David Walker v Salomon Smith Barney Securities Pty Limited & Anor

THE COURT ORDERS THAT: 1. Judgment be entered for the applicant against the respondents for damages to be assessed. 2. The respondents file and serve written submissions on costs on or before 4.00 pm on 31 October 2003. 3. The applicant file and serve written submissions in reply on or before 4.00 pm on 7 November 2003. 4. There be a case management conference, at a date to be fixed, before a Registrar to prepare the matter for trial on the question of damages. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

AND: SALOMON SMITH BARNEY AUSTRALIA SECURITIES PTY LIMITED

REASONS FOR JUDGMENT 1 By an application dated 2 October 1998, the applicant, David Walker, applied to this Court pursuant to s 87 of the Trade Practices Act 1974 (Cth) ("the TPA") and s 32 of the Federal Court of Australia Act 1976 (Cth) for relief in respect of the respondents' alleged breach of contract and contraventions of ss 52 and 53B of the TPA. I am presently concerned only with the question whether the respondents are liable to Mr Walker for the damage allegedly suffered by him as a consequence of the respondents' acts.

the parties 2 Mr Walker is a corporate researcher specialising in the mining sector. In 1998, he was an Executive Director and the Head of Research at abn amro Australia Hoare Govett (Securities) Limited ("abn amro"). abn amro was (and is) an investment bank. Mr Walker had joined the bank in 1995. 3 Between 19 November 1997 to 30 March 1998, the first respondent was known as County NatWest Securities Australia Limited. It was owned by NatWest Markets Australia Limited, a wholly-owned subsidiary of National Westminster Bank Plc (a British company). On 31 March 1998, it was renamed County NatWest Securities Australia Pty Limited. It acquired its current name, Salomon Smith Barney Australia Securities Pty Limited on 1 April 1998. The first respondent is referred to below as "NatWest". 4 The second respondent, Salomon Smith Barney Australia Pty Limited ("Salomon Smith"), has been the holding company of NatWest since the end of March 1998, following its purchase of shares in NatWest in February 1998. Salomon Smith is a subsidiary of the very large stockbroking house, Salomon Smith Barney Holdings Inc. (a company based in the United States of America).

the applicant's claims 5 Mr Walker's claims arose out of an offer of employment made to him by NatWest, by letter dated 12 January 1998, and the circumstances surrounding the making of that offer. Mr Walker's case was that he entered into a contract of employment with NatWest in January 1998, which the respondents failed to honour. He also claimed that, in the course of negotiating the contract, NatWest's representatives made a number of misleading representations to him. He said that he relied on these representations to his detriment, in consequence of which he suffered loss and damage. He also advanced a number of other claims in response to the case made against him by the respondents. For the reasons I am about to give, it is unnecessary to refer further to these responses.

the respondents' answer 6 The respondents accepted that their representatives had discussions with Mr Walker from August to November 1997 regarding a research analyst position with NatWest, covering either RTZ or BHP. The respondents' case was that, as Mr Walker requested, within five or six weeks after a meeting held on 5 November 1997, NatWest prepared a letter of offer for him. Mr Walker subsequently rejected this offer when he returned the annotated letter to a personnel consultant who was involved in his recruitment. 7 The respondents contended that NatWest made a further offer to Mr Walker, by letter dated 12 January 1998. They submitted that he never accepted this offer; alternatively, the offer was not capable of giving rise to a binding contract because it did not stipulate a commencement date. The respondents further contended that there was no implied term in the offer of employment that Mr Walker would start within a reasonable time; alternatively, if there was such a term, he breached it and repudiated the agreement. According to the respondents, at a meeting on 20 February 1998, Mr Walker was given a last chance to accept NatWest's offer. As he did not do so, they were entitled to withdraw the offer. 8 The respondents denied that they made the representations as Mr Walker alleged; alternatively, they denied that the representations were actionable. The respondents also maintained that Mr Walker was never promised any other position with them. Rather, he was given an opportunity to be considered for a position in the Corporate Finance department. He was considered and not selected for such a position. His failure to be appointed did not, however, give rise to any legal liability. the evidence 9 In support of his case, Mr Walker relied on his own affidavits sworn on 9 February 2000 and 15 January 2001. He also relied on the affidavit of Oonagh Lancaster sworn on 10 March 2000. Ms Lancaster was a principal of Lancaster, Blake & Associates Pty Limited, which specialised in "undertaking executive searches for senior employees in financial institutions". 10 The respondents relied on the affidavits of Mark Fulton sworn on 26 June 2000 and 4 September 2002; Robert Bain Thomas sworn on 19 June 2000; Malcolm Sinclair sworn on 13 June 2000; Glenn James Fredericks sworn on 1 February 2000and 12 September 2002; and Stephen John Dobbs sworn on 12 September 2002. 11 There was cross-examination of all deponents. the facts of the case Initial contacts 12 The evidence disclosed that, in August 1997, Ms Lancaster, in her capacity as a personnel consultant, telephoned Mr Walker (with whom she had previous dealings) to ask him whether he would consider taking up employment with NatWest, as a financial analyst covering RTZ. Mr Walker deposed that: I knew that NatWest had a much larger operation in Australia than ABN AMRO … and there were rumours concerning the UK-based parent selling out. I told Ms Lancaster that I was interested in discussing a position. 13 On 5 August 1997, Ms Lancaster sent Mr Walker's curriculum vitae to Robert Thomas, who was the Managing Director of the Equities Division of NatWest. Mark Fulton, who was at that time Head of Research at NatWest reporting to Mr Thomas, later telephoned Mr Walker. Mr Walker said that Mr Fulton indicated that he was responsible for recruiting equity research analysts for the company. Mr Walker said further in cross-examination that Mr Fulton referred to "the current difficulties of the firm" and stated that he would ask Ms Lancaster to arrange for Mr Walker to meet with Mr Thomas, when Mr Walker was next in Sydney. 14 Mr Fulton deposed that he was unable to recollect this conversation with Mr Walker in August 1997, although he conceded in cross-examination that, in August 1997, he needed to "beef up" the research department, especially in the resources area. 15 I accept Mr Walker's account of his initial conversations with Ms Lancaster and Mr Fulton in August 1997. I also accept that, as Mr Walker's counsel pointed out, Mr Walker was not looking for another job in 1997. This fact is relevant when considering the negotiations that followed.

The August 1997 meeting 16 On 12 August 1997, Mr Walker met Mr Thomas at Ms Lancaster's offices in Sydney. Mr Walker said that, during the course of the meeting, which, according to him, lasted no more than 30 minutes, Mr Thomas acknowledged that Ms Lancaster had contacted Mr Walker in relation to a position at NatWest as a mining analyst covering RTZ or, perhaps, BHP, or in some other position. Mr Thomas told Mr Walker that he would like him to have a further meeting with other members in NatWest's Equity Division to see how he would fit in with them. 17 In his first affidavit, Mr Walker stated that: I also explained to Mr Thomas that I was expecting a substantial bonus from abn amro due to the firm's participation as a lead broker with the Telstra-1 float, which was payable on 15 January, 1998 and that I was not prepared to forego this amount unless I received compensation from NatWest. I indicated that to receive the bonus I could not resign before 15 January, 1998 and that under my contract with abn amro I would need to give one month's notice. 18 In cross-examination, Mr Walker maintained that he specifically raised the matter of the abn amro bonus with Mr Thomas at this meeting, saying: If there was a fundamental disagreement at that time, I would not have pursued the potential employment. According to Mr Walker, there was no other discussion at that meeting about the terms of his employment if he were offered a position with NatWest. 19 In his affidavit, Mr Thomas denied that he acknowledged that Ms Lancaster had contacted Mr Walker in connection with a position as an analyst covering RTZ. He also said that he did not recall any discussion regarding Mr Walker's expected bonus from abn amro, or a likely starting date. Mr Thomas stated, in cross-examination, however, that he had only "a broad recollection of what was discussed". When asked by the applicant's counsel whether he discussed the prospective sale of NatWest, Mr Thomas answered: Look, I can't recall that discussion. I'm not saying it didn't happen, but I can't recall. 20 I accept Mr Walker's evidence concerning the meeting of 12 August 1997 in preference to that of Mr Thomas. I find that Mr Walker was a truthful witness. The receipt of his bonus was important to him at the relevant time. It was more likely than not that he raised the matter in this meeting as he said. Mr Thomas was not untruthful, but, as he conceded, his recollection of this matter, like a number of other matters relevant to this proceeding, was poor. 21 In his affidavit, Mr Fulton said that he met with Mr Walker at Ms Lancaster's offices on 21 August 1997. He further deposed: We had been interviewing another candidate for the RTZ position and there was a strong preference to pursue that candidate over any other. However, I still wanted to meet David Walker in case that candidate did not eventuate or to see if there were any other fits. … . I outlined the general background to our resources group and talked in general terms about possible roles for him including RTZ and BHP. 22 For reasons that appear more distinctly below, Mr Fulton was not a credible witness. I reject this evidence. Mr Walker and Ms Lancaster contradicted it.

The 10 September 1997 meeting 23 At or around 10 September 1997, Mr Walker received a "new employees'" pack of documents from NatWest's personnel manager, Kathy Cocks. Also on 10 September 1997, he attended a second meeting at Ms Lancaster's offices, this time with Ms Lancaster, Mr Fulton, Graeme Newing (NatWest's BHP analyst), David O'Halloran (senior equities dealer) and Alan Heap (commodity analyst). According to Mr Walker, he and NatWest's representatives discussed Mr Walker's possible roles in the Research Department of the Equities Division, in Melbourne, focusing on RTZ. Mr Walker added that he discussed a position covering BHP, particularly with Mr Newing. Also, according to Mr Walker, at the end of this meeting, he met with Mr Fulton and Ms Lancaster separately and raised with Mr Fulton "the fact that I had heard rumours that NatWest might sell its Australian operations". According to Mr Walker, Mr Fulton confirmed that a sale was "on the cards" and said that this would not affect NatWest's interest in recruiting him. Ms Lancaster corroborated his evidence on this point. 24 In his affidavit, Mr Fulton conceded that, at the September meeting, there was discussion about Mr Walker's possible roles in NatWest, including as a BHP analyst, but there was, he said, no discussion about the RTZ analyst position as the position had already been filled. According to him, he informed Mr Walker of this at or before the meeting. He also conceded that he had told Mr Walker and Ms Lancaster that "I did not think that [the sale of NatWest] would affect any interest we might have in recruiting him". 25 In cross-examination, however, Mr Fulton said that he had no recollection of meeting with Mr Walker and Ms Lancaster separately at the September meeting, although he conceded that it was a possibility. He also said that he could not remember whether Mr Walker discussed with him the rumours that Mr Walker had heard about a proposed sale of NatWest, although he conceded that Mr Walker might have done so. He also said, in cross-examination, that he thought he recalled telling Mr Walker some time after this meeting, but prior to or at the early November meeting, that the RTZ position was filled. 26 I prefer the evidence of Mr Walker to the evidence of Mr Fulton in connection with this meeting. Mr Fulton gave inconsistent evidence concerning the RTZ position. In cross-examination, his approach to answering questions was, on occasions, evasive. Mr Walker's evidence, on the other hand, was consistent with the evidence given by Ms Lancaster. 27 I interpolate here that it was not in contest that, as at 10 September 1997, Mr Walker had not yet discussed with anyone from NatWest what salary he might expect if he were to join the company. His evidence was to the effect that the subject would have been raised before the middle of December 1997, although he could not recall precisely when in fact this had occurred, or what had been said in this connection. 28 As it happened, on 1 October 1997, NatWest made a public announcement about its intention to sell its Australian operations. According to Ms Lancaster, Mr Walker telephoned her to ask whether this announcement would affect his potential employment with NatWest. She then telephoned Mr Fulton, who "confirmed that there would be a position for Mr Walker following the sale and that he would contact Mr Walker". According to Mr Fulton, he had said no more than he did not expect the sale to affect our (NatWest's) recruitment process. Again, for reasons that appear more distinctly below, I reject Mr Fulton's evidence on this point.

The 5 November 1997 meeting 29 Ms Lancaster and Mr Fulton arranged for Mr Walker to meet Mr Fulton and some employees of NatWest's Equity Division in Melbourne, including the Head of the Melbourne Sales Desk, on 5 November 1997. The meeting lasted about half an hour. According to Mr Walker, on this day too, he also met separately with Mr Fulton. 30 According to Mr Walker, he discussed with Mr Fulton a number of matters, including the sale of NatWest (and the availability of equity to new senior employees), improving the research teams and his joining NatWest. Mr Fulton informed him that NatWest was "very impressed" with his references, including those from some large institutions. Although Mr Fulton stated that he had "a few mixed responses from smaller institutions" concerning Mr Walker, Mr Fulton "indicated that some negative responses were to be expected, and was more than pleased with the overall response". 31 In his first affidavit, Mr Walker said that, at this meeting, he told Mr Fulton that he "would not leave [his] position at abn amro without a binding contract for a position at NatWest". According to Mr Walker, Mr Fulton told him that he (Mr Fulton) understood this requirement. Mr Walker also said that Mr Fulton told him that "the position intended for [him] would continue even if there was a change in the ownership of NatWest". In cross-examination, the respondents' counsel put to him that Mr Fulton said no such thing. Mr Walker's response was: I cannot recall all the details of all of these conversations nearly five years ago. What I can recall at the time of that series of meetings in Melbourne [on] the agreed date was that that was possibly the second time that I spoke to Mr Fulton, or through Mrs Lancaster to Mr Fulton, about my employment with [Natwest] given that [Natwest] was going to be sold. I was clearly not interested in joining a company that had two or three months' life left. It was fundamental that my employment was not for the last months of life of [Natwest]. My best recollections are reflected in the affidavit because they are some years ago now. I do, on reading the particulars that I've been directed to …, I now do remember some of those details and in fact Mr Crotty from London, the president, I do remember now; do recall. But in those discussions about the sale of [Natwest] to a new purchaser I do remember now that there were discussions on whether my candidature would go through and whether I was actually applying for a position with [Natwest] or the new owner. Mr Fulton was very specific on that, it was with the new owner. That representation was made a number of times from this date up until 15 January the following year. 32 Mr Fulton agreed with Mr Walker that they met in November 1997, although he did not "think" that the date was 5 November. Mr Fulton also agreed that they discussed the sale of NatWest, but he denied saying that NatWest "had a position for him or that that position would not be affected by the proposed sale or that his employment would continue after the sale". According to Mr Fulton, he merely told Mr Walker that "the sale would not affect any offers of employment that we might make prior to completion of the sale". According to Mr Fulton, he also conveyed to Mr Walker that "having him in the research department would be a positive" for NatWest. 33 Mr Fulton denied that Mr Walker told him that he would not leave abn amro without a contract and that he had acknowledged this requirement. According to Mr Fulton, Mr Walker told him that he would be reluctant to leave abn amro (to whom hewas required to give a month's notice) before 15 January 1998 because he was due to receive his 1997 bonus on this date. 34 In cross-examination, Mr Fulton agreed that, at this meeting, he was seriously exploring Mr Walker's potential in the research department, especially covering BHP. He also agreed that there had "[n]ever been a question in my mind" that he was highly technically and academically qualified. He reiterated, however, that he had no recollection of Mr Walker's saying that he would not leave abn amro without a binding contract, although he said that: On that particular date I don't recall, but certainly in the lead-up to our letter of offer on 16 December it would have been plain between us that he required a letter of offer and the terms of that explained very plainly. Mr Fulton conceded too that, in referring to a letter of offer, he was referring to a valid letter of offer; and that it was "highly likely" that Mr Walker would have raised the prospective sale of NatWest with him and that he would have responded along the lines Mr Walker said, including that the sale would not affect any employment he might take up with NatWest. 35 I accept Mr Walker's evidence that, at the November meeting, he told Mr Fulton that he would not leave abn amro unless he had a contract of employment with NatWest. At the time of these discussions, Mr Walker held a senior position at abn amro and was well remunerated in this position. He gave his evidence directly. It was more likely than not that he would have clearly stated his position to NatWest's representatives, including that he required a contract before leaving his then employer. I accept that Mr Fulton agreed to this requirement. I further accept that, as Mr Walker said, he asked about the effect of the sale of NatWest on his prospective employment: given his level of business experience, it was unlikely that he did not. I accept too that Mr Fulton gave an assurance in the terms Mr Walker described: given Mr Walker's position, it was unlikely that the negotiations would have continued without such an assurance. In addition, NatWest's preparation of a letter of offer in mid-December 1997 was consistent with Mr Walker's account. The first letter of offer 36 Ms Lancaster deposed (and Mr Fulton denied) that, some time after the November meeting, Mr Fulton told her that NatWest was keen to go forward with an offer of a position as senior analyst, although it had appointed another person to the RTZ position and was looking at Mr Walker to cover BHP. According to Ms Lancaster, Mr Fulton also said that, regarding the sale, there was a possibility that equity would be offered to senior employees. Ms Lancaster stated that she conveyed this information to Mr Walker. 37 As already noted, Mr Fulton maintained that he had mentioned the filling of the RTZ position in September 1997. In cross-examination, Ms Lancaster conceded that she had no clear recollection about when Mr Fulton told her that the RTZ position had been filled. 38 Mr Walker's evidence was that he did not hear much from Mr Fulton or Ms Lancaster over the period of 5 November to December 1997, although he said that Mr Fulton telephoned him during this period to say that NatWest had employed another analyst to cover RTZ and that its interest in him would "turn to covering BHP". In his first affidavit, Mr Walker deposed: I was taken aback at the decision being taken without any discussion with me. I found Mr Fulton's approach at times to be erratic and unsettling because he often chopped and changed between potential employment options. I decided then that if NatWest were interested in employing me I would secure a written contract, as the next step. Mr Walker reiterated this in cross-examination. He also said that, at some time in December 1997, Mr Fulton approached him again, with some "vigour" and "urgency" to hire him. 39 I accept Mr Walker's evidence concerning his conversation with Mr Fulton. Ms Lancaster's evidence was consistent with that of Mr Walker, as was the preparation of the first letter of offer by Mr Fulton in mid-December 1997. 40 Mr Fulton deposed that, in early December 1997, he decided to offer Mr Walker a position at NatWest. He said: By that time we had obtained two substantive references which were positive towards David Walker and I felt confident enough to offer him a position. 41 On Mr Fulton's recommendation, Mr Thomas subsequently signed the letter of offer dated 16 December 1997, which had been prepared at Mr Fulton's direction and offered "the position of Resources Analyst" ("the first letter of offer"). The letter named an annual salary on commencement of $275,000 and a guaranteed minimum bonus of $250,000 for the 1998 year (to be paid in February 1999). According to Mr Fulton, "the position offered to David Walker required him to work with Graham Newing who carried out research on BHP and other diversified companies". 42 By facsimile transmissionto abn amro, Mr Walker received the first letter of offer from Ms Lancaster on 6 or 7 January 1998. As it turned out, Mr Walker also wanted a guarantee that, in his second year at NatWest, he would be "elevated" "to the title of Director", as well as a number of other things. He annotated the letter by hand to indicate what he sought. As the respondents' counsel noted in final submissions, Mr Walker did not, however, amend that part of the letter that concerned the manner of accepting the offer. 43 On 7 January 1998, Mr Walker returned a copy of the annotated letter to Ms Lancaster (by facsimile transmission) and telephoned her to discuss the matter. Ms Lancaster also annotated the facsimile that she received, including the comment: In any change of ownership Ret After Mr Walker's reference to a directorship, she noted: MARK will need to talk to Rob Ms Lancaster sent the annotated draft to Mr Fulton. Mr Thomas recollected that Mr Fulton had in fact spoken to him about the directorship issue and that he was "comfortable" in agreeing to this matter. 44 On 6 January 1998, abn amro notified Mr Walker that his 1997 bonus would not be paid until 15 February 1998 (that is, a month later than expected). 45 In his first affidavit, Mr Walker stated that, on this day, he telephoned Ms Lancaster to tell her that he would not resign until the abn amro bonus was paid (unless NatWest agreed "to pay out" his bonus) and that he could not start his employment with NatWest until 15 March 1998. He stated that, in a telephone conversation with Ms Lancaster later the same day, Ms Lancaster said that Mr Fulton had not only agreed to the March start date but had "suggested that [Mr Walker] could sign the contract which would then be lodged with Ms Lancaster who would forward it to NatWest when [Mr Walker] was clear of abn amro". 46 Mr Walker said that Mr Fulton subsequently telephoned him, stating that he accepted the 15 March 1998 start date and that all discussions and any contract that Mr Walker might make with NatWest would remain confidential (as Mr Walker required) until, as Mr Walker deposed, he was "clear of abn amro and [his] existing contractual obligations". According to Mr Walker, in this telephone call, Mr Fulton also stated that the sale of the NatWest operation was "imminent and … [Mr Walker] would be part of the resources team after the sale was completed". 47 In cross-examination, Mr Walker said that, in a telephone conversation with Mr Fulton on or about 6 January 1998, they discussed the matters that he wanted addressed in the first letter of offer. He agreed that, perhaps in this or another conversation, Mr Fulton raised the possibility of his moving to the Corporate Finance department in the future. Mr Walker denied, however, that, on or about 6 January 1998, Mr Fulton asked him when he was resigning from abn amro. Mr Walker said that the "key event" was "the deferral of the bonuses by one month". He said: What I would say happened is that - there was concern, this letter of deferral of bonus from my employer meant very clearly that I would be unable to join and start with [NatWest] at the earliest until 15 March. This was a significant event. 48 He maintained, throughout his cross-examination, that he and Mr Fulton agreed that he should commence with NatWest on 15 March 1998 "or earlier if possible". He said that the starting date was "left out of the contract as a condition of the contract because of the flexibility needed in order to exit me from abn amro at the earliest opportunity" and that he had discussed the matter with Mr Fulton and Ms Lancaster in these terms. 49 In her affidavit, Ms Lancaster recalled Mr Walker's telephone call about the delay in payment of his bonus. She said that, after this call, she spoke to Mr Fulton, who: … explained to me that NatWest prepared a major report on BHP each year and that that report had to be completed by a certain time so that time was of the essence. Mr Fulton was anxious that Mr Walker should be available to work with Mr Newing on this report. Mr Fulton indicated that NatWest was unwilling to pay out Mr Walker's abn amro bonus and that he could start on 15 March, 1999 [sic]. 50 With leave, Ms Lancaster augmented her evidence-in-chief, saying, amongst other things, that: My recollection is that on about 6 or 7 January 1998 I had spoken with Mr Fulton concerning the offer of employment and the contract. It was agreed between us that when Mr Walker signed the copy of the contract I would hold it and it would be executed and I would hold it in my office for safekeeping in case news of the contract leaked out within Natwest and the traders might speak about it in the market. It was totally for confidentiality. … I had discussed the concerns of Mr Walker with Mr Fulton. Mr Fulton had agreed that it was appropriate for me to keep the signed copy of the contract. When it was executed I would hold it in my filing cabinets. I would inform him when I received the post from Mr Walker and I also informed Mr Thomas. 51 In cross-examination, Ms Lancaster maintained that, well before the meeting of 15 January 1998 (see below) she told Mr Fulton of the delay in the payment of Mr Walker's bonus and that he agreed that 15 March 1998 would be an acceptable starting date. 52 Mr Fulton accepted that he had conversations with both Mr Walker and Ms Lancaster in early January 1998. In his affidavit, he said that, in speaking to Ms Lancaster in early January about the letter of offer, he asked when Mr Walker would be able to start and that Ms Lancaster replied: He must keep the job secret until his bonus is paid by abn amro on the 15 January. He will then give abn amro his notice. In the worst case he will start a month later. Mr Fulton also said that, when speaking to Mr Walker in early January about the letter of offer, he asked him when he would resign and that Mr Walker replied: I should be resigning on the 15th of January when my bonus is paid. 53 Mr Fulton denied that he had any conversation with either Ms Lancaster or Mr Walker (see below) on or about 6 January 1998 in which either of them told him that the payment of Mr Walker's bonus was to be delayed by a month and that Mr Walker could lodge the signed contract with Ms Lancaster in order that it be kept confidential until Mr Walker was free of abn amro. Mr Fulton said that, on the basis of what Mr Walker and Ms Lancaster told him at this time, he believed that the bonus would be paid on 15 January 1998 and that Mr Walker would then be in a position to give notice to abn amro. 54 In cross-examination, Mr Fulton initially gave a different account of his conversation with Mr Walker on or about 6 January 1998. Mr Fulton reiterated that Mr Walker made no mention that payment of his bonus was to be delayed for a month. He said, however, that he telephoned Mr Walker at this time: … because I would want to know how he was feeling about the process early in the New Year following Christmas - if I rang, or he may have rung me, you know. People do a lot of talking during this process. 55 It was clear from Mr Fulton's evidence that he had little or no recollection of what Mr Walker had said to him in early January 1998, prior to the 15 January meeting (see below). I formed the view that Mr Fulton fabricated his evidence in order to support the respondents' case. 56 I accept Mr Walker's evidence concerning his conversations with Mr Fulton and Ms Lancaster about the delay in payment of his bonus. I find that Mr Walker telephoned Ms Lancaster on 6 January 1998 to tell her that the bonus payment had been delayed. Mr Fulton subsequently telephoned Mr Walker and, in the course of the conversation, agreed to a starting date of 15 March 1998 and that any contract of employment between Mr Walker and NatWest should be kept confidential until Mr Walker had left the employ of abn amro. Further, I find that, in a conversation with Ms Lancaster on 6 or 7 January 1998, Mr Fulton suggested that, in the interests of confidentiality, any contract signed by Mr Walker should be held by her until the need for confidentiality passed. Abn amro offers voluntary redundancies and Mr Walker receives a second letter of offer 57 abn amro had announced to staff, on 22 December 1997, that it was purchasing bzw Australia ("bzw") and that, in consequence, there would be some redundancies. On 12 January 1998, abn amro notified its employees that it would offer voluntary redundancies under certain conditions and that employees accepting redundancies would be able to immediately leave abn amro and take up employment elsewhere, regardless of previous contractual restrictions. Mr Walker telephoned Ms Lancaster with this information. According to Ms Lancaster, she then telephoned Mr Fulton, who "was very interested ... that there might be no delay in Mr Walker's commencing his employment with NatWest if he were to agree to be made redundant by abn amro". Mr Walker said that he later received a telephone call from Mr Fulton, who indicated that he was "interested in the possibility that if I took voluntary redundancy there would no longer be a delay of one month in starting my employment with NatWest". 58 Mr Walker deposed that: I told Mr Fulton that abn amro had indicated that the whole takeover including all redundancies would be completed by the end of February 1998 and abn amro was seeking applications for positions in the new firm. I told Mr Fulton that if I accepted employment with NatWest I would not apply for a position in abn amro. We discussed the arrangement whereby in order that the contract be signed as soon as possible that the signed contract would be lodged with Ms Lancaster so that it would be kept confidential until I was clear of abn amro. Mr Fulton then reiterated that I should sign the contract which could be lodged with Ms Lancaster who would forward it to NatWest when I was clear of abn amro. Mr Fulton agreed that at all times the nature and detail of the contract would be kept confidential until I was clear of abn amro. He also agreed at that time that a starting date would be left out of the contract and not form a term of the agreement so that I could start earlier with NatWest upon any earlier exit from abn amro than 15 March 1998. Mr Walker said that he later spoke with Ms Lancaster, who said that she had confirmed these arrangements with Mr Fulton. In his second affidavit, Mr Walker deposed that, in this conversation, Mr Fulton said that NatWest agreed "the course of action would be to wait until I was clear of abn amro and start with NatWest on 15 March 1998 but also to pursue redundancy in order to start with NatWest at an earlier date". 59 Ms Lancaster corroborated Mr Walker's account, deposing: After many phone calls between myself and Mr Fulton and between myself and Mr Walker it was agreed that Mr Walker would countersign a contract and that I would hold that contract until Mr Walker left abn amro's employment. 60 Mr Fulton denied that, on or about 12 January 1998, he discussed with either Mr Walker or Ms Lancaster the matter of redundancy, or that Ms Lancaster could hold a signed copy of the contract until he had left abn amro. In cross-examination, however, Mr Fulton said that he was told some time in late January 1998 about the possibility of Mr Walker taking voluntary redundancy and agreed that "anything was a good idea" if it would expedite Mr Walker's leaving abn amro. Mr Fulton agreed that he was aware that Mr Walker's redundancy would make him available to NatWest at an earlier date than otherwise the case. 61 I accept that, as Mr Walker said, on or about 12 January 1998, he discussed with Mr Fulton abn amro's offer of voluntary redundancies and that Mr Fulton encouraged him to seek to be made redundant, in order that Mr Walker might commence his employment at NatWest before 15 March 1998. I also accept the evidence given by Mr Walker and Ms Lancaster that, in the interests of confidentiality, it was agreed by them and Mr Fulton that Mr Walker would return a signed copy of any contract to Ms Lancaster, who would inform Mr Fulton that she held it in her possession, and that she would send it to NatWest when the need for confidentiality passed. At this time, Messrs Walker and Fulton understood that there would be a binding contract once both parties signified their agreement by signing and Mr Walker returned a signed copy to Ms Lancaster, who would inform NatWest that she held it. 62 On 13 January 1998, Mr Walker received, by courier, a letter dated 12 January 1998, setting out the revised terms and conditions of employment ("the second letter of offer"). The first two pages of the letter set out the substance of NatWest's offer, with Mr Thomas's signature appearing on the bottom of page two. The remaining four pages set out further general conditions and there was provision at the very end for the offeree to indicate a "Proposed Joining Date". The second letter of offer again provided for a salary of $275,000 and a guaranteed bonus of $250,000. It offered "the position of Senior Resource Analyst, covering BHP and related entities, within [the] Research area". It also provided that he would receive "the title [of] Director of Research at the completion of the 1998 year". 63 The next day, 14 January 1998, Mr Walker told Ms Lancaster that the terms were acceptable to him. As the applicant's counsel observed in final written submissions, the parties were negotiating "a long-term position, which the Applicant was entitled to expect to hold for at least one year". The 15 January 1998 meeting 64 On Thursday, 15 January 1998, Mr Walker attended another meeting with Mr Thomas, Mr Fulton and Ms Lancaster at Ms Lancaster's offices, at which he was handed what appeared to be a copy of the first two pages of the letter he had received on 13 January 1998 ("the third letter of offer"). There was no provision in the third letter of offer for a starting date. Mr Walker discussed the main terms of the contract with Messrs Thomas and Fulton. Mr Walker said that Mr Thomas "confirmed that NatWest were more than satisfied with the references I had provided as to my suitability for the position". Mr Walker said that he reiterated that abn amro was to announce all redundancies by 28 February1998, by which date it was to complete its purchase of bzw. In his first affidavit, he deposed: We also discussed my starting date and agreed that this was not a term of the contract. It was agreed that 15 March, 1998 would be the latest date on which I would start. It was agreed that if I was able to take voluntary redundancy I would be able to commence immediately on the voluntary redundancy taking effect. … . Mr Thomas agreed that I pursue the redundancy option. I then confirmed with Mr Thomas, Mr Fulton and Ms Lancaster that the signed contract was to be lodged with Ms Lancaster until I was clear of abn amro. Mr Thomas again agreed with this procedure, and Ms Lancaster acknowledged her role in receiving and holding the signed contract. At this point Mr Thomas indicated he wanted me to read and execute the document immediately. I told Mr Thomas, Mr Fulton and Ms Lancaster that I accepted the terms set out in the letter, subject to taking a copy of the letter back to Melbourne for checking, and if I was satisfied with its terms, I would countersign the letter and return it to Ms Lancaster. I said I saw no problem with the revised contract, I just wanted to check it over quietly as it was a new document. At this point Mr Thomas signed the document at the bottom of page two, shook hands with me and said "Good. Welcome to the firm." 65 According to Mr Walker, before the meeting concluded, Mr Thomas told Mr Walker that the sale of NatWest to a third party was close to being completed and, although no equity would be available to employees, he thought that Mr Walker would be pleased with the outcome. Mr Walker reiterated his evidence about this meeting in cross-examination. 66 In his second affidavit, Mr Walker stated: I did not say at that time that I did not want to sign because of a delayed bonus. I said I would take the letter back to Melbourne and if satisfied, sign it and send it to Ms Lancaster to hold until I was clear of abn amro as agreed. Mr Fulton did not ask whether I was getting my bonus that day or why I couldn't sign the letter immediately. I did not say that I wouldn't be getting my bonus when I originally thought, or that I did not know when I could start. I said that the previously agreed starting date of 15th March 1998, or earlier if possible, was agreeable. 67 The respondents' counsel cross-examined Mr Walker on his failure to sign the contract at the 15 January meeting, as Mr Thomas asked him to do. In cross-examination, Mr Walker said that: … I insisted that I take it [the third letter of offer] away to check it and sign it the next day he [Mr Thomas] was comfortable with that. I do not agree with the version of events that are given elsewhere. Mr Walker denied saying that he would not sign because he did not want to prejudice the receipt of his bonus, which had been delayed. He also denied that he had suggested that he sign and return the third letter of offer to Ms Lancaster for safekeeping until he had given notice of termination to abn amro. In addition, Mr Walker denied saying that he did not know when he would be able to start with NatWest. His evidence was that: In regard to the use of [Oonagh] Lancaster as a post box, as a holder of the signed document, there was a specific undertaking and understanding that I would take the document away, in my own time check it, sign it and then return it to her and she would hold the document until I was clear with abn amro; that was the precise understanding. 68 Mr Walker's evidence was that his acceptance of the contract would be complete when he had forwarded a signed copy of the contract to Ms Lancaster and she had informed Mr Thomas that she had received it. His concern was, according to his evidence, that the matter be kept confidential until he was "clear of abn amro". Mr Walker maintained that both Messrs Fulton and Thomas agreed with the arrangement to lodge the signed agreement with Ms Lancaster. 69 In relation to this meeting, Ms Lancaster deposed that: At the meeting Mr Walker accepted a signed revised contract from Mr Thomas. During the meeting we went through every term in the contract. Mr Walker told us that he was taking a copy of the letter and the attachment back to Melbourne to check and that he would countersign the letter and return it to me. As had previously been agreed in discussions between myself, Mr Walker and Mr Fulton it was agreed that when Mr Walker had checked the contract he would return it to me and I would hold it on behalf of NatWest until Mr Walker departed abn amro. All parties at the meeting agreed to this. At the end of the meeting Mr Thomas shook hands with Mr Walker and said "Welcome to the firm". 70 She repeated this evidence at the trial. In cross-examination, Ms Lancaster said that she had not been present for the entirety of the meeting and she could not recollect any reference being made to the 15 March date. She denied, however, that Messrs Fulton and Thomas had not known before this meeting of the delay in Mr Walker's receipt of his bonus from abn amro. She was clear that, by this stage, the agreed starting date was 15 March 1998 or earlier, and that the contract would be taken as executed when Mr Walker had signed it. She said: … it had already been discussed and agreed that there would be an offer made, there would be an agreement and there would be an execution of the contract by the signature of Mr Walker on the contract and that I would notify them when I had received it, but would hold it for safekeeping. The contract was made then and there. 71 As already indicated, Mr Fulton's account differed from that of Mr Walker and Ms Lancaster. Mr Fulton's evidence was that Mr Walker indicated that he would not sign the contract that day because his bonus payment had been delayed. He said that he had not known that the payment was delayed until this point. Mr Fulton deposed: I said: Aren't you getting your bonus today. Why can't you sign immediately? He said: I won't be getting my bonus when I originally thought. I don't know when I can start, but it shouldn't be long. I'm sure I'll be resigning soon. I said: That's disappointing. Can you let us know as soon as possible when you are going to resign. If you want to send the signed letter to Oonagh for safekeeping that's fine by me. 72 According to Mr Fulton's affidavit, there was no discussion at this meeting about the matter of voluntary redundancy or whether the starting date was a term of the contract or that it might be 15 March 1998. He denied that there was any agreement that Mr Walker would return the signed letter to Ms Lancaster and that she would hold it on behalf of NatWest until Mr Walker left abn amro. In cross-examination concerning a meeting on 20 February 1998, there was, however, the following exchange between counsel for the applicant and Mr Fulton. Counsel: He'd made it clear, and you'd agreed, that the signed letter of offer would remain with Mrs Lancaster for reasons of confidentiality until he'd left abn amro, didn't he? Mr Fulton: That was what he said to us, yes. Counsel: And that's what you agreed to back in January, isn't it? Mr Fulton: In January we agreed - no, in January we said, "It's fine by me if you want to do that." Those were the exact words, "If you want to do that, that is fine by me." 73 Mr Fulton reiterated some of this evidence at the trial, saying also that he did not recollect "a timing on the delay in the bonus, just that it had been delayed". He conceded, however, that his recollection was "hazy" and he was not in a position to contradict Mr Walker, who specifically referred to the dates of 15 February and 15 March as nominated dates for the payment of his bonus and for starting with NatWest respectively. 74 Mr Thomas deposed that he recalled a discussion about Mr Walker "signing a copy of the letter of offer and leaving it with Oonagh Lancaster until he was ready to accept the offer". Mr Thomas also deposed that, at the 15 January 1998 meeting, he did not tell Mr Walker that he was "more than satisfied with [his] references" or discuss the main terms of the contract with him. He added that he could "not recall any discussion about whether the starting date was a term of the contract … or any agreement that 15 March 1998 would be the latest date on which he would start". Further, he did not recall any specific discussion during this meeting about a redundancy payment. 75 In cross-examination, Mr Thomas said that he could not remember when he signed the third letter of offer, although he recalled that there was some discussion about Mr Walker not signing because he wanted to take it back to Melbourne to check that it was identical to the one that he had received on 13 January 1998. Mr Thomas agreed that, at the 15 January meeting, Mr Walker said that, if he were so satisfied, then he would lodge his signed copy of the contract with Ms Lancaster. Although he could not recall precisely what Mr Fulton had said about this arrangement, he conceded that Mr Fulton may have said something to the effect of "[t]hat's fine by me". 76 Mr Thomas also conceded that Mr Fulton had told him in December 1997 that Mr Walker would not leave abn amro until he had been paid his bonus. In cross-examination, he said: My only recollection was that, on the meeting of the 15th, my belief was that the bonus was being paid on that day or around that time, hence the fact that we were going to sign the - go and have a meeting. Mr Thomas agreed that he and Mr Fulton had been happy to accept that Mr Walker receive his bonus before joining NatWest. He added that: … my recollection is that, as I say, on the meeting of the 15th, the reason advanced why Mr Walker wasn't signing and sending the letter back was some delay in the bonus. 77 His evidence was that he was first told of the delay at the meeting. Mr Thomas said that: I walked out of that meeting thinking we were looking at days of the bonus being paid, because we were looking at a guaranteed bonus of quite a large amount of money. I think I would have started to get concerned about the fact that we were paying, I guess, a guaranteed bonus which is the equivalent of $5000 or so or $6000 a week, and we had no start date. So if it was going to be spread out a month or more ‑ ‑ ‑ Mr Thomas agreed that, at the end of the meeting, he had shaken Mr Walker by the hand and said, "Welcome to the firm". He put forward no factual basis to support his evidence (which I reject) that he thought the bonus would be paid within a few days. 78 I accept the evidence of Mr Walker and Ms Lancaster concerning the meeting on 15 January 1998. Their evidence was cogent and consistent with the circumstances that existed at the time. I find that, at this meeting, Mr Walker and Messrs Thomas and Fulton agreed that, if Mr Walker were to sign and return the third letter of offer to Ms Lancaster, then Mr Walker would be taken to have accepted the NatWest offer, upon the terms and conditions set out in the third letter of offer, and upon condition that he start no later than 15 March 1998 (or earlier, if possible). 79 It was apparent that Mr Thomas's recollection of events was generally poor and that, in any event, the day-to-day responsibility for negotiating with Mr Walker was left with Mr Fulton, with the consequence that Mr Thomas relied on what Mr Fulton told him. Mr Thomas's statement that he did not discuss the terms of the contract with Mr Walker is not borne out by the evidence of the other witnesses who were present at the meeting. Mr Thomas's statement that he did not know of the delay in Mr Walker's receipt of his bonus is consistent with the fact that Mr Fulton did not tell him of the change in Mr Walker's circumstances. It does not contradict the evidence of Mr Walker and Ms Lancaster (which I accept) that they told Mr Fulton of this well before the 15 January 1998 meeting. Mr Thomas's evidence did, however, support Mr Walker's case that he was not prepared to join NatWest until he had received his bonus from abn amro. Furthermore, by his conduct at the end of the meeting, Mr Thomas clearly signified to those present (and, in particular, to Mr Walker) that he understood that, if Mr Walker were to sign the contract and return it to Ms Lancaster as arranged, then Mr Walker would have accepted NatWest's offer of employment. Indeed, Mr Thomas conceded as much. 80 As already indicated, I reject Mr Fulton's evidence that he did not know prior to the meeting on 15 January 1998 that Mr Walker would not receive his bonus from abn amro until 15 February 1998 and that, unless Mr Walker was made redundant, he would not start with NatWest until 15 March 1998. I reject his evidence that the matter of redundancy was not discussed in this context. I also reject his evidence that there was no agreement that Mr Walker could accept the NatWest offer by returning the third letter of offer, signed by him, to Ms Lancaster (who would inform NatWest when she received it). Mr Fulton's evidence was inconsistent with the evidence of Mr Walker and Ms Lancaster and the circumstances that existed at the time.

Mr Walker signs the contract 81 On Friday, 16 January 1998, Mr Walker countersigned the third letter of offer and telephoned Ms Lancaster to tell her that he would be sending the signed document to her. Ms Lancaster said that, in a telephone conversation with Mr Thomas, he had congratulated her, saying, "Well done Oonagh, a fantastic hire" and that they were "thrilled" with Mr Walker's appointment. Mr Thomas said that he recalled her telephoning him with the news that Mr Walker had signed the third letter of offer but he could not recall the terms of the conversation.) 82 The respondents' counsel put to Ms Lancaster that her recollection of the relevant events was hazy. Ms Lancaster responded: No. It is not hazy. I can remember certain things very vividly. I remember the meetings. I organised them. I remember the contract, I remember the agreement, to where the contract would be kept, the signature. I remember the conversation with Rob Thomas saying, "Well done and what a fantastic hire." I remember all those things. I might be - I might have - with some of the points, when you say - I can't - I have been honest with you saying that I can't recollect every single point. The points that I am 100 per cent certain of is I put forward Mr Walker who had a very high profile in the market; I was not acting as his agent, I was working for [Natwest], the way I always did my job, I worked on their brief; they didn't give me an exclusive. That was the way I always did it. I never had anything in writing or any of my previous briefs. I recollect the conversations I had with Rob Thomas concerning him starting off discussing his profile, his candidature. I recollect my conversations with Mr Walker at the initial interview, the letter I sent out, the CV, business conditions. I recollect the reason why I didn't discuss it with Mr Fulton in case there was a slight conflict. I did not know Mr Fulton as well as I knew Mr Thomas. I had met Mr Fulton, I think it was the previous year when I went and found a senior economist … who is still working for [Natwest]. … But I am 100 per cent - it's indelibly printed in my mind - when I received the contract, the changes that were made; the fax that I sent off …; the fact that I received the signed contract; the fact that the meetings were held in my office, in the boardroom; and the fact that it was a signed, sealed, delivered contract and the start date was not in issue. What it was was, "Welcome, we're glad you're starting. We're happy to wait." 15 March was to be the latest date … . If we could facilitate it further, yes. Both Mr Thomas and Mr Fulton had been - had agreed that it would be financial suicide - they're my words - for Mr Walker to walk away from his bonus. As already noted, Ms Lancaster was, in my estimation, an honest witness. I accept her evidence in large measure. 83 On Monday, 19 January 1998, Mr Walker sent the third letter of offer, signed by him, to Ms Lancaster. She deposed that she received the document on 20 January 1998. Her evidence was that she subsequently telephoned Mr Fulton to tell him that she "had the contract and would hold it as agreed pending the termination of Mr Walker's employment with abn amro". She further deposed that "Mr Fulton expressed his delight at Mr Walker's signed acceptance". She maintained this position in cross-examination, saying that she definitely spoke to Mr Fulton around the time she received the signed letter of offer, although she could not recall the exact date. 84 Mr Fulton denied that he spoke to Ms Lancaster on 16 and 20 January 1998, saying that he was on holidays from 19 January to 26 January 1998. He recollected discussions with her in February 1998. His affidavit evidence was that, on his return from holidays, he had a number of conversations with Ms Lancaster and Mr Walker during which he asked Mr Walker to confirm his starting date, which he would not do. Mr Fulton said that, in a conversation in late January, Mr Walker referred, for the first time, to his efforts to "sort out a redundancy payment", saying it might speed up his "getting out" of abn amro. 85 In cross-examination, Mr Fulton conceded that he knew, by mid-February 1998, that Mr Walker was looking for voluntary redundancy and, in so doing, Mr Walker clearly signified to abn amro that he was intending to quit its employ. Also in cross-examination, Mr Fulton said that he spoke to Ms Lancaster around 16 or 17 February 1998 in order to arrange a meeting and, in the course of a conversation at this time, Ms Lancaster told him that she had the signed letter of offer. Mr Fulton also said: On about 17 February during conversations, that late, when we were trying to set up a meeting to discuss the whole situation with Mr Walker, [Mr Walker] did say it was possible he could start on 2 March. Mr Fulton added that he wanted to have a meeting "to discuss the whole thing" and was very keen to have Mr Walker as an employee up until mid-February 1998, when he received "more strident" "negative feedback from the market". 86 Mr Thomas said that he could not recall Ms Lancaster telling him that she had the signed letter of offer in her possession, although he thought that Mr Fulton had informed him of this by late January 1998. He recalled that he knew in late February (prior to 20 February 1998 meeting) that Mr Walker was seeking voluntary redundancy, although he did not recall that this was in order that he might start with NatWest more quickly than 15 March 1998. 87 I find that, after Mr Walker signed the third letter of offer on 16 January 1998 and telephoned Ms Lancaster, she spoke to Mr Thomas, who congratulated her on the hire. I also find that, after she received the signed document, Ms Lancaster telephoned Mr Fulton to inform him of the receipt. I am satisfied that she spoke with him around 20 January 1998, probably in the following week. I reject Mr Fulton's evidence to the contrary. It is implausible that Ms Lancaster failed to inform Mr Fulton until mid-February 1998 that Mr Walker had signed and returned the third letter of offer to her, or that Mr Fulton knew nothing of Mr Walker's attempts to secure his redundancy before mid-February 1998. As already indicated, I also reject Mr Fulton's evidence concerning Mr Walker's alleged failure to give a starting date. Severing ties with abn amro 88 Because Mr Walker had signed the third letter of offer, he determined not to attend meetings in Melbourne concerning the new abn amro; andhe did not apply for a position in the new organisation when invited to do so. On 3 February 1998, he had a brief conversation with the person responsible for integrating research in the new organisation (Alan Hargreaves) about his future at abn amro and confirmed that he was not intending to stay. His evidence was that: There were a number of meetings held in early January, mid-January. There was a particular meeting with Mr Alan Hargreaves, who was the head of my particular division in abn amro, which I did attend … . That ended up being the entire formal process that I went through to move or to not move into the new merged firm. The point I would make … is that at this time it was fairly clear from my non-attendance - my voluntary non attendance at meetings - that I was not going through into the new business. 89 Some time in early February 1998, Mr Walker sought details of abn amro's redundancy policy. The company did not provided these details before 17 February 1998. In an e-mail of that date, the company notified its staff that all requests for voluntary redundancy were to be lodged by Friday, 20 February 1998. 90 On 6 February 1998, another man was appointed to the position of Head of Resources (Research) at abn amro in Mr Walker's stead. In cross-examination, counsel for the respondents asked Mr Walker about his complaint, in an internal abn amro memorandum dated 6 February 1998, concerning his "lack of inclusion in the selection process for the new mining team" and his statement that he "had every expectation of continuing in [his] role beyond the end of the month". Mr Walker responded that he had in fact expected to remain at abn amro until mid-March 1998, because that would have been the effect of a termination notice given by him in mid-February 1998. Whilst this explanation may have an air of unreality, I accept thatthis complaint was part of Mr Walker's attempts at the time to negotiate an earlier end to his employment with abn amro. 91 There was other evidence of these attempts. On 16 February 1998, the day after Mr Walker finally received his 1997 bonus, his solicitors wrote to abn amro, alleging his constructive dismissal. In connection with this letter, Mr Walker said, in cross-examination, that: The purpose of the letter of 16 February … was a tactic to be put to abn amro to effect my earlier release than the giving of one month's notice and serving out that one month. It was done on the instruction and with the express agreement of Mr Fulton. It was done to effect an earlier exit from abn amro. It proved to work. As already stated, I accept Mr Walker's evidence that, with the knowledge and support of Mr Fulton, Mr Walker sought to negotiate a voluntary redundancy from abn amaro. By taking steps to leave abn amro, he acted to his disadvantage. Marketplace rumours about Mr Walker's new employment 92 On 5 February 1998, the abn amro Head of Dealing in Melbourne spoke to Mr Walker about his new position at NatWest, saying that he had heard the details of Mr Walker's contract "from a dealer at the AMP who had heard it from an analyst at Salomon Smith Barney in New York" and stating that the information had reached all the dealers on abn amro'sMelbourne and Sydney dealing desks. Later that day, two institutional analysts separately told him that they had heard that he had joined NatWest. Mr Walker telephoned Ms Lancaster to express his concern that this information had been disclosed. Ms Lancaster spoke to Mr Fulton about the matter. She said that she subsequently telephoned Mr Walker to pass on Mr Fulton's apologies about the information "getting out". 93 Ms Lancaster and Mr Fulton also said that at this time they too heard of rumours in the market about Mr Walker's employment at NatWest. Mr Fulton denied, however, that the rumours originated with NatWest and suggested that they derived from Mr Walker's referees. 94 I accept that, as Mr Walker's counsel submitted, Mr Fulton knew by early February 1998 that Mr Walker's prospects of continuing employment with abn amro had been significantly prejudiced, both by his request for a redundancy package and by the rumours in the marketplace that he was to join NatWest. A new starting date is agreed 95 On 10 February 1998, the financial press reported that the second respondent had purchased NatWest; that Mr Thomas had been appointed Managing Director of the Equities Division; and Mr Fulton had been appointed Head of Research. (The second respondent completed its acquisition of shares in NatWest on 31 March 1998.) 96 Mr Walker spoke with Mr Fulton on 13 February 1998, asking him, amongst other things, whether the sale affected his contract with NatWest. Mr Walker's evidence was that Mr Fulton told him that the contract was: ... fine and in full force, would not have to be altered, and [was] similar to all other NatWest employee contracts for Research staff which were held by NatWest Markets. He said that the contract was for employment under the new owner as previously agreed. He said the contract would be transferred to the new holding company along with all other staff contracts by completion on 31 March, 1998. 97 For the reasons already stated, I accept Mr Walker's evidence in this regard. 98 Mr Fulton said that he had told Mr Walker merely that the sale of NatWest would not affect NatWest's offer of employment. In his affidavit, Mr Fulton deposed: In my conversations with David Walker at around this time, he told me that he did not know when his employment would be terminated and he could not give me a definite starting date. For the reason already stated, I reject Mr Fulton's evidence. 99 In the evening of 15 February 1998, Ms Lancaster received a telephone call from Mr Fulton. She deposed: On Sunday 15 February, 1998 at approximately 10:30 p.m. I received a telephone call at home from Mr Fulton. Mr Fulton was in an extremely agitated state … . Mr Fulton said words to the effect that NatWest had not made a "bad hire" in the past. I referred to the contract that Mr Walker and Mr Thomas had signed, told him that it was a binding contract and that I would be bringing it across within a few days. I challenged Mr Fulton over the comments he made about Mr Walker's ability. …. I do recall that he was extremely agitated, and it seemed to me that he was almost hysterical. 100 Ms Lancaster's evidence was that, in this evening conversation, Mr Fulton had stated that "his job was on the line" over Mr Walker's appointment and that he had "negative feedback from the market". According to Ms Lancaster, the call lasted for over an hour. 101 In cross-examination, the respondents' counsel asked Ms Lancaster whether she and Mr Walker discussed delivering the contract to NatWest at this time. She said: In stockbroking offices it is very easy for word to go around - connection with hires. Confidentiality is extremely important. The agreement had been made that I would hold the contract. Why would we change it? Both sides had been happy with that agreement. I had - Mr Thomas, when I told him that the contract was signed, said, 'Well done, [Oonagh], fantastic hire.' I held Mr Thomas in very high esteem ... and I remember the word because I thought there were - I felt really happy, it was wonderful praise. Having regard to the facts as I have found them to be, I accept Ms Lancaster's evidence in this regard. In this connection, Ms Lancaster also said that she understood that Mr Walker's concern was that his attempt to obtain a voluntary redundancy would be jeopardised if his engagement to NatWest were not kept confidential. 102 On 16 February 1998, Ms Lancaster received further calls from Mr Fulton. In one telephone discussion, he "indicated that Mr Walker had a bad reputation in the marketplace". Ms Lancaster said that: When I asked him where he had heard these comments he avoided giving a straight answer. I then stated that he had a binding signed contract with Mr Walker. He then became abusive and hysterical and threatened me "You open your mouth and discuss this with anyone and I will make sure you will never work in this town again". 103 In cross-examination, in connection with this conversation, she said further: On 16 or 17 February my recollection is that Mr Fulton was on the phone to me and highly abusive. He said that he heard a lot of bad rumours concerning Mr Walker's standing in the market. I put it to him, where had he heard these rumours? I then asked him if he had spoken to another head hunter and I named a particular one and he said, "Yes". I then said to Mr Fulton, "You have breached confidentiality. It is express terms of my business conditions that there is to be strict confidence outside your company concerning that". Mr Fulton said, "You open your mouth that I have spoken to John Coles and you will never work in this industry again. You will never work in this town again", those were the words. I was so shocked, so amazed and I was trembling at that, because he was so angry on the phone and I was so - I just could not believe that a director of the firm could discuss someone's career with another head hunter, because surely it is a conflict of interest. If he had heard negative rumours concerning Mr Walker's standing in the market from another head hunter, obviously he had a vested interest in putting forward a different candidate. Mr Coles was a personnel consultant in the same field as Ms Lancaster (see below). 104 When the respondents' counsel asked why she made no mention of Mr Coles in her affidavit, she answered: Because I had intended putting it in a second affidavit. I did not put it in this affidavit because I thought I would like to say it in court. I had nothing to be gained by bad-mouthing anybody else in the industry, but I was incredibly upset and shocked, and I think it was disgraceful, disreputable behaviour. 105 In another telephone conversation on 16 February 1998, Mr Fulton told Mr Walker that he wanted him to start earlier than 15 March 1998. According to Mr Walker, he told Mr Fulton that this was contrary to the agreement reached the month before, on 15 January 1998. Mr Walker subsequently telephoned Ms Lancaster for an explanation. Mr Walker said, in cross-examination: The phone calls being received from Mr Fulton at this time were not for a firm starting date, they were for an earlier starting date. We were being inundated with phone calls from Mr Fulton sometimes three or four a day, sometimes after 10 o'clock at night, sometimes Sunday afternoons in the middle of barbecues is one I remember which caused some concern. Mr Fulton was seeking urgently to bring the starting date forward. He was not seeking a starting date because he already had one. He was seeking to bring it forward. … At this time, the middle of February, I probably had 20, 30 or 40 telephone conversations with Mr Fulton who was pressing for an earlier starting date. In a number of those conversations I told him, "Our agreement says". In a number of conversations - a couple of conversations, I said, "Perhaps we should simply stick to the agreement and not try and modify it the way you're trying to do". I made it very clear to him that I would use my best endeavours and in his interests I would try and exit abn amro earlier than 15 March, and he kept pressing for an earlier starting date, sometimes in a very animated form and sometimes coolly asking me, "How can we arrange an earlier starting date than the 15th". 106 On 17 February 1998, Mr Fulton again telephoned Mr Walker, saying he was under pressure from his management group to confirm an earlier starting date than 15 March 1998. Mr Walker reiterated that he was likely to be "separated" from abn amro within the next few days. After some further discussion, Mr Walker deposed: After [Mr Fulton] further insisting on an immediate decision I reluctantly agreed to a stating date of 2 March, 1998 whether or not I was clear of abn amro, although this would risk the financial arrangements of my separation. I reiterated our agreement on complete confidentiality until I was out of abn amro. According to Mr Walker, Mr Fulton said that he was comfortable with this situation. Shortly thereafter, Mr Walker telephoned Ms Lancaster, confirming that he had agreed upon a 2 March 1998 starting date. 107 Later on 17 February 1998, Mr Walker received information from an abn amro dealer in Sydney that NatWest dealers were transmitting information about his employment by NatWest to Mr Walker's institutional clients. He subsequently confirmed by telephone calls to his clients that they had this information. He also telephoned Ms Lancaster about the disclosure of this information within the market. 108 Whilst Mr Fulton said that he had conversations with Ms Lancaster and Mr Walker on and around 15, 16 and 17 February 1998, he denied that they were to the effect described by them. He said that he told Ms Lancaster that he was "uncomfortable" with the information that had emerged from the market and that she had not picked this up herself. He acknowledged that their conversations became heated but denied that he was "almost hysterical". In his conversations with Ms Lancaster, he reiterated that Mr Walker declined to give him a firm starting date. Amongst other things, he deposed: During that conversation I did say words to the effect that in view of her failure to conduct due diligence into David Walker I might not use her services again. 109 Mr Fulton specifically denied that he had a conversation with Mr Walker in the terms described by Mr Walker on 17 February 1998. In particular, he said there was no discussion about a starting date of 15 March 1998 and he did not reach agreement with Mr Walker that Mr Walker would start no later than 2 March 1998. Mr Fulton deposed: Whilst he had indicated that 2 March 1998 might be a possible starting date, I did not take this seriously given his delay up to that point. Mr Thomas gave evidence that Mr Fulton never told him about the 2 March 1998 start date. 110 I accept the evidence of Mr Walker and Ms Lancaster concerning their telephone calls with Mr Fulton between 15 and 17 February 1998. Mr Walker's evidence was consistent with Ms Lancaster's on the nature of these calls. I also accept that Mr Fulton did not inform Mr Thomas of the actual position. I find that Mr Fulton was fabricating his evidence to suit the respondents' case and to justify his own actions at the time. 111 Mr Fulton admitted that he had conversations with Mr Coles around this time, including on 9 February 1998, during the course of which he discussed Mr Walker's prospective employment. Mr Fulton also admitted that Mr Coles put forward a rival candidate to Mr Walker in February 1998. (Mr Thomas (whose evidence I accept on this point) said that he knew nothing of this.) Mr Fulton did not deny that Mr Coles's candidate began at NatWest as an oil and gas analyst some time in the first half of 1998. 112 Mr Walker's counsel questioned Mr Fulton about his breach of confidence. I set out part of the exchange. Counsel: You discussed Mr Walker's candidature for your firm with Mr Coles, didn't you? Mr Fulton: I have a recollection of a telephone conversation with Mr Coles somewhere in February before - I thought it was somewhere around the 16th, 17th or the 13th, around that time, where because of the negative feedback we were getting, in confidence I asked Mr Coles if he would have any comment on this. Counsel: So your answer is yes, you did discuss Mr Walker's candidature? Mr Fulton: Yes. Counsel: For a position ‑ ‑ ‑? Mr Fulton: Yes, I did. Counsel: - - - with Salomon Smith Barney in February 1998? Mr Fulton: Mid-February, I believe. Counsel: With Mr Coles, the head-hunter? Mr Fulton: Correct, I did, yes. Counsel: It was particularly in the context of, as you say, negative rumours about Mr Walker? Mr Fulton: Correct. Counsel: So you took negative rumours, negative statements about Mr Walker, and put them to Mr Coles for comment? Mr Fulton: Not specific statements, no. I put to Mr Coles that we were involved in talking to Mr Walker in confidence - many times did I refer in my conversation, as I can remember, that this was a confidential question to him - and whether he would be able to give me any comment, and he could not, actually. He did not give me any specific feedback on David Walker. Counsel: Mr Fulton, Mr Walker's candidature was confidential, wasn't it? Mr Fulton: At that stage the market was talking back to us a lot about him. Counsel: In the context of knowing that he was about to take up a position with you? Mr Fulton: It appears the market had found that out, yes. … . Counsel: You breached his and Ms Lancaster's confidence, didn't you? Mr Fulton: I asked him to keep it in confidence. Counsel: Mr Fulton, answer my question, please. You breached Mr Walker's confidence? Mr Fulton: I don't believe so. I don't see - what is the confidence I breached? I mean in a sense I was asking, in confidence, someone I trusted if he could shed any light on the situation, that's how I saw it. … . Counsel: What on earth gave you the right to discuss with another head-hunter Mr Walker's candidature with your firm? Mr Fulton: I believed it would shed some light on the situation and it would allow us to make a better judgment of what was going on. 113 I accept that the disclosure by Mr Fulton of Mr Walker's prospective employment with NatWest was a patent breach of confidence and was, in the circumstances known to Mr Fulton, likely to work adversely to Mr Walker's interests. Furthermore, Mr Fulton knew at the time that Mr Walker was anxious that his involvement with NatWest be kept strictly confidential until he had left abn amro. 114 Mr Fulton said, in cross-examination, that there were a number of reviewers that published their ranking of brokers and that to be ranked well was "a very positive thing". Mr Coles's firm was one such reviewer. Mr Fulton denied that "the reason why [NatWest] rocketed to number one with [this firm] in 1999 was because [he] gave preferment to [Mr Coles's] headhunting firm" and that he "got rid of Mr Walker to make room for Mr Coles' candidate" in order that he might increase his rating in Mr Coles's survey. Mr Fulton said: [The Natwest] research department was rated extremely highly all the way through the late 80s through to the mid-90s. There was a drop-off in the ratings in the mid-90s before I assumed control of the research department. He conceded, however, that NatWest's research department had rated "quite poorly" with Mr Coles in 1996-1998, but went to number 1 in Mr Coles's survey in October 1999-2002. Further, he did not deny that, in 1999, Reuters ranked his department only number 6 and that the financial press commented about the discrepancy. 115 Having regard to the matters I am about to discuss, I find, that, for reasons that did not clearly appear in the evidence, in mid-February 1998, Mr Fulton decided that he would attempt to prevent Mr Walker joining NatWest if he could. On the balance of probabilities, the evidence does not establish whether his reasons included matters arising from his conversations with Mr Coles. 116 Mr Fulton admitted that, in mid-February 1998, he became less enthusiastic than before about Mr Walker. He claimed that this was on account of the "negative feedback" he received from the market and because Mr Walker would not commit to a starting date. In his first affidavit, Mr Fulton said that, on or about 16 February 1998, one of NatWest's Specialist Resources salespersons (Chris McElroy) gave him some adverse comments about Mr Walker. 117 Mr Walker's counsel questioned Mr Fulton about the claimed negative feedback about Mr Walker. Mr Fulton said that he received some negative feedback in early February 1998, although he could not recall from whom. He principally recalled feedback from Mr McElroy sometime between 13 to 16 February. According to Mr Fulton, Mr McElroy came to him on 16 February, saying: … in general terms that the market was saying to us that they didn't know if David Walker would be suitable for this particular position that they assumed he was taking. So it was just sort of out there in our resources team and this was what was coming back. Mr Fulton said that Mr McElroy prepared a note, which had since been lost, containing a list of some 5 to 10 clients, none of whom Mr Fulton could recall at trial, reportedly making comments about Mr Walker, the specific substance of which he could not remember. He denied that he was fabricating this evidence. 118 Mr Fulton said he discussed these comments and his frustration at the lack of a definite starting date for Mr Walker with Mr Thomas. Mr Thomas confirmed that Mr Fulton told him as much and that they decided to seek legal advice. On the instructions they received, NatWest's solicitors advised Messrs Thomas and Fulton that it was open to NatWest to withdraw its offer of employment to Mr Walker, but that he should be given an opportunity to accept the offer before NatWest withdrew it. The solicitors conveyed this advice in a telephone conversation with Mr Fulton on 20 February 1998. A note made by Mr Fulton read as follows: Phone calls Peter Arthur Thurs/Fri 19/20 February 1. Key point is whether Walker has returned contract to us signed 2. Can he do it now - ask 3. If not, contract has lapsed. 4. We can send him letter after meeting explaining this 5. He can reapply to work in corporate, new starting point, no guarantees 119 I accept that Messrs Fulton and Malcolm Sinclair (Managing Director and Deputy Head of Equities of NatWest) received some negative feedback about Mr Walker, although precisely what this was does not appear. Although I accept that someone prepared a note containing adverse comments about Mr Walker and that Mr Sinclair showed this note to Mr Walker at the meeting on 20 February 1998 (see below), I am not satisfied that it was prepared by Mr McElroy, as Mr Fulton claims. Nor am I satisfied that the note contained adverse remarks of any significance from institutional clients. I accept, however, that Mr Fulton told Mr Thomas that he had received negative feedback about Mr Walker and that he had not yet agreed to a firm starting date. Mr Fulton knew that the last-mentioned matter was incorrect. The 20 February 1998 meeting 120 On 20 February 1998, Mr Walker attended a meeting at the Sydney offices of NatWest with Messrs Fulton and Sinclair. At the meeting (which, according to Mr Walker, was about an hour long) Mr Fulton mainly spoke for NatWest. 121 In his first affidavit, Mr Walker deposed: Mr Fulton appeared anxious and uncomfortable and spoke as if he had rehearsed what he was going to say. Mr Fulton fidgeted around and did not make eye contact. At the outset, Mr Fulton made the following points: (a) the equity research position was no longer available; (b) I lacked standing in the market, lacked technical ability and was highly litigious and this was the reason for their action; (c) he had been advised to tell me that the contract was not binding and that it had lapsed; (d) but I should not get "too hung up" on the loss of the equity position, because there were positions available in the Corporate Finance area and a position would likely be offered to me because of my expertise and experience; (e) Salomon would no longer offer contracts of this nature to any employees, reverting to lower base salaries and definitely no guaranteed bonus; (f) but the Corporate Finance position would have a similar base salary, therefore fulfilling one term of the contract. 122 Mr Walker said that he told Mr Fulton that he believed that he had a binding contract and that he reserved his rights in this connection. He said that he was "staggered that after 6 months of negotiation and 1 month after I had signed the contract and after I had left abn amro at their request a firm such as Salomon/NatWest could then decide to not honour the contract". In his first affidavit, he added: I said … that I would in good faith consider an alternative position in the Corporate Finance Department instead of the Equity position providing it was a real position. In response to [Mr Fulton's] comment that I lacked standing in the market, lacked technical ability and was highly litigious, I asked Mr Fulton about his earlier canvassing of referees and the positive responses he had previously acknowledged receiving. Mr Fulton acknowledged that he had received positive responses but did not explain how he concluded that I was not qualified for the position. 123 In cross-examination, Mr Walker agreed that Mr Fulton may well have asked him whether he had tendered his resignation to abn amro and that he would have answered that he was still negotiating his "redundancy exit". Mr Walker agreed that he was shown a document recording adverse comments about him, although he added: … it was a [small] piece of paper … it was torn on two sides …. It had five or six black marks on it like that which were supposed to be blacked out names of people. Then it had comments next to it which I was - this piece of paper this size had been screwed up as well, it was creased, perhaps it had been in the bin. This piece of paper is supposed to be the evidence against me in this position coming from a firm of this standing. I thought it was a joke. 124 In connection with the Corporate Finance position, Mr Walker said: But we're not talking about whether I'm going to go and have interviews with people. What we're talking about is whether I have a contract and whether they're going to transfer this contract into corporate finance on ostensibly the same terms and conditions, that was the gravity of that discussion. Mr Fulton made specific mention, "At least we can offer you a base salary that's the same as this contract, thereby satisfying one of the conditions of the contract". He made that specific point. 125 Mr Fulton's account of this meeting differed from that of Mr Walker. He deposed that he asked Mr Walker whether he was "still employed by abn amro"; whether he had "tendered his resignation yet"; and whether he was "in a position to resign today", "execute the letter of offer now" and "give us a definite starting date". According to Mr Fulton, Mr Walker stated that he had not tendered his resignation but was still negotiating his redundancy payment; that he wanted the NatWest offer to remain confidential; that he was not able to resign from abn amro and execute the letter of offer, which he had lodged with Ms Lancaster; and that he could not give a definite starting date. Mr Fulton said that he advised Mr Walker that: In that case, I have to inform you that the offer has lapsed and the position is no longer available. 126 Mr Fulton also said that Mr Sinclair showed Mr Walker a copy of a note recording the adverse comments NatWest had received about him and that Mr Walker had said that these might be "due to his recent focus on corporate work". Mr Fulton deposed that he raised the corporate finance role, saying: You will have to start from scratch with the interview process. 127 In cross-examination, Mr Fulton denied that he was anxious and uncomfortable. He said, "I was keen to set out to Mr Walker the situation and ask him what to do". He denied that he told Mr Walker that he "lacked standing in the market" or that he was known to be "litigious". He conceded, however, that he had raised Mr Walker's litigiousness with Ms Lancaster and that Mr Walker may have said to him that he had him confused with a former colleague of his. Mr Fulton said that he had been told to tell Mr Walker that "the letter of offer had lapsed" because "he wouldn't execute it in the way I asked at the meeting". He recalled saying that: … we would like to interview him for a corporate finance role now that this letter of offer had lapsed and that we would like to start from that from fresh. There were no guarantees - you know, it was not a rollover of the offer in any way, but that we'd really like him to do that. 128 Counsel for Mr Walker asked Mr Fulton whether he recalled saying that his company no longer offered contracts with a guaranteed bonus. Mr Fulton replied that: I recall saying to Mr Walker that in the corporate finance position that he could not expect necessarily or most likely to get an offer of this nature, but he'd have to negotiate with them directly. Counsel also asked Mr Fulton about the signed third letter of offer, which he knew had been lodged with Ms Lancaster: Counsel: Why didn't you send somebody over to [Oonagh] Lancaster's office to get it? Mr Fulton: Because I don't think that's my job, to do that. It was Mr Walker's and Ms Lancaster's job to do that. Counsel: Her office is just round the corner, about 100 metres away from yours, at that time, wasn't it? Mr Fulton: Yes. That's why it struck me as strange that no-one actually just brought it over to us - very good point. Counsel: Because it was there for confidentiality purposes, wasn't it? Mr Fulton: Yes, they said that. Counsel: That had been said back in January? Mr Fulton: Yes. Counsel: And you'd agreed to that being done? Mr Fulton: Yes, but at this point we asked for the letter to be executed. Counsel: But the need for confidentiality was not yet over, as you well knew? Mr Fulton: That had to be Mr Walker's call at that point of time. We simply asked for our letter to be returned and accepted. 129 Mr Fulton conceded that, from Mr Walker's perspective, as at 20 February 1998 the need for confidentiality remained, admitting that was "why he didn't give it [the signed contract] to us, but we had asked for it." Mr Fulton also conceded that NatWest was prepared to ignore the negative feedback about Mr Walker "if he executed a legally binding contract" on this day. He also admitted that he knew, by mid-February 1998 at the latest, that Mr Walker had signed the third letter of offer and had given it to Ms Lancaster. He said that, if Mr Walker had signed the letter presented to him on 20 February 1998, then he would have become a NatWest employee. 130 In his affidavit, in connection with the 20 February 1998 meeting, Mr Sinclair deposed that both he and Mr Fulton told Mr Walker of the negative market feedback about him; and Mr Fulton asked him: … whether he was prepared to sign the contract. David Walker said that he couldn't because he was still trying to work out some arrangements with abn amro. I recall there was some discussion about the fact that David Walker said that he had given a signed copy of our letter of offer of employment to Oonagh Lancaster but she couldn't give it to us until he had sorted out his payments from abn amro. Mark Fulton then said to David Walker that as he was not willing to give us the signed letter of offer, the offer was withdrawn. Mr Sinclair denied that Mr Walker said that he had a binding contract and that he was "staggered" at NatWest's conduct. 131 In cross-examination, Mr Sinclair said: I remember distinctly David [Walker] said, "I cannot - I have given a signed letter of offer to [Oonagh] but I cannot release that until I complete my discussion with abn amro". I'm not privy to what those discussions were. Mr Sinclair reiterated that he knew nothing of the detail of these arrangements, although he had previously attended a meeting with Messrs Fulton and Thomas where they had discussed the legal advice received from NatWest's solicitors and determined to withdraw Mr Walker's offer if he did not respond as Mr Fulton was to request. 132 Although Mr Walker thought that he spoke by telephone to Ms Lancaster after the meeting and could not recall going with Mr Fulton to see her, I accept, as Ms Lancaster and Mr Fulton said, that all three met at Ms Lancaster's office after the meeting. When the respondents' counsel asked her about the position in Corporate Finance, she maintained that: I regarded the deal as done, Mr Walker regarded that he had a firm contract. I thought it was just a matter of deciding where he would work, that they had changed their minds slightly about the department, not about the fact that he was not going to work for [Natwest]. 133 On the return flight to Melbourne, Mr Walker made a note in his diary, which is consistent with his account of the meeting. The note, which was plainly not exhaustive, reads: Summary: M Fulton · employment contract lapsed · contract not binding - had legal advice · BHP equity research position no longer available · lacked standing in the market - reason · did not acknowledge that contract was valid · no response on his announcement of my joining County · offered position in Corp Finance instead · more suited to my skills · $250k base salary, no guaranteed bonus - would have to compete - no employees have base salary · contract salary term would be fulfilled · will arrange Corp Fin meetings ASAP - next week · Salomon moving to $100-$150K base salaries, more emphasis on bonus My response · I had a binding contract · reserved my rights · questioned Fulton over good references from [certain institutions] - no reply · would pursue Corp Fin job 134 I substantially accept Mr Walker's account of the 20 February 1998 meeting, which was consistent with the note he made on his return flight to Melbourne. I accept that, in accordance with the legal advice that NatWest received, Mr Fulton asked Mr Walker whether he was still employed by abm amro and whether he was in a position to resign. I also accept that there was some discussion about the third letter of offer and that Mr Walker reiterated that, as arranged, he had returned the signed document to Ms Lancaster, who was to hold it until he left abn amro. It was apparent from the evidence that Mr Fulton pursued a course designed to give NatWest a legal entitlement to renege on its arrangements with Mr Walker, without real regard to the actual circumstances. According to Mr Fulton, Mr Walker only needed to "give us a signed copy of the letter" to ensure that he had a contract. He disregarded the fact (which he knew) that, in the interests of confidentiality, Ms Lancaster held a signed copy of the contract and he placed no reliance on the alleged absence of a starting date. Further, Mr Fulton's assertions that Mr Walker was unsuitable for a research position was contradicted by Mr Fulton's acknowledgement at trial that he knew Mr Walker to be well qualified. Mr Fulton's position was untenable. 135 Mr Walker was a credible witness and Mr Fulton was not. Although Mr Sinclair's evidence contradicted Mr Walker's evidence in part, it must be borne in mind that he not only knew little of the detail of events since August 1997, but also, before he attended the meeting, he did not know that Mr Walker had already signed the third letter of offer. His perception of events on 20 February 1998 cannot be regarded as reliable. The letter of termination 136 On 22 February 1998, Mr Walker received, by courier, a letter dated 20 February 1998 from NatWest, purporting to withdraw its offer of employment. NatWest solicitors had drafted the letter, on Mr Fulton's instructions. The letter read in its material parts: On 12 January 1998, after a considerable period of negotiation, NatWest Markets executed an agreement to employ you as a Senior Research Analyst. We are unaware of whether or not you have in turn executed this agreement. The arrangement was that Lancaster & Associates [sic] would send to us a copy of the agreement executed by you only when you were in a position to accept our offer ie. once you had ceased to be employed by ABN Amro. Well over a month later you are still an employee of ABN Amro and there has been no firm indication of when you would be able to commence with NatWest Markets. Accordingly NatWest Markets withdraws the offer of employment made on 12 January 1998. This offer has probably lapsed in any event, since it was intended by both parties that you would be in a position to commence with NatWest Markets by early February; and as you know, fundamental changes have occurred here since that time. This does not mean, however, that NatWest Markets does not wish to offer you employment. We would like to continue to discuss with you the position that you could occupy with NatWest Markets and the terms and conditions on which you could accept employment with us. … . 137 Although Mr Sinclair signed the letter, he was not involved in its drafting. NatWest's solicitors drafted the letter on the instructions of Mr Fulton. The letter was plainly incorrect or misleading in a number of particulars. It was not correct to say, as the letter did, that NatWest did not know whether Mr Walker had executed the agreement. Both Messrs Thomas and Fulton well knew that Mr Walker had signed the letter by this stage. Mr Fulton asserted that "executed" in this context meant signed and delivered to Mr Thomas, but this must be rejected. The reference to "early February" as a starting date was, as Mr Fulton conceded, wrong. Mr Fulton also conceded that the reference to "fundamental change" at NatWest could only have been a reference to the sale of NatWest (and its acquisition by the second respondent). Mr Fulton admitted, in cross-examination, that this was not a relevant matter. Mr Fulton's evidence was that the sale did not affect staff employment. He had, in any case, assured Mr Walker that the sale would not affect his employment. The letter did not refer to any "negative feedback", being one of the matters Mr Fulton claimed at trial affected his change of heart. The letter did, however, acknowledge that there was an agreement between NatWest's representatives and Mr Walker that Ms Lancaster would hold the letter of offer, signed by all parties and returned by Mr Walker to her, until he ceased to be employed by abn amro. Until this point, however, no-one had suggested that Mr Walker was unable to "accept" the offer until he ceased his previous employment. Mr Walker's stated concern was confidentiality, a fact accepted by Mr Fulton. 138 Only Mr Thomas suggested (in cross-examination) that: My understanding was that he wouldn't be in a position to accept the offer until he had received his bonus. Apart from this statement and the respondents' assertion in the letter of 20 February 1998, there was no evidence for this claim, which I reject. Other meetings 139 On the next day, 23 February 1998, Mr Walker met with representatives of abn amro, who gave him a redundancy offer, which he accepted. Mr Walker deposed that "[b]y this time there was no possibility of continuing with abn amro". He ceased his employment with abn amro that day. Later that day, Ms Lancaster telephoned Mr Walker, saying that she had spoken to Mr Fulton and that he was organising a series of meetings with the Corporate Finance division in Sydney. Ms Lancaster deposed that, by this stage, she was "unhappy and concerned with the actions" of NatWest. 140 On 24 February 1998, Mr Walker met Mr Fulton (who, according to Mr Walker, was in "a very nervous state") at the Sydney offices of NatWest before attending a number of meetings with NatWest staff. Between about 10.30 and 11.30 am, he met the joint Managing Directors - Corporate Finance (David Hancock and Malcolm McComas) to discuss a senior position in the Corporate Finance department in Melbourne. Later on, he met the Chairman of Salomon Australia (Trevor Rowe) and the Head of Natural Resources of Salomon from Hong Kong (Doug Reynolds). These discussions were general in nature. Mr Walker did not refer to any starting date in these conversations. 141 Finally, he had a short meeting with Messrs Thomas and Fulton in Mr Thomas's offices. In his first affidavit, Mr Walker deposed: Mr Fulton remarked that I was "being good about this" and being prepared to look at the Corporate Finance position which had been offered. Mr Thomas questioned me about the possibility of legal action. I answered that there was no intention on my part to commence action against Salomon over the equity research position at this point because of the offsetting offer of an appropriate position in the Corporate Finance division. After this Mr Thomas appeared to be more relaxed and shook hands as we parted. 142 Mr Walker reiterated this evidence in cross-examination, remarking that: My impression of Mr Thomas was at that time that he was an extremely unhappy person. He didn't want me there in his office, he didn't want to talk to me. Until Mr Fulton said those words, Mr Thomas hardly opened his mouth. He was very, very concerned for the situation. Once Mr Fulton said that, then Mr Thomas - we had some conversation. He denied the suggestion that Mr Fulton had not been present, although he said that he might have left the room at some stage. He also denied that Mr Thomas had said that NatWest believed that it had been misled about his research experience. 143 In his affidavit, Mr Thomas deposed that he told Mr Walker that NatWest could not "look at a job" for him if he was intending legal action, and that Mr Walker said that this was not his intention. He added that he told Mr Walker that "we felt that he had misled us to some extent as he had not been involved in research in recent years", but that he would "do what [he] could to see if there was a position available for him in the Corporate Finance department". 144 Both Messrs Walker and Thomas gave similar accounts of their recollection of their conversation on 24 February 1998. To the extent that they differed, I prefer the evidence of Mr Walker. Some of Mr Thomas's evidence was, so it seemed to me, the product of unconscious reconstruction, rather independent recollection. Mr Thomas had a memory that was appreciably better in connection with details favouring the respondents' interests than in connection with other matters. 145 Following his meeting with Mr Thomas, Messrs Fulton and Walker had lunch together, after which they met Ms Lancaster at her offices. In his first affidavit, Mr Walker deposed: In the course of this meeting with Mr Fulton, Mr Fulton spoke of being relieved that I would consider the Corporate Finance position offered and that he had been under pressure to "get out" of my contract and that his job was "on the line" over the contract. Mr Fulton said that Salomon would not contemplate guaranteed minimum bonus contracts and that Salomon would not have accepted my contract structure. Mr Fulton warned me that Mr Thomas had plenty of previous legal experience and that I should not contemplate taking any legal action over the rescinded contact. Mr Fulton described BHP research as being a "no brainer" over the next two years … . Mr Fulton asked me whether the abn amro 1997 bonus had been paid. On my telling him that it had he said - "Thank goodness for that, at least you got something". During the course of my discussion with Mr Fulton I repeated my view that I had a binding contract … . I told Mr Fulton I did not accept his comments about my lack of standing in the market … . I asked Mr Fulton about the alleged negative comments from referees but Mr Fulton refused to respond. I reiterated my position that I would seriously consider the position in the Corporate Finance Department provided the offer was genuine. Mr Fulton confirmed that the offer was genuine, and "that's what you are here for". 146 Referring to his conversation over lunch with Mr Fulton, Mr Walker said, in cross-examination, that: … at this time I was acting in good faith with people I still believed were going to be my employer shortly coming. I believed their representations to me that there was a real position for me in corporate finance, the equity position now clearly having disappeared. I was not going to get into a serious fight with these people at this point in time. In hindsight, I don't believe that they were genuine in this at all, at any point. 147 Mr Fulton denied that he had a conversation with Mr Walker in the terms described by Mr Walker. He deposed that the lunch was relatively short and "our discussion was confined to a general discussion about the interview process and why in my view he was more suited to a corporate role at that stage of his career". In cross-examination, Mr Fulton maintained that he did not tell Walker that he was under "pressure to get out" of the contract with him; that his "job was on the line" over the contract; or that the new owner of NatWest had a policy of no guaranteed bonuses. He denied that he "dangled a corporate finance job in front of him that in fact never existed". 148 For the reasons already stated, I accept that Mr Walker gave an honest account of his recollection of his conversation with Mr Fulton over lunch on 24 February 1998. 149 On 26 February 1998, according to Mr Walker, Ms Lancaster telephoned him to say that she had heard "derogatory comments about him in the market concerning [his] ability and standing". According to Mr Walker, she told him that his name was "now mud" in the industry. Ms Lancaster deposed that she recollected this conversation and the general substance of it. Mr Walker heard nothing further from NatWest until he telephoned Trevor Jones, whom Mr Thomas had nominated as the contact within Corporate Finance. Mr Jones advised him that there would be no offer of a position for some time. 150 Mr Fulton deposed (and Mr Walker denied in cross-examination) that he had a telephone conversation with Mr Walker in early March 1998 in which Mr Walker told him that he had received his payout from abn amro; that he was going to South Africa for a few weeks to pursue business interests; that he (Mr Fulton) would like Mr Walker to "have every chance of an interview" with the Corporate Finance department; and that Mr Walker asked him not to "push too hard" since he only wanted a position "if it is really there and suits everybody". 151 From about 20 March 1998, Mr Walker was actively seeking employment with other employers. On 30 March 1998, Mr Walker wrote a letter to Mr Thomas, setting out his view of events. On 2 April 1998, he again telephoned Mr Jones, who reiterated that there would be no offer until the division was reorganised. Mr Walker spoke to Ms Lancaster on 8 April 1998, saying that he did not believe that NatWest genuinely had a position for him. He unsuccessfully sought to contact Mr Jones by telephone on 22 and 24 April 1998. He wrote to Mr Thomas again on 27 April 1998, saying, amongst other things, that: Prior to your letter dated 20 February, 1998 there were several discussions between myself, Mr Mark Fulton and Mrs Oonagh Lancaster concerning a starting date. It was agreed that I would commence employment, at the latest, on 2 March, 1998. On reaching agreement on a starting date, the obligations contained in my contract of employment became operative and binding on myself and the company. Mr Walker conceded that he was in error in the second paragraph. 152 Two days' later, Mr Thomas telephoned him, telling him to speak to Mike Chester (because Mr Jones had left the firm). Mr Walker telephoned Mr Chester on 1 May 1998, only to learn that a decision on staffing would not be forthcoming for a further two weeks. Ultimately, on 19 May 1998, he received a letter from NatWest signed by Ms Cocks, advising that NatWest had no position for him and denying contractual liability.

was there a contract of employment? 153 In the respondents' outline of submissions, counsel for the respondents submitted that there was no basis for a finding that either of them was liable for a breach of contract because: (i) there was no acceptance by [Mr Walker] of the offer of employment in accordance with the mode prescribed; i.e. that it be signed by [Mr Walker] and returned to [Mr Thomas]; (ii) if there was acceptance of the offer upon [Mr Walker] signing it and forwarding it to [Ms Lancaster] such acceptance did not give rise to a contract because of the absence of an essential term, namely, the date upon which [Mr Walker] would commence employment; (iii) there was no implied term in the offer of employment that [Mr Walker] would start within a reasonable time. The implication of such a term is irreconcilable with the express term of the offer that the Applicant would be paid a guaranteed bonus for the 1998 calendar year; (iv) alternatively, if there was an implied term it was breached by [Mr Walker] as a consequence of his failure to agree to a start date during the period 15 January 1998 to 20 February 1998. His refusal to provide [the second respondent] with a signed agreement on 20 February 1998 constituted a repudiation of the agreement. As the parties agreed, I entertained these submissions, notwithstanding that the pleadings did not raise all points.

Was there acceptance of the offer? 154 In order for an acceptance of an offer to be effective, it must comply with the requirements stipulated in the offer. If an offer does not stipulate a particular mode of acceptance, it is, of course, sufficient that acceptance is communicated by the offeree to the offeror, e.g., George Hudson Holdings Limited v Rudder (1973) 128 CLR 387 ("Rudder"), at 395 per Menzies J, 398 per Walsh J and 402 per Mason J. Like the first and second letters of offer, the third letter of offer, which was signed by Mr Thomas, stated: We look forward to receiving your acceptance to our employment offer, by signing and returning to me the attached copy of these documents. Mr Walker did not give to Mr Thomas personally a signed copy of the third letter of offer. 155 The respondents contended that there was no acceptance of the third letter of offer because Mr Walker did not comply with the mode of acceptance prescribed by the offer. They denied that there was any agreement between the parties as to any other mode of acceptance. They noted that Mr Walker did not seek to amend this part of the first letter of offer when he returned the annotated copy to Ms Lancaster in early January 1998 (although I interpolate that this was before the parties made the arrangement with Ms Lancaster relied on by Mr Walker). The respondents submitted that the parties' agreement on 15 January 1998 that Mr Walker should sign and return the third letter of offer to Ms Lancaster, who would hold it until he left abn amro, did not "override the requirement for the letter to be forwarded to [Mr Thomas] in order for the acceptance to be complete". Counsel for the respondents submitted that the arrangement "did no more than defer the point in time when the letter would be returned" to Mr Thomas. The respondents submitted that Mr Walker failed to provide "a credible explanation for his refusal to deliver a signed copy of the letter of offer" to Mr Thomas in the period up to and including 20 February 1998. 156 Counsel for Mr Walker submitted that there was a contract of employment between NatWest and Mr Walker, because NatWest had made an offer and Mr Walker had accepted it in accordance with the arrangements between them. According to counsel for Mr Walker, at the meeting on 15 January 1998, Messrs Fulton and Thomas agreed with Mr Walker that he could accept the offer in the third letter of offer by signing and returning the letter to Ms Lancaster. Ms Lancaster undertook to inform Mr Thomas or Mr Fulton when she received the signed letter from Mr Walker and to hold the document for them until Mr Walker left abn amro. 157 Messrs Fulton and Thomas gave evidence that the offer, in the third letter of offer, was intended by them to be capable of acceptance. As stated above, I am satisfied, on the balance of probabilities, that, at the meeting on 15 January 1998, Messrs Fulton and Thomas agreed with Mr Walker that, in order to protect the confidentiality of his engagement to NatWest, Mr Walker could accept the NatWest offer by signing and returning the third letter of offer to Ms Lancaster. As part of this arrangement, Ms Lancaster agreed with Messrs Thomas and Fulton to advise them when she received the signed document and to hold it for them until the need for confidentiality passed (that is, when Mr Walker left abn amro). As already noted, on 16 January 1998, Ms Lancaster told Mr Thomas that Mr Walker telephoned her, saying that he had signed the third letter of offer and would be sending it to her. She received the signed document on 20 January 1998. Sometime in the following week, she told Mr Fulton that she had the document in her possession. There was, therefore, a contract of employment in existence on 20 January 1998. Pursuant to the arrangement made on 15 January 1998, Ms Lancaster received the signed letter of offer and held it in her possession on behalf of NatWest. 158 Regard may be had, in circumstances such these, to the communications of the parties subsequent to the alleged contract: see Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, at 550 per Gleeson CJ (with whom Hope and Mahoney JJA agreed at 552). These communications confirm that up until Messrs Thomas and Fulton consulted their lawyers in and around 19 February 1998, they and Mr Walker proceeded on the basis that they had concluded a contract. Mr Thomas did not, in the end, dispute that, on 16 February 1998, he told Ms Lancaster that Mr Walker was a "fantastic hire", a comment consistent in the circumstances with his understanding that Mr Walker was accepting the NatWest offer in the agreed way. 159 Having been told that Ms Lancaster held the document signed by Mr Walker, Mr Fulton did not intimate to Mr Walker (or even Ms Lancaster) prior to 20 February 1998, that Mr Walker had not duly accepted NatWest's offer and concluded a contract of employment with the company. The evidence of Mr Walker and Ms Lancaster (which, as already noted, I accept) was that, by subsequently seeking Mr Walker's consent to an earlier starting date than 15 March 1998, they took Mr Fulton to be seeking to vary a term of a concluded contract; and that he also represented that he approached the matter on this basis. Furthermore, given that Mr Walker had made it clear to NatWest from at least 5 November 1997 that he would not leave abn amro without a contract, his conduct after 20 January 1998, especially in seeking voluntary redundancy, is explicable only on the basis that he believed that he had a valid contract with NatWest. Mr Fulton's conduct, including his encouraging Mr Walker to seek voluntary redundancy, is also consistent with an understanding on Mr Fulton's part that Mr Walker had entered into a contract of employment with NatWest. 160 I reject the respondents' submission that Mr Walker entered into an arrangement pursuant to which he would initiate steps to leave abn amro but would not accept an offer of employment before he left his former employer, as inconsistent with the facts as I find them and implausible. As counsel for Mr Walker noted, at the time the negotiations commenced, Mr Walker had a well-remunerated position with abn amro. There is no evidence that this position was under threat at any time prior to February 1998. Even Mr Fulton conceded that it would have been unusual for someone in Mr Walker's position to leave his employer without another contract of employment. I accept this evidence and conclude that it is unlikely that Mr Walker would have taken steps to leave at abn amro without having a contract of employment with NatWest. 161 In answer to a subpoena filed on 6 August 2002, NatWest Markets Australia Pty Limited (NatWest's former holding company) produced some employee lists, which showed, amongst other things, that, around late January 1998, Mr Walker's name had been on NatWest lists and that he had been recorded as a permanent full-time employee, in the position of "analyst - resources". Counsel for the respondents contended, however, that, taken as a whole, these records were of doubtful significance and that the Court should not draw any inference from them, or the respondents' failure to explain them. Counsel noted that, in the case of Mr Walker, the lists referred to a hire date of "1 February", a Sydney location and the (rejected) offer of 16 December 1997. The respondents' counsel conceded, however, that someone in the company's human resources department had prepared the lists. 162 The respondents adduced no evidence to explain the inclusion of Mr Walker's name. It was not disputed that they could have called Ms Cocks and a company secretary (Ms Victoria Weekes) in connection with the employee lists. (Ms Cocks and Ms Weekes made affidavits of documents in the proceeding.) Although I would not give the matter much weight, I would, in the circumstances, infer that any evidence that might have been given by Ms Cocks or Ms Weekes would not have assisted the respondents' case: cf Jones v Dunkel (1959) 101 CLR 298, at 308 per Kitto J, 313 per Menzies J, 332 per Windeyer J. 163 Furthermore, in the due diligence report dated 28 January 1998, prepared by the solicitors Mallesons Stephen Jaques ("Mallesons") at the time of the sale, "David Walker" was named as employee, beside the date of "16 December 1997" and the notation "standard executive conditions of employment apply". Again, the respondents offered no explanation. Stephen Dobbs, solicitor, gave evidence that, in 1998, he was part of the legal team representing NatWest in connection with the share sale to the second respondent. He said that he prepared a schedule of disclosures between 4 February and 8 February 1998. According to Mr Dobbs, the primary source of the information for the schedule was Andrew Smyth, then the vendor's company secretary and now living in Hong Kong. 164 Perhaps, as the respondents' counsel submitted, in light of the reference to a date of "16 December 1997", no inference of any kind can be drawn from the due diligence report. I have proceeded on this basis, although I note that the very purpose of the arrangement made on 15 January 1998 was to prevent the dissemination of knowledge about Mr Walker's actual contract beyond Messrs Walker, Fulton and Thomas and Ms Lancaster. I accept the respondents' counsel's submission that none of the references to Mr Walker in either the due diligence report or the employee lists should be treated as admissions on the respondents' part that there was a contract of employment with Mr Walker. 165 As counsel for Mr Walker noted, it was not for Mr Walker to establish why Mr Fulton changed his mind about the desirability of his joining NatWest. As already stated, the evidence yields no satisfactory explanation. Given the history of the matter, Mr Fulton's statements at the 20 February 1998 meeting about Mr Walker's lack of suitability for the position were implausible. The letter, which Mr Walker received on 22 February 1998, was false or misleading in a number of particulars. What is clear, however, is that, by 19 February 1998, Mr Fulton did not want Mr Walker to join NatWest as an analyst in the Equities Division; and that Mr Thomas relied on Mr Fulton in the matter. Whilst NatWest consulted its lawyers and purported to act on their advice, it must be borne in mind that, so far as this advice was concerned, it depended on the information that Mr Fulton provided to the lawyers and Mr Thomas. 166 Counsel for the respondents contended that I should not accept Mr Walker's account because it was inconsistent with statements in Mr Walker's letter of 27 April 1998 and his solicitors' letter of 9 June 1998. At best, however, these letters showed, as one might expect, that Mr Walker and those advising him were in a state of confusion as to what had happened and its legal significance. I regard Mr Walker's diary note of 20 February 1998 (which was made shortly after his meeting with NatWest's representatives that day) as much more reliable evidence of what occurred at the meeting than these letters. I observe than none of Messrs Fulton, Thomas or Sinclair had any contemporaneous note of what had occurred at any meeting with Mr Walker. They set down the accounts in their affidavits a year or more after the events with which the proceeding is concerned, in the main, without the assistance of any note made at the time of these events. 167 I reject the respondents' counsel's contention that Mr Walker failed adequately to account for his "refusal to deliver a signed copy of the third letter of offer" to Mr Thomas, or to Mr Fulton, when he was asked to do so on 20 February 1998. Further, I doubt that the statement in the last paragraph of the third letter of offer prescribed an exclusive mode of acceptance: cf Rudder at 392 per Barwick CJ, 395 per Menzies J, 398 per Walsh J and 402 per Mason J. In any case, in sending the signed document to a person to whom Mr Thomas had given relevant authority (to receive and hold it on his behalf), Mr Walker complied with the mode of acceptance referred to in the third letter of offer. 168 Mr Walker was anxious that the fact that he had contracted with NatWest to become its employee be kept confidential until he left abn amro and, as at 20 February 1998, he had not yet left his former employer. Both Messrs Thomas and Fulton accepted that there was a genuine need for confidentiality in the circumstances surrounding Mr Walker's recruitment. In the interest of confidentiality, they and Mr Walker agreed that Ms Lancaster would hold the signed third letter of offer on NatWest's behalf until Mr Walker left abn amro. When Mr Walker came to the meeting on 20 February 1998, he believed (correctly as I find) that he had made a contract with NatWest, a copy of which was held by Ms Lancaster as agreed. In this circumstance, Mr Fulton's request to sign another letter of offer was extraordinary. Mr Walker's conduct was the conduct of a person ambushed by those whom he believed he had joined. His conduct is to be judged accordingly. 169 I reject the respondents' submission that there was no contract because Mr Walker did not return the third letter of offer directly to Mr Thomas. Was the contract unenforceable because it contained no starting date? 170 The third letter of offer did not stipulate a starting date. Further, there was no provision for a starting date in the two pages that NatWest gave to Mr Walker at the 15 January 1998 meeting and which he subsequently returned to Ms Lancaster. The respondents admitted that, during the last quarter of 1997 and January 1998, NatWest's standard letter of offer of employment did not contain a start date. Mr Fulton said, in cross-examination, "[w]e did not put start dates on our letters of offer". 171 Mr Walker's evidence (which, as I said, I accept) was that, from the beginning, he told Messrs Fulton and Thomas that he would not leave abn amro before he had received his bonus for the 1997 year, which was payable on 15 January 1998. They accepted this. It was understood and agreed with Mr Walker that he would give a month's notice from the time he received his bonus. On 6 January 1998, Mr Walker informed Mr Fulton that his bonus would not be paid until 15 February 1998 and Mr Fulton indicated that a starting date of 15 March 1998 was acceptable to NatWest. On 12 January 1998, he also told Mr Fulton that abn amro was offering voluntary redundancies. Finally, at the meeting of 15 January 1998, Mr Walker and Messrs Thomas and Fulton agreed that, if Mr Walker were to sign and return the third letter of offer to Ms Lancaster, then Mr Walker would be taken to have accepted the NatWest offer, upon the terms and conditions set out in the third letter of offer and upon condition that he started no later than 15 March 1998 (and earlier, if possible). That is, Messrs Fulton and Thomas agreed that the commencement date would be 15 March 1998, or earlier. As already noted, at Mr Fulton's insistence, Mr Walker subsequently agreed with him to bring the starting date forward to 2 March 1998. 172 Accordingly, I reject the respondents' submission that any "such acceptance did not give rise to a contract because of the absence of an essential term, namely, the date upon which [Mr Walker] would commence employment". It is unnecessary to discuss the respondents' submissions that "there was no implied term in the offer of employment that [Mr Walker] would start within a reasonable time"; or that "if there was an implied term it was breached by [Mr Walker] as a consequence of his failure to agree to a start date during the period 15 January 1998 to 20 February 1998". 173 By reason of the matters set out above, NatWest repudiated and breached the contract of employment that it had concluded with Mr Walker, as alleged in the par 42 of the statement of claim in this action. NatWest repudiated the contract at the meeting on 20 February 1998 and in its letter of the same date, by indicating an intention no longer to be bound by the contract. The respondents did not contend, however, that, if there were a contract, then Mr Walker accepted NatWest's repudiation on 20 February 1998. The issue of whether Mr Walker accepted any repudiation was not argued at trial. I note, however, that, at the meeting of 20 February 1998, Mr Walker specifically said that he was reserving his rights, although he participated in subsequent meetings to discuss a corporate finance position. In the circumstances, the approach taken by Mr Walker in respect of NatWest's failure to perform cannot be criticised. NatWest was in breach of contract because it failed or refused to employ Mr Walker as it had previously agreed. trade practices act matters 174 Section 52 of the Trade Practices Act 1974 (Cth) ("TPA") prohibits a corporation from engaging in conduct in trade and commerce that is misleading or deceptive, or that is likely to mislead or deceive. The words "engage in conduct" include the making of representations about a past, present or future matter. It was not in issue that the respondents were corporations engaged in trade and commerce. Mr Walker claimed that they contravened s 52 by making certain representations with respect to present and future matters. 175 In order to make out his case under s 52 in respect of each pleaded representation, Mr Walker needed to establish (1) that the representation was made; (2) that, viewed objectively and subject to s 51A (see below), the representation was misleading or deceptive or likely to mislead or deceive; and (3) that he relied on the representation. In order to be compensated for any loss and damage under s 82(1) of the TPA, Mr Walker needed to establish a causal connection between the respondents' conduct and the loss for which he sought compensation: see, e.g., Wardley Australia Limited v State of Western Australia (1992) 175 CLR 514, at 525-526 per Mason CJ, Dawson, Gaudron and McHugh JJ. 176 The application of s 52 of the TPA is not restricted to conduct that is intended to mislead or deceive: see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 ("Puxu"), at 197 per Gibbs CJ; Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216, at 225 per Stephen J; and Fried v Dixie Holdings Pty Ltd [2000] FCA 1048, at [55] per Weinberg J. The section has a broad reach: see Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 22 ALR 621, at 648-649, where Deane J noted that the words "trade" and "commerce" were terms of the widest import. As Gibbs CJ observed in Puxu, at 197: A corporation which has acted honestly and reasonably may therefore nevertheless be rendered liable to be restrained by injunction, and to pay damages, if its conduct has in fact misled or deceived or is likely to mislead or deceive. 177 The conduct complained of must be viewed as a whole. Again, as Gibbs CJ observed in Puxu, at 199: It would be wrong to select some words or act, which, alone, would be likely to mislead if those words or acts, when viewed in their context, were not capable of misleading. It is obvious that where conduct complained of consists of words it would not be right to select some words only and to ignore others which provided the context which gave meaning to the particular words. 178 Where a corporation makes a representation with respect to a future matter without reasonable grounds for making the representation, s 51A deems the representation to be misleading for the purposes of s 52. As Hill J said in Ting v Blanche (1993) 118 ALR 543 ("Ting v Blanche"), at 552: What s 51A does, in a practical sense, in cases where it applies, is to cast the burden of proof upon the respondent corporation who has made a representation about a future matter to show that in making that representation it had reasonable grounds for so doing. 179 An applicant does not have to establish as a part of a cause of action that a respondent corporation did not have reasonable grounds for making the representation. Subsection 51A(2): … throws the evidentiary burden on a respondent to establish that reasonable grounds for making the representation existed and in the absence of such evidence the deeming provision has the consequence that the representation is taken to be misleading. Section 51A does not create an independent cause of action separate from s 52 and other sections in Pt V of the Act but rather casts the burden of proof on the respondent and if that burden is not discharged then a breach of s 52 is established by the applicant proving the representation as to the future matter and the fact that it did not come to pass. See Phoenix Court Pty Ltd v Melbourne Central Pty Ltd (1997) ATPR (Digest) ¶46-179 at 54, 432 per Goldberg J, citing Ting v Blanche at 552.

The application of s 52 in an employment context 180 The authorities support the proposition that a statement made in the course of employment negotiations, which proves to be misleading or deceptive, can fall within s 52 of the TPA: see O'Neill v Medical Benefits Fund of Australia (2002) 122 FCR 455 per Carr, Moore and Marshall JJ; Stoelwinder v Southern Health Care Network (2000) 177 ALR 501 ("Stoelwinder"), at 503 per Finkelstein J; and Patrick v Steel Mains Pty Ltd (1987) 77 ALR 133 ("Patrick"), at 136 per Wilcox J. 181 Whether negotiations in relation to employment contracts (with existing or prospective employees) come within the scope of s 52 depends on whether the negotiations can be characterised as being "in trade or commerce". In Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 ("Concrete Constructions") Mason CJ, Deane, Dawson and Gaudron JJ held, at 603, that conduct "in trade and commerce" in s 52 refers to: … conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. In Concrete Constructions, the Court held, at 605, that an "internal communication by one employee to another in the course of their ordinary activities" was excluded from the ambit of s 52. 182 In Patrick, Wilcox J accepted that misleading and deceptive conduct in the course of negotiations for contracts of negotiations was actionable under s 52. In Orison Pty Ltd v Strategic Minerals Corporation NL (1987) 77 ALR 141, French J, at 157-158, referred to Patrick with approval. In Finucane v New South Wales Egg Corporation (1988) 80 ALR 486 ("Finucane"), at 507-8, Lockhart J held that "the activities of the Corporation in and about the conduct of interviews of Finucane [regarding the sale of an egg run] by the Corporation's officers fall within the ambit of conduct in trade and conduct within the scope of s 52 of the Act". His Honour held, at 507, that the facts of Wright (see below)were "clearly distinguishable" from the case before him: compare also Merman Pty Ltd v Cockburn Cement (1988) 84 ALR 521 ("Merman") at 530-531 per Lee J and Callinan v Gilro-ERG Pty Ltd [1996] FCA 986 ("Callinan v Gilro-ERG")per O'Loughlin J. 183 Wilcox J's decision in Patrick was not followed by Lee J in Wright v TNT Australia Pty Ltd (1988) 15 NSWLR 662, at 676. Whilst an appeal from his Honour's decision failed, the Court of Appeal rejected his Honour's characterisation of negotiations for employment: see Wright v TNT Australia Pty Ltd (1988) 15 NSWLR 679, at 683 and 685 per Mahoney JA, 693-695 per McHugh JA (dissenting) and 697 per Clarke JA. In his dissenting judgment, McHugh JA observed, at 694: No doubt as Lockhart J observed in Finucane (at 507…) it may be that not everything done by a corporation that is engaged in trade or commerce is done "in" trade or commerce. But everything done for the purpose of carrying out its trading or commercial activities is in my opinion done as part of a corporation's trade or commerce. The employment of staff for the purpose of carrying out its trading and commercial activities is in my opinion near the centre of a corporation's trade and commerce. Those concepts do not exist independently of the sum of the activities of the corporation and individuals who engage in them. [Emphasis added] 184 In Barto v GPR Management Services Pty Ltd (1991) 33 FCR 389 at 395, Wilcox J adhered to the approach that he had taken in Patrick: compare McCormick v Riverwood International (Australia) Pty Ltd (1999) 167 ALR 689, at 694-6 per Weinberg J and Nagy v Masters Dairy Ltd (1996) 150 ALR 273, at 294-5 per RD Nicholson J. In Mulcahy v Hydro-Electric Commission (1998) 85 FCR 170, at 213 and Martin v Tasmania Development and Resources (1999) 163 ALR 79, at 97-98, Heerey J adopted a more restrictive approach than Wilcox J, although it may be noted that neither of these cases involved negotiations for employment contracts. 185 Having regard to the authorities mentioned above, I accept that misleading and deceptive conduct in the course of negotiations for employment may support a cause of action under s 52 of the TPA. 186 Further, s 53B (upon which Mr Walker also relied) provides: A corporation shall not, in relation to employment that is to be, or may be, offered by the corporation or by another person, engage in conduct that is liable to mislead persons seeking the employment as to the availability, nature, terms or conditions of, or any other matter relating to, the employment. In order to make out his case under s 53B, Mr Walker needed to establish (1) that each representation was made; (2) that, viewed objectively, the representation was liable to mislead him as to the availability, nature, terms or conditions, or another matter relating to the employment proposed by NatWest; and (3) that he relied on the representation. As in connection with s 52 of the TPA, in order to be compensated for any loss and damage under s 82(1) of the TPA, Mr Walker needed to establish a causal connection between the respondents' conduct and the loss for which he sought compensation. 187 Section 53B prohibits a corporation from engaging in misleading and deceptive conduct in relation to an offer of employment before a contract of employment has been entered into. The misrepresentation must induce the applicant to take up employment with the respondent: see Callinan v Gilro-ERG Pty Ltd. The provision is limited to conduct that took place prior to the commencement of the employment: see Wright v TNT Australia Pty Ltd (1988) 15 NSWLR 679, at 691-692, per McHugh JA and 696 per Clarke JA; Dawson v Australian Consolidated Reserves Pty Ltd (1983) ATPR 40-374 per Toohey J; and Thomas v Star Maid International Pty Ltd [1999] FCA 911 at [16] per Weinberg J. 188 In the course of recruiting Mr Walker, Messrs Fulton and Thomas made various representations to Mr Walker. Mr Walker's case was that the respondents made five representations in the course of negotiations; and that they resulted in breaches of ss 52 and 53B of the TPA. The first alleged representation 189 First, Mr Fulton, on behalf of NatWest, represented to Mr Walker that the proposed employment would not be affected by the sale of NatWest to another firm. Mr Walker alleged, and the evidence established, that, at a meeting with Mr Walker on 5 November 1997, Mr Fulton told him that the position intended for him would continue, even if there was a change in the ownership of NatWest. I accept that this was a critical matter in the continuing negotiations. 190 The representation was with respect to a future matter. As at 5 November 1997, there was no sale agreement in respect of NatWest and NatWest had not offered employment to Mr Walker. Was there evidence that Mr Fulton had reasonable grounds for the representation? Mr Fulton's evidence, in cross-examination, was that, in the circumstances in which the second respondent acquired NatWest, "down-sizing" was unlikely. The respondents' counsel submitted that, in view of this, and Mr Fulton's perception then of Mr Walker's qualifications, Mr Fulton "had reasonable grounds for advising [Mr Walker] that if he were offered a position ... it would not be affected by any sale of the business". I reject this submission. There was no evidence before me that, as at 5 November 1997, Mr Fulton had any information about the nature of the proposed sale and the identity of any potential purchaser. 191 Is there any evidence that Mr Walker relied to his detriment on Mr Fulton's representation, at the 5 November 1997 meeting, that the proposed position would continue, even if there were a change in the ownership of NatWest? I accept that this representation kept the negotiations on foot. It did not, however, induce Mr Walker to accept an offer of employment with NatWest, to leave abn amro, or otherwise prejudice his position. Following the 5 November 1997 meeting, Mr Fulton took steps to have the first letter of offer prepared and sent to Mr Walker, who received it in early January 1998. Mr Walker rejected the offer contained in it, by annotating and returning the document to Ms Lancaster. 192 When Mr Walker entered into the contract of employment with NatWest in January 1998, he relied on the representations made by NatWest's representatives at the meeting of 15 January 1998 and not on a representation that had been made the previous November, following which he had rejected NatWest's offer of employment. In failing to pursue employment at abn amro and taking steps to leave his former employer, he relied on the contract and the representations concerning it: see below. 193 Further, I doubt whether Mr Fulton's statement, in November 1997, about the effect of the sale of NatWest on any proposed employment would, in the circumstances as they existed at that time, have been liable to mislead Mr Walker. As at 5 November 1997, little more than a month had passed since NatWest's announcement that it proposed to sell its Australian operations. Given Mr Walker's experience of business, he can be taken to have realised that Mr Fulton would be unlikely to know at that time what the precise effect of a sale would be, more particularly as no purchaser had apparently been identified. 194 For the reasons set out above, I accept the respondents' counsel's submission that the first alleged representation was not actionable under either ss 52 or 53B of the TPA. The second alleged representation 195 Secondly, Mr Walker alleged that Messrs Fulton and Thomas, on behalf of NatWest, represented to him that he could commence his employment with NatWest one month after he gave a notice of termination to abn amro. On 6 January 1998, Mr Walker informed Mr Fulton that his bonus would not be paid until 15 February 1998. In response, Mr Fulton represented that a starting date of 15 March 1998 was acceptable to him. As already stated, at the meeting of 15 January 1998, Messrs Thomas and Fulton represented and agreed that Mr Walker could commence his employment on 15 March 1998 (and earlier, if possible). I accept that this was an important aspect of the negotiations because, on this basis, Mr Walker was to remain with abn amro until he received his 1997 bonus on 15 February 1998, on which date he was to give his termination notice. Mr Walker and Messrs Fulton and Thomas all understood that Mr Walker would be available to start with NatWest a month after he had given his notice to abn amro. 196 Mr Walker entered into the contract of employment with NatWest on the basis that Messrs Fulton and Thomas represented (and agreed) that Mr Walker would commence his employment on 15 March 1998 (and earlier, if possible) if he accepted the NatWest offer. The representation, which concerned the commencement date of Mr Walker's employment, was as to a future matter. 197 Was the representation misleading and deceptive for the purposes of s 52 of the TPA? The representation concerning the 15 March 1998 commencement date was not fulfilled, but it was not shown to be inaccurate at the time it was made or during the period it continued: compare Patrick at136 per Wilcox J. 198 The respondents' case was that Messrs Fulton and Thomas did not know of the delay in Mr Walker's receipt of his bonus until the meeting on 15 January 1998. I have rejected Mr Fulton's evidence in this regard (whilst accepting that Mr Fulton may not have told Mr Thomas of the delay). Mr Fulton gave evidence, however, that, in the circumstances as they existed up until 20 February 1998, the date of 15 March 1998 (and, presumably, any earlier date) would have been a reasonable starting date. There were, therefore, reasonable grounds for the representation made on 15 January 1998 that Mr Walker would be able to commence employment at NatWest on 15 March 1998, if he accepted the offer. (Mr Walker did not plead that Messrs Fulton and Thomas represented that they had an intention or capacity that they did not in fact have.) In these circumstances, I also doubt that the representation concerning the 15 March 1998 was liable to mislead Mr Walker as prohibited by s 53B of the TPA. 199 In any case, even if the representation concerning the 15 March 1998 commencement date was misleading and deceptive, or liable to mislead as to the availability of the employment, Mr Walker's reliance on it ended on 17 February 1998 when, at Mr Fulton's insistence, Mr Walker agreed to bring his commencement date forward to 2 March 1998. 200 For the reasons set out above, I accept the respondents' counsel's submission that the second alleged representation was not actionable under either ss 52 or 53B of the TPA. The third alleged representation 201 Mr Walker also pleaded that Mr Fulton, on behalf of NatWest, represented that, if Mr Walker accepted employment with NatWest, then the salary would be $275,000 per annum, with a minimum bonus of $250,000 per annum, and other benefits. By providing the second and third letters of offer to Mr Walker, NatWest undoubtedly represented that Mr Walker would enjoy these benefits if he accepted the offer in these letters. Assuming promissory statements of this kind can be the subject of s 52 (or s 53B) of the TPA, they are not to be held misleading and deceptive merely because they were not performed: cf Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217, at238-241 per Ormiston J, discussed and approved by Mason P in Concrete Constructions Group v Litevale Pty Ltd (2002) ATPR (Digest) 46-224, at 53,539-53,546; Serrata Investments Pty Ltd v Rajane Pty Ltd (1991) 6 WAR 419, at 433-434 per Owen J; and Sheldrick v WT Partnership (Aust) Pty Ltd (1998) 89 IR 206, at 237-238 per Einfeld J. 202 Mr Fulton's evidence established that the offer in the third letter of offer was made on his recommendation and with the approval of his superior, Mr Thomas. Mr Fulton's evidence established that, up until mid to late February 1998, he desired to have Mr Walker join his department at NatWest. Given that he had made a positive assessment of Mr Walker's qualifications for appointment and that he had the support of Mr Thomas, there were reasonable grounds for these promissory representations (pleaded as the third representation). 203 This is not a case where, having entered into a contract, a contracting party receives different benefits from those which he or she was led to believe would be his or hers under the contract. In this case, if there were a valid contract, then there is no dispute about the promises that the contracting parties made. That is, if there were a valid contract, then there is no dispute that the promissory representations (pleaded as the third representation) formed part of that contract. There was nothing misleading or deceptive about the representations because there was nothing relevantly inaccurate in them. Further, Mr Walker has not asserted that the respondents represented that they had an intention or a capacity they did not have. The parties are not in dispute because the third representation was untrue, but because the respondents deny (wrongly as it turns out) that Mr Walker accepted the offer in the third letter of offer. 204 For the reasons set out above, I accept the respondents' counsel's submission that the third alleged representation was not actionable under either ss 52 or 53B of the TPA. The fourth alleged representation 205 Mr Walker alleged that, after the announcement of the purchase of NatWest by the second respondent, Mr Fulton, on behalf of the second respondent, represented to him that he would be employed after the sale on the same terms and conditions as had previously been agreed. As stated above, I accept that Mr Fulton made this representation to Mr Walker in a telephone call on 13 February 1998. Mr Walker's employment was to begin in March 1998 and Mr Fulton's representation about it was as to a future matter. 206 Was this future representation misleading and deceptive for the purposes of s 52 of the TPA? On the one hand, the sale agreement, which was dated 8 February 1998, provided for the continued employment of NatWest's employees; and it is, therefore, some evidence of the existence of reasonable grounds. Further, there was evidence given on behalf of the respondents that, had Mr Walker responded appropriately at the meeting on 20 February 1998, he would have become a NatWest employee. 207 In the circumstances as they then existed, NatWest's conduct at this meeting was, however, extraordinary; and I doubt that Mr Fulton genuinely believed in much of what he said to Mr Walker at the time. Further, in a subsequent letter to Mr Walker, also dated 20 February 1998, NatWest referred to the sale as a "fundamental change" that had occurred since early February 1998 and indicated that the sale was a factor in the "withdrawal" of its offer of employment to Mr Walker. At trial, the respondents gave no acceptable explanation for this reference to the sale in this letter. I reject Mr Fulton's evidence he did not know why the letter referred to the sale and that the reference was only included on NatWest's lawyers' advice. The evidence was that the lawyers gave advice on the instructions of Mr Fulton (or Mr Thomas, who relied on Mr Fulton). 208 The diary note that Mr Walker made on his return to Melbourne after the 20 February 1998 meeting confirmed Mr Walker's evidence that Mr Fulton told him at that meeting that, following the sale, NatWest was adopting lower base salaries without guaranteed bonuses. This was, of course, contrary to the agreement that Mr Walker had previously made with NatWest. Further, as already mentioned, at lunch on 24 February 1998, Mr Fulton advised Mr Walker that the second respondent would not contemplate guaranteed minimum bonus contracts and it would not accept Mr Walker's contract structure. 209 There was also the evidence of Mr Walker (which, as previously stated, I accept) that, in the course of lunch on 24 February 1998, Mr Fulton had stated that "his job was 'on the line' over the contract", the terms of which were not acceptable to the second respondent. Ms Lancaster also gave evidence that, in a telephone call on 15 February 1998, Mr Fulton said to her "his job was on the line" over the matter. 210 Having regard to all the evidence, I reject the respondents' submission that they established that they had reasonable grounds for the representation made by Mr Fulton in early February 1998 that Mr Walker would be employed after the sale on the same terms and conditions as had previously been agreed. By virtue of s 51A the representation is taken to be misleading and deceptive. 211 Mr Walker relied on the representation in pursuing (or continuing to pursue) a redundancy package with abn amro and in taking other steps, through his solicitors, to leave his former employer as speedily as he could. In so doing, he acted to his detriment. In connection with this representation, his cause of action under s 52 of the TPA is made out. 212 Having regard to the above conclusions, it is unnecessary to consider the position under s 53B of the TPA. The fifth alleged representation 213 Finally, Mr Walker claimed that, on and after 20 February 1998, Mr Fulton, on behalf of the second respondent, represented that there were other positions available in the Corporate Finance department and that it would be likely that a position would be offered to Mr Walker, having regard to his expertise and experience. 214 I accept that Mr Fulton made this representation to Mr Walker on 20 February 1998. Amongst other things, the note of the meeting Mr Walker made that day supported Mr Walker's evidence in this regard. Bearing in mind that Mr Walker believed (correctly as it turned out) that he had already entered into a contract with NatWest, his subsequent conduct is explicable because of this representation. The respondents relied on Mr Fulton's note of the lawyers' advice as evidence that this representation was not made: see [118] above. This is not, however, evidence of what actually happened at the meeting. For the reasons already outlined, I prefer the evidence of Mr Walker in this regard to the evidence of Mr Fulton. 215 The representation was that it would be likely that a position would be offered to Mr Walker in the Corporate Finance department and, as such, was as to a future matter. The respondents led no evidence that anyone at NatWest had given any thought to a specific position for Mr Walker. No position was subsequently offered. At most, the respondents' evidence showed that, during the relevant period, Mr Walker had a number of meetings with NatWest personnel about a position in the Corporate Finance department and the discussions were general in nature. There was also evidence that this department was undergoing reorganisation and that this reorganisation might have resulted in a position for Mr Walker. The respondents did not show, however, that Mr Fulton had reasonable grounds for the representation that it would be likely that a position would be offered to Mr Walker in the Corporate Finance department. 216 Mr Walker relied on the fifth representation in the period between 20 February and 20 March 1998, when he sought to secure a position in the Corporate Finance department that, on the basis of what Mr Fulton told him, he believed would be his. During this period, on the basis of Mr Fulton's representation, he did not pursue employment other than with NatWest. 217 In connection with this representation, his cause of action under s 52 of the TPA is apparently made out. Having regard to the above conclusions, it is unnecessary to consider the position under s 53B of the TPA. the role of ms lancaster 218 Prior to August 1997, Ms Lancaster had assisted NatWest in the recruitment of employees. She telephoned Mr Thomas in early August 1997 to discuss the company's recruitment needs, as she had done previously. Around early August 1997, she also had a conversation with Mr Fulton concerning the recruitment of an analyst covering RTZ. As a consequence, she telephoned Mr Walker in August 1997. 219 Both Messrs Thomas and Fulton said that they did not retain Ms Lancaster to act for NatWest in the recruitment of an analyst for Mr Fulton's department in August 1997. Ms Lancaster gave evidence to the contrary, deposing that Mr Thomas had retained her "to search for an analyst to fill a vacancy in the resources area". Her evidence was that she sent a copy of Mr Walker's curriculum vitae, a covering letter, her business card and her business conditions to Mr Thomas on 5 August 1997. I accept her evidence, which was consistent with other evidence before me. The letter with Mr Walker's curriculum vitae and her business conditions were in evidence. 220 Ms Lancaster's business conditions provided, amongst other things, that: Acceptance of referrals from Lancaster, Blake & Associates Pty Ltd constitutes agreement by the Employer to the following terms. … Fee Entitlement Lancaster, Blake & Associates Pty Ltd's fee is earned when a Candidate referred by Lancaster, Blake & Associates Pty Ltd commences employment with the Employer or any associated company. … . Mr Fulton acknowledged that he was aware that, "in the normal course of events", Ms Lancaster would receive a placement fee if NatWest employed Mr Walker and that NatWest would pay the fee. As it happened, NatWest did not pay a fee to Ms Lancaster in respect of Mr Walker's recruitment, although she rendered an invoice to Mr Thomas on 8 July 1998. 221 Ms Lancaster herself said that: [M]y role [was] to facilitate, not to act as agent for either the employer or the employee. With one qualification, I accept this evidence. 222 The evidence of Messrs Walker and Fulton confirmed her account of her role in the recruitment process. Mr Walker said, in cross-examination, that Ms Lancaster "very much was the conduit of information between me and Mr Fulton and Mr Thomas for the majority of the negotiation". Mr Walker also said: But what the working position was here was that if I had any query or point that I wanted to raise with County Natwest going forward, I would contact Mrs Lancaster, she would contact Mr Fulton or Mr Thomas, she would relay their comments back to me, and on certain occasions Mr Fulton would call me directly. She was in every respect in between the two of us. In substance, Mr Fulton agreed. He said, in cross-examination, that "[s]he was an important element in the relationship that we formed between David [Walker] and ourselves", although "a lot of the conversations happened directly between David [Walker] and I, from what I recall". 223 When the trial began, there was an issue about whether, in recruiting Mr Walker, Ms Lancaster was the agent of NatWest. The resolution of this issue was said to affect the admissibility of certain evidence. I deferred ruling on the question until I had heard evidence of the kind set out above. By the end of the trial, it was apparent that not a great deal turned on the issue concerning Ms Lancaster's status in the recruitment process generally; and of more importance was her status in any arrangement made at the meeting on 15 January 1998. Save for this arrangement, there is much force in the respondents' counsel's submission that Ms Lancaster was in the nature of a commission agent and she was not an agent in the sense that she could bind NatWest by admissions made by her (or by NatWest representatives and passed on by her to Mr Walker). Nor was she Mr Walker's agent. 224 As already stated, however, I have found that, by virtue of the arrangement made at the meeting on 15 January 1998, Ms Lancaster was to hold the third letter of offer, when signed and returned by Mr Walker, on behalf of NatWest. discovery issues 225 Counsel for Mr Walker contended that the respondents were responsible for the serious suppression of evidence. The respondents denied that this was the case. This issue is relevant to the consideration of costs: see below. 226 As early as 26 March 1999, Mr Walker's solicitors wrote to NatWest, requesting that it retain documents relating to the proceedings, including documents relating to the employment of Mr Walker. In a letter dated 2 August 1999, Glenn Fredericks, a solicitor for the respondents, replied that his instructions were that: NatWest does not have any documents of the type referred to in your letter. Any documents that were in the possession of NatWest were handed over to Salomon Smith Barney at the time of the acquisition of the NatWest business by Salomon Smith Barney in March 1998. Since mid 1998, Mr Fredericks has had the carriage of this litigation for the respondents, initially under the supervision of a partner in Freehills (Chris Barton). He has had sole responsibility since 1 July 2000. In what follows, it must be borne in mind that Mr Fredericks was not involved in the sale of NatWest. Nor was he involved in the initial discovery process, which was apparently handled by Mr Barton. 227 As it turned out, NatWest (or Freehills) actually retained a large number of documents, including some relating to Mr Walker's employment, which the firm failed to discover. In his evidence, Mr Fredericks admitted that there might be still other documents concerning Mr Walker that had not come to light. In light of what follows, it is plain enough that there has been inadequate discovery on the respondents' part. 228 Discovery issues were well ventilated in this proceeding. The parties agreed, in October 1999, to discovery of (amongst other things) "all documents constituting, evidencing or referring to the employment or possible employment of Mr Walker by the respondents". At this time, a registrar of the Court made appropriate orders. These orders did not, however, lead the respondents to make discovery of the employee lists or the due diligence report referred to earlier in this judgment. 229 Mr Walker's solicitors expressed doubts about the adequacy of the respondents' discovery in a letter to their solicitors, which was dated 9 December 1999. The letter read in part: In terms of due diligence, we note that the number and quality of senior employees is one of the major assets of the company. On this basis, it seems likely that the due diligence documents would have identified senior employees and their entitlements and that the Applicant's employment would have been included. As already noted, Mr Walker's name appeared in the due diligence report dated 28 January 1998, prepared by Mallesons at the time of the sale. 230 In a letter dated 28 January 2000, the respondents' solicitors responded, however: With respect to the issues you raise as to the adequacy of the discovery provided by the Respondents, we respond as follows … : … Could you please let us know more precisely what documents you are referring to. The substance of the concern that Mr Walker's solicitors raised was clear. The response of the respondents' solicitors was not calculated to assist the proper conduct of the litigation in this Court. The respondents noted, however, that the applicant's solicitors did not respond to their inquiry. 231 As it happened, in early 2000, in the course of other proceedings involving the respondents, Mr Fredericks became aware that the sale agreement and the vendor's disclosures referred to the employment of Mr Walker. He drew this to the attention of Ms Cocks, who, it may be recalled, was NatWest's personnel manager before and after the sale. In consequence of this, on 25 February 2000, the respondents filed a supplementary list of documents that referred to the sale agreement. The parties subsequently filed other supplementary lists of documents. 232 Shortly prior to trial, in a letter dated 6 August 2002, Mr Walker's solicitors again raised the matter of the respondents' discovery, saying in part: We advise that our client does not accept that your clients have made full discovery of relevant documents, in particular, we believe that either or both the First or Second Respondents would have the following: … Documents identifying the personnel employed by the First Respondent in all key positions and details of their contracts of employment. Our client believes these documents would have been prepared at various stages in the process of the sale of the shares of the First Respondent to the Second Respondent. … . 233 As to this, Mr Fredericks replied, by a letter dated 12 August 2002, relevantly observing: Your letter raises similar issues to those raised in your letter of 9 December 1999 in which we responded on 28 January 2000. However, in the interests of avoiding unnecessary disputes, we are instructed to respond as follows … . … We do not see how these documents fall within the categories of documents to be discovered. … . This was incorrect. The respondents failed to make proper discovery in response to repeated calls for discovery of documents of the kind that subsequently came to light. 234 In cross-examination, Mr Walker's counsel asked Mr Fredericks about his efforts to locate relevant documents. He answered: … I've discussed with the company secretary of Natwest Markets - this is over the course of several years - the records which they hold. I've discussed with Victoria Weekes, who, in addition to being the company secretary now of Salomon Smith Barney companies, was also part of the Natwest business, albeit for a relatively short time, before it was sold, and had some familiarity with what records there are in existence, and also has to deal with those records on an ongoing basis. I also discussed it with Kathy Cocks when she was still employed by Salomon Smith Barney. This turned out to be inadequate for the proper discharge of his responsibility. 235 About this time, in answer to a subpoena filed on 6 August 2002, NatWest Markets Australia Pty Limited produced a quantity of documentary material, which had been held on Freehills files since the sale to the second respondent. (NatWest Markets Australia Pty Limited and the second respondent retained the same firm of solicitors.) The material consisted of copies of the vendor's disclosure documents, which had accompanied the sale of NatWest to the second respondent in 1998. According to Mr Fredericks, the copies were made in early 2001 in connection with another matter (but at about the time of an unsuccessful mediation in the present proceeding). These documents included the employee lists, referred to above. 236 In cross-examination, Mr Fredericks properly conceded that these documents should have been discovered at an earlier time. They plainly fell within a class of discoverable documents. The respondents subsequently produced the same documents (as well as the due diligence report dated 28 January 1998) in response to a notice to produce served by the applicant shortly prior to trial. 237 Mr Fredericks said that Freehills did not obtain a copy of the due diligence report from Mallesons (who had prepared it for the second respondent) before the afternoon of 9 September 2002. He conceded, however, that the respondents could have obtained the report at any time during the present proceeding; and that the report clearly fell into one of the categories of documents of which discovery was required. In cross-examination, Mr Fredericks said that he did not ensure that the report was discovered because he relied on the discovery initially made when Mr Barton was in charge and on the fact that his clients (principally Ms Cocks) told him that Mr Walker's name did not appear in the due diligence documents. 238 As already noted, Mr Fredericks conceded in cross-examination that, by virtue of his involvement in other litigation, he had known of the existence of the employee lists since early 2001. Mr Fredericks reiterated that he had not made any inquiries of the respondents concerning documents of this kind, because he had been on leave in 1999 when they completed their initial discovery and Ms Cocks had made the first affidavit of documents (sworn on 19 October 1999). He said that, at some time after 9 December 1999, when the applicant's solicitors had written to him about the paucity of the discovered documents, he asked the respondents whether they had any employment records in their possession and was told that they did not. 239 Against this background, on 9 September 2002, in the week before the trial, a registrar of the Court made further orders for discovery of certain disclosure documents created at the time of NatWest's sale to the second respondent. Ms Victoria Weekes, company secretary, subsequently made a further affidavit of discovery, sworn on 10 September 2002, in which she deposed that NatWest had very few of the documents the subject of the registrar's order. Mr Dobbs gave evidence, however, that a copy of the disclosure documents was not only in the possession of Freehills (being the solicitors who prepared them) but also probably in the possession of the purchaser (namely, the second respondent). 240 Plainly enough, the respondents' discovery was deficient. In these circumstances, counsel for Mr Walker not only contended that the respondents were responsible for the suppression of evidence, but also that the respondents' solicitors were "seriously derelict in their duty to ensure proper discovery was made by their clients". The respondents and their solicitors denied that this was the case. 241 In written submissions, the respondents' counsel replied that: The failure to produce the Mallesons due diligence report and the employee lists was a result of the understanding of the Respondents that the possible employment of the Applicant was not an issue during the due diligence process and he would not be listed as an employee. In this respect, the Respondents themselves did not have a copy of the Disclosure Material referred to in the Sale Agreement … . There is no evidence to show that the Respondents received a copy of the Mallesons due diligence report. Further, the due diligence (and indeed the sale process) on the part of Salomon Smith Barney was dealt with by the global parent company Salomon Smith Barney Inc. The Respondents were aware of the existence of the lists. However, the discovery categories did not oblige the Respondents to produce all copies of employee lists or rosters as such. There can be no suggestion that the Respondents attempted or intended to withhold from the Applicant the fact that he was on "employee lists". The Applicant's name is included in a schedule to the Sale Agreement. The Sale Agreement was discovered by the Respondents on 17 February 2000. 242 These submissions do not answer the gravamen of Mr Walker's complaint about the respondents' discovery. The respondents led no evidence to explain their error "that the possible employment of the Applicant was not an issue during the due diligence process and he would not be listed as an employee". They should have given an explanation for this (or why an explanation could not be given). It was this error that resulted in Mr Fredericks being incorrectly instructed. Bearing in mind that the respondents conceded that they knew of the employee lists (and, indeed, they could scarcely have denied this knowledge), their representatives should have looked at them in order to confirm whether or not Mr Walker's name was on them. 243 In any case, in the circumstances, it would have been proper for Mr Fredericks to have sought to examine the due diligence report personally, bearing in mind the nature of the parties' dispute, the doubts expressed by Mr Walker's solicitors and the ready availability of the report had he asked for it. This was apparently never done. Bearing in mind the dispute between the parties and the inquiries made by Mr Walker's solicitors, once Mr Fredericks was aware of the employee lists, he should have ensured that they were specifically examined for Mr Walker's name. 244 The respondents sought to shift some of the responsibility for their conduct to Mr Walker's solicitors, who, according to the respondents, were dilatory at times in their responses to the respondents. The respondents submitted that Mr Walker could have brought the discovery issues to the Court's attention at an earlier date than he did. I reject the respondents' attempt to shift their responsibility for their defaults in this way. Even if Mr Walker's solicitors were dilatory, especially in failing to apply to the Court, as the respondents contend, it could not excuse their own default. In any case, this Court does not encourage interlocutory disputes: rather, it encourages the parties to litigation to resolve issues of this kind between themselves. The success of this approach depends on the professional competence and integrity of legal practitioners in the Court. Mr Walker's solicitors acted properly in seeking to resolve issues relating to discovery with the respondents' solicitors in the manner they did. They ought to have been able to do so. 245 I accept that Mr Fredericks was an honest witness. He was led into error chiefly by his clients' incorrect instructions. Whilst there is no evidence that his clients deliberately suppressed the existence of these documents, as already noted, they have proffered no explanation when one was called for. It was most unfortunate that Mr Fredericks compounded his clients' inadequate discovery, by failing to respond appropriately to the matters raised by Mr Walker's solicitors and by failing to make proper inquiries of his own. 246 What are the practical consequences of the respondents' failure to provide proper discovery? There was no evidence of any special prejudice, other than any costs occasioned by the respondents' default, as to which, see below. COSTS 247 Counsel for Mr Walker has made certain submissions on costs. I indicated at the trial that counsel for the respondents would have an opportunity to respond after judgment on liability was delivered. I will afford the respondents this opportunity. I certify that the preceding two hundred and forty-seven (247) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny J.

Associate: Dated: 10 October 2003 Counsel for the Applicant: Mr C Gunst QC with Mr B D Lawrence

Date of Hearing: 9-13 September and 17 October 2002