Hodgson v Amcor Ltd; Amcor Ltd & Ors v Barnes & Ors [2012] VSC 94

Hodgson v Amcor Ltd; Amcor Ltd & Ors v Barnes & Ors [2012] VSC 94 | Case summary | Zoe

[121]

I did not have power as one of the Group General Managers of Amcor Australasia to make substantial decisions affecting Amcor or indeed Corrugating. As Group General Manager, I had limited authority, in the 2002/03 financial year, to approve budgeted (namely, transactions pre-approved by the Amcor Board) capital expenditure only up to $250,000. I do not recall having any authority to sell Amcor assets and I do not recall ever doing so. I had no financial authority in respect of unbudgeted transactions. Amcor had a policy ("Acquisition of Capital Assets" in relation to capital expenditure and a review committee referred to as the Capital Expenditure Review Group (CERG) was established by that policy. In the late 1990s when I was working at Rocklea in Queensland, I was a member of CERG with Mr Morris, Mr Brown and, I believe, Mr Reichler. CERG was responsible for acquisitions (capital expenditure). The policy did not apply to the sale of assets. No one at Amcor told me that the sales of the Service Packaging Business and the ACB Business the subject of these proceedings had to be approved or reviewed by CERG. The first time I ever saw a suggestion that these two sales should have been referred to or reviewed by CERG was in February 2011 when I read the witness statements filed on behalf of the Amcor Parties in this proceeding.

The power to make decisions in relation to Amcor Australasia was vested in Mr Brown and later Mr Sutton in their role as Managing Director, Amcor Australasia. In the 2002/03 financial year, Mr Brown had financial authority to approve budgeted capital expenditure up to $2 million and unbudgeted capital expenditure up to $1 million.

I could make recommendations, submissions and presentations to Mr Brown and Mr Sutton relevant to Corrugating and I did so (less often in the case of Mr Sutton).

Some decisions affecting Amcor Australasia could not be made by Mr Brown or Mr Sutton. These types of decisions (for example, the recommendations set out in the BluePrint for Further Improvement for the closure of Amcor's Townsville, Box Hill and Wetherill Park operations to which I refer below) required approval by Mr Jones and the Amcor Board.

I did make, when asked to do so by Mr Brown or Mr Sutton (less so by Mr Sutton) or Mr Jones, formal submissions to the Amcor Board on matters relevant to the interests of Corrugating. Again, by way of example, I presented the BluePrint for Further Improvement to the Board of Amcor Limited in conjunction with Mr Brown.

Mr Brown and Mr Sutton in relation to Amcor Australasia and, at the higher level, Mr Jones and the Amcor Board made all the significant decisions that were considered to affect Amcor's interests and the interests of Corrugating. My role as Group General Manager, Corrugating was to make recommendations or submissions for approval by Brown (later Sutton) and the Amcor Board but otherwise to implement the directions or the strategic vision given to me by my superiors.

[138]

Under clause 5 Barnes had a duty to comply with directions and keep Amcor informed by:

(i) reporting to Mr Morriss, Regional General Manager, Northern Region AFPA;

(ii) informing Amcor of any developments in relation to his role;

(iii) abiding by all ethical standards, policies and procedures that related to the operation of the business;

(iv) devoting his full time and attention to Amcor's business during working hours; and

(v) honestly and diligently carrying out his duties and responsibilities.

Under clause 7 Barnes was entitled to further remuneration including:

(i) a fully maintained motor vehicle inclusive of $4,000 worth of options;

(ii) health insurance cover under the Amcor Health Care Plan; and

(iii) eligibility to participate in the Amcor Employee Incentive Share Plan.

Under clause 15 Barnes had a duty to avoid conflicts of interest by:

(i) refraining from any involvement with, or financial interest in, any business or enterprise that competed with, was a customer of, or supplied goods or services to, any business or enterprise within the Amcor Group including the Amcor Limited Group and its related bodies corporate whilst employed by Amcor; and

(ii) arranging his affairs to ensure there was no conflict between his personal interests and those of the Amcor Group;

Under clause 16 Barnes had a duty of confidentiality which required him to refrain from:

(i) disclosing or using, other than for the purposes of Amcor, any information to which he was exposed during his employment that was not in the public domain relating to the financial affairs; suppliers; customers and clients (including lists of names and addresses); future plans, research and development; business methods, systems and strategies; technical operations and pricing policies and costings of businesses and enterprises within the Amcor Group; and

(ii) disclosing, for his own purposes or those of any person associated with him, any knowledge of financial results of businesses and enterprises within the Amcor Group prior to their release to the public, in particular, any information concerning Amcor which, if publically disclosed, could affect the market price of Amcor shares.

Under clause 23 Barnes was restrained from:

(i) employing, engaging or endeavouring to entice away from Amcor any employee of Amcor either on his own account or for any other person, form or company during his employment and for a period of three months following the effective date of the termination of his employment (namely, 28 January 2005);

(ii) disclosing confidential information about Amcor or belonging to Amcor obtained during employment;

(iii) engaging in any business, employment, consultancy or otherwise, engaging in any specific project or research in relation to which the use of Amcor's confidential information may reasonably be expected to put him at an unfair advantage during his employment and at all times after the termination of his employment; and

(iv) canvassing or soliciting business the same as or similar to that provided by Amcor from persons who have been clients or customers of Amcor during his employment and for a period of three months in Australia following the termination of his employment (namely 28 January 2005).

[174]

Under clause 5 Holihan had a duty to comply with directions and keep Amcor informed by:

(i) reporting to Barnes, General Manager AFPA, NSW;

(ii) informing Amcor of any developments in relation to his role;

(iii) abiding by all ethical standards, policies and procedures that related to the operation of the business;

(iv) devoting his full time and attention to Amcor's business during working hours; and

(v) honestly and diligently carrying out his duties and responsibilities.

Under clause 7 Holihan was entitled to further remuneration including:

(i) a fully maintained motor vehicle;

(ii) health insurance cover under the Amcor Health Care Plan;

(iii) eligibility to participate in the Amcor Employee Incentive Share Plan; and

(iv) eligibility to participate in the Management Incentive Plan.

Under clause 15 Holihan had a duty to avoid conflicts of interest by:

(i) refraining from any involvement with, or financial interest in, any business or enterprise that competed with, was a customer of, or supplied goods or services to, any business or enterprise within the Amcor Group including the Amcor Limited Group and its related bodies corporate whilst employed by Amcor; and

(ii) arranging his affairs to ensure there was no conflict between his personal interests and those of the Amcor Group.

Under clause 16 Holihan had a duty of confidentiality which required him to refrain from:

(i) disclosing or using, other than for the purposes of Amcor, any information to which he was exposed during his employment that was not in the public domain relating to the financial affairs; suppliers; customers and clients (including lists of names and addresses); future plans, research and development; business methods, systems and strategies; technical operations and pricing policies and costings of businesses and enterprises within the Amcor Group; and

(ii) disclosing, for his own purposes or those of any person associated with him, any knowledge of financial results of businesses and enterprises within the Amcor group prior to their release to the public, in particular, any information concerning Amcor which, if publicly disclosed, could affect the market price of Amcor shares.

Under clause 23 Holihan was restrained from:

(i) employing, engaging or endeavouring to entice away from Amcor any employee of Amcor either on his own account or for any other person, form or company during his employment and for a period of three months following the effective date of the termination of his employment (namely 31 October 2003);

(ii) disclosing confidential information about Amcor or belonging to Amcor obtained during employment;

(iii) engaging in any business, employment, consultancy or otherwise engaging in any specific project or research in relation to which the use of Amcor's confidential information may reasonably be expected to put him at an unfair advantage during his employment and at all times after the termination of his employment; and

(iv) canvassing or soliciting business the same as or similar to that provided by Amcor from persons who have been clients or customers of Amcor during his employment and for a period of three months in Australia following the termination of his employment (namely 31 October 2003).

[211]

Under clause 5 Sangster had a duty to comply with directions and keep Amcor informed by:

(i) reporting to Hodgson, Group General Manager AFPA;

(ii) informing Amcor of any developments in relation to his role;

(iii) abiding by all ethical standards, policies and procedures that related to the operation of the business;

(iv) devoting his full time and attention to Amcor's business during working hours; and

(v) honestly and diligently carrying out his duties and responsibilities;

Under clause 7 Sangster was entitled to further remuneration including:

(i) a fully maintained motor vehicle inclusive of $10,000 worth of options;

(ii) health insurance cover under the Amcor Health Care Plan; and

(iii) eligibility to participate in the Amcor Employee Incentive Share Plan;

Under clause 15 Sangster had a duty to avoid conflicts of interest by:

(i) refraining from any involvement with, or financial interest in, any business or enterprise that competed with, was a customer of, or supplied goods or services to, any business or enterprise within the Amcor Group including the Amcor Limited Group and its related bodies corporate whilst employed by Amcor; and

(ii) arranging his affairs to ensure there was no conflict between his personal interests and those of the Amcor Group;

Under clause 16 Sangster had a duty of confidentiality which required him to refrain from:

(i) disclosing or using, other than for the purposes of Amcor, any information to which he was exposed during his employment that was not in the public domain relating to the financial affairs; suppliers; customers and clients (including lists of names and addresses); future plans, research and development; business methods, systems and strategies; technical operations and pricing policies and costings of businesses and enterprises within the Amcor Group; and

(ii) disclosing, for his own purposes or those of any person associated with him, any knowledge of financial results of businesses and enterprises within the Amcor group prior to their release to the public, in particular, any information concerning Amcor which, if publically disclosed, could affect the market price of Amcor shares;

Under clause 23 Sangster was restrained from:

(i) employing, engaging or endeavouring to entice away from Amcor any employee of Amcor either on his own account or for any other person, form or company during his employment and for a period of three months following the termination of his employment (namely, 28 January 2005);

(ii) disclosing confidential information about Amcor or belonging to Amcor obtained during his employment;

(iii) in the course of any business, employment, consultancy or otherwise, engaging in any specific project or research in relation to which the use of Amcor's confidential information may reasonably be expected to put him at an unfair advantage during his employment and at all times after the termination of his employment (which occurred on 28 October 2004); and

(iv) canvassing or soliciting business the same as or similar to that provided by Amcor from persons who have been clients or customers of Amcor during his employment and for a period of three months in Australia following the termination of his employment (namely 28 January 2005).

[242]

Under clause 4 Bayley had a duty to promptly notify Amcor of any matter coming to his attention which could have a material effect on the business or affairs of Amcor;

Under clause 5 Bayley had a duty to avoid conflicts of interest by refraining from being engaged, interested or concerned either directly or indirectly in any other business which was a customer, competitor or supplier of goods and services to Amcor or any of its related corporations;

Under clause 7 Bayley was entitled to remuneration including:

a salary of AUS $180,000 per annum;

a fully maintained motor vehicle;

eligibility to participate in Amcor Management Incentive Program;

a mobile telephone;

the reasonable costs associated with utilities; and

appropriate accommodation;

Under clause 14 Bayley received health insurance cover for himself and his dependent family;

Under clause 23 Bayley was restrained, during his employment and for 12 months thereafter, from:

employing, engaging, soliciting, interfering with or endeavouring to entice away from Amcor any employees of Amcor; and

engaging in any specific project or research in relation to which the use of Amcor's confidential information may reasonably and objectively be expected to put him or other person(s) at an unfair advantage or put the relevant Amcor company at an unfair disadvantage, whether that use may be inadvertent or deliberate, without Amcor's prior written authorisation in the course of any profession, business, employment, consultancy or otherwise;

Under clause 24 Bayley had a duty of confidentiality, during his employment and for 12 months thereafter, to:

keep entirely secret and confidential and not indirectly use, divulge or communicate to any person any of the trade secrets or otherwise confidential information of, or in relation to, the business of Amcor which he may have received, obtained or have access to while in the service of Amcor;

report any approach, except as permitted by this clause, to provide such information;

refrain from using for his own purposes or for purposes other than those of Amcor, any information so acquired; and

refrain from disclosing to any competitor the names and addresses of any clients of Amcor, any information relating to methods of operation, marketing, finance, fees and costs, business systems or techniques, or any other confidential information not generally available to competitors.

[246]

Under clause 5 Bayley had a duty to comply with directions and keep Amcor informed by:

(i) reporting to Hodgson, Group General Manager AFPA;

(ii) informing Amcor of any developments in relation to his role;

(iii) abiding by all ethical standards, policies and procedures that related to the operation of the business;

(iv) devoting his full time and attention to Amcor's business during working hours; and

(v) honestly and diligently carrying out his duties and responsibilities.

Under clause 7 Bayley received further remuneration including:

(i) a fully maintained motor vehicle inclusive of $10,000 worth of options;

(ii) continued participation in the Amcor Health Care Plan; and

(iii) eligibility to participate in Amcor Employee Incentive Share Plan;

Under clause 15 Bayley had a duty to avoid conflicts of interest by:

(i) refraining from any involvement with, or financial interest in, any business or enterprise that competed with, was a customer of, or supplied goods or services to, any business or enterprise within the Amcor Group including the Amcor Limited Group and its related bodies corporate whilst employed by Amcor; and

(ii) arranging his affairs to ensure there was no conflict between his personal interests and those of the Amcor Group;

Under clause 16 Bayley had a duty of confidentiality which required him to refrain from:

(i) disclosing or using, other than for the purposes of Amcor, any information to which he was exposed during his employment that was not in the public domain relating to the financial affairs; suppliers; customers and clients (including lists of names and addresses); future plans, research and development; business methods, systems and strategies; technical operations and pricing policies and costings of businesses and enterprises within the Amcor Group; and

(ii) disclosing, for his own purposes or those of any person associated with him, any knowledge of financial results of businesses and enterprises within the Amcor Group prior to their release to the public, in particular, any information concerning Amcor which, if publically disclosed, could affect the market price of Amcor shares;

Under clause 23 Bayley was restrained from:

(i) employing, engaging or endeavouring to entice away from Amcor any employee of Amcor either on his own account or for any other person, form or company during his employment and for a period of three months following the termination of his employment (namely, 28 January 2005);

(ii) disclosing confidential information about Amcor or belonging to Amcor obtained during employment;

(iii) in the course of any business, employment, consultancy or otherwise, engaging in any specific project or research in relation to which the use of Amcor's confidential information may reasonably be expected to put him at an unfair advantage during his employment and at all times after the termination of his employment; and

(iv) canvassing or soliciting business the same as or similar to that provided by Amcor from persons who have been clients or customers of Amcor during his employment and for a period of three months in Australia following the termination of his employment (namely, 28 January 2005).

[275]

Under clause 5 Mihelic had a duty to comply with directions and keep Amcor informed by:

(i) reporting to Hodgson, Group General Manager Corrugating;

(ii) informing Amcor of any developments in relation to his role;

(iii) abiding by all ethical standards, policies and procedures that related to the operation of the business;

(iv) devoting his full time and attention to Amcor's business during working hours; and

(v) honestly and diligently carrying out his duties and responsibilities;

Under clause 7, Mihelic was entitled to further remuneration including:

(i) a fully maintained motor vehicle, or alternatively, a car allowance in lieu thereof in the sum of $20,244;

(ii) eligibility to become a member of the Amcor Health Care Plan;

(iii) eligibility to participate in the Amcor Employee Incentive Share Plan; and

(iv) a mobile telephone;

Under clause 16 Mihelic had a duty to avoid conflicts of interest by:

(i) refraining from any involvement with, or financial interest in, any business or enterprise that competed with, was a customer of, or supplied goods or services to, any business or enterprise within the Amcor Group including the Amcor Limited Group and its related bodies corporate whilst employed by Amcor; and

(ii) arranging his affairs to ensure there was no conflict between his personal interests and those of the Amcor Group;

Under clause 17 Mihelic had a duty of confidentiality which required him to refrain from disclosing or using, other than for the purposes of Amcor, any information to which he was exposed during his employment that was not in the public domain relating to the financial affairs; suppliers; customers and clients (including lists of names and addresses); future plans, research and development; business methods, systems and strategies; technical operations and pricing policies and costings of businesses and enterprises within the Amcor Group;

Under clause 25 Mihelic was restrained from:

(i) employing, engaging or endeavouring to entice away from Amcor any current employees of Amcor;

(ii) disclosing confidential information obtained during his employment;

(iii) canvassing or soliciting business the same as or similar to that provided by Amcor from persons who had been clients or customers of Amcor during his employment and for a period of 12 months in Victoria after the termination of his employment (namely, 28 October 2005); and

(iv) engaging in any specific project or research in relation to which the use of Amcor's confidential information may reasonably be expected to put him (or any other person, firm or company) at an unfair advantage.

[391]

Visy Industries Holdings Pty Ltd _("_Visy") and Amcor were the major participants in the market for the supply of corrugated fibreboard packaging (CFP) products in Australia. Between them they held over 90% of that market.[2]
Broadly speaking, the contraventions fell into four categories.[3]
First, there was an over-arching understanding made in early 2000 under which Amcor and Visy agreed to maintain their respective market shares and not to deal with each other's customers. If a customer did change suppliers, the firm receiving that new customer would provide one of its own to the other by way of "compensation". In effect, there would be a swapping of customers (although the customers were not to know this). Further, Visy and Amcor would collaborate with each other in order to increase prices.[4]
Second, there were annual price increase understandings whereby increases in prices were agreed in each of the years 2000, 2001, 2002 and 2003.[5]
Third, there were customer price understandings whereby prices were agreed in respect of particular customers.[6]
Fourth, there were compensation understandings whereby, in respect of particular customers who had changed from one supplier to the other, that supplier would provide another customer or customers in exchange. It worked this way. If, say, Amcor customer X decided to switch to Visy, Amcor and Visy would get together and decide on a Visy customer, say Y, who would be provided to Amcor as "compensation" for the loss of X. When Y's contract came up for renegotiation, Visy and Amcor would exchange details of proposed prices and other terms so as to ensure that the deal offered to Y by Visy was much less attractive than Amcor's. Y would then, as Visy and Amcor intended, accept Amcor's offer.[7]
A vast range of consumer goods are packaged in CFP. They include groceries, beverages, dairy products, fruit, produce, meat, poultry, seafood and confectionery. Returnable plastic crates, shrink wrap and other packaging products compete in segments of the CFP market, but otherwise there are no packaging materials which are reasonably substitutable for, or in close competition with, CFP products in relation to the packaging of the goods mentioned. CFP is used to make the ubiquitous cardboard box.[8]
The type of CFP products and associated services supplied by Visy and Amcor would vary substantially between customers due to differing customer requirements in terms of board paper type, strength, construction, sheet size, design style, print characteristics and method of assembly. Different board grates were used in the manufacture for supply of CFP products to suit the different applications of the products. Corrugated boxes were supplied in a number of different styles. CFP products could have printing applied either in a pre-print or post-print process.[9]
In most cases CFP products were supplied to the customer's specifications. In particular industries, some standard sized CFP boxes were used, such as fruit and other produce. However, further value adding could be required such as the individual customer's logo or product information.[10]
The CFP services supplied by Visy and Amcor in connection with the supply of CFP products included performance and quality testing, art graphics and printing services, packaging design, performance and cost optimisation, development services, tooling and packaging systems, transport and delivery, warehousing of stock and supply chain cost analysis services.[11]
The cost of supplying different CFP products is affected by product type, dimensions, board grade, printing, order quantity, freight and other factors.[12]
From 2000 to 2004 the value of the CFP market was between $1.8 and $2b per annum. Details of some individual customers' requirements were the subject of confidential evidence. However, it can be said that some of the larger customers would have annual purchases of the order of $20m or more. There were thousands of non-contract customers who contributed approximately $212m per annum in gross sales.[13]
Visy and Amcor were in competition with each other in the CFP market, except where such competition was reduced or eliminated as a result of the cartel conduct with which this case is concerned.[14]

[476]

The plaintiff contends that the changes communicated in the email broadcast of 12 February 2009 constituted a restructuring of the defendant's business and as a consequence, Mr Whittaker was made redundant.

The defendant says that there was no redundancy. Ms Carter continued in the VP and GM position formerly occupied by Mr Whittaker. It is also submitted that there is no termination pleaded as a result of restructuring, rather the plaintiff's claim is that the termination of his employment arose from redundancy. But in any event, the defendant says that there was no restructuring in this case as the relevant clause is concerned with terminations resulting from Unysis' 'restructuring ... its business with any other organisation or entity'. The defendant contends that the clause is not concerned with the internal restructuring of some positions, but rather with the restructuring of the business with another organisation or entity. It is also submitted that, in this case, the employer did not wish to terminate Mr Whittaker's employment, rather it wished that his employment would continue, albeit in a different role, and hence the clause does not apply.

It is convenient to deal first with the proposition that Mr Whittaker's employment was terminated as a result of redundancy.

The defendant contends that an essential feature of redundancy is that the particular position occupied by the employee ceases to exist for reasons such as economic downturn or restructuring. It is said that the focus is on the position not the person, and that in this case the plaintiff's position, as VP and GM, did not cease to exist. Ms Carter took the plaintiff's VP and GM role and Mr Whittaker was offered the mega deal role. In these circumstances, it is said that there was no redundancy. A number of authorities are relied on in support of this proposition.

In R v Industrial Commission of South Australia; Ex parte Adelaide Milk Cooperative Ltd, Bray CJ defined redundancy in these terms: [22]

... the concept of redundancy in the context we are discussing seems to be simply this, that a job becomes redundant when the employer no longer desires to have it performed by anyone.

As the defendant observes, this description of redundancy was referred to with apparent approval by the Full Bench of the Australian Industrial Relations Commission in the Termination Change and Redundancy Case (the TCR case)[23] and by Beach J in Lindeman v Bentley.[24] But these cases do not assist the defendant; they are not concerned with the definition of redundancy at common law. The TCR case was about the creation of a standard redundancy provision for inclusion in federal awards. In Lindeman v Bentley, Beach J was construing a Victorian Public Sector Agreement titled 'Redeployment and Retraining in the Victorian Public Service'. Clause 3 of that agreement defined redundancy in terms of positions, not persons.

The same observation may be made of the judgments in Foster's Group Limited v Wing.[25] In that matter, the Victorian Court of Appeal was concerned with the application of Foster's redundancy policy which defined redundancy in these terms:

A redundancy arises when an employee's role no longer exists or the duties of the role have changed that for all practical purposes the original role no longer exists.

I am not persuaded that the concept of redundancy at common law is as narrow as the defendant contends. It is not simply concerned with the abolition of a position, but may arise upon the redistribution of job functions. As Beazley J observed in Quality Bakers of Australia Ltd v Goulding:[26]

A redundancy will arise where an employer has labour in excess of the requirements of the business; where the employer no longer wishes to have a particular job performed; or where the employer wishes to amalgamate jobs. It is not necessary for the work to have disappeared altogether. As was said in Bunnett's case:

'Organisational restructuring may result in a position being abolished and the functions or some of them being given to another or split amongst others'. (citations omitted)

Hence a redundancy may arise where the duties performed by an employee are redistributed among other employees. The employer still requires the duties to be performed, but the reorganisation gives rise to a redundancy. The plaintiff says that that is what happened here:

Mr Whittaker's former position, that is the bundle of duties that comprised his position were redistributed among the two persons (Mr Whittaker and Ms Carter).

I accept that the duties that made up Mr Whittaker's former GM and VP role were redistributed between Ms Carter and Mr Whittaker. But I do not accept that Mr Whittaker was made redundant as a result. As Ryan J observed in Jones v Department of Energy and Minerals:

... it is within the employer's prerogative to rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly created positions. ... One illustration of it occurs when the duties of a single, full time, employee are redistributed to several part time employees. What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the reorganisation, any duties left to discharge. [Emphasis added]

In Jones, some of the tasks previously assigned to the applicant still had to be carried out, but as a consequence of the employer's rearrangement of its operational structure, these tasks were combined with other functions and performed by the holder of a newly created position. Mr Jones was rendered redundant when he could not be redeployed and was found to be surplus to the respondent's personal needs.

The situation in the present case is quite different. Unysis rearranged its operational structure by splitting the functions of Mr Whittaker's former GM and VP role between Mr Whittaker and Ms Carter. But, importantly, after the reorganisation Mr Whittaker still had duties to perform. Contrary to the plaintiff's submission, I am not persuaded that the mega deal position did not exist - the weight of the evidence supports the existence of such a role. A position description in respect of the proposed role was drawn up and forwarded to Mr Whittaker and the position is referred to in the organisational chart on p 6 of Exhibit R7. Further, in his letter to Mr Barkla of 10 April 2008, Mr Whittaker describes the proposed position as 'essentially a sales role' which he saw as a severe downgrading of his previous role. But Mr Whittaker does not say that the proposed role was a sham or did not exist. While the mega deal position has not yet been filled, that is explicable on the basis that a person with the requisite skills has not yet been identified.

In such circumstances, and consistent with what Ryan J said in Jones, Mr Whittaker was not redundant.

[538]

C. NON-COMPETITION

As separate and distinct agreements and undertakings -

The Executive [Hodgson] shall not for a period of 36 months after execution hereof either on his own account or as a partner, officer, agent or employee of any other person, firm or corporation be engaged in Australia or New Zealand in the business of designing, developing, manufacturing, distributing, marketing or selling any fibre packaging or other like products or any component of these products (hereinafter collectively referred to as the Products).

The Executive shall not for a period of 36 months after execution hereof supply or offer to supply any person, firm or corporation within Australia or New Zealand any advice, service or product in any way connected with the design, development, manufacture, distribution, marketing or sale of any of the Products or with the supply of any services sold or supplied by the Companies.

The Executive shall not for a period of 36 months after execution hereof either on his own account or as a partner, officer, agent or employee of any other person, firm or corporation, solicit or interfere with or endeavour to entice away from the Companies any person, firm or corporation who at any time during his employment with the Company was a customer of or otherwise in the habit of purchasing from the Companies any of the products or services designed, manufactured, supplied, distributed, marketed or sold by the Companies.

The Executive shall not for a period of 36 months after execution hereof either on his own account or as a partner, officer agent or employee of any other person, firm or corporation, solicit or interfere with or endeavour to entice away from the Companies any person, firm or corporation who at any time during his employment with the Company was a supplier of or otherwise in the habit of providing goods or services to the Companies that were used in connection with the design, manufacture, supply distribution, marketing or sale of any products or services by the Companies.

The Executive shall not for a period of 36 months after execution hereof solicit any employee of the Companies to terminate his or her employment with the Companies or otherwise knowingly interfere with the Companies' relations with any of their employees.

The Executive acknowledges that each of the prohibitions and restrictions contained in Part C of this Deed:

[1336]

(A) Each of ACB (Australia) Pty Limited (ACN 104 489 670) ('the holding company') Achilla Pty Limited (ACN 104 489 581) ("the trading company") and LeoRose Pty Limited (ACN 104 857 247) ("the shareholding company") is a company registered under the Corporations Act.

(B) Holihan ("the director") is the sole director of each of the holding company, the trading company and the shareholding company

(C) The holding company owns all of the shares in the trading company.

(D) The shareholding company owns eighty per cent (80%) of the shares in the holding company.

(E) Holihan Investments Pty Limited (ACN 104 851 247) ("Holihan's company") owns twenty (20%) per cent of the shares in the holding company and LeoRose Pty Limited (ACN 104 857 247) (the shareholding company) holds the remaining eight[y] (80%) of the shares (the trust shares) as trustee.

(F) Holihan's company holds all of the shares in the shareholding company as trustee for Astra Corporation Pty Limited (ACN 104 784 438) (Barnes' company)

(G) Barnes is the sole director and shareholder of Barnes' company.

(H) All shares in Barnes company are held by another company, in which there are ten (10) shares issues, of which Barnes holds two (2) share beneficially and the other eight (8) (the trust shares) on trust.

(I) Holihan is not aware of the identity of the beneficial owners of the trust shares.

(J) The holding company proposes to acquire the goodwill, plant and equipment of the corrugated packaging supply business known as Australian Corrugated Box Co at 159 to 163 Newton Road Wetherill Park ("the business") and to cause the trading company to conduct that business.

(K) The trading company proposes to change its name to Australian Corrugated Box Co Pty Limited.

(L) The trading company will conduct the substantial portion of its business with the Amcor Group of Companies.

(M) This agreement will govern the affairs of each of the trading company, the holding company and the shareholding company (the companies).

[1996]

This Term Sheet is intended to set out the agreement in principle between Carter Holt Harvey Limited ("CHH") and Australasian Manufacturing Consulting Group Pty Ltd ("AMC") regarding a consulting arrangement (the scope of which being more fully described below).

It is intended that this Term Sheet will form the basis f a more formal consultancy agreement ("Consultancy Agreement") (governed by Victorian law) between the parties. The first draft of any Consultancy Agreement shall be prepared by CHH. Both parties acknowledge that this document is a confidential Term Sheet, not a binding contract.

KEY TERMS

Term of Engagement: The consultancy arrangement shall commence one month from the date the principals for AMC terminate employment with their current employer and shall continue for a period of six months (or such other period as mutually agreed by the parties).

Scope of Engagement: AMC shall (on a non-exclusive basis) provide CHH with assistance in respect of certain performance improvement initiatives for its packaging business ("Services"). CHH and AMC shall form time to time to agree a Project Plan in respect of each initiative identified by CHH. That Project Plan shall include a description of the deliverable for that project; a project scope and time-line; and specify any performance targets/KPIs to be met by AMC (and any associated performance related payments).

AMC represents and warrants that it can lawfully carry out the Services for CHH in accordance with the arrangements set out in this Term Sheet (and has obtained legal advice to that effect). Furthermore, and without limitation to the foregoing, in carrying out the Services, AMC shall ensure that its employees, agents, officers and sub-contractors comply at all times with any legal restrictions which may be applicable to them in respect of the provision of the Services.

Consulting Fee: In consideration for the provision of the Services CHH shall pay AMC a consulting fee of $AUD162,000 (ex GST) per calendar month. The fee shall be paid monthly in advance and shall be remitted on the 15th of each month. If for any reason AMC is unable to provide the Services, CHH's payment obligations shall be suspended on a pro-rata basis during that period. It is the parties' expectation that the consulting fee shall be reviewed at 3 monthly intervals.

The first month's consulting fee shall include an additional payment of up to $AUD50,000 (ex GST) to partially reimburse AMC in respect of certain set-up costs. Furthermore, CHH shall on a quarterly basis pay AMC a performance bonus in accordance with the terms of any applicable Project Plan agreed by the parties.

Disbursements: CHH shall meet all of the reasonable disbursements of AMC related to carrying out the Services. Such disbursements to include: travel, accommodation; the provision of a vehicle (whether a hire car or long-term lease arrangement). Individual disbursements in excess of $AUD5,000 must be approved by CHH before they are incurred.

[2006]

PROJECT FLIPPER 29 October 2004

Four executives of Amcor Fibre Packaging (Trevor Barnes, Ian Sangster, Albert Mihelic and Roger Bayley) tendered resignation that became effective on 28 October '04 with the publicised intention of forming a manufacturing consultancy together. This is that preferred approach of their major client to carry out what has been named Project Flipper.

The four executives formed Australasian Manufacturing Consulting Group Pty. Ltd on October 29 ...

AMCG has begun invoicing the major client for the equivalent of previous salary and superannuation packages as remuneration ...

As a result of the directors' activity namely leaving their existing employer, and the potential significant damage they could cause that business, it is possible that the old employer may wish to negotiate a satisfactory outcome for both themselves and AMCG's client. ...

The major client desire that AMCG build a factory in Queensland targeting strategic markets for its products. Simultaneously, the client intends ceding management control of its existing Australasian operations to AMCG to ensure tight integration of the new facility. The major client wants to find a way to then buy out AMCG so as to reward the directors for a successful completion of the project. Depending on degree of success, the value of AMCG through a buyout could range from $15-20 million or more. At the time of buyout, each director of AMCG will be given the choice as to his employment situation. At this point in time, JH and RB have indicated they wish to retire. IS, AM and TB have indicated they will accept the equivalent positions guaranteed by the client within its organisation.

Management Contract Key points

JH; AM; IS; RB (The management Team) will form a management company. This will be a PTY LTD company and 10000 shares will be issued.

The management team will also consult to other companies.

The management team will be paid retainers up until business case approval.

CHH will underwrite the retainers.

CHH will underwrite superannuation benefits for each member such that each member will be no worse off by leaving Amcor's 1970 defined benefit scheme wether the management team are part of the management company or employed by CHH.

...

The management team JH; TB; IS; AM; RB will be paid according to the schedule contained in Appendix 2.

JH and RB may leave after three years. If this occurs then they will be paid pro rata as per schedule in appendix 2.

[Underlined for emphasis]

At a glance

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Judgment (2619 paragraphs)

Legislation Cited (48)

Cases Cited (65)