Hillam v Lewis

The proceedings and the judge's decision 6It was not disputed that the parties had entered into a contract. The controversy concerned the terms of the contract. Mr Lewis and the other defendants put a number of matters in issue. The central issues went to the quantum of the fees payable to Mr Hillam and Mr Hillam's entitlement to a 10 per cent equity interest in the several companies. A central feature of the defence was an allegation that the several contracts between the parties included a term that Mr Hillam's entitlement to a 10 per cent shareholding in each of the companies would only arise upon the satisfaction of certain conditions precedent - in particular, that, through the instrumentality of Mr Hillam's efforts, a binding agreement was achieved under which the relevant outside party was to provide certain funding and that that funding was in fact provided. 7The primary judge decided that Mr Lewis owed Mr Hillam $130,000 for consulting fees. The decision with respect to the 10 per cent interest in the companies was summed up at [119] of the judgment: "In relation to the allegation by the plaintiff that he had an oral agreement in relation to his equity participation in one or more of the first defendant's corporate entities I have to say I not only have grave reservations about the plaintiff's credit in a number of respects, and I am unable to accept that such an arrangement existed in an unqualified sense. I am firmly of the view that at all relevant times whatever negotiations were taking place and/or for that matter whatever arrangement might ultimately have been arrived at, each was predicated upon the plaintiff introducing some form of capital injection into one or more of the corporate entities. I am therefore firmly of the view that his agreed equity participation was always discussed in the context of it being a success fee and/or as an incentive for him bringing an investor or investors to the table. He never did so." 8An important part of the basis for this finding was the judge's acceptance of the evidence of Mr Lewis that, on 28 December 2008, he told Mr Hillam that receipt by him of a 10 per cent shareholding interest would only be by way of a success fee and upon the raising of funds. Mr Hillam's evidence was that no such conversation took place. 9The judge relied on "the surrounding circumstances" as a basis for preferring the evidence of Mr Lewis to that of Mr Hillam. His Honour also preferred the evidence of Mr Lewis to that of Mr Hillam's wife who testified to certain representations that she had heard Mr Lewis make.

Matters arising on appeal 10The appeal is concerned wholly with factual findings. It is accepted on both sides that Mr Hillam, in order to succeed on appeal, must establish that the judge's conclusions were erroneous by reason of incontrovertible facts or uncontested testimony or that the decision is glaringly improbable or contrary to compelling inferences: Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [28], [29]. It must also be accepted, of course, that, insofar as the judge made credibility findings, he had the very considerable advantage of seeing the relevant witnesses give their oral evidence and was thus able to bring to bear aspects of judgment and appraisal that are simply unavailable to this Court: Fox v Percy (above) at [23]. 11The grounds of appeal stated in the notice of appeal are, in summary, as follows: Ground 1: In relation to findings concerning the 28 December 2008 conversation, the judge did not have regard to several enumerated matters that made Mr Lewis's version glaringly improbable and, having regard to those matters, did not give adequate reasons for preferring Mr Lewis' version. Ground 2: In preferring generally the evidence of Mr Lewis over that of Mr Hillam, the judge did not have regard to several enumerated matters that made Mr Lewis's version glaringly improbable and impugned his credibility and, having regard to those matters, did not give adequate reasons for preferring Mr Lewis' version. Ground 3: In relation to findings based on the evidence of Mr Hillam's wife, the judge wrongly took into account that details of the date and context of conversations to which she deposed were absent when it was not in dispute that the conversations occurred; did not have regard to enumerated matters that made Mr Lewis' version glaringly improbable; and did not give adequate reasons for accepting Mr Lewis' version. Ground 4: The judge should have held that the objective evidence, including five particular written communications, supported Mr Hillam's claim that Mr Lewis agreed in March/April 2009 that Mr Hillam should have a 10 per cent interest in the companies. Ground 5: Having found that the agreement for equity participation was contingent on capital injection being achieved with the aid of a real contribution by Mr Hillam, the judge should have held that the contingency had been satisfied. Ground 6: The judge should have held that, in March/April 2009, Mr Lewis, for himself and the other respondents, agreed in March/April 2009 that Mr Hillam would have a 10 per cent shareholding in each of the three companies. Ground 7: The judge should have granted particular relief based on entitlement to such 10 per cent shareholdings. Ground 8: The judge should have held that Mr Hillam was entitled to a consulting fee for 14 months' work, being $282,000, rather than $130,000. 12On the hearing of the appeal, oral submissions by counsel for Mr Hillam concentrated very substantially on Ground 5 and Ground 8. It is therefore convenient to deal with those matters first.

Ground 5 13In advancing Ground 5, Mr Hillam accepted (contrary to his principal case) that the agreement for the 10 per cent shareholding interest was contingent or conditional in the sense that the obligation to give the 10 per cent interest did not become due for performance except in consequence of successful completion of fundraising by the companies arranged or procured by Mr Hillam. He then said that the condition had been satisfied, with the result that the promise was required to be performed. 14As canvassed in the course of the hearing in this Court, there is a fundamental problem with this approach. Mr Hillam never sought to make a case based on a conditional contract or conditional promise, with some form of successful fundraising being required to satisfy the condition. His pleaded case was wholly to the effect that there was an unconditional promise to provide the 10 per cent shareholding interest. That pleading was met, in the defence filed by Mr Lewis and his companies, by an allegation that the contract between the parties included conditions, first, that through the instrumentality of Mr Hillam's efforts a binding agreement should be achieved under which an outside party was to provide certain funding and, second, that that funding should be provided. 15Because the matter of such a binding agreement and the actual provision of funding was raised in that way, there was, on the pleadings, an issue whether the contract was subject to such a term or condition but no issue whether, if it was, a binding agreement for the provision of funding (and funding itself) had eventuated so as to satisfy the condition. 16The primary judge held that the contract between the parties was conditional. In paragraph [119] of the judgment (set out at [7] above), his Honour described the nature of the condition. In doing so, he referred to "the plaintiff introducing some form of capital injection into one or more of the corporate entities" and a "success fee and/or as an incentive for him bringing an investor or investors to the table", which Mr Hillam never did. The judge returned to the matter at [147] where he said that "equity participation was contingent upon capital injection and upon success being achieved and the plaintiff having made a real contribution towards that end". 17There was no precise delineation or definition of the condition. Nor did there need to be. It was sufficient to defeat Mr Hillam's claims in respect of the 10 per cent shareholding interest that the Lewis parties show that, if there was a contract, it was not the unconditional contract upon which Mr Hillam relied. 18The judge's findings as to conditionality and the general nature of the condition were sufficient to cause Mr Hillam's claim to fail. Mr Hillam, of course, never sought to define any condition upon satisfaction of which his entitlement would crystallise. Nor, therefore, did Mr Lewis and the other defendants seek to deal with the question whether any condition had been satisfied. Had a condition been precisely defined by Mr Hillam, it would have been for him to lead evidence to show that the condition was satisfied and Mr Lewis would have had an opportunity to present evidence in support of the proposition that it was not satisfied. 19In short, the process of adducing evidence at trial would in all probability have taken a quite different course had the question of satisfaction of a precisely formulated condition contended for by Mr Hillam as plaintiff arisen as an issue on the pleadings. It would therefore be unfair and unsafe for this Court to address, by reference to the evidence actually led, the question whether there had been satisfaction of a condition that the judge identified in somewhat general terms merely for the purpose of deciding whether the contract relied upon by the plaintiff as an unconditional contract was in truth unconditional. 20Mr Hillam as appellant therefore cannot succeed on Ground 5.

Ground 8 21The judge readily accepted that Mr Lewis owed money to Mr Hillam for outstanding consulting fees. The real issue went to the amount. Mr Hillam claimed $282,000, saying that he commenced work for Mr Lewis or his interests in about August 2008 and continued until September 2009, a period of 14 months. The judge referred to a number of invoices sent by Mr Hillam to Mr Lewis after having given credit for amounts Mr Hillam acknowledged having received. The judge also accepted that the agreed rate was $20,000 per month and that a condition precedent had been concerning the sale of equity or assets was satisfied by the sale to Royal. 22The judge noted that Mr Hillam ceased work in September or perhaps early October 2009 and that, before doing so, he sent two emails, one dated 31 August 2009 and the other 17 September 2009. In the first, Mr Hillam claimed that he was then owed $130,000, a claim that was reiterated in the second. After referring to these emails, the judge said (at [155]): "Doing the best I can on the evidence available I see no reason why the plaintiff should not be taken at his word. The better view of the evidence which I prefer is that the plaintiff was actually doing geological work from about November/December 2008 and ceased in about August/September 2009. He was the one who had been involved in the work of the preparation of reports and matters of the sort and at a time when he wrote those emails he would have made, in my opinion very likely, the maximum claim to which he thought he was legitimately entitled. It happens to accord with the first defendants calculation (10 months approximately X $20,000 less $70,000 equals $130,000)... In my opinion in all the circumstances it is fair and reasonable that the plaintiff be awarded the sum of $130,000". 23The ultimate submission made on Mr Hillam's behalf in this Court was that the judge should have found that Mr Hillam rendered services for a period of 12 months, being October 2008 to September 2009. This was in a context where Mr Hillam said in evidence that he started work in August 2008 and continued until at least September 2009 (a period of 14 months) and explained in cross examination that the figure of $130,000 in the email of 23 August 2009 was up to May 2009, an assertion that the judge apparently did not accept. 24Counsel for Mr Hillam pointed out that contemporaneous documents support a finding of 12 months' work, from and including October 2008 to and including September 2009. As regards the date of commencement, reference was made, in particular, to an email from Mr Lewis to a third party dated 19 January 2009 referring to Mr Hillam's having done "considerable work since the middle of last year" and to his efforts "during these last 10 months"; a letter from Mr Lewis to Mr Hillam dated 1 May 2009 referring to professional services rendered "for the last seven months"; and a statement by Mr Lewis that a substantial exploration program dated 6 November 2008 had been prepared by Mr Hillam - something that, of its nature, would have taken a substantial quantity of earlier work. 25In relation to the time until which he continued to provide services, Mr Hillam points to a letter from Royal to another third party dated 17 October 2009 saying, "Mr Hillam has submitted the Summary Report on Mineral Exploration on 21/9/09". 26The position ultimately taken by counsel for Mr Lewis on the question of the relevant period was that the evidence indicated something in the range of nine months to 12 months with "the most common result" being 10 months. Counsel for Mr Lewis also accepted that one possible construction of an email from Mr Hillam to Mr Lewis claiming $130,000 on which the judge placed reliance is that it was written on Mr Hillam's own implicit view of his having started in August, thus modifying the message it appears to convey. That email is dated 17 September 2009 and reads in part as follows: "... [Y]ou have an existing and outstanding payment obligation to me for the balance of $130,000. This is for work completed up to May 2009. ... I note that a prior undertaking to pay $130,000 out of the outstanding amount of $200,000 several months ago was not paid as agreed. Only $70,000 was ever paid on that occasion". 27Mr Hillam, in September 2009, was referring to $200,000 as having been earned up to May 2009, implying commencement of work in August 2008. There does not seem to be any other evidence supporting a finding of commencement as early as August 2008. But Mr Lewis made statements in contemporary documents indicating commencement at the beginning of October 2008. It should therefore be accepted that services were rendered for the whole of October 2008. 28As to the time at which services ceased, the third party letter referring to Mr Hillam's having submitted a report on "21/9/09" is sufficient to ground a finding of September 2009. 29The primary judge was, in my opinion, in error when he took Mr Hillam's emails as an indication that he claimed only $130,000 and that that represented the residual entitlement after allowing for the $70,000 paid. The conclusion that the evidence required was that services were rendered for a period of 12 months at the agreed rate of $20,000 and that only $70,000 was paid, leaving a balance of $170,000. 30There is then a question about goods and services tax. Mr Hillam says that the agreed rate of $20,000 should have been understood as struck on the basis that a sum for goods and services tax was to be paid in addition to the contracted sum. No particular basis was put forward for that contention. It is sufficient, in that regard, to refer to Australian Competition and Consumer Commission v Signature Security Group Pty Ltd [2003] FCA 3; (2003) ATPR 41-908 (at [17]) and Techno Build Developments Pty Ltd v Sayers Australia Pty Ltd [2007] ACTSC 60 (at [8]) where it was recognised that the quoting of a price without reference to the incidence of goods and services tax entails acceptance of the proposition that the quoted amount includes tax and nothing additional is payable. 31The judgment awarded to Mr Hillam should be increased from $130,000 to $170,000.

Other grounds of appeal 32As I have said, counsel for Mr Hillam placed emphasis on Ground 5 and Ground 8. While the remaining grounds were not abandoned, counsel was content to rely on written submissions.

Grounds 1 and 2 33These grounds are concerned with the matter described at [29] to [32] of the judgment, as follows: "[29] The first defendant asserts that a conversation took place between himself and the plaintiff on 28 December 2008 which involved the entry of the plaintiff and the first to fourth defendants into an agreement. [30] In particular on 28 December 2008 the first defendant was in Bougainville. He says that he rang the plaintiff for the purposes of checking on the status of negotiations with New Rise. During the conversation he discussed the provision of geological services. He says that he told the plaintiff he could not pay him there and then for geological services but he was prepared to pay at the rate of $20,000 per month for full time work. He also says that he stated that he had no geologist on PIRSA's files for the company's licenses and he would like to tell PIRSA that the plaintiff was the relevant geologist. He then says that he told the plaintiff that he would be paid as soon as 'you or someone else' comes up with a successful deal and the companies receives funds. The first defendant says that the plaintiff agreed to that proposal. [31] The first defendant says it was agreed the plaintiff was to provide all geological services that may have been required by PIRSA in relation to the exploration and exploitation licenses EL3143, EL3927 and EL3997. The first defendant further asserts that in the course of the same telephone conversation he stated explicitly that if the plaintiff was able to secure a potential investor that puts 'me' in funds then he was prepared to give a 10% shareholding in the company or companies which entered into an agreement with a potential investor, and actually receives funds as a result of the agreement. He said in the course of the conversation he told the plaintiff that he estimated that he needed $250,000 as an upfront payment on the signing of the Memorandum of Understanding or similar document and at least $5 million on signing an agreement. He insists that he told the plaintiff that if he could get that arrangement the plaintiff would in return receive 10% shareholding in the company or companies that benefited from such a deal. He asserts he explicitly asked the plaintiff whether he was satisfied with that arrangement, to which he said the plaintiff said he was. [32] The plaintiff denies that such a conversation ever took place, or that such an agreement was ever made." 34The judge found that the position was as stated by Mr Lewis. Mr Hillam challenges that finding. 35The written submissions made by counsel for Mr Hillam on appeal identify eight matters that were relied upon at trial to indicate that Mr Lewis' evidence about the 28 December 2008 meeting was not credible:

1. There was no contemporaneous note at the meeting even though the parties exchanged a number of e-mails in the following days on other issues.
2. Mr Lewis accepted that his recollection for the period 2008 to 2009 was poor and that the relevant conversation was "rushed".
3. While Mr Lewis said he composed a note of what he intended to say to Mr Hillam and what he had in fact told him, Mr Lewis also said that the note had been destroyed by rain water and that he did not prepare another one. This was despite Mr Lewis' statement that he knew the alleged conversation was significant.
4. The explanation Mr Lewis gave for not making a note was that he believed Mr Hillam to be honourable. This, however, did not stand well with his concession in cross-examination that he regarded Mr Hillam to be a hard man to pin down and that he (Mr Lewis) would have wanted to record the conversation "had the opportunity presented itself".
5. Mr Lewis did not challenge Mr Hillam's claims in his e-mail of 18 March 2008 that at that time no formal agreement had been recorded between the parties and that he would like to discuss with Mr Lewis "a workable and long-term agreement" - a request that would have been superfluous had the 28 December 2008 discussion occurred.
6. The existence of the 28 December 2008 agreement was not disclosed by Mr Lewis until the proceedings commenced. There were many earlier occasions on which he could logically have mentioned it to his advantage.
7. It was improbable that the conversation of 28 December 2008 lasted for less than two minutes which was Mr Lewis' estimate of its duration. Much of that time would have been consumed by another matter about which Mr Lewis claimed he spoke with Mr Hillam, namely, the importance of their having someone willing to do the geological work and to put his name on the file with PIRSA (Primary Industry & Resources South Australia).
8. Mr Lewis' evidence indicated that he was quite uncertain about the terms of the alleged agreement. He said in an affidavit of 5 April 2012 that he would allocate to Mr Hillam ten per cent of the shareholding of companies that benefited from capital raising, provided it involved a $250,000 upfront payment on signing a memorandum of understanding and at least $5 million on signing an agreement. However, in his oral evidence he resiled from the $5 million figure and said that the figure depended on what "they were buying and how much of it". Mr Hillam submitted to the primary judge that the uncertainty of Mr Lewis about the terms of his stipulations rendered it unlikely that he had ever communicated those stipulations to Mr Hillam. 36As to Item 1, it is pointed out on behalf of Mr Lewis that the point is directly contradicted by Item 3 where reference is made to the fact that Mr Lewis did in fact make a note, albeit one that was later destroyed by rainwater. It was not put to Mr Lewis that the note was never in fact made or that he was not telling the truth when he said that it had been destroyed by rain. 37As to Item 2, it was submitted on behalf of Mr Lewis that the evidence was not to the effect stated. Attention was drawn to the following part of the cross-examination of Mr Lewis: "Q. And I'm not being critical Mr Lewis, but is it your position to his Honour that you have a poor recollection, generally, of the events of 2008 and 2009, given they were so long ago? A. The explicit details of which knife I used to spread the butter on the toast if I had any, yes. Q. And what about conversations with Mr Hillam, Mr Lewis? A. Where they matter to me, to a lesser degree, do I have difficulty. In other words, it is easier. That is the nature of my memory." 38Mr Lewis submits (and I accept) that the better reading of this exchange is that he was saying that he did not have a good recollection of some of the finer detail of events of 2008 and 2009 but that he had less difficulty in recalling the conversations that mattered to him, that is, the more important conversations. Given its nature, the conversation in question must have been of the important kind, as distinct from a matter such as which knife he used to spread butter on his toast. 39As to Item 4 (and, to an extent, Item 3), counsel for Mr Lewis pointed to several matters. First and as already noted, Mr Lewis' explanation based on his belief that Mr Hillam was an "honourable man" was given in relation to the matter of lack of confirmation of the terms of the 28 December 2008 conversation in an e-mail, as distinct from a note. Furthermore, the actual evidence was: "Q. ... If it was your perception in late 2008 and early 2009 that Mr Hillam was a hard man to pin down, can I suggest to you that it followed that your attitude at the time was that communications and agreements with him should be documented and recorded? A. Yes." 40Mr Lewis did not concede that his perception was that Mr Hillam was a hard man to pin down. It was put to him that if that were his perception, then it followed that his attitude at the time was that agreements with him should be recorded. There is accordingly no foundation for Mr Hillam to submit that Mr Lewis made the alleged concession and no basis for Item 4. 41Item 5, although referring to an e-mail of 18 March 2008, apparently relates to a "discussion paper" that was an attachment to an e-mail of that date. The reference to "claims" in that e-mail should therefore be understood as a reference to the content of the attachment. Mr Hillam said in the attachment that "at this time no formal agreement is yet recorded between the parties". That statement was not challenged by Mr Lewis; but the failure to challenge it cannot be regarded as some kind of acceptance of the proposition that a binding contract had arisen from the conversation of 28 December 2008. Any contract arising from the conversation would have been oral only and, in a real sense, therefore, neither "formal" nor "recorded". Nor is Mr Hillam's case advanced by pointing to the part of the e-mail's attachment in which Mr Hillam said that he wanted to discuss a "workable long term agreement" - being one in which he "would seek a five year contract to Mintech and Goldus whereby this would be a long term work and incentive passage based on fees paid for my time and work and an equity passage based on achievements made". There is no necessary inconsistency between such an expressed desire of Mr Hillam and the 28 December 2008 conversation having occurred. Mr Hillam's statement could have been understood by Mr Lewis as nothing more than an alternative and long term proposal to supersede the agreement reached on 28 December 2008. Counsel for Mr Lewis also makes the point that Mr Lewis was not cross-examined in relation to any such inconsistency. 42Item 6 involves a submission that, if the 28 December 2008 conversation had occurred and resulted in a contract, Mr Lewis could be expected to have referred to it on, in particular, the occasion of the recording of the agreement concerning Mr Hillam's remuneration in a letter dated 1 May 2009. As counsel for Mr Lewis pointed out, however, the 28 December 2008 agreement relied on by Mr Lewis related to two aspects of remuneration: first, a fee of $20,000 per month for geological services; and, second, the conditional entitlement to a 10 per cent shareholding interest in the companies. The letter of 1 May 2009 dealt with the first aspect only. That being so, there was no need for the letter to make reference to the earlier agreement. This was particularly so in circumstances where the purpose of the letter was to provide Mr Hillam's creditors with "comfort" that he had "prospects of income in [the] fairly short run" - something of relevance only to the regular payments of $20,000 per month. 43Other occasions on which, it is said, Mr Lewis ought logically to have referred to the 28 December 2008 agreement but did not do so are said by Mr Hillam to have been when responding to an e-mail of 23 August 2009 sent by Mr Hillam to Mr Lewis and others which set out Mr Hillam's understanding of his agreement; in an affidavit Mr Lewis swore on 4 November 2009 for the purposes of proceedings in South Australia relating to a statutory demand served by Mr Hillam; and in Mr Lewis' initial commercial list response in the proceedings under appeal which was dated August 2010. As to the first of these, it is pointed out by counsel for Mr Lewis that Mr Lewis did, in an email of 23 August 2009 to Mr McDonald, describe the arrangement with Mr Hillam in terms consistent with the 28 December 2008 conversation. He said that everything that Mr Hillam was to get "is utterly dependent on his performance arising from his work - and in particular, the achievement of a successful payment to Mintech for the sale of equity on terms acceptable to me". As to the second matter, Mr Lewis gave evidence that he had in fact told the solicitors dealing with the statutory demand matter about the 28 December 2008 conversation but they did not think it relevant to be included in his affidavit. As to the third matter, the point is made that the document in question was not verified by Mr Lewis and he gave evidence that he could not recall receiving the document prior to its being filed. 44In relation to Item 7, counsel for Mr Lewis makes the valid point that it is quite possible that, after an interval of more than three years, Mr Lewis' recollection of the length (as opposed to the content) of the conversation was imprecise. 45In relation to Item 8, counsel for Mr Lewis took issue with the proposition that Mr Lewis resiled from the $5 million figure in cross-examination. When regard is had to the relevant part of the cross-examination, it can be seen that references to the possibility of figures above $5 million were made but that the central proposition was as follows: "Q. And do you say to his Honour that deal was conditional upon certain amounts of money being raised? A. Yes. Q. How much? A. If it was at least $5 million for the purchase rights to a joint venture and something above that for the sale of the tenement or the sale of equity, fine, $5 million was the base that we needed to get." 46None of these Items 1 to 8 serves to detract from the veracity of Mr Lewis' evidence or to indicate that it was glaringly improbable. 47The judge also supported his conclusions regarding the 28 December 2008 conversation by reference to surrounding circumstances. He referred to two particular matters: the arrangements Mr Hillam referred to in his e-mail of 23 November 2008; and the kind of arrangement or arrangements Mr Lewis was seeking to enter into with third parties. In each case, there was a success element or contingency aspect. Mr Hillam contends on appeal that these were minor and relatively unimportant aspects of the surrounding circumstances. Of much greater significance, he says, are: (a) nine conversations between the two men following 28 November 2008; and (b) matters said to impugn Mr Lewis' credibility. 48The nine conversations took place in the period 16 March 2009 to 22 July 2009. Mr Hillam says that the judge dealt with only three of these and that his Honour, while giving detailed reasons for rejecting Mr Hillam's account of a conversation of 9 July 2009 and stating less detailed bases for preferring Mr Lewis' evidence regarding conversations of 16 March 2009 and April/May 2009, failed to deal at all with conversations of 3 June 2009, 14 June 2009, 16 June 2009, 20 July 2009 and 22 July 2009. 49Counsel for Mr Lewis points out that this submission cannot be accepted as regards the conversation of 14 June 2009. The judge rejected Mr Hillam's version on the balance of probabilities. 50Also significant is the weight attached by the judge to an e-mail (with attached letter) from Mr Lewis to Mr Hillam dated 13 June 2009 which Mr Hillam said he received on 9 July 2009. His Honour said of that e-mail (or letter) at [131]: "As I have said although I am of the view that the first defendant's email of 13 June was not sent to the plaintiff on that day the contents of it corroborates entirely that at or about that time, the arrangements being discussed between the two in relation to equity participation clearly involved 10% being contingent upon the raising of capital; namely an immediate injection of $250,000 and a $5 million cash injection. I have no reason to consider the email of 13 June was not an accurate reflection of the first defendant's state of mind and of discussions he had with the plaintiff and indeed of the offer he had intended to make at that point. It is entirely inconsistent with any offer of equity participation other than in the context of a successful capital raising. Insofar as the plaintiff's evidence suggests otherwise I reject it." 51Given what was said about the date of the e-mail and the date of its receipt, it may be accepted that it recorded in tangible form Mr Lewis' contemporary statement of position on the matter that was the subject of the conversations in relation to which the judge preferred Mr Lewis' evidence to Mr Hillam's. The e-mail therefore provides a basis for the preference the judge expressed. 52Mr Hillam points to other matters said to be destructive of Mr Lewis' credibility but not given adequate recognition or weight by the judge. These are: (a) what is said to have been the swearing of a false affidavit in the statutory demand proceedings; (b) alleged reconstruction of evidence in the course of cross-examination; and (c) alleged making of baseless allegations against Mr Hillam concerning the latter's entitlement to a consulting fee. 53As to (a), Mr Lewis accepts that the affidavit stated that Mr Hillam was not entitled to be paid any amount by the relevant companies. But, as counsel for Mr Lewis pointed out, Mr Lewis gave evidence that, before the time at which the affidavit was sworn, Mr Lewis was aware that Mr Hillam, in the atmosphere of dispute that prevailed, had refused to accept anything "unless it was on his terms completely". That, coupled with the fact that Mr Lewis had legal advice as at November 2009 that Mr Hillam was not entitled to any payment, was capable of providing a basis for Mr Lewis' statements in the affidavit. 54As to (b), Mr Hillam refers to inconsistent evidence given by Mr Lewis about how he presented to Mr Hillam the critical letter of 13 June 2009 and whether he had a conversation with Mr Hillam shortly before 30 July 2009 concerning documentation of the shareholding entitlement. Mr Lewis said in various parts of his oral evidence about the letter of 13 June 2009 that he printed it out on Mr Hillam's home computer on 9 July 2009, that he read it to Mr Hillam from his own laptop and that he could not recall whether he printed it out or merely read it aloud. In relation to the conversation on about 30 July 2009, the point is made that Mr Hillam set out his recollection of it in an affidavit, that Mr Lewis did not refer to the matter in his own affidavit or take issue with what Mr Hillam had said but that Mr Lewis, in the course of cross-examination, denied that there had been a conversation in the terms deposed to by Mr Hillam, saying "it is rubbish". 55The oral evidence was given more than three years after the relevant events. Mr Lewis submits that that is an adequate explanation of the inconsistencies. There is force in that submission. Viewed in the light of the passage of time, the inconsistencies do not warrant any adverse credibility finding. 56In relation to (c) at [52] above, Mr Hillam points to inconsistency between Mr Lewis' denial of any entitlement on Mr Hillam's part and his acceptance of the $20,000 per month entitlement. Mr Lewis submits and I accept that the matter is explicable on the basis discussed in relation to the affidavit in the statutory demand proceedings. 57Mr Hillam has not made good the proposition that fact-finding and decision-making by the primary judge miscarried because of failure to have regard to relevant evidence and lack of cogent bases for preferring the evidence of Mr Lewis. 58Grounds 1 and 2 are not made out.

Ground 3 59Mr Hillam's wife gave evidence that Mr Lewis told her on four occasions that Mr Hillam "has 10 per cent in all my companies". Mr Lewis denied this. The judge accepted the denial. Counsel for Mr Hillam says that his Honour did so without having regard to submissions concerning Mr Lewis' credibility on the particular matter. 60In his affidavit of 17 May 2012, Mr Lewis merely denied the words attributed to him by Mrs Hillam without giving any alternative description of the conversations. This, combined with the fact that Mr Lewis said in cross-examination that the matter was omitted from the affidavit because its inclusion would have been too detailed whereas the evidence he ultimately gave (in essence, that Mrs Hillam did not properly understand the context and arrangements) was brief, grounds a submission that an adverse inference should have been drawn from the absence of elaborating material from the affidavit. 61The response by counsel for Mr Lewis emphasises a practical point. Mrs Hillam's affidavit was sworn on 11 May 2012 and thus, according to counsel for Mr Lewis, "months late". This is of particular significance when it is recognised that the trial began on 14 May 2012 and that the intervening days - 12 and 13 May 2012 - were a Saturday and a Sunday. In these circumstances, there was a good explanation for any brevity that may have appeared in Mr Lewis' affidavit dealing with the evidence in Mrs Hillam's affidavit. 62Counsel for Mr Hillam complains that the judge rejected Mrs Hillam's evidence in part because the date and context of conversations were not disclosed and because there was no note of the conversations. It is pointed out that Mr Lewis accepted that he had spoken with Mrs Hillam on the occasions she described and the only matter he disputed was the admissions attributed to him concerning Mr Hillam's shareholding entitlement. The date and context of the conversations was, it was submitted, accordingly not something that served to undermine Mrs Hillam's evidence. 63Counsel for Mr Lewis takes issue with the proposition that Mr Lewis accepted that he had spoken with Mrs Hillam on the occasions she identified. This is because Mrs Hillam's description of occasions entailed no greater precision than that they were during periods when Mr Lewis was staying at the home of Mr Hillam and Mrs Hillam. Mrs Hillam herself identified periods in early November 2008, 16 to 21 March 2009, 25 April to 2 May 2009, 28 May to 9 July 2009 and 6 and 7 August 2009 as periods during which Mr Lewis had stayed at the Hillams' home. Given that Mrs Hillam did not identify any conversation as having occurred at any particular point during any of the several periods, there is substance to the submission that Mr Lewis did not, in reality, accept that he had spoken to Mrs Hillam "on the occasions she described". 64The judge's conclusions in relation to Mrs Hillam's evidence are also challenged on the basis of failure to recognise that Mr Hillam had testified as to Mr Lewis' having spoken words to the same effect as those alleged by Mrs Hillam, with Mrs Hillam saying that her husband had repeated the words to her. The submission in response by counsel for Mr Lewis is that this submission lacks cogency in the light of the judge's assessment of Mr Hillam's evidence of conversations between the two men in the period 16 March 2009 to 22 July 2009. Given the conclusions in relation to those conversations adverse to Mr Hillam stated above, that submission must be accepted. 65Ground 3 is not made out.

Ground 4 66It is accepted on both sides that it was open to the judge to read communications between the parties in context. His Honour construed the e-mails of 30 July 2009 and 3 August 2009 in the context of the e-mail of 9 July 2009 which, as his Honour observed (at [144), made it "abundantly clear that equity participation was upon a capital raising, and that any written agreement would be drafted accordingly". 67Beyond that, Mr Hillam merely falls back on earlier arguments that the judge failed to consider Mr Hillam's evidence as to a number of conversations which he had with Mr Lewis. That, Mr Hillam says, caused the judge to consider the e-mails out of context. For reasons already stated, that proposition cannot be accepted. 68Mr Hillam also points to what is said to be a failure to afford adequate weight and relevance to an e-mail of 5 August 2009 sent by Mr Lewis to Mr Coote and copied to Mr Hillam and Mr McDonald. In that e-mail, Mr Lewis acknowledged that Mr Hillam had "a significant beneficial interest in the project, as well as my full support in the good work he has been doing on many aspects of the commercialisation process to date". But, as is pointed out in submissions made on behalf of Mr Lewis, the "beneficial interest" referred to is a specific interest in the proposed commercialisation of EL3143 through an initial public offering in accordance with the "term sheet agreement" entered into by Mr Lewis and others on 25 June 2009. That proposal, had it come to fruition, would have produced results consistent with satisfaction of the equity raising condition that Mr Lewis maintains was always attached to any commitment to give Mr Hillam a 10 per cent shareholding interest. 69In that context, the reference, apparently in the present tense, to a "significant beneficial interest" is in reality concerned with an interest in a proposal in respect of which it was assumed, by way of anticipation, that the equity raising condition would be satisfied. 70Ground 4 is not made out.

Grounds 6 and 7 71These two grounds do not raise issues beyond those already considered.

Conclusion 72Mr Hillam is entitled to judgment in the sum of $170,000 instead of $130,000. Otherwise, he has not shown any basis on which the decision of the primary judge should be altered. This represents a very modest degree of success on appeal. 73I propose orders as follows:

1. Appeal allowed in part.
2. Set aside Order 1 made in the Equity Division on 9 August 2012 and order in lieu thereof: "That there be judgment in favour of the plaintiff and against the first, second and third defendants in the sum of $170,000."
3. Appeal otherwise dismissed.
4. That the appellant pay 90 per cent of the respondents' costs of the proceedings in this Court. 74There is, in my opinion, no need to vary the costs orders made at first instance. There were separate orders in relation to "costs of and incidental to the unpaid consultancy fees claim" and "costs of and incidental to the equity performance promise claim", with Mr Hillam ordered to pay the other parties' costs of the second description and those other parties ordered to pay Mr Hillam's costs of the first description. That result remains appropriate in the light of the outcome on appeal that I propose. 75GLEESON JA: I agree with Barrett JA.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 October 2013