Berry v CCL Secure Pty Ltd - [2017] FCA 1546 - FCA 2017 case summary — Zoe

CTHFCA

Berry v CCL Secure Pty Ltd

[2017] FCA 1546

Federal Court of Australia|2017-12-19|Before: Rares J

View original source

At a glance

Source facts

Court

Federal Court of Australia

Decision date

2017-12-19

Before

Rares J

Source

Original judgment source is linked above.

Judgment (28 paragraphs)

[1]

Background 36 Dr Berry began conducting business in Nigeria in 1978. He acquired a textile mill and was able to interest the then military president, General Obasanjo, to use his mill to produce uniforms for Nigeria's armed forces as well as for numerous other government agencies. Dr Berry formed, and subsequently maintained, a friendship with President Obasanjo. Over the years Dr Berry, through companies that he owned or controlled, engaged in a number of commercial dealings with Nigerian Government authorities under different presidents, including in public-private partnership arrangements. His companies were the first in Africa to manufacture telephones, handsets and computers. He established his company, Contec, in 1984. 37 In 2000, the Nigerian Government engaged Contec to operate and maintain a database scheme called Cerpac. Cerpac collected and provided the Government with immigration and other information about approximately 1.5 million foreigners who worked in Nigeria, including in oil and infrastructure projects. The data included details as to their entry into and departure from the country and their tax liabilities and other financial data. 38 After the terrorist events in the United States on 11 September 2001, the Nigerian Government also engaged Contec to advise on and develop systems for responding to such incidents. Contec provided, on behalf of the Nigerian Ministry of Interior, secure identity (ID) cards that it issued to foreigners. Contec has continued since 2001 to operate the identity card system as part of Nigeria's immigration controls at airports and other points of entry. Contec installed and has operated automatic gate readers for its identity cards. However, at some point, the Ministry of Interior refused or failed to pay Contec what it claimed was an entitlement to a surcharge for installing and operating the gate system. This led to the arbitration that began in November 2007 and resulted in a substantial but, as yet, unpaid award. 39 Dr Berry worked closely with, and gained the confidence of, most of Nigeria's Presidents since 1984, some of whom, like President Obasanjo, also sought his advice. Indeed, in 2003, President Obasanjo nominated Dr Berry to the President of Burundi as a person with whom that President should deal. 40 In 2000, Dr Berry first met Mr Chapman, who was then working for a security company that supplied equipment that Contec needed to run the Cerpac system in Nigeria, which Mr Chapman described as the "green card" or aliens' registration scheme. In 2000, Mr Chapman began employment with Innovia Films. In November 2003, he took up employment with Innovia Films again, which seconded him, from then to 2009, to work for Securency, principally as the latter's director of business development for Africa and the Middle East. 41 As at 2003, the Nigerian Government was considering the complete privatisation of the Mint. It had sought a round of tenders but had not accepted any and was considering in late 2003 and early 2004 whether to call for fresh tenders. One commercial banknote printer, De La Rue plc, had a small interest in, or in connection with, the Mint. Securency had not put in a tender in the failed round, but wished to tender if the Government called for a fresh round. Mr Chapman enlisted Dr Berry's assistance for this purpose. Mr Chapman discussed with Dr Berry in London the concept of introducing polymer banknotes into Nigeria. Mr Chapman introduced Dr Berry to Mr Brown as a person who had influence with the President and other senior Nigerian Government officials. Mr Brown asked Dr Berry if he could represent Securency in dealings with the Nigerian Government with the object of securing a contract to print polymer banknotes. 42 Dr Berry then discussed the introduction of polymer with President Obasanjo, his chiefs of staff, the Minister for Policy and the then Governor of the CBN. These discussions included what Securency could do to implement the conversion of Nigeria's paper banknotes to polymer. Dr Berry said that in late 2003 he met with the new Governor of the CBN, however at that time Dr Sanusi was still Governor. 43 Dr Berry said that the Governor was concerned that polymer might not be a suitable material on which to print banknotes. He wanted to ensure that, if Nigeria were to use polymer, the material on which the notes would be printed would also be produced there. Dr Berry said that he and Securency were discussing with the Mint the establishment of a polymer production (i.e. opacification) plant in Nigeria and printing of polymer notes. I infer that the 2003 meeting that Dr Berry described as being with the "new" Governor, was in fact with Governor Sanusi, albeit that Dr Berry and Securency personnel had many similar discussions later when Governor Soludo was in office. 44 On 10 February 2004, Mr Chapman wrote an email to Mr Ellery, who was then Securency's chief financial officer, and Mr Brown. Mr Chapman sought Mr Ellery's guidance about "setting up our relationship with 'Secure Currency Ltd'", which he described as "a confection" of Dr Berry "who we have drafted in at the political level just as he was under pressure from the [Presidential] Villa to find a supplier of polymer notes". On 14 February 2004, Mr Chapman told Mr Curtis, Mr Brown and Securency's then marketing manager, Bruno Garoffolo, that Dr Berry would operate "from top down to Governor and for Joe Raad to operate from bottom up". 45 Mr Raad was a person with experience in supplying the Mint with consumables for its printing operations. He and one of his companies, Whitvale (International) Ltd, were Securency's then agents in Nigeria. 46 Mr Chapman wrote to Mr Ellery that the President wanted Dr Berry to form a Nigerian company to take over the running of the Mint. He wrote that Dr Berry would name the new company "Secure Currency": … as a deliberate elipse and to create a degree of fog. He will contract in the professional services required to run the operation, run the risks and take the reward. … and understands that it's his problem if no business results for whatever reason. However, what he wants and needs from us is a document which ties Securency to Secure Currency, for 2 purposes: 1) To guarantee him exclusive access to polymer technology and the technology transfer services should he win the bid to manage the Mint. 2) To stand up to the due diligence which will be conducted into Secure Currency, that it's not just a shell operation (although it is) but has sharp-end clout behind it. Both purposes could be served by a Memorandum of Understanding (or two). (emphasis added) 47 As will become evident in these reasons, Mr Chapman's summary accurately reflected Dr Berry's continuing desire and vision for his ultimate commercial objective throughout his relationship with Securency. 48 Mr Chapman and Dr Berry had agreed that Dr Berry would incorporate a special purpose vehicle that would include the words "Secure Currency". Mr Chapman said that one reason for the use of those words, in what became the name of GSC, was to confuse their competitors into believing that the special purpose vehicle was a subsidiary of Securency, hence his reference to "deliberate elipse" and "fog". Mr Chapman wished that competitors, such as De La Rue, would not become aware, at least in the short term, that a person with the influence of Dr Berry was acting on its behalf in negotiating with the Nigerian authorities. 49 Moreover, Mr Chapman's email to Mr Ellery of 10 February 2004 exemplified Securency's manner of dealing with persons in Dr Berry's position through whom Securency would seek to secure business. Those persons would have to pursue the business opportunity at their own expense and risk based on expectations as to their reward that Securency created, but it would only offer them a contract and pay commission once Securency, through those persons' efforts, had won the business. 50 On 4 March 2004, the new Australian High Commissioner to Nigeria, Iain Dickie, emailed Mr Garoffolo, referring to their meeting in Melbourne in February 2004 prior to Mr Dickie's departure to take up his new office. Mr Dickie reported that he had yet to present his credentials to President Obasanjo but had paid a courtesy call on a senior official in the Nigerian Ministry of Foreign Affairs in the preceding week. The High Commissioner reported that the official had foreshadowed that, when he presented his credentials, the President was likely to raise with him the state of play concerning Securency's interest in the possible introduction of polymer banknotes and that "the Nigerians were looking to Securency to take a 40% equity in the privatisation of the Mint". 51 Mr Dickie asked Securency for an update so that he would be well prepared when he presented his credentials. Mr Brown responded to the High Commissioner on 5 March 2004, informing him that Mr Chapman was likely to visit Abuja the next week, as was Dr Berry, whom he described in the email as "our Nigerian partner in this matter". 52 GSC was incorporated only on 13 May 2004, but by letter dated 4 April 2004, Mr Chapman wrote to it on Securency's letterhead as follows: Re: Partnership for the Technology Transfer of Guardian Polymer banknote substrate to the Federal Republic of Nigeria. Further to the series of discussions that we have conducted on this subject, we are pleased to advise you that we wish to appoint Global Secure Currency Limited as our technical partner for the transfer of Guardian Polymer banknote substrate to the Federal Republic of Nigeria. We envisage that our work with you will take place in a number of stages in approximately the following chronology: • Formal adoption of Guardian Polymer substrate by the Central Bank of Nigeria for use on Naira Banknotes. • An order for polymer banknotes, to be produced either by an external security printer or internally in Nigeria by [the Mint]. • A decision by the Central Bank and the [Mint] to commit to the further production of polymer substrate banknotes in Nigeria. • Acquisition by the [Mint] of the necessary equipment (overcoaters) to successfully produce high quality Guardian polymer banknotes. • The formal Technology Transfer of Guardian polymer by Securency, PolyTeq and the experts of Global Secure Currency Limited to the [Mint]. • Formal accreditation by Securency and PolyTeq of [the Mint] as an official Preferred Polymer Printer (PPP) according to the well-established programme already implemented in Mexico, Vietnam, Brazil, Switzerland and elsewhere. • When volumes permit, consideration of the establishment in Nigeria of a Guardian Polymer opacification facility, most likely in a joint venture arrangement with the Central Bank of Nigeria and [the Mint]. Naturally, in due course there will be a number of contractual and other documentary requirements to formalise the commercial arrangements as and when they arise, and we propose to deal with these on a case by case basis according to the situation prevailing at the time. With this programme of stages in mind, we anticipate that the teams from Global Secure Currency Limited and Securency will need to begin immediate work in a number of areas in order to provide a strong platform for our future work together. As you are aware, we have very high levels of confidence and respect for the personnel you have at your disposal for these tasks, and we are very much looking forward to working with them. We trust that the arrangements outlined in this letter are acceptable to you, and remain at your disposal to discuss the details with you in depth. (emphasis added) 53 PolyTeQ Services was jointly owned by the RBA and Securency. It provided technical consulting services to entities like the Mint in relation to printing on polymer. 54 Mr Chapman explained in his evidence in chief that he had included the last bullet point, emphasised in [52] above, because: From quite early on, Mr. Berry was very interested in being part of the future permanent infrastructure that he envisaged for Nigeria for polymer. So, I put that point in to cover that, because at this stage we did not know what was going where in Nigeria. So, it was something that covered generally that possibility should it ever come about, that it is in here; and it probably was the first time it was expressed in quite this way. But that was my intention. (emphasis added) 55 Mr Chapman disingenuously characterised Securency's letter to GSC dated 4 April 2004 as a "letter of comfort". He gave this evidence in cross-examination about the last bullet point in that letter (emphasised in [52] above): Yesterday I think you tried to downplay that bullet point as being something that would never happen, nor could ever happen. You stand by that evidence? A. Absolutely. It could never happen. It could not happen even now or in the next million years. Q. Would you describe it as a ludicrous proposition, Mr. Chapman? Nonsense, maybe? A. Not nonsense, just unobtainable. Q. I see. Yet you knew, did you not, that the very purpose of this letter was to be shown to the government of Nigeria? A. Yes. Q. Thank you. JUSTICE RARES: Did it also not tell Mr. Berry what he and Global Secure Currency were being retained to do? THE WITNESS: It does, but if you look at the first four bullet points, in fact, those are all to do with getting polymer banknotes adopted by the Central Bank and printed by the Mint in Nigeria. So four of five of those bullet points were what the real objective, core objective was, without which the fifth one was an impossibility anyway, even if all the other conditions could be met. So the emphasis on this, I use the word emphasis, is 80% about getting polymer banknotes going into Nigeria and printable by the Mint, without which bullet point 5 falls anyway. (emphasis added) 56 The last answer demonstrated what actually happened subsequently, namely, Securency induced both the Nigerian authorities and Dr Berry to believe that if Nigeria decided to use polymer on which to print its currency, then Securency would consider, genuinely, the practical way in which to establish an opacification plant in Nigeria. As Mr Chapman said in evidence, the Mint had had a goal, since it had opened in 1960, to move Nigeria from being a net importer to a net exporter of banknotes and other secure printed products. 57 Dr Berry said that he had discussed the conditions for establishing an opacification plant with each of Mr Curtis, Mr Brown and Mr Chapman. Each had told Dr Berry that Securency required a minimum order for about 5 billion polymer banknotes to justify setting up an opacification plant at a cost of about $25 million, as occurred in Mexico during 2007 and 2008. Dr Berry believed in 2004 that, at the time, Nigeria required about 7 billion notes to be on issue and, thus, was confident that he could satisfy Securency's requirements for the construction of such a plant in Nigeria within about 1.5 years. 58 However, all of the witnesses who gave evidence for Securency, that I accept, namely Mr Chapman, Mr Brown, David Beeby, a former director (and chief executive officer of Innovia Films), and Joe Mamo, the chief director of marketing and strategic planning (2005 to 2008) and, from 2008, chief financial officer, were emphatic that Securency (despite what its officers said to Dr Berry and the Nigerian authorities) never intended that an opacification plant be built in Nigeria. Nonetheless, Securency was fully aware that Dr Berry and the Nigerian authorities believed throughout Dr Berry's involvement that, if Nigeria did convert all its banknotes to polymer, they would be able to build an opacification plant in Nigeria. Yet Securency never disabused them of their belief. This practiced deception was central to Securency's success in obtaining orders from the Nigerian authorities and, of course, was vital in Dr Berry's dealings with them on Securency's behalf. 59 Moreover, Dr Berry had an obvious commercial interest in the goal of constructing and operating an opacification plant in Nigeria. Dr Berry engaged, on Mr Chapman's recommendation, Richard Ashwell as technical director to lead the project to bid for the shares in the Mint. 60 In about June 2004, Prof Soludo became Governor of the CBN. It may be that Dr Berry had the conversation I have described in [42]-[43] above, which he attributed to the new Governor, at about this time. 61 On 22 September 2004, Mr Chapman and Gary Wilmshurst, who was on secondment to Securency from the Reserve Bank of New Zealand, made a short power point slide presentation to the board of the CBN. 62 The slides had Securency's name on each of them. The first had the title "Opportunities for Nigeria with the introduction of polymer substrates for banknote printing" followed by the names of Messrs Chapman and Wilmshurst and the date. The agenda set out on slide 2 listed seven bullet points, the last two of which were: • CBN and the progression to polymer • Technology Transfer services, banknote printing and polymer production (emphasis added) 63 And the final bullet point on slide 9, immediately before the tenth and last slide that read "Time for Questions", was: • Securency ready to provide technology transfer of polymer printing and polymer production to Nigeria (emphasis added) 64 Mr Chapman sought to explain the seventh bullet point in slide 2 in his evidence in chief. He said initially that "polymer production" was not the process of creation of the polymer bubble, but the printing of the polymer banknotes, in other words, the printing process that occurred after opacification. Then, he said that the last bullet point's reference to "polymer production" (on the ninth slide) was there because: we were still envisaging the possibility at some point that they might raise "Could you produce the full polymer substrate in Nigeria?" So, at this point --- which is still really very early --- that was still an option which we wanted to keep open. We did not want to close the door. So, it got a 10-second mention. Q. So, polymer production is or is not the bubble? A. No, absolutely not the bubble. (emphasis added) 65 I then asked him to clarify the last bullet point on slide 9, and he gave the following evidence: JUSTICE RARES: Am I correct in understanding that you to be saying that the polymer production was talking about an opacification plant? A. Yes, a possible future opacification plant. Opacification is really a posh word for printing, really. It is printing coatings on the film that comes from the bubble, to make it opaque --- simply that. Q. Is that not the same thing, then, as what you are talking about on [slide 2], in the last few words of [slide 2], the last dot point? A. No. That technology transfer thing was all about what would happen --- in my mind, we are talking really about the Mint at that point and what could be done fairly imminently to sort out their Mint. When it came up later, I know the same words are used, but what was in my mind at that point was talking about a future possibility of opacification. (emphasis added) 66 I do not believe Mr Chapman that the words "polymer production" in the last bullet point on each of slides 2 and 9 dealt with different concepts. In my opinion, he used those words consistently in the presentation to emphasise that an ultimate objective of the relationship, that Securency was offering if Nigeria agreed to use its polymer technology for its banknotes, was the building in Nigeria of an opacification plant. Indeed, in November 2004, he wrote a report on behalf of both Securency and GSC in which he confirmed this. The 70-page report was headed "Assessment of the [Mint] and Recommendations to enable [the Mint] to achieve self-sufficiency in banknote and security documents requirements for Nigeria and the West African Monetary Zone within 2-3 years". Under the heading "Inward Investment in a Polymer Manufacturing Plant in Nigeria", the report noted that once the CBN and Mint had adopted polymer for naira notes, GSC proposed immediately to commence planning for the erection and operation of a polymer manufacturing plant in Nigeria. The report continued, stating, as had been said in Securency's and GSC's presentations to the CBN board "in October [scil: September] 2004": it is the policy of Securency to actively promote the establishment of plants to manufacture the polymer substrate material, where the volumes and economic viability permit. Securency are in advanced discussion with a number of countries at the moment to build plants, usually as a Joint Venture with the Central Bank and their Banknote Printing companies. These joint ventures have the following characteristics which also apply to CBN and NSPMC: • The Central Bank is the owner of the banknote printing plant and is in a position to specify polymer for the printing of its banknotes. • The Central Bank wishes the banknote printing plant to operate more efficiently and to be able in due course to export polymer banknotes within its immediate region. • The banknote plant is of a good technical level, and there is room on its premises for construction of new manufacturing units for the production of polymer material. It is essential that polymer is produced under the same security conditions as for the printing of banknotes. Having surveyed the Abuja plant, we have noted that there is sufficient space to erect a polymer manufacturing plant and that this would be the ideal location to service the demand from the factory itself. • There is a ready source of petrochemicals, which are the raw materials for the polymer substrate. Global Secure Currency is prepared to partner with the Central Bank of Nigeria and NSPMC to generate the investment required to establish this plant in Nigeria. (emphasis added) 67 Mr Chapman said that the third bullet point in that passage in the report referred to the land needed to build an opacification plant. Dr Berry gave this evidence in chief about the location of the land on which the opacification plant was to be built: Peter Chapman mostly had identified that we would use Abuja as the location next to the Mint to set up this. We had located a piece of land, which I then bought, which was not an easy task to do, because they only wanted at least a four to five acre plot in the centre of town where the Mint was. And to get it right next to the Mint, almost adjoining the Mint, we purchased it. And we got … ready for the opacification plant. We had done all the groundwork studies relating to this, in terms of what I had been told would be the civil engineering part of it. Our civil engineer had prepared the prints of what will be required. They tested … the ground for whether it could take the weight or - of the equipment that was going to be installed. (emphasis added) 68 During his cross-examination he described the location of that land and it emerged that first, the land was more than a kilometre from the Mint and, secondly, was held in the name of a company, Safi International Company Ltd, that owned that land. Nominees of Dr Berry owned the two issued shares in Safi. Securency submitted that this reflected adversely on Dr Berry's credit since the land was not "right next door to the Mint". I do not consider that Dr Berry gave, or intended to give, misleading evidence on this issue. First, Securency did not suggest that Dr Berry had acquired the land, or the company that owned it, for any purpose other than for the construction and use of the opacification plant and, secondly, Dr Berry said that "It's next door when you consider distances in Abuja" in the context where the Mint and the site were both in relatively close proximity in Abuja's central business district. Indeed, the two sites were about 1.4 kilometres or four minutes away from each other by car. 69 While it is true that the Mint is not literally "next door" to the site that Safi owned, I accept Dr Berry's evidence that the purpose for which he arranged for acquisition of the shares in Safi and that acquisition's relationship to the assessment of the suitability of that site for an opacification plant was as described in the passage from the November 2004 document set out in [66] above. Ultimately, the proposed sale of the Mint did not proceed. 70 During 2004, and subsequently, the governments of Nigeria and its neighbouring States were considering the introduction of a common currency for use in the Economic Community of West African States (ECOWAS). Each of Securency, Dr Berry, the CBN and Mint were hopeful that, if this occurred, Nigeria would be in a position to print the new currency's banknotes. If that occurred, Securency and Dr Berry wanted the printing to be on polymer.

[2]

The N1,000 note proposal 71 In about August 2004, the CBN decided to print a new denomination of a N1,000 note, which was a very high face value in Africa, especially where the largest denomination in Nigeria was then the N100 note. Large denomination banknotes are used primarily as stores of value rather than as a day-to-day unit of exchange in transactions. The Nigerian Government wanted to print 100 million of the N1,000 notes, 50 million of which would be on paper and the other half of the order on polymer, using GSC and Securency for that purpose. This required the new notes (both paper and polymer) to be designed from scratch, including the selection of security features. 72 By 17 February 2005, Mr Chapman reported to Securency that Governor Soludo had said that when the design of the N1,000 note was completed, Securency and GSC would be authorised to proceed with designing N5 and N10 notes for polymer. He also reported that none of Securency's competitors had questioned GSC's credentials or "its exact relationship with Securency, which we have left fairly vague". He wrote that, however, GSC and Securency had appeared together repeatedly at the CBN and they had the strongest team to evaluate the requirements of the Mint. Mr Chapman also wrote that GSC had "excellent relationships at all levels", but that those needed to be used sparingly and not exhausted on matters of detail. He concluded his report saying that there were strong indications that Governor Soludo would "like to go with our proposals for the Mint's self-sufficiency, which would involve giving GSC a contract to project manage the sorting out of various areas including polymerisation" that had been covered in detail in the November 2004 report. 73 I do not accept Mr Chapman's evidence in cross-examination that his use of "self-sufficiency" and "polymerisation" in his report of 17 February 2005 referred only to the Mint being enabled to print on polymer. That evidence was inconsistent with his earlier evidence that the November 2004 report referred to the construction of an opacification plant, as was clearly the case. 74 On 12 April 2005, the CBN placed an order with GSC for 50 million N1,000 polymer banknotes at a price of €4,884,000. Securency had to use GSC, as its agent, to receive this order because Securency itself could not accept orders for printed banknotes, as Mr Chapman acknowledged, with Mr Brown's endorsement, in his email report to Messrs Curtis and Mamo of 13 May 2005. Mr Chapman noted that once the order resulted, a letter of credit would have to be opened in favour of the banknote printer, Orell Fussli Security Printing Ltd, to which GSC would subcontract, and Securency would have to have in place a commission arrangement with GSC. 75 By early July 2005, both De La Rue, with which the CBN had placed its order for the paper N1,000 note, as well as Securency, were having difficulties in producing proofs of their new notes for approval by the CBN that the Governor and other officials liked, within the very short production deadline that the CBN had specified to the President. 76 In the event, by late July 2005, Mr Chapman had explained to Governor Soludo that Securency, GSC and Orell Fussli could not produce the required quantity of N1,000 polymer notes by the October 2005 deadline. The Governor then accepted that position and soon after he told Dr Berry that he was happy that Securency had, in Mr Chapman's words, "come clean with him". Importantly, the Governor still remained open to switching the printing of paper notes to polymer ones for a lower denomination.

[3]

Securency's quest to print a lower denomination on polymer 77 Soon after the issue of the N1,000 paper banknotes in October 2005, Mr Brown and Mr Chapman corresponded in emails about the need to obtain orders of lower denomination polymer notes from Nigeria. Mr Chapman reported to Mr Brown that Dr Berry suggested that they all visit Governor Soludo in Abuja in mid-November 2005 for a seminar to discuss using polymer in what Mr Brown recognised was the "prize for us", namely the two lowest denominations, being the N5 and N10 notes. Mr Brown asked Mr Chapman what was being done by the Australian High Commission with the Nigerian Government and said of Mr Raad's continuing role "[w]hether we like it or not, Joe is still part of the 'Mafia' and Africa being what it is remains an issue". 78 In about November 2005, Governor Soludo met separately with Mr Chapman and Dr Berry and told each of them that he wanted to switch to a polymer N20 note that had to be ordered from Securency (as opposed to GSC with which the N1,000 order had been placed). The number of N20 notes in circulation was the largest of all denominations. The Governor told Mr Chapman, in a meeting in London on 25 November 2005, that his priority was to prepare a project budget with two elements, namely the purchase of "interim" polymer notes from overseas and the technology transfer for subsequent production in Nigeria. He said that the Mint had been following a lot of the recommendations in Securency's and GSC's assessment report of November 2004. He also agreed to meet Dr Berry, of whom Mr Chapman said he "spoke very warmly", and Mr Chapman in Abuja soon afterwards. The Governor also asked Mr Chapman to explain the relationship between Securency and GSC to check (in Mr Chapman's assessment) if they had an agreement. 79 In early December 2005, Securency prepared draft pricing for printing N20 notes on polymer. Mr Mamo emailed Mr Chapman on 6 December 2005 noting that he had included a commission of 20% in the price for the substrate (i.e. the opacified polymer suitable for printing). Mr Mamo noted that Securency had "two agents on our books for Nigeria (J Raad and Whitvale)" and asked if that were correct. He also told Mr Chapman that both agreements had expired and would need to be renewed if both those agents "are required to secure this contract". Mr Brown received a copy of that email and responded later on 6 December 2005 saying that both agents' agreements were in Mr Raad's control and had expired, although Mr Raad had made repeated requests for their renewal that Securency had resisted. He said that there was "no way that Joe will get what we had originally contracted with him", and said that it would be more like 3%. He added that Dr Berry: has a loose agreement for his commissions though again this needs to be quantified clearly. 80 Mr Brown said that Mr Chapman would be sorting out Dr Berry's commission "as part of the overall contract when he gets to that point" but agreed to Securency pricing in a 20% commission "to cover all eventualities". He said that it would be necessary to await the dimensions of the final order and then evaluate the input of each of Dr Berry and Mr Raad, but he did not want to give either man a rate of commission at that stage, lest he or they became alienated, saying: Given Beno[y]'s place in the hierarchy and Joe's influence in the market place too, it would be wrong to precipitate anything at this stage - though the time for that is not far off. 81 In late December 2005, the CBN invited Securency and some paper banknote printers to prepare designs and indicative pricing for the N5, N10, N20 and N50 notes. All those invitees made presentations in Abuja on 17 January 2006. Mr Chapman reported to Mr Curtis and Mr Brown on 13 February 2006 that Governor Soludo had been speaking daily with Dr Berry. On 26 February 2006, Mr Chapman reported to them that Dr Berry and Mr Raad "are doing their stuff as required. Working well at last". 82 On 22 March 2006, Mr Ellery reported to Mr Curtis and Mr Brown that Securency had no current agency agreement for Nigeria, but that there were two that lapsed on 14 November 2003 and 1 April 2003 respectively, the first for Mr Raad with a commission of 7.5% and the second for Whitvale with a commission of 10%. Mr Brown responded that he would attend to cutting Mr Raad back to one agreement for less than 5%. He said that Dr Berry would have one agreement for 10% and in any event the combined commission would not exceed 15%. Mr Ellery replied expressing concern that the agreements had to be in place before Securency received any order from Nigeria, and Mr Curtis agreed. 83 Mr Beeby was chief executive officer of Innovia Films. He lived in England and visited Australia from time to time on its and Securency's business. Officers of Securency made a slide presentation to him on 6 April 2006. The slides included a detailed report on Nigeria that noted it was the largest user of banknotes in Africa, wanted to become self-sufficient in relation to the printing of banknotes and was "Securency's gateway into Africa". The slides noted that Securency had lodged a tender to print N20 polymer notes before tenders closed on 24 March 2006. 84 The slides also reported that Securency's Craigieburn printing facility would need to run at full capacity, working 24 hours per day seven days per week, to meet any order from Nigeria and its other existing commitments. Another section of the slides reported on Securency being in a major growth phase. Those slides recorded that the board and Banco de Mexico (the central bank of Mexico) had commissioned a feasibility study to assess the commercial and operational viability of establishing an opacification plant in Mexico with a view to establishing a manufacturing presence to support the Latin American market for polymer bank note substrate. The slides included a timeline from the anticipated completion of the feasibility study, in June 2006, to the time in the first or second quarter of 2008 when the Mexican opacification plant would be operational (if approved).

[5]

Mr Harding becomes a 40% shareholder in GSC 87 On 9 May 2006, Dr Berry signed, as a director, a share certificate that certified that Mike Harding of Berkshire, England, held 40,000 fully paid shares of 1 pence each (i.e. £400 worth) in GSC, being 40% of the issued shares in GSC. Dr Berry said, and I find, that Mr Chapman had introduced him to Mr Harding at Dr Berry's London house. Mr Chapman told Dr Berry that Securency's board wanted Mr Harding to help with marketing in the ECOWAS region and to hold 40% of GSC's issued shares until such time as the RBA, through Securency, decided whether it would participate in the ownership of the Nigerian opacification plant or that GSC would be the sole owner. Dr Berry met Mr Harding only on two occasions, the second being about six months later, when Mr Harding came alone to his house. He had no other dealings with Mr Harding or his daughter, Amanda Whatley, with whom Dr Berry had never met or dealt. 88 Mr Chapman denied that he knew anything about Mr Harding acquiring 40% of the issued shares in GSC and asserted that he did not meet Mr Harding until 2007. I do not accept Mr Chapman's evidence about his lack of involvement in Mr Harding's acquisition of the 40% interest in GSC. That is because, first, having considered Mr Chapman's evidence as a whole and observing both him and Dr Berry in the witness box, I prefer Dr Berry's evidence where it conflicts with Mr Chapman's and, secondly, Mr Chapman's selection of Mr Harding as an agent in 2007 to replace Dr Berry and GSC and the circumstances in which that occurred (as I will describe below) suggest that Mr Chapman had a much longer and deeper involvement with Mr Harding than one which commenced only in 2007. Moreover, Dr Berry's evidence of the rationale which Mr Chapman put for issuing 40% of the shares in GSC to Mr Harding is consistent with the expectation of the Nigerian Government to which the Australian High Commissioner had referred in his email of 4 March 2004 (see [50] above).

[7]

The terms of the agency agreement 92 Recital B of the agency agreement recorded falsely that Securency was appointing Dr Berry and GSC as its sole agent in Nigeria. Mr Brown's only explanation of Securency's use of the false description "sole agent", when he knew of Mr Raad's concurrent agency, was that, "This was a standard agency agreement" and that it had been prepared by Securency's lawyers. Mr Brown's detailed account of his meeting in Mumbai did not suggest that any part of his discussions with Dr Berry about commission or the agency in general involved Mr Raad (or his company) having any role as a co-agent. Mr Chapman gave similar evidence that there was a number of territories in which Securency had more than one agent but, nonetheless, its agency agreements provided that each agent was its sole agent in that territory. This conduct itself is revealing of a corporate culture within Securency that was disinterested in honest behaviour. 93 The agency agreement was about 32 pages long and covered a wide range of topics. Although it was executed later, the agency agreement provided that it had a commencement date of 2 February 2006. It was common ground that at some stage after it was executed, Dr Berry agreed with Mr Chapman that the territory would be "Nigeria and other ECOWAS territories" and Mr Chapman added the latter extension in writing, which he initialled. Only a few provisions are relevant for present purposes, namely: Dr Berry and GSC were named as the agent; the agent agreed to act as Securency's agent and during the term of the agreement would use its best endeavours to advertise, market, promote and obtain orders in the territory for Securency's product of opacified polymer (referred to in the agreement by its trade name of Guardian®Polymer) (cl 2.2); the scope of the agency was restricted to advertising, marketing and promoting the product in the territory, obtaining orders for it from customers located in the territory, submitting them to Securency and any matter incidental to those tasks (cl 2.3); the agent had to devote sufficient time and attention to the performance of its obligations under cl 2.3 so as satisfactorily to perform its obligations and do so in accordance with any timing or other requirements of Securency (cl 2.4(d)); the termination date was defined (in cl 1.1) as meaning either the date on which the agency agreement was terminated or the expiry date in item 2 of schedule 1, namely: This agreement remains valid until 30th June, 2008 and will be automatically renewed for further terms every two years unless terminated as per the Termination clauses contained in the contract. the agent acknowledged and agreed that its appointment would terminate immediately upon the earlier of Securency giving it 60 days' written notice terminating it or "the termination of this Agreement" (cl 2.6); the term of the agency agreement commenced on 2 February 2006 and continued until the expiry date "unless terminated earlier in accordance with this Agreement" (cl 3.1) and cl 3.2 provided: This Agreement will continue until terminated by 30 days' written notice given by either party to the other party, which notice may be given at any time on or after the date which is 30 days before the Expiry Date. the agent had to forward all orders it received to Securency no later than five business days after receipt (cl 5.1(b)); if Securency received an order for the product from a customer located in the territory, "it must forward a copy of the order to the Agent as soon as practicable" (cl 5.1(c)); commission was payable on invoice sales (defined in cl 1.1 to mean, relevantly, the amount of all invoices rendered by Securency and paid by customers relating to sales in the territory) in accordance with a formula set out in cl 8; a party also could terminate if an event of default or insolvency occurred under cl 16 (but that circumstance is not relevant here); on the expiry or termination of the agency agreement, the agent was not entitled to payment of any commission in respect of invoice sales from the date of expiry or termination (cl 17.1(a)); other than for the purposes of enforcement, and the continued operation of its provisions relating to intellectual property rights, confidentiality, restrictive covenants and the general provisions of cl 20, the agency agreement would be at an end from the date of its expiry or termination (cll 17.1(b) and 17.2); the agency agreement contained the entire understanding between the parties and neither had relied on any representation, warranty or undertaking not forming part of its terms (cl 20.3); the agency agreement could not be varied except in writing signed by the parties (cl 20.11); the governing law was that in force in the State of Victoria and the parties submitted to, relevantly, this Court's jurisdiction (cl 20.14); where there was a conflict between the main body of the agency agreement and any schedule, the former prevailed (cl 20.17); the rate of commission was 15% (sch 1). (emphasis added) 94 Both Dr Berry (whose signature was witnessed by Mr Wilmshurst) and Mr Brown (on behalf of Securency) signed the first version of the agency agreement that is in evidence. It is not clear in the evidence when that document came into existence, when Dr Berry signed it or how or why a later version, in identical terms (except for the small handwritten addition of the extended territory), came to be signed in late March 2007, as I describe immediately below. Dr Berry said that he "signed off on the first [version of the] agreement" and it "was taken back to Australia". Mr Brown said that he signed the agency agreement and gave it to Dr Berry, I infer in India, "and he then, because he was pretty unhappy with it he decided to take it off to see his lawyers". However, I do not accept that Mr Brown's version was an accurate recollection. There is no record of Dr Berry doing that, or how any version signed by Dr Berry was returned, had he retained it. I find that both men signed the agency agreement, and Mr Wilmshurst witnessed Dr Berry's signature, in India. 95 On 31 January 2007, Securency prepared, and Mr Ellery sent to Mr Brown in the United Kingdom, two (identical) copies of the agency agreement for execution by Dr Berry and GSC. Mr Ellery asked him to have them signed by Dr Berry and GSC and returned to Securency as soon as possible. Mr Chapman emailed Mr Brown and Mr Ellery on 13 March 2007 informing them that he had given Dr Berry and his lawyer the two copies at Heathrow on 11 March 2007 and said that Dr Berry would consider the changes and, if all were well, would return the signed copies to Australia in a couple of weeks. 96 Although Securency challenged Dr Berry's denial that he wanted his lawyers to look at the draft, I accept his evidence. There were no changes from the earlier version that Mr Brown and Dr Berry had signed except for Mr Chapman's handwritten addition of "AND OTHER ECOWAS TERRITORIES" in item 5 of schedule 1 which extended the territory beyond the typed "Nigeria". There was no evidence as to when Mr Chapman added this, but it is likely that he did so after Mr Curtis and Mr Ellery had executed the document (see [97] below). I think it likely that Dr Berry told Mr Chapman that he wanted a couple of weeks to consider the draft (with a view to him or an employee doing so) before he signed it. Given that the second signed version was identical to the first, except for Mr Chapman's handwritten amendment, it is likely that he told Dr Berry that there were no changes but that Dr Berry wanted to check that for himself. Mr Chapman's contemporaneous written and oral communications were not always accurate or straightforward, nor was he a witness in whose honesty I have any confidence. Moreover, the confused nature of the termination provisions in cll 2.6, 3.2 and schedule 1 in the agency agreement has all the appearance of the absence of any commercial lawyer's review of the document (by either party) and the use by lay persons of cut and paste options from other documents. 97 Mr Curtis and Mr Ellery executed the second version of the agency agreement for Securency after Dr Berry had done so for himself and GSC. Dr Berry, who was in India, told Mr Chapman on or shortly before 27 March 2007 that he would send the signed agency agreements to Mr Ellery in Australia.

[8]

The launch of the N20 polymer notes 98 In the meantime, on 5 June 2006, the Mint wrote to Securency placing an order for 20,000 reams of polymer at a price of €729 per ream for the N20 note. This marked the success that Securency had derived from Dr Berry's efforts. 99 On 19 July 2006, the persons conducting Securency's feasibility study into the construction of a Mexican opacification plant reported. The study said that the estimated cost to acquire the land and construct the plant would be AUD24.5 million. The study envisaged that Banco de Mexico would contribute the land and building component and Securency the equipment and technology. Securency's board discussed the study at its September 2006 meeting. In the event, Securency and Banco de Mexico participated in constructing an opacification plant at Queretaro in Mexico, that was being built in 2007. 100 On 10 November 2006, Dr Berry sent a text to Mr Chapman informing him that Governor Soludo wanted to meet with Mr Brown and Dr Berry when he flew through London soon thereafter. Dr Berry said in the text that he anticipated that the Governor wanted to proceed with another denomination. Dr Berry also expressed his concern that he had not received payment of his commission or confirmation from Securency of his entitlement to receive 15% commission, no doubt because Securency had not yet prepared the final form of the agency agreement (see [93] above). 101 On 28 February 2007, President Obasanjo launched the new N20 polymer notes (that cost €59.00 per thousand notes to print) into circulation in Nigeria together with new paper N5, N10 and N50 notes (that cost per thousand notes €34.50, €34.50 and €37.00 respectively) and three new N0.5, N1 and N2 coins. 102 On 10 April 2007, Mr Chapman emailed Messrs Curtis, Ellery, Mamo and Brown with the news that, if the evaluation of the polymer N20 note were successful, then Governor Soludo was likely to move to printing the N50 note on polymer. Subsequently, the CBN evaluated the new paper N5, N10 and N50 notes with the new polymer N20 ones from May 2007 and found that the polymer ones were wearing far less than the new paper ones. 103 On 20 April 2007, Dr Berry (who was then in India) sent Mr Chapman a text informing him of a proposed meeting at Heathrow that evening between Mr Harding and Governor Soludo. Dr Berry said that Mr Harding had informed him of the proposed meeting and that he had brought Mr Harding in as a person whom he understood held 40% of the shares in GSC on behalf of Securency. I do not accept Mr Chapman's evidence that he was told by Mr Harding, Governor Soludo and Dr Berry of a discussion at a meeting at around the time of this text between Dr Berry, the Governor and Mr Harding. Mr Chapman gave that evidence after being shown the text, yet there is no written record of such a meeting in evidence, Mr Chapman could not recall what he had been told about the discussion at the meeting and, crucially, Dr Berry could not have been at Heathrow to attend it since his passport showed that he was in India. 104 On 15 May 2007, Dr Berry sent Mr Chapman a text enquiring as to when he would be receiving both an original signed (second version of the) agency agreement (he having sent to Securency his signed second version at the end of March 2007 - see [95]-[96] above) and a remittance of his commission. He also asked Mr Chapman, in the text, whether he had clarified with Mr Brown "what we are supposed to work out re the proposal for Pacification [sic] unit. When are we getting together? I am in the UK just for u guys …". 105 Dr Berry said that he had asked about the opacification plant because he had understood that Mr Brown and Mr Chapman were to provide him with some detail about the proposed partnership between Securency and him (with GSC) concerning the technology transfer to and establishment of the opacification plant in Nigeria. Mr Chapman confirmed, and I accept, that since their discussions in early 2004 (see [46]-[47] above), Dr Berry: wanted a document that would clarify the, or set out the terms and conditions under which an opacification plant might eventually be possible. So, frankly, it was a sideshow for me and a distraction, but to keep him happy we supplied him with a document which refers to the conditions under which an opacification plant might be … possible. MR. O'BRYAN: Are you able to tell his Honour, today, what those conditions were that you discussed in … 2007? THE WITNESS: Well, in fact they had not really changed since it was first discussed in about 2004, which is that, first, you have to do a feasibility study, and that feasibility study would have to examine all of the conditions in the territory. … I think before the feasibility study was even done[, t]he Central Bank would have had to have committed all of its denominations, so in the case of Nigeria that would have meant all eight denominations. (emphasis added)

[9]

Mr Chapman moves to replace Dr Berry 106 On 9 July 2007, Mr Chapman emailed Mr Ellery with the company profile of JH Marketing (Africa 2000) Ltd, as at 1 March 2006, which was controlled by Mr Harding and his daughter, Ms Whatley. His email stated that this was the company: we are considering to provide wider coverage in Nigeria and for the region. You will see that they are well qualified to do so. I have met the principal operators of the business and have verified as much of the content of the profile as I can. I have also checked their bona fides in Nigeria and have found them fine on both counts. (emphasis added) 107 The profile described JH Marketing's clients which appeared to be supermarkets, food, beverage, diaper and battery suppliers. It said that: we provide in depth Marketing, Financial and Intelligence Services to Manufacturers in and for the Sub-Saharan Markets of East and West Africa. 108 Mr Chapman's email of 9 July 2007 did not identify who the "principal operators" of JH Marketing were, nor did he make any connection between it, Mr Harding and his 40% shareholding in GSC. Nor did Mr Chapman give any reason for Securency to contemplate replacing Dr Berry so soon after he had achieved Securency's goal of having Nigeria use polymer for its new N20 notes, with the imminent addition of more denominations. 109 Relevantly, on 12 and 13 July 2007, Securency held a strategic meeting at Aitken Hill, near Melbourne, at which Mr Brown was present. Mr Curtis reported that Note Printing Australia (an RBA subsidiary) had dismissed two agents, one in Malaysia and the other in Nepal, for acting inappropriately and that the RBA had expressed concerns about the arrangements Securency had with its agents. Mr Curtis noted that it was likely that the RBA would subject Securency to additional audit scrutiny in relation to its agents and "as such it is imperative that good professional behaviour and accurate records are maintained". He cautioned the meeting that "Securency is under the microscope [and] as such it is imperative that we make no mistakes …". The meeting discussed the fact that the N20 polymer note had "been very well received in Nigeria" and that Governor Soludo had "advised that the two low denominations will be converted to polymer in due course". 110 Of course, by this time, as Mr Chapman knew, Dr Berry and GSC were entitled to and earning substantial commissions from sales of a large amount of either opacified polymer used to print N20 polymer notes or the printed notes themselves. 111 On 14 July 2007, Mr Chapman emailed Mr Ellery and Mr Brown attaching a letter dated 9 July 2007 from JH Marketing which Ms Whatley signed, as managing director. The letterhead disclosed its registered address in Berkshire and she attached the company's certificate of incorporation, her personal profile and an undated letter from Energizer Middle East & Africa Ltd, in Dubai, confirming that JH Marketing had been selling its products "to a high standard in Nigeria". Mr Chapman wrote that Ms Whatley was "Mike Harding's daughter. I've met her and can confirm she is certainly capable of conducting the business we envisage. Let's discuss when I'm in Melbourne next week". He did not elaborate what they envisaged. (emphasis added) 112 By late July 2007, following the strategic meeting, Mr Ellery was co-ordinating with, among others, Messrs Brown, Chapman and Mamo on the preparation of a Securency board paper on the role of an agent and why Securency needed agents. Mr Mamo identified reasons why he thought that Securency needed agents in a territory as including their ability to gain access to key decision makers, and their "[l]ow upfront costs, that is payment [of] commission on success". Those reasons reflected how Securency had treated its relationship with Dr Berry and GSC. 113 On 1 August 2007, Mr Curtis wrote to Dr Berry proposing variations to the agency agreement in respect of the definition of invoice sales, adding new definitions to cl 1.1 and replacing the existing cl 8.4 with a new clause. The purpose of the proposed changes was to remove an apparent anomaly that might have limited the agent's right to payment of commission and to give Securency, rather than the agent, the right to calculate the amount of the commission due. Indeed, as Dr Berry explained, the Mint placed orders for polymer notes or opacified polymer reams directly with Securency, and he (and GSC) did not receive a copy of those orders. However, Securency's conduct was a breach of cl 5.1(c) of the agency agreement which required it to forward a copy of any order to the agent "as soon as practicable" (see [93] above). Thus, Dr Berry and GSC could not verify if they had become entitled to commission or if they had been paid the full amount to which they were entitled under the agency agreement (including as it was amended by the 1 August 2007 letter). That was as a result of the combination of them not receiving copies of all orders by the Mint and Securency having the right to calculate its liability to pay commission, after deducting certain expenses that it had, or claimed to have, incurred.

[10]

The 15 August 2007 memorandum 114 Mr Chapman wrote a memorandum to Mr Ellery and Mr Brown dated 15 August 2007 entitled "Nigerian Agency arrangements" which he headed "private and confidential" (the 15 August 2007 memorandum). For the reasons that I give below, I am satisfied that Mr Chapman created this document well after 15 August 2007. The document read as follows: Further to our numerous discussions on this subject, I am now in a position to advise you formally on my proposals for how to deal with the Nigerian agency arrangements going forward in view of the ever-changing commercial landscape. 1. Joe Raad. His current agreement expires at the end of 2007, and I do not intend to renew it. 2. Benoy Berry. His current agreement is due to expire on 30-06-08, however I am very conscious of his ongoing health issues which might impact on his travelling and therefore his capacity to fulfil his duties under the agreement. We should therefore have a succession plan for this eventuality. Having considered a number of candidates and options to cover both of these situations, I would now like to propose that we conduct formal due diligence on the following companies with a view to appointing them formally: 1. S.P.T Ltd 2. JH Marketing (Africa 2000) Ltd. I would like to appoint both companies to operate within the same scope and commission parameters as the entities they are replacing. Please advise me of the requisite information needed to progress this matter. (emphasis added) 115 Mr Chapman accepted in cross-examination that, as at August 2007, JH Marketing and Ms Whatley were not based in Nigeria (although he asserted that "they went there quite frequently"), and that SPT Ltd was not based there either. He said, unequivocally, that all of them could not supply the service of providing security and transport in Nigeria. That evidence may also be consistent with evidence that he gave at his criminal trial, and confirmed as correct before me, that, through SPT, he had paid for security and transport in Nigeria after he asserted Dr Berry stopped doing so at sometime late in 2008 (see [281] below). 116 Moreover, Dr Berry had no "ongoing health issues". Mr Chapman knew in August 2007 that Dr Berry was well and had been travelling extensively between Europe and India during 2007. In cross-examination, Mr Chapman asserted: that phrase "ongoing health issues" had two meanings. He told me he was unwell; he told me he had had to have hospital tests. But it had another meaning. It is a euphemism there which referred to the embarrassment that was caused in Nigeria by him not being able to go there, and that embarrassment was expressed to me by the governor of the Central Bank. DR. WARD: Mr. Chapman, that is a complete falsehood, is it not? A. No. It is precisely what happened. JUSTICE RARES: Why did you not just write that to Mr. Ellery, instead of putting "health issues", when you were dealing with somebody in Securency? A. What I was very keen to do was to play down those legal problems that he had in Nigeria, play it down in the sense that I did not know how far or wide this document would go. So, I ought to be explicit. I considered Mr. Berry a friend. I had introduced him into the business, after all, in 2003. I considered him a friend. I did not want to embarrass him further than was necessary for a situation that could possibly resolve itself -- because these things happen in Nigeria, that there are inquiries and things going on and then they blow over and it can be, you know, back to normal. So, I did not want to embarrass him. So, it was said euphemistically in part. But he did tell me he was unwell. I will not go into the details of what he told me was wrong with him, but he did tell me he was unwell; and that, I think, your Honour, is what he had been telling people in Nigeria as to why he could not be there, that he was unwell. I am sure that is where that came from. (emphasis added) 117 Having carefully assessed Mr Chapman's evidence as a whole and observed him in the witness box, I am satisfied that his evidence above was deliberately false. First, the 15 August 2007 memorandum was headed "private and confidential" and addressed specifically to Mr Ellery and Mr Brown. There is no evidence that it was an attachment to an email and it bears Mr Ellery's initials superscribed over his typed name. Mr Chapman's claim that "I did not know how far or wide this document would go" made no sense. The document purported to justify to Mr Chapman's superiors his recommendation to terminate the agency agreement of Dr Berry and GSC at a time when Mr Chapman and Securency knew that Nigeria was going to order its product for two more large circulation denominations of polymer notes as a result (at least to a substantive degree) of Dr Berry's and GSC's efforts. 118 Secondly, Mr Chapman's assertion that Governor Soludo had told Mr Chapman of "the embarrassment that was caused in Nigeria by [Dr Berry] not being able to go there", if true, would have provided a good reason to terminate the agency agreement, especially in light of the concerns raised about the role of its agents that Securency was then addressing. Yet, Mr Chapman did not include that supposed assertion of Governor Soludo in the 15 August 2007 memorandum. Thirdly, Mr Chapman's assertion that he was "very keen … to play down those legal problems that he [Dr Berry] had in Nigeria" was, if true, inconsistent with the best interests of Securency in pursuing its business in Nigeria. Although, the Nigerian Government would have been aware of the commercial dispute it was having with Contec, nonetheless it was proceeding with Dr Berry's active participation (albeit from outside Nigeria) with introducing the N5 and N10 polymer notes. Fourthly, the 15 August 2007 memorandum appeared to contemplate leaving the agency agreement on foot until 30 June 2008. 119 Fifthly, Mr Chapman's assertion that he "did not want to embarrass [Dr Berry] further than was necessary for a situation that could possibly resolve itself", bespeaks betrayal rather than friendship. After all, the consequence of Mr Chapman's recommendation was that Dr Berry and GSC would lose an entitlement to very large sums of commission from the existing N20 contract and the contemplated orders for N5 and N10 polymer notes. It is inconceivable that a friend would make such a recommendation, supported by a lie about Dr Berry's health, to save a successful businessman from "embarrassment" in a situation where the source of the supposed embarrassment was known to the Nigerian Government and, if it matured (as it did) into a legal dispute, would be likely to become public. Dr Berry did not need shielding within Securency from the consequences of his commercial judgment in his conduct of his and Contec's dispute with the Nigerian Government. 120 Mr Chapman gave yet another inconsistent, and I find false, explanation that Dr Berry supposedly agreed in early 2007 to give up the agency agreement in favour of JH Marketing, Mr Harding and Ms Whatley. I explain at [216]-[219] below why I disbelieve that evidence. 121 Mr Chapman also asserted that, as at 15 August 2007, a company called "SPT Limited" had offices in or near Pretoria in South Africa although, he said, "I did not know if it was incorporated or not". He claimed that Don McArthur and Dave Marais with whom he, Mr Brown and Mr Curtis had worked previously for Innovia Films together with a John McKay, were the principals of the "SPT Limited" referred to in the 15 August 2007 memorandum. Mr Brown explained, in answer to questions that I asked, the connection between Mr McArthur and Mr Marais and Nigeria as follows: Q. Am I correct to understand that you are saying you would have expected that because Mr. Marais and Mr. McArthur would have known people in the MTN [a South African mobile telephone] company, MTN could have given them contacts if they asked, were they to want to go to Nigeria and try and get contacts? A. I would not go that far, no, but they would have certainly been able to point them in the right direction and open doors for Don McArthur and Dave -- well, Dave Marais probably was not travelling by that stage; he had had a bad accident -- but Don McArthur, to actually go and talk to people in Nigeria. (emphasis added) 122 In comparison to the ability of Dr Berry to meet directly with the President of Nigeria, Ministers in its Government and other senior officials, Mr Brown's perception of what Mr McArthur might be able to achieve in Nigeria through his contacts with a mobile telephone company makes no apparent commercial sense. No document in evidence referred to any company named "SPT Limited" or "SPT" that was based in South Africa. 123 Mr Brown sought to explain the 15 August 2007 memorandum in his evidence. He said that Mr Raad would be let go at the end of 2007, as Mr Chapman proposed in the 15 August 2007 memorandum, and that both he and Dr Berry (with GSC) would be replaced by SPT and Mr Harding's JH Marketing. He said that "SPT was intended to be a hub for Africa, and we were setting up hubs in three different parts of the world", namely Africa, based in South Africa, Latin America, based on the Mexico plant, and the Far East, Asia and the Pacific, to be dealt with from the head office in Australia. He said that this was to simplify Securency's arrangements for agents into a regional structure, rather than one run out of the United Kingdom. I do not believe that evidence of Mr Brown's. It is not supported by any document, and it is in the teeth of the documents and agreements he or Securency wrote to and made with SPT and JH Marketing that confined their activities to Nigeria, but, in JH Marketing's case (as with the handwritten amendment to the agency agreement of Dr Berry and GSC), extended to only the ECOWAS States. None of Mr Chapman, Mr Mamo or Mr Beeby gave any evidence about Securency having decided to set up regional hubs. In my opinion, Mr Brown gave that evidence because he realised that no contemporary documents existed that could or did provide any explanation for replacing Dr Berry and GSC as Securency's agent for Nigeria (and the ECOWAS States). 124 By 20 August 2007, Mr Ellery had prepared a draft agency agreement for JH Marketing, using as a template the agency agreement as varied on 1 August 2007 of Dr Berry and GSC, to cover Nigeria and ECOWAS States as at 1 September 2007. He proposed that it provide for JH Marketing to be entitled to an 8% commission (Dr Berry and GSC had a right to a 15% commission). There is no corresponding document or other reference to any draft agency agreement for SPT in any written material in evidence that is contemporaneous with the 15 August 2007 memorandum. No doubt that is because, as Mr Chapman, Mr Brown and Mr Ellery knew (for the reasons that I give below), there was no company with the name SPT until Mr Chapman caused a Seychelles company, Paladin Limited that had been incorporated on 27 July 2007, to change its name to SPT on 26 May 2008. 125 On 24 August 2007, Mr Ellery asked a Peter Harrison, whose role in Securency Mr Brown did not know and about which there is no evidence, to undertake an investigation into JH Marketing which, he said in the email, Securency was considering appointing as an agent in Nigeria and to report as soon as possible. The email did not refer to or ask for a report on SPT. That suggests that the 15 August 2007 memorandum, which had referred to both proposed new agents, had not been written when this email was sent. There is no document of Securency dated in 2007 in evidence, other than the 15 August 2007 memorandum, that mentions SPT by name, in contrast to numerous ones referring to JH Marketing. 126 On 21 and 22 September 2007, Dr Berry sent text messages to Mr Chapman asking him to speak to Securency in Australia "about my money" and complaining of the long silences that had followed his earlier requests for payment.

[11]

Dr Berry's 2007 interactions with Mr Harding 127 Between 15 and 21 October 2007, Dr Berry sent text messages to Mr Chapman about calls that he (Dr Berry) had received from Mr Harding who was seeking a meeting. Dr Berry had told Mr Harding that he would get back to him after the 15 October 2007 call and asked Mr Chapman to call him to discuss. On 17 October 2007, Dr Berry texted Mr Chapman saying, "The old fart is really desperate … 3 calls [from] him this [morning]". On 19 October 2007, Dr Berry sent Mr Chapman a text that stated, "no news re: funds. The old guy [Mr Harding] rather desperate and I must leave Sunday", and asked when he and Mr Chapman were to get together. 128 On 20 October 2007, Dr Berry texted Mr Chapman asking that they speak and saying, "Matter re Mike kind of urgent". He said that funds had not yet been received in the bank and requested Mr Chapman to confirm with Mr Ellery if and when the funds had been remitted. He said that, "need to sort out both Mike and G [Governor Soludo] (independently) before he comes back [from] the US so [I] am kind of badly stuck". 129 Dr Berry gave evidence that Mr Harding only wanted to speak about what needed to be done in GSC and, because Mr Chapman had brought Mr Harding into GSC, he (Dr Berry) wanted Mr Chapman to brief him about what to tell Mr Harding. Dr Berry was frustrated by Mr Chapman's failure to respond to his texts. Dr Berry said, and I accept: What I needed to sort out with Mike Harding, and with Governor Soludo, was related to the opacification plant that Governor Soludo was on my neck about. Mike was sitting over there as 40 per cent shareholder of the company, asking me what is going on. I'm not getting any responses from Peter, or from anybody, and I needed to find out. 130 On 21 October 2007, Dr Berry sent Mr Chapman a text saying that he had received a transfer of funds and commiserating with Mr Chapman about being sick in bed. Dr Berry said that he had postponed his trip to Goa, India, and "should try and see Gov[enor Soludo] today and then Mike during the week", but added that he needed to pick Mr Chapman's brains. Dr Berry said that he did not meet with Mr Harding later that week. 131 On 22 October 2007, Dr Berry sent another text acknowledging receipt of a further €889,000 that morning and asking Mr Chapman to remind Mr Ellery to get whatever clearance he required to remit the balance due that week. He wrote: need to sit with u … too much is at stake including Nigeria future so pl[ease] let me know when u can make it. He said, and I accept, that this was not a reference to the Contec dispute but rather to: the opacification plant and the way forward. We've got a mint ready to go, they've … spent a lot of effort on it. Its producing - it's now ready to print on polymer. We are waiting and waiting and waiting and nothing is coming. 132 Next on 30 October 2007, JHM Global (FZC), a company incorporated in the United Arab Emirates, sent Dr Berry an invoice for USD250,000 for "commission and fees on trade deals to Nigeria". Dr Berry had never heard of that company before receiving its invoice but he understood that Mr Harding had sent it. Dr Berry said, and I accept, that he had no idea what the claim for payment related to and that he "tossed it aside". There is no evidence that Dr Berry made or caused any payment of that invoice to be made. 133 In early November 2007, Dr Berry sent several more texts to Mr Chapman seeking to speak with him and chasing payment of outstanding commission that he needed to help him finance the development of a resort he was building in Goa. On 12 November 2007, Dr Berry sent Mr Chapman a text referring to "tremendous pressure" that he was under from Mr Harding, asking if Mr Chapman had heard from Australia and that he be kept informed. 134 Mr Chapman asserted that he had not known Mr Harding before 2007 and had nothing to do with Dr Berry's issue to him of 40% of the shares in GSC. However, Dr Berry's texts seeking Mr Chapman's input about what to do in relation to Mr Harding do not suggest that Dr Berry had any responsibility for introducing Mr Harding as a shareholder in GSC. It is improbable that Dr Berry was asking Mr Chapman to give him advice about how he (Dr Berry) should deal with or respond to Mr Harding if, as Mr Chapman asserted, Mr Harding was Dr Berry's (beneficial) co-owner of GSC and Dr Berry had initiated that position without Mr Chapman's involvement. Dr Berry said, and I accept, that he did not know what Mr Chapman had promised Mr Harding, but assumed that it was to do with being paid money. 135 On 20 November 2007, Contec commenced an international arbitration in London seeking substantial damages against the Federal Government of Nigeria, its Attorney-General and Minister for the Interior. 136 In 2008 Dr Berry had an in-house counsel, Wole Adebayo, who lived mostly in his residences in Nigeria, but also in London and in Atlanta, Georgia in the United States of America. Dr Berry said that Mr Adebayo led a team of four lawyers whom he employed. Mr Adebayo acted for Contec in the arbitration.

[12]

The London meeting in November 2007 137 In the latter part of (around 20 or 21) November 2007, Dr Berry met with the Nigerian Minister for Finance, Governor Soludo and the Nigerian High Commissioner at the High Commissioner's residence in St James' Place, London. The principal focus of that meeting was to discuss means of returning the value of the naira to the level in the past when it was high as against the United States dollar. After the meeting at the High Commissioner's residence, Mr Brown had met Dr Berry at the Ritz Hotel to discuss how they would seek to gain orders from Nigeria for lower denomination polymer notes, a greater volume of orders "and the possibility of [Dr] Berry representing us in India". I infer that together they planned how to approach the meeting they had very soon after at the Metropole Hotel in London with Governor Soludo. Mr Brown explained Dr Berry's role at this meeting as follows: JUSTICE RARES: Having read your e-mail of 5th December … can you explain to me how you understood Dr. Berry's role to have been in this meeting with the governor, why he was there and what he was doing? A. Purely because if the governor was in London, at the same time as Mr. Berry, there would have been, I am sure they would have met and they would therefore be at the same meeting. Mr. Berry is our agent, and the governor representing the Central Bank. Mr. Berry was not always in London when we met with the governor, but on this occasion he was, so it is quite proper for him to be there. Q. Even though is he having the dispute with the government? A. Even though he is having a dispute with the government? Yes. He was having a dispute with the government in a different area. …. Clearly the governor felt comfortable with it, with his presence, that is why he was there. Q. You must have felt comfortable with his presence there too, must you not? A. Yes. Absolutely. Sorry I did not infer that I did not. (emphasis added) 138 Dr Berry recalled that Mr Chapman was also present on that occasion. But, Mr Chapman said (and I accept) that he was not, which was corroborated by Mr Brown's email of 5 December 2007 to Mr Mamo (to which I will shortly come). I am satisfied that Dr Berry was mistaken in his recollection of Mr Chapman being present at this meeting. However, I accept that Dr Berry's account of the meeting was otherwise correct in substance. That is because Securency's internal documents, as did Mr Brown's evidence, confirmed the significance that Governor Soludo, at this meeting, placed on clarifying Securency's position in respect of the construction of an opacification plant. Dr Berry said that at the meeting, Mr Brown did most of the talking on their part (as Mr Brown corroborated). Dr Berry said that Governor Soludo: wanted very definite dates and commitments from when we were going to be able to move on the opacification plant. I had mentioned to him that I still had not got the partnership agreement in place, we were still operating loosely as … agents. He … was quite upset, and he … turned to Brown, and he said, "Enough is enough". Those were his exact words to Brown, and … he was actually quite annoyed, and he said, "Look, why … can't you people keep to the commitment that you have made? You have come into my office, made this commitment. Till today, you have still not been able to finalise a partnership agreement with the local content provider, and we are talking about moving on to polymer. How are we going to move to polymer if … we still are working with agents? I'm not prepared to do that". (emphasis added) 139 Dr Berry added that, at the meeting, the Governor said that Nigeria was ready to move on to printing the lower N5 and N10 denominations on polymer but added: Please confirm to us as soon as you can what you're doing about the opacification plant. 140 Mr Brown said that this meeting occurred on about 22 November 2007 (which I infer he gave by reference to the use of that date in a heading that appeared in an internal email chain within Securency dealing with the meeting and the preparation of a draft letter to Governor Soludo about an opacification plant). He said that: The governor was concerned with making Nigeria as self-sufficient in polymer printing as he possibly could. So, his whole rationale was to have the process through from the opacification all the way through to finished banknotes. … I said to the governor … that the opacification plant was always a possibility but that it had to be seen in the context of a long-term commitment from the Nigerians to us, similar [to] the one that we had … for the Banco de Mexico. … We discussed the possibility of the programme of the polymer note introduction and the possibility for an opacification plant. (emphasis added) 141 Mr Brown emphasised the then interconnection between Securency securing orders for polymer notes from Nigeria and an opacification plant in the following evidence: Q. Do you recall, Mr. Brown, the topic of discussion or the topics of discussion at this meeting? A. Well, one of the topics, your Honour, that would have been discussed was the onward going programme for polymer being introduced into Nigeria. Q. You recall, do you not, Mr. Brown, that one of the topics that was discussed was the possibility of a feasibility study being conducted into the construction of an opacification plant in Nigeria? A. That is one and the same thing. (emphasis added) 142 On 22 November 2007, Dr Berry sent a text to Mr Chapman saying that he had just arrived in New Delhi and would be travelling to Rome on the 28th. He said that he had "not received Joe's information as yet" at Dr Berry's Contec email address. I infer, first, that the meeting at the Metropole Hotel with Dr Berry, Governor Soludo and Mr Brown in London occurred shortly before 22, on around 20 or 21, November 2007 and, secondly, that "Joe" in the text was Mr Mamo who was to draft a letter for the Governor. 143 Governor Soludo's expressed concern at this meeting about the significance to him and Nigeria of an opacification plant being built in Nigeria to support its increasing the use of polymer notes there struck a chord with Mr Brown on this occasion. This had been an important matter for the Governor, as it was for Dr Berry. Thus, about two weeks after the meeting, Mr Mamo, Mr Brown and Mr Chapman worked on drafting a suitable letter for Securency to send to Governor Soludo that would offer him comfort, but avoid any commitment by Securency, on the future construction of an opacification plant in Nigeria. 144 By 27 November 2007, Mr Chapman had sent Dr Berry a draft letter, as the latter acknowledged in a text on that day, adding: I know ur [you are] trying but this is not the strategy we envisaged. Also for godsake don't start quoting numbers … [sic] to anybody. (empahsis added) Dr Berry's reference to quoting numbers related to a draft of the letter that suggested an investment cost of AUD35 million for the opacification plant. Dr Berry said that he did not want the letter to include such quantified costs because the building of the plant was "a commercial transaction for me" and its cost as well as his funding of it were matters for discussion with the CBN, especially when the quoted cost had gone up from AUD25 million, which they had been discussing, to AUD35 million. Dr Berry said, and I accept, that he was never shown any reworked draft or final version of this letter. 145 However, within Securency, Mr Chapman, Mr Mamo and Mr Brown worked carefully on a redraft until about 5 December 2007. On 3 December 2007, Mr Mamo commented to Mr Brown in an email that the revised letter went further than they had discussed in Melbourne and made him "a little uneasy". On 4 December 2007, Mr Chapman sent his own revised version to Mr Mamo and Mr Brown which he said had "deliberately remove[d] references to indicative project values for good reason!". 146 On 5 December 2007, Mr Brown emailed Mr Mamo with his own account of the Metropole Hotel meeting with Governor Soludo and Dr Berry as follows: The meeting with the Governor went well and whilst there is an interest in putting up something our conversation was couched in such terms as to provide for a number of caveats - some of which might never be fulfilled in order to bring about such a plant. Significantly, Benoy kept quiet and was supportive and so did not 'drive' the project as he had in earlier discussions with me. The Governor for his part is seeking all ways to get three additional values onto polymer over the line and this kind of overt support provides him the ability to gain the necessary approvals to go ahead. We are still not clear on this issue but I believe that we will be able to achieve our goal without having to go the whole hog so to speak. Peter also believes it will not be necessary but how we achieve that and the tactics to do so still remain for us to settle. We need to review this letter quickly so that Peter can provide, when he is next in Abuja, the kind of assurances he needs to, to keep the whole process moving forward whilst at the same time not over-committing ourselves. He has done this before and understands the parameters. I feel confident he can handle that but we do need to discuss with him a clear steer to give him the best chance to achieve our common objectives. (emphasis added) 147 Mr Mamo replied later on 5 December 2007 saying that he understood that the letter would not be required to secure an order for three additional denominations on polymer. But, in the event, he attached a revised draft letter. That draft reflected Securency's strategy to encourage Governor Soludo to believe that it was giving genuine consideration to the feasibility of the eventual construction of an opacification plant in Nigeria, as was then occurring in Mexico. But, each of Mr Beeby, Mr Mamo, Mr Brown and Mr Chapman made clear in his evidence that Securency never had any intention of constructing such a plant in Nigeria. When Mr Mamo, Mr Brown and Mr Chapman worked on successive versions of the draft letter, they sought to convey in it encouragement to Governor Soludo while giving Securency as much leeway as possible to excuse itself from ever actually proceeding to construct an opacification plant in Nigeria. In other words, Securency's strategy was to use the prospect of the eventual construction of an opacification plant in Nigeria as a bait to encourage Governor Soludo and the Nigerian Government to commit to ordering polymer banknotes in more and more denominations without providing (and never intending to have) any definite commitment or obligation to proceed with constructing a plant there. 148 Mr Mamo's final version of 5 December 2007 of the draft letter stated: Incorporated within Securency's strategic plan is the globalisation of its operation, of which an integral component of this strategy is the establishment of other manufacturing plants in locations which can be supported by the growth of polymer banknotes in that region. There are many factors that are taken into consideration when making such a strategic decision, these include: … 149 The draft then set out numerous factors, including a requirement for reliable infrastructure to ensure the uninterrupted operation of the plant (e.g. by power failures). Mr Chapman asserted that even the proudest and most patriotic Nigerian would read that requirement and conclude that it "was most unlikely". The draft referred to "a concrete example" of Securency's joint venture with Banco de Mexico for the construction of an opacification plant in Queretaro, 250 kilometres north of Mexico City, that was then underway. It held out the prospect that the adoption of polymer notes by Nigeria and in a common currency for the ECOWAS region "makes Nigeria a strong candidate for the location of such a plant". 150 Dr Berry and GSC discovered a draft memorandum of understanding of about eight pages between an unnamed company, described as "ABC", and Securency in relation to the possible construction of an opacification plant. It bore a marking that it was a draft for discussion purposes only. Mr Chapman said (and I accept) that he had prepared this document with some assistance from Mr Ellery and or Mr Mamo during the two or three months immediately prior to December 2007. Mr Chapman said that he could not remember if he handed the document to Dr Berry or left it with the latter's United Kingdom secretary, Ms Waterfield. Tellingly, Securency did not discover any version of the draft memorandum of understanding. 151 The preparation of the draft memorandum of understanding and its provision to Dr Berry, reinforce the significance that Securency understood both Governor Soludo and Dr Berry had placed on the goal of achieving the construction of an opacification plant in Nigeria as an integral feature of their relationships.

[13]

Securency appears to take steps to appoint SPT as a Nigerian agent 152 Securency's records in evidence made no reference to SPT from the time of the 15 August 2007 memorandum until the date of a curious document on Securency's printed stationery. That document was dated 1 January 2008 and entitled "Request for appointment of an agent". Mr Chapman initiated the request in respect of Nigeria. He named, and then crossed through, Marie Mein and Mr McKay as the proposed agent, writing "SPT Ltd" by hand in their stead above the same typed name, which appeared immediately below, in the field for "Company Name". He gave SPT's address as being in Mahé, an island of Seychelles. 153 However, Mr Chapman left blank the fields for SPT's telephone, fax, email address and (character) references on the request, yet both Mr Ellery, as director of commercial services, and Mr Curtis signed their approval on the request. Someone had ticked the box on the request indicating that an Austrade check of SPT had been completed, but there was nothing in the evidence to indicate what, if anything, Austrade had done. As I noted at [124] above, no company with the name of SPT existed in Seychelles until 26 May 2008. Moreover, SPT's audited financial statements for the period ended 31 December 2008 gave a different address in Mahé for SPT than the one recorded in the request albeit those financial statements were only signed on 24 October 2010. The directors of this SPT were Ms Mein, Mr McKay and Bernadette Julie. 154 Mr Chapman said that he signed the request in Australia in about August or September 2008. He claimed that was because "I never went to Australia in the Australian summer". (However, his text to Dr Berry of 29 February 2008 appeared to show that he was then in Melbourne: see [230] below). He said that he had not prepared the request and had no knowledge of any Austrade check or process. Although he said that he helped to collect due diligence information for Securency "[i]n the same way that I did for many agents", Mr Chapman could not remember any of what he may have collected in respect of SPT. Mr Brown said that he probably saw the request after 1 January 2008, most likely later in January 2008 when he visited Australia from the United Kingdom, and he did not tick that the Austrade check had occurred. He said that the tick may not have been on the request when he signed it because his practice was to sign forms in Melbourne in good faith on Friday afternoons as he was about to leave for home, trusting his colleagues in Securency "to have done what they should have done". He said that: Mr Ellery … was in charge of the Austrade programme of vetting of agents. So … he would certainly have undertaken the Austrade check. 155 However, there is no record in evidence that reflected that Securency performed any due or other diligence in respect of SPT. Mr Brown gave this evidence in answer to a question I asked: Q. In the light of your evidence that in the middle of 2007 or around August, when we looked at that earlier document of 15th August, you had proposed reorganising the whole of Africa under the aegis of SPT, why is it that this document in the line "Country" has Republic of Nigeria rather than the whole of Africa, in accordance with what you told me was the plan? A. (Pause) I expect it is because we would not legally be allowed to pay commissions to SPT unless a country was actually nominated. So, in the case of SPT being the umbrella organisation, the Republic of Nigeria is the country for which they would become responsible. So, in effect, your Honour, we could not have paid commissions to SPT unless the country was specifically named, so when the auditors came to audit the books, internal or external auditors, the external orders came from the Reserve Bank, they would ask to see a piece of paper, which said "why are you paying STP an agency commission in respect of Nigeria?" So there had to be a box somewhere that denoted the fact that this was in relation to Nigerian contracts. (emphasis added) 156 I do not believe that answer. If, as Mr Brown had asserted earlier to explain his rationale for replacing Dr Berry and GSC with SPT and JH Marketing, Securency had adopted the approach of appointing agents for the whole of Africa, the auditors would have been aware of that fact. I accept that the request had the purpose and function of providing an audit or paper trail or justification. I find that the request was backdated from its creation much later in 2008 (certainly after late May 2008) to 1 January 2008, to the knowledge of each Securency officer who signed it, in order to provide a paper or audit trail, as Mr Chapman said. But it was a false audit trail. The importance of such an audit trail will become evident from Securency's desire to backdate to 31 December 2007 the date from which the agency agreement came to be terminated on 24 February 2008. 157 Mr Brown was not candid in his evidence relating to how Dr Berry and GSC came to be replaced by SPT and JH Marketing. He had met with Dr Berry and Governor Soludo in London in late November 2007 purposely knowing, first, of his own plan to jettison Dr Berry as Securency's agent, but secondly, of Dr Berry's immediate importance at the meeting in persuading the Governor to cause orders for polymer notes for not only the N20 but also two other denominations. 158 By a letter, copied to Mr Ellery and Mr Brown, that has the date 15 January 2008, Mr Chapman wrote to Mr McKay as a director of "SPT Ltd" at an address in Pretoria, South Africa. Mr Chapman's letter referred to discussions he had had with Mr McKay. He wrote that Securency would be conducting a due diligence process on SPT "with a view to its eventual appointment as Agent for Nigeria". (I interpolate that there was no suggestion in this letter or any document in evidence, that, as at 1 September 2007, Securency had ever appointed or considered appointing, first, any entity called "SPT" beyond a territory of Nigeria, and secondly, JH Marketing beyond a territory of Nigeria and the ECOWAS States.) Mr Chapman wrote giving this "SPT" an ambiguous authority that: In the interim, we are happy for you to perform some of the agency functions we have discussed. However, these must always be with my specific prior approval. 159 He added that upon the successful completion of the due diligence and appointment processes, the agency agreement would commence from 1 January 2008 "and any business obtained since that date would be subject to the commission rates specified in the agreement". He added that if either of the processes were not completed there would be no commission payable. The latter caution, as did the content of the letter, had all the appearance of window dressing. 160 Both the request and the 15 January 2008 letter to SPT confined the proposed territory of SPT to Nigeria and made no suggestion that SPT was or would act as agent for the African region, contrary to Mr Brown's asserted rationale for replacing Dr Berry and GSC (see [123] above). In addition, the 15 January 2008 letter was addressed to a supposed company, SPT, in South Africa, rather than to an address in Seychelles, as identified in the request that was dated 15 days earlier. Mr Brown, after a significant pause recorded in the transcript, said that it would not have concerned him, in considering SPT's appointment as agent, that it had a connection to Seychelles. Mr Mamo, however, said that he would have questioned the payment of commissions to a company in Seychelles because of its reputation as a "tax free or tax evasive" State.

[14]

The January 2008 orders for Nigerian polymer notes 161 On 23 January 2008, the Mint sent Securency an order for 10,000 reams of N20 polymer for delivery in three tranches at the end of May, June and July 2008, being the balance of the 20,000 reams it had ordered in 2006 (see [98] above). Securency, through Mr Chapman, knew from December 2007 that this order would soon be received. That was because, as he explained, the CBN had decided in December 2007 that it would require a quantity of new N20 polymer notes to be printed in 2008. This order was closely connected to Dr Berry's earlier work and the recent discussions he and Mr Brown had had in London with Governor Soludo in late November 2007. However, Mr Chapman and Securency were aware that commission was payable under the agency agreement, not on mere orders, but only on invoice sales. 162 In his criminal trial, Mr Chapman was cross-examined about the 23 January 2008 order and a meeting he had with Mr (Ehi) Okoyomon, the managing director of the Mint at Heathrow "a little bit later in January" 2008. Mr Chapman reported to, among others, Mr Mamo and Mr Brown before 28 January 2008 that: I had a short but effective meeting with Ehi at Heathrow … He advised me that [the Mint] would need to order 20,000 reams this year to meet the demands of the [CBN] for a continuation of the N20 … (emphasis added) That meant that, in addition to the 10,000 reams in the 23 January 2008 order, the Mint would be ordering a further 20,000 reams of polymer for N20 notes in 2008, making a total order for the year of 30,000 reams. Thus, by late January 2008, Securency had received a firm order for 10,000 reams of polymer for N20 notes and had a reliable expectation, based on what Mr Okoyomon had told Mr Chapman at Heathrow, that during 2008 the Mint or the CBN would order a further 20,000. 163 Mr Chapman's convictions related to bribes that he or a Seychelles company that he controlled (perhaps with his long term girlfriend who was domiciled in Brazil), Swingaxle Ltd, paid Mr Okoyomon a year later in early 2009. 164 Mr Chapman wrote a handwritten note, dated 26 January 2008, to Mr Ellery that read: Dear John, This is to advise you that further to our telephone discussions on this subject, I am now requesting that you issue Benoy Berry a letter of release in respect of his current Agency Agreement for Nigeria. This is due to his continuing ill health which is necessitating extended hospital stays in India and is preventing him from travelling to Nigeria. Please advise me when the release letter is available for me to forward to him. (emphasis added) 165 At the foot of that note, under Mr Chapman's signature, Mr Ellery wrote and initialled: "30/1/08 - Hugh Brown confirmed above to be correct". 166 Viewed in the context of the knowledge of Mr Chapman, Mr Brown and (as I find) Mr Ellery of the 23 January 2008 order and Mr Okoyomon's communication before 28 January 2008 that Securency would receive orders in 2008 for N20 polymer substrate totalling 30,000 reams, the proposal to "release" Dr Berry from the agency agreement, without mentioning a word to him about any information concerning those orders, is a tangible reflection of the lack of commercial integrity of Securency. That conduct was plainly dishonest. And, if Mr Chapman's lie in his note dated 26 January 2008 about Dr Berry's ill health had been true, the conduct would have evinced a lack of humanity. 167 Securency's conduct in failing to send Dr Berry and GSC a copy of the 23 January 2008 order from the Mint was a breach of its obligation to do so "as soon as practicable" after its receipt under cl 5.1(c) of the agency agreement (see [93] above). 168 The behaviour of the three men demonstrated that they lacked integrity in their dealings, on behalf of Securency, with Dr Berry. Mr Chapman's bribery of Mr Okoyomon, his nomination of SPT and JH Marketing as agents to replace Dr Berry and GSC and his concealment of the actual and expected new orders for the 30,000 reams from Dr Berry, have led me to the firm conclusion that he was a person in whose uncorroborated evidence I could not place any confidence or credibility. In my opinion, he is a person who is and was prepared to say or do anything in his dealings with others, including Dr Berry (and GSC), regardless of what the standards of ordinary reasonable people as to honesty and integrity require. Mr Brown's and Mr Ellery's knowing participation in Mr Chapman's deceit of Dr Berry in procuring him to sign the termination letter in February 2008 exhibited a similar lack of honesty and integrity. 169 Mr Chapman was unsure whether the handwritten date in his note dated as at January 2008 was 21 or 26. The stroke on the second figure is curved, not straight and in my opinion the figure is a six, not a one. Mr Chapman said that he wrote the note "Because Mr Ellery wanted it for the file. You do not just make changes to anything without having, if you like, a paper trail". He said that it was not a false paper (or audit) trail. I asked him about the circumstance of his making that handwritten note for Mr Ellery and he gave the following evidence: … you are someone who is obviously very good with writing things in emails and on computers, are you not? A. Yes. Q. Why did you write a handwritten note, rather than sending a report in writing on a computer-generated document to your superiors? A. This was -- if you recall, your Honour, I was with Mr. Ellery in the UK, and not in my office. And Mr. Ellery wanted something straightaway, and so I wrote this for him and gave it to him before he left. So, normally, I would have done it on my computer, but Mr. Ellery asked me just to write it out, so I did. Q. But I thought you said at this time you knew that Dr. Berry could not go to Nigeria because he was suing the Nigerian government? A. Yes. Q. Why did you not put that into this note? A. It was still something that we did not want widely known in the business, in Securency. Because once that had gone on the file saying that, there could have been never a possibility of ever working with him again and we did not want to close doors off like that; you do not, in Nigeria. Particularly, at the time, it was a very volatile situation in Nigeria with the new President now, … new personnel coming in. So, we wanted to not cause more problems for Mr. Berry than, frankly, were necessary internally. As I said yesterday, I considered him a friend and I did not want to embarrass him more than necessary. (emphasis added) 170 I accept that the handwritten note was created to form a paper trail but I do not accept Mr Chapman's evidence that he handwrote it, rather than including it in a computer generated note or report, because Mr Ellery wanted him to do so immediately or that its contents had any basis in fact. Having regard to the whole of the evidence, I am of opinion that Mr Chapman and Mr Ellery created the note well after its date, whether 21 or 26 January 2008, to create a false audit or paper trail. They did so to explain why, despite the contemporaneous commercial success of Dr Berry's agency in securing orders for 30,000 reams of opacified polymer or polymer substrate, Securency had "released" Dr Berry and GSC from the agency agreement as from 31 December 2007 and so would not be liable to pay them all the commission that they would otherwise have been entitled to receive. Mr Chapman and Mr Ellery needed something on file to explain to someone, such as an auditor, why an apparently incongruous commercial result had occurred just as Securency had achieved a flow of substantial orders from the Nigerian authorities. No objective observer would believe, and I do not believe, that sick or not, Dr Berry had, or would have, agreed to give up the agency agreement and accept that the millions of euros in commission generated by orders for either 10,000 or 30,000 reams of opacified polymer or polymer substrate would now go to other people. 171 Moreover, Mr Chapman's evidence that "we did not want widely known in … Securency" that Dr Berry was suing the Nigerian Government, as his explanation for his handwritten note's reference to Dr Berry's health, is unbelievable. Unlike an email, the handwritten note was not capable of being "widely" known or disseminated. It was given to one of Securency's most senior officers, Mr Ellery, for his file to be part of a paper or audit trail should anyone with authority need to see it. Nor do I believe Mr Brown's evidence that the handwritten note reflected his own understanding of Dr Berry's state of health as being the true reason for Securency (through him, Mr Ellery and Mr Chapman) manoeuvring to terminate the agency agreement and to backdate that to 31 December 2007.

[15]

Securency formalises an agency agreement with JH Marketing 172 Earlier on 23 January 2008, Ms Whatley emailed Mr Chapman, in answer to his request, attaching "relevant documentation", namely a certificate of incorporation of JHM Global issued on 19 July 2007 by the Government of Sharjah in the United Arab Emirates that named Ms Whatley as its manager and her and her father, Mr Harding, as its owners. She wrote that: "I await details of meeting venue and time." Her email suggested that at this time, first, she wanted JHM Global, rather than JH Marketing, to take up a Nigerian agency and, secondly, she had not then concluded any agreement with Securency on behalf of either of her companies. 173 On Sunday, 27 January 2008, Mr Chapman forwarded Ms Whatley's email and attachment to Mr Ellery saying only, "John, as requested." On 30 January 2008, Mr Ellery wrote to Mr Chapman saying: I have initiated the due diligence again based on the attached certificate of incorporation which is in the name of our proposed agent … JHM Global (FZC). This will pose a problem as based on the agency agreement commission can only be paid too [sic] our agent in the UK. 174 By 5 February 2008, the position with which company Ms Whatley and Mr Harding were to use for the agency had changed. On that day, Mr Ellery emailed Mr Curtis saying that Mr Chapman had "confirmed receipt of the Nigerian Agency Agreement and is arranging with the MD of JH Marketing to have the agreement executed and returned immediately". 175 On 6 February 2008, Ms Whatley wrote on behalf of JH Marketing to Mr Ellery enclosing two executed copies of its agency agreement for Nigeria and the ECOWAS States. Mr Curtis and Mr Ellery executed the JH Marketing agreement on behalf of Securency. Relevantly, it provided that: it commenced on 1 January 2008 for a term of 10 years (i.e. until 31 December 2017) subject to annual reviews by Securency and its right under cl 2.7 to terminate the agreement at any time with immediate effect; JH Marketing was entitled to commission of 8% of the net sales price; if the agreement were terminated for any reason, Securency would pay the agreed commission on any long term contracts made, or orders received, before the date of termination for a further two years. 176 On 11 February 2008, Securency wrote to the Mint accepting its order of 23 January 2008 for 10,000 reams at €729 per ream. Of course, Securency did not inform Dr Berry that it had done so, in breach of cl 5.1(c) of the agency agreement. 177 On 12 February 2008, Dr Berry (who was on his way to Delhi) sent Mr Chapman a text message in response to his request for a meeting and suggested that they communicate the next day. 178 On 14 February 2008, Mr Ellery sent an email to Mr Chapman, copying in Mr Curtis and Mr Brown, attaching a termination letter to Dr Berry that he said, "requires his signature", together with a copy of the execution page of the new JH Marketing agreement that Mr Curtis and Mr Ellery had already executed (as I noted above). Mr Ellery added: I confirm my understanding that the [JH Marketing] Agency Agreement will not be given to them until BB [Dr Berry] has executed the attached termination letter. Importantly, the email (like all other contemporaneous documents in evidence) made no mention of SPT. 179 Mr Curtis responded on 14 February 2008 saying: Guys, Good progress we need to get the ducks in a row re BB and getting the new one finalized. Keep up the good work. 180 Curiously, on 13 February 2008, Mr Ellery also had written a letter to Mr Chapman with which he enclosed a "termination letter" for Dr Berry and GSC. Mr Ellery asked Mr Chapman to hand deliver the termination letter and "explain that they are no longer authorized to act as an agent for Securency". None of this internal activity within Securency reflected any prior suggestion that Dr Berry had ever discussed with any Securency officer that he (and GSC) wished to give up the agency agreement, or its benefits. 181 On 16 February 2008, Dr Berry sent a text to Mr Chapman explaining that he could not meet as proposed since he had to leave Goa for the United Kingdom on 20 February 2008. By 19 February 2008, the two had arranged to meet at Dr Berry's home on 24 February 2008. Mr Chapman suggested 3.00pm and Dr Berry responded with a text suggesting that if Mr Chapman came a little earlier "we could do a great Indian lunch. My chef is really good!!". Next, they agreed that Mr Chapman would come at between 1.30pm and 2.00pm.

[16]

How Dr Berry came to sign the termination letter 182 Both Dr Berry and Mr Chapman agreed in evidence that Mr Chapman went to Dr Berry's home on Sunday 24 February 2008 and stayed there for about two hours. It was common ground that Mr Chapman arrived in his old Volvo car. At some point during the meeting Dr Berry signed and dated the letter of termination, gave the copy to Mr Chapman that included the acknowledgment, kept the other copy and they had a pleasant lunch prepared by Dr Berry's Indian chef. But, their accounts of what occurred on that occasion were very different. 183 There are two copies of the termination letter addressed to Dr Berry at GSC in evidence, both in the form set out at [13] above. One of the copies had at its foot an endorsement as follows, that Dr Berry signed and dated 24 February 2008, in the circumstances to which I will come shortly: I hereby acknowledge that the Agency Agreement with Securency dated 2nd February 2006 was terminated on 31 December 2007 in accordance with the terms of the Agreement. Benoy Berry/Global Secure Currency Limited Dr Berry kept the second copy, initialling it and noting on it the date of his signature. As I have found above ([14] and [180]) there had been no discussions to which the opening sentence of the termination letter referred. 184 Dr Berry's account of the discussion at his home on 24 February 2008 was as follows. He said that the two men ate an Indian lunch in the conservatory of his house. He said that they spoke over lunch about the technology transfer, involving the construction of an opacification plant in Nigeria. Mr Chapman told Dr Berry that he had brought some documents with him, drafted by lawyers in Australia, that he would show Dr Berry once they finished lunch and that "we eventually would be able to move forward on the partnership and the opacification plant". 185 Whey they finished lunch, Dr Berry said they sat down to discuss matters that Governor Soludo and Mr Chapman had spoken about in Nigeria which made it urgent that Dr Berry sign both the documents Mr Chapman brought "so we could have this put in place very quickly". He said that Mr Chapman: showed me the two documents. One was an agency termination, which he said, "We've got to … this is routine. We have to bring this to an end before the partnership agreement can be put into place. This [being the second document] is the partnership agreement that has been drafted by the lawyers in Australia". So all I needed to do was to sign it and they would take it back and go through the normal routine of endorsing it and sending it back to me. (emphasis added) 186 Dr Berry said that Mr Chapman told him that their existing financial terms would continue. Dr Berry said that after they had chatted for 30 to 45 minutes he signed the termination letter in the form set out at [13] and [183] above. He said that the second document was not like the draft memorandum of understanding described at [150] above but that "I signed it and gave it back to Peter, as is normal". He said that normally lawyers in Australia had drafted documents that he "would look at …, sign off on it. It would go back to Australia, where it would be endorsed by signing, then sealed and sent back" to him. Dr Berry described the second document as follows: The content of the document … was dealing specifically with how we were going to proceed with the partnership agreement and how we were going to lay the foundations of the opacification plant. It also dealt very clearly with the fact that the Reserve Bank of Australia was not going to participate … in investing in Nigeria and would not want a share of this, but they would instead want to get a royalty on every substrate … that was supplied and then pacified. 187 Dr Berry said that he did not read the second document, but only flicked through it and that it "must have been about 35, 40 pages". He looked for the parts that dealt with the technology transfer, its timing and "what our total investment was going to be", while chatting with Mr Chapman "about all sorts of things", including "how soon we can get this in place" and why the second document provided that the price that he or GSC would be investing for constructing the opacification plant had increased to USD35 million. He said that "about 15, 20 minutes" after Mr Chapman handed the second document to him, he "would have … signed it". 188 Dr Berry said that Securency would supply the Nigerian opacification plant with the polymer film (hence, as I understood him, the RBA as a joint venture partner in Securency would benefit from that sale). After opacifying the polymer, the plant would supply that (substrate) product to the Mint, so that it could print polymer banknotes that the CBN had ordered. He then gave this evidence in chief: And, Dr Berry, did Mr Chapman say anything to you about the topic of your commission payments? --- Yes, very distinctly. … when he asked me to sign the termination … he said to me that … this is routine and this does not affect our agreements in any way whatsoever for the continuing supply of polymer. (emphasis added) 189 Dr Berry said that he had no copying facilities at his home and Mr Chapman was to send a copy of the second document back to him the next day. He denied fabricating his evidence about the existence of that document and what he did in relation to it at the meeting on 24 February 2008. He said that subsequently he had not demanded that Mr Chapman provide him with a copy of the second document "because that was not how I communicated with Peter". Indeed, when challenged that he had not ever written to Mr Chapman asking for a copy of the second document, he said that since meeting Mr Chapman in 2000 and up to 2008, "I had never written to him and asked him for any document". I accept Dr Berry's evidence that in giving those answers, he understood (as did I) that he was being asked about writing a letter. He accepted that he had made requests for documents in text messages but said, "It's not writing". And, based on Dr Berry's past experience of Securency taking its time to finalise, execute and return the agency agreement and Mr Chapman's reference to the "routine" nature of what he was doing at Dr Berry's home on 24 February 2008, I accept that Dr Berry handed over the signed second document without taking a copy or feeling perturbed that he did not receive a copy soon after (see [94]-[97] above). 190 Mr Brown gave evidence that, as he was about to fly to Australia, Mr Chapman handed him a thin envelope at Heathrow after the 24 February 2008 meeting. Securency relied on that evidence to establish that Mr Chapman was unlikely to have had Dr Berry sign a substantial (in page numbers) second document for return to Australia. However, if, as I have found, Mr Chapman's use of the second document was a ruse to procure Dr Berry's execution of the termination letter, he had no need to include an inconvenient document in the material that Mr Brown was to take to Australia. All that Securency wanted was the termination letter signed by Dr Berry. In any event, I have no confidence in Mr Brown's reliability as to the size of any documents included in an envelope that he received, but did not open, well over nine years before he gave evidence about it. I place no weight on Mr Brown's evidence of his recollection of the size of the contents of that envelope. 191 Securency argued that Dr Berry's description of the second document as having "been about 35, 40 pages" was implausible since no such document had been discovered. However, the absence of any discovered record is consistent with what Securency did in not discovering any record of the draft memorandum of understanding that Mr Chapman left in 2007 with Dr Berry's secretary (see [150] above), and the slippery and deceitful manner in which it set about procuring, and ultimately achieved, Dr Berry's signature on the termination letter. Securency prepared a false paper or audit trail for how it replaced Dr Berry and GSC as its agent in Nigeria. The retention by Securency of any record, or reference to the existence, of a second document, just as with the draft memorandum of understanding, would have undone the purpose for which its officers (Mr Ellery, Mr Brown and Mr Chapman) created that false paper or audit trail of how JH Marketing and SPT came to be Securency's Nigerian agents. It is not necessary for me to find how Securency came not to discover both the draft memorandum of understanding and the second document that Mr Chapman took to, and away from, the 24 February 2008 meeting. I am satisfied, however, that had it produced or revealed the earlier existence of either or both documents to its external lawyers, who act for it in this proceeding, they would have ensured that Securency's list of documents revealed that fact. 192 I do not place much significance on Dr Berry's estimate of the length of the document as "35, 40 pages", beyond finding that it is likely to have been a document of some length and that it had the appearance of being a deliberate commitment by Securency to proceed with allowing him to achieve his objective of constructing an opacification plant in Nigeria. There is no suggestion that Dr Berry counted the number of pages at the time or paid any attention to the page numbering. He reviewed the second document, flicking through it, while engaged in his discussion with Mr Chapman whom he (mistakenly) no doubt thought he could trust. 193 Since Mr Chapman had described the termination letter to Dr Berry as being "routine", I find that he also said, or by his words and conduct created the impression, that Dr Berry should treat the second document in a similar fashion, namely, as being, in effect, a formality or matter of routine that would all be worked out in good faith between Securency and Dr Berry in due course. As far as Dr Berry knew, on 24 February 2008, Securency was still seeking to address his and Governor Soludo's pressing requirement for clarification of what Securency was proposing for the construction of an opacification plant that the Governor had insisted on in the late November 2007 meeting in London with Dr Berry and Mr Brown. 194 In my opinion, based on what Mr Chapman said during the 24 February 2008 meeting, Dr Berry considered, reasonably, that if Securency were prepared to put forward for his signature an agreement of the kind that he saw the second document as reflecting, as he flicked through and discussed it with Mr Chapman, that would ensure that in future discussions with Governor Soludo and other senior Nigerian officials, he (Dr Berry) would have a firm basis to negotiate for more orders for polymer notes and the construction of the opacification plant. In that context, I am satisfied that Dr Berry did not consider that he needed to review the second document in any detail or seek legal advice on it before signing it. As a savvy businessman, Dr Berry would have known that, like Mr Chapman's promised rework of the agency agreement, the second document would be renegotiated by the time it came for him to arrange for the construction of the opacification plant. What mattered to him was that the second document appeared to evince a firm indication that Securency was now prepared to move forward to co-operate in the construction of the long discussed opacification plant to satisfy both his and Governor Soludo's repeated urgings for this to occur. 195 Dr Berry did not use emails or letters to communicate, but rather he, generally, interacted orally with those with whom he dealt in meetings or over the phone, and he also used text messages from time to time. Nor, as the evidence demonstrates, did he write letters confirming or giving his version of a business meeting or decision. By 24 February 2008, he had dealt with Securency for over four years. Had he been a prolific, or even occasional writer of letters or emails, it would have been likely that some examples of those modes of communication would have been in evidence. After all, he was dealing with senior officials, up to the President of Nigeria and Governor Soludo, yet he did not report to Securency in writing about those matters or provide it with copies of any correspondence or emails with Nigerian officials. 196 I think that Dr Berry's habit of orality and personal one-on-one interaction in his day-to-day dealings, just as his cultural inclination to eat Indian food, as Indians do, with his fingers (as he said he did at the lunch on 24 February 2008), informed his explanation in his evidence of how he dealt with Mr Chapman. An Australian or English businessperson, and particularly a lawyer, frequently, if not habitually, will document requests and meetings, that persons from other cultural backgrounds will not: cf. Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186 at 190 [21]-[22] per Ipp JA with whom Mason P and Tobias JA agreed. Although Ipp JA and his quotation from Sir Thomas Bingham's article: "The Judge as Juror: The Judicial Determination of Factual Issues" (1985) Current Legal Problems 1 at 10-11 concerned specifically the difficulty in making demeanour based findings, what both judges wrote has equal application to taking account of cultural differences in the behaviours of individuals. Sir Thomas Bingham wrote: [H]owever little insight a judge may gain from the demeanour of a witness of his own nationality when giving evidence, he must gain even less when … the witness belongs to some other nationality and is giving evidence either in English as his second or third language, or through an interpreter. Such matters as inflexion become wholly irrelevant; delivery and hesitancy scarcely less so. … If a Turk shows signs of anger when accused of lying, is that to be interpreted as the bluster of a man caught out in a deceit or the reaction of an honest man to an insult? If a Greek, similarly challenged, becomes rhetorical and voluble and offers to swear to the truth of what he has said on the lives of his children, what (if any) significance should be attached to that? If a Japanese witness, accused of forging a document, becomes sullen, resentful and hostile, does this suggest that he has done so or that he has not? I can only ask these questions. I cannot answer them. And if the answer be given that it all depends on the impression made by the particular witness in the particular case that is in my view no answer. The enigma usually remains. To rely on demeanour is in most cases to attach importance to deviations from a norm when there is in truth no norm. 197 In a sense, Dr Berry's way of conducting his business relationships, in which, of course, he signed documents and did so on occasions after referring them to his lawyers, put him at a forensic disadvantage in a legal proceeding such as this, since he may lack any contemporaneous or other documentary records of a particular occasion. And, of course, that lack of documentary material may make the reliability of his memory more vulnerable or fragile. However, the text messages recovered from his old mobile phone, which were not complete, and Securency's records generally, did corroborate his evidence. 198 Dr Berry was cross-examined about his and GSC's four pleaded formulations of the representations that Securency, through Mr Chapman, allegedly successively had made, in the original (filed on 23 December 2013), amended (filed on 20 February 2014), further amended (filed on 7 December 2015) and second further amended (filed on 21 December 2016) statements of claim, in order to procure him to sign the termination letter. In its closing submissions Securency repeated, what it said was, the significance of the disconformity between the various versions of those representations and other matters pleaded in the four statements of claim both internally and with Dr Berry's evidence. 199 The cross-examination proceeded on false premises, namely that each statement of claim was in some way an admission and that Dr Berry was the author, or had settled, or had approved, the terms of those pleadings. At no point in Dr Berry's cross-examination did senior counsel for Securency put, let alone establish, that Dr Berry had ever seen any of the various versions of the statements of claim or pleaded representations, let alone approved any of their contents. Dr Berry gave evidence of instructing his lawyer, Mr Adebayo, about what he, Dr Berry, had said, including that, on occasion, he spoke to Mr Adebayo on a less than satisfactory Skype communication. I am not satisfied that Dr Berry ever saw, settled or approved any of the statements of claim on which he was cross-examined. There is no evidence that he did. I formed the impression that Dr Berry did not pay close, if any, attention to documents that he understood had been drafted by persons whom he trusted, such as Mr Adebayo and, at the relevant times, Securency's personnel, including Mr Brown and Mr Chapman. 200 Unverified pleadings, such as those in this Court, are not admissions, but merely statements of a party's case that are to be adjudicated by the Court. The pleadings limit and define the issues for trial and admissibility of evidence: Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 85-86 per Mason CJ and Brennan J, at 98 per Gaudron and McHugh JJ; Stohl Aviation v Electrum Finance Pty Ltd (1984) 5 FCR 187 at 201-202 per Jenkinson J. In particular, as Mason CJ and Brennan J said, an unverified pleading "does not amount to an assertion of belief in the correctness of the facts pleaded" or to admissions: Laws 170 CLR at 85. 201 The purposelessness of a cross-examination, without first (or in this case at all) establishing the foundation that the party knew and approved the contents of an unverified pleading appeared in questions that senior counsel for Securency addressed to Dr Berry, such as, "Why is it referred to in these particulars of this claim", as if it had been established that he were the author of the pleading, let alone familiar with the basis of including particulars in a pleading in relation to a pleaded allegation. Dr Berry had no legal qualifications. Moreover, I had made orders that the trial would proceed on oral evidence and that each party should serve outlines of evidence, that he or it anticipated a witness would give, that could not be departed from substantively in evidence in chief or cross-examined upon, without leave. I made those orders so that each party would have fair notice of what a witness would be likely to say when giving oral evidence and to prevent the frequently sterile exercise of cross-examining him or her on a lawyer's drafting of the witness' evidence, let alone a party's pleading. 202 Generally, human beings do not express themselves orally in the way that he or she writes, let alone the way in which a lawyer expresses (even on the witness' instructions) an affidavit, witness statement or pleading. A lay witness will adopt, most likely, the lawyer's phraseology because of a natural deference to the professional's way of doing things, without appreciating that any difference of expression when giving his or her oral account in the witness box may be seized upon as inconsistent.

[17]

Mr Chapman's evidence of the February 2008 meeting 203 According to Mr Chapman, the discussion at Dr Berry's home on 24 February 2008 was different, namely: In fact, the first thing we did was, we sat in his lounge and I passed him [the termination letter]. … I said to him, "This is the letter of release from the agency agreement. Would you, you know, sign it and keep one, and I will get the other one back to Australia". That is all. Q. Did he say anything in response? A. No, he did not, actually. He signed it. It was all over within under a minute, really. It was like just doing a bit of routine admin, frankly. (emphasis added) 204 Mr Chapman said that Dr Berry "glanced at it, he signed it, and gave me back the signed one and he kept the unsigned one". Mr Chapman said that he did not bring any other document with him to Dr Berry's house on that day. He said that after Dr Berry returned the signed letter to him they "had a bit of a chat about a very wide range of things" that continued amicably after the chef called them into the conservatory for lunch. 205 I do not believe Mr Chapman's account that Dr Berry simply signed the termination letter, first, without any prior explanation or discussion on 24 February 2008 or, secondly, on the basis of some earlier discussion (of which there is no oral or written evidence) before that date (as the letter's first sentence falsely stated) of why Mr Chapman had brought it. 206 Mr Chapman's assertion that he said to Dr Berry "This is the letter of release from the agency agreement" is revealing. First, the text messages by which the two men arranged the 24 February 2008 meeting make no reference to any "letter of release" nor did any witness refer to Dr Berry having any prior knowledge, or expectation, of receipt of the letter. Secondly, if Dr Berry had known, before that meeting, anything about such a proposal, let alone been prepared to go along with it as Securency sought, and, as Mr Chapman's recounting of, its "routine" nature suggested, it is difficult to see why Securency could not have asked Dr Berry to send a signed letter back to it. Thirdly, Mr Chapman did not give any evidence, at or in the weeks before the meeting, of putting any rationale to Dr Berry as to why he should sign the termination letter. In particular, Mr Chapman gave no evidence of referring in the 24 February 2008 meeting to Dr Berry's supposed ill health, his legal dispute with the Nigerian Government or any other reason for Dr Berry being prepared to sign, without any discussion then or beforehand, a document terminating the lucrative agency agreement as "a bit of routine admin". 207 Mr Chapman said that: Over lunch, he raised again the perennial subject of a possible future opacification plant. … He said that he was still interested in it. He insisted that this was a hot topic still with the governor of the Central Bank and other officials in Nigeria. He insisted. But that was common. He always insisted that this was a hot topic; and by now, pretty much, it was just a routine conversation about it. He also raised the subject of wanting GSC to be authorised to be an importer of materials for polymer notes, so it could operate as an importer of substrate - substrate meaning the already opacified polymer sheets - to supply to [the Mint]. (emphasis added) 208 Mr Chapman said that they discussed these matters for about 20 minutes during which he said that he told Dr Berry that he would need express permission from the CBN and probably the President to build an opacification plant as well as to import materials for use in printing banknotes. Mr Chapman said: the idea that you can build a plant and be importing materials without those kinds of approvals is just ridiculous in the banking industry. It just does not happen. So, I explained that to him. He insisted it was still a goer. So, I said I would go back and talk to Securency about what the whole framework would be of being able to do that. (emphasis added) 209 Moreover, as the meeting that Mr Brown and Dr Berry had had with Governor Soludo in late November 2007 and Securency's subsequent drafting of a letter for the Governor showed, Dr Berry's discussion of an opacification plant was also central to the Governor's agenda for introducing and increasing the use of polymer banknotes in Nigeria. Mr Chapman's evidence that I have just set out sought to downplay, falsely, Dr Berry's emphasis on the need to proceed with an opacification plant in order to satisfy, also, Governor Soludo's vision. 210 Mr Chapman said that the occasion on 24 February 2008 was an "amicable heated discussion" of the kind the two men frequently had, which was not bitter or personal At the end of the lunch, he got into his car and drove home where he scanned the letter Dr Berry had signed to Securency. 211 Mr Chapman denied in cross-examination that he had brought any other documents to Dr Berry's home or that he had ever been in Dr Berry's study. He denied saying that the termination letter did not affect the agreements for the continuing supply of polymer. Also, he denied as "absurd" that he told Dr Berry that he had to sign the termination letter to bring the agency agreement to an end before they could move forward with the partnership agreement for an opacification plant. Mr Chapman also denied that he showed Dr Berry the second document and that he described it as drafted by lawyers in Australia. He denied telling Dr Berry that if he signed the termination letter, he would take the second document back to Australia and send a copy back to Dr Berry. 212 Mr Chapman also denied knowing that the Nigerian Government was "extremely interested" in the construction of an opacification plant. Having regard to the consistency of Securency's written presentations and other evidence, to which I have referred above, and Mr Chapman's participation in the drafting process and email exchanges before and following the November 2007 London meeting between Governor Soludo, Mr Brown and Dr Berry, I am satisfied that that was a deliberately false denial. 213 As his cross-examination exposed, Mr Chapman had given a very different explanation of how the termination letter came to be signed in his affidavit that he affirmed in Brazil on 17 June 2014 before a partner of Mr Hope. In that affidavit, Mr Chapman asserted that: in January 2008, he met with Dr Berry at his home and, in the course of a civilised, pragmatic discussion, Dr Berry said that he did not want the agency agreement terminated for breach and that, from his perspective, it looked much better if he just signed a letter confirming that that agreement had come to an end; subsequently, he had a short meeting with Dr Berry in a coffee shop at Heathrow, where he handed Dr Berry the termination letter in duplicate and Dr Berry signed both. 214 In re-examination, Mr Chapman asserted that the date of the first of those two meetings (which he had placed, in his affidavit, as being in January 2008) was in winter, but in around October or November 2007. I do not believe any of that account of Mr Chapman's. It is inconsistent with the contemporaneous documentary evidence. First, Mr Chapman had begun his activities to cause the appointment of JH Marketing by early July 2007, long before the English winter began. Secondly¸ Securency never suggested, in any internal document or otherwise, that Dr Berry was in breach of the agency agreement. Indeed, Mr Brown wanted him to attend, as he did, the meeting with Governor Soludo in London in late November 2007 and the earlier meeting where they worked out their strategy for the meeting with the Governor. Thirdly, by the time of the 24 February 2008 meeting, Securency had received the signed JH Marketing agreement and was ready to provide JH Marketing with its signed counterpart as soon as Mr Chapman succeeded in having Dr Berry sign the termination letter. Fourthly, as the text messages that Dr Berry and Mr Chapman exchanged to arrange the 24 February 2008 meeting showed, Dr Berry had no idea why Mr Chapman wished to see him but was co-operative in facilitating the "routine" meeting. Fifthly, had Dr Berry asked to be "released" as Mr Chapman asserted, Mr Chapman would have reported just that, rather than fabricating his claim that Dr Berry was in ill-health. And, of course, if Dr Berry wanted to be released from the agency agreement, it would have been the work of an instant for him to write such a letter himself. Last, if Dr Berry really wanted to be "released" without an allegation of breach, there was no reason why Mr Chapman could not have sent (or left with Dr Berry's secretary) the termination letter for him to sign. 215 In my opinion, the account in Mr Chapman's affidavit, and his evidence in re-examination of the supposed meeting being in October or November 2007, were fabrications calculated to give plausibility to his earlier false account. 216 Mr Chapman gave yet another account of how, he asserted, Dr Berry came to relinquish the agency agreement that was also inconsistent with the contemporaneous documentary evidence, and his above account in his 17 June 2014 affidavit. In his evidence in chief, Mr Chapman said that he went to lunch in March, April or May 2007 at Mr Harding's home in England at which his daughter, Ms Whatley, joined them. He said that he had also had meetings with combinations of all of Governor Soludo, Mr Harding and Dr Berry. He said that what emerged out of these meetings "was that [JH Marketing] - which was Amanda Whatley's company, would take over the functions of the agency instead of GSC, and [Dr] Berry was well aware of that". Mr Chapman also said, after he was taken, in chief, to the 15 August 2007 memorandum (that I have found was backdated as part of the creation of a paper or audit trail), that Dr Berry's response to that proposal was that: He was a bit disappointed, because it was a disappointing situation that he was in [namely not being able to travel to Nigeria] but he saw that it was a pragmatic, workable situation. We discussed exactly that, that he would work with Mike and Amanda, and it was the best thing for that time. 217 Of course, Mr Chapman's 15 August 2007 memorandum gave the lie to this evidence because it proposed, supposedly, three to five months later, that Dr Berry's ill health might impact on his being able to fulfil his duties which meant that Securency "should therefore have a succession plan for this eventuality" (see [114] above). The express terms of his 15 August 2007 memorandum negated Mr Chapman's evidence that Dr Berry and Governor Soludo had accepted an arrangement in March, April or May 2007 that Mr Harding and Ms Whatley would replace Dr Berry and GSC as Securency's Nigerian agent. 218 None of the texts between Mr Chapman and Dr Berry in evidence refer to Ms Whatley or JH Marketing at all. Dr Berry referred in his texts, in about October 2007, only to Mr Harding seeking money and being "desperate". Those texts are irreconcilable with some antecedent or existing arrangement for Dr Berry and GSC to surrender the agency agreement to JH Marketing or at all. In addition, the invoice dated 30 October 2007 from JHM Global (see [132] above) is inconsistent in itself with not only the 15 August 2007 memorandum and Mr Chapman's assertion that by then there was some arrangement that JH Marketing would take over the agency from Dr Berry and GSC, but also with Mr Harding in his own right having a 40% shareholding in GSC. Dr Berry's texts in October 2007 show that he had not come to any understanding that Mr Harding had any role to play in the performance of the agency agreement or a right to receive any remuneration or other money arising out of it. Further, the way in which Securency acted in January and February 2008, by dealing completely separately with JH Marketing and Dr Berry, was, itself, inconsistent with Dr Berry having accepted beforehand on some occasion, about which there was no evidence, that he would be replaced by JH Marketing. There was no consensual arrangement in place for a smooth hand over by Dr Berry of his agency when the 24 February 2008 meeting occurred. As Mr Curtis' email of 14 February 2008 made clear, Securency needed "to get the ducks in a row re BB and getting the new one finalized" (see [179] above). I have rejected as fabricated Mr Chapman's evidence of the meeting or meetings in March, April or May 2007 given in his evidence in chief. 219 For these reasons, I do not believe Mr Chapman's assertion that Dr Berry knew during 2007 and 2008 of the existence of JH Marketing or Ms Whatley or accepted or acquiesced in either of them or her father (Mr Harding) replacing him and GSC as Securency's agent in Nigeria. Moreover, Securency's senior counsel did not put this assertion to Dr Berry in cross-examination. 220 The key to how Dr Berry approached the signing of the termination letter is in Mr Chapman's evidence quoted at [203] above namely: It was all over within under a minute, really. It was like just doing a bit of routine admin, frankly. (emphasis added) In other words, Mr Chapman pitched to Dr Berry the line that his signature of the letter was "a bit of routine admin". Dr Berry also gave evidence of Mr Chapman saying that the signing of the termination letter was "routine" (see at [188] above). Mr Chapman never suggested that at the meeting on 24 February 2008 he told Dr Berry that the termination letter was the end of the agency relationship. 221 Of course, that is how that document read on its face, as Dr Berry would have appreciated when he signed it. But were the termination letter to have had its literal effect, devoid of any context in which Dr Berry had been forewarned of that literal effect, no one could describe Mr Chapman's proffering it to him to sign as "routine". Moreover, Mr Chapman gave no context as to why this "routine" letter was to bring about a termination that was retrospective to before late January 2008, when Securency had received (but never disclosed to Dr Berry) the order for 10,000 reams and Mr Okoyomon's information that another, for 20,000 more reams, would come during 2008. It is the essence of routine administration that nothing substantive changes, even though some loose ends may be tidied up and formalities addressed. 222 As appears in [254] below, on 6 August 2008, Securency terminated, "as a bit of routine admin", the JH Marketing agreement, less than six months after it was made, on the basis that it would be immediately replaced, as it was, by one with JHM Global. 223 Indeed, the interactions between Dr Berry and Mr Chapman that continued after the lunch meeting on 24 February 2008, including the text messages later that day, manifested that nothing substantive (such as the complete termination of the agency relationship between Dr Berry and Securency), or non-routine, had happened at the meeting. That was because this was exactly the impression Mr Chapman had sought to convey to Dr Berry and he succeeded in doing so. Mr Chapman's slippery use of the accoutrements of "routine admin" to trick Dr Berry into signing the termination letter, was akin to the lucid description of a fraud that Lord Blackburn gave in his speech in Smith v Chadwick (1884) 9 App Cas 187 at 201, namely: The defendants might honestly believe that the shares were a capital investment, and that they were doing the plaintiff a kindness by tricking him into buying them. I do not say this is proved, but if it were, if they did trick him into doing so, they are civilly responsible as for a deceit. And if with intent to lead the plaintiff to act upon it, they put forth a statement which they know may bear two meanings, one of which is false to their knowledge, and thereby the plaintiff putting that meaning on it is misled, I do not think they can escape by saying he ought to have put the other. If they palter with him in a double sense, it may be that they lie like truth; but I think they lie, and it is a fraud. Indeed, as a question of casuistry, I am inclined to think the fraud is aggravated by a shabby attempt to get the benefit of a fraud, without incurring the responsibility. (bold emphasis added, italic emphasis in original)

[18]

The events immediately following the 24 February 2008 meeting 224 After Mr Chapman left Dr Berry's home, later that afternoon, at 5.26pm, he sent a text to Dr Berry that recorded that he had seen a missed call (from Dr Berry) and would speak to him at about 6.00pm when he finished his then current meeting. At 10.42pm, Mr Chapman sent Dr Berry another text thanking him for "the excellent lunch" and suggesting that they meet the next day, Monday, at 2.00pm at Heathrow with Mr Brown who was flying out then. Mr Chapman's text continued: He's [Mr Brown] keen to discuss ways forward, didn't go into detail on the phone about some aspects but got his attention. Let's give it a shot. Pls [Please] let me know if you can make it. (emphasis added) 225 Next, 17 minutes later, Mr Chapman sent another text as follows: Still think we need to get Hugh's attention on a couple of aspects. This will help you and me to have some space to come up with solutions he will assist with endorsing upstairs. So pls [please] make it to Heathrow if you can. I will call you to advise on best approach with him. (emphasis added And, seven minutes later at 11.06pm, Mr Chapman sent a further text saying, "What time good for you to talk? Need to sleep now!" 226 At 11.58pm that night Dr Berry sent Mr Chapman a text, saying: Have no problem meeting Hugh … but do not feel [a] hurried meeting at HRow [Heathrow] will achieve anything. I think u & I should sit down when we have time and propose a way fwd [forward]. I have given it considerable thought after u brought it up today and might have some suggestions. Mr Chapman replied soon after and they agreed to speak later in the morning of 25 February 2008. 227 Dr Berry said that earlier at lunch he had spoken with Mr Chapman about financial and technical issues about which Mr Brown was to speak with Mr Ellery, when he went to Australia. Those issues concerned the difference in the construction cost figures for the opacification plant of USD25 million and USD35 million. Dr Berry said that he wanted to know how the extra USD10 million had come about, especially if the RBA did not want to participate in such a plant in Nigeria. He also wanted to know if Securency wanted to participate and how. He said that the second document, that he had signed at the lunch, provided that GSC would fund the construction entirely by itself with: no participation in the funding from the Australian end. We were now working out what were going to be the continued guarantees for the supply of the substrate for the opacification plant, which I needed to have in place before I would raise [USD]35 million and invest it. 228 Dr Berry, in his 11.58pm text of 24 February 2008, referred to his discussion at lunch with Mr Chapman about the increase in the price of the plant and the RBA's position that it would not participate in its construction or operation. (I understood Dr Berry to have been concerned that this decision meant that Securency, as a joint venture company 50% owned by the RBA, also would not be investing in or operating a Nigerian opacification plant.) He said that he needed to be sure that a Nigerian plant would have guaranteed supply, for the next 15 to 20 years, of the polymer film that the plant would opacify, saying: It was not a question of giving them to me and saying, "Yes. We will continue to supply." I needed firm guarantees, and those guarantees had to come from the Reserve Bank of Australia. 229 On 26 February 2008, Mr Chapman emailed a scanned copy of the termination letter to Mr Ellery, writing that he had given the original to Mr Brown to hand deliver. 230 On 29 February 2008, Mr Chapman sent a text to Dr Berry that read, relevantly: Discussions with our chaps going well. Will see them with Hugh [Brown] next Friday night after board meeting. Will call you when I'm back in the UK. Trying to pin main man to meeting Sunday. (emphasis added) 231 I infer that the "main man" was Governor Soludo. If Dr Berry and GSC had terminated their agency relationship with Securency, five days before, there is no intelligible reason for Mr Chapman to be writing that discussions within Securency were "going well" and that he would see his superiors with Mr Brown in Melbourne (as I infer was the place of the board meeting) before calling Dr Berry on his return to the United Kingdom. Moreover, Mr Chapman was also telling Dr Berry about a meeting that he was trying to organise with Governor Soludo on the following Sunday (which I infer was when he would be at Heathrow or in London following his return from Australia). In the balance of that text, Mr Chapman offered to discuss a separate and distinct matter, namely aspects of TSSI's business, with Dr Berry on the following Monday or Tuesday. And on 2 March 2008, Mr Chapman sent Dr Berry a text saying, "No meeting time or location from man yet. Am chasing". 232 On 5 March 2008, Dr Berry sent a text to Mr Chapman asking him to call as soon as possible and Mr Chapman responded on 9 March with a text saying: Reasonable progress. John [Ellery] still here to work on legal structure and draft document. Should have it for your perusal Tuesday or so. (emphasis added) 233 If Dr Berry were too ill or inappropriate (because he was in a commercial dispute with the Nigerian Government) to continue as Securency's agent, then there could be no occasion for Mr Ellery to be working on a legal structure and draft documents to give to Dr Berry. Certainly, Securency gave no explanation of why it was engaging in this interaction with Dr Berry, in the days following his signature of the termination letter, if, as it subsequently asserted, he and GSC had decided unequivocally to give up the right to act as Securency's agent in Nigeria and the ECOWAS States. I infer that Mr Chapman's reference to the "legal structure and draft document" related to the structure of a relationship between Dr Berry and Securency concerning the proposal to construct an opacification plant in Nigeria and to a replacement agency agreement as had been discussed between the two men on 24 February 2008. 234 In final address, senior counsel for Securency submitted that the expression "legal structure and draft document" related to the structure that would exist between Dr Berry and JH Marketing. I reject that argument. First, there was no evidence to support it. Secondly, the argument did not explain why, if JH Marketing had, or was to have, some relationship with Dr Berry, Securency was working on that issue rather than Dr Berry and JH Marketing doing so. Thirdly, on 9 March 2008, Mr Chapman sent another text to Dr Berry, saying that he had seen Mr Ellery off at Heathrow and that the latter was "working on some legal issues so it all flies upstairs but [Mr Ellery] thinks we can tackle most things". Fourthly, (as described in [237] below) Securency wrote two letters dated 16 March 2008 to Dr Berry, as managing director of GSC, dealing with the topics of supply of opacified polymer (or polymer substrate) and a memorandum of understanding for constructing an opacification plant in Nigeria. 235 Securency did not challenge Dr Berry's evidence about the text messages discussed above or their context in the period after the 24 February 2008 meeting and Mr Chapman was not asked anything in chief about them. I accept Dr Berry's evidence about these. I have inferred that any evidence of Mr Chapman's on these text messages would not have assisted Securency's case: Kuhl 243 CLR at 384-385 [62]-[64]. 236 Those text messages do not demonstrate that Securency or Mr Chapman had terminated once for all Dr Berry's and GSC's agency for Securency. To the contrary, they confirmed that what had occurred during the lunch was a matter of routine administration, not a cessation once for all of the agency relationship. And Mr Chapman agreed that, after 24 February 2008, he continued to speak to Dr Berry as though nothing had changed. That was the very impression that Mr Chapman, and through him Securency, wanted Dr Berry to believe, being the deceit that they practised on him. 237 Importantly, on 16 March 2008, after discussing their content with Mr Ellery (see [297] below), Mr Chapman signed two letters on Securency's letterhead addressed to the managing director of GSC, one dealing with Securency's conditions for the supply of polymer substrate (i.e. the material that an opacification plant would convert into opacified polymer on which printing of banknotes could occur) and the second headed "Conditions for the consideration of a Memorandum of Understanding pertaining to the construction of an Opacification Plant in Nigeria". Securency expressed the letters in qualified language, and referred to its need to be satisfied that the appropriate Nigerian authorities had granted formal and irrevocable permission to enable the proposal to proceed. The letter dealing with the memorandum of understanding referred to Securency's preparedness to consider negotiating such a document with GSC. Dr Berry said that he needed letters in this form to be able to sit down with the CBN to discuss how they would both proceed. 238 Securency, itself, did not manufacture the polymer film, which Innovia Films made and then supplied to Securency to process in its opacification plant. The evidence was unclear as to Dr Berry's understanding of how that arrangement operated but as he was dealing with Securency (and it was involved in the project to construct an opacification plant in Mexico) it was important for him to ascertain, via Securency, that if an opacification plant were constructed in Nigeria, he had a guaranteed supply of the polymer film that was essential for its operation as a commercial enterprise. 239 On 22 March 2008, Mr Chapman sent a text to Dr Berry informing him that Governor Soludo was due to be in England and that he hoped that they would meet on Monday. Dr Berry replied asking Mr Chapman to "let me know the plan of action". On 23 and 24 March 2008, Mr Chapman and Dr Berry exchanged texts arranging to meet in a meeting room at the Hilton Metropole Hotel before they met with Governor Soludo. 240 On 24 March 2008, Dr Berry and Mr Chapman met together and then with Governor Soludo at 11.00am at the Metropole Hotel. Mr Chapman had no recollection of this meeting with Dr Berry and Governor Soludo other than that there was nothing unusual or not routine about it. There could have been nothing "routine" in such a meeting, if Dr Berry and GSC had ceased to be Securency's agent one month earlier, especially if his active arbitration against the Nigerian Government were a cause for any genuine concern on behalf of Securency. On the other hand, Dr Berry gave unchallenged evidence of his "very clear" recollection that, at the meeting, the Governor wanted to know what progress Dr Berry and Securency had made on the issue of a partnership to construct an opacification plant in Nigeria and that Mr Chapman had "assured him that we were well on course". Dr Berry said that the only then unfinalised matter was the guarantee of continued polymer supplies for the opacification plant to process. Although neither Dr Berry nor Mr Chapman referred to Securency's two letters of 16 March 2008 in connection with this meeting, I infer that Mr Chapman ensured that Dr Berry had received them for the purpose of his being able to assure the Governor of the then position on the progress that Securency and Dr Berry were making to progress towards the construction of the opacification plant.

[20]

The SPT agency agreement 243 At some point in early 2008, Mr Chapman arranged with Mayfair Trust to acquire two shelf companies in Seychelles, one of which was Paladin. It was incorporated in Seychelles and, as I have noted at [124] above, only changed its name to SPT on 26 May 2008. Mr Chapman agreed that he was "heavily involved in the establishment of SPT Limited in … Seychelles", undertaking many of the steps to do so. He was the "protector" (which he said gave him power to oversee, dismiss and change the trustees) of two trusts that held SPT's issued capital. He caused Swingaxle to pay for the costs associated with establishing SPT, totalling around USD15,000. 244 Mr Chapman said that he had admitted, truthfully, for the purposes of his criminal trial, that "Swingaxle is essentially an extension of myself". Mr Chapman said that in about 2009, Swingaxle had entered into two loan agreements with SPT that provided that Swingaxle would pay money to each of Mr Marais and Mr McArthur and that Mr Chapman then arranged for the payments. Mr Chapman also said that Swingaxle was one source for his payments of bribes to Mr Okoyomon. 245 Mr Chapman asserted that there was also a company called SPT in South Africa owned by Messrs Marais, McArthur and McKay. Mr Chapman also said that the South African SPT "had not actually traded" and that it "redomiciled" to Seychelles. He said that when this occurred they had stopped using the South African company and instead used the new SPT, which acted as Securency's agent in Nigeria. He gave this evidence that I do not believe: JUSTICE RARES: What do you mean redomiciled? A Yes, Mr. Marais and Mr. McArthur had [been] working under the banner of SPT in South Africa, with Mr. McKay. It was decided that they would rather have it based in the Seychelles, so they redomiciled that entity, the entity being really two effective people, redomiciled and rebased the business in the Seychelles, hence the need to open the business there, so it was redomiciled. (emphasis added) 246 Mr Chapman asserted that Mr McKay was a chartered accountant. He said that Mr Marais and Mr McArthur could not pay the establishment costs for the Seychelles SPT because of South African exchange controls but that, by then, they had worked for 9 or 10 years for Securency without remuneration, which was why he had Swingaxle pay the establishment costs. However, he also said that, for all that time, Mr Marais was the managing director of UCB South Africa, a subsidiary of the RBA's joint venture partner in Securency. It would be unusual for such a senior executive to be in a position where he simultaneously with his full time employment conducted his own substantive enterprise. 247 Mr Chapman said that Mr Marais had introduced Mr Raad to Securency in Nigeria because Mr Raad's brother was the agent for UCB Plastic Films there. Mr Chapman said that Mr Raad was appointed as a subagent to SPT and received some of its commission payments. He also said that JH Marketing and JHM Global were subagents of SPT and also received some of its commission payments. (I do not believe that evidence, for Securency paid JHM Global commission directly and had an agency agreement with it and, before that, JH Marketing (see [281] below).) He asserted that they were all "collaborating on a number of things". Mr Chapman accepted that during 2008 and 2009, SPT had paid Mr Raad a total in excess of €1.6 million because, he said, Mr Raad "was working for SPT". 248 There was no explanation why neither Mr Marais or Mr McArthur was a director or shareholder of the Seychelles SPT, if it were their company, and why they were not mentioned on the request dated 1 January 2008, especially if Mr Marais was connected to it when he was then currently managing director of the South African UCB company. Mr Chapman's role in establishing SPT in Seychelles suggested, as I find, that he had a substantial interest in it. 249 On 22 July 2008, Mr Ellery emailed Mr Chapman attaching for his review two draft agency agreements "as discussed. Please note that we are still awaiting completion of the due diligence for SPT". 250 On 23 July 2008, Mr Chapman forwarded only a draft agency agreement for SPT to Mr Marais and Mr McArthur seeking that they review it so that "we can get it issued and signed at your end". He said that the due diligence (on SPT) had not been completed but would be imminent once Securency received some taxation certificates that they had discussed. 251 Mr Chapman replied to Mr Ellery later on 23 July 2008 thanking him for sending drafts of, relevantly, two agency agreements. He wrote that the one for JHM Global looked fine and that he had emailed it to Ms Whatley, asking her to sign it before Mr Ellery travelled to the United Kingdom to meet with her. He said that she had agreed "to sign a simultaneous release of the old agreement". This occurred later on about 6 August 2008 (see [222] above and [255] below). 252 Mr Chapman also reported to Mr Ellery in his email of 23 July 2008 that the draft SPT agency agreement looked fine and that he had emailed it to SPT to review. He said that "they are aware they need to obtain the tax certificates and have this in hand". He suggested that Mr Ellery "issue" the agreement for SPT's execution to hold pending final due diligence. There is no evidence of what, if any, due diligence Securency ever performed in respect of SPT. 253 On 24 July 2008, Mr Marais replied to Mr Chapman's email saying they had "reviewed the Agency Agreement for SPT Limited" and had no comments. He requested Mr Chapman to ask Mr Ellery to issue the document for signature. 254 Clearly enough, these emails show that nothing of substance had been done to appoint any entity called SPT at any time contemporaneous with the documents that Mr Ellery, Mr Brown and Mr Chapman created for the paper or audit trail, including Mr Chapman's memorandum dated 15 August 2007, the request dated 1 January 2008 for appointment of an agent (which did not mention Mr McArthur by name), Mr Chapman's letter of 15 January 2008 and the 26 January 2008 note (see [114], [152]-[153], [158], [164] above). 255 On about 6 August 2008, Ms Whatley, on behalf of JH Marketing, and both Mr Curtis and Mr Ellery signed a letter dated 6 August 2008 terminating the JH Marketing agreement and she, on behalf of JHM Global, signed a new agency agreement between it and Securency. The new agreement appeared to be on the same terms as the replaced JH Marketing agreement (see [250] above). 256 On 7 August 2008, Dr Berry sent a text to Mr Chapman saying: I am a little surprised at the silence … my turn to ask if all is well and if u [you] are getting my messages? Dr Berry followed up with another, enquiring, text the next day, having received no reply. 257 On 13 August 2008, Mr Chapman emailed Mr Ellery and attached a draft letter for Securency to execute so that, once the SPT agency agreement was signed, SPT "could prove their status and bona fides to those with whom they need to discuss on our behalf and might require proof on a confidential basis". 258 On 14 August 2008, Contec obtained an award of approximately N29.66 billion (about USD252 million) in damages against the Federal Government of Nigeria, its Attorney General and Minister of the Interior in the international arbitration. Contec has so far been unsuccessful in its attempts in the United States to enforce the award. 259 Later on 13 August 2008, Mr Chapman sent an email to Mr Ellery captioned "SPT: letter from John McKay", attaching a scan of that letter. The scanned letter was on the letterhead of SPT on which its address appeared to be similar, but not identical, to that in the request dated 1 January 2008 (see [152]-[153] above). The letter, curiously, bore the date 12 February 2008, despite the fact that the Seychelles company, Paladin, did not change its name to SPT until 26 May 2008 (see [124], [243]). It listed its directors as Ms Mein, Ms Julie and Mr McKay. There was no mention of Mr Marais or Mr McArthur. The letter had a heading "Agency letter". Mr McKay wrote: With reference to your letter re the above, we acknowledge receipt thereof and have noted the contents. We look forward to conclusion of the Agency Agreement in the very near future. 260 No earlier letter to which Mr McKay referred was in evidence. The backdating of this letter, its vacuous content, in the context of Mr Chapman forwarding it to Mr Ellery on 13 August 2008, after Mr Marais had reviewed and accepted the terms of the draft SPT agency agreement that Mr Chapman had sent to him in South Africa on 23 July 2008, are also suggestive of its creation as a part of the paper or audit trail to explain Securency's activities earlier in 2008 in terminating the agency agreement (of Dr Berry and GSC). 261 On 18 August 2008, Dr Berry sent another text to Mr Chapman saying: Your silence is very odd. Hope u [you] are allright [sic]. Mr Chapman responded on the morning of 20 August 2008, texting that he had been "on extended leave. Now back in circulation and just arrived [in] Abuja for a routine review". The two exchanged several texts that morning. Mr Chapman suggested a meeting in early September 2008 when he would be in the United Kingdom. Dr Berry replied saying: Beleive [sic] me Peter, it was good to hear frm [from] u. The radio blackout was rather strange. I am still in the UK for a few weeks. The Award was finally published last week, much better than expected, so that is a huge releif [sic]. When are we meeting? Much to discuss. … I am rearing to go. (emphasis added) 262 Mr Chapman congratulated Dr Berry on the arbitration award and suggested a celebration. Dr Berry responded affirmatively and enquired "Are u seeing our man by any chance?", meaning Governor Soludo. Mr Chapman said that he would try to do so, to which Dr Berry replied asking Mr Chapman to let him know "when things are a bit firmer" and agreeing that celebrations were a must. 263 On 22 August 2008, Securency made its first commission payment of €1,164,979 to SPT. Securency's Commission statement for that payment described it as being, "In respect of 16,000 reams of N20 substrate shipped April-July 2008". 264 On 25 August 2008, Mr Ellery signed the final form of the letter I referred to at [253] above, addressed "To whom it may concern". The letter confirmed that "SPT Ltd of Victoria, Mahe, Seychelles have been formally appointed as Agents to represent Securency … in the Federal Republic of Nigeria" under an agreement that was valid until 31 December 2017. Mr Ellery invited any questions in respect of the letter to be directed to him. 265 Given the payment of commission on 22 August 2008 and that Mr Ellery signed the above letter about SPT's appointment on 25 August 2008, I infer that 22 August 2008 is the date on which SPT and Securency entered into the SPT agency agreement that was backdated to 1 January 2008. In it, SPT's address in Seychelles was the same as in the request dated 1 January 2008. The terms of the SPT agency agreement were materially similar to those for JH Marketing and JHM Global, except that SPT was entitled to a commission of 12% and the territory was limited to only Nigeria. 266 Thus, in 2008 Securency entered into two agency agreements with 10 year terms in respect of Nigeria under which it was liable to pay commissions totalling 20%, in lieu of the 15% commission payable to Dr Berry and GSC under the agency agreement. None of Securency's witnesses or documents explained why it had chosen to agree to pay the separate, or total, amounts of commission to Mr Harding's and Ms Whatley's companies and to SPT that were 5% greater than what it had been liable to pay to Dr Berry and GSC under the agency agreement. There is no evidence of Securency making any payment of commission to or in respect of Mr Raad after 2 February 2006. 267 Mr Chapman said in his evidence before me that he had given truthful evidence at his criminal trial about payments that, in the second half of 2008 or early 2009, he, or Swingaxle, made. He said that he (or Swingaxle at his instigation) had furnished to Securency a letter from SPT with a false invoice by which Securency paid money to SPT that was then paid to him or for his benefit. I limited the use of the transcript of Mr Chapman's evidence at his criminal trial under s 136 of the Evidence Act to be evidence only of matters on which Mr Chapman had been cross-examined before me, so that the transcript was not itself evidence of the truth of the representations in it. The criminal transcript suggested that the false invoice was for GBP40,000, but, because of the limitation under s 136, I am not able to make any definite finding about its amount beyond that Mr Chapman or Swingaxle is likely to have received a substantial benefit from its use. Mr Chapman's preparedness to use false documents for his financial benefit further reflected what I find to be his generally untrustworthy character and evidence. 268 On 29 September 2008, Dr Berry sent Mr Chapman a text informing him that he was soon to meet Governor Soludo and asking to touch base before that. 269 On 14 November 2008, Mr Chapman sent an email to Messrs Curtis, Ellery, Mamo, Brown and others, reporting on his meeting that day with Mr Okoyomon. Mr Chapman said that the Mint would begin printing the 4,000 reams that Securency was about to ship to it but needed support from PolyTeQ. He said that the advantage for Securency in this would be that it would bring forward when the Mint would take, and pay for, some of the further 20,000 reams it had ordered, which now was likely to occur in February 2009. He wrote that: Signs continue to be good for the other 3 low denom[ination]s. There will be a lot of activity on this in the next week or so, and I will advise as things develop. 270 Mr Chapman's report of his positive interactions with Mr Okoyomon (and I infer the one that he reported in late January 2008 (see [162] above)) can be seen to be linked to his convictions for paying bribes to Mr Okoyomon in early 2009 and why Mr Chapman wanted to replace Dr Berry and GSC with others through whom or which he could channel or obtain the money to pay the bribes he ultimately paid. 271 On 15 November 2008, Dr Berry texted Mr Chapman asking if he would be in the United Kingdom on the next weekend because "we must spend some time together, so pl[ease] keep me posted". After several exchanges of texts, they agreed to meet at Dr Berry's in late November 2008. There was no evidence of what transpired at the meeting. However, the relevance of Dr Berry's texts with Mr Chapman and his requests for information and meetings is a demonstration that, first, he was not acting as if his agency had been terminated and, secondly, Mr Chapman was not treating Dr Berry as if it had. In making this finding I have not overlooked that Dr Berry was also seeking to pursue his and Governor Soludo's desire to construct an opacification plant. 272 By now, Securency knew that Contec had obtained the award in its favour, but there is no suggestion in any of the contemporaneous written material in evidence that Securency, Dr Berry or any Nigerian official regarded the award, or Dr Berry's and Contec's pursuit of the arbitration as an impediment to the Nigerian Government dealing with or through Dr Berry. As the text messages demonstrated, he continued to meet with Governor Soludo without any apparent problem. Since Dr Berry was aware that the commercial justification for constructing an opacification plant could only be that Nigeria had converted all its banknotes to polymer, it is inconceivable that, first, Dr Berry's interactions with Governor Soludo did not involve Dr Berry pushing the case for that conversion and, secondly, Securency, and Mr Chapman in particular, were unaware of this fact. Moreover, there was no evidence at all of anything that Mr Harding's and Ms Whatley's two companies (JH Marketing and JHM Global) or SPT did to bring about any order from Nigeria for opacified polymer. 273 On 18 December 2008, Securency made its second commission payment of €291,245 to SPT in respect of 4,000 reams of N20 substrate, being the final shipment of 2008.

[21]

Events in 2009 274 On 16 March 2009, the Mint placed an order with Securency for 16,000 reams of opacified polymer at a price of €729 per ream for production of N5, N10, N20 and N50 polymer banknotes. 275 By May 2009, articles had appeared in Australian and international media alleging that Securency had engaged in bribery of officials of foreign governments in order to secure orders for its opacified polymer and polymer banknotes. At about that time the SFO raided Dr Berry's English home while he was overseas, but his wife and young son were at home. Dr Berry said that the SFO took away whatever documents they could relating to GSC some of which, with the SFO's watermark, are in evidence. The SFO asked to interview Dr Berry and he attended at an office of the SFO where he was interviewed. In the end, the SFO paid Dr Berry damages or some compensation and did not suggest that he had engaged in any dishonest conduct. 276 On 2 June 2009, Dr Berry sent Mr Chapman a text informing him that Governor Soludo had been replaced by Governor Sanusi, who had formerly been the managing director of a major commercial bank, and whom Dr Berry described as a "very old and dear friend … done many deals!". Dr Berry and Mr Chapman spoke the next day after which Dr Berry sent a text to Mr Chapman referring to their very interesting conversation and adding: But I just wanted to clarify that I am staying action just on your word and hoping something positive materializes. Mr Chapman responded later on 3 June 2009 that he understood and had a "couple more aspects to discuss". He enquired when Dr Berry would be back in the United Kingdom. 277 On 16 June 2009, Securency made its third commission payment of €569,280 to SPT in respect of 8,000 reams of N20 substrate shipped in January and February 2009. 278 On 17 June 2009, Dr Berry sent another text to Mr Chapman enquiring what "Oz [scil: Securency's head office] wants to do, in relation to both India & Nigeria and overall vis a vis Company. Tremendous pressure here". Dr Berry said that he had started working in India with Securency and in about the first quarter of 2008 they had arranged for a trial of a 10 rupee polymer bank note. He said that this was on the same basis as his dealings in Nigeria, namely that eventually they would set up an opacification plant with the Indian Government. However, the nature of any actual or alleged relationship between Dr Berry and Securency in respect of India was not an issue in this proceeding. 279 However, Dr Berry described the position at that time in Nigeria as "quite a disaster" because Governor Soludo had lost office and been replaced by Governor Sanusi. Dr Berry said that the new Governor had approached him and asked him to clarify what was going on with GSC's position. Hence, Dr Berry said that he made the enquiry of Mr Chapman in the text of 17 June 2009. Dr Berry subsequently exchanged texts with Mr Chapman over the next month trying to get Mr Chapman to speak to him. 280 Finally by 20 July 2009, Mr Chapman sent Dr Berry a text asking him if he could have "GSC position ready to discuss tomorrow afternoon?". Dr Berry said that he understood, in the context of their discussions and his dealings with both his lawyers and Governor Sanusi, that Mr Chapman wanted to know what guarantees GSC required or could accept from Securency for the supply of polymer for an opacification plant. 281 On 3 August 2009, Securency made its fourth commission payment of €582,489.60 to SPT in respect of 8,000 reams of N20 substrate shipped in May 2009. And on 7 August 2009, Securency made its fifth commission payment of €2,625,058 to SPT in respect of substrate comprising 17,200 reams of N5 substrate, 2,765 reams of N10 substrate, 186 reams of N20 substrate, 8,951 of N50 substrate and 975 reams for "Pinks". Thus, SPT had received a total, from its five 12% commission payments, of about €5.23 million and it is safe to infer that Securency paid JH Marketing and JHM Global, at the least, €3.3 million, being their 8% commission for the same period and shipments. I note that Securency's banking records evidence a payment to JHM Global of €540,018.18 on 29 September 2009 in respect of a claim dated 18 September 2009. 282 In about August 2009 Mr Chapman sought to recoup USD110,000 from Securency for which he said he was out of pocket. At a Securency sales meeting in Rio de Janeiro, which happened to be where he and his girlfriend lived, Mr Chapman said that he told Mr Mamo that he had spent that sum on cars and drivers. As I have found at [90] above, it was necessary for the conduct of business by foreigners in Nigeria, such as Securency personnel and Dr Berry, to have cars and security to move about the country. As I noted at [115] above, Mr Chapman said at his criminal trial (and verified before me) that he had a discussion with Mr Mamo based on what, he asserted, Mr Mamo had done in 2008 about payments allegedly for cars and drivers as follows: So I said to him, "Look this how we've done it this time. I covered it in February/March and I need to be reimbursed". … He said things are very difficult back in Australia at the moment. I wasn'' really in touch that much with what was happening there but all hell had broken loose in Australia with the press articles from The Age newspaper which began in May and they were in meltdown mode as the -- Q. When you say "they", who was? A. Securency senior management, the auditors, the board, everybody was in meltdown. And they had the Australian Federal Police and auditors and KPMG crawling -- Q. KPMG being? A. The -- Q. The accountants? A. Yes. The bigger accounting firm were brought into do a complete "drains up" as they called it, lift all the drains up. And he said they were - "crawling all over us" was an expression he used. Q. Right. So he said it was very difficult in Australia? A. Yes. Q. Please tell us how the conversation continued? A. I had said, maybe a bit naively, could we just do it as we did before through SPT. And he said absolutely no way. I think it was the day before in fact, or it was around that day - it might have been the day before or the same day - when the front page of The Age newspaper had been all about Don McArthur and SPT in South Africa and Nigeria. He said absolutely no way in this climate can we do what we did at the back end of last year. So we will have to find another way. (emphasis added) 283 Mr Chapman said at both his trial and before me that Mr Mamo had proposed an alternate method of paying him the USD110,000 namely, that: Q. Your evidence is that you and senior management agreed a plan by which you would be repaid the money; is that right? A. Yes. With principally Mr Mamo and in the background Mr Brown. … Q. There were two parts to the plan. One relating to untaken leave? A. Yes. Q. And the other relating to the consultancy agreement? A. Correct. … Q. So is this right: part one of the plan involved a fiction, ostensibly making you entitled to leave that you were not entitled to? A. It didn't bother me at all. … A. Yes, it was a fiction. Did I care? No. It didn't bother me at the time. It doesn't bother me now. Q. It was a means to an end? A. Yes. (emphasis added) 284 Mr Chapman gave this further evidence to me that also reflects his lack of integrity: Q. You are a man, Mr. Chapman, who is fully prepared to rely upon false invoices and false arrangements to obtain personal benefit? A. There is no personal benefit here. Q. You are being reimbursed for money that you have spent? A. That is not [a] benefit. Q. … Mr. Chapman, you say to this court, do you, that you were prepared to be reimbursed by Securency based upon knowingly false invoices and false arrangements; you agree that that is the effect of your evidence? A. If permitted by a senior officer of the company, yes. (emphasis added) 285 Mr Brown said that he had no knowledge of any such arrangement with Mr Chapman and Mr Mamo. Mr Mamo denied saying any such thing to Mr Chapman. 286 Mr Chapman also said that Swingaxle was an agent in Nigeria for a Mr Cross or his company under a contract. He said that Swingaxle was entitled to commission on certain supplies of consumables that Mr Cross or his company provided to the Mint but that the Mind did not know of this arrangement. He asserted that the arrangement under which Swingaxle received commission was "for a short period … in 2006 I think" and that he had disclosed his ownership of Swingaxle to Mr Ellery and Mr Brown in Mexico in July 2007. He claimed that Swingaxle had paid about 60% of its commission to Mr Raad (about which the Mint also was not informed). Each of Mr Mamo and Mr Brown said, and I accept, that he had never heard of Swingaxle.

[22]

Dr Berry's letter of 29 September 2009 287 On 29 September 2009, Dr Berry wrote on behalf of GSC and himself to Mr Curtis, as managing director of Securency, concerning his agreements with Securency in respect of Nigeria and India for the supply of polymer substrates (i.e. opacified polymer), his claims for "specific performance of technology transfer partnership agreement" and for an account and payment of his fees and commissions. Dr Berry sent copies of his letter to each of Messrs Ellery, Brown and Chapman. 288 In his letter, Dr Berry recited some of the history of his relationship with Securency from 2003, including the original promise of 20% as the rate for his commission. He noted that Securency had undertaken to issue him with a letter granting him a similar agency agreement for India as that for Nigeria "upon your resolving your issues with your erstwhile agent" (being a reference to an agent whom, Mr Brown said in his evidence, had been charged in India with an offence relating to an oil for food program). He noted that he (and GSC) had successfully introduced polymer technology to Nigeria and that, as paper notes were being phased out gradually, all denominations of the naira were converting to polymer. 289 The letter complained of Securency's failures to disclose the contracts or orders that his (and GSC's) agency in Nigeria had secured and to pay resulting commissions. He wrote, accurately, I find, in respect of Nigeria: It is very apparent by now that the principled objectives of transferring technology to developing nations which formed the basis of relationship with your Company, Securency in West Africa and India is mere lip service, the truncation of which requires your sidelining us so that the polymer based mint which we had planned to establish in Nigeria and India would not see the light of day. You regrettably consider it to be in your interest to continue to offer pay-offs and kick-backs to public functionaries in poor nations rather than deliver the promised technology transfer. 290 Dr Berry concluded his letter by demanding that within seven days Securency render accounts of all its contracts in respect of Nigeria, as well as India, pay his and GSC's outstanding entitlements to commission at the rate of 20%, effect a clear and verifiable work plan for "technology transfer in line with our contractual agreements" (scil: establishing a partnership for the construction of an opacification plant) and cease making illegal payments to public officials. 291 Dr Berry said that he had not been aware that Securency had appointed other agents (apart from him and GSC) in Nigeria until the scandal broke in the media. He said that before the news of the scandal broke, he had been communicating with Mr Chapman about the need for Securency to pay his commission and formalising: how we were going to incorporate the partnership agreement. And it wasn't until I realised what they had been up to that I found it absolutely necessary for the first time to write a demand letter. I had never done it in my entire relationship with them. 292 I accept that evidence. It is supported by the text messages and the other evidence to which I have referred, particularly the "routine" or "business as usual" way in which Mr Chapman continued to interact with Dr Berry in the texts sent on 24 February 2008 and thereafter, including the meeting that they both had with Governor Soludo on 24 March 2008. 293 On 1 October 2009, after he received Dr Berry's letter of 29 September 2009, Mr Ellery sent an email to Mr Brown and Mr Chapman seeking their comments on the matters Dr Berry had raised. Mr Brown replied on the same day saying that he would discuss it in detail, but added that Dr Berry never had any mandate to act for Securency in India. Relevantly, he wrote: Suffice to say Mr Berry's statements are without foundation. He was contracted to us for a period of time but that contract was rescinded when it became clear he was not competent to have any impact on our business interests. (emphasis added) 294 Mr Brown's criticism of Dr Berry's competency is revealing for its disingenuousness, as was much of his evidence. Notably, Mr Brown did not write then, as he claimed in his evidence, that Dr Berry was being replaced because of Securency's supposed decision to have an agency for the whole of Africa or because of the Contec arbitration or, as laid out in the false paper or audit trail he had been party to creating, because of Dr Berry's "ill health". 295 Mr Chapman provided a more detailed response that he faxed to Mr Brown as his "rebuttal of BB's 09-2009 letter". However, he corroborated some of what Dr Berry had set out as the history or the relationship, including: Mr Raad, as Securency's agent at the time of Dr Berry's introduction in 2003, "had not been entirely unsuccessful"; "the general idea was to facilitate the TT [technology transfer] to Nigeria but it was implicit that this could only be done when sales were achieved"; Dr Berry had worked to ensure the successful acceptance of polymer technology in Nigeria; Mr Chapman had accompanied Dr Berry at meetings at the Presidential Villa - Mr Chapman appeared to accept that Dr Berry had had a role (as his letter asserted) in placing the polymer technology issue on the agenda for the meeting in Abuja between Prime Minister Howard and President Obasanjo; "It is fair to say that GSC did a good job as agent in securing the N20 onto polymer", although, Mr Chapman added, there was a significant effort by Securency "and other agents". 296 However, Mr Chapman wrote that not all of Nigeria's banknotes had been converted to polymer; only the lowest four denominations had. He said that Dr Berry had not been involved in the project since 2007 and the agency agreement had been terminated at the end of 2007 "with a release letter signed by him in early 2008. He has not been in Nigeria since early 2006". Significantly, but as one might expect, Mr Chapman wrote: "The comments about payments to officials, etc, are entirely incorrect." 297 Mr Chapman also wrote that in early 2008 Dr Berry had insisted that the relevant authorities in Nigeria still wished to contract for the establishment of an opacification plant there and to purchase materials through GSC, which was why, after discussion with Mr Ellery, Mr Chapman sent Dr Berry the two letters dated 16 March 2008 (see [237] above). Mr Chapman said that the commission claim for "20% of gross is rubbish". 298 In the event, Securency did not acknowledge or reply to Dr Berry's letter of 29 September 2009, as his next letter, sent on 19 April 2010, noted.

[23]

The representations issues - Securency's submissions 299 Securency's senior counsel commenced his closing in London saying: We commence … with the obvious proposition, this is, in essence, a fraud case. … It is, on its face, a case of deliberate trickery, near enough to an old common law deceit case. 300 That is how the parties fought the case and I understood their contest. Despite this, Securency put an argument that if, contrary to its case, I were to find that its fraud had succeeded, nonetheless, Dr Berry and GSC were estopped from unravelling it, or had waived their rights to do so. That was because, supposedly, Securency had acted in reliance on Dr Berry and GSC, in effect, not suing it immediately so that it engaged and paid JH Marketing, and subsequently JHM Global in its place, and, later, SPT. I have written "in effect" in the preceding sentence to encapsulate the language of Securency's defence. That asserted that by Dr Berry signing the termination letter and giving it to Securency, allegedly not performing any services after 31 December 2007 and not asserting any entitlement to reappointment or commission subsequently, Securency acted to its detriment in appointing new agents under contract and subsequently paying them commission. 301 Securency advanced other more substantial defences, namely that: it could have brought the agency agreement to an end had Dr Berry not signed the termination letter by use of its powers to terminate without cause on 60 days' notice, under cl 2.6, or on 30 days' notice before the agency agreement would have expired on 30 June 2008, under cl 3.2; its board had made a policy decision to terminate all agencies, in about July or August 2010, well after the bribery scandal had become notorious, and as a result Securency would have terminated any agency agreement that may then have existed with Dr Berry and GSC. 302 Securency's argument that it would have terminated the agency agreement, had Dr Berry not signed the termination letter, relied, in support, on the following assertions by Mr Brown in his oral evidence. First, (as I find) Mr Brown was party with Mr Chapman to the decision to seek Dr Berry's signature on the termination letter, because they had recommended this to "the senior management" being Messrs Curtis, Ellery and Mamo. Secondly, Mr Brown asserted in the witness box that this was because Dr Berry was: not travelling into Nigeria, as far as we were concerned, and therefore he was not carrying out his functions as agent …. He was uncontactable and also we believed that he was ill and was hospitalised in India … and most compelling of all, was that he had started proceedings against the Nigerian government … we felt that would have denigrated his ability to perform for Securency.

[24]

The representations issues - consideration 303 Based on what I have found above in considering what occurred at the 24 February 2008 meeting between Dr Berry and Mr Chapman, I am comfortably satisfied that Mr Chapman made: first, the renewal representation, as pleaded, namely that if Dr Berry and GSC agreed to terminate the agency agreement, the existing terms would continue and the parties would make a new agreement on those terms (see [185]-[188]); secondly, a representation to materially the same effect as the opacification plant representation, namely that if Dr Berry signed the second document (being a memorandum of understanding or partnership agreement for the goal of establishing an opacification plant in Nigeria), that Securency had prepared, Mr Chapman would cause it to be sent to Securency in Australia and it would execute that document (see [185]-[189]). 304 I am of opinion that the evidence of Dr Berry that I have accepted concerning the representation to materially the same effect as the pleaded opacification plant representation, entitles him and GSC to relief, notwithstanding that it is not in exactly the same words as the pleading. The reason why the representation that I have found is materially similar is that Mr Chapman proffered the second document as one prepared by Securency (and thus an offer capable of acceptance by Dr Berry and GSC) which, if Dr Berry (and GSC through him) accepted it by signing it, Securency would formalise in due course - as a matter of "routine" - by executing it. This occurred in the context in which Mr Chapman also persuaded Dr Berry to sign the termination letter, namely that the two men were engaged in a bit of "routine admin". Dr Berry had for the preceding four years been seeking, as had the Nigerian authorities from President Obasanjo down (including Governor Soludo), that Securency agree to Dr Berry (and GSC), with or without Securency itself participating, arranging the construction and operation of an opacification plant in Nigeria. Mr Brown and Dr Berry had met Governor Soludo in late November 2007, when he had insisted, forcefully, that he wanted Securency to act on the matter of the opacification plant. 305 Immediately after this meeting, Securency internally sought to address both how to appear, without any actual commitment, to be satisfying the Governor's requirement and how to terminate the agency agreement. Securency's internal communications about the terms of the draft letter to Governor Soludo stopped around 5 December 2007 without there being any email or other evidence that revealed a decision or reason for the dropping of the internal discussion directed at formulating the letter. However, in the period immediately following the 24 February 2008 meeting, Securency produced and provided Dr Berry with the two letters dated 16 March 2008 that would give Dr Berry comfort in the "routine" meeting he and Mr Chapman had with Governor Soludo in London on 24 March 2008 (see [237], [240] above). This conduct, of using the ambiguous letters of 16 March 2008, on the part of Securency was akin to using documents to "lie like truth", to coin Lord Blackburn's expression: Smith 9 App Cas at 201. 306 Securency knew that the Nigerian Government and Governor Soludo in particular wanted, as did Dr Berry, an opacification plant to be constructed if Nigeria were to convert all its denominations to polymer notes. Securency set about creating the impression that this is what it was proposing, while using words of qualification to ensure that, when push came to shove, it could say that it had never made any definite commitment to construct, or assist in the construction of, an opacification plant in Nigeria. As Lord Macnaghten said in Gluckstein v Barnes [1900] AC 240 at 250-251: My Lords, it is a trite observation that every document as against its author must be read in the sense which it was intended to convey. And everybody knows that sometimes half a truth is no better than a downright falsehood. (emphasis added) 307 Securency contended that the agency agreement was "only marginally profitable for GSC, which earned only 3% of the 15% commission payable by way of profit". It referred to Dr Berry's statement that he needed a 12% commission to break even and argued that this marginal return supported its case that Dr Berry was tired of the agency agreement and did not see the need to pursue it for such a small return. It submitted that this provided a good reason why Dr Berry was prepared to terminate the agency agreement on 24 February 2008 without any qualm. 308 I reject that argument. Dr Berry's continued activity in support of Securency, including at the meeting with Governor Soludo on 24 March 2008, is inconsistent with any desire or intention to give up the right to commission. And, had he done so, he would have put himself in a weaker commercial position to push for an opacification plant if others were acting as Securency's agents in Nigeria. That is because those other agents would stand to lose their commission if Dr Berry succeeded in his aim of constructing such a plant. Thus, the other agents would have a powerful motivation to seek to persuade the Nigerian authorities against agreeing to Dr Berry's proposed opacification plant. And assuming that Dr Berry and GSC did only make a small margin, nonetheless that profit margin was 20% of the total commission paid. On the evidence, during 2008 Securency paid SPT about €1,456,000 at 12% commission, so that a 15% commission was worth about €1.73 million, 20% of which was worth over €340,000, a not inconsiderable sum in itself. 309 Having regard to all of the evidence, there was no rational or other reason for Dr Berry to sign the termination letter, if (as the intelligent man he is) he had understood it to have had its literal effect. In my opinion, he was tricked deliberately by Securency, through Mr Chapman, into signing the termination letter by each of the representations that I have found, whether the effect of each representation is considered separately or combined. In my opinion, Dr Berry trusted in the integrity of Securency that, when he signed each of the termination letter and the second document on 24 February 2008, Securency thereafter would continue to act as he had perceived it to have acted in the past, by honouring or working co-operatively to honour the promises it had made to him. 310 I have not overlooked that it could be said that Mr Chapman's request that he sign the termination letter could have raised an alarm in Dr Berry's mind that he (and GSC) would then be without any contract with Securency. Life can be stranger than fiction. Human beings do not always act logically. Dr Berry heard Mr Chapman's explanation that what was occurring was "routine" and he trusted Mr Chapman and Securency to be good to their word. Brennan J said in Gould v Vaggelas (1985) 157 CLR 215 at 252: "A knave does not escape liability because he is dealing with a fool". While Dr Berry was no fool, he was fooled into acting on the overall impression made on him by what Mr Chapman said: see too Gould 157 CLR at 236-237 per Wilson J (with whom Gibbs CJ agreed on this aspect at 219) and per Brennan J at 250-251. Had Dr Berry followed Lord Macnaghten's advice about how to read a prospectus in Gluckstein [1900] AC at 251-252 in relation to Securency's representations of how it would act, that Mr Chapman made at the 24 February 2008 meeting and by its subsequent conduct in 2008, he would have, to use his Lordship's thinking analogically: That sum, they tell us, is 'payable in cash.'" You will observe those last words, "payable in cash." Their introduction is almost a stroke of genius. That slight touch seems to give an air of reality and bona fides to the story. Would anybody after that suppose that the directors were only going to pay 120,000l. for the property, and pocket the difference without saying anything to the shareholders? "But then," says Mr. Gluckstein, "there is something in the prospectus about 'interim investments,' and if you had only distrusted us properly and read the prospectus with the caution with which all prospectuses ought to be read, and sifted the matter to the bottom, you might have found a clue to our meaning. You might have discovered that what we call 'interim investments' was really the abatement in price effected by purchasing charges on the property at a discount." My Lords, I decline altogether to take any notice of such an argument. I think the statement in the prospectus as to the price of the property was deliberately intended to mislead the shareholders and to conceal the truth from them. (emphasis added) 311 There was nothing routine about terminating a four year business relationship that generated large amounts of revenue for both parties and that each knew would continue to be generated in the future. Securency had made no suggestion to Dr Berry that it would or might terminate the agency agreement. Securency's conduct, through Mr Chapman's representations on 24 February 2008, was a shabby fraud designed to conceal from Dr Berry and GSC that it was not going to pay them commission, while leaving them under the impression that they were still acting as its agent in Nigeria and would be able to progress with persuading the Nigerian Government to allow Dr Berry to construct and operate an opacification plant there. 312 Governor Soludo's express position in both the November 2007 and March 2008 meetings with Dr Berry and, respectively, Mr Brown and Mr Chapman, was to require that Dr Berry (and GSC) be involved in the construction of an opacification plant as integral to Nigeria's future demand, and orders, for polymer banknotes. The termination by Securency of the agency of Dr Berry and GSC would have been likely to have caused Dr Berry and the Governor to react adversely to Securency. Neither knew, of course, of the nature of Mr Chapman's relationship with Mr Okoyomon, which I infer was by early 2008 corrupt, even though the bribes for which Mr Chapman were convicted only came to be paid in early 2009. And, Mr Chapman needed to set up the agency and flow of commission to SPT, which did not occur until 22 August 2008 (see [263] above). Swingaxle, which Mr Chapman said was "an extension" of himself, set up and controlled SPT and he or Swingaxle paid some bribes to Mr Okoyomon in early 2009. 313 The estoppel argument only needs to be stated to appreciate its unsoundness. As I have found, Mr Chapman continued to treat Dr Berry as if nothing had happened so as to maintain the effect or spell of the two fraudulent representations that I have concluded he made on 24 February 2008. Mr Chapman arranged for Dr Berry to meet with him and Governor Soludo in London and they met there on 24 March 2008 for what, even on Mr Chapman's evidence, was a "routine" meeting - i.e. with Dr Berry acting as he had done routinely for over four years before as Securency's agent. Not only did Securency, through Mr Chapman, make use of Dr Berry, with knowledge of what Mr Chapman had fraudulently said on 24 February 2008 to trick Dr Berry into signing the termination letter, it pretended to him that it was still "routine" for him to be at the 24 March 2008 meeting with Governor Soludo. And Securency continued, through Mr Chapman, interacting with Dr Berry during 2008 as if all were "routine" and their agency "agreement" continued on the basis that Mr Chapman explained it would on 24 February 2008. 314 I do not believe Mr Brown's assertion, on which Securency relied (that I have quoted at [302] above), that had Dr Berry not signed the termination letter, Securency would have exercised one of its powers to terminate the agency agreement. That is because, first, a unilateral termination would have converted Dr Berry from a person who was using his influence with Governor Soludo and other senior Nigerian officials to advance Securency's interests, into a person who would be likely to impede those interests. Moreover, Governor Soludo's determination, as demonstrated in both the November 2007 and March 2008 meetings was that Dr Berry in his own right would be involved in the construction of an opacification plant. Securency was conscious of the importance of that objective of the Governor and if it had terminated the agency of Dr Berry and GSC, it would have shown the Governor that it was not going to fulfil his vision. That is why Securency provided Dr Berry with the 16 March 2008 letters and Mr Chapman had Dr Berry meet Governor Soludo in London on 24 March 2008 - namely to show the Governor that Securency was moving in the direction he had set. 315 Secondly, after 15 May 2007, Securency, through Mr Chapman, had recently extended, by his handwriting on the second version of the signed agency agreement, its territory to include the ECOWAS States (see [96], [104] above). Dr Berry had been consistent in urging Securency to develop a proposal for the opacification plant, which Governor Soludo also wanted. 316 Thirdly, there was no evidence to support Mr Brown's assertion that Dr Berry's and Contec's legal issues or the arbitration had had any effect on his other relationships with the Nigerian Government or his capacity to do business with it. Nor would Dr Berry be able to build such a plant if any of his legal issues, in fact, had compromised his relationship with that Government. Dr Berry had been open about that dispute, yet there was no document that Securency produced in evidence that referred to it as a problem. Mr Chapman's text of 14 July 2008 was the first document in evidence in which anyone from Securency referred to the arbitration. More significantly, in their internal responses to Dr Berry's 29 September 2009 letter, neither Mr Brown nor Mr Chapman said a word about the existence, let alone significance for Securency, of any concern about the arbitration as at February 2008 or otherwise. 317 Fourthly, there was no evidence that Dr Berry was inhibited, or contemporaneous evidence that Securency in 2007 and 2008 perceived him to be inhibited, in performing the agency at all, or by reason of his inability, unwillingness or failure to travel to Nigeria. And, fifthly, Mr Brown's suggestion that Dr Berry was in ill health or hospitalised had no evidentiary basis. Nor was Mr Brown's asserted reasoning consistent with his request for, and use of, Dr Berry in the meeting in late November 2007 which was an important step in procuring the January 2008 order from the Mint. None of the documents that Mr Ellery, Mr Mamo, Mr Brown and Mr Chapman created immediately after that meeting suggested any problem with Dr Berry's performance of his agency. Moreover, Mr Brown said that, immediately before that meeting, he and Dr Berry discussed the possibility of Dr Berry's appointment as Securency's agent in India (see [137] above). Likewise, Securency through Mr Chapman continued to make use of Dr Berry after 24 February 2008, including having him meet with Governor Soludo in London on 24 March 2008. 318 Sixthly, Securency argued that it had two modes of terminating the agency agreement, namely on 60 days' written notice (cl 2.6(a)) or on 30 days' written notice within 30 days of its expiry (prior to its automatic renewal for a further two years) (cl 3.2). Under cl 2.6(a) Securency had the right to issue a 60 day notice at any time, whereas, under cl 3.2 each party could issue a 30 day notice in the 30 day period leading up to the expiry date. In the event, no such notice was issued and no document in evidence contemplated that Securency would enforce its right to issue such a notice. The 15 August 2007 memorandum contemplated that, on 30 June 2008, being the expiry date (before the automatic two year renewal), Dr Berry's supposed health problems might require a succession plan to be in place. 319 Securency's action in tricking Dr Berry into signing the termination letter in February 2008 suggests that it was not prepared at the time to use its contractual right to terminate. Generally, the policy of the law is that a court will be disinclined to allow a party to a contract to take advantage of its own wrongdoing: Gnych v Polish Club Ltd (2015) 255 CLR 414 at 426-427 [45] per French CJ, Kiefel, Keane and Nettle JJ. If one party to a contract has the right to avoid it without default by the other but does not do so, the other may enforce the contract according to its terms: Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 441-442 per Latham CJ, Williams and Fullagar JJ. 320 Here, Securency's fraud (or contravention of s 52 of the Trade Practices Act) constituted by Mr Chapman's making of each of the false representations to induce Dr Berry to sign the termination letter on 24 February 2008, requires that letter to be treated as vitiated, i.e. as being of nor force or effect: Lazarus Estates Ltd v Beasley [1956] 1 QB 702 at 712-713 and Farley (Aust.) Pty Ltd v JR Alexander & Sons (Queensland) Pty Ltd (1946) 75 CLR 487 at 493. In SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189 at 196 [15], Gleeson CJ, Gummow, Kirby, Hayne, Callinan, Heydon and Crennan JJ quoted from both those cases to explain how this general policy of the law as to the effect of fraud applies in circumstances such as these, namely: In Lazarus Estates Ltd v Beasley [[1956] 1 QB 702 at 712-713] Denning LJ declared: "No court in this land will allow a person to keep an advantage which he has obtained by fraud. No judgment of a court, no order of a Minister, can be allowed to stand if it has been obtained by fraud. Fraud unravels everything. The court is careful not to find fraud unless it is distinctly pleaded and proved; but once it is proved, it vitiates judgments, contracts and all transactions whatsoever: see as to deeds, Collins v Blantern [1 Smith's Leading Cases, 13th ed, p 406; (1767) 2 Wils KB 34 [195 ER 847]]; as to judgments, Duchess of Kingston's Case [2 Smith's Leading Cases, 13th ed, 644, at pp 646, 651; (1776) 20 State Tr 355 at 538-539, 543-544]; and as to contracts, Master v Miller [1 Smith's Leading Cases, 13th ed, 780, at p 799 (1791)]." Earlier, speaking in this Court of a fraudulently obtained trade mark registration, Williams J said in Farley (Aust) Pty Ltd v JR Alexander & Sons (Qld) Pty Ltd [(1946 75 CLR 487 at 493]: "Fraud is conduct which vitiates every transaction known to the law. It even vitiates a judgment of the Court. It is an insidious disease, and if clearly proved spreads to and infects the whole transaction (Jonesco v Beard [[1930] AC 298 at 301-302])." (emphasis added) 321 In Master v Miller (1791) 4 TR 320 [100 ER 1042] at 329, Lord Kenyon CJ identified the principle (with which Ashurst J expressly agreed at 332, as did Buller J in his dissent at 337-338, and the Exchequer Chamber affirmed the King's Bench's decision: Master v Miller (1793) 2 (H) Bl 141 [126 ER 474]) that: no man shall be permitted to take the chance of committing a fraud, without running any risk of losing by the event, when it is detected. 322 I am of opinion that Securency, having committed the fraud that I have found, by making the two false representations on 24 February 2008, cannot now be permitted to assert that it had a lawful alternative path, that it chose not to take (viz: terminating the agency agreement under cll 2.6(a) or 3.2), to achieve the very position that its fraud procured. 323 I note, but need not decide, what Dr Berry and GSC argued, that the retrospective operation of the termination letter involved a departure from any contractual method of prospective termination on 30 or 60 days' written notice. They contended that it followed that the parties had treated the termination letter as a contract but it was not supported by consideration and so had no contractual or other legal efficacy. However, had I to decide that question, cl 20.11 of the agency agreement provided that the parties could amend or vary any provision in writing, and the termination letter (if it were effectual, untainted by Securency's fraud or misleading conduct that I have found) evinced an intention to do just that.

[25]

What is the duration of the period for which the agency agreement as automatically renewed would have run? 324 Securency also relied on the policy decision its board made in about July or August 2010 to terminate all agencies. Securency argued that, as a result of that policy decision, it was likely that Dr Berry's and GSC's agency would have come to an end, had they remained as its agents until that time. 325 However, in my opinion, had Securency engaged in honest dealing in Nigeria and with Dr Berry and GSC, it is likely that they would have had the opportunity to construct and operate an opacification plant there. Of course, if that occurred then the agency agreement (or its promised replacement) would have no further work to do at the point when the plant began operating. Dr Berry and GSC would have had to make the capital investment to construct and then operate the opacification plant. 326 In my opinion, it is not readily possible on the material before me to assess any loss flowing from the loss of the opportunity to construct and operate an opacification plant in Nigeria as damages on a contractual or other basis. No contract for the construction of such a plant was ever made nor was there any contract for the supply of the polymer film to Nigeria or for the sale by the owner of such a plant of the printed notes or opacified polymer. Nor was there any evidence as to the costs of financing or operating an opacification plant in Nigeria or any basis for assessing what, if any, level of profitability operating it would have and how long it would take to recover the cost of the capital sum invested. There are many unknown financial integers in the matters that I have just raised that affect the ability to make any meaningful assessment of damages on the present evidence. Dr Berry and GSC did not lead any evidence of these matters. However, they complained that Securency had not given full discovery of the requisite financial material necessary to calculate their damages. 327 In those circumstances, my preliminary view is that one basis on which Dr Berry's and GSC's damages can be assessed is by reference to the presumed continuation of the agency agreement, as automatically renewed, based on the actual sales to Nigeria that Securency has made, less any just allowances for expenses that Dr Berry and GSC would not have had to make while they did not perform their role as agent. 328 It may be that Dr Berry and GSC are able to identify in the evidence, or, if entitled to obtain discovery or production of further documents by Securency, to rely on material by reference to which it is possible to ascribe a value to the commercial opportunity that they lost of potentially being able to construct and operate an opacification plant in Nigeria, on the land owned by Safi in Abuja or elsewhere. I have not concluded that that opportunity is valueless, but rather that on the material currently before me, as I understand it, in the absence of any argument to this point, there does not appear to be a means of attributing value to it: cf. Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 355-356 per Mason CJ, Dawson, Toohey and Gaudron JJ. Securency is likely to have documents that relate to the costs of constructing and operating the Mexican opacification plant and its profitability. The parties can address this question, if they wish, in preparing the orders that I will make to fix or quantify damages or other compensation. 329 It may be appropriate to appoint a referee to take evidence and report on the assessment of such damages, including making findings as to the value of the lost opportunity to construct and operate an opacification plant, as to the invoice sales that have occurred and as to the deductions that Securency was authorised to make from the commencement of the agency agreement. That could include deductions for any bona fide expense that JH Marketing, JHM Global or SPT incurred, if any of them did anything of substance as an agent under their respective agencies that would have been an expense that Dr Berry or GSC would have had to incur had they been allowed to carry out their duties after 24 February 2008.

[26]

Rectification 330 Dr Berry and GSC also sought rectification of the agency agreement so that it would read that the right to commission survived termination and remained in force while ever Securency continued to make invoice sales in Nigeria. There is no credible evidence that this was the common intention of not only Dr Berry (and through him, GSC), but also Securency. Securency's draft of the standard terms of its agency agreement, settled by its solicitors in 2005 (unlike the forms of some agency agreements in evidence that officers of Securency had adapted in other respects from that standard form), provided in some emanations for the agent's right to commission to cease on termination, which is what the agency agreement itself provided, and in others such as the JH Marketing, JHM Global and SPT agency agreements, for the agent's right to commission to continue for two, or a number of, years after termination. There is nothing unreasonable or inappropriate in either term. After all, if the agency were terminated, any replacement agent would have to deal in the territory with any issues, including the procurement of new orders, and ordinarily could expect to be paid a commission for its activities in the role. It is unlikely that Securency would agree that it would pay commission twice over for more than two years if Dr Berry and GSC lost their agency in circumstances untainted by fraud or misleading conduct. 331 Notably, in submissions, senior counsel for Dr Berry and GSC did not refer to any written or oral evidence to support their claim for rectification. In addition, there is little commercial sense in a right to commission for an unlimited, indeed perpetual, period in the absence of contemporaneous cogent and clear evidence of language and or conduct that this was the common intention of both parties: cf. Simic v New South Wales Land and Housing Corp (2016) 339 ALR 200 at 223 [103]-[104] per Gageler, Nettle and Gordon JJ, see too at 211-213 [40]-[46] per Kiefel J. 332 Dr Berry and GSC sought that their commission be calculated at the rate of 15% that Dr Berry negotiated with Mr Brown in Mumbai in June 2006 (see [89] above). 333 Because I have found that the termination letter was ineffective, the agency agreement should operate according to its terms, including in respect of the rate of commission and provision for automatic renewal.

Parties

Applicant/Plaintiff:

Berry

Respondent/Defendant:

CCL Secure Pty Ltd

Legislation Cited (3)

Trade Practices Act 1974(Cth)ss 5, 51AB, 52, 82

Competition and Consumer Act 2010(Cth)s 5, Sch

Evidence Act 1995(Cth)ss 128, 136

Cases Cited (23)

The central issue 13 The substantial issue in this proceeding arises in that context. On 24 February 2008, Dr Berry had a meeting and lunch at his home in London with Securency's director of business development for Africa and the Middle East, Peter Chapman. On that occasion, Dr Berry signed a letter (the termination letter) on behalf of himself and GSC that Mr Chapman had brought with him. The termination letter was in the following form: Securency Agency Agreement - Nigeria I refer to our recent discussions and confirm that the Agency Agreement with Securency dated 2nd February 2006 was terminated in accordance with the terms of the Agreement as from 31 December 2007. Kindly acknowledge the formal termination of the Agency Agreement by signing and returning the duplicate copy of the letter attached. Yours faithfully John Ellery Chief Financial Officer Securency International Pty Ltd (emphasis added) 14 There had been no recent discussions on this topic. The decisive factual issue in this proceeding is whether, as Securency asserted based on Mr Chapman's evidence, Dr Berry simply signed that letter in response to Mr Chapman's telling him, "This is the letter of release from the agency agreement", before the two men proceeded to have a pleasant interchange about other matters for about two hours, over a good lunch prepared by Dr Berry's Indian chef or whether, as Dr Berry and GSC asserted, Securency, through Mr Chapman, made one or both of the following false representations which induced Dr Berry to act as he did, namely: (1) if Dr Berry and GSC agreed to terminate the agency agreement, the existing terms would continue and the parties would make a new agreement on those terms (the renewal representation); (2) if Dr Berry signed a second document (that Mr Chapman presented to him), being a memorandum of understanding or a partnership agreement for the goal of establishing an opacification plant in Nigeria, Mr Chapman would take that document back to Australia and have Securency execute it straight away (the opacification plant representation). 15 If Mr Chapman made one or both representations, then there is a further issue as to the damages or compensation to which Dr Berry and GSC are entitled for the tort of deceit or under s 82(1) of the Trade Practices Act 1974 (Cth). Dr Berry and GSC relied on the provision in the agency agreement for its automatic renewal every two years to contend, principally, that damages or compensation would be payable on Securency's invoiced sales in perpetuity, or at least until June 2010, when Securency terminated all of its agency agreements, and for a loss of opportunity to earn commission thereafter. 16 Securency argued that, had Dr Berry not signed the termination letter, it would have terminated the agency agreement on 60 days' notice under cl 2.6, or within 30 days before its expiry on 30 June 2008 and automatic renewal under cl 3.2, or alternatively, when its board resolved to terminate all of its agency agreements in about mid-2010. 17 The reason for that board resolution was Securency's involvement in a scandal that became public in about May 2009. At that time, the Australian Federal Police, the United Kingdom's Serious Fraud Office (SFO) and other international regulators investigated and subsequently brought proceedings against officers of Securency, including Mr Chapman, and some of its country agents, including persons associated with those who had replaced Dr Berry and GSC in Nigeria, in respect of allegations that those officers and agents had paid bribes, or been party to corrupt payments, on behalf of Securency, to government officials so as to procure contracts or orders of opacified polymer or polymer banknotes for Securency: see R v Ellery [2012] VSC 349 at [32], [41]. 18 On 17 August 2017, the Minister for Small Business gave consent under s 5(3) of the Trade Practices Act and s 5(3) of the Competition and Consumer Act 2010 (Cth) for Dr Berry and GSC to rely on Securency's conduct that they alleged it had engaged in outside Australia, namely in the United Kingdom, in contravention of ss 51AB and 52 of the Trade Practices Act and ss 18 and 20 of the Australian Consumer Law (ACL) in Sch 2 of the Competition and Consumer Act. The conduct to which the Minister's consent referred was Securency's alleged making of the renewal and opacification plant representations in February 2008 and its subsequent related conduct, which Dr Berry and GSC alleged was first, conduct in trade or commerce that was misleading or deceptive or likely to mislead or deceive in contravention of s 52 of the Trade Practices Act and, secondly, unconscionable within the meaning of s 51AB. I will use the sections in the Trade Practices Act, as that Act was in force at the relevant time and governed the parties' relationship. The provisions of the ACL are relevantly the same and require no consideration in the resolution of this proceeding.

Witnesses' credibility and the absence of evidence from others 19 Having had the opportunity of observing Dr Berry giving evidence over the course of three days, I formed the impression that, on occasion, he was inaccurate, but that in general he was an honest witness doing his best to tell the truth about events that had occurred between 9 and 13 years earlier. 20 However, I was concerned about his admission on the third day of the hearing that he had lied in his evidence on the day before about visiting Nigeria in the period between mid-2006 and mid-2010. That lie related to an important issue, namely Dr Berry's capacity to conduct the obligations of an agent when he could not, and did not, visit the country with the officials of which he had to deal for Securency. Clearly enough, the reason that he said, initially, that he had visited Nigeria several times in the four year period from about mid-2006 was to create the false impression that his and Contec's evolving commercial and legal dispute with the Nigerian Government had not created any problem for him in visiting that country and dealing there with both its officials and his own business or in performing his role as Securency's agent. 21 In assessing Dr Berry's evidence and his credibility overall, I have been concerned that his preparedness to lie in the witness box on that issue could have reflected a more general tendency on Dr Berry's part to tailor his other evidence to suit his perception of what would support his case. That concern was especially so because of the absence of contemporaneous written records that he had authored, other than a relatively few text messages. 22 I have considered carefully all of his and the other evidence having particular regard to my concern about his lie over his travel to Nigeria. Overall, however, I found him to be credible and that the objective and other relevant evidence positively corroborated or supported his account. In particular, my generally unfavourable view of the credibility of Mr Chapman and Mr Brown has not led me unthinkingly to accept Dr Berry's evidence where their accounts conflicted. Rather, I found myself in the position where I have been satisfied affirmatively that Dr Berry's account was more probably than not true. 23 At the end of the day, Dr Berry did continue his business dealings in Nigeria throughout the four year period in which he did not travel there while he was involved in the dispute and ensuing arbitration. He was able subsequently, in early 2010, to travel to Nigeria and continue his and Contec's business there while unsuccessfully seeking to enforce the USD252 million arbitration award. He had meetings, such as the crucial one in late November 2007 with Governor Soludo and Mr Brown at the Metropole Hotel in London at which Dr Berry was an important participant. He was reluctant or, more probably, not able safely to travel to Nigeria during the four year period about which he lied. There is no evidence that the nature of Dr Berry's (and Contec's) commercial and legal dispute with the Nigerian Government had any substantive inhibitory or negative effect on his ability to perform his (or Contec's) existing contractual obligations in Nigeria or to deal or interact with Nigerian Government officials, including the President. 24 Of course, the recollection of honest witnesses concerning conversations that occurred over 9.5 years earlier (in the case of the 24 February 2008 meeting) will be affected by the very significant lapse of time between the actual events, and the natural tendency of persons to view past events more favourably to their own position or interest than a completely objective or detached observer may at the time of giving oral (or written) evidence. In cases involving, as this does, a claim based on one or more alleged representations made in conversation years before, it is appropriate to apply (as I have) the following principles identified by Dowsett, Rares and Logan JJ in Julstar Pty Ltd v Hart Trading Pty Ltd [2014] FCAFC 151 at [73]-[74]: The assessment of the evidence of witnesses in such a case, ordinarily, will be approached in the manner discussed by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318-319 as follows: "Where, in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously described as "misleading") [sic] within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court: (1) what the alleged conduct was; and (2) circumstances which rendered the conduct misleading. Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. Each element of the cause of action must be proved to the reasonable satisfaction of the court, which means that the court "must feel an actual persuasion of its occurrence or existence". Such satisfaction is "not … attained or established independently of the nature and consequence of the fact or facts to be proved" including the "seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding": Helton v Allen (1940) 63 CLR 691 at 712. Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a causes of action based on s 52 of the Trade Practices Act 1974 (Cth) … in the absence of some reliable contemporaneous record or other satisfactory corroboration." (non-italic bold emphasis added) That caution is also reflected in s 140 of the Evidence Act 1995 (Cth) and in what Dixon J said in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-363 about the standard of proof. Dixon J emphasised that, when the law requires proof of any fact, the Court must feel an actual persuasion of its occurrence or existence before it can be found. He said that a mere mechanical comparison of probabilities, independent of any belief in its reality, cannot justify a finding of fact: see too Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466 at 479-482 [29]-[38] per Weinberg, Bennett and Rares JJ. As Dixon J said (60 CLR at 362): "In such matters 'reasonable satisfaction' should not be produced by inexact proofs, indefinite testimony, or indirect inferences". But, the nature of the fact to be proved necessarily affects the sufficiency of the evidence by which it can be established. (emphasis added) 25 On 11 May 2016, in London, a jury convicted Mr Chapman on four counts of corruption contrary to s 1 of the Prevention of Corruption Act 1906 (UK) involving the payment of bribes to Mr Ehi Okoyomon, the then managing director of the Nigerian Mint. Judge Grieve QC sentenced Mr Chapman on 12 May 2016 to 30 months imprisonment, and he served the term from the time of his sentencing on licence until about May 2017: Berry v Innovia Security Pty Ltd (No 3) [2017] FCA 244 at [12]-[15]. 26 Because Mr Chapman was not willing to give evidence, Securency applied for, and I granted, a letter of request to the judicial authorities of the United Kingdom for me to take his evidence in London as an examiner. As it transpired, I could take Mr Chapman's evidence in London in the week after I heard the other witnesses give evidence at the trial in Sydney. Senior Master Fontaine of the Queen's Bench Division arranged for a witness summons to issue requiring Mr Chapman to appear to give evidence before me, as examiner, at the Royal Courts of Justice in London and for me to hear final submissions there. Subsequently, Mr Brown said that he was not willing to give evidence in Australia, which led to Securency seeking a further letter of request for him to be examined in London while I was there. I granted that request and the Senior Master issued a witness summons for Mr Brown: Berry (No 3) [2017] FCA 224; Berry v Innovia Security Pty Ltd (No 4) [2017] FCA 811. 27 Mr Ellery did not give evidence, nor did Myles Curtis who was Securency's managing director at all times relevant to this proceeding. David Hope, Securency's solicitor, explained in his affidavit of 25 August 2017 that his client had suspended both Mr Ellery and Mr Curtis in about November 2009 and, in March 2010, terminated their employment. Mr Hope said that in August 2012, Mr Ellery pleaded guilty to one charge of false accounting as an officer of Securency. Hollingworth J sentenced him to six months imprisonment which her Honour wholly suspended. The charge related to Mr Ellery's recording of a payment made to Securency's Malaysian agent in 2006 and had nothing to do with its dealings with Dr Berry: R v Ellery [2012] VSC 349. Her Honour found that Mr Ellery did not make the accounting entry for his own gain and, since mid-2011, he had co-operated fully with the Australian Federal Police. Mr Hope said that Mr Ellery had appeared as a prosecution witness at Mr Chapman's trial in London. 28 Mr Hope sought to explain why Securency had not called Mr Ellery and Mr Curtis. Mr Hope attached to his affidavit a letter dated 17 March 2014 from Mr Ellery's solicitors that stated that their client had indicated that he was unable to assist Securency and that he had been "only peripherally involved at the time" of the events concerning Dr Berry and GSC in respect of the agency agreement and its termination. On 7 April 2014, Mr Ellery's lawyer told Mr Hope that Mr Ellery was "simply not willing to assist" Securency. Mr Hope had had no further contact with Mr Ellery or his lawyers. 29 Mr Hope said that he had searched recently on the internet and found references to Mr Ellery providing consultancy services in Papua New Guinea. However, Mr Hope had made no attempt to contact Mr Ellery or his lawyers since 7 April 2014 and Securency did not seek the issue of a letter of request to have Mr Ellery's evidence taken in Papua New Guinea, in contrast to its conduct in seeking and obtaining orders that I hear in London, as examiner, as in fact occurred, the evidence of both Mr Chapman and Mr Brown: Berry (No 3) [2017] FCA 244; Berry (No 4) [2017] FCA 811. 30 Mr Hope also said in his affidavit that in 2013 Mr Curtis had been committed to stand trial that is expected to commence in late January 2018 in respect of allegations relating to bribery of officials in countries other than Nigeria. On 24 August 2017, Mr Curtis' solicitor wrote to Mr Hope saying that his client was unwilling voluntarily to assist Securency or to become involved in this proceeding and that, if he were subpoenaed to give evidence, Mr Curtis would seek to exercise his legal right to decline to answer all questions put to him on the ground in s 128(1) of the Evidence Act 1995 (Cth) that any answer may be evidence that may tend to prove that he had committed an offence against Australian law or the law of another country. In my opinion, Mr Hope's evidence demonstrated a sound reason why Securency did not call Mr Curtis and why it should not have drawn (and I have not drawn) any inference against it because it did not call him. 31 I am not satisfied that Securency has provided a sufficient reason for its failure to lead evidence from Mr Ellery. As will appear below, he played a real and important role in the decision making process by which the agency agreement came to be terminated. Both Mr Chapman and Mr Brown reported, or were subordinate, to Mr Ellery. I infer that Mr Ellery's evidence as to his role and actions would not have assisted Securency's case on the issue of how and why the agency agreement came to be terminated: Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 at 412-414 [167], [169] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; Jones v Dunkel (1959) 101 CLR 298 at 308 per Kitto J, at 312 per Menzies J and at 320-321 per Windeyer J; Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 at 384-385 [63]-[64] per Heydon, Crennan and Bell JJ. 32 The inference I have drawn about the absence of oral evidence from Mr Ellery is that his evidence would not have led me to arrive at a different conclusion on the ultimate issues in this proceeding more favourable to Securency. 33 In Kuhl 243 CLR at 384-385 [62]-[64] Heydon, Crennan and Bell JJ referred to what Handley JA had said in Commercial Union Assurance Company of Australian Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418-419 as being authority "at least" for the proposition that where a party calls a witness but does not question him or her on a particular topic, the Court "will be less likely to draw inferences favourable to that party from other evidence in relation to that issue". However, their Honours pointed out that a failure to ask a question in chief of a party, when he or she is called as a witness, can be qualitatively different to a failure to ask a question in chief of a non-party. They said that a litigant who entered the witness box "is under a positive duty to tell the whole truth in answer to questions asked" so that a failure to elicit evidence from him or her "may support an inference that the party suppressed evidence which would have been damaging to the party-witness". 34 In contrast, their Honours said that a witness who was not a party was only under a duty to answer questions put to him or her truthfully and that a failure to ask a question in chief of such a witness only permitted the Court to infer that the answer would not have assisted (as opposed to would have damaged) the case of the party who called that witness. 35 Neither Mr Chapman nor Mr Brown was a party, or even a current employee of Securency, and Mr Chapman was a convicted criminal. In all of the circumstances, I consider that any failure of Securency to ask either of them questions in chief on any matters of substance, only supports an inference that his answer to such a question would not have assisted its case on the topic. Of course, I have considered the evidence of each witness as a whole in my assessment of the overall reliability of his testimony. Mr Chapman's sense of business ethics as revealed in his paying bribes, obtaining secret commissions, creating a paper or audit trail (as I have described below) and dealings with Dr Berry, led me to the conclusion that wherever his evidence conflicts with that of Dr Berry, and unless I have made a specific contrary finding, I accept and prefer Dr Berry's evidence as reliable and truthful: see e.g. [88], [117]-[120], [168], [218]-[219] below. I have also found Mr Brown not to be a witness on whose uncorroborated evidence I can rely, as for example I explain at [123], [156]-[160], [168], [294] below.

(2012) 247 CLR 345

(1991) 22 NSWLR 389

(1946) 75 CLR 487

(2015) 255 CLR 414

(2006) 66 NSWLR 186

(1985) 157 CLR 215

(1959) 101 CLR 298

(2011) 243 CLR 361

(1990) 170 CLR 70

(1994) 179 CLR 332

(2016) 339 ALR 200

(1984) 5 FCR 187

(1950) 81 CLR 418

(2007) 232 CLR 189

(1995) 49 NSWLR 315

(1940) 63 CLR 691

(1938) 60 CLR 336

(2007) 162 FCR 466

[2017] FCA 244

[2017] FCA 224

[2017] FCA 811