Mende v Kundrun

Medium Neutral Citation: Mende v Kundrun [2026] NSWCA 1

Hearing dates: 15 December 2025

Decision date: 04 February 2026

Before: Leeming JA at [1];
Mitchelmore JA at [66];
Stern JA at [67]

Decision: 1. Order that AMCI Investments Pty Ltd and Mr Jamie Frankcombe be joined as the third and fourth respondents to this appeal.
2. Dispense with the requirements under the rules (including as to filing of notices of appearance and submissions) applicable to the third and fourth respondents.
3. Appeal dismissed.
4. The appellants to pay the costs of the first and second respondents.

Catchwords: CORPORATIONS — directors and officers — appointment, removal and retirement of directors — employment of director purportedly terminated by executive chairman of another company — whether executive chairman had actual express or implied authority
APPEALS — parties — obligation to join all persons directly affected by orders sought — appellants co-owned company and sought orders that employment contract between company and director validly terminated but joined neither to the appeal — joinder ordered

Legislation Cited: Corporations Act 2001 (Cth) ss 140, 198E, 201A
Supreme Court Act 1970 (NSW) s 101
Uniform Civil Procedure Rules 2005 (NSW) r 51.4

Cases Cited: Coshott v Prentice (2014) 221 FCR 450; [2014] FCAFC 88
Equiticorp Finance Ltd (in liq) v Bank of New Zealand (1993) 32 NSWLR 50
Hawksford v Hawksford [2005] NSWSC 463; 191 FLR 173
Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549
In the matter of AMCI Investments Pty Ltd [2025] NSWSC 1019
John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19
Lewis v Condon; Condon v Lewis (2014) 85 NSWLR 99; [2013] NSWCA 204
Murdoch v Mudgee Dolomite & Lime Pty Ltd (in liq) [2022] NSWCA 12; 398 ALR 658
National Westminster Bank plc v Jones [2001] 1 BCLC 98
Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146; [1990] HCA 32
Pavlovic v Universal Music Australia Pty Ltd (2015) 90 NSWLR 605; [2015] NSWCA 313
Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146; [1964] HCA 61
Rialto Sports Pty Ltd v Cancer Care Associates Pty Ltd [2022] NSWCA 146
The Law Debenture Trust Corporation plc v Ukraine [2024] AC 411; [2023] UKSC 11
Zhang v Commissioner of the Australian Federal Police (2021) 273 CLR 216; [2021] HCA 16

Texts Cited: A Gonzales and J Griffith, “Challenges of Multi-State Series and Framework for Judicial Analysis” 42(3) Journal of Corporation Law 101 at 102-104 (2017)
J Leahy, “Series LLCs: Statutory Ambiguities, Potential Litigation, and Proposed Clarifications” 27 U of Pennsylvania Journal of Business Law 443 (2025)

Category: Principal judgment

Parties: Hans Juergen Mende (First appellant)
Jose Spilimbergo Delamanha (Second appellant)
Fritz R Kundrun (First respondent)
2010 FRK CRT Investments Ltd (Second respondent)
AMCI Investments Pty Ltd (Third respondent)
Jamie Frankcombe (Fourth respondent)

Representation: Counsel:
C Ward SC, S Constable (Appellants)
J Giles SC, T Boyle, S Odgers (First and Second Respondents)
Third and Fourth respondents submitting
Solicitors:
Hamilton Locke (Appellant)
Corrs Chambers Westgarth (Respondent)

File Number(s): 2025/384510

Publication restriction: Nil

JUDGMENT

1. LEEMING JA: The active litigants both at first instance and in this Court were Mr Hans Juergen Mende and Mr Fritz Kundrun, who are equal co-owners of AMCI Investments Pty Ltd (AIPL). The ultimate issue in this litigation is whether Mr Jamie Frankcombe’s employment, as Head of Australian Coal Operations, with AIPL was terminated by letter dated 6 August 2025 by Mr Mende, purportedly acting on behalf of AIPL and pursuant to his authority as Executive Chairman of AMCI Group LLC, a Delaware company also co-owned by Messrs Mende and Kundrun. The primary judge held that the letter did not terminate Mr Frankcombe’s employment, and issued declarations to that effect: In the matter of AMCI Investments Pty Ltd [2025] NSWSC 1019.

2. Mr Mende purported to appeal as of right. He advanced three principal submissions, namely, that the primary judge erred in finding that (a) Mr Mende lacked express actual authority to terminate Mr Frankcombe’s employment, (b) Mr Mende lacked implied actual authority to terminate his employment and (c) in any event such authority was withdrawn by correspondence from Mr Kundrun. No case based on ostensible authority was advanced. I did not understand it to be disputed that, in order to succeed in his contention that he could, personally by his own unilateral act, bring Mr Frankcombe’s employment with AIPL to an end, Mr Mende needed to establish either (a) or (b) as well as (c) of those submissions. In any event, that must be the position as a matter of logic, for only if Mr Mende had authority from AIPL on 6 August 2025 could he cause AIPL to exercise its contractual power of termination, and it was not suggested that the contract of employment was terminated in some other way.

3. According to Mr Mende, his appeal was principally about the application of the law to undisputed facts, although there was a challenge to some of the findings made by the primary judge which he was content to “tread rather lightly over” in oral submissions. As will be seen below, the respondents took a different approach, and took the Court to each and every document upon which Mr Mende had relied in his written submissions.

4. The appeal spawned additional procedural issues.

5. First, AIPL and Mr Frankcombe were parties to the litigation at first instance, with neither playing an active part. But Mr Mende did not join them to the appeal, although he asked this Court to make orders declaring the contractual relations between them to have been validly terminated. Rule 51.4(1)(a) of the Uniform Civil Procedure Rules 2005 (NSW) conforms to the ordinary position at general law (see for example John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 at [131]) in requiring every person who is directly affected by the relief sought to be joined. The Court put in place directions whereby they would be served and could if they wished be heard after the hearing. On 19 December 2025, in accordance with those directions, the solicitor for the appellants advised that AIPL and Mr Frankcombe had been served and did not oppose being joined to the appeal and would submit to the Court’s decision. I propose that AIPL and Mr Frankcombe be joined to the appeal, and that each be relieved from all other requirements under the rules (including filing notices of appearance).

The structure of AIPL and the AMCI Group

AIPL and its officers

5. AIPL is an Australian company whose shareholding is equally divided by Mr Mende (whose shares are held by him personally) and Mr Kundrun (whose shares are held either personally or by the second respondent, 2010 FRK CRT Investments Ltd, a company controlled by him). Formerly, AIPL was a subsidiary of AMCI International AG, a Swiss company.

6. For many years, Messrs Kundrun and Mende have been directors of AIPL. Their addresses are given, in the company’s ASIC search, as Florida in the United States and Zuoz in Switzerland respectively. Mr Frankcombe was appointed as a director in April 2025. Mr Jose Spilimbergo Delamanha, whose address is stated to be in Singapore, was appointed a director in May 2025, and he has at all times been a party to the proceedings, at first instance and on appeal, represented by the same firm and counsel as Mr Mende.

7. Australian proprietary companies must have at least one director resident in Australia: Corporations Act 2001 (Cth), s 201A(1). According to the ASIC search, Mr Frankcombe was appointed a director on 15 April 2025, and Mr Stuart Terry was appointed a director on 13 May 2025. Previously, from 20 March 2025, Mr Terry had been an alternate director. Mr Terry had filed a submitting appearance before the primary judge.

8. Mr Frankcombe was employed by Employee Service Agreement dated 20 August 2024 between AIPL and himself. At that time, AIPL’s board comprised four directors: Mr Kundrun, Mr Mende, Mr Brian Douglas Beem Jr (a resident of Nashville, Tennessee) and Mr Patrick Joseph Christopher Murphy, an Australian resident. The agreement was executed by Mr Brian Beem, who was described as the authorised representative of AIPL.

9. Mr Murphy ceased holding office as a director on 27 March 2025 and Mr Beem ceased holding office as a director on 30 May 2025.

10. The Agreement authorised both employee and employer to terminate without cause on six weeks notice and also conferred a right of termination by the Employer without notice in certain circumstances. This latter power was purportedly exercised by Mr Mende on 6 August 2025, giving rise to this litigation.

11. Mr Frankcombe was appointed “Head of Australian Coal Operations”. Although AIPL owns, indirectly, interests in various Australian iron ore projects, the appeal proceeded on the basis that it owned no Australian coal assets. Instead, various interests in Australian coal mines are owned, not by AIPL, but by subsidiaries of a different company co-owned by Messrs Mende and Kundrun, AMCI Group LLC.

12. AMCI Group LLC is a “series limited liability company” incorporated in Delaware, which owns various “series”, which were referred to in argument as subsidiaries. The overview in A Gonzales and J Griffith, “Challenges of Multi-State Series and Framework for Judicial Analysis” 42(3) Journal of Corporation Law 101 at 102-104 (2017) and the more detailed commentary by J Leahy, “Series LLCs: Statutory Ambiguities, Potential Litigation, and Proposed Clarifications” 27 443 (2025) suggest that describing the series as “subsidiaries” may be a little loose. The latter noted at 448 that “a series within an LLC is deliberately designed as an indeterminate entity, sometimes functioning as a separate legal person and sometimes not”. However, nothing turns on this question of foreign law for present purposes. It was accepted that some of the series own interests in coal mines in Australia. There was evidence that prior to around 2020, AIPL ceased to be a subsidiary of AMCI International AG, which seems formerly to have been the company which owned assets throughout the world, and that this was done for “commercial issues in terms of change of control under the shareholder agreements of [two iron ore joint ventures] and tax related issues”.

AMCI Group LLC and its officers

15. It is important to distinguish the company which is named “AMCI Group LLC” from the group of companies comprising AMCI Group LLC and its subsidiaries, and to distinguish both from AIPL, despite the similarity of their names. That is why I have adopted the same terminology as the primary judge and referred to the latter as AIPL.

16. AIPL is not a subsidiary of AMCI Group LLC. However, both AIPL and AMCI Group LLC are owned directly or indirectly by Mr Mende and Mr Kundrun in equal shares.

17. Mr Mende is and has at all relevant times been the Executive Chairman of AMCI Group LLC. Article 1 of the Amended and Restated Limited Liability Company Agreement for that company dated 31 January 2020 provides that “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”. The same article provides that some matters are reserved for the board, but those matters do not include terminating the employment of any officer or employee. Indeed, Article 1 provided that the Executive Chairman may “create any other officer [sic, scil office or] position (including a chief executive officer, chief financial officer, chief operating [officers], 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”.

18. An Employment Agreement between AMCI Group LLC and Mr Mende dated 30 August 2014 recited that AMCI Group LLC and its series desired to continue to employ Mr Mende as Executive Chairman, and if requested “to assume the highest management officer position of each of its subsidiaries and other affiliated entities under common control with the Company”. The document defined “Group” to extend to such “other affiliated entities under common control with the Company” and conferred on Mr Mende “authority and responsibility for all operations of the Group”. Prima facie AIPL would appear to be an “affiliated entity under common control with AMCI Group LLC” within the meaning of Mr Mende’s employment agreement.

Correspondence preceding the purported termination of employment

19. At around the same time that Messrs Frankcombe and Terry joined AIPL’s board, there was correspondence from Mr Kundrun and (to a lesser extent) Mr Terry concerning the way decisions were being taken by the company. Both sides relied on the correspondence: Mr Mende in effect as admissions that Mr Mende had express or implied authority, and Mr Kundrun in support of the reasons of the primary judge that such authority as Mr Mende had was withdrawn.

20. The most important correspondence was as follows. By letter dated 2 April 2025, the solicitors acting for Mr Kundrun and 2010 FRK CRT complained about certain steps taken by Mr Mende and Mr Delamanha because they did not have authority to bind AIPL, stating that:

[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 cease 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.

21. By email dated 21 April 2025, Mr Kundrun advised the board 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.

22. On 15 May 2025, Mr Kundrun wrote to the board complaining that “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”. He added 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.

…

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.

23. On 20 June 2025, Mr Kundrun distinguished AIPL and AMCI Group LLC, and said that “No one director has the right to make unilateral decisions about matters like the frequency of our meetings …”.

The purported termination of Mr Frankcombe’s employment

24. Notwithstanding the correspondence in the preceding four months, Mr Mende acted unilaterally in purporting to terminate Mr Frankcombe’s employment. By letter dated 6 August 2025 on the letterhead of AMCI Group LLC, Mr Mende purported to terminate Mr Frankcombe’s employment, saying:

I am the “Executive Chairman” and under Article I 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 [AMCIG] 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.”

25. The letter also required Mr Frankcombe to take steps to resign as a director of AIPL and its subsidiaries, in accordance with a provision in his employment agreement.

Procedural background

26. The proceedings at first instance were commenced by summons filed on 18 August 2025 and heard on a final basis on 2 September 2025. Evidently, the parties adhered to a highly expedited timetable, which is understandable in light of the uncertainty of board composition of a company whose equal shareholders were evenly divided.

27. The primary judge reserved and delivered reasons for judgment and made orders only three days later, on 5 September 2025. The declarations concerned Mr Frankcombe’s positions both as employee and director, but the latter is consequent upon the former, and the parties sensibly proceeded in this Court on the basis that what mattered was Mr Mende’s purported authority to cause AIPL to terminate Mr Frankcombe’s employment.

28. The primary judge held that Mr Mende (a) lacked express authority to terminate Mr Frankcombe’s employment with AIPL, (b) lacked implied authority, and in any event (c) held that any authority that had been conferred upon him was withdrawn by the correspondence summarised above. The most convenient course will be to elaborate his Honour’s reasons when addressing the submissions advanced in support of the grounds of appeal.

Did Mr Mende have express authority to terminate Mr Frankcombe’s employment?

29. As recently encapsulated by Lords Reed, Lloyd-Jones and Kitchin in The Law Debenture Trust Corporation plc v Ukraine [2024] AC 411; [2023] UKSC 11 at [38]:

The authority of an agent may be actual or apparent. Actual authority describes a legal relationship between principal and agent created by a consensual agreement to which they alone are parties, and pursuant to which the principal grants to the agent the right to enter into legal relations with third parties on the principal’s behalf. To this agreement a third party contractor is a stranger: he may be totally ignorant of the existence of any authority on the part of the agent; but if the agent does enter into a contract pursuant to his actual authority, it creates contractual rights and liabilities as between the principal and the contractor: Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480, 502 per Diplock LJ.

30. Actual authority may be express or implied. The starting point is the general rule that, absent express conferral of authority, a director has no implied authority to act unilaterally and instead directors “can act only collectively as a board and the function of an individual director is to participate in decisions of the board”: Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 at 205; [1990] HCA 32. A director of an Australian proprietary company who is its sole director and shareholder is given a broad conferral of authority by s 198E of the Corporations Act 2001 (Cth) but that is not the present case. Many companies have power to delegate authority to a director (especially, a managing director), as indeed did AIPL, but this was not relied upon. A managing director will be impliedly authorised to do all such things as fall within the usual scope of that office (Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549 at 583, and see Hawksford v Hawksford [2005] NSWSC 463; 191 FLR 173 at [68]), but Mr Mende was not AIPL’s managing director.

31. Instead, Mr Mende pointed to his position as Executive Chairman of another company, AMCI Group LLC. The first issue in this appeal is whether the Company Agreement of AMCI Group LLC, and in particular, Article 1, conferred power on Mr Mende to terminate Mr Frankcombe’s employment by AIPL. Dr Ward SC, who appeared at first instance and in this Court for Mr Mende, emphasised that Mr Frankcombe’s title accurately reflected his involvement in managing Australian coal assets, all of which were owned by series companies whose activities were within the width of the authority conferred by Article 1. He also referred to the conferral of “unqualified and complete authority over the day-to-day operations of the business of the company” in the Article upon Mr Mende as Executive Chairman. The submission was elaborated thus:

[W]e draw from that the emphasis upon the day to day operations of the business of the company and each series and we say that that extends to the operations of AMCI Investments Pty Ltd in relation to the Australia coal business.

AMCI Investments does not, in fact, do anything in relation to coal in Australia. This is the point, and I will make it good from the contracts, but this is where it leads. So AMCI Investments in Australia does not do anything in relation to coal. It owns no coal assets. It operates no coal assets. They are all owned and operated by the series companies and fall squarely within that definition, yet Mr Frankcombe was employed solely to work in the Australian coal business.

So his employment contract, although formally with AMCI Investments Pty Ltd, had nothing whatsoever to do with any business held or owned or otherwise involved in AMCI Investments. His employment relationship with AMCI Investments was solely for the operations of the business of the series companies in Australian coal business.

32. The primary judge rejected this submission, noting that it was necessary to find some conferral of authority by AIPL. That authority could not be found in the articles of the AMCI Group LLC Company, in circumstances where AIPL was not a series company, or a subsidiary of the Delaware company, as the primary judge observed at [41] and reiterated at [50] and [51] when responding to slightly different ways in which Mr Mende’s submission was advanced.

33. Contrary to Mr Mende’s submission, the fact that subsidiaries of the Delaware company own interests in the Australian coal assets which were managed by Mr Frankcombe did not entitle Mr Mende to bring to an end the contractual relations between AIPL and Mr Frankcombe. Instead, it is necessary to identify some separate basis whereby authority is conferred on Mr Mende by AIPL.

34. It is not to the point that AMCI Group LLC has conferred a very large authority upon Mr Mende, nor that that authority extends to the day-to-day operations of assets including coal mines in Australia, which related to the work done by Mr Frankcombe. The question is straightforward. It is whether the contractual relations between AIPL and Mr Frankcombe can be brought to an end not by AIPL itself, acting by board resolution or members’ resolution, but by Mr Mende’s unilateral act. Mr Mende’s case was one of actual authority, either express or implied. If that case is to be made out, it requires a conferral of authority from AIPL upon Mr Mende, such that Mr Mende by his own act can alter the contractual relations of AIPL. The invocation by Mr Mende of the breadth of authority conferred upon him by another company, AMCI Group LLC, does not affect the answer to that question.

35. I have been relatively verbose in dealing with this basic point because Mr Mende maintained that the concision of the primary judge’s reasons bespoke error. It was said:

by dealing with that proposition obviously so briefly his Honour hasn’t engaged with the propositions that I’ve put to the primary judge, and again this morning derived from Article 1 of the group agreement, and the breadth of the definition of the day to day operations of the business of the Company and each series, and the matters that I opened with.

36. I do not accept that this is a valid criticism. Concision where concision is possible is valuable and indeed preferable, as Gleeson JA observed with the agreement of Bell CJ and Macfarlan JA in Rialto Sports Pty Ltd v Cancer Care Associates Pty Ltd [2022] NSWCA 146 at [63]. Some submissions may and should be rejected concisely because they are misconceived in law, and in such cases perfectly adequate reasons will be given by stating the misconception. The proposition that the breadth of authority conferred upon Mr Mende by the Delaware company can produce the result that there is an express conferral of authority upon him to bind AIPL is an example. It was not suggested that the separate corporate structures of AIPL and AMCI Group LLC were a sham and in truth there was a single partnership between the two men, or that AIPL was in fact a subsidiary of AMCI Group LLC, or that Mr Frankcombe was in fact employed by AMCI Group LLC despite the terms of his written contract, or that the board of AIPL had no separate function. No such submissions were made, nor could they have been made in the absence of such a case having been put and indeed pleaded at first instance, and then the allegation would have been subject to a heightened standard of proof, for there is a “strong and natural presumption against holding a provision or a document a sham”: National Westminster Bank plc v Jones [2001] 1 BCLC 98 at [59] (Neuberger J); see also Lewis v Condon; Condon v Lewis (2014) 85 NSWLR 99; [2013] NSWCA 204 at [62]-[63] and Coshott v Prentice (2014) 221 FCR 450; [2014] FCAFC 88 at [64]. Once it is accepted that the starting point is that AIPL and AMCI Group LLC are two separate companies, the width of authority conferred by one upon Mr Mende has no bearing on the authority conferred on him by the other.

37. For completeness, I would add (as Mr Giles SC who appeared in this Court but not at first instance for Mr Kundrun observed) that it is not the case, contrary to Dr Ward’s submission, that AIPL “does not do anything in relation to coal in Australia”. That is because AIPL has formally contracted with “AMCI Group LLC, Series 23”, pursuant to a written contract said to be effective from 1 October 2024, to provide services to that company, and in particular to deploy Mr Frankcombe to manage “the Fitzroy coal operations and business”. The contract was executed by AIPL by its then Managing Director, Mr Murphy. The result of that contract is that AIPL by its officer Mr Frankcombe was providing services to manage the Australian coal assets which were ultimately owned by AMCI Group LLC.

Did Mr Mende have implied authority to terminate Mr Frankcombe’s employment?

38. The second and most substantial aspect of the appeal was the challenge to the rejection by the primary judge of Mr Mende’s submission that he had implied authority to terminate Mr Frankcombe’s employment.

39. The dispositive reasoning of the primary judge on this point (and also the third point concerning withdrawal of authority) is at [35]-[39], which are best reproduced in full:

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. A deal of evidence had been served concerning (I infer) Mr Mende’s involving himself in the affairs of AIPL, but it was rejected as inadmissible, and no appeal was sought to be brought from those rulings. Nonetheless, it was said that what remained was sufficient.

41. The submissions advanced in writing and orally in support of this ground were expressed at a level of generality. That reflected the evidence, which was directed in general terms to Mr Mende’s involvement in decision-making. But it is one thing for a person to be a key decision-maker in the company, and another thing entirely for that person to be able, by his own unilateral act, to bind the company contractually.

42. It was not disputed that whether authority is to be implied and, if so, its scope, will turn upon “a close analysis of the evidence before the court which is relied upon to support the implication of actual authority”, as it was put in Equiticorp Finance Ltd *(*in liq) v Bank of New Zealand (1993) 32 NSWLR 50 at 134.

43. The starting point for a case based on implied authority to exercise on AIPL’s behalf its power of termination would be other instances of Mr Mende unilaterally binding the company. At one stage, it was in fact put that Mr Mende had by his own signature bound AIPL:

LEEMING JA: You’re saying Mr Mende, by his own signature, caused AIPL to bind itself…

WARD: We do.

LEEMING JA: …to some of these projects.

WARD: To these very significant projects.

44. Mr Giles said this was not so, and after taking the Court to every document referenced in the appellants’ written submissions, established that none of them went so far. In reply, Dr Ward very properly acknowledged that that was not his clients’ case.

LEEMING JA: I don’t want there to be any factual dispute about it. Is it the case that there is no document you point to with your client’s name signed on it to bind the company.

WARD: Yes, your Honour …

45. Next, it will be seen that Mr Mende was not personally involved in executing the contract of employment; as noted above, it was signed by Mr Beem on behalf of AIPL. Nor did Mr Mende unilaterally cause Mr Frankcombe to be appointed a director of AIPL: this was done by a formal board resolution. It is of course not conclusive on the issue of implied actual authority that Mr Mende did not exercise the authority he claimed to have from AIPL in order to bind AIPL to the contract of employment, or to appoint him as a director. However, it might be thought that if Mr Mende had power unilaterally to bring the employment relation between AIPL and Mr Frankcombe to an end, thereby obliging Mr Frankcombe to resign as a director, it would have been natural for his appointments to those positions to have been brought about in the same way.

46. Instead, Mr Mende’s submission was there had been a “consistent practice of [Mr Mende] acting for and on behalf of [AIPL] over several years”, and “lots of evidence of Mr Mende being in a position such that the company would not take decisions without Mr Mende’s approval”. It is perfectly easy to appreciate that a corporate decision might not be made without the approval of a director and 50% shareholder; there must be many proprietary companies in Australia where that is the case. As was pointed out in argument, the issue is not whether Mr Mende was a shadow director of AIPL. The question is whether he had implied actual authority, which is to say, whether he by his own act could cause AIPL to be bound. The fact that a company might only proceed to bind itself after taking steps to ensure that Mr Mende was content with that course is quite different from whether Mr Mende had impliedly been given actual authority to bind the company.

47. No doubt counsel’s submissions were framed as they were because of the quality of the evidence available to him. In fact the evidence relied upon is mostly focussed upon the significance of Mr Mende as a decision-maker, as opposed to whether he could bind the company. Thus Mr Mende relied upon evidence that “all senior employees of the AMCI business and management of AMCI operational assets sought the approval of Mr Mende before taking significant positions and would not act on those decisions without Mr Mende’s approval”. That does not speak directly to whether Mr Mende could bind AIPL. Nor does the evidence that all senior employees reported to Mr Mende.

48. The high point of Mr Mende’s case based on evidence of corporate practice was said to be evidence of two instances of “Significant Commercial Decision Making” where it was said that “Hans Mende made or his approval was the basis for significant commercial decisions”. They were said to be the “Onslow Project” and the “South Galilee Coal Project”. AIPL was not a party to the latter, and thus the evidence bearing on it says nothing about any implied conferral of actual authority. The Onslow Project is a little different. It appears that “Non-Binding Heads of Agreement” were entered into dated 22 December 2021, to which AIPL was not a party. However, a “Binding Project Development Term Sheet” dated 26 August 2022 was subsequently entered into, and AIPL was a party to that. It was said that the contract was entered into by Mr Mende or at his “direction or approval”. There are a number of difficulties with this evidence. For one thing, precisely what Mr Mende had done was not explained in the evidence. For another, counsel for Mr Mende was unable to identify what right or obligation AIPL assumed by being made a party. For a third, the written contract contained an “entire agreement” clause (cl 23) which superseded any earlier representations and understandings, and the written document which constituted the parties’ agreement was executed not by Mr Mende, but instead by Mr Murphy as director and witnessed by AIPL’s secretary. The document accordingly does not support the inference that Mr Mende had implied actual authority; the company became bound because of the act of a director other than Mr Mende and the company secretary.

in relation to the existence of the implied authority, we, in fact, rely upon the content of the various communications made by Mr Kundrun during 2025, seeking to limit Mr Mende’s authority as evidence supporting the existence of the authority, that is, his Honour has treated all of those correspondences as being Mr Kundrun’s clearly expressed view that, Mr Mende’s authority is, hereby terminated and, at least, he wanted more board transparency. That may or may not be the case, but one thing is certain, Mr Kundrun understood that Mr Mende was in the practice of exercising authority in relation to AIPL …

55. I do not agree. Once again, the critical distinction is between informal decision making within AIPL and causing AIPL to be bound pursuant to authority conferred by AIPL upon Mr Mende. Mr Kundrun’s complaints are about the former. An example is the complaint made by Mr Kundrun that Mr Mende had caused Mr Murphy to resign without that fact being made known Mr Kundrun. If indeed Mr Mende had unilaterally purported to terminate Mr Murphy’s contract of employment with AIPL in the same way as he did on 6 August 2025 in relation to Mr Frankcombe, that would have been relatively powerful evidence supportive of his case on implied actual authority. But that was not what occurred. Instead, Mr Murphy resigned, bringing the contract of employment to an end by his own act. It may be that Mr Mende placed pressure upon Mr Murphy to take that course, and it may be that if Mr Murphy formed the view that a director and 50% owner wanted him gone, he had effectively no choice. Assuming favourably to Mr Mende that all of that is so, that does not without more establish any actual authority upon Mr Mende to bind the company.

56. The result is that no error has been shown in the statement by the primary judge at [39] that “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”. This ground is not made out.

Was any authority withdrawn?

57. This issue does not arise, because no error has been established in the conclusions by the primary judge that Mr Mende lacked express or implied actual authority. Nonetheless, I shall address, albeit briefly, the parties’ submissions.

58. Both sides advanced relatively extreme positions. On behalf of Mr Mende, it was said that any withdrawal of authority was a matter for AIPL’s board alone, as opposed to the wishes of a director and shareholder such as Mr Kundrun. The submission was that in the absence of a board resolution (no doubt a members resolution would also suffice) the express or implied authority conferred by AIPL upon Mr Mende could not be withdrawn.

59. On behalf of Mr Kundrun, it was said that the primary judge was right to state that any director or member could enforce the corporate constitution, which took effect as a statutory contract between them and the company pursuant to s 140 of the Corporations Act. The submission was in fact more nuanced, including reference to the difficulties that incoming directors or members would face if they could not rely on the statutory contract.

60. It is not necessary fully to summarise the parties’ submissions on this point which cannot affect the outcome of the appeal.

61. I am sceptical of the correctness of both sides’ submissions. On the one hand, it seems decidedly odd that the implied authority conferred by a course of conduct in one year could never be withdrawn in any subsequent year by anything short of a formal corporate act. On the other hand, it also seems odd that, say, a statement by a member (including a member with a miniscule shareholding) insisting upon punctilious compliance with the constitution would then and there revoke actual authority which had previously been conferred, expressly or impliedly, on an officer. As noted in a very different context in Zhang v Commissioner of the Australian Federal Police (2021) 273 CLR 216; [2021] HCA 16 at [26]-[27], courts should be wary of parties adopting extreme positions to suit their forensic goals.

62. I am disinclined to accept either side’s submissions. Instead, I favour the view that the approach taken on both sides, in strictly delineating questions of implied actual authority from whether such authority has been withdrawn, may be incorrect. There is only one issue in this litigation. That issue is whether Mr Mende had actual authority to bind AIPL when he wrote purportedly exercising a power of termination vested in AIPL on 6 August 2025. Insofar as Mr Mende’s authority turns on an implication, it requires a careful consideration of the whole of the evidence bearing upon his authority up to and including that time. That includes the claims that he was closely involved in all large decisions, and also the correspondence from Mr Kundrun. It is quite artificial, at least on the facts of this case, to approach the ultimate question by first determining whether, at some (unstated) earlier time, Mr Mende had implied actual authority, but that closer to 6 August 2025 such actual authority was withdrawn. Instead there is a single issue: did he have the requisite authority on 6 August 2025?

Conclusion and orders

64. For those reasons, there was no error in the conclusion of the primary judge that Mr Mende lacked actual authority, express or implied, to cause AIPL to terminate the employment of Mr Frankcombe by letter dated 6 August 2025. The appeal should be dismissed. So far as I can see there is no reason for costs not to follow the event. If either side wishes to seek some other or further order, then that may be done by motion filed and served within 14 days of today.

65. I propose the following orders:

1. Order that AMCI Investments Pty Ltd and Mr Jamie Frankcombe be joined as the third and fourth respondents to this appeal.

2. Dispense with the requirements under the rules (including as to filing of notices of appearance and submissions) applicable to the third and fourth respondents.

3. Appeal dismissed.

4. The appellants to pay the costs of the first and second respondents.

66. MITCHELMORE JA: I agree with Leeming JA.

67. STERN JA: I agree with Leeming JA.

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