In the matter of AMCI Investments Pty Limited

Jurisdiction: Equity - Corporations List

Before: Black J

Decision: Declarations that Mr Jamie Frankcombe’s employment with, and directorship of, AMCI Investments Pty Ltd was not validly terminated and that he remains managing director of that company.

Catchwords: CORPORATIONS — directors and officers — appointment, removal and retirement of directors — where employment of managing director of a company purportedly terminated by executive chairman of another company — where executive chairman of that other company alleged to have authority to terminate employment and require resignation as director — where any such authority was terminated when another director ceased to acquiesce in any such arrangement — where no authority to terminate employment or require resignation as a director

Legislation Cited: - Corporations Act 2001 (Cth), s 140

Cases Cited: - Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd [1992] 2 VR 279
- Equiticorp Finance Limited (in liq) v Bank of New Zealand (1993) 32 NSWLR 50
- Hawcroft v Jamieson [2017] NSWSC 1478
- Hely-Hutchinson v Brayhead Ltd. [1968] 1 QB 549
- Junker v Hepburn [2010] NSWSC 88
- Kraus v JG Lloyd Pty Ltd [1965] VR 232
- Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd (2005) 220 ALR 211; [2005] FCAFC 131
- Woonda Nominees Pty Ltd v Chng (2000) 34 ACSR 558; [2000] WASC 173

Category: Principal judgment

Parties: Fritz R Kundrun (First Plaintiff / First Cross-Defendant)
2010 FRK CRT Investments Ltd (Second Plaintiff / Second Cross-Defendant)
AMCI Investments Pty Ltd (First Defendant)
Hans Juergen Mende (Second Defendant / First Cross-Claimant)
Jamie Frankcombe (Third Defendant)
Jose Spilimbergo Delamanha (Fourth Defendant / Second Cross-Claimant)
Stuart Terry (Fifth Defendant)

Representation: Counsel:
M Izzo SC / T Boyle (Plaintiffs / First and Second Cross-Defendants)
C Ward SC / S Constable (Second and Fourth Defendants / First and Second Cross-Claimants)
C McMeniman (Third Defendant)
Solicitors:
Corrs Chambers Westgarth (Plaintiffs / First and Second Cross-Defendants)
Hamilton Locke (Second and Fourth Defendants / First and Second Cross-Claimants)
Deutsch Miller (Third Defendant)

File Number(s): 2025/316713

JUDGMENT

Nature of the application

1. By Originating Process dated 18 August 2025, the Plaintiffs, Mr Kundrun and 2010 FRK CRT Investments Ltd (“2010 FRK CRT”) seek declarations concerning, broadly, the validity of the purported termination on 6 August 2025, by the Second Defendant, Mr Hans Mende, of the employment of the Third Defendant, Mr Jamie Frankcombe, with the First Defendant, AMCI Investments Pty Ltd (“AIPL”). By an Interlocutory Process filed on 21 August 2025, Mr Mende and the Fourth Defendant, Mr Delamanha, seek declaratory relief which is, broadly, to the converse sought by the Plaintiffs. I will address that matter below.

Background facts and affidavit evidence

2. The background facts and the matters in issue emerge from Points of Claim (“POC”) filed 22 August 2025 and Points of Defence (“POD”) filed 25 August 2025 by the parties. It is common ground Mr Kundrun or his controlled companies are a shareholder in AIPL and he is a director of AIPL (POC [1]; POD [1]). The Second Plaintiff, 2010 FRK CRT Investments, is a company controlled by Mr Kundrun and is a shareholder in AIPL (POC [2]; POD [2]). Mr Mende, or his controlled companies, are also a shareholder in AIPL and he is also a director of AIPL(POC [3]; POD [3]). Mr Frankcombe is, or was, a director of AIPL and was appointed its managing director on 28 April 2025, although the purported termination of his employment and its consequences are in issue in the proceedings (POC [5]; POD [5]). Mr Frankcombe appeared, but did not take a substantive role at the hearing, where allegations as to the basis of the termination of his employment were not pursued. Mr Delamanha and the Fifth Defendant, Mr Terry, are also directors of AIPL (POC [6]–[7]; POD [6]–[7]), AIPL and Mr Terry did not take an active role in the proceedings.

3. It is common ground that Mr Kundrun and Mr Mende and their respective companies hold equal interests in AMCI Group LLC (“AMCIG”) which is a company incorporated under the laws of Delaware and has global investments in natural resources, transportation, infrastructure, metals and energy. Mr Kundrun and Mr Mendes and their respective companies also hold equal interests in AIPL but, importantly, AMCIG does not itself have any interest in AIPL.

4. The AMCI Group LLC Amended and Restated Limited Liability Company Agreement dated 31 January 2020 (“AMCIG Agreement”) (Ex P1, CB 129) sets out the history of AMCIG and records, in article 1, that, “[a]s a general rule, governance is a company-level responsibility, and in particular is the responsibility of the company’s board of directors.” That article records that the board of directors, acting as a body, will manage the company and, unless the member of any particular “Series” agree otherwise, each Series. Article 1 of the AMCIG Agreement also recorded that the board may delegate any or all of its authority to act with respect to any matter to officers of AMCIG; AMCIG will have an “Executive Chairman” and, subject to the board’s authority:

“The Executive Chairman will have the unqualified and complete authority and responsibility over the day to day operations of the business of the company and each series. Unless later rescinded by the board, the Executive Chairman is, by virtue of this agreement, delegated the full powers and authority of the board with respect to the company and each company-managed series.”

That article also records that the initial Executive Chairman is Mr Mende, and he remains in that role. That article also identifies certain “Board reserved matters”. It is not necessary to explore the scope of that clause further here where AIPL is not a “Series” company and is not within the scope of that agreement.

5. The concept of “Series” is in turn defined in article 2 of the AMCIG Agreement, which records that the company was established as a limited liability company with “Series” under s18-215(b) of the Delaware Law. The parties did not seek to explore the content of that provision, nor was it necessary to do so, since, as I noted above, AIPL is not a Series company and the AMCIG Agreement had no application to it. A Series Creation and Member Joinder Agreement (Ex P1, CB 245) in turn records the creation of several Phase III Series and a list of the relevant Series is attached. Again, little turns upon that, beyond the fact that AIPL is not a Series company.

6. AIPL’s constitution (Ex P1, CB 99) provides, in cl 14.3, for the appointment of a director to fill a casual vacancy. Mr Ward, with whom Ms Constable appears for Messrs Mende and Delamanha, relies on that clause that a casual vacancy created by Mr Frankcombe’s resignation as a director of AIPL could be filled by AIPL’s board. That proposition is likely correct but does not advance the question whether Mr Mende had authority to terminate the employment of Mr Frankcombe, without a decision being made by AIPL’s board to do so, or whether Mr Frankcombe was required to resign as a director of AIPL in the relevant circumstances. Clause 14.4 of AIPL’s constitution in turn provides that the company may, by ordinary resolution, remove any director and may, by ordinary resolution, appoint another person in their stead. Mr Frankcombe was not removed as a director of AIPL by that mechanism. Clause 14.7 of AIPL’s constitution provides that a director’s office is vacated, relevantly, upon his or her resigning office by notice in writing to the company or being lawfully removed from office. Clause 16.1 provides for the conduct of directors’ meetings in conventional terms. Clause 16.11 provides that the directors may appoint a managing director and there is no controversy as to the fact that Mr Frankcombe was here appointed as managing director of AIPL.

7. It is common ground (POC [11]; POD [11]) that the effect of s 140 of the Corporations Act 2001 (Cth) (“Act”) is that AIPL’s constitution has effect as a contract between AIPL and each of its members, between AIPL and each director and company secretary, and between a member and each other member, under which each person agrees to observe and perform the constitution as applicable to that person.

8. It is common ground that, on or around 20 August 2024, AIPL entered into an Employee Service Agreement with Mr Frankcombe (“Employment Agreement”) (POC [8]; POD [8]). That Employment Agreement provides that Mr Frankcombe is employed in the Position (as defined) until it is terminated in accordance with cl 9. The term “Position” is defined by reference to Schedule 1, as Head of Australian Coal Operations commencing 1 October 2024. Schedule 2 in turn specifies the scope of Mr Frankcombe’s duties in that role which I accept largely relate to operations of Series companies. Clause 3.1 sets out Mr Frankcombe’s duties, include performing tasks that are assigned to him by the AMCI Managing Director (defined as the Managing Director of AMCIG) or their delegate or by Mr Mende, and reporting to the AMCI Managing Director or their delegate and Mr Mende. Clause 3.2 requires Mr Frankcombe to accept employment as a director or officer of any Group Member nominated by the AMCI Managing Director, and the term “Group Member” is defined as any company in the “Group” which is in turn defined as AIPL and all Related Corporations including specified companies. Clause 3.2(c) requires Mr Frankcombe immediately to do all things necessary to resign his office as a director of a Group Member if his employment is terminated for any reason or the AMCI Managing Director requests his resignation from that office in writing. For the reasons noted below, Mr Frankcombe’s employment has here not been validly terminated and the AMCI Managing Director has not requested his resignation as a director of AIPL although Mr Mende has done so. Clause 9.1 provides for termination of Mr Frankcombe’s employment by the Employer (defined to mean AIPL) with notice or without notice in specified circumstances.

9. By letter dated 13 March 2025 (Ex P1, CB 289), the solicitors acting for Mr Kudrun and 2010 FRK CRT had referred to a request or direction that a former employee and director of AIPL resign and had drawn the attention of AIPL’s directors, including Mr Mende, to the terms of AIPL’s constitution in that regard.

10. By letter dated 28 March 2025 (Ex P1, CB 308), Mr Terry, an alternate director of AMCI for Mr Kudrun, pointed to a historical practice of making corporate decisions at AMCI by circular resolution and suggested that a more orthodox process for directors’ meetings should be undertaken in the future and referred, in particular, to the need for board review in respect of the resignation of a former managing director of AIPL, if relevant documents were executed by AIPL.

11. By letter dated 2 April 2025 (Ex P1, CB 316), the solicitors acting for Mr Kundrun and 2010 FRK CRT protested steps taken by Mr Mende and Mr Delamanha at recent joint venture meetings on the basis that they did not have authority to bind AIPL and observed that:

“… [AMCIG] does not own or control [AIPL]. [AIPL] is a separate legal entity that is to be managed by its board of directors. Absent a specific delegation of authority by the board of [AIPL], no officer of [AIPL] has any authority to bind [AIPL] … Each of [AIPL] and its various subsidiaries must be operated in a manner that is consistent with the duties of its respective directors and Constitution.

It follows that Mr Mende does not have unilateral power to control [AIPL] or any of its subsidiaries and joint venture projects. Mr Mende must therefore immediately case acting as if he is entitled to make autonomous business decisions for [AIPL] without the express consent of the board of [AIPL] or the relevant subsidiary.”

12. That letter also requested confirmation from Mr Mende and AIPL that the equal ownership between Mr Kundrun and Mr Mende would be recognised and that there would be consultation on business operations concerning AIPL between Mr Mende and Mr Kundrun, either directly or by Mr Mende coordinating with Mr Kundrun’s alternate director, Mr Terry. Putting aside the position in respect of any Series company, as to which Mr Mende may have powers under the AMCIG Agreement, that letter correctly identified the position under Australian law. There can be no doubt that, from that time, Mr Kundrun and 2010 FRK CRT had required compliance with AIPL’s Constitution in respect of its management, and there was no longer any acquiescence by them as to any previous practice of Mr Mende making decisions without reference to the board of AIPL.

13. By a further letter dated 2 April 2025 (Ex P1, CB 318) expressed concern as to the circumstance that a previous director and employee of AIPL had ceased in his role.

14. By notice of meeting dated 10 April 2025 (Ex P1, CB 321), Mr Mende called a meeting of AIPL’s directors to confirm the appointment of Mr Frankcombe as a director of AIPL and certain other companies.

15. By a meeting of directors held on 15 April 2025 (Ex D1, CB 1059), the directors of AIPL agreed that Mr Frankcombe would be appointed as a director of AIPL by circular resolution. That appointment was notified to the Australian Securities and Investments Commission on or about that date (Ex P1, CB 393).

16. By email dated 21 April 2025 (Ex P1, CB 322), Mr Kundrun advised the then directors of AIPL, including Mr Mende, that:

“individual directors should not purport to take any action on behalf of this Company outside those matters specifically delegated to them by the Board, as you will have seen this is one of the matters that I think that the Board should consider and decide on so we all clearly understand to whom authority has been delegated and the limits of that delegation”.

17. He also there pressed for Mr Frankcombe’s employment to be considered by AIPL’s board, and observed that

“As I have made clear on several occasions, I have no objection to [Mr Frankcombe] joining the Board, my concern is only that it should be done at a meeting where we all understand [Mr Frankcombe’s] credentials and can properly welcome him to the board.”

18. By a notice of meeting dated 22 April 2025 (Ex P1, CB 326), Mr Kundrun gave notice of a meeting of directors to consider, inter alia, the ratification of Mr Frankcombe’s appointment in place of a former director of AIPL. Mr Kundrun also gave notice of a resolution to the effect that Mr Mende:

“must cooperate and consult on all of [AIPL’s] and its affiliates and subsidiaries business operations with [Mr Kundrun] moving forward including by [Mr Mende] liaising with [Mr Kundrun’s] alternate director [Mr Terry].”

19. By a meeting of directors of AIPL held on 22 April 2025 (Ex D1, CB 1060), the directors of AIPL ratified the appointment of Mr Frankcombe as a director of AIPL and did not pass a resolution that no material action be authorised to be taken by any director of AIPL or subsidiary companies without a vote by the board of AIPL. The failure to pass the latter resolution did not confer any authority upon Mr Mende which did not otherwise exist. By a further meeting of directors held on 28 April 2025 (Ex D1, CB 1063), the directors of AIPL resolved that Mr Frankcombe be appointed as managing director of AIPL.

20. On 15 May 2025, Mr Kundrun wrote to the then directors of AIPL including Mr Mende and stated, inter alia, that he was concerned that AIPL “and the group more generally is being run in a way that is, by accident or design, unfair to me as a director and a 50% shareholder”; asked why, if earlier appointments to joint venture management committees had happened in March 2025, he was only learning about them in May 2025; stated that “I am deeply concerned, as a director, that neither I nor the Board was given an opportunity to even know about Mr Delamanha’s appointment, let alone discuss or agree to it”; and also stated that:

“I was assured by Mr Mende that [AIPL] and the [AIPL] group is operated in a way that is “open and transparent”. These words and the Board’s conduct do not align. This must change.”

21. By email dated 20 June 2025 (Ex P1, CB 349), Mr Kundrun again pointed to the distinction between AIPL and the wider AMCIG and pointed out, again, that:

“No one director has the right to make unilateral decisions about matters like the frequency of our meetings, that is why each director has the right to call a directors’ meeting.”

Mr Kudrun and 2010 FRK CRT again there made clear that they had ceased to acquiesce in any earlier practice by which Mr Mende made decisions for AIPL without board approval.

22. By letter dated 6 August 2025 (Ex P1, CB 380), on the letterhead of AMCIG and signed by Mr Mende as Executive Chairman of AMCIG, Mr Mende purported to terminate Mr Frankcombe’s employment by AIPL as Head of Australian Coal Operations. Mr Mende made clear the basis on which he sought that step as follows:

“I am the “Executive Chairman” and under Article 1 and Exhibit D of the [AMCIG Agreement] with complete authority and responsibility over day to day operations of the business of the company and its Series including hiring, firing and setting the compensation of all members of senior management of each of [AMCIG’s] subsidiaries and other affiliated entities under common control with [AMCG] Series B.

On behalf of [AIPL] and pursuant to my authority as Executive Chairman of [AMCIG], I have decided to terminate your employment with [AIPL] as Head of Australian coal operations, effective immediately.”

As I have noted above, the AMCIG Agreement conferred no such authority upon Mr Mende, where AIPL was not a Series company. That letter also requested, under cl 3.2(c) of the Employment Agreement, that Mr Frankcombe resign as a director of AIPL. I address the position as to that request below.

23. Turning now to the evidence, the Plaintiffs did not read any affidavit evidence but tendered documentary evidence to which I have referred above

24. Mr Mende and Mr Delamanha read several affidavits, significant parts of which were not admissible and were not admitted. Mr Mende and Mr Delamanha read the affidavit dated 27 August 2025 of Mr Delamanha, who is the Chief Executive Officer of AMCI Group and a director of AIPL. Mr Delamanha refers to Mr Mende’s role in the decision to appoint Mr Frankcombe as Head of Australian Coal Operations and to Mr Frankcombe’s execution of the Employment Agreement. I accept that Mr Mende played a significant role in the decision to appoint Mr Frankcombe to that role, and may well have been the ultimate decisionmaker; but it does not follow from that fact that he has the authority to terminate Mr Frankcombe’s employment, particularly after the Plaintiffs sought to require the conduct of AIPL’s governance in an orthodox way and in accordance with its Constitution. Mr Delamanha also points out that the coal mining assets and coal mining companies, for which Mr Frankcombe would have management responsibility, are “Series” companies managed by the AMCIG. That does not assist the Defendants, as Mr Frankcombe was an employee of AIPL and not an employee of those companies and AIPL was not a “Series” company.

25. Mr Mende and Mr Delamanha also read the affidavit dated 27 August 2025 of Ms Fiona Murdoch, who was previously, from March 2011 until November 2021, the General Manager – Commercial for AIPL and is now a representative appointed by another company within the AMCIG to joint venture management committees and a consultant to that other company. She refers to her responsibilities in her former role with AIPL and to her regular communications with Mr Mende and her limited contact with Mr Kundrun concerning AIPL. She refers to several significant projects where Mr Mende made decisions, or his approval was the basis for significant decisions, including in respect of several coal projects. That evidence also did not assist Mr Mende and Mr Delamanha since, in each of those cases, the party to the relevant contract was a Series company and not AIPL. I accept that Mr Mende has authority to make decisions within Series companies, but that does not assist in establishing his authority to make such decisions within AIPL. Other aspects of Ms Murdoch’s evidence establish that, possibly unsurprisingly, executives within the AMCIG consulted with Mr Mende in respect of significant decisions, but that also does not advance Mr Mende’s and Mr Delamanha’s position where a practice of consultation with Mr Mende does not confer the authority on him to make decisions for AIPL other than as authorised by its Constitution or with the acquiescence of other directors.

26. By her affidavit dated 26 August 2025, Ms Ornella Bolz, who is the Vice President of AMCIG, referred to the formation of the AMCIG and the history and formation of AIPL and referred to aspects of the AMCIG’s coal business in Australia. Ms Bolz’s evidence established, uncontroversially, that Mr Mende played a significant role within the AMCIG but did not advance the question of his authority within AIPL.

The termination of Mr Frankcombe’s employment

27. First, the Plaintiffs seek a declaration that Mr Mende’s purported termination of Mr Frankcombe’s employment was not authorised under AIPL’s Constitution and is of no effect. They contend (POC [15]–[17]) that Mr Mende did not have authority to terminate Mr Frankcombe’s employment, on the basis that AIPL is separate from, and not owned by, AMCIG; there had been no delegation of power by AIPL to Mr Mende, at least in respect of the termination of employment contracts; Mr Mende is not an employee or executive of AIPL and did not have authority to bind AIPL unilaterally or any authority conferred by AIPL’s board to unilaterally bind AIPL. The Plaintiffs also contend (POC [18]) that Mr Mende had no power to require a director of AIPL to resign; AIPL has itself not terminated Mr Frankcombe’s employment or sought his removal from office; and any conferral of power on Mr Mende to remove Mr Frankcombe as a director of AIPL would be inconsistent with the power to remove a director created by cl 14.4 of AIPL’s constitution.

28. The Plaintiffs have established this contention on the straightforward basis that Mr Frankcombe’s employment under the Employment Agreement can only be terminated by “the Employer”, namely AIPL. Clause 15.1 of AIPL’s Constitution confers on AIPL’s directors (and not a single director such as Mr Mende) the power to manage the business of AIPL and AIPL’s directors did not resolve to terminate the Employment Agreement. That position is consistent with the general law position. That is sufficient basis to find that Mr Mende’s purported termination of Mr Frankcombe’s employment was without authority and invalid, subject to the matters raised by Messrs Mende and Delamanha which I do not accept for the reasons noted below.

29. Messrs Mende and Delamanha identified several overlapping bases for Mr Mende’s claim to have authority on terminate Mr Francombe’s employment without the need for any decision by AIPL by its board. Messrs Mende and Delamanha respond that Mr Mende had power to terminate Mr Frankcombe’s employment “acting for [AIPL] and/or as Executive Chairman of the AMCIG and/or as the Managing Director of the AMCI Group” (POD [9 (d)(ii)]). In an overlapping claim, Messrs Mende and Delamanha contend (POD [12(b)]) that:

“[Mr Mende] terminated the Employment Agreement on or around 8 August 2025 on behalf of [AIPL] and/or as Executive Chairman of the AMCI Group, and/or as the Managing Director of AMCI Group LLC and/or as the person who authorised that [AIPL] enter into the Employment Agreement.”

30. The first aspect of the contention in (POD [12(b)]) is that Mr Mende terminated the Employment Agreement on behalf of AIPL. This first contention overlaps with further contentions that, at least prior to March 2025, it was understood and accepted by the Plaintiffs that significant commercial decisions for AIPL were being made by or with approval of Mr Mende. Messrs Mende and Delamanha also contend (POD [16(f)]) that Mr Mende had regularly, over a long period, controlled the operations of AIPL and caused it (directly or indirectly) to enter into and to terminate contracts.

31. Both Mr Ward and Mr Izzo (with whom Mr Boyle appears for the Plaintiffs) draw attention to the applicable case law. Mr Ward refers to the basis on which implied authority was established in Hely-Hutchinson v Brayhead Ltd. [1968] 1 QB 549 at 584, where Lord Denning MR observed that:

“… It is plain that Mr Richards had no express authority to enter into these two contracts on behalf of the company: nor had he any such authority implied from the nature of his office. He had been duly appointed chairman of the company but that office in itself did not carry with it authority to enter into these contracts without the sanction of the board. But I think he had authority implied from the conduct of the parties and the circumstances of the case … The judge finds that Mr Richards acted as de facto managing director of Brayhead. He was the chief executive who made the final decision on any matter concerning finance. He often committed Brayhead to contracts without the knowledge of the board and reported the matter afterwards.”

32. I recognise that, as Mr Ward also points out, in Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd [1992] 2 VR 279 a director was found (at 361) to be “more than an ordinary director” and to have had actual authority to manage the business of that company, by reference to the steps which he had taken in doing so. Mr Ward also points out that, in Equiticorp Finance Limited (in liq) v Bank of New Zealand (1993) 32 NSWLR 50 at 132–134 (“Equiticorp”), Clarke and Cripps JJA observed that:

“Actual authority arises where a principal grants, and an agent accepts, authority for the agent to perform specific tasks on behalf of the principal… Notwithstanding the absence of an express agreement, the parties, that is, the principal and agent, may conduct themselves in such a way that it is proper to infer that the relevant authority has been conferred on the agent…

[The scope of agency] is to be ascertained by applying the ordinary principles of construction of contracts but also by reference to any proper implication from the course of business between the parties has been conferred on the agent…Accordingly, where the question is whether the agent has express or implied authority to act in a particular way the court directs its attention to the conduct of the parties in order to decide whether the inference of authority should be drawn…

Whether authority is to be implied and, if so, the scope of the authority implied is, in our view, to be found in a close analysis of the evidence before the court which is relied upon to support the implication of actual authority…”

Mr Izzo in turn points to their Honours’ observation that, in a case of alleged implied actual authority, it was relevant whether there had been previous attempts to interfere in the actions of the relevant repository of the alleged authority.

33. In Woonda Nominees Pty Ltd v Chng (2000) 34 ACSR 558; [2000] WASC 173 at [41], Owen J similarly noted that, once a director’s entitlement to act as chairman was put squarely in issue, no question of acquiescence could arise. Mr Ward also draws attention to Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd (2005) 220 ALR 211; [2005] FCAFC 131 at [124], where the Full Federal Court followed the approach in Equiticorp and observed that:

“Actual authority requires the consent of both the principal and the agent but the manifestation of consent may be express or implied. Regardless of the terms of the agreement between the parties, if the facts fairly disclose that one party is acting for another with that person’s authority then agency is established. The scope of the agency is to be ascertained by applying the ordinary principles of construction of contracts but also by reference to any proper implication from the course of business between the parties.”

34. In Junker v Hepburn [2010] NSWSC 88 at [43], Hammerschlag J (as his Honour then was) in turn observed that:

“[a]n implied grant of actual authority can result from acquiescence in the course of behaviour by persons who have actual authority to delegate. For example, if directors as a board stand by whilst a single director enters into transactions outside his or her authority, the board’s acquiescence in that course of dealing can constitute the grant, by implication, of actual authority to enter into those transactions.” His Honour also observed (at [48]) that:“[a]n ordinary individual director of a company does not have ostensible authority to bind it. Directors can act only collectively as a board and the function of an individual director is to participate in decisions of the board. In the absence of some representation made by the company, a director has no ostensible authority to bind it: Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; (1990) 170 CLR 146 at 205.”

35. Mr Ward submits that:

“The exercise of authority by Mr Mende over many years in relation to the operations of [AIPL] forms a course of dealing accepted at the relevant time by all involved with the control of [AIPL].”

36. Mr Ward also submits that:

“Mr Mende has long exercised the actual authority to bind [AIPL] with the knowledge and acceptance of the other shareholder and directors.”

37. Mr Ward further submits that:

“Since incorporation, or at the very least at the relevant dates (being the date on which the Employment Agreement was executed (24 August 2024) and the date of termination (8 August 2025)), the AMCI board has, by virtue of its ongoing acquiescence to Mr Mende’s decision-making and running of the AMCI business, delegated its powers to M Mende to manage the day-to-day affairs of AMCI Investments.

Mr Mende also at the time of entry into the Employment Agreement, and at the time of the Termination letter, had the authority to bind the AMCI Group in relation to its coal operations that are the sole subject of this Employment Agreement.”

38. Mr Izzo responds that:

“…not only is the evidence of what is alleged to be a 20 year practice slight but, importantly, it is irrelevant in light of more recent conduct of [AIPL] shortly before the purported termination was effected. Whatever the historical position may have been as to acquiescence in Mr Mende exercising some unilateral power in relation to the affair of [AIPL], that acquiescence was withdrawn before the termination occurred.”

39. Here, there was no admissible evidence of Mr Mende directly exercising authority, either generally or in respect of the termination of contracts or employment contracts, in respect of AIPL as distinct from other companies that were Series companies where he had such authority under the AMCIG Agreement, although management of AIPL likely sought Mr Mende’s approval for the steps which they took. Here, even if Mr Mende had previously regularly exercised control of AIPL (as distinct from the Series companies), that does not assist the Defendants where the Plaintiffs had, prior to the purported termination of Mr Frankcombe’s employment, required that decisions within AIPL be made in accordance with its Constitution. Any implied authority was withdrawn by the letters dated 2 April 2025, 21 April 2025, 15 May 2025 And 20 June 2025 to which I referred above. Mr Ward submits that Mr Kudrun and 2010 FRK CRT could not depart from any earlier practice by which Mr Mende made decisions for AIPL without board approval without a majority decision of AIPL’s board of directors. I reject that submission. It is a necessary consequence of a director’s and shareholder’s rights under s 140 of the Act that that director, or shareholder, can insist on compliance with the company’s constitution, even if a majority of a company’s board would be content to acquiesce in non-compliance.

40. The second aspect of the contention in POD [12(b)]) is that Mr Mende terminated the Employment Agreement as Executive Chairman of AMCIG. Mr Ward here relies on the AMCIG Agreement and submits that that Agreement:

“a. confers on the Executive Chairman of [AMCIG] (Mr Mende), subject to the authority of the board, the ‘unqualified and complete authority and responsibility of the day-to-day operations of the business of the company and each series;’

b. delegates the full powers and authority of the [AMCIG] board with respect to [AMCIG] and its managed series;

c. has the authority to create any other officer position (including a chief executive officer, chief financial officer, chief operating officer, or any other offices), appoint an individual to serve in that office, and delegate to that officer any of the Executive Chairman’s authority and responsibility;

d. expresses ‘the broad delegation of authority to the Executive Chairman”;

e. reserves six matters that require board approval, which do not include hiring and firing; and

f. Mr Mende’s Employment Agreement for the role of Executive Chairman at Annex D to the [AMCIG] Agreement expresses [AMCIG’s] desire to continue to employ Mr Mende in the same role, and if requested by [AMCIG] to assume the highest management officer position of each of [AMCIG’s] subsidiaries and other affiliated entities under common control with [AMCIG].”

41. Mr Izzo responds and I accept that:

“… Mr Mende is Executive Chairman of [AMCIG] under Article 1 of the [AMCIG Agreement]. However, Mr Mende’s authority under the terms of that agreement is confined to the affairs of [AMCIG] and each “series”: see Article 1, “Officers”. [AIPL] is not a series under the [AMCIG Agreement.]”

42. The third aspect of the contention in POD [12(b)]) is that Mr Mende terminated the Employment Agreement as the Managing Director of AMCIG. I do not accept this contention where Mr Mende was not the Managing Director of AMCIG although he appointed other persons to that position in his capacity as Executive Chairman of AMCIG. By an Action by Written Consent dated 25 January 2021 (Ex P2, CB 517.003), AMCIG resolved that it may have one or more managing directors, and the then appointed managing directors were Messrs Beem, Patel and Murphy. An officer’s certificate in respect of AMCI Holdings LLC dated 9 July 2025 (Ex P1, CB 1056) subsequently records that Mr Mende, as Executive Chairman of AMCIG, appointed four other persons as managing directors of AMCIG.

43. It is therefore not necessary to address Mr Izzo’s further submission that:

“Insofar as Mr Mende has asserted that he has authority to terminate Mr Frankcombe’s employment by reason of being the “Managing Director of the AMCI Group” this does not assist his contentions for two reasons: first, someone occupying that position is not empowered under the Employment Agreement to terminate Mr Frankcombe’s employment because cl. 9 does not permit such an officeholder to terminate his employment (and cf both cll. 3.2 (which permits such an officeholder to do things under the agreement) and 14.1(b) (which contemplates that for the purposes of certain provisions, but significantly not cl. 9, the term “Employer” can have an extended meaning) …”

44. The fourth aspect of the contention in POD [12(b)] is that Mr Mende is the person who authorised AIPL to enter into the Employment Agreement. Mr Ward submits that Mr Mende:

“… is given express authority in relation to the particular issue of Mr Frankcombe’s employment by the execution (by Mr Beem, on behalf of [AIPL]) of the Employment Agreement that confirmed his particular authority in relation to Mr Frankcombe’s employment issues, including performance.”

45. In an overlapping contention, Mr Mende and Mr Delamanha further contend (POD [16(a)–(b)] that Mr Mende approved the execution of the Employment Agreement by Mr Beem, a director of AIPL on its behalf and AIPL’s board acquiesced Mr Mende’s conduct in respect of the execution of the Employment Agreement. The evidence establishes that Mr Beem, who executed the Employment Agreement, likely sought Mr Mende’s approval for that course and that Employment Agreement was subsequently ratified by AIPL’s board as I noted above.

46. It seems to me that these matters do not assist Messrs Mende and Delamanha. The fact that executives, or here Mr Beem, sought Mr Mende’s approval generally for the Employment Agreement does not confer any relevant legal authority upon Mr Mende, beyond the scope of his powers as a director of AIPL; AIPL’s board retrospectively ratified Mr Frankcombe’s appointment so as to confirm its efficacy; and AIPL’s board has not ratified the termination of that employment.

47. Next, Messrs Mende and Delamanha contend that Mr Mende had the power to terminate Mr Frankcombe’s employment because Mr Frankcombe was to perform duties “otherwise assigned to [him] by the AMCI Managing Director (or their delegate), or by [Mr Mende]” (POD [9](d)(iii) and (e)(i)(C)) or because Mr Frankcombe was to report to “the AMCI Managing Director (or their delegate), and [Mr Mende]” with respect to his responsibilities and performance of his duties (POD [9](d)(iii) and (e)(iii)) or because Mr Frankcombe was to comply with reasonable and lawful directions given by “the AMCI Managing Director (or their delegate)” (POD [9](d)(iii) and (e)(iv)). In an overlapping claim, they also contend (POD [16(c)–[e]) that Mr Frankcombe was to report to, inter alia, Mr Mende in carrying out his duties and his position as Head of Australian Coal Operations related exclusively to duties and responsibilities with respect to Series companies managed by AMCIG.

48. Mr Ward submits that:

“the Employment Agreement itself makes clear that, consistently with Mr Mende’s overall responsibilities for the operations of the Group and its assets, including those managed by AMCI Investments, Mr Mende was to have authority over Mr Frankcombe’s employment, notwithstanding that Mr Frankcombe was formally employed by [AIPL].

That position was achieved with the authority of the AMCI Group, which owned the coal assets, and with the authority [of] [AIPL], at the time of entry into the Employment Agreement, with the Agreement being executed by Mr Beem on behalf of AMCI Investments following Mr Mende’s approval.”

49. Mr Ward also submits that:

“Mr Mende has the express authority to terminate Mr Frankcombe’s Employment Agreement by virtue of the terms of that agreement, including that:

a. Mr Frankcombe is to report to Mr Mende;

b. Mr Mende is to direct Mr Frankcombe’s duties; and

c. the role of Head of Coal Operations relates exclusively to AMCI Group entities, over which Mr Mende has complete authority for the day-to-day operations (save for limited expressly reserved matters).”

50. I do not accept this contention. In my view, the fact that Mr Frankcombe was to report to, inter alia, Mr Mende, does not confer upon Mr Mende any authority to terminate his employment. Where Mr Frankcombe was employed by AIPL, which was not a Series company, then Mr Mende also obtained no further authority from the fact that his duties extended largely or wholly to matters relating to Series companies.

51. Messrs Mende and Delamanha also contend (POD [15]) that Mr Kundrun and entities he controls and Mr Mende and entities he controls reach hold 50% of the shares in AIPL and that the “Series” companies managed by AMCIG are also owned 50% by Mr Kundrun or entities controlled by him and 50% by entities controlled by Mr Mende. The position is correct but does not assist them where AIPL is not a Series company and the powers conferred on Mr Mende in respect of Series companies do not extend to it. They also contend that AIPL is an affiliated or associated entity of AMCIG, by reason of Mr Mende exercising his powers as Executive Chairman of AMCIG in relation to the business of the AMCIG. That proposition may be true, but it begs the question whether Mr Mende has any authority in respect of the termination of employment of a senior executive of AIPL.

52. The Plaintiffs also point (POC [18]) to the constitutional provisions for removal of a director of AIPL, to which I have referred above; Messrs Mende and Delamanha respond (POD [18]) that those constitutional provisions are not exhaustive. That proposition also does not assist them, where no basis on which Mr Mende could exercise such a power has been established.

53. I am satisfied that the Plaintiffs have standing to seek the first declaration and the Court has power to make it. In Kraus v JG Lloyd Pty Ltd [1965] VR 232, Hudson J similarly held that an injunction could be granted, so as to protect a shareholder’s individual membership rights, where a person acting as a director was not validly in office. I do not understand the observations of Gleeson J in Hawcroft v Jamieson [2017] NSWSC 1478 at [152], which identified additional bases on which such relief may be sought, to be inconsistent with the Court’s power to grant declaratory relief on that basis. The dispute is such that it can properly be quelled by the grant of declaratory relief. For the reasons set out above, the termination of Mr Frankcombe’s employment by Mr Mende took place without authority and is invalid and the first declaration sought by the Plaintiffs should be made.

Whether Mr Francombe was obliged to resign as director of AIPL

54. Second, the Plaintiffs seek a declaration that Mr Frankcombe remains managing director of AIPL under cl 16.11 of its constitution.

55. Under cl 14.7(d) of AIPL’s Constitution, a director can vacate office by resigning by notice in writing to AIPL. Mr Francombe has not done so. Clause 3.2(c)(ii) of the Employment Agreement in turn provides that Mr Frankcombe “must immediately do all things necessary to resign … [his] office as a director of [AMCI Investments] … if … the AMCI Managing Director requests … [it] in writing”. I have held above that Mr Mende is not the (or a) Managing Director of AMCIG and he did not have power to require that Mr Frankcombe resign from his office as a director of AIPL.

56. Mr Frankcombe continues to hold office as Managing Director of AIPL where he would only cease to hold that office if he in fact resigned as a director of AIPLP, which he was not obliged to do and has not done. The second declaration sought by the Plaintiffs should also be made on that basis.

The relief sought by the Defendants

57. As I noted above, by their Interlocutory Process filed on 21 August 2025, Messrs Mende and Delamanha seek a declaration that Mr Frankcombe’s employment was validly terminated on 8 August 2025 that, on or by that date, he was required to resign as a director of AMCI and any other “group member” as defined in cl 1 of an Employment Agreement and a declaration that any role or position that he held as managing director of AIPL ceased on or about 8 August 2025. It is not necessary to determine whether Messrs Mende or Delamanha have standing to seek those declarations, where they would not be made consequential on the findings that I have reached above.

Orders

58. For these reasons, I make the following declarations:

1 Declare that Mr Hans Mende’s purported termination (on 6 August 2025) of the employment with, and directorship of, AMCI Investments Pty Ltd of Mr Jamie Frankcombe was not authorised pursuant to the Constitution of AMCI Investments Pty Limited and is of no effect.

2 Declare that Mr Jamie Frankcombe remains the Managing Director of AMCI Investments Pty Limited pursuant to clause 16.11 of the Constitution of AMCI Investments Pty Limited.

59. I note that Mr Francombe has sought the opportunity to make further submissions as to costs. I direct the parties to bring in agreed short minutes of order as to costs within seven days or, if there is no agreement, their respective draft orders and short submissions as to costs, and any reply submissions as to costs within 14 days.

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