareholders, in respect of each year ending 31 March, the minimum bonus payable to Berg will be the average bonus paid to associate directors in the Treasury & Commodities Division who are on salaries comparable to that of Berg .

(ii) Once the return on shareholders funds reaches the Target Earnings Rate for the particular year, the profits of the Bank will be distributed 50/50 between staff and shareholders and a substantially higher bonus than that referred to in (i) above will be available for distribution to Berg in the Treasury & Commodities Asian bonus pool.

(i) If one or more joint ventures are established in Asia, Bell shall control and manage all such joint ventures for their duration, within the framework of the general practices and systems of the Bank.

(ii) If one or more joint ventures are established in Asia, Bell is to have the power to select senior staff who are to work in the operation of the joint venture or ventures, the power to hire staff from outside the Bank and the power to determine the role that such staff are to play in the joint ventures.

(iii) Berg shall report to and be responsible to Bell, who in turn shall report to and be responsible to the Head of Treasury & Commodities Group of the First Respondent.

(iv) If the Bank does not allow Bell to control and manage the joint ventures that are set up or if Berg is required to report to a person other than Bell, this will amount to a repudiation by the Bank of Berg's contract of employment, whereupon Berg shall be entitled, notwithstanding that he may have ceased to be employed by the Bank, to continue to receive bonuses based on those paid to comparable executives for a period of 2 years .

(d) Risk Management Systems If one or more joint ventures are established in Asia, the Bank shall supply to the joint venture or ventures suitable risk management systems, computer systems and support.

(e) Structured Idea Brokerage Berg shall be allowed to implement ideas for structured brokerage he devises to meet the problems of customers of any Asian joint venture, subject to compliance with the Bank's risk management system and any regulatory controls.

(i) For the purpose of this clause "termination" shall include termination of the employment by the Bank for any reason other than serious and wilful misconduct by Berg.

(ii) Upon termination of Berg he shall be entitled to 2 years' remuneration, in addition to bonus payments for that period based on the bonuses paid to comparable executives.

(iii) Termination shall not be harsh, unjust or unreasonable.

(iv) The employment of Berg as an Associate Director of the Bank cannot be terminated without the Executive committee of the Bank having first been informed of the termination and having approved it, in accordance with the Bank's Guidelines.

(g) Discrimination In respect of senior and managerial positions in the Asian joint ventures, the Bank will not discriminate against Bell, Berg or any of the staff hired by Bell from outside the Bank by comparison with other employees of the Bank.

7. An order that the First Respondent grant to the Applicant 50,000 share options exercisable at A$686 which shall vest forthwith.

8. An order pursuant to s.106(5) that the First Respondent pay the Applicant an amount of A$2,830,950 (or A$2,270,950 + HKD3,446,97) or US$1,535,205.

11 The monetary sums were calculated as: Alternative 1 In the alternative

Alternative 1 4 months' unpaid leave from May/June 1996 A$ 80,000 (HKD 492,417) 2 years' salary as associate director at HKD1,477,250 pa 500,000 (HKD2,954,500) (the 9 December 1994 equivalent of A$250,000)

Loss of future bonuses for the period of 1 July 1997 to 30 June 1999 on the basis of bonuses paid to comparable executives (estimated at 100% of salary) 480,000 Options - on basis that if he had not been terminated he would have been promoted within 2 years of 1 July 1997 to be divisional director:

50,000 options exercisable at A$6.86 - assuming current price @ $28.00, Profit would be $50,000 x $21.14 1,057,000

Interest @ 10%pa on A$2,097,000 to 31.12.00 (3.5 yrs) 773,950

Total A$ 2,830,950

or (A$2,270,950 + HKD 3,446,917

Compensation for loss of income, ie: commission on accounts at Arbor Trading

Average earnings at Arbor for 1992/1993: US $268,024pa But estimated to be US $300,000 pa by 1 July 1997.

1995US$268,024 less actual (A$283,055) = US$206,631 US$ 61,393 1996 US268,024 less actual (A$164,957 = US$127,017) 141,007 (inc 4 mths unpaid leave)

1 January 1997 to 30 June 1997 (actual A$136,767 = US$101,206) 32,805 Total lost while at MBL US$ 235,205

1 July 1997 to 31 December 1997 US$ 150,000 1998 300,000 1999 300,000 2000 (actual US$100,000) 200,000 2001 (est. actual US$175,000) 125,000 Total lost since leaving MBL US$1,300,000

Total lost US$1,535,205 plus interest

12 This involved a significant departure from the original claims. Mr Bell had, for example, originally sought money orders totalling some $20million and Mr Berg $12million.

The Evidence 13 In addition to the evidence which they themselves gave, evidence was called by the applicants from Paiboon Kittisrikangwan, Central Banker; Dr Phillip Grub, International Business Consultant and Mark Ford, General Manager, Wholesale Funds Management at Armstrong Jones (NZ) Limited. 14 In the respondents' case evidence was called from Allan Moss, Managing Director of Macquarie Bank Limited; Raymond Parnell Hall, Grazier; Andrew Downe, Banker, Macquarie Bank Limited; Ho Heng Chuan, City Bank Malaysia and Andrew McWhinnie, Chartered Accountant.

The circumstances 15 In late 1994, the applicants approached Macquarie with a proposal that they be employed by the bank in pursuit of new business opportunities, which they had identified as existing in Asia. What was proposed was both a business to be established by Macquarie, as well as it entering into joint ventures with other local financial institutions there operating. In the written paper put forward by Mr Bell to Mr Moss in September 1994, Mr Bell indicated that he had been employed by Barclays Bank Plc/BZW ('Barclays') some 10 months earlier in order to pursue such opportunities, but that due to various internal changes at Barclays, the proposals which he had there developed were not to go forward. On Mr Bell's evidence, he was at that time, while still employed by Barclays, also approaching a number of other institutions in relation to this same proposal. 16 Mr Berg's involvement in the proposal was that in November 1993 he had taken leave of absence from his employment with the Arbor Trading Group ('Arbor') in the United States and had travelled to Vietnam, where he studied Vietnamese for some months. He met Mr Bell and agreed to work with him at Barclays, on payment of a nominal daily fee, for the experience. He left Singapore in June 1994 and returned to Arbor. He and Mr Bell later developed the proposal which Mr Bell put to Macquarie and other institutions. It was largely Mr Bell's work, with input from Mr Berg. Evidence was also called from Dr Grub as to his involvement in the development of this proposal. 17 Macquarie was interested in expanding its Asian operations at that time and was thus receptive to exploring the proposal when it was put. Mr Moss referred the approach to Mr Hall, then Head of Macquarie's Treasury and Commodity division. On Mr Hall's evidence, Macquarie had also had success with a joint venture with a local financial institution in South Africa and in the context of financial market deregulation throughout Asia, was interested in exploring opportunities to develop similar relationships there. Macquarie then had a number of dealings in various Asian countries. Mr Hall wished to expand the Bank's Treasury and Commodity division into other Asian opportunities. He had been unable to pursue these aims, on his evidence, because he lacked personnel with suitable experience and interests. Thus it was that the applicants' approach was opportune and one which he was interested in pursuing. Mr Hall had met Mr Bell before, but not Mr Berg. They had a number of telephone conversations. 18 The applicants met with Mr Moss and Mr Hall in early December 1994 in Sydney. Discussions continued quickly with Mr Hall to the point where a few days later, a specific business plan was prepared for Macquarie by Mr Bell and Mr Berg which was referred by Mr Hall to Macquarie's Executive committee, together with a proposal that they be employed. Mr Berg's assessment was that 80% of the work involved in preparing the plan had been Mr Bell's and 20% his. Mr Hall proposed that both applicants be employed in connection with 'business opportunities in Asia, of which the business plan provides an illustration'. 19 The discussions also dealt with the positions to which the applicants would be appointed, (Mr Bell as a divisional director and Mr Berg as an associate director); salaries (the Hong Kong equivalent of $300,000 for Mr Bell and $250,000 for Mr Berg) and other benefits; how the Macquarie discretionary bonus system operated and how the applicants were likely to participate in it; as well as Mr Hall's level of involvement in the work of establishing the proposed joint ventures. The applicants' later participation in the Macquarie employee share scheme was also discussed. The applicants' evidence was that Macquarie proposed to adopt a 'hands off' approach to the venture. It was Mr Bell's evidence that this was explained by Mr Hall as: 'Hall: "You guys are the experts in Asia. I have no idea how the business should be developed in Asia, that's up to you. You are the ones taking the business risk and you are the ones who will decide the success or otherwise of the business."

Hall: "Well, putting it bluntly, you will not have a job at Macquarie if the business is not successful and that if the business is successful you will be rich men."

Bell: "I fully agree with that approach. We prefer taking a higher risk job that is based purely on performance, providing that it also carries a higher level of reward if we perform successfully."

20 Mr Hall could not recollect aspects of the early conversations outlined in considerable detail in the applicants' affidavits in chief. He thought that some matters had been discussed at different times and some not at all. He thought that the above was almost certainly not said and denied representing that Mr Bell would be 'in charge' of any business developed. 21 Mr Hall's evidence, not denied by Mr Bell or Mr Berg, was that he had said to them: 'We learnt in South Africa that there are several phases in a joint venture project overseas. First, you have to find the joint venture partner. It doesn't matter if that takes two years. That's what we want you to focus on. In the second phase, you have to put the infrastructure in, because, ultimately, what we're selling is the technology. This can take six months. It needs support from the whole Bank. The third phase is building the business. I don't' have enough of a feel for you yet to know whether your' right for this final phase. The jury's out on the ultimate management. But there's the potential for you to run a joint venture project, if, when the time comes, you demonstrate that you've got the capacity.'

22 Mr Bell himself gave evidence, not denied by Mr Hall, that he was told: "Macquarie is in fact a business which consists of 28 individual businesses. They fall under the umbrella of 5 profit centres, but essentially they are individual businesses. The philosophy of the bank is to allow as much autonomy or independence as impossible to ensure that we do not blunt the entrepreneurial flair of the businesses. Macquarie provides the infrastructure, the capital, technical and administrative support to these businesses. The reality is though, that the success or failure of these businesses comes down to the people who manage these businesses."

23 The evidence demonstrated that Mr Bell and Mr Berg did receive a very free hand from Macquarie in the pursuit of potential joint venture partners for the bank over the following year, with Mr Bell reporting to Mr Hall and Mr Berg working with Mr Bell. Macquarie also later acted consistently with the above approach, when it came to terminate Mr Berg's employment. 24 On 9 December, the applicants were offered employment, after the Executive had given its informal approval, which was later confirmed at a meeting. Both offers of employment contained words to similar effect in relation to their employer. Mr Bell's letter said: 'I write to confirm our offer for you to join the Macquarie Bank Group of Companies as a Division director within the Treasure and commodities group in Hong King. The corporate structure of our Treasury operations in Hong Kong has not yet been finalised. Accordingly the Company that will act as your employer will be notified to you in due course. I understand that Ray Hall has explained your role and responsibilities and that you are expected to commence employment in January 1995. You will be remunerated in Hong Kong at the rate of HK$1,772,700 per annum. However, it has been agreed that upon your commencement you will be paid HK$443,175 of your salary in advance. The remaining amount of salary pertaining to your first year of employment (HK$1,329,525), will be paid on a monthly basis.'

25 Mr Bell and Mr Berg were given an opportunity to consider the offer, which they refused. They accepted immediately and discussions about the proposed push into Asia continued with Mr Hall. Neither Mr Bell nor Mr Berg had a practice of making contemporaneous notes of their conversations. One of the few notes which Mr Bell kept, recorded Mr Hall's agreement that in the event that Macquarie did not wish to pursue this business, for reasons outside Mr Bell's control, Macquarie would pay him a year's salary. Mr Hall agreed that he had made this promise. It was never otherwise documented. 26 In December 1994, Mr Bell resigned from Barclays and in early January 1995 commenced his employment in Sydney. Mr Bell explained that while in Sydney his time was spent in meetings with various people at Macquarie, in which he explained the projects which he proposed to pursue and in which he came to understand the different roles of those employed by Macquarie. He also commenced negotiations with institutions in South Korea and Thailand. 27 The plan prepared for Macquarie in December focussed on two businesses, using partnership vehicles - debt trading in South Korea and Thailand, with operations to be established in both countries by June 1995. In January, Mr Bell prepared another revised business plan for the Executive committee. The January plan had a number of elements. It involved the pursuit of joint ventures in South Korea and Thailand in 1995, with the applicants living and operating from offices in Hong Kong, where the core of the proposed management group was to be based. Mr Bell was to report direct to Mr Hall, with Mr Berg and Mr Jorgenson reporting to him. The establishment of a currency brokerage business in East Asian debt securities was also envisaged, initially in 1995 in Thailand, with brokers with established issuer networks and client bases to be hired, in partnership with local banks. Mr Berg was to be involved in this business, as 'Head of Brokerage', with a number of heads reporting to him. A joint venture with Arbor, was also suggested as a possibility. Under this plan, income of US$1.5million or AUD$2million was expected to be generated in 1995, to be 'at least doubled' in 1996. Expected business expenses were also outlined. 28 The minutes of Macquarie's Executive committee of 31 January recorded that approval was given by the Executive committee in December for "Treasury & Commodities to explore opportunities in Asia for the formation of a debt derivative partnership and a debt securities brokerage and for the appointment of Mike Bell and Charles Berg." It noted that Mr Hall had discussed the activities proposed. Thailand, South Korea, Indonesia, Taiwan and Malaysia were identified as countries where local partnerships, probably as joint ventures might be found. Further papers were to be submitted to the Executive, before any specific business was commenced. 29 Mr Berg commenced employment with Macquarie in late January 1995, having resigned from his employment at Arbor. Mr Bell moved to Hong Kong at the end of February, where he began work on pursuing the first of the proposed joint ventures in South Korea and Thailand. Mr Berg joined him there. They were then based in Thailand for some 4 months, pursing potential joint venture partners. While an in-principle agreement was reached with a joint venture partner in Thailand and a memorandum of understanding between it and Macquarie prepared, that proposal did not succeed for reasons connected with the apparent reliability of the person nominated by the proposed Thai joint venture partner ('JVP'), to be involved in the operation of the joint venture. There was an issue as to whether it was Mr Bell or Mr Hall who made the final decision not to proceed with this opportunity, which it is unnecessary here to resolve. It did not proceed. 30 In September 1995 a proposal for a debt securities brokerage business to be established by MICML as a 'boutique broking company' based in Hong Kong was submitted to Mr Hall. It was intended that the business be complementary to 'the businesses of establishing regional partnerships with east Asian financial institutions'. A profit level of US$2million in the second year of operations and $6million in the third was forecast. It was envisaged that this business would start earning income for Macquarie before the joint ventures were established, it being recognised that 'The establishment of the JVP's will take time. Additionally we do not have complete control over the timing of their establishment and the nature of our business relationship with the JVP's (e.g., local brokerage, risk management products, strategic and trading advice and systems).' 31 Mr Bell's evidence was that this business would have utilised Mr Berg's skills. Mr Hall could not recollect the written proposal, but remembered discussing such a business with Mr Bell after December 1994. His evidence was that he told Mr Bell that the bank did not have the 'country risk appetite to facilitate a business of this kind' and explained the limits which the bank set for particular countries. Mr Bell was shown the list. The result was that in Mr Hall's view these limits were too low to permit any appreciable income to be generated from such a business. The plan was rejected by Macquarie. Mr Bell's evidence was that rejection of this business left Mr Berg 'in limbo', until a joint venture was established. 32 Other negotiations with a bank in Thailand were then pursued, but were also unsuccessful. Evidence was called from Mr Kittisrikangwan about his involvement with Mr Bell and Mr Berg in Thailand in 1995. There were also negotiations pursued by Mr Bell and Mr Berg with a Korean bank, which eventually also did not proceed, due to internal difficulties faced by that bank. Evidence was called from Dr Grub about his discussions with Mr Bell and Mr Hall in Korea, how he refused a consultancy offered to him by Macquarie and his involvement with Mr Bell in Indonesia. Mr Hall gave evidence disagreeing with various aspects of Dr Grub's evidence. It is unnecessary to resolve these conflicts. 33 In October 1995, Mr Bell began pursuing a joint venture partner in Malaysia, the Arab Malaysian Merchant Bank Berhad ('AMMB') and another possible joint venture partner in Korea. The Korean proposal also ultimately did not proceed, but the negotiations with AMMB bore fruit. 34 In July/August 1995, MICML was acquired as a wholly owned subsidiary of Macquarie. Mr Bell became the managing director and was appointed to the board. The applicants received letters of appointment from MICML, effective from 1 September. 35 Mr Bell continued to report to Mr Hall throughout this time. In January 1996, Mr Hall informed Mr Bell of his impending retirement and that his replacement as Head of the Treasury and Commodities division would be Mr Downe. Mr Downe was a younger man than either Mr Bell or Mr Berg, who had had considerable success with the establishment and operation of the joint venture in which Macquarie had been involved in South Africa since 1994. On his evidence, Mr Bell was not convinced of Mr Downe's suitability as Mr Hall's replacement, having regard to his age and experience. He told Mr Hall that he was upset and wanted to know how it would affect 'my business'. 36 Mr Hall suggested to Mr Bell that it would help him to get Mr Downe's support. He suggested that Mr Downe be appointed as the head of the Malaysian joint venture for a period of 6 months. Mr Bell had himself intended to go to Malaysia to work in the joint venture when it was established. He disagreed with the idea of Mr Downe heading the joint venture, again having regard to his age and lack of experience in Asia. 37 Mr Hall's evidence was that by this time, he was concerned to ensure that the bank delivered its side of the agreement to AMMB and was trying to get Mr Bell either to focus on that task in Malaysia, until the joint venture was up and running, or to pursue other joint ventures and have someone else implement the Malaysian agreement. Mr Bell wanted to do both. Mr Hall took the view that it was not possible to do both. Mr Bell was concerned as to how this would affect his income and declined to make any commitment. Mr Hall's evidence was that his suggestion about Mr Downe was not designed to preclude Mr Bell focussing on Malaysia. It remained his choice, but he made no decision. 38 Mr Downe's evidence was that his replacing Mr Hall and working in Malaysia was first raised with him by Mr Hall in January 1996 and that he then discussed the possibility with both Mr Hall and Mr Bell. He was not initially convinced about going to Malaysia. Mr Downe did not recollect it being proposed at that time that he would be the business head of the Malaysian joint venture, but rather that he would work together with Mr Bell on the joint venture. His recollection of the details of his discussions with Mr Bell, differed somewhat from those of Mr Bell. It is unnecessary to resolve these differences. In cross examination, he agreed that one of the matters discussed was Mr Bell's aspiration to sit above a collection of joint ventures eventually. Their discussions continued in February, March and April. 39 It was Mr Downe's evidence that until late March or early April he expected that Mr Bell would move to Malaysia and that they would work together there. Mr Bell then informed Mr Downe that he had decided to move to Jakarta instead, to pursue the Indonesian joint venture. Mr Downe did not regard this decision as a matter within his control. 40 On Mr Bell's evidence, until June 1996, he still intended to go to Malaysia to run the joint venture. Mr Hall's evidence was that this was not known to him. Mr Bell's evidence appeared to be inconsistent with a January 1996 document, which he sent to Mr Hall, proposing a management structure, involving a country head/product head, responsible for the whole Trading and Commodity Group in a particular country, with Mr Downe being appointed to that position in Malaysia. That structure did not provide that any of these positions report to him - Mr Bell's role was not mentioned. In February he sent to Mr Hall another document, outlining his 'wish list', in which he referred to the original proposals put to the Bank, what had in fact been achieved and commented that: 'Clearly, the employment framework that I joined at Macquarie has changed. That is, MICM was to build 2 specific businesses and I would be fully responsible for the success or failure of those businesses. Success of these businesses, measured by profitability, would be the basis of my total remuneration.'

41 This comment reflected that the '2 specific businesses' - the partnerships and the currency brokerage business proposed to be established in 1995 in the December and January plans - had to that point not eventuated, only the then imminent Malaysian joint venture had been achieved. In that context, Mr Bell went on to suggest other possible positions at Macquarie for himself: '1. An Asian cross divisional role. This would be difficult given the strong product divisions within the Bank. Imagine the response from John Cauldon and Richard Jenkins!

2. Group Head in Asia for T&C with the additional responsibility for developing the JV's . This would involve dual reporting lines to Group head of T&C and Allan Moss. Again this would cause difficulties with the Malaysia Group Heads who (at least one) have a more senior ranking at Macquarie. This would ensure a profit centre to enable access to appropriate linkage of remuneration to profitability.

3. Head of Asia Business Development reporting to Allan Moss. A reporting line outside of T&C would be required to ensure credibility and authority, particularly with in the light of our recent conversations.

4. A remuneration which would include a success fee for each JV or alternatively linked to the ongoing global profitability of the JV's.'

42 He concluded: 'My concerns only relate to my future together with Charles, Phil, Mark Ford and Andy (if he does not take a position in PSF). I am very excited about the prospects of working long term for Macquarie. I just want to make sure that I am appropriately remunerated for my involvement in getting Macquarie into Asia (excluding Hong Kong), my ongoing involvement and avoiding a position inferior to my current alternatives.'

43 Mr Bell explained why he regarded being a group head in a particular country to be an unattractive proposition and commented that the only position he regarded as attractive in Sydney, was Mr Hall's job, but he did not regard this as a likely outcome for himself. Mr Bell's proposals were not accepted by Mr Hall. His evidence was that he had great difficulty understanding what Mr Bell really wanted at that point. On Mr Bell's evidence, the following week, they had a conversation to the following effect: '… I said to Hall: "The business is changing."

Hall said words to the following effect: "I don't know why you guys are getting so upset. Nothing has fucking changed. I don't see that anything's changed. There will be no alteration to the original business proposals nor to the income you expect to make out of bonuses paid from earnings of the various joint ventures that you set up. It's up to you guys. Your responsible. Either you're successful or you're not."'

44 Mr Bell's evidence was that he was concerned that changes proposed to the management structure involved no alteration to the original business plans. Given Mr Hall's assurances, he continued working on the Malaysian joint venture. 45 Mr Hall denied this version of their conversation. His evidence was that he said: "Nothing has changed. We set about finding joint venture partners in several Asian countries. We knew it would be difficult. We've had some success. We're now in the phase of building a real business in Malaysia. There's work to be done, and as I have told you again and again, you can do it if that's what you want to do. There are still opportunities in other countries which we are pursuing. You can go on kicking tyres, and looking for new opportunities, if that's what you want to do. I can't understand why you can't appreciate that you either do one or you do the other. I've explained to you many times that you can't do both effectively. I'm sick of you dancing around the issue, and still trying to eat your cake and have it too. In fact, we're absolutely on track. Its only a matter of you making up your mind what you want to do."

46 Mr Bell's negotiations with AMMB in Malaysia continued with Mr Downe's involvement. Mr Bell's evidence was that he negotiated the terms of the joint venture memorandum of understanding and the subsequent agreement. Mr Ho's evidence was that Mr Bell had brought the parties together, but had not had such a large role in negotiating the agreement, as Mr Bell suggested in his evidence. Again, it is unnecessary to resolve this conflict, it was common ground that both Mr Bell and Mr Downe were involved. Mr Bell, Mr Downe and AMMB staff made presentations to Malaysia's Central Bank, Bank Negara, about the proposed venture. Mr Berg had no involvement in these matters. 47 In April 1996, Mr Bell was paid a bonus of $135,000 by Macquarie, which he felt did not adequately reflect the contribution he had made to the establishment of the Malaysian joint venture. He discussed his bonus with Mr Moss and Mr Hall, but the amount of the bonus was not altered. He also received 30,000 five-year share options in Macquarie, vesting at the rate of 25% over four years. Mr Berg was paid no bonus and received no share options, he then being on leave without pay. 48 In June 1996 the negotiations with AMMB concluded successfully. Mr Bell began travelling to Korea, Thailand and Indonesia in pursuit of further joint ventures. In late July, Mr Bell again discussed with Mr Hall his future career at Macquarie. On his evidence, he was concerned to 'maximise' his income and that it was Mr Hall's view, that this would best be achieved by Mr Bell pursuing further joint ventures. Mr Hall confirmed that if Mr Bell stayed to manage the Malaysian joint venture, no one else would be working to establish other joint ventures. In that context, they again discussed Mr Downe managing the Malaysian joint venture for 6 months. Mr Hall convinced Mr Bell that this appointment would be useful to him and his long-term relationship with Mr Downe, when he replaced Mr Hall as head of Macquarie's Treasury and Commodities division upon his retirement. Mr Bell's evidence was that Mr Hall also said to him that for the business to be successful, he would need Mr Downe's support and that in his view, in order to maximise his income for the future, it would be in his interests to stay and manage one joint venture. Mr Bell's evidence as to this conversation was: 'Bell: I think we have 2 good opportunities now. I think Korea will go ahead and I'm particularly excited about Indonesia."

Hall: "Well, if you go to Indonesia, I can see you making - let's say you make $10 million - that you would be taking home $1,000,000 and I don't reckon that's too bad."

Bell: "And what about income from the other joint ventures?"

Hall: "You would be receiving royalties from those as well."

Bell: "You said before that if I did that I would be coming back to Sydney after 2 years and running all of Asia from Sydney."

Hall: "Yes, that's right, but I don't' know whether its Indonesia or Korea that you would be setting up, but it would be best for you to stay in one spot for a minimum of 12 months and make your claim."

49 Mr Hall's version of this conversation was that he had discussions with Mr Bell about these matters, but that the details were inaccurate in various respects. This included a denial that Mr Bell had ever been promised a position in Sydney after 2 years, running all of Asia. Mr Hall's evidence was that the possibility that one day a structure to accommodate multiple joint ventures being managed from Sydney was discussed. The discussions were hypothetical, because at that stage everything was a prospect, other than Malaysia, which had still to be implemented. 50 Not much turns on the difference. It was common ground on the evidence that it was agreed that Mr Bell would not remain to work in the Malaysian venture during its initial establishment; Mr Downe would do that; Mr Bell would pursue other joint ventures; he would then work in either the Indonesian or Korean joint ventures in their initial phases 'for a minimum of 12 months' and would eventually have the possibility of managing the joint ventures established, possibly from Sydney. It was after this conversation that Macquarie and AMMB executed a memorandum of understanding for their joint venture. Mr Downe then moved to Malaysia and was seconded to work in the joint venture, signing an employment contract with AMMB and obtaining a Malaysian work permit. Mr Bell was never employed by the joint venture. Mr Ho's evidence was that he understood that Mr Downe was to play an active role in Malaysia as the day to day business head to whom Macquarie staff in Malaysia would report, together with AMMB staff. Mr Bell was to be involved as some sort of relationship manager to AMMB and that he would also pursue other opportunities in the region for Macquarie. 51 Mr Downe's evidence was that in Malaysia he then worked on establishing the joint venture 'from scratch' and that this involved considerable work in order to finalise the terms of the joint venture; put the infrastructure in place; secure approvals from AMMB and Macquarie and the Malaysian Central Bank for the business and products of the joint venture; form trading relations with other banks and futures exchanges; educating Malaysian sales staff; integrating systems; designing risk systems for the joint venture; and hiring staff. This took about 5 months, and then the work of marketing the joint venture began. Mr Downe remained in Malaysia for 11 months, during which time Mr Bell spent only some 13 days there altogether, over 4 visits. 52 Despite his physical absence Mr Downe, Mr Ho and other Macquarie employees were in close contact with Mr Bell about the AMMB joint venture throughout this time. He was involved in its development and in making important decisions, even though he was not appointed a member of the joint venture management committee. Mr Downe described theirs as a particularly close working relationship. He regarded Mr Bell as having a fundamental loyalty to the bank and up until his resignation, believed he would work closely with Mr Bell at the bank, he eventually being appointed as a divisional head of the bank. 53 Mr Downe did not recollect any dissent from Mr Bell, when in May 1996 the need arose for Mr Ho to be informed of Mr Hall's retirement, Mr Downe's replacement as his successor and that Mr Jorgenson would be employed in the joint venture, eventually to replace Mr Downe in Malaysia. Mr Downe's recollection was that while the possibility that Mr Ford might be appointed to that position instead was raised by Mr Bell, it was not pressed by him. Mr Bell's evidence was different - he preferred Mr Ford, but his preference was rejected. Mr Ho's evidence in cross examination was that the joint venture agreement provided that AMMB and Macquarie had to ultimately agree on who was to be the business head and that he had to have input into Mr Jorgenson's selection as a result. Other candidates were not discussed. He could not remember Mr Bell being involved in the discussion. 54 Evidence was led from Mr Ford as to his various discussions with Mr Bell, Mr Hall and Mr Downe about his working in the Malaysian joint venture. He went there in May 1996, after Mr Downe. He and Mr Downe needed Malaysian work permits, which were obtained in October, when he also entered an employment contract with AMMB. Mr Ford continued being paid a salary by Macquarie, in addition to the payments he received from AMMB. Mr Jorgenson was later employed in the joint venture. Mr Ford was made redundant in October 1998, after the events here in question. 55 Mr Bell moved to Jakarta in August 1996 and continued work on the Indonesian joint venture. He also pursued further negotiations in Korea. PD Bank PDFCI Tbk ('PDFCI'), the proposed Indonesian joint venture partner, approved the joint venture in principle in late September 1996. In October, Mr Bell prepared 5 year forecasts for the Indonesian joint venture, ranging from AUD$18.5million on a best case basis, to AUD$5million on a worst case, with earnings of AUD$9million likely for the 1997/8 year, with increases in ensuing years. Like Mr Bell's earlier projections, these earnings also did not eventuate. 56 In November, Mr Hall's impending retirement and Mr Downe's appointment as his successor were generally announced by Macquarie. 57 Mr Bell's evidence was that in January 1997, Mr Downe told him that he wanted to discuss with him how the joint ventures were going to be developed. His evidence as to his then understanding was: 'I expected that I would stay in Indonesia and be the Business Head there for the first 6 months of the life of the joint venture. I expected to maintain control after that, particularly once the "runs were on the board" in terms of the establishment of the Indonesian JV and its viability.'

58 Mr Bell later formed a different view. Instead of heading the Indonesian joint venture, in order to permit him to pursue negotiations in Korea, he proposed that Mr Ford be appointed as the Indonesian head and that he report to Mr Bell. Mr Hall rejected that proposal and later he and Mr Downe suggested Mr Busch as business head. Mr Bell's evidence was that he did not regard Mr Busch as suitable for the position, given his level of experience and did not believe that he would be acceptable to PDFCI. That view was confirmed in a note Mr Bell later wrote to Mr Downe in June 1997, in the context of a request from PDFCI about Mr Bell's involvement in the joint venture. There, Mr Bell explained that PDFCI did not find Mr Busch acceptable for the position, after he had been introduced to PDFCI as the proposed business head. The problem was Mr Busch's years of experience. As a result, Mr Bell had agreed to head the joint venture for at least 6 months. Mr Bell also there explained that PDFCI required from Macquarie a letter explaining the job and responsibilities of each person it proposed for the joint venture. 59 Mr Hall's evidence was that Mr Busch was an Associate Director, like Mr Berg. He was highly regarded for his energy, determination and expertise in Macquarie's foreign exchange division, which they wanted to involve in the Indonesian joint venture. 60 Mr Downe's evidence was that he did not recollect Mr Bell opposing Mr Busch taking the leading part in the Indonesian joint venture, when that prospect was initially raised with him in either late 1996, or early 1997. However, by April 1997, Mr Bell was taking a different view, advising that he proposed to be the business head in Indonesia, perhaps for 6 months. Mr Bell also told him that PDFCI had reservations about Mr Busch's level of experience. Mr Downe supported Mr Bell in his decision to remain in Indonesia, for various reasons including the delay in having a memorandum of understanding signed with PDFCI and a concern that the Indonesian joint venture be bedded down, before another was commenced. He also believed that it would give Mr Bell a good opportunity to demonstrate his worth to Macquarie, in a venture which had the capacity to generate a lot of income, very quickly. 61 Mr Bell was very unhappy about these developments. In March, unbeknownst to Macquarie, he and Mr Berg sought legal advice as to their position. 62 By April 1997, Mr Bell was in Indonesia making arrangements for the proposed team of three to work there - himself, Mr Busch and Mr Murray. Mr Downe then became aware that Mr Busch was dissatisfied that he was not, after all, to be the business head of the joint venture. He thus proposed a flat management structure to Mr Bell, in which there was no identifiable business head, reflective of his view that such titles were meaningless anyway, especially amongst so few staff. He expected that Mr Bell would be the natural leader of the team, given his position and experience. 63 Mr Bell was unhappy with this proposal. Mr Downe's evidence was that Mr Bell was also greatly concerned about his remuneration at this time and that they had many conversations about that topic. He was especially concerned that if he set up new joint ventures, he would not be recognised for having done so, when they later began to produce income. 64 Mr Downe and Mr Hall then discussed the 1997 bonuses. Mr Downe's evidence was that Mr Hall told him of similar discussions he had had with Mr Bell as to his concerns about his remuneration. Mr Hall was anxious that Mr Bell be looked after, so that he would 'calm down' about his remuneration. Mr Hall proposed a substantial payment be made to Mr Bell in recognition of the establishment of the Malaysian joint venture, even though Mr Downe had spent the time, 'on the ground', setting the venture up and it had produced some revenue, even if little profit. Mr Downe agreed. Mr Hall also proposed a large cross divisional bonus for Mr Bell and that they should also discuss with him how bonuses would operate for the future. Mr Hall could not recollect the detail of his involvement in these matters, which occurred shortly before his retirement. 65 In May, Mr Downe advised Mr Bell that he would receive a bonus of $287,750. Mr Downe explained to him that it included the highest cross divisional bonus awarded by the bank. Mr Bell's evidence was that he was surprised. He had not expected to receive such a large bonus, given the position of the Malaysian joint venture. The operation of the bonus system and Mr Downe's hopes of improving it further for employees, were also the subject of ongoing discussion between Mr Downe and Mr Bell. Mr Bell agreed in cross examination that in these discussions he did not disagree with Mr Downe and understood that Mr Downe would be going into bat for him with the Bank, in order to maximise his bonuses, just as he had in Malaysia, where Mr Bell had been paid a bonus, even though no profits had been generated. Mr Bell was also informed that the bonus would be paid to him in June and that 'Under the Bank's profit share policy, 25% of profit share is retained for two years. The retained amount is subject to forfeiture if an executive leaves the Bank's employment prior to 30 June 1999.' 66 Mr Bell was, nevertheless, still unhappy. He took the view that he was being demoted. In May, Mr Bell raised with Mr Downe the possibility of he leaving Macquarie and becoming an employee of PDFCI. Mr Downe counselled him against this. In re-examination, Mr Bell explained that at the time he believed that while he was highly regarded by Mr Downe, that he was being pushed out by him. His view was that if he worked with PDFCI, in the joint venture, this would still assist Macquarie. They would still have the same objectives. 67 As requested by Mr Bell, on 12 June Mr Downe wrote to PDFCI confirming that Mr Bell was to be the business head of the joint venture, as had been his wish. Mr Downe had sent Mr Bell a draft of this document for comment. Mr Bell's only comment was that it lacked detail. His evidence in cross examination however, was that he did not accept that Mr Downe, in reality, meant what his letter suggested and that this was confirmed by a job description which he had received from Mr Busch, as to the role which Mr Busch would play in the joint venture. In light of that document, he formed the view that: 'It would not have been sensible for me to have traded, as this document suggests. This document effectively meant that I had nothing left to manage.'

68 The document provided by Mr Busch was not one Mr Downe had previously seen. How it came to be provided to Mr Bell was not apparent on the evidence. In cross examination Mr Bell, nevertheless, accepted that he and Mr Busch, in fact, had discussed Mr Bell being business head and they had both agreed and accepted that this would be the case. This conversation was taped, but not referred to in Mr Bell's affidavit evidence. 69 Mr Bell wrote to Mr Downe on 15 June asking him to clarify three matters: '1) You mentioned to me when you gave me my bonus details in Sydney last month, that I could expect a declining profit share from the Malaysian JV's from now on. Does this mean in notional terms or in percentage terms? After what time period would my bonus attributable from the Malaysian JV finish? What percentage for my 1996/97 bonus was attributable to Malaysia?

2. You have indicated to PDFCI that I will be the business head in Indonesia. Does this mean that my bonus will be based on the global income generated by the JV i.e income generated by David Busch and Derek Murray as well as the areas I will be responsible for? Or should I expect a bonus only on the areas of responsibility that are exclusively mine?

3. I have seen my role in the development of the Asian JV's change since I have joined Macquarie. I would therefore appreciate having a clear understanding of what you expect my role to be so that my expectations are consisted with Macquarie Bank's. Do you see my role as Head of the Asian T&C JV's, Head of the Indonesian JV or one of relationship development? If relationship development, what does this entail?'

70 On 24 June, PDFCI representatives travelled to Sydney and met with Mr Moss and other Macquarie representatives. Mr Moss' evidence was that an approach from Mr Bell for employment direct with PDFCI was discussed. Mr Bell confirmed, in cross examination, that he had raised this with directors of PDFCI over lunch in Indonesia, after one of its employees had made the suggestion to him, despite Mr Downe counselling him against this. Mr Bell agreed that he understood that PDFCI was then concerned about his commitment to the joint venture and that he might end up working for one of it competitors. In re-examination, he explained that he had approached PDFCI despite Mr Downe's advice, because he was forming the view that there was no role for him at Macquarie and the bank was not going to give him the opportunity to manage the business as originally agreed. He felt he was being squeezed out and this was one of the opportunities where he thought he could, at least, get the joint venture in Indonesia going. 71 Mr Bell met with Mr Downe on 27 June and also tape-recorded the conversation they then had. They discussed the various issues to which Mr Bell steered the conversation, including the possibility of him pursuing the Korean joint venture. In this context, Mr Bell sought clarification as to the remuneration he might earn from the Indonesian joint venture, if he did not stay to manage it, but rather worked on pursuing the Korean joint venture and what bonus payments he might then derive from the Malaysian and Indonesian joint ventures in future years. 72 Mr Bell was concerned that he would become bored running only one joint venture and he wanted, in the long-term, to manage them all. Mr Downe's advice was that he should establish a track record in managing one of them, in order to achieve the aim of being appointed to manage all of the joint ventures for Macquarie in the long run. Mr Bell's view was that he ought not to have to establish such a track record, given what he had been employed to do by Macquarie. 73 Mr Downe, however, suggested that the time was not then appropriate for such an overall management position to be created, particularly given what PDFCI had raised with Mr Moss about his approach for employment. Mr Busch's position in Indonesia was discussed, as was Mr Berg's dismissal, a matter to which I will return below. The possible ways in which Macquarie's bonus arrangements could be restructured, having in mind the possibility of further joint ventures being established in Asia in the future, was also discussed, as well as Mr Downe's intention of changing the way the discretionary aspects of the bonus pool operated, so as to lead in future, to a wider distribution of profits among employees. The future of the Malaysian and Indonesian joint ventures, were also discussed. 74 On 1 July, Mr Bell wrote again to Mr Downe seeking a response to his 15 June email and on 7 July they spoke again. This conversation was also taped. Mr Bell told Mr Downe that he was unhappy, because he was not in the position he had been hired for 'to establish joint ventures, negotiate the joint ventures, hire who I want and manage the businesses.' Mr Downe's attitude was that Mr Bell had to demonstrate that he could run the businesses profitably, but Mr Bell argued that Macquarie could not now change the deal, he having concentrated on establishing joint ventures, and complaining that now when he was to manage Indonesia, he was not being given authority to select the staff. 75 Mr Bell suggested to Mr Downe that he being 'Asian Head' was a part of the plan originally submitted to the Executive committee. Mr Downe confirmed that he had not seen this plan, but that he had discussed the matter with Mr Hall, whose view was that there had not been any commitment of that kind made. The original December and January plans, I note, did not provide for Mr Bell occupying such a position. Mr Hall's evidence was that he and Mr Bell had then discussed the possibility, that if Mr Bell were successful in establishing a number of joint ventures, there would be a need for one person at Macquarie to be responsible for them and that this could be the way that the role would develop, but that such a position was premature before the joint ventures were established. It was also Mr Downe's evidence that he had a similar view, but that at that time there was no need for such a role - only one joint venture having been established. In cross examination, Mr Downe agreed that at this time, it was his role to decide for Macquarie, what form its management structure in the Indonesian joint venture was to be. 76 Mr Downe also raised with Mr Bell the difficulty of making a proposal to Mr Moss that Mr Bell be appointed to such a position at that point in time, given the concerns which PDFCI representatives had recently raised with Mr Moss in Sydney. Mr Downe understood that they were concerned that Mr Bell was not committed to remaining with the joint venture in Indonesia, he having pursued with PDFCI a proposal which it had rejected, that he leave Macquarie and PDFCI employ him direct. 77 Mr Bell's evidence, in cross examination, was that he did not accept that there was any problem in him having done so, or that it raised any conflict, but regarded it as a viable way for him to resolve the problems which he then perceived he had, namely that Macquarie had reneged on its agreement with him. His approach had been rejected by PDFCI, but he was, nevertheless, surprised that it had raised his approach with Mr Moss, without first telling him. 78 Mr Downe suggested that the best way to overcome this difficulty was for Mr Bell to stay in Indonesia, to run the joint venture for a time and then when a number of joint ventures had been established, the need for the position he wanted in managing all joint ventures would have arisen. Mr Bell was reluctant to stay in Indonesia. He doubted that he could do so effectively, given the flat management structure Mr Downe was proposing. Mr Downe's view was that there were three people from Macquarie who were going to be working in that joint venture and that while Mr Bell was to be the business head, he believed in the circumstances which had developed, that the three had to work together as a team. Mr Bell agreed, in cross examination, that he didn't tell Mr Downe that he believed Macquarie was breaching his contract. His evidence was that in adopting this approach he was not then sure legally as to whether that was the case or not, although he had accused them of breaching the original deal. 79 Mr Downe promised to come back to Mr Bell in writing and did so on 10 July. He confirmed his views about a flat structure and described Mr Bell's role as: 'Therefore your role will be a combination of marketing to the Indonesian corporates (along with David Busch), principle positioning of the trading books (along with Derek Murray) and managing the relationship with PDFCI. As you are in charge of the relationship and are most familiar with PDFCI, you will be the business head for the Treasury in venture. However David and Derek will also be able to attend the committee meetings and in the event of dispute amongst yourselves, Sydney will adjudicate.'

80 Mr Bell's questions about the bonus in respect of Indonesia and Malaysia were also addressed. Mr Downe advised him that: 'As for whether you are better to stay in Indonesia or venture to Korea you must decide. As discussed you will need to eventually choose one of the jv's to operate from and on which to concentrate. I do not believe that at this stage there is a role as 'Asian jv head' until we have three jv's up and running. We will also need to think carefully about where this role is based since it has become clear that all our partners regard the jv's as arrangements with MBL and therefore are likely to want links to head office. Should you decide to stay with the Indonesian joint venture at the moment it does not preclude you from deciding to move onto Korea later. This will only occur if you decide you want to move and we manage to set up a jv in Korea.'

81 This response was entirely unsatisfactory to Mr Bell, who by this time had sought and obtained legal advice about his position. He had also earlier discussed with Mr Jorgenson, Mr Downe's plans for bonuses flowing from the joint ventures, where Mr Downe had confirmed his intention that Mr Bell would continue to participate in bonuses, reflecting the joint venture profits. Still Mr Bell was dissatisfied. There had also been a further discussion between Mr Bell and Mr Downe on 10 July during which the Indonesian joint venture was discussed, as well as various management issues. Mr Bell accepted that this was a conversation conducted in the context that he was to be the Indonesian business head. Mr Ford's position was also discussed, without complaint or difficulty by Mr Bell. Mr Bell agreed in cross examination that the impression he was trying to convey to Mr Downe in this conversation, was that he was committed to involving himself and going forward in Indonesia. 82 This was the last conversation Mr Bell had with Mr Downe before he left the bank. While it was a conversation Mr Bell taped, it was not referred to at all in his affidavit evidence. It was put to Mr Bell that reference to the conversation had been omitted from his evidence, because it did not assist his case. He could not recall why it had been omitted. 83 Mr Bell wrote to Mr Downe on 18 July, alleging that his employment had been repudiated and purported to accept the repudiation. He proposed to stay on until 31 August, when certain of his options would have vested. Mr Downe consulted with Mr Moss and Mr Hall. They both disagreed with what Mr Bell asserted as to the basis upon which he had been employed. His employment thus came to an end. 84 I now turn to Mr Berg. His employment had in the meantime also come to an end. 85 Mr Berg had first taken 3 weeks' leave without pay in mid-1995 after the Thai joint venture did not proceed. Mr Berg felt at the time that there was no role available which required his expertise. Mr Berg returned to Hong Kong in August 1995 and in September a proposal was submitted to Macquarie for a conventional brokerage type business to be established there. Mr Hall rejected the proposal because it did not fit with the bank's country risk limits. Mr Berg then assisted Mr Bell with the Korean negotiations, which were unsuccessful. He also developed an idea for an Indonesian rupiah trade in November, but final approval was not given by Macquarie until February 1996, by which time it was decided by he and Mr Bell that it would not be prudent to take the risk, especially as no income had yet been generated by them, against which any losses from this trade could be set off. Mr Berg remained in Hong Kong until May 1996. 86 Mr Berg then proposed to take further leave without pay and to return to Malaysia. This was raised with Mr Downe and Mr Hall by Mr Bell in April 1996, whom he advised 'We had a very open discussion with Ho about when Charles should start. Charles and I had spoken earlier in the morning. Charles was of the view that the derivative products should be in place first before he could make a meaningful contribution to developing relationships with international institutional investors. The existing lack of product, taking into consideration the low interest rate environment in Malaysia relative to the US, means that he would have weak hand to play introducing AMMB to these investors. Charles believes this would leave a bad impression and adversely affect the potential to develop these accounts in the future. Charles has offered to take 3 to 4 months "leave without pay" to wait for the basic product infrastructure for the JV to be put in place before joining the JV.'

87 Mr Bell also told Mr Downe that Mr Berg would be taking leave without pay because there was 'no role for him until the joint venture is up and running'. Mr Ho's evidence was that Mr Bell raised with him the prospect of Mr Berg later working in the joint venture. Mr Ho did not see how he would fit in and suggested that they wait until the venture had taken shape. Mr Bell agreed. 88 Mr Berg had the view that Malaysia was the least suitable country for the business plan approved by Macquarie, so far as he was concerned. Mr Bell was sure that at the time Mr Berg would be able to find some way to add value there. In April 1996, he went to Kuala Lumpur and met with Mr Bell and AMMB representatives, including Mr Ho. Mr Berg's evidence was that they were told that Mr Berg planned to take an unpaid leave of absence, on his return to then spend a few months in Malaysia to understand its bond market, before moving to Indonesia by the end of the year. Mr Ho told them he was welcome to come any time. 89 As a result of his visit Mr Berg did not believe that he could add significant enough value to the Malaysian joint venture, to warrant spending more than 4 to 6 months there. He then took a vacation and 4 months unpaid leave and returned to work in October. In that period he kept in contact with Mr Bell and offered to resign, but Mr Bell took the view that it was important in the start up phase to have him on hand and he believed that a joint venture where Mr Berg's skills were relevant could be established in a few months. During this period Mr Berg tried to minimise his business expenses, in order not to jeopardise the business long term. 90 Mr Ho's evidence was that when Mr Berg arrived in Malaysia, it was without announcement. When he arrived, Mr Downe was there working as business head of the joint venture. Mr Downe suggested to Mr Ho that he should discuss Mr Berg's role with Mr Bell. Mr Bell asked him to employ Mr Berg. Mr Ho refused. Mr Bell then asked that Mr Berg be given an opportunity to learn the Malaysian market and Mr Ho agreed that he would be allowed into the dealing room for a defined period and allowed to visit clients, if accompanied by AMMB staff. In cross examination, Mr Ho said that he understood that Mr Berg reported to Mr Downe while he was in Malaysia. 91 Mr Downe's evidence was that when Mr Berg arrived, he had no particular appreciation of what he was to do. He assumed that Mr Bell had something in mind for him. He could not satisfy Mr Ho's questions about Mr Berg's proposed role and thus referred him to Mr Bell. This was necessary, because in order to work in Malaysia Mr Berg required a visa and this necessitated AMMB employing him, which required Mr Ho's approval. The Malaysian banking regulator had limited expatriate employment in the joint venture to five. Mr Downe understood that Mr Ho was anxious to ensure that those employed would make a real contribution. 92 Mr Downe asked Mr Bell to come to Malaysia, telling him that Mr Ho would not give Mr Berg a contract, but had confirmed the arrangement that if Macquarie wanted to pay him to stay around for a few months, he could stay in the dealing room and could visit clients, if accompanied by Mr Ho's staff. 93 Mr Berg's evidence was that in November Mr Downe began raising with him what role he was to play. Mr Berg explained that he was there to learn about Malaysia, which, in his view, was not the right market to establish a brokerage business. Later they discussed the establishment of such a business in Indonesia. Mr Berg's evidence was that Mr Downe saw that this had some possibilities and that he could envisage Mr Berg going there. They also discussed various other business possibilities which might be pursued. Mr Bell gave oral evidence that he had produced a document outlining an assignment for Mr Berg in Malaysia for 3 months. He asserted that he had provided this document to, and discussed it with, Mr Downe and Mr Berg. He agreed, however, in cross examination that the business strategy which Mr Berg was to produce had not been produced, nor had it ever been presented to the joint venture management committee, as the document envisaged. Mr Bell agreed that Mr Berg never produced this material, or met the deadlines imposed. 94 Mr Berg came up with the idea of a Eurobond trade for the Malaysian Employee Provident Fund. In mid-January 1997, the proposal was put to the Fund. It required Central Bank approval. Mr Berg's evidence was that late in January, Mr Downe informed him that he had again raised with Mr Ho the possibility of his employment with the joint venture, which Mr Ho had rejected. Mr Downe told him that unless he was employed by the joint venture, he would have to leave Malaysia by March, when Mr Downe was himself leaving. Mr Berg was anxious to stay, because he was still pursuing the Eurobond trade, but also again floated the possibility of he then going to Indonesia. Mr Downe told him that he didn't envisage Mr Berg going there. Mr Downe could not see a role for Mr Berg in Indonesia, given that there was no structure in place, like that of the Malaysian joint venture. Mr Berg offered to take further leave without pay until the Indonesian joint venture was set up, which in his view was just a matter of time. Mr Downe also rejected that idea. 95 In January, Mr Ho discussed Mr Berg with Mr Downe. Mr Ho informed Mr Downe of his decision that Mr Berg could not remain. Mr Ho was, however, prepared to accommodate his departure taking a couple of months. There was a conflict in the evidence of Mr Berg and Mr Downe as to whether or not Mr Downe told Mr Berg in January that his employment would end by the end of March. I prefer Mr Downe's evidence on this point, which included that he told Mr Berg that he would investigate what payment would be made to him on termination. The policy was for one month's pay for each year of service, of which he then informed Mr Berg, advising that he would receive that payment in March. Mr Berg was not happy and wanted to continue to work in Malaysia as long as possible. Mr Downe still proposed the end of March as Mr Berg's last day. 96 In January 1997, Mr Downe also raised Mr Berg's position with Mr Hall and Mr Bell. Mr Bell suggested that Mr Berg could go to Indonesia. Mr Downe considered this but could not agree, given the views he had formed about Mr Berg. Mr Hall agreed with the view that Mr Berg had had long enough to find himself a role and to contribute and that his continued employment by Macquarie was not warranted. In cross examination, Mr Hall explained that he had not really been aware of any work that Mr Berg had been performing, or any function that he had been performing before. He had not been overly concerned about this, because had been content for Mr Berg to have been assisting Mr Bell and supporting him. He also agreed that it was not unusual for him not to have been aware of the details of work being directly performed by Mr Berg. 97 In cross examination, Mr Downe explained that he had also discussed with Mr Hall what role Mr Berg might play in Indonesia or elsewhere. He agreed that he did not consult with the Bank's human resources department about this. 98 Mr Berg had encountered some difficulties while in Malaysia. There was a dispute on the evidence as to the existence and nature of these difficulties, which included various problems with AMMB staff in Malaysia, which it is unnecessary here to detail. Mr Ho's evidence was that he found Mr Berg's presence disruptive. Mr Downe's evidence was that Mr Ho raised his concerns about Mr Berg with him, which Mr Downe then dealt with Mr Berg. Mr Berg's evidence was that the evidence as to these problems was fabricated. It is unnecessary to determine what in fact happened in Malaysia between Mr Berg and AMMB employees. I note, however, that in cross examination, Mr Bell said that in his view Mr Berg could be difficult to manage and was sometimes confrontational, but that his interaction with Asians was very good. In re-examination he added that he did not find Mr Berg difficult to manage. 99 What was not in dispute was that Mr Downe had formed the view that he could not trust Mr Berg to represent the Bank and its interests. He had lost confidence in Mr Berg and his professional judgment. It was also his view, that Mr Berg had produced nothing tangible for the bank. Mr Downe's evidence was that Mr Berg produced only the Eurobond proposal while in Malaysia, but no income. Mr Downe also discussed the idea of a business brokering Asian debt securities with Mr Bell and Mr Berg. In Mr Downe's view it was not a business envisaged by the Malaysian joint venture and he did not support the idea, but he also did not preclude it as a possibility. No detailed proposal ever emerged from Mr Berg in relation to such a business. 100 Mr Ho's evidence was that Mr Berg produced no income for the joint venture while he was there and only one proposal, the Eurobond trade, which did not receive the necessary Malaysian Central Bank approval, when it was sought. Mr Berg's opinion was that approval could have been obtained had the joint venture persisted in seeking it. 101 Mr Berg continued his discussions with Mr Downe about his employment. He pressed his view as to the opportunity which the Eurobond trade presented the joint venture and argued that this would be damaged by his departure. Mr Berg believed that the Central Bank could be persuaded to change its attitude. In cross examination, Mr Downe explained that he took a different view, once the Bank had ruled the transaction illegal. Mr Downe's evidence was that he told Mr Berg that his options were to finish up by the end of March and to receive a payout according to normal Macquarie terms, or to continue working until the end of June. The latter would involve payment of the same remuneration as the payout, but opened up the possibility that there would be some change by that time. 102 It was common ground that Mr Berg and Mr Downe had many discussions over this period about Mr Berg's continued employment at the bank, although there were differences of detail, much of which it is unnecessary to resolve. Mr Berg complained about the morals and ethics of Macquarie's approach, particularly given the original business proposal he and Mr Bell had put to Macquarie. Mr Downe told Mr Berg that he had never read that proposal and did not see its relevance, at that point in time. Mr Berg said that he would consider his options. 103 Mr Berg's evidence was that he also spoke with Mr Bell and later discussed with Mr Downe taking a further 2 months of unpaid leave and then returning to spend 4 months in Indonesia and if nothing had happened by then, that he would return to the United States. Mr Downe agreed to consider this. The next day he told Mr Berg that he would not agree to this proposal, but offered to pay him a bonus if he elected to stay until 30 June and the Eurobond trade was achieved. He told him that his employment would be terminated even if the Eurobond trade was achieved. Mr Berg suggested to Mr Downe that he discuss his going to Indonesia with Mr Bell, as Mr Bell had the expertise there. The conversation concluded with Mr Berg saying to Mr Downe 'OK you guys work it out. Whatever you guys decide I'll go along with.' Mr Downe promised to come back to Mr Berg after he had spoken with Mr Bell. 104 In cross examination, Mr Downe explained that, in his view, while he was in Malaysia, Mr Berg was reporting to him and not to Mr Bell and that this had been discussed between them, some time after Mr Berg first went to Malaysia. Mr Downe's evidence was that he did discuss Mr Berg's position with Mr Bell on a number of occasions, but he was not persuaded that Mr Berg's employment should continue. The upshot was that Mr Berg remained in Malaysia until June. He, however, had no success in his pursuit of the Eurobond trade. 105 Mr Downe then confirmed that Mr Berg would have to leave Malaysia by the end of June. Mr Ho had no place for him in the joint venture. The Eurobond trade had not been achieved. On 3 June, Mr Downe wrote confirming the termination of Mr Berg's employment. The letter provided: 'We write to confirm arrangements negotiated between the Bank and you. We confirm that following counselling and some negotiations in January 1997, you were given notice of termination of your employment by the Bank, the notice period ending 31 March 1997. Following the issue of this notice, there has been further negotiations between you and the Bank and it has been agreed that in consideration for the continuation of your employment, beyond 31 March 1997 until 30 June 1997 you could remain in employment with the Bank subject of course to you continuing to perform your duties as an employee. The purpose of this letter is to confirm the agreement previously reached, namely: 1. At your option you can leave the Bank now and receive payments referable to the balance of the term of your employment, namely to the close of business 30 June 1997; or 2. You can work out the period of notice in which case the Bank will tender to you, as at close of business on 30 June 1997, an amount representing your accrued entitlements until that date with no further payments to be tendered. We look forward to your confirmation as to which the options your choose to exercise. In the event that we do not hear from you, we will assume that you do not wish to pursue the first option and accordingly, the employment relationship will end at close of business on 30 June 1997 when the payments mentioned will be tendered.'

106 Mr Bell and Mr Downe discussed Mr Berg again later in June, in a conversation which Mr Bell taped. Mr Bell told Mr Downe that he agreed that Mr Berg's continued employment could not be supported. 107 Mr Downe's evidence was that Mr Berg did not respond to his letter until 27 June, when he wrote denying that he had received any notice of termination from Macquarie, that he had not agreed to the termination of his employment, that he was available to work in Indonesia and that the termination was a repudiation of his original agreement. He also advised that he would cease work on 30 June. 108 After the termination of his employment, Mr Berg sought to pursue the Eurobond trade himself, by seeking employment direct with the Malaysian Pension Fund. He was unsuccessful, despite the support of one of the members of the board of the Fund. The Eurobond trade was never approved by the Central Bank and never proceeded. 109 The applicants each gave evidence about their search for work after the termination of their employment with Macquarie, It is unnecessary to deal with that evidence in any detail. Mr Berg eventually returned to work at Arbor in the United States. Mr Bell eventually took a position in London. Dr Grub also gave some evidence about the Asian economic crisis which appears to have affected the applicants, who had difficulty in obtaining alternative work after their relationship came to an end. Macquarie was also affected. The Indonesian joint venture did not proceed and the Malaysian joint venture came to an end. I do not need to go to this evidence.

The parties' cases 110 The parties filed extensive written submissions, which they also addressed orally. There were numerous issues lying between the parties as to matters of fact and law, credit and the exercise of any discretions available to the applicants. I do not propose to summarise these submissions in detail, but note various of the major areas of disagreement. 111 It was the case advanced for the applicants by Mr Rothman SC and Mr Dalgleish of counsel, that the applicants had been employed by Macquarie to implement the business plans referred to in the summonses. The respondents' failure to abide by these plans and finally their refusal to permit the respondents to implement them, had rendered the contracts unfair. The case advanced for the respondents by Mr Goot SC and Mr Neil of counsel was that the evidence demonstrated that the business plans had neither formed a part of the contracts, nor had they formed the basis of any representations made to the applicants. 112 The applicants claimed that numerous other representations had been made by Macquarie, which had induced them to take up the employment and to leave existing, stable employment, but that the representations had not been honoured, also rendering the contracts unfair. It was Mr Bell's case that Macquarie had constructively dismissed him from his employment. Other complaints were advanced as to the respondents' conduct, which it was also alleged had made the contracts relevantly unfair. The respondents denied that such representations had been made, that any unfairness had resulted from its conduct or that the contacts were unfair in any respect. It was their case that Mr Bell had resigned his employment. 113 It was argued for the applicants that while they had diligently pursued the implementation of the business plan, through no fault of their own they had not been successful in realising what had been proposed. It was complained that the respondents thereupon began acting inconsistently with the plans and representations made, ultimately depriving Mr Bell of the control of the businesses he had been promised and excluding him from the management of the Malaysian joint venture, which he had also been promised. Particular complaint was made in Mr Berg's case that Macquarie refused to implement a brokerage business which he and Mr Bell had devised, depriving him of the opportunity to perform meaningful work in his area of expertise. All of these allegations were denied by the respondents, who argued that the claims advanced misrepresented what had in fact occurred and been agreed between the parties. 114 Similar complaints were advanced by the applicants about Macquarie's conduct in relation to the Indonesian joint venture; it being alleged that it had failed to adhere to promises made in relation to bonus payments and Mr Bell being appointed to manage and control all of the joint ventures established. These complaints were similarly denied by Macquarie. 115 In Mr Berg's case, complaint was also made as to an alleged failure to give him proper notice of the termination of his employment and the failure to comply with the bank's procedures applicable to his termination. The respondents' case was that notice had been given and that the failure to follow the procedure in question had not demonstrated any unfairness in the contract in the circumstances, given the reasons for, and circumstances of, Mr Berg's dismissal. 116 In the respondents' case, a detailed analysis was made of the claims advanced in the summonses in light of the evidence led. It was argued that the applicants had failed to make out any of the fundamental aspects of their claims on the evidence and that their conduct had been such that even if any unfairness had been demonstrated, the Court would not exercise any discretion in their favour. 117 A deal of time was spent in the proceedings in dealing with tape recordings which had been made by the applicants of various conversations which they had had with employees of the respondents and others, prior to the termination of their employment. The applicants argued that no account would be taken of any deficiencies in their affidavits, when compared to the recordings and transcripts which had been made of these conversations. It was put that it would be accepted that any errors had resulted from the preparation of the affidavits, where omissions had resulted from a desire for brevity and that this had resulted from their lawyers' drafting of the affidavits. 118 The respondents sought to put this evidence in quite a different light, submitting that it went to the applicants' credit, having demonstrated a deliberate attempt to improve their case inconsistently with the conversations which they had had. It was also submitted to have shown that both applicants had lied during the course of their employment and in these proceedings and that the evidence as to this conduct put them into a position where no discretion would be exercised by the Court in their favour, in any event. It was also argued that the conduct in which they had engaged was such as to have warranted their summary dismissal for misconduct and to draw their veracity as witnesses into question. It was submitted that as a result, their evidence could not be preferred over that of other witnesses. 119 It was also submitted for the respondents that the evidence showed that the applicants had elaborately set out in these proceedings to damage the reputation of the respondents, inconsistently with the obligations which fell upon parties to proceedings such as this. Claims had been advanced for which the applicants well knew they had no credible evidence. Their attack on Macquarie and various witnesses in the proceedings was, nevertheless, persisted with. This too, was argued to provide a proper basis for refusing them any relief. 120 Detailed submissions were advanced in reply for the applicants as to why these attacks upon the applicants and the case which they pursued would be rejected by the Court. The contracts and the respondents' conduct were argued to have plainly been demonstrated to have been unfair, so as to warrant the granting of the relief here sought.

Jurisdiction 121 In New South Wales, s106 of the Act and its predecessors have operated as a powerful incentive to those who enter into contracts 'whereby work is performed in an industry', to ensure that such contracts are not unfair, as that term is defined in s105 and that their conduct pursuant to such contracts, is, likewise, not unfair. Undoubtedly, many of those to whom the sections have applied, have heeded its implicit requirements. That legislative incentive has persisted since the 1950s. Recent amendments to the section do not here arise for consideration. 122 The section is not, however, designed to deal with all such work contracts. As the cases have made plain, there is a limit to its scope - namely that discussed by the Full Court in Chrysler Jeep Automotive Distributors Australia Pty Limited v Canberra Star Motors Pty Limited and Others (1997) 79 IR 452. In order to attract the jurisdiction, there must be work performed under the contract or arrangement in question, in an industry 'in and of' New South Wales. This limitation requires that consideration be given to the connection which the parties' contract and arrangement had with New South Wales (Chrysler Jeep at p459). This approach was followed by other Full Court benches in Perrott v Xcellenet Australia Limited and Others (1998) 84 IR 255 at 269 and Savage v Digital (unreported; Glynn, Hungerford, Schmidt JJ; 17 May 1999). 123 In Xcellenet, it was concluded that the work in question was performed in the New South Wales computer industry and that: 'It will not always be the case that the performance of work in New South Wales will satisfy the jurisdictional requirements of s.106. A transitory or casual visitation to New South Wales for the purpose of the performance of work may well, dependent on the facts of the matter, fail to meet the requirement that the contract has a "real and sufficient connection" with New South Wales so as to satisfy jurisdiction.'

124 In Savage, it was also concluded, having regard to the findings at first instance in relation to work performed in Sydney, that the appellant performed work in the computer industry in and of New South Wales. This flowed from 'an assessment of the nature, quality and extent of the work performed for the respondent by the appellant under the challenged contract in the New South Wales computer industry, which led to the conclusion that the necessary connection with New South Wales was established. The work was not performed on a 'transitory or casual' visitation to Sydney, as discussed in Xcellenet.' In light of the facts established it was also concluded that the work was not performed in the computer industry in Victoria and that even if such an industry existed in the Asia/Pacific region, that this would not detract from the conclusion that the particular work connected with the project which the respondent had determined to trial in Sydney, was performed in the New South Wales' computer industry. 125 The applicants submitted that the evidence demonstrated that the contracts here in question had the requisite connection with New South Wales. The respondents made no submissions about this aspect, confining their submissions to the merits of the claims advanced. 126 In my view however, on the evidence, the conclusion that the contracts of employment here in question, whether with the first or second respondent, had the requisite connection with New South Wales, was not beyond doubt. 127 The evidence suggested that Macquarie operated in a number of industries other than the banking industry and that its activities in that industry, were not confined to that of New South Wales. There was no evidence which suggested that MCIML was involved in any New South Wales industry. The Full Court, of course, considered that the employment agreements that the applicants and MCIML entered were collateral to their agreements with Macquarie. The evidence demonstrated a proper basis for that view. 128 Nevertheless, the question of whether these applicants were employed by Macquarie to perform work in the banking industry in and of New South Wales, when working in the various Asian countries in which Macquarie was seeking to establish joint ventures with local banking institutions and other local businesses, was not fully explored as the case finally developed. In the course of my consideration of the evidence and the arguments on the merits, however, I have come to the view that there must be considerable doubt as to the existence of the necessary connection between the contracts here in question with New South Wales. 129 The applicants approached Macquarie with an idea, which would have given it entry into various Asian banking markets in which it was not then operating. Macquarie was anxious to penetrate those markets. The applicants were offered and accepted employment in Sydney, but soon afterwards took up residence and employment in Asia, in order to pursue these opportunities. They lived and worked in Hong Kong, Thailand, Korea, Indonesia and Malaysia, seeking partnerships with local banks, to pursue Macquarie's entry into the banking industry operating in those countries. This was at a time when those markets were being deregulated and the parties saw opportunities for Macquarie to establish new businesses, to take advantage of the deregulation in those markets. Apart from the location of Macquarie's head office in Sydney, where executives such as Mr Hall and Mr Moss were based, the connection with New South Wales of the work which the applicants performed under their contracts, was remote, to say the least. There were certainly transitory visits by Mr Bell to Sydney and telephone and email communication, with other employees working there. That this involved Mr Bell working in the banking industry in and of New South Wales, rather than the banking industries of other Asian countries, was by no means obvious. Mr Berg's connection with New South Wales was even more remote. 130 Given the views which I have otherwise reached, it has been unnecessary for me to come to any conclusions about the question of jurisdiction. Had I come to a different view on the merits of the cases advanced, the question of jurisdiction would plainly have had to be addressed and decided. 131 I turn to the fairness of the contracts in question.

The taping of evidence 132 It is convenient to deal with this issue at the outset. Credit was a substantial issue in this case. In order to resolve such questions, it was necessary for me to have regard to what emerged at the hearing as to how the applicants had secretly taped various conversations while they remained in their employment, and how they then dealt with that material in the cases which they advanced. The affidavits in chief sworn by the applicants in 1997 recounted, in considerable detail various conversations which they each had with others, but did not reveal that some of these conversations had been taped. Nor were copies of the transcripts of the conversations which had been made by the applicants and/or their legal advisers attached to the affidavits. 133 In cross examination, the evidence was that Mr Berg had taped one conversation with Mr Downe, while employed by Macquarie. Mr Bell was aware of this, but did not discourage him. Mr Bell then used the same device to record conversations which he had with Mr Downe, Mr Jorgenson, Mr Murray, Mr Busch, Mr McKay, all Macquarie employees and with Mr Ho of AMMB, both face to face and over the telephone. Both Mr Bell and Mr Berg concealed their activities from Macquarie. In cross examination, Mr Bell revealed that he was quite conscious that those who had been taped would have been deeply upset by what he had done and that this conduct would have been regarded by Macquarie as involving a breach of trust and amounting to serious misconduct. He was also conscious that AMMB could have regarded his conduct as a breach of trust by Macquarie. 134 The existence of tape recordings of some unspecified conversations referred to in Mr Bell's affidavits was later revealed to the respondents in October 1998. An offer was made by the applicants to give the respondents access to the transcripts of the tapes and other matters, in the context of conciliation. The respondents' solicitors sought instructions and on 6 November sought to accept that offer. The applicants took the view that the offer had not been accepted within the time limit they had imposed and thus access was not granted. That time limit, 12 noon on 6 November, was fixed by the applicants that day, in an advice given to the respondents' solicitor after 11am. The respondents' solicitors indicated at 12.30pm that they had been instructed to accept the offer and asked for a time and place for the inspection. The request was repeated and it was not until April 1999, that the inspection was refused, by the applicants' solicitors. The reason given was that the offer had not been accepted prior to noon on 6 November. 135 Production of the tapes was later resisted by the applicants. This was dealt with in an interlocutory judgment of 26 April 2001. (See [2001] NSWIRComm 82). The end result was that the respondents were not given access to the tapes until the start of the hearing before me in July 2001. 136 The respondents had in the meantime filed affidavits sworn by those involved in these conversations, prepared without access to the tape recordings or transcripts. In the affidavits filed by the applicants in reply, reference was made to the tape recordings which they had made of some of these conversations. Transcripts of some of these conversations were annexed to the affidavits of both Mr Bell and Mr Berg and others have been supplied. 137 The cross examination of the applicants revealed that the recordings were made without the knowledge of the persons with whom the conversations were held. Mr Bell had also recorded other conversations not referred to at all in his affidavits. Transcripts of those conversations had also been made, either by Mr Bell or his lawyers. In cross examination, Mr Bell confirmed that he had had access to all of these transcripts before his affidavits in chief were sworn and that he had checked the transcripts against the recordings, before he swore his affidavit. He was certain of their accuracy. Mr Bell also conceded that in some of the conversations to which he did not refer in his evidence, matters relevant to the claims he advanced were discussed. 138 In cross examination Mr Berg's evidence was that he had only taped one conversation with Mr Downe; that he had never taped a conversation before and was uncomfortable doing so; he went out of his way in Vietnam to acquire a tiny tape recorder used by the secret police in Vietnam; and that he had only done so because Mr Downe was not honouring the agreement which he and Mr Bell had reached with Mr Hall and Macquarie. He wanted an accurate record of Mr Downe's view, attitude and lack of intention and did not reveal to him that he was being taped because he did not believe that somebody who had an intent to not live up to the law, would say the same things they otherwise would. Mr Berg had prepared the transcript not long afterwards; it took hours to make from the tape and he had used it when obtaining legal advice about his position, before the termination of his employment. Mr Berg said that it was his idea to make the recordings and not his lawyers. He had told Mr Bell what he had done, showed him the transcript of the conversation and gave him the device, so that he too could use it to record conversations. 139 Cross examination of Mr Bell and Mr Berg revealed that Mr Berg had copies of the tapes which Mr Bell had made of various conversations which he had had with others. Mr Berg gave copies of those tapes to a number of other people in the United States. These people were entirely unconnected with the contracts and events here in question. One or more of these individuals created a website on the internet, which went into the details of the dispute and the resulting litigation between the parties. The evidence was that it was possible to download and listen to the tape recordings from that site, which also included notes Mr Bell had made of a conversation he had had with Mr Downe in a plane, which he had not taped. Mr Bell's evidence was that he had never accessed the site, but was aware of it and upset about its existence. Only one of the respondents' witnesses, Mr Hall, appears to have attempted to access the website. His evidence was that he had tried to do so, but had been unsuccessful. 140 As I have already noted, despite the applicants having access to the tapes and transcripts at the time their first affidavits in chief were sworn in 1997, no reference was made therein to the making or existence of the recordings. It emerged at the hearing that what was said by the applicants in their affidavits as to their conversations, differed in a number of important respects from the transcripts which had been made of these tape recordings. 141 In cross examination, Mr Bell repeatedly agreed that he had set out to ensure that his affidavit evidence included a fair and accurate report of the conversations he had recorded. He insisted they were accurate; having been made by he and his legal advisors. He could not explain how omissions and alterations had occurred when they were put to him, although in re-examination he gave evidence as to how his affidavit had been prepared. The implicit suggestion was that it had been the actions of his lawyers in preparing the affidavit, rather than any step he took himself, which had led to the omissions. Mr Bell said that it was his lawyers who had chosen what aspects of the taped conversations were to be included in his affidavit, rather than himself, although in cross examination his evidence repeatedly had been that he had taken care to ensure that his affidavit was accurate, included relevant material and did not put any of the conversations deposed to, out of context. 142 After the tapes were produced at the hearing the respondents had transcripts of the recordings prepared by Unisearch and their solicitors. Those transcripts differed in material respects from those which the applicants had prepared. What emerged was that certain aspects of the conversations which appear on the tapes, were also inaccurately recorded in the applicants' transcripts. Even where their transcripts were accurate, some parts of the conversations extensively quoted in their affidavits in chief, had been altered in a variety of material ways, most often by omission, but also by addition. By way of contrast, the accuracy of the transcripts prepared for the respondents was accepted by the applicants. 143 In re-examination, Mr Bell's explanation of his purpose in making the recordings was that he had cause for concern that Macquarie was changing the deal and he simply wanted an accurate record, so that he had a clear and accurate statement of what Mr Downe believed the relationship was. Mr Bell also explained how his affidavits were prepared. His evidence was that he assumed that the tapes and transcripts could all be submitted to the Court with the affidavits and that it was his lawyers who chose the conversations included in his affidavit. In re-examination, Mr Bell was also taken to various of the problems in his affidavits. Mr Bell's evidence was that, in his view, the alterations had no consequence for the context in which the conversations took place. 144 That view was difficult to accept. I am entirely satisfied that the alterations put some of the conversations upon which the applicants relied in the case which they advanced, in a materially different light to that in which they were initially portrayed. 145 Mr Bell explained that he did not inform those he was taping of his desire to record their conversations, because then he would have had a very different conversation with them and they would not have been as unguarded, or forthcoming, in what they said to him. He also accepted in cross examination that he had steered these discussions in particular directions and had conducted himself in such a way as to give the others involved in his conversations an impression as to his own attitude in relation to the matters being discussed, which was inaccurate. 146 An example of this approach was revealed in one transcript where Mr Bell had inserted numerous editorial comments, which appeared in italics. In the conversation which he had with Mr Downe on 27 June, Mr Bell raised with Mr Downe the termination of Mr Berg's employment. His transcript of this part of the conversation was to this effect: 'MB To what extent was Allan involved in the decision to get rid of Charles? Not at all?

AD Other than bloody Jenkins sits there and says he saw the guy in Hong Kong and he is a nutter.

AD But Ah Allan would associate your name with Charles' whom Jenkins views, for a long time, as basically a fruit cake. What is the problem is that Allan has in his mind two equations. It says yes I know a bit about Mike Bell, he's the guy that brought that idiot. Whether it is true or not I don't' care. Right, I quite like Charles I don't think he can work for us so I am happy to stick by my decision, But, in terms of going forward, in terms of where Allan gets this perception of should he trust you to run a bit of Asia. It's all in there ( pointing to his head ). AD I did not speak, I have not spoken one word to Allan about Charles. Absolutely deliberately. Uh Uh because I just don't want Allan to even you know, I want Allan to as much as possible not to include other? It goes against the both of us in terms of what we are trying to do.

MB Hmmmm yeah I agree ( want to appear onside during the conversation) '

147 By way of comparison, Mr Bell's affidavit in chief omitted this indication of his agreement with Mr Downe. 148 In cross examination Mr Bell accepted that at the time of this conversation, he agreed with Mr Downe, that it would be in neither of their interests, to raise Mr Berg's position with Mr Moss. Mr Bell could not explain how this omission had occurred, but resisted the suggestion that the omission had been deliberate, or that it had changed the flavour of the conversation in question. I cannot accept that view. Mr Bell also agreed that he had deliberately adopted a strategy of agreeing with what Mr Downe was then putting to him, in their conversations, in order to keep Mr Downe talking about the topics he was raising. He also agreed that he had in fact made no complaint to Mr Downe about the termination of Mr Berg's employment. Nor had he suggested that it had involved any breach of Mr Berg's contract of employment, or any repudiation of his own contract. 149 Mr Bell also accepted that he was aware that Mr Downe trusted him at the time of these conversations and that he was encouraging Mr Downe to be frank with him. He did not accept that his approach in steering and recording these conversations was unfair to Mr Downe. He agreed that he then occupied a very senior position at the bank, a position of trust, unusual in the geographical isolation in which he worked. He agreed that Mr Downe was sharing confidences with him, including in relation to the development of joint ventures which the bank was pursuing, which he would not share with other employees. He, nevertheless, disagreed that he was abusing that trust and confidence. That was a view also difficult to accept on the evidence. 150 Mr Bell also accepted in cross examination, that Mr Downe, Mr Moss and the respondents would have regarded the making of such secret recordings in a most serious light. He accepted that they would have been very upset, would have regarded this conduct as a breach of trust and might even regard it as amounting to misconduct by him. One of the recordings was of a conversation between Mr Bell and Mr Ho, the senior employee of AMMB who was its representative in Macquarie's joint venture in Malaysia. Mr Bell also agreed that Mr Ho would have regarded this secret recording of the conversation in a most serious light, even that it might have put the joint venture with AMMB in jeopardy. Mr Bell sought, in dealing with these questions, to place some emphasis upon the use which he made of the recordings. He emphasised that if he had not used the recordings in the proceedings against the respondents, but had perhaps revealed their existence in other circumstances, or had never revealed them at all, that the respondents and the people involved in the conversations might have taken a different view. The evidence of Mr Downe and Mr Ho confirmed the serious light in which AMMB and Macquarie would view this conduct. 151 It was Mr Downe's evidence that had the taping, in which the applicants had engaged come to light, it would have led to the termination of their employment by Macquarie. Mr Ho's evidence was that it amounted to a serious breach of trust and if it had come to his knowledge, he would have taken steps to have Mr Bell removed from any further involvement with the joint venture. His personal friendly relationship with Mr Bell made the breach worse, in Mr Ho's opinion. 152 The tapes showed that Mr Bell was seeking to gather information not only as to his own position, but also that of Mr Berg. Mr Bell explained that it was Mr Berg's idea to make the tapes and that he had listened to the one tape which Mr Berg had made. Mr Bell also retained copies of the tapes which he provided to his lawyers. Mr Bell's explanation of the device used for the recordings, the rather elaborate steps he took to conceal its use while making the recordings and the approach which he adopted in his conversations, upon which real light was thrown by some of the editorial comments inserted into the transcripts which Mr Bell had prepared, on his evidence, for the purpose of instructing his lawyers, can only be understood as Mr Bell deceiving those with whom the conversations were being held, in order to further his own ends. 153 It is also important to note that one of the deliberate omissions from Mr Bell's affidavit evidence in chief was any reference to discussions between Mr Bell and Mr Downe about the approach made by Mr Bell to the Indonesian joint venture partner, PDFCI, about the possibility of Mr Bell leaving Macquarie and becoming an employee of PDFCI. The evidence as to these events can only be viewed as disadvantageous to the success of the claim being pressed by Mr Bell in these proceedings. Mr Bell gave evidence about these matters in his affidavit in reply, but in cross examination denied that he ever considered that employment with PDFCI would involve him in a conflict of interest if he were to, as he explained, to drive Macquarie's interests from the PDFCI side. He rather regarded it as a 'win win' situation. 154 The upshot of the evidence as to how Mr Bell had prepared his affidavit evidence and earlier, the transcript of the tape recordings, was that while his stated purpose in making the tapes was to keep an accurate record of what had been said to him, his affidavits were not prepared so as to give an entirely accurate reflection of what was recorded on the tapes, or what was said in the conversations. I do not accept that Mr Bell's legal advisors should shoulder sole responsibility for the preparation or accuracy of the affidavits which Mr Bell swore in these respects, although their involvement gives rise to a serious question as to the responsibility which officers of the Court have in relation to affidavit evidence which they must be aware is not accurate. I could not find Mr Bell's expressions of surprise as to the omissions and alterations in his affidavit as convincing, having regard to the way in which the recordings were made and transcribed. Nor did his later explanation of his lawyers' responsibility for these matters advance matters. 155 I do not overlook that the transcripts were attached to a reply affidavit or otherwise provided. Nevertheless, it cannot be overlooked that those transcripts were neither complete, nor accurate. 156 Inevitably, this led to a position where Mr Bell's evidence had to be approached with caution, especially where his evidence was not supported by recordings, or was contradicted by the evidence given by other witnesses. The evidence given by witnesses called by the respondents as to the conversations in question was prepared without the assistance of these tapes and transcripts. In some respects, their version of what had transpired was supported when reference was made to the tapes. The discussions in relation to Mr Bell's approach to PDFCI for employment, was one such example. The complete transcripts of these discussions and the cross examination, put the circumstances in which Mr Bell's employment came to an end, in quite a different light to how he sought to portray it in his case. He accepted, in cross examination for example, that as a result of his approach to PDFCI, it had become concerned that he would end up working for one of its competitors. He and Mr Downe were discussing no compete contracts for Macquarie staff working on the joint venture. The management of those concerns obviously affected the negotiations being pursued by Macquarie in Indonesia, as well as Mr Bell's own concern in relation to his income and position at Macquarie and whether he should work in Indonesia or pursue the Korean joint venture. Mr Bell's concerns about Mr Busch's position in Indonesia were similarly not frankly dealt with in his evidence. He omitted to refer, for example, to a conversation with Mr Busch which he had recorded, in which the issue as to Mr Busch not being business head had been resolved to everyone's satisfaction including, Mr Bell's. 157 Mr Berg's position was a little different. While in cross examination he expressed his discomfort at having made his recording, he took the view that he had done so as a matter of self defence, given Mr Downe's stated intention of not honouring the agreement which the applicants had made with Macquarie. He also said that he did not know what attitude Mr Downe or Mr Moss might have adopted to the making of the tapes and had never considered what Mr Moss might have thought. He thought Mr Downe's attitude might have been 'all is fair in love and war'. 158 Mr Berg had no difficulty in explaining in cross examination how the omissions in his affidavit had arisen. He explained that it was only matters of no or little relevance, which had been excluded by his counsel for the purpose of brevity. He was happy with the resulting trade off between brevity and accuracy. He was content that the omissions had not changed the context of what was left. That explanation was entirely unconvincing. The affidavit contained not only material omissions, but also alterations. Furthermore, the transcript prepared was itself inaccurate in a number of respects, when compared to the transcripts of taped conversations prepared for the respondents. A comparison of the two transcripts showed a number of substantial differences. 159 Mr Berg's eventual explanation of this, having given it some thought, was that he had been tired when transcribing the tape and, in the interests of brevity, had summarised parts of it. He did not believe that what he had omitted changed anything of substance. If this explanation truly represented the truth, Mr Berg's earlier evidence that the transcript he had prepared was an accurate record of the taped conversation, was also inaccurate. I am satisfied, given the nature of the inaccuracies, that the differences between the actual conversations and what Mr Berg's affidavit recorded them to have been, were not explicable simply as the result of either transcription errors, or an attempt at a summary by anyone. 160 Mr Berg's evidence that omissions were made because what was said was not relevant and was made in the interests of brevity was also difficult to accept. The claim advanced was that the original agreement made by the parties was not honoured by Macquarie and that representations it had made were not adhered to, making the contract unfair. In that context, an expression of Mr Berg's opinion while employed, that the bank had been fair to him, was plainly relevant to the claims here advanced under s106. That comment was not included in his affidavit. Mr Berg's explanation in cross examination that the comment related only to what he was being paid, does not alter the position. Here, after all, one claim advanced was that Mr Berg should have been paid a bonus. 161 The approach adopted and the omissions and alterations made, have led me to the view that Mr Berg's evidence too, must also be approached with caution. 162 It is also convenient to note at this point that both Mr Bell and Mr Berg demonstrated a remarkable memory as to the detail of their early discussions with Mr Moss and Mr Hall, especially the latter. Some of this evidence accorded with that given by Mr Moss and Mr Hall, but much did not. Mr Berg explained in cross examination that he had not taped these discussions, but could recollect them in such detail, because he was making a life changing decision to take up employment in Asia. Even if it be accepted that the applicants had such remarkable memories as their affidavits suggested, I became concerned that their recollection of these discussions had been embellished or improved, in order to advance the claims they were pursuing. This concern was heightened by the evidence about the tape recordings which I have dealt with. 163 The upshot was that I came to the conclusion that in their evidence the applicants had sought to elevate the proposal with which they had approached Macquarie and the plans they prepared for Macquarie, together with the matters dealt with in their initial discussions, particularly with Mr Hall, to a level which was not warranted and not reflective of what had in fact, occurred and been agreed. Their evidence about these matters needed to be approached with considerable caution, as a result.

Mr Bell 164 I turn then to Mr Bell's claim. Some of the conclusions which I have reached apply with equal force to Mr Berg's case, where many of the same claims were advanced. 165 It is helpful to set out the letter sent by Mr Bell to Mr Downe on 18 July, when he took the view that his contract of employment had been repudiated. It provided: 'I have attempted to clarify with you (and I have recently been pressing you) about what your understanding of my contract with the Bank was. Broadly, my contract with the bank was to implement the proposal put forward by me and Charles Berg to set up and manage joint ventures in East Asia. The scope of the set up and management was to be consistent with the concept of taking the business risk in doing so and the philosophy of the Bank to allow a high degree of management control to entrepreneurs willing to establish businesses for Macquarie.

Thy contractual relationship that I had with the bank involved an agreement, which, amongst other things, provided:

1. That I have control over the joint ventures that were established; 2. That Macquarie Bank would supply and allocate sufficient resources to assist in the establishment and conduct (for its part) of the joint ventures; 3. That the resources applied to the joint ventures would include staff with appropriate levels of experience; 4. That the resources applied to the joint ventures would include the Bank's best available technology and systems; 5. That I would be remunerated by the agreed bonus.

My recent discussions with you confirmed to me that the bank will not comply with its agreement, but most especially on the terms referred to above.

You have indicated to me that you are not prepared to meet these contractual terms.

As a consequence the bank has repudiated the agreement.

I have no alternative but to accept the repudiation.

I understand the MOU with PDFCI is about to be signed. It is not practicable that I walk away, without the MOU being completed. I am ready, willing and able to do what I can to bring this about.

In the circumstances I am prepared to give notice that the last day of employment will be 31 August 1997.'

166 This letter was at considerable odds with the evidence of the events which preceded it. There was no evidence that Macquarie had sought to terminate Mr Bell's employment. To the contrary, given the tenor of the ongoing discussions between Mr Bell and Mr Downe, as explained by Mr Bell in cross examination, together with the payments and options which he had recently received from Macquarie, it must be accepted that this letter would have come as a surprise to Mr Downe, as he said in his evidence. 167 Mr Bell's decision was premised on the basis that his contract had been repudiated by Macquarie, the specified contractual terms not having been honoured. That approach was in stark contrast to Mr Bell's prior discussions with Mr Downe and later, what was claimed in the summons initiating these proceedings. There it was said that the contract was unfair, because essentially these same terms were representations, not terms of the contract. It was claimed that the contract therefore need to be varied so as to insert these terms into the contract, in order that the identified unfairness be rectified. These two positions are plainly irreconcilable. They cannot both be right. Either Macquarie repudiated the contract which contained the terms in question, or Mr Bell resigned from a contract which did not contain them, because they were representations which had not been honoured. There is, of course, another possibility, namely that Mr Bell resigned in circumstances where his contract did not contain the alleged terms and where the alleged representations had not been made. This was Macquarie's case. 168 Given the terms of the summons pressed in these proceedings and the case brought by Macquarie, which also denied that the terms alleged in Mr Bell's letter of 18 July ever formed a part of the contract, it must follow that it was common ground the contract did not, in fact, contain the terms in question and that Mr Bell resigned from his employment. Neither repudiation, nor constructive dismissed as a consequence of such repudiation, can thus arise. The analysis of Bleby J in Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia (1999) 90 IR 211, does not assist me in reaching any different view here as to the repudiation of Mr Bell's contract. 169 If the terms of the contract alleged by Mr Bell on termination to have been breached had actually formed a part of the contract between the parties, this part of the summons, as framed, would have been otiose. The claims here advanced were that the contract was unfair, because these terms were representations which were not honoured by Macquarie, with the result that the contract should be varied, so as to insert them. 170 It follows that, at best, Mr Bell's claim can be approached from the point of view of constructive dismissal, on the basis that Macquarie's conduct was such that it forced Mr Bell's resignation - see for example the discussion in Allison v Bega Valley Council (1995) 63 IR 68 at 72-77. The question, so approached, can be put in this way - was Macquarie's conduct such that it was the real and effective initiator of the termination, even if the position was that Mr Bell resigned his employment? This, of course, was not a basis upon which the applicants' case was advanced. On the evidence, it was a conclusion which was not open, in any event, for reasons which I will explain. 171 In assessing the claims made, it is relevant to note that this was not a case where the applicants had been headhunted by Macquarie, or where the applicants had chosen to take up employment with Macquarie from amongst a number of other institutions, then interested in employing them to pursue their ideas. There was a suggestion that Mr Bell had been offered a position elsewhere through a head-hunter, at the time he approached Macquarie. He was, nevertheless, in a position where he was seeking to leave his employment at Barclays. The applicants had approached Macquarie with an idea as to business opportunities which Macquarie could pursue in Asia. They were each seeking to leave their employment if some institution were prepared to employ them to pursue these ideas. On Mr Hall's evidence there was then a meeting of minds about the pursuit of such opportunities, which Mr Hall had also been contemplating in the context of deregulation of the Asian markets. All of the parties then believed that those opportunities had the prospect of financial reward for all of them. They were later proved wrong, but nevertheless, the applicants were employed after the Executive committee's approval, on Mr Hall's urging. 172 The relationship came to an end some two and a half years later, in circumstances where the parties' early expectations had not borne fruit. None of the profit projections, which Mr Bell and Mr Berg had advanced, had been achieved. Mr Downe and Mr Hall had by then become convinced that the contribution being made by Mr Berg to what was still being pursued, was not sufficient to warrant his continued employment. In submissions, it was argued for the applicants, that once Mr Berg had been dismissed, the 'team' was gone, that being one of the bases upon which Mr Bell and Mr Berg had been employed. I note that this was not a complaint made in Mr Bell's termination letter, nor in either of the summonses and it was not a view which Mr Bell or Mr Berg ever appear to have expressed to Mr Downe. Indeed, Mr Bell and Mr Berg appear to have ceased working together as a 'team' to establish businesses for Macquarie fairly early in the piece. There was no such teamwork, which led to the establishment of the Malaysian joint venture, or indeed what was achieved in Indonesia by Mr Bell. The respondents submitted that this was a claim which could not properly be advanced in submissions for the first time. I agree. It was, in any event, a claim not made out in the evidence. 173 The evidence to support the view that the representations referred to in the summons had been made by Macquarie, but were not honoured, was said to be found in the September 1994 business plan 'as varied from time to time', with which Macquarie was initially approached and the conversations which the applicants had with Mr Hall at that time. On the applicants' evidence these conversations were not the subject of tape recording, although Mr Hall had a suspicion that they were, given the detail of what the applicants appeared to recollect. Much of what was specifically asserted by Mr Bell and Mr Berg was not denied by Mr Hall, who could not recollect the detail of the conversations, although the tenor of much of what was asserted was firmly rejected. I have already noted my reservations as to the accuracy of the applicants' recollections of those conversations. Their approach to accurately reflecting in their affidavits conversations of which they had a complete record left me entirely doubtful that they had not similarly enhanced their version of the conversations which they elsewhere advanced in their affidavits. 174 Even if their recollections had been accurate two problems, nevertheless, flowed from the case which the applicants advanced. The first was that the business plans relied upon themselves did not support significant aspects of what the applicants claimed had been agreed. The second was that the claims made as to the alleged representations, which it was asserted had not been honoured by Macquarie, largely ignored what had transpired in this relationship between the time it commenced and when it concluded. 175 These were significant difficulties, not only for the case which Mr Bell advanced, but also that of Mr Berg, given the way in which his claim was framed. I will return to this below. While the Act requires the Court to have regard to relevant conduct (s106(2)), it is the conduct of all of the parties which must be considered. Evidence was here led by the applicants that they and Macquarie had agreed to various changes in direction, when they were unsuccessful in achieving what had been outlined in the December and January business plans. The applicants' claims nevertheless in reality, either ignored these developments, or sought to treat them as breaches of the original agreement, even when they had been expressly agreed. 176 The summons sought a number of variations to the contract beginning with a term that Mr Bell be employed to implement the September plan with which the applicants approached Macquarie. The evidence showed that neither of the applicants were ever promised such employment. That plan never went to the Executive committee. 177 The applicants were asked and did produce a specific proposal for Macquarie. This was the December plan, which was put forward to the Executive committee by Mr Hall before the relationship between the parties was established, to explain why it was proposed to employ them. It went forward on the basis that Mr Hall was seeking authority to employ the applicants, in order to 'explore opportunities in Asia', of which the matters outlined in the business plan were examples. Mr Hall was then authorised to offer the applicants employment. He did so and they accepted those offers. Their letters of appointment were in fairly conventional terms. It is impossible to see anything inherently unfair in them, even though they made no reference to the December business plan. 178 There was then a further plan devised for Macquarie in January 1995, after the applicants had been employed. This led the Executive to approve the proposals being pursued, subject to the submission of further papers, before any specific business was pursued. The evidence showed that the applicants had never been employed to implement the September business proposal with which they were then approaching numerous potential employers. Nor were they employed to implement the December or January plans. Neither of the two later plans were a variation of the September proposal. Both plans outlined ideas to be pursued by the applicants when employed by Macquarie. They did so with Macquarie's support. 179 The applicants' case centred around these three business plans, complaining of Mr Downe's ignorance of them in 1997 and Macquarie's failure to them adhere to them. As I have found, the applicants were never employed to implement the September plan. When the two versions of the plan put forward to the Executive committee are considered, it is apparent that what Mr Bell and Mr Berg there proposed in late 1994 and early 1995, was never achieved in any event. While the relationship continued, so long as Mr Hall headed the Treasury & Commodity Division, the parties acted to accommodate that failure. This does not appear to have been a matter of complaint by either the applicants or Macquarie at the time such accommodations were made. Mr Hall soon regarded the early plans as entirely irrelevant to what the parties were pursuing. The plans were in fact never even provided to Mr Downe, either by Mr Hall or either of the applicants. He, too, regarded them as irrelevant to what was in fact being pursued in 1997, when he became head of the Division. 180 Mr Hall's attitude and that of the applicants, demonstrated an acceptance that the plans became irrelevant over time. This seemed entirely understandable on the evidence. For example, the 1995 plan envisaged that partnerships would be established in 1995, in Thailand or Korea. None were ever there established. The plans also envisaged that a business be established in Thailand, with the employment of a number of staff and the generation of income of $1.5million to $2millon in 1995, to be at least doubled in 1996. That also did not occur. Indeed, no income at all was generated from any of the ventures proposed in these business plans, although significant expenses were incurred. 181 By August 1997, when Mr Bell resigned from his employment, the only joint venture which had been achieved was that established in Malaysia with AMMB in 1996. That was the only business which was ever established as a result of Mr Bell's work and which ever generated any income from his efforts. Even the Indonesian joint venture, which Mr Bell regarded as being imminent when he resigned, did not proceed. On any view, Mr Bell was handsomely rewarded for this work. It appears that Mr Berg's efforts never led to the establishment of any business and never generated any income at all. He was not involved in the establishment of the Malaysian joint venture. 182 In re-examination, Mr Downe explained why, in 1997, he did not pursue Mr Berg's suggestions about the original business plans. By that time, he had been in constant discussion with Mr Bell about their plans, for a considerable time. He was aware of what their plans were and what was being pursued by Mr Bell. He regarded plans made several years earlier as entirely irrelevant. It was Mr Downe's evidence that in this industry it was difficult to plan years ahead. The bank constantly had to change its plans, to deal with the circumstances which emerged. His view was that at that point, they had more knowledge of the existing joint venture, local product applicability and were dealing with existing circumstances for opportunities and staff. 183 At this point Macquarie took the view that Mr Berg's further employment was not warranted, given that it had lost confidence in him. A different view was taken in relation to Mr Bell, who was accepted as having been successful and was remunerated accordingly. The applicants' failure to achieve what the original plans envisaged for 1995 and 1996 was not an issue. Indeed, unlike the case here advanced by the applicants, the evidence demonstrated that from the outset the parties' plans were fluid and developed in response to the opportunities and disappointments which they encountered during the course of their relationship. That so much was recognised by Mr Bell himself, relatively early in the relationship, was apparent on the evidence which he himself led. For example, when he was recruiting Mr Jorgenson for employment by MCIML in September 1995, his facsimile message outlining his job description said: 'The nature of MICM's business is such that it will pursue a strategy which is consistent with maximizing income and achieving the corporate objectives of Macquarie Bank. This means that over the next several years MICM's business mix may change depending on the market environment and the opportunities presented to us.'

184 Mr Berg taking leave without pay at times when he had nothing to do, when he felt bored and offering to resign because he took the view that he had nothing to contribute to the business opportunities which Mr Bell was exploring, evidenced a similar recognition. 185 Seen in that context, Mr Downe's lack of familiarity in 1997 with, or interest in, the original plans developed in 1994 and 1995 seems entirely understandable, particularly given the context in which Mr Berg was raising those plans with him. That was at a time when both Mr Downe and Mr Hall had formed the view that Mr Berg had not made any contribution to Macquarie, as he plainly had not, on the evidence. He had produced nothing tangible, in reality had nothing to do, had taken leave without pay, and in Malaysia had been refused employment in the Malaysian joint venture by AMMB, who did not wish him to remain there. Mr Downe, about to replace Mr Hall as Head of the Treasury Division, had also lost confidence in Mr Berg and was seeking to manage the termination of his employment, while giving him an opportunity to work out his notice, so as to maximise the possibility that the Eurobond trade, which he had such high hopes of achieving in Malaysia, could materialise. Mr Hall agreed. The Eurobond trade never emerged, either before or after Mr Berg's termination from Macquarie's employ. The Malaysian Central Bank never approved the idea. By June 1997, not even Mr Bell could find a basis to support his continued employment. 186 These matters are all relevant to a consideration of the claims advanced in Mr Bell's summons, that the various contracts and arrangements between the parties were unfair, harsh and unconscionable and should be varied, in order to address the deficiencies identified. As I have noted, the first of the variations sought went to insert an express term that Mr Bell was to be employed to implement the proposal submitted to Macquarie in September 1994, 'as varied from time to time by agreement'. 187 The September plan was the one which Mr Bell had developed in his employment at Barclays and which he and Mr Berg were pursuing with a number of potential employers, apart from Macquarie. While it was the trigger for the discussions which ensued with Mr Moss and Mr Hall, the evidence does not permit the conclusion that the applicants were employed to implement that proposal. Mr Hall could not even recollect seeing it in December, although he saw it afterwards and accepted that it was likely that he saw it at the time. Nevertheless, that proposal was never considered by the Executive, which made the decision that the applicants be afforded employment. The evidence was that it was the specific plan which the applicants wrote for Macquarie in December which was put to the Executive committee as an illustration of the type of business proposals which Mr Bell and Mr Berg would pursue in Asia for Macquarie. That plan was by no means a 'variation' of the September proposal, which the parties had agreed. 188 The second plan written in January further refined what was proposed to be pursued and it was the pursuit of what was outlined in this document, which the Executive then approved, but subject to its approval of any specific business. On the evidence it cannot be doubted that this was the basis upon which the parties proceeded together in this employment. This plan contained details of the businesses proposed to be pursued and the income which they expected to generate, if established. That evidence does not lead to the conclusion that the implementation of these plans formed either a contractual basis for the employment of the applicants, or amounted to any precontract representations. Nor does the evidence permit the conclusion that it was unfair that the implementation of the plans did not form a part of the contracts here in question. 189 The evidence was that when the precise proposals contained in the business plan were not achieved by Mr Bell and Mr Berg, other opportunities were identified and pursued. Mr Bell and Mr Berg received considerable support from Macquarie in those endeavours. I can find nothing unfair in any of these matters, which would lead to the conclusion that the contracts here in question were relevantly unfair and would require any variation in order to address any such unfairness. 190 The first time difficulties seemed to develop in this relationship was in late 1996, when Mr Hall's impending retirement and his proposal in relation to his replacement, were raised with Mr Bell. 191 That there was, by then, a concern on the part of Macquarie that the success of the first joint venture in Malaysia was so important that it required attention either by Mr Bell, or another senior employee, hardly seems surprising. After all, the original plans had high expectations of the business and income which could quickly be achieved by Mr Bell and Mr Berg. They had come to nought. 192 At that point, it was known that Mr Downe was to become Mr Hall's successor, a matter about which Mr Bell was unhappy from the outset. He doubted Mr Downe's suitability for the position and had concerns about what this would mean for his own position, given that he was going to report to Mr Downe when he replaced Mr Hall. These concerns seem to have flowed from a view held by Mr Berg that Mr Downe lacked experience, given his age. Mr Bell later had similar reservations in relation to Mr Busch. The evidence suggested that he had particular views in relation to how experience, ability and age were related, flowing from his experiences in Asia. Dr Grub expressed similar views and they were views which Mr Bell later ascribed to PDFCI, even though apparently, their concerns on that front had, in fact, been addressed. This was revealed by the transcript of another conversation with Mr Downe which Mr Bell had taped, but not referred to in his affidavit. 193 Mr Hall had proposed to Mr Bell that Mr Downe should head the Malaysian joint venture for a time, if Mr Bell did not wish to spend the time needed for the establishment of the joint venture. Mr Downe had experience in establishing Macquarie's South African joint venture, but no Asian experience. AMMB was already interested in understanding Macquarie's South African experience. Mr Bell also disagreed with this proposal initially, but on his evidence, accepted what was proposed after consideration. Despite his reservations, Mr Bell was plainly convinced that establishing a working relationship with Mr Downe and having him develop an understanding of what he was working to achieve in Asia, as well as having him work to bed down the Malaysian joint venture, would be in his own interests in the long term. 194 As I have said, what cannot be ignored in an application such as this is the respective conduct of the parties in their relationship with each other. Mr Bell's own evidence was that he accepted Mr Hall's proposal about Mr Downe. It was argued for the applicants that this was when Macquarie began misleading them as to what it was about in altering the original arrangements. On the evidence, I cannot accept that this is what occurred. 195 One can well understand why Mr Bell might have accepted at the time that it was in his own interest that Mr Downe became involved. To that point, he simply had no 'runs on the board' and had generated none of the high profits which the plans envisaged would have been generated by that time. If truly the early plans had formed the basis of his employment in the manner here claimed, Mr Bell was then in breach of what he had promised to deliver. That was not how the parties conducted themselves. It follows that Mr Bell's acceptance of Mr Downe's involvement in the Malaysian joint venture and its consequences, cannot here be ignored. Nor can it be seen as an example of how Macquarie breached the understanding which had been reached at the outset of these relationships, as claimed. In any event, Mr Bell's own evidence was that he agreed to Mr Hall's proposal. The evidence demonstrated neither that he was misled, or that this involved Macquarie reneging on any deal. 196 It is also difficult to see how Mr Bell was disadvantaged by this development. To that point, it had been proposed by Mr Bell and Mr Berg that a number of joint ventures and other business would be operating, generating considerable returns. Despite their efforts, none were. Mr Downe's involvement in Malaysia neither precluded the successful establishment of the joint venture, nor the payment of a considerable bonus to Mr Bell as a result, even though he did not stay in Malaysia to work on its implementation, it also allowed Mr Bell to turn his attention to potential joint ventures in Korea and Indonesia. 197 Mr Bell was still involved in the negotiations with AMMB and obtaining the approval of the regulator, Bank Negara, for the venture with Mr Downe. Mr Downe was later accepted by AMMB to head up the joint venture. Mr Downe was successful in getting that joint venture up and running, before he left Malaysia in March 1997, to take up his promotion as Mr Hall's successor. That success involved considerable work and allowed Mr Bell to pursue other joint venture opportunities in Indonesia and Korea. It also undoubtedly helped in achieving the payment of a substantial bonus to Mr Bell in 1997. 198 It is difficult to characterise these developments as variations to the original business plans, which were agreed from time to time by the parties. The evidence did not show that either the applicants or Macquarie so regarded them. Indeed, as I have noted, the applicants' case here advanced, was that they were inconsistent with the plans. The evidence did not make this out. Rather, it can only lead to the conclusion that the developments were, in fact, consistent with the basis upon which the applicants were employed by Macquarie from the outset. That was, to develop and pursue opportunities in Asia, of which the proposals in the original plan were but examples or illustrations. In Malaysia, that was pursued with Mr Downe's involvement and Mr Bell's express agreement. 199 If it were otherwise, fairness could hardly now result in a variation to Mr Bell's contract of employment, which would require implementation of the 1994 and 1995 plans. In practical terms this would require the parties' adherence to plans which the applicants never achieved, including income of $3,500,000 in 1995 and $9,500,000 in 1996, as opposed to total costs of $2,585,250. 200 The evidence can only lead to the conclusion that the representations upon which the applicants relied, had not been made by Macquarie in the way asserted. Undoubtedly, the various topics dealt with in the summonses were the subject of discussion between Mr Bell, Mr Berg and Mr Hall from time to time. However, neither the plans, nor the precontractual discussions concerned a blueprint for the establishment of new businesses for Macquarie in Asia, which the applicants were employed to implement. What was proposed and accepted was that Mr Bell and Mr Berg would be employed to explore opportunities of the kind identified in the plan, with Macquarie's support. 201 In his resignation letter, Mr Bell complained that he did not have control over the ventures that were established. That complaint was also advanced in the summons, as another term, which should be inserted into the contract by variation, 'within the framework of the general practices and systems of the Bank'. 202 The evidence did not, however, establish that such control had been promised to Mr Bell, nor, in my view, would it do justice as between the parties to vary the contract to now give Mr Bell the control sought. The business plans themselves made no such provision. The December plan envisaged that the core of the management group responsible for building relationships were to be based in Hong Kong. The organisational structure gave Mr Bell no title and had him reporting to Mr Hall. The January plan made no alteration to this proposal. In any event, in June 1996 Mr Bell agreed to an arrangement in relation to the Malaysian joint venture quite inconsistent with he having such control. The discussions on which Mr Bell relied, even on his own version of what Mr Hall had said to he and Mr Berg at the outset, provided no proper foundation for the view that a representation that Mr Bell was to have the control he here sought, was made. Mr Hall's comments, which he denied in any event, that Mr Bell and Mr Berg would be taking the business risk in pursuing these joint ventures, cannot properly be elevated in the way in which the applicants here sought to do. The risks and rewards of what the applicants were employed to do were obvious. Continued employment and substantial rewards in salary, bonus and share options, if the applicants were successful in pursuing the business opportunities identified for Macquarie. If they were not, they would have no basis to expect continued employment. 203 The evidence as to the position in which Mr Bell was employed, as a divisional director of Macquarie, later as managing director of MCIML, and the way in which both he and Mr Hall represented him to those with whom he was dealing throughout Asia, confirmed that while he did not have the control which he sought, he held a very senior position at the bank, but one reporting to Mr Hall and later, Mr Downe. The complaints made that Mr Hall's conduct, for example in discussions with Dr Grub, evidenced some breach of any part of the arrangement between the parties, was not made out on the evidence. Mr Bell appears to have made no complaints at all about such concerns during his employment. In light of all of the evidence, they cannot be regarded as complaints which have any proper basis in either what was promised, or what, in fact, occurred. 204 When Mr Bell resigned there was but one joint venture established. It is also relevant to the claim about control, that the terms of the Malaysian joint venture agreement negotiated by Mr Bell, did not provide for either Macquarie, nor Mr Bell, to have control of the joint venture. In my view such a term would have been a necessary basis for the contractual provision here sought by Mr Bell. Mr Bell's complaint has no proper foundation in the events as they unfolded themselves. Mr Bell had not negotiated such control for Macquarie, nor did it wrongfully exclude him from such control. Mr Bell simply did not obtain terms which would have enabled Macquarie to give him the control of the joint venture, which he sought in his application. 205 Even if the claim was regarded as relating to the position of head of the Malaysian joint venture, it ignored entirely Mr Bell's acceptance in 1996, that Mr Downe should head the joint venture, while he pursued the opportunities he had identified in Indonesia and Korea. That he would have been capable of doing both was not made out on the evidence and entirely ignored his discussions with Mr Hall and what he in fact agreed with him. 206 Mr Bell's acceptance of Mr Downe's role in Malaysia itself has to be considered in the context of the terms of the Malaysian joint venture, the terms of which Mr Bell had himself negotiated. The memorandum of understanding provided that Macquarie was to appoint the business head of the joint venture for the first two years and AMMB, for the second two, with Macquarie then having the right of veto of any particular person nominated. No provision was made for the business head to report to any Macquarie employee. Rather, the structure provided for a joint committee of Macquarie and AMMB representatives to manage the joint venture, as if it were the board of the joint venture. 207 Mr Bell's evidence was that the original business plans did not go into details of how joint ventures themselves were to be structured. That was plainly a correct reflection of those proposals. Obviously both the applicants and Macquarie had to accommodate the practicality of the business environment with which they were faced in Asia, including the terms of the joint ventures which they were able to negotiate. In terms of the business head of the Malaysian joint venture, there was no evidence that in any of the discussions between Mr Bell, Mr Berg and Mr Hall, that an arrangement of the type actually agreed in Malaysia had earlier been contemplated. Nor, however, was there any evidence that Mr Bell objected to that structure as being inconsistent with his agreement with Macquarie, which required that the business head report to him or that he control the joint venture. It would have been curious had there been such a complaint. After all, on the evidence it was Mr Bell who negotiated the terms of the joint venture for Macquarie. 208 Likewise in relation to the Indonesian joint venture, which Mr Bell was engaged in negotiating, when he resigned his employment. The agreement which he there negotiated, did not provide Macquarie with control of the joint venture in such a way that it could have had any basis for giving Mr Bell the control which he here sought. 209 In the memorandum of understanding for the Indonesian joint venture, it was agreed that there would be a committee of management of four, with equal representation by the joint venture partners, but with one of the PDFCI nominees being designated chairman. There was also to be a business manager appointed by the committee, being a Macquarie nominee for the first two years and thereafter the committee being free to appoint anyone it selected as manager. Again, there was no provision made for the business manager or chairman to report to any Macquarie employee and no evidence that Mr Bell had any view that this structure, which he had also negotiated, was inconsistent with his agreement with Macquarie. 210 If, at the time, Mr Bell had truly understood his agreement with Macquarie in the terms which were pressed at the hearing, that he was to have control of the joint ventures, one would have expected to have seen this view being reflected in the memoranda of understanding, which he negotiated for Macquarie with the joint venture partners. It was not. 211 To the contrary, in June 1997, when Mr Bell was pressing Mr Downe for written confirmation of his proposed role in Indonesia, he explained that 'as part of our original business strategy Ray and I had decided that each country JV business required a business head' and related the difficulties which had arisen with Mr Busch becoming the business head of Indonesia, as having arisen because PDFCI had objected to him, upon learning that Mr Busch had had only three years' experience. As a result of discussions over this difficulty, it had been agreed that Mr Bell would himself work as business head in Indonesia for six months. This became a feature of the ongoing negotiations with PDFCI, about the memorandum of understanding from there on. Mr Bell also informed Mr Downe that PDFCI required written confirmation of this from Macquarie. This was apparently untrue. That confirmation was later provided by Mr Downe, but in terms which apparently led Mr Bell to the view that his contract had been repudiated, because of the flat management structure being proposed, despite he being nominated as business head. 212 At that time, Mr Downe was of the view that a joint management structure was desirable. Mr Bell was putting that difficulties with Mr Busch being the business head had emerged, consistently with his view from the outset that he was too young and inexperienced. He sought to conceal that he and Mr Busch had settled their differences about this and that PDFCI's concerns had also been allayed. PDFCI, however, also had concerns about Mr Bell's commitment to the joint venture, given his approach in seeking direct employment with it. Despite what Mr Bell had agreed with Mr Hall in June 1996, that he would stay in either Indonesia or Korea for 12 months to manage a joint venture, he was still not certain whether his financial interests would best be served by he remaining in Indonesia to manage the joint venture initially, or having someone else perform this work while he pursued further joint ventures. All of these matters put Mr Downe's views and Mr Bell's complaints about a joint management structure in Indonesia into context. I can find nothing in these matters to form a conclusion that Macquarie had breached any agreement reached with Mr Bell about his control of joint ventures when established. 213 Even if this claim was viewed as being more confined than the summons suggested on its face, namely to Mr Bell having control of the joint ventures in relation to Macquarie's participation in them, subject to the terms of the joint venture agreements, no different conclusion can result. Such control was not dealt with in the original plans. It was certainly envisaged that in the long term, a position would be created at Macquarie, responsible for all of the joint ventures which it was hoped would be established. Both Mr Hall and Mr Downe envisaged such a new position would eventually be required and had discussed their views with Mr Bell. Mr Bell certainly wanted that position. Mr Downe and Mr Hall also both envisaged that when sufficient joint ventures were established, in the order of three, this role would likely belong to Mr Bell. They had also both encouraged him to get management 'runs' on the board in working to establish at least one of the joint ventures, as Mr Downe had done in Malaysia, to cement his claim to this position, when created. That this became more necessary, given the approach made by PDFCI to Mr Moss, after Mr Bell had approached it direct for employment, seems entirely understandable. That PDFCI had a basis for concern as to Mr Bell's commitment to the joint venture, was, after all, later confirmed when Mr Bell resigned before the joint venture was even in place. It, in fact, then never eventuated. 214 Upon Mr Bell's resignation, the position was that there was only one joint venture which had been achieved and no need for the position which he coveted. It was premature. I can find no relevant unfairness in these matters. 215 There was also a complaint made about the selection and experience of staff engaged in the Malaysian and Indonesian joint ventures. I have already referred to Mr Bell's views about Mr Downe and Mr Busch. He had other concerns with other employees and their positions, some of which I've touched on. The evidence showed that those concerns were not pursued while Mr Bell was in employment, in the way in which he later sought to portray them in these proceedings, as involving a breach of the original arrangement between the parties. Mr Bell sought a variation of his contract, to enable him to select the senior staff who were to work in the joint ventures; the power to hire staff from outside the bank and the power to determine the role which such staff were to play in the joint venture. This claim also needs to be seen in the context of what Mr Bell negotiated in the joint ventures. 216 Both the Malaysian and Indonesian joint ventures did not give Macquarie the rights which Mr Bell was here seeking for himself. Mr Bell's own evidence was that Mr Ho, the AMMB representative on the Malaysian joint venture, for example, refused to agree to the employment of even Mr Berg in the joint venture, despite Mr Bell's personal approach to him. Mr Downe's approach on more than one occasion was similarly rejected. Having that evidence in mind, it is difficult to see how it could be concluded that Macquarie had the practical right to select and appoint employees to the joint venture, in the manner here claimed by Mr Bell for himself. I do not accept that Mr Berg would have been employed by AMMB had Macquarie forced the issue. The terms of the memorandum of understanding and the joint venture agreement itself confirmed that Macquarie did not have such rights. Likewise, the concerns apparently expressed by the Indonesian joint venture partner, PDFCI, both about Mr Busch's appointment as head of the Indonesian joint venture and later Mr Bell's own involvement in the joint venture, confirmed that the terms of the joint venture which Mr Bell was there negotiating did not grant Macquarie the rights which Mr Bell here asserted he should have had. The memorandum of understanding confirmed this. 217 Macquarie could not deliver the control of staff employed in the joint ventures sought by Mr Bell. On his own case Mr Bell was himself instrumental in negotiating the relevant joint venture documents. Given the terms of what he negotiated, the claim advanced in relation to appointment of staff is also one which neither fairness, nor common sense, could warrant being granted. 218 Nor can I conclude that Mr Bell was promised the rights he here asserted at the outset. Even if he was, this claim too ignores the developments with which the parties were confronted, as they had to deal with the failure of Mr Bell and Mr Berg to deliver the businesses envisaged in the early plans and to come to grips with the opportunities which they were able to exploit. 219 These conclusions also impact upon the claim made in the summons in relation to 'constructive dismissal', which turned upon Mr Bell's management participation being reduced substantially below the levels claimed in relation to the control and management of the joint ventures and the appointment of staff. It was argued that Macquarie's conduct in respect of such matters amounted to Mr Bell's constructive dismissal. Such a dismissal was the basis upon which the claims for payment on termination of 2 years remuneration, plus certain bonus payments and share options, depended. 220 The difficulty with the claim so advanced is obvious. Mr Bell, having resigned from his employment, complaining that the bank had breached existing terms of his contract in relation to these matters, then pursued a claim that the contract contained no such terms, but fairness required that the contract be varied to have them inserted. That claim was advanced after Mr Bell had negotiated terms of two joint ventures inconsistent with the claims advanced, immediately placing Macquarie, if the claims were granted, in a position where it would have constructively dismissed him. 221 So understood, the claim is unusual, to say the least and one which I would not be minded to grant, as a matter of justice between the parties. In any event, I am satisfied that on the evidence it is not open to conclude that Macquarie constructively dismissed Mr Bell. 222 There were also complaints made in relation to the technology and systems provided by Macquarie to the joint venture in Malaysia and a claim that the contract should be varied to require Macquarie to provide 'suitable risk management systems, computer systems and support'. Again these claims and complaints were problematic, having in mind the evidence. 223 There was no evidence that Macquarie failed to provide adequate resources of this kind. To the contrary, prior to the termination of Mr Bell's employment, there appears to have been no complaint that the resources provided either to Mr Bell, Mr Berg, or to the Malaysian joint venture was inadequate. 224 Indeed, one of the conversations which Mr Bell had recorded, but which was not referred to in his affidavit evidence, was held with Mr Ho. In that conversation Mr Bell informed Mr Ho that he was going to be speaking to Mr Moss and pressed him repeatedly to raise any difficulties which he wanted Mr Bell to take up with Mr Moss. Mr Ho had no complaints to make. This evidence hardly supported Mr Bell's complaints about the inadequacy of Macquarie's support of the Malaysian joint venture. 225 Mr Downe's evidence in relation to the technology provided to the Malaysian joint venture, was that Macquarie provided its Half Object Oriented Programming System ('HOOPS') and that considerable work was undertaken while the practical operation of the joint venture was set up, in order to integrate that system with AMMB's computer system. 226 The evidence was that one of the attractions of the joint venture to AMMB was the access which the joint venture gave it to Macquarie's system. There was a deal of evidence that in 1998, some months after Mr Bell's resignation, problems occurred with two transactions undertaken by the Malaysian joint venture, and that Mr Ho and Mr Jorgenson were the subject of criticism in relation to these transactions, which were "off the book" transactions. 227 There are obvious difficulties with banks conducting such transactions. There was, however, no evidence from which it could be concluded that these transactions had not been identified or addressed by the joint venture, or that it had placed in jeopardy either the Malaysian or Indonesian joint ventures. To the contrary, the audit systems in place appear to have drawn these transactions to the attention of the joint venture partners in Malaysia, who then addressed what had taken place. 228 The evidence suggested that transactions pursued outside any operating system, even a computerised one, in the first instance requires the involvement of people, who either inadvertently or deliberately do not comply with the system laid down. The evidence was not such as to permit any firm conclusions to be reached about who was responsible for any off the book transaction; whether it was a problem with the system, or resulted from people's failure to adhere to or use the system, either inadvertently or deliberately. Nor could it be concluded that any losses flowed to the joint venture as a result. 229 The evidence as to these events, such as it was, after Mr Bell had left his employment, cannot provide a sound basis for the relief here claimed. 230 Complaint and claims were made by Mr Bell about his bonus payments. They have to be understood in a context where Mr Bell was being paid AUD$300,000 per year. He had been paid a bonus of $138,000 in 1996, a year when no income had been generated by Macquarie as the result of his activities, despite significant expenditure, and at a time when no joint venture or other business had been established as a result of Mr Bell's efforts. He was paid a bonus of $257,000 in 1997, in respect of the Malaysian joint venture, then in operation, even though little profits were then being generated. 231 One of Mr Bell's complaints about the 1996 bonus was that it took no account of future profits, which would be generated by the Malaysian joint venture. At the time this bonus was paid, the Malaysian joint venture had not been entered and had yet to pay Macquarie any profits. On the evidence, Mr Bell, after establishing the joint venture, spent only 13 days in Malaysia thereafter, with Mr Downe living and working in Malaysia to do the work necessary to establish the practical operation of the venture. While Mr Bell was much involved in discussions with Mr Downe and others involved in the joint venture when Mr Downe first commenced that work, his involvement diminished over time, while he concentrated on pursuing other opportunities, especially in Indonesia. Mr Downe eventually was replaced by Mr Jorgenson. 232 In 1997, Mr Bell nevertheless received the biggest bonus of any employee involved in the Malaysian joint venture, including Mr Downe and the highest cross divisional bonus awarded by the Bank. There was no basis in this evidence upon which it could be concluded that these payments were unfair. Nor did the evidence establish that they were inconsistent with any promises made to Mr Bell by Mr Hall in relation to the way in which Macquarie operated its discretionary bonus scheme, or would do so in his case. 233 The claim as to bonus would also have the effect of altering, in part, the discretionary aspects of the scheme. The claim would require that Mr Bell be paid a bonus each year, once particular profits and returns to shareholders were achieved. It would, however, retain certain of the discretionary aspects, particularly as to the amount of the bonus to be paid to Mr Bell, both in relation to the performance of the Treasury and Commodities division of Macquarie as a whole and the Asian operation in particular. 234 The proposed variation to Mr Bell's contract would have the effect of requiring that a 'substantially higher bonus' be paid to Mr Bell from the Asian bonus pool, once returns on shareholders funds reached 'the Target Earnings Rate' for a particular year. One of the difficulties with this claim was that its meaning was unclear. Given the evidence as to other operations conducted by the Treasury and Commodities division in Asia, apart from those in which Mr Bell and Mr Berg were involved, it is difficult to understand why fairness would require that his bonus payments would be 'substantially higher', in the manner claimed. 235 The claim also sought a variation requiring Mr Bell to be appointed an executive director of the bank if certain profit levels were achieved. It is unnecessary to consider these claims. The earnings were never generated before he resigned. 236 I have reached the conclusion on the evidence that Mr Bell's employment came to an end, not because Macquarie had either repudiated his employment or constructively dismissed him, but because he was dissatisfied with his employment. He was at that point dissatisfied with both his level of control of his activities at Macquarie, the position to which he had been appointed and his level of remuneration. He had decided to explore his opportunities elsewhere. That was why he approached PDFCI, an approach which was unsuccessful and indeed backfired, given the approach which it then made to Mr Moss. This confirmed Mr Downe in his view that it was premature to consider creating a position responsible for managing all of the joint ventures which might be established and appointing Mr Bell to it. 237 The evidence demonstrated however that rather than seeking to bring about the termination of his employment, Mr Downe, then the head of the Treasury and Commodities division, remained an active supporter, seeking ways to help Mr Bell overcome this difficulty so that the Indonesian joint venture could proceed, other opportunities in Korea and elsewhere could be explored, and Mr Bell could later be appointed to the position he desired, once three joint ventures were established. Mr Downe was also frank with Mr Bell, as to the improvements he proposed to press for in the bank's bonus scheme, being conscious of Mr Bell's ongoing concern about his remuneration level. Mr Bell deliberately misled Mr Downe in these discussions, as to his own position. He also understood Mr Downe was supportive of his concerns about bonus payments, but he could not be satisfied. The evidence of Mr Bell's conduct up to the time of his resignation letter, including the taping of his conversations with Mr Downe, made entirely understandable Mr Downe's surprise when it was received, confirming that Mr Bell's resignation was not an outcome Macquarie ever sought. On the evidence Macquarie might well have taken a different view, had it been aware of Mr Bell's conduct in taping conversations with bank and AMMB staff. That conduct was plainly inappropriate in the circumstances. None of this evidence assisted Mr Bell's case. 238 Mr Bell had plainly not achieved the successes he envisaged in the business plans he and Mr Berg proposed in 1994 and 1995. He, nevertheless, retained Mr Downe and Macquarie's support, albeit with a view being taken that he had to demonstrate further success in establishing joint ventures, before the position he sought would eventuate. Given the circumstances at the time, this approach hardly appears to have been an unfair one. There was only one joint venture and Mr Bell was receiving high financial rewards, with the potential for further ongoing rewards. He left Macquarie alleging repudiation. The summons advanced in these proceedings confirmed that there had been none and the evidence established that there had been no constructive dismissal. 239 Nor did the evidence otherwise permit the conclusion that this contract was relevantly unfair, so as to warrant the relief claimed. Even if I were to come to a contrary view, the relief here claimed could not have been granted. Mr Bell claimed payment of notice of 2 years' salary, plus bonus, entirely ignoring an express agreement which he had reached with Mr Hall, that in the event that Macquarie wished to terminate his employment, if it no longer wished to pursue opportunities in Asia, through no fault of Mr Bell's, 12 months' salary would be paid to him. Given the circumstances in which this agreement was made, Mr Bell's position, the time during which the employment persisted and the circumstances in which it came to an end, I am unable to conclude that this aspect of the parties' arrangement was unfair, or that Mr Bell should be relieved from it, so as to be granted more generous terms as the result of the Court's order. In any event, Mr Bell resigned and was plainly not dismissed and thus no entitlement to any notice arose. 240 I deal finally with the claims made in relation to the retained bonus and the vesting of share options. These claims must be considered in light of the conclusions which I have reached, that it was Mr Bell who resigned from his employment, without giving Macquarie any notice. It was not Macquarie which brought this employment to an end. 241 I am not satisfied, on the evidence, that any relevant unfairness was demonstrated in either the bonus or share options scheme in circumstances of resignation. Mr Bell certainly did not address his claims as to the operation of these schemes, in circumstances of resignation. Macquarie opposed the claim being entertained on such a basis, given what was advanced in the summons and the basis upon which it was pursued, namely that there had been either a repudiation or a constructive dismissal. 242 Having in mind the grounds upon which the claims were advanced, I am satisfied that this is an objection which must be upheld. See the discussion in Burgess & Ors v Mt Thorley Operations Limited [2002] NSWIRComm 106 at [113] to [119], following the Full Court decisions in Bourke Air Charter v Easton (2001) 109 IR 443 and Vision Publishing Pty Ltd v PK Lane Holdings Pty Limited & Ors (1998) 84 IR 277. 243 As to the option claim, it was argued that Mr Hall had promoted it on this basis: 'One of the big benefits at Macquarie is the opportunity you'll have to participate in the options program we have for our executives. Mike, you'll get options on 50,000 shares coming in at a Division Director level, while Charles will be granted 20,000. And there are bigger benefits if you get promoted. (looking at Mike) When you reach the Executive level, you'll be granted at least another 100,000 options. (looking at me) You'll get another 50,000 (looking at me) if Mike gets you promoted to Divisional Director. We like to think of our employees' option program as one of the bigger incentives for someone like yourselves to joint the bank. It's as good as anything you'll find among the Australian banks.'

244 Mr Bell was granted 50,000 options, to vest in January 1997, which were exercised in June. In July 1996, he was granted 30,000 options which were to vest 25% per year over the ensuing years. This offer was explained as: 'The Plan is a long term incentive plan for senior executives of the Bank and is a significant component of remuneration for these employees. Under the Plan, employees become entitled to be granted five year options over unissued fully paid ordinary shares in the Bank for no consideration. These options give the employee access to some of the benefits of being a shareholder of the bank. In particular, option holders benefit from increases in the bank's share price over time. … … senior executives are invited to apply for options on promotion and where awards are made on the basis of merit. The number of options that an employees is able to apply for increases with their advancement in the Bank. … The options are granted with an exercise price reflecting the market price and about the time of issue. Hence, a grantee has the ability to benefit from any increase in the share price above his/her exercise price ... … Vesting of Options Options are subject to an effective vesting period and cannot be exercised until after the relevant vesting period. In the past, a vesting period of two years has applied. However, for options granted pursuant to invitations issued after 15 May 1996, all tranches of options will carry a staggered vesting period, with 25% of each tranche of options vesting on each of first four anniversaries of the date of grant. If the executive leaves the Bank any unvested options lapse unexercised.

245 Orders varying these provisions were sought, in relation to the lapse of unexercised options and the expiry date, the relevant committee having a discretion as to the vesting period or extend the exercise period, in the event that employment ceased. It was argued to be unfair that no decision to the benefit of Mr Bell had been made by the committee. 246 The result was that the first 25% tranche of the second lot of options vested on 20 August 1997, 9 days before Mr Bell's employment ceased. Mr Bell exercised those options and after some dispute between the parties, received payment of some $50,000 from Macquarie in respect of those options. It was argued that it was unfair that the remaining 75% of the options had been forfeited upon Mr Bell's resignation, given that he was "'pushed' out of his job". Reliance was placed upon the decisions in Westfield Ltd v Helprin (1997) 82 IR 411 at 435-6 and Adams v Westfield Holdings Ltd (2000) 99 IR 382. It was argued that Mr Bell should be entitled to all of the remaining options, having regard to the 2 years' notice sought. (See Canizales v Microsoft Corporation & Ors (2000) 99 IR 426 at 479.) 247 The fact that share options do not vest in an employee who elects to resign, in a scheme which provides for vesting of options over a number of years, while employment continues, (in this case 25% over 4 years), does not thereby make the scheme relevantly unfair. The same conclusion must be reached in relation to a bonus scheme, which contains a retention element. Such schemes plainly enough give employees access to valuable benefits, which, in part, may reward past performance. There is nothing conceptually unfair in such schemes also seeking to ensure retention of staff, in addition to such reward. (See the discussion in Hairman v FileNET Corporation Pty Limited [2001] NSWIRComm 318 at [129] to [130].) That an employee would have been more highly rewarded if the employment had continued on foot, or if the scheme did not contain a retention element, of itself cannot demonstrate such unfairness. Something more must be demonstrated namely, the unfairness arising in the particular circumstances in which the retention aspects of the scheme operate. 248 I cannot accept that the circumstances here arising are at all comparable to those considered by Hungerford J in Adams or by the Full Court in Helprin. Nor does the approach of Peterson J in Canizales assist. All those cases dealt with circumstances where employment had come to an end as the result of action taken by the employer including circumstances of redundancy in Adams. See also Westfield Holdings v Adams [2001] NSWIRComm 293. I can find no unfairness in the circumstances here arising. 249 Here, Mr Bell's complaints centred around the options which he was granted, some of which had vested before his resignation and in respect of which he was paid significant sums after termination. The value of the remaining options was thereby demonstrated, but that value was plainly not sufficient to attract Mr Bell to the continued employment then available to him at Macquarie. It was submitted that Mr Bell had lost access to these other tranches of shares because he was 'pushed out' of his job. That submission was simply not made out on the evidence. 250 As to the claim for pro rata bonus for the work performed by Mr Bell on the Indonesian joint venture, I have not been satisfied by the evidence that there was any unfairness in this part of the contract, which would require a variation so that on termination, Mr Bell should be entitled to a bonus payment, in respect of a year of employment which had not been completed. What transpired in relation to that joint venture after his resignation, was but another reason for refusing to contemplate this claim. That joint venture in fact never went ahead. The evidence in relation to these matters provided no proper basis for any relief. 251 Mr Bell's claim also sought some variations in relation to Mr Berg's position. It is unnecessary to deal separately with these, I am satisfied that they were not made out on the evidence, for reasons dealt with in relation to Berg's claim.

Mr Berg 252 I will not repeat the conclusions which I have reached in relation to Mr Bell's claim, which are relevant to the claims advanced by Mr Berg. They apply with equal force, where similar claims were pressed. 253 I deal at the outset with the claim in relation to 'structured idea brokerage'. The claim was a fanciful one, in my view, given the evidence as to why particular ideas developed by Mr Berg were not implemented. The reasons included the fact that the Malaysian Central Bank refused to approve the Eurobond trade which he had developed. Another business was assessed as being unviable, given the bank's country lending limits. In another instance approval was given for a trade Mr Berg proposed, but by then Mr Bell and Mr Berg were not prepared to take the risk involved, given that they had not yet generated any other income for the bank, which could offset any losses flowing from the trade. Furthermore, Mr Bell confirmed in cross examination that the rupiah trade proposed had nothing to do with the Malaysian joint venture and was not contemplated by the joint venture arrangement or the original plans, nor was the Eurobond trade. 254 The evidence which the applicants led also showed that the Executive had always required that it approve any particular business, before it was implemented. The claim advanced had no regard at all to that limitation. None of the evidence about these matters provided a basis either for a finding of unfairness, or a variation of the contract on the basis claimed, particularly so as to override that limitation. 255 In his evidence, Mr Berg suggested that while he was in Malaysia, he tried to 'counsel' Mr Downe about the terms of the original agreement which Macquarie and he and Mr Bell had reached. Mr Downe had not read that plan and Mr Berg suggested that he should, but did not provide him with a copy of what he was referring to. Mr Downe did not read the plans. 256 Mr Hall confirmed that he had not provided the plans to Mr Downe. He did not regard them as relevant by 1996, when his discussions with Mr Bell and Mr Downe were taking place, about Mr Downe becoming involved in the Malaysian joint venture and later becoming his successor as head of Treasury. 257 In cross examination, Mr Hall explained that the reality was that the original plans were never referred to by anyone, after they had given to the Executive committee. They did not deal at all with the detail of the joint ventures which later emerged. The brokerage operation envisaged in several different countries in which Mr Berg was to be employed was never achieved, nor were joint ventures in several different countries. As a result, the parties had moved to targeting a completely different type of business with AMMB, PDFCI and a proposed Korean joint venture. Mr Hall, nevertheless, agreed that it had always been envisaged that there would be a person on the ground devoted to the job of managing the joint ventures when established. He also agreed that the Malaysian joint venture was run in a way inconsistent with the management structure outlined in the original plans. In re-examination, he explained that this was because the Malaysian joint venture was not applicable to the proposals made in the original plans. 258 Having in mind what was contained in the plans, what had transpired in the meantime and what the parties were then pursuing, which I have earlier outlined, that the original plans had become irrelevant, even before Mr Hall retired, seemed an entirely understandable position. Indeed, it was consistent with the approach which Mr Berg and Mr Bell had themselves pursued in the meantime. The plans, did not, for example, envisage that Mr Berg should take leave without pay, because he and Mr Bell had been unsuccessful in establishing the partnership business in which it was envisaged Mr Berg would be employed. Nor did the plans envisage Mr Berg working in the Malaysian joint venture, as he did. 259 I have already dealt with Mr Downe's evidence as to why he regarded the original plans as irrelevant when they were raised with him by Mr Berg. Mr Berg's evidence as to what constituted him 'counselling' Mr Downe as to the nature of his agreement with Macquarie, cannot on any view be accepted as having amounted to such counselling. If his view at the time was truly as he stated it to be in these proceedings, it is difficult to understand why Mr Berg did not himself simply give Mr Downe a copy of the business plans, or why he did not ask Mr Bell to do so, or did not involve Mr Bell in his discussion with Mr Downe of his continued employment, on the basis he asserted the plans provided. 260 It was Mr Bell to whom Mr Berg reported before he went to Malaysia. In cross examination, Mr Berg asserted that even while in Malaysia, he did not regard himself as reporting to Mr Downe. He agreed, however, that during their discussions he never told Mr Downe that the question of the termination of his employment was not a matter for Mr Downe, but Mr Bell. Mr Berg wanted to join Mr Bell in Indonesia when he left Malaysia, even though no joint venture had yet been established there. Mr Downe could see no role for him in Indonesia, even though Mr Bell was happy for Mr Berg to join him there. The fact was that the original plans also never envisaged Mr Berg working in Indonesia, even if a joint venture were established there. The tape of Mr Bell's conversation with Mr Downe in late June showed that when they did discuss Mr Berg's position, Mr Bell did not argue for Mr Berg's continued employment. It cannot be overlooked that this part of the conversation was excised from Mr Bell's transcript of the recording and not referred to in his affidavit. 261 Mr Bell, on his own evidence, did not put to Mr Downe that the termination of Mr Berg's employment involved any breach of his agreement with Macquarie, nor did he refer in the discussion to the original business plan. Neither Mr Bell nor Mr Berg gave Mr Downe a copy of the plan, or sought to discuss with him what, if anything, it meant for Mr Berg's continued employment at that point. 262 To the contrary, the evidence led by both Mr Bell and Mr Berg made clear that they had long recognised that things had changed significantly since their original proposal was put to Macquarie and had acted accordingly. They had had no success in establishing the businesses in which they envisaged Mr Berg's expertise would be useful. Mr Berg took leave without pay, on his own instigation, because he was bored and had nothing to do. When he returned, he went to Malaysia, where he reported to Mr Downe, but where AMMB refused to employ him in the joint venture, despite requests from both Mr Bell and Mr Downe. Mr Bell was then pursuing further joint ventures in Indonesia and Korea and did not require Mr Berg's assistance, just as he had not when he was pursing the Malaysian joint venture. 263 When he arrived in Malaysia, Mr Berg set about exploring opportunities in Malaysia in areas where he had expertise. He was entirely unsuccessful. By January 1997, Mr Ho did not want him to remain and Mr Downe had formed the view that his employment should be brought to an end. Mr Hall concurred. At that time Mr Hall apparently gave no thought to implementation of the processes which applied to Macquarie employees when being dismissed. This was plainly an oversight. The policy applied to Mr Berg, even given the basis upon which the employment had proceeded from the outset and the reason for the dismissal. 264 The evidence demonstrated that Mr Berg was already then conscious of his difficulty. During his leave without pay he had already offered to resign. Mr Bell refused to accept this, being confident that there would be work for him to perform in the Malaysian joint venture. Given what transpired, this assessment was plainly wrong. 265 In January, Mr Downe informed Mr Berg that Macquarie had come to the view that his employment must come to an end and that he would have to leave Malaysia by the end of March, when he would receive a month's pay for each year of his employment. The evidence showed that Mr Berg had plainly had problems in Malaysia, albeit in his view they had been resolved satisfactorily. He did not want to leave, because he was pursuing the Eurobond trade from which he expected to make a few million dollars a year and which might have opened a lot of other opportunities. After Mr Downe's consultation with Mr Ho, he was given the option of a payment in lieu of notice or working out the notice period, which would enable him to remain until June. He chose the latter, because he wished to pursue the Eurobond trade. I am satisfied on the evidence that Mr Berg clearly understood the position Mr Downe was then putting to him, despite his evidence in cross examination that he did not regard what Mr Downe was saying to him to be relevant, because he did not report to him. This did not accord at all with the taped conversation and Mr Berg's concession in cross examination, that he then understood that the termination of his employment was inevitable. Indeed, the evidence he gave in re-examination as to work which he performed while still employed by Macquarie, but not for it, merely confirmed his understanding that his employment was to come to an end, as he had been informed by Mr Downe. 266 Mr Berg was unsuccessful in achieving the Eurobond trade. In early June Mr Downe raised with him the arrangements for the termination of his employment at the end of June. He persisted in his refusal to allow Mr Berg to join Mr Bell in Indonesia. When advising Macquarie that his last day of work would be 30 June, Mr Berg also asserted that Macquarie had repudiated his contract. The evidence did not establish any foundation for that assertion. Mr Berg persisted with his pursuit of the Eurobond trade, in the belief that the Central Bank could be persuaded to alter its position. He continued even after his employment ceased, without success. 267 Having elected to work out his notice in the circumstances I have described, it is difficult to see that Mr Berg had a proper basis for complaint, that his contract was relevantly unfair, or that he should have received a payment for notice, when his employment came to an end. Given the basis on which he was employed, namely that if the pursuit of business opportunities in Asia in respect of which he and Mr Bell were employed did not succeed, their employment would come to an end; the fact that so far as Mr Berg was concerned, his efforts had entirely failed to achieve any positive results for Macquarie; the length of his employment; what transpired during his employment; the notice of termination which he was given and the circumstances in which he continued to work until the end of June, no requisite unfairness was established. 268 The circumstances of Mr Berg's dismissal do not permit the view that Mr Berg was made redundant. Macquarie had not formed the view that the pursuit of business opportunities in Asia, for which he had been employed, should be abandoned. To the contrary, the problem was that, so far as Mr Berg was concerned, what he had been employed for had not been achieved, his activities had generated no returns for Macquarie, it had lost confidence in him and in those circumstances, it was no longer prepared to employ him. 269 I turn then to deal with the complaint that Mr Berg's dismissal was not approved by Macquarie's Executive committee, as required by the applicable policy. Mr Rothman confirmed early in the hearing that the fairness of the decision to dismiss Mr Berg, was not an issue in the proceedings, having in mind the provisions of s109A of the Act. 270 Mr Downe made the decision to dismiss Mr Berg in January 1997, in consultation with Mr Hall. Mr Downe did not then have authority to implement that decision and assumed that Mr Hall took whatever steps were necessary to have the decision implemented. He was not then familiar with the applicable termination policy. There was no evidence of any decision made by the Executive in relation to Mr Berg's dismissal. Mr Downe consulted with the HR department, in relation to issues such as notice and payment in lieu, which he then discussed with Mr Berg. 271 The proper inference from the evidence was that the Executive had not approved the dismissal, in accordance with the policy. Failure to observe an applicable policy is not, by itself, a basis for concluding that Mr Berg's contract was unfair, as alleged, although obviously it is a matter to be taken into account. Given the views Mr Downe and Mr Hall had formed and Mr Berg's involvement to that point in the pursuit of opportunities in Asia, for which his employment, like that of Mr Bell, had initially been approved by the Executive, it is difficult to imagine that the Executive would have withheld its approval of his dismissal, had the matter been put before it. 272 That particularly follows from the views Mr Downe had formed, having worked with Mr Berg in Malaysia, namely that he no longer had any confidence in Mr Berg, or his ability to represent the bank. That such confidence was a necessary ingredient in this employment relationship, cannot be doubted. The evidence as to the work which Mr Berg was employed to perform; where and how he worked and the level of remuneration he received for that work, made the necessity of a high degree of trust and confidence between these parties self evident. The clandestine taping of his conversation with Mr Downe and his involvement in Mr Bell then setting out to make tapes of his own conversations, copies of which Mr Berg obtained and later supplied to strangers, who created the website earlier referred to, merely confirms the accuracy of Mr Downe's assessment of Mr Berg. 273 In my view, it would be a triumph of form over substance, now to find that Mr Berg's contract was unfair, because of a failure by Mr Hall to follow a procedure requiring reference of the decision to dismiss Mr Berg to the Executive committee, in all of these circumstances. Even if the view were open that the contract was unfair in the manner claimed, as to the failure to refer Mr Berg's dismissal to the Executive committee, questions would obviously arise as to whether any discretion should be exercised in his favour in these proceedings, a matter as to which I have considerable doubt. 274 It is unnecessary however for me to come to any views about the exercise of such a dismissal. There are also other reasons for concluding that the relief sought is not available. The variations sought to Mr Berg's contract included a term that termination shall not be harsh, unjust or unreasonable and a term requiring that the Executive committee first be informed and approve of the dismissal, in accordance with the relevant guidelines, before Mr Berg's employment be terminated. 275 As the majority in Abboud v The State of New South Wales (NSW Department of School Education) (1999) 92 IR 32 discussed at pp49 to 51, complaints as to procedural inadequacies in decisions made to dismiss an employee, have in the past arisen for consideration in applications brought under s106 and its predecessors. At p50, it was said that 'The initial question must be whether the contract permitted the termination of the contract in a manner which was unfair.' It was concluded that the trial judge had there failed to give proper weight to the procedural unfairness demonstrated in that case. It was held at p51: 'In our view, the procedures adopted by the respondent in dismissing the appellant demonstrated that the contract was unfair in its operation, and that the terms of the contract, insofar as it permitted an inquiry of the kind conducted by the respondent, was also unfair.'

276 The operation of s109A did not arise for consideration in Abboud. It was a decision later referred to by the Full Court in Beahan v Bush Boake Allen Australia Limited (1999) 93 IR 1 at p13. There the proper construction of s109A arose for consideration, in the context of the interaction between s106, being concerned with complaints advanced about unfair contracts, as defined in s105 and the unfair dismissal provisions of the Act. The Full Court's conclusions appear at pp41 to 42: 'In our opinion, it is central to the operation of s.109A that an excluded contract of employment is one where it is alleged that it is unfair for any reason for which an unfair dismissal claim could have been made. In other words, and as Mr. Hannaford observed during the second reading debate in the Legislative Council, "if somebody wants to argue that the terms of his contract are unfair, unconscionable or harsh, he will still be able to achieve a variation of the contract by an application" under s.106; and, as Ms. Kirkby said in the same debate, an applicant "will still be able to plead an unfair contract case but this will be on the terms of the contract and not on whether the termination of the contract was unfair". The answers given by the Attorney-General to the concerns expressed by Ms. Kirkby provide further insight, we are satisfied, into the purpose of the amendment having in mind that the intention as to the operation of s.106 was to "circumscribe it to a limited extent" so that "cases that do not essentially involve dismissal will still be able to be agitated under the general umbrella of the unfair contracts provisions". In minimising concern that the amendments were "not as drastic as some might think", the Attorney-General gave clear guidance to the real intent of the amendments when he said that "only the case which is really disguised as an unfair dismissal (in context, we think this clearly should read, as both counsel acknowledged, as "unfair contract") case is to be prohibited under these sections". It is palpably clear, then, that s.109A has the purpose of removing from the unfair contracts jurisdiction those claims which are in truth or essentially involve unfair dismissals. In a very real sense, and having in mind the way in which this jurisdiction developed, such an approach is unexceptional. It is consistent with the views expressed by the Court and the former Industrial Commission in Court Session in cases such as Huskisson R.S.L. Sub-Branch Club v. Sullivan and BNY Australia v. James , as developed in the later cases of Westfield v. Helprin and Harcourt Brace v. Cory . Consistent with the approach there adopted are the decisions of the Court of Appeal, as earlier outlined, in Incitec v. Industrial Court , Walker v. Industrial Court and Rothmans Distribution Services v. Industrial Court . Indeed, the opening words of the explanatory note to the Bill as to its object "to remove the possibility of unfair dismissal claims being dealt with ... under provisions relating to unfair contracts" make that plain. In short, our view is that s.109A operates to exclude a contract of employment from the operation of s.106 only where the unfair contract claim is an unfair dismissal claim in disguise and where essentially it is of the nature of an unfair dismissal. Where a claim challenges the terms or operation of a contract of employment by genuine, not superficial or coloured, reasons related to the contract itself then, in our view, it is a claim properly within s.106 and s.109A has no operation in relation to it.

277 These conclusions must be understood in light of the Full Court's earlier comments, at pp39 to 40: Importantly also, it seems to us, are the provisions of s.88 which set out the matters to be considered in determining an unfair dismissal claim. If a contract of employment is to be excluded by reason of s.109A then it must be for any reason for which an application could have been made by the employee for unfair dismissal. That immediately directs attention, in our view, to the terms of s.88 as to the relevant matters to be taken into account. Those matters have been set out earlier and it only needs to be stated that nowhere do they encompass expressly or by necessary implication the adequacy or otherwise of payments made on dismissal. True it is that para.(f) of the section refers to "such other matters as the Commission considers relevant", but, on the ordinary approach, those matters are to be read ejusdem generis with the matters contained in paras.(a) to (e).

278 Here, correctly in my view, complaint as to the unfairness of the decision to dismiss Mr Berg was expressly eschewed, as falling within the provisions of s109A. The complaints as to the procedural failure to refer the decision to dismiss to the Executive committee before it was implemented, were however pursued. Undoubtedly, on its face that complaint was concerned with the contract of employment. The question which must be answered however, is whether in reality the complaint advanced was concerned with the failure to abide by the procedural step which applied to Mr Berg in any event, under the applicable policy, absent any contractual term to that effect. 279 As the majority in Abboud observed at p50, 'the issue of whether considerations of a procedural nature are pertinent to a determination of whether the dismissal of an employee was unfair, has, of course, regularly been visited in the context of claims for unfair dismissal'. Those cases were accepted as providing 'guidance when dealing with a claim under s106 that the contract has become unfair primarily as a result of the actions of the respondent in terminating it.' Section 109A has however now been enacted and requires consideration. 280 It follows from the judgment in Beahan, that s109A requires that consideration here be given as to whether the complaint advanced in relation to the failure to abide by the applicable procedure, is not one for which an application could have been made for unfair dismissal. That is, is this aspect of the complaint, in reality, an unfair dismissal claim in disguise? 281 Given the provisions of s84, permitting applications to be made in the event that the employee claims that dismissal is harsh, unreasonable and unjust and the many cases which have decided that failure to follow an applicable procedure in relation to dismissal, even if not contractual, may provide a proper basis for the conclusion that the dismissal was so tainted, it must follow that the particular complaint advanced here, failure to follow the procedure provided in the applicable guidelines, is a complaint not available to be brought under s106. This, in my view, follows particularly from the discussion of the Full Bench of the Commission in Antonakopolous v State Bank of New South Wales (1999) 91 IR 385 at pp387 to 390, where it was concluded: 'While the findings of the Commission in Buckman focus on the issue of warnings, the observations apply also to broader tenets of procedural fairness contemplated in s88 and to matters such as those raised in these proceedings. We agree that there is no obligation in the Act to follow any particular procedure when effecting a dismissal. However, a failure by an employer to adopt appropriate procedures when effecting a dismissal, or a failure to follow procedures prescribed in an industrial instrument, or in procedures laid down administratively by an employer, may be properly taken into account by the Commission as part of the consideration of an application brought under s84. Further, as we have noted, where procedures are specified in an industrial instrument or by administrative action, a failure by an employer to apply, or to properly apply, those procedures may in appropriate cases, of itself, support a finding that the dismissal was harsh, unreasonable or unjust. An example of this approach being taken is Johnson v Catholic Education Office, Diocese of Parramatta (1998) 87 IR 57 at 64 where a Full Bench ( Cahill J, Vice-President, Schmidt J and Tabbaa C) granted relief to an employee on appeal on the basis that she had been denied the procedural opportunity to respond to the matters on which the decision to dismiss rested.'

282 Here, there was no doubt that the guidelines relied upon had been laid down administratively by Macquarie. They applied to Mr Berg's employment. There was a failure to adhere to them. That failure was plainly a matter about which complaint was properly available in unfair dismissal proceedings under s84, had the section applied to Mr Berg. Applying the approach of the Full Court in Beahan, it follows that this aspect of the claim was precluded by s109A, together with any other complaints as to the unfairness of the decision made to dismiss him. 283 In my view, failure to follow applicable procedures administratively laid down by an employer, since the enactment of s109A, is not a proper basis for complaint that the contract is relevantly unfair, pursuant to s106 of the Act.

284 Claims were also advanced in relation to bonus. Given the evidence of Mr Berg's performance and the failures which I have described, I am satisfied that no unfairness was demonstrated in the contracts flowing from the fact that no bonus payments were made to him. This evidence warranted no variation or any monetary compensation calculated by reference to the average bonus paid to other associate directors, or otherwise.

Conclusion 285 While there were many complaints here advanced about the conduct of the respondents, the fundamental premises upon which these claims were advanced, were simply not made out on the evidence. The evidence showed that the applicants were never employed to implement the plan with which they originally approached Macquarie, or which they later wrote for Macquarie. Nor were the other promises and representations claimed made. 286 The evidence disclosed that at the time that the parties' relationship came to an end, Macquarie had been providing ongoing support to the applicants in their employment, the basis of which was the pursuit of business opportunities in Asia. Some problems had emerged. One was the difficulties which the parties had encountered in exploiting such opportunities. Another, the views which Macquarie had formed about Mr Berg. 287 The complaints as to lack of necessary support from Macquarie were simply not made out, nor were the allegations that it had repudiated the applicants' contracts, or had failed to honour representations made to them. When Mr Bell resigned, the only business established and starting to show a profit as the result of his efforts was the Malaysian joint venture. He then had ongoing concerns about his earnings, in a context where he was experiencing difficulty in bringing the Indonesian joint venture into existence. He was also uncertain as to whether he wished to remain in Indonesia to ensure its implementation, or to move on to establish a joint venture in Korea, or indeed whether he should even remain in employment with Macquarie. He was interested in a move to PDFCI's employment, which was raising its concern about Mr Bell's commitment to the joint venture with Macquarie. Nevertheless, his success in Malaysia was recognised by the payment of a significant bonus and granting of share options to him. No such recognition was given to Mr Berg, who really had had but the most peripheral involvement in the establishment and operation of the Malaysian joint venture. 288 Despite what was proposed in the applicants' original plans, not surprisingly, given the parties' actual experience of the difficulty and time involved in pursuing opportunities in Asia, reaching agreement on a joint venture and what was then required to be done once the venture was established, to get it up and running, there were a variety of developments and changes in their joint direction. This affected what the applicants were pursuing for Macquarie and how, but did not involve any breach of the original agreements, any representations made by Macquarie or any unfair conduct by Macquarie. 289 The case advanced by the applicants sought to cast these developments over time in a light which did not fairly, or accurately, reflect what had originally been agreed between the parties, or what later transpired in the relationships. Indeed, the applicants sought to treat even matters which had been expressly agreed, as if they involved a breach of their contracts of employment. Other matters, such as the appointment of staff to the Malaysian joint ventures, about which little real complaint or concern existed at the time, in these proceedings were sought to be cast in a light not reflective of the basis of the parties' actual relationship. Other claims were advanced which Macquarie could not have provided, had they formed terms of these contracts, given the result of Mr Bell's own negotiations with joint venture partners, on Macquarie's behalf. 290 The evidence demonstrated that these relationships never involved a partnership or joint venture between the applicants and the respondents or anything remotely approaching such a relationship. The respondents were always employees, albeit highly remunerated and operating with a high degree of autonomy and little day to day supervision. 291 I have not been satisfied on the evidence about the parties' initial discussions and plans, that Mr Bell and Mr Berg had any proper basis for claiming that the employment, or the basis upon which it was agreed, was of the nature which they asserted in their amended summons, or which gave them the rights which they here claimed. On these matters I cannot prefer their evidence over that of other witnesses. Indeed, I am well satisfied that the applicants' evidence suffered from attempts at improvement, which strict adherence to the truth should not have permitted. I am also satisfied that the evidence demonstrated neither that the contracts, or the respondents' conduct, were unfair. 292 The applicants' lack of success in achieving the businesses and revenue which the original plans envisaged and the way in which the parties then dealt with those failures together, confirmed the view which I have reached that the employment was not of the character claimed and that the requisite unfairness of the contracts in question has not been demonstrated. 293 I find it unnecessary to further deal with the applicants' conduct in these proceedings and whether, in the circumstances, any discretion could properly have been exercised in their favour, had any unfairness been found. Had I come to any other view as to the unfairness of the contracts here in question, such a consideration could not have been avoided, given the evidence and the submissions advanced.

Orders 294 For all of these reasons, I have concluded that the applicants' claims must be dismissed. I so order. 295 The usual order as to costs would be that the applicants bear the respondents' costs, as agreed or assessed. If the parties cannot agree as to the appropriate costs orders, they have liberty to approach within 21 days of the date of judgment. ------------------------

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