BETWEEN : NEWSHORE NOMINEES PTY LTD AS TRUSTEE FOR THE COMMERCIAL & EQUITIES TRUST (ACN 067 099 616)

Contract of services - Whether void for uncertainty - Implied term as to remuneration - Assessment of reasonable rate without evidence - Turns on own facts

Agent's authority - Whether express, implied or ostensible - Turns on own facts

Evidence - Prior consistent affidavit of witness - Evidential weight thereof - Failure to call potentially relevant witnesses - Turns on own facts

Judgment for the plaintiff in the sum of $46,532.91

British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197

Equiticorp Finance Ltd (in liq) v Bank of New Zealand (1993) 32 NSWLR 50

Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 1 QB 480

Jones v Sutherland Shire Council (1979) 2 NSWLR 206

Meehan v Jones [1982] HCA 52; (1982) 149 CLR 571

Upper Hunter District Council v Australian Chilling & Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429

Walker v Walker [1937] HCA 44; (1937) 57 CLR 630

Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279

Brenner v First Artists' Management Pty Ltd [1993] VicRp 71; [1993] 2 VR 221

Byrnes Corp Pty Ltd v Tarman Pty Ltd t/as Express Scaffolding and Rigging [1999] NSWSC 175

Camelot Resources Ltd v MacDonald (1994) 14 ACSR 437

Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co [1975] HCA 49; (1975) 133 CLR 72

Entwells Pty Ltd v National & General Insurance Co Ltd (1991) 6 WAR 68

Foamlite Australia Pty Ltd v Desmond Frederick Campbell and Skilled Engineering Pty Ltd, unreported; FCt SCt of WA; BC8901065; 31 May 1989

Hall Chadwick Corp Finance (WA) Pty Ltd v Axiom Properties Ltd [2002] WASC 179

Northside Developments Pty Ltd v Registrar General [1990] HCA 32; (1990) 170 CLR 146

Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221

Pinson v Lloyds & National Provincial Foreign Bank Ltd [1941] 2 KB 72

Re Haycraft Gold Production & Mining Co [1900] 2 Ch 230

Re Qintex Ltd (No 2) (1990) 2 ACSR 470

Re Tummon Investments Pty Ltd (in liq) (1993) 11 ACSR 637

Ritek Incorporation v Nece Pty Ltd (1997) 24 ACSR 38

State of Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146

Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323

1 FENBURY DCJ: The plaintiff is a company that acts as Trustee for the Commercial & Equities Trust which is the vehicle through which Mr Roger Bryer, provides financial consultancy services (referred to hereafter as "Newshore"). Mr Bryer is the Managing Director and Chief Operating Officer of the plaintiff ("Bryer").

2 The defendant is a substantial mining company incorporated in South Africa (hereinafter referred to as "DRD"). It has been a registered foreign company according to the laws of Western Australia from about 15 February 1999. From the date of its Australian registration DRD's registered office in Australia was at Level 4, South Shore Centre, 83 South Perth Esplanade, South Perth. DRD had a number of directors one of whom was Charles Phillip Mostert whose home address was in Como, Perth ("Mostert"). The Local Agent in Western Australia was Mr John Stratton who lived in Applecross (Exhibit A63-64).

3 Newshore sues on a "partly written, partly oral and partly implied" agreement it asserts was reached with DRD on or about 21 May 2000.

4 Newshore's claim is that pursuant to that agreement it provided services to DRD over a period of 64 days between 20 May and 30 July 2000. DRD has refused to pay the invoice rendered for those services. Newshore seeks the sum of $238,200 and interest.

5 The nature of the services provided by Newshore through Bryer are said to be of a highly specialised nature. They involve public relations, lobbying, consulting, networking, facilitating and co-ordinating. Bryer displayed a gregarious, sociable and affable nature in the witness box. He seems to have put his personality and personal skills to good business use.

6 Further insight into the nature of the services provided by Newshore through Bryer can be gained from his description of work that he allegedly performed for DRD on previous occasions in 1999 ("the Consultancy Agreement"). The nature of those services involved international financial matters and corporate business dealings for high stakes. Bryer explained the brief he had from DRD related to the need to "maintain the share price" of DRD which meant to engage in activity which would see the share price remain stable in spite of other factors and events occurring which might cause it instability. Bryer at T138 put it as follows:

"Over many, many years I built up extremely good contacts amongst stockbrokers and some fund managers but mainly stock brokers overseas. That rapport has lasted these many years. Fortunately with my explanation which is sometimes put a different way than what you read in the newspaper or the very bland attempt of a quarterly or annual report, I was able to explain that the share market price had a better future than what seemed to be reflected in the annual report. In other words, looking at it from a different perspective I was able to explain that and still am able to explain that fortunately through those contacts because those people had been close to me in financial dealings for nearly 30 years and I was able to be truthful to them and show them a different way of looking at it. That helps maintain a share price, simply because the way that investors work. Its like a horse race. There are so many horses in the field to notice them all would be impossible, but if a particular company has a bright future and can be explained in such a way then it becomes apparent to the buyer who may not have seen that before. Consistently if that is kept up, that promotional affect is kept up, not only is the share price maintained but sometimes it can be increased because of the new interest in the stock."

7 Against the background of having provided services like those abovementioned Bryer described the discussions that, according to him, formed the preliminary basis of the agreement upon which he sues ("the Service Agreement"). At T149 he said:

"...the first is I was able to be told quite important information and the first is that there was a debt to Rothchilds for an acquisition made by DRD which was somewhat pressing and that what was needed was a cornerstone investor, a new investor to come along, put some money into the company in order to relinquish that debt, number one, and provide stability in the share registry, and the reason for that is there were no, and still is not, any single large shareholder larger than 5%. A cornerstone investor of that nature would stabilise the registry if somebody was to control 15 or even 20% of a company of that size. It would indeed stabilise the register."

8 Bryer alleges that he worked extremely hard, for long hours and incurred numerous expenses in his efforts to assist DRD to achieve these goals. He contacted his associates, he travelled overseas, he made use of his various contacts around the world.

9 The way Newshore's claim is formulated was usefully summarised by counsel in an outline of submissions prepared prior to the commencement of the trial. Although counsel spoke to the submissions and provided more detail in his opening, the written submissions provide a fair outline of Newshore's case. In its action on the abovementioned alleged agreement of 21 May 2000 Newshore relies upon the earlier and allegedly similar business dealings it had had with DRD, as a basis for asserting the terms of the agreement upon which it sues. Counsel put it like this:

"Simply put the plaintiff's case is that Mr Mostert, on behalf of the defendant, orally engaged Mr Bryer [the plaintiff] in August 1999 to assist the defendant in maintaining and increasing DRD's share price. Pursuant to that engagement Mr Bryer met with brokers, fund managers, etc in Europe and the USA and reported back to Mr Mostert (both in person and by telephone) between September 1999 and April 2000. The plaintiff rendered an invoice in the amount of $247,000 for Mr Bryer's services in April 2000 for work done in the preceding seven months. The defendant paid that invoice."

"In early May 2000 Mr Mostert asked Mr Bryer to essentially carry out a feasibility study (in the sense of 'sounding out' possible contributors) as to the raising of US$75 million to assist the defendant with the buy-out/merger of a group of African companies involved in the mining/resources industry. In this regard Mr Bryer travelled to Hong Kong and Singapore. Upon Mr Bryer's return to Perth on 19 May 2000 Mr Mostert contacted Mr Bryer about an extended assignment. Mr Mostert informed Mr Bryer that the defendant was vulnerable to a hostile takeover by a number of companies. Mr Mostert repeated the request of early May 2000, as it was part of the plan to thwart the hostile takeover of the defendant, and added to it a request that Mr Bryer find a "cornerstone investor" who would invest US$40 million in the defendant. It is this engagement that these proceedings relate to. The defendant has not paid the plaintiff for work undertaken by Mr Bryer in that engagement.

In early May 2000 Mr Bryer was concerned that if the defendant was taken over there might be a dispute as to the plaintiff's engagement by the defendant. Accordingly Mr Mostert and Mr Bryer confirmed that the engagement should be recorded in writing. Mr Bryer (on behalf of the plaintiff) signed a document headed 'Service Agreement' on 19 May 2000. Mr Mostert signed that document on behalf of the defendant on 21 May 2000. Because of the history of dealings as set out above between Mr Bryer and Mr Mostert Mr Bryer reasonably understood that Mr Mostert had been mandated by the defendant's Board to sign the document and engaged Mr Bryer to proceed as discussed."

10 On 19 May 2000 Bryer on behalf of Newshore and on 21 May 2000 Mostert purportedly on behalf of DRD, described as "Chief Financial Officer" of DRD, signed a document entitled "Service Agreement" (Exhibit A119). This document, described at the time as a "pro forma" was prepared by and at the suggestion of Bryer (T154). It is not said to contain all of the terms of the agreement. It is said to be the "written" part of the agreement. It contains the following terms:

"It is herein agreed that Newshore will provide the company with services and introductions, make arrangements, conduct meetings and carry out initial negotiations for the company.

It is further agreed that Newshore will seek arrangements with appropriate financial parties and/or individuals or institutions in order to construct agreements that give rise to placements of shares and/or underwriting of shares in The Company.

Both parties agree that Newshore will conduct itself on a best endeavour basis.

Notwithstanding the final conclusion of all such negotiations it is agreed herein that The Company will pay to Newshore all of the expenses incurred by Newshore together with fees based on time spent in furthering such negotiations.

Newshore to provide continuous reporting of the progress of each negotiation to management of The Company.

This Agreement is to be for a period of 12 months from the form (sic) the date hereon, or until such time as the objects of this Agreement have been finalised to the satisfaction of the company."

11 It can be seen that the terminology is vague and open ended as to key areas in which, one might imagine, a large company would be interested. There is no reference at all to how "fees based on time spent" might be calculated. What precisely Newshore agrees to do by reference to the first and second paragraphs is difficult to determine. The fourth paragraph is particularly difficult to construe.

12 It is not Newshore's case that the agreement allegedly reached with DRD is entirely incorporated in this document; far from it. However, it is surprising that Mostert was prepared to sign such a poorly drafted document on behalf of his employer, DRD. A moment's careful reading would have revealed the obvious vagueness and uncertainty of the terms proposed and set out therein.

13 Newshore particularised the services provided to DRD between 21 May and early August 2000, in par 14 of the statement of claim as follows:

(a) Arranged meetings in Hong Kong for 23 May 2000.

(b) Attended meetings in Hong Kong on and following 23 May 2000.

(c) Attend and assist in presentation in Hong Kong to and in the presence of Mostert, John Stratton, Leeming Tee and other executives.

(d) Entered into negotiations with Arthur Dew of Sun Hung Kai Ltd in May, June and July of 2000.

(e) Arranged and attended meetings and conducted negotiations in Sydney in May, June and July of 2000. At, on or about 11 July 2000 in Sydney negotiated with Lee Ming Tee and his associates in the presence of Mike Prinsloo and Mostert of DRD.

Bryer reported regularly to Mostert and conducted meetings and negotiations in the presence of Mostert and Prinsloo."

14 DRD merely denied each and every allegation pleaded in par 14.

15 DRD sought further and better particulars of, amongst other paragraphs, par 14 of the statement of claim and was met with the following answer:

"The services are adequately described in the 'Particulars of Services Provided' subjoined to par 14 of the statement of claim.

The regular reports referred to under the 'Particulars of Reports Provided to DRD' were given by Bryer (on behalf of the plaintiff) to Mostert over the telephone and during in-person meetings. The negotiations in the presence of Mostert and Prinsloo are those referred to in par (e) of 'Particulars of Services Provided' subjoined to par 14 of the statement of claim.

In respect of time spent in providing services and providing reports Newshore also relies upon par 15 of the statement of claim."

16 Paragraph 15 of the statement of claim stated:

"Between 20 May 2000 and 30 July 2000 Newshore spent a total of 64 days working in the provision of the services pursuant to the Services Agreement."

17 Without going into a detailed analysis of Bryer's evidence on what he did he generally gave evidence that he had carried out his brief as described in the Service Agreement and as directed orally by Mostert. Much complaint was made by counsel for DRD about Bryer's evidence of activities and services provided that went beyond those pleaded. There may have been some merit in counsel's complaints, however given the defence case that no work was done by the plaintiff, and given the lack of prejudice to the defence case and the view I take of the plaintiff's case, I do not think the numerous pleading points need to be further addressed.

18 It is Newshore's case that in carrying out his brief Bryer attended a meeting in Hong Kong between 22 and 24 May 2000. Bryer had been in Hong Kong only days earlier, but he was initially there on other business. It appears that although his negotiations with Mostert concerning this new assignment may have taken place in Hong Kong, he did not go to Hong Kong on 16 May for that purpose.

19 In his affidavit sworn in opposition to an application brought in the Supreme Court to set aside a statutory demand, Exhibit 8, at par 27, Bryer made reference to a trip to Hong Kong from Perth between 22 and 24 May 2000. (See Exhibits A125-129). As I have said there is no doubt he undertook that trip. There is no claim for any earlier Hong Kong trip in that affidavit.

20 Yet in Exhibit A227, which is Newshore's schedule of alleged expenses the subject of this action, there is clear reference to a claim for expenses for the trip to Hong Kong between 16 May and 20 May. (See Exhibit A113). I make further reference to this below.

21 Putting that aside, as a generalisation, it appears to be beyond doubt that Bryer did indeed, apart from going to Hong Kong on 22 to 24 May, travel to Sydney on 18 June. (Exhibit A130, 131). It also appears he travelled to Sydney on 22 June. (Exhibit A101-A107). There is also no doubt Bryer travelled to Sydney on or about 11 July for several days (Exhibits A155, A149-A153, perhaps A26, A228 and A148). Bryer did indeed go to the places that he says he did, when he did. The airline tickets, boarding passes, invoices, itineries and the like provide convincing proof.

22 It is also clear that as a result of taking these trips Bryer incurred associated expenses. What is really in dispute is what function he performed whilst he was on these business trips, whether or not he has already been adequately compensated and how reasonable is his claim if he has not.

23 As I have stated Bryer gave evidence about his activities. He had a convincing sort of presentation and demeanour in the witness box in evidence in chief as indeed did the plaintiff's other witness, Mostert.

24 It was Bryer's evidence that discussions with Mostert concerning his brief to find a cornerstone investor, etc, occurred whilst they were in Hong Kong conducting other business. He said Mostert agreed to engage Newshore to carry out various tasks but there was a concern about a risk of DRD being taken over by another company. Accordingly, Bryer felt it would be prudent to obtain some form of written agreement, which he drafted himself to protect his interests. (Exhibit A119; p 7 above). He sent that to Mostert on 19 May and Mostert signed it on 21 May 2000.

25 Bryer's evidence was that there were many oral instructions given to him by Mostert and much of the detail unexpressed in the written service agreement was covered in oral briefing. Thereafter, as a generalisation, Bryer said that he fulfilled his obligations in seeking to obtain a cornerstone investor.

26 Bryer's evidence was that over a period of some 71 days between 20 May and 30 July, he worked 64 days. He did not produce any written records to substantiate this claim.

27 Newshore's case was that it was Bryer's usual practice to "charge in the order of $A100,000 per calendar month or A$25,000 per week". (Paragraph 29 Exhibit 8). It was asserted that this equated to an hourly rate of $250 for "a 100 hour week". Bryer asserted that it was common place during this period for him to spend 100 hours or more per week. Given there are only 168 hours in a week this leaves an average of 9.7 hours per day for attending to the necessaries of life including rest.

28 During the alleged term of the contract, Newshore rendered an invoice to DRD that DRD says is relevant and furthermore goes to the issue of Bryer's credit.

29 DRD raises this matter specifically in its defence at par 25 as

follows:

"Further and in the alternative, if the defendant is liable to pay any sum to the plaintiff (which is expressly denied) the defendant says further that:

(a) On or about 16 May 2000 Mr Mostert caused the defendant to pay the sum of US$20,000 to Mr Bryer on behalf of the plaintiff;

(b) On or about 26 June 2000 the defendant received an invoice dated 20 or 23 June 2000 from the plaintiff in the total sum of US$22,500 of which the payment of US$20,000 referred to in par 21(a) above (sic par 25(a)) was credited in favour of the defendant and US$2,500 was said to be still owing, (the June invoice) for services allegedly performed during the period 10 May 2000 to 4 June 2000, the description of which services were substantially identical or similar to that of the alleged services said to be the subject of the August invoice;

(c) As at 28 June 2000 the Australian dollar equivalent of US$2,500 was A$4,157.51;

(d) On or about 28 June 2000 DRD Australasia Pty Ltd on behalf of the defendant paid the sum of A$4,157.51 to the plaintiff in payment of the outstanding balance of the June invoice; and

(e) The sum payable by the defendant to the plaintiff pursuant to the August invoice (if any which is denied) must be reduced or distinguished by the sum of US$2,500 or such other part of the June invoice which amounts to double charging of the defendant by the plaintiff."

30 The Newshore invoice referred to in par (b) above was "for work done during the period 10 May 2000 to 4 June 2000 inclusive". (Exhibit A380).

31 The invoice is in the following terms:

"Liaison with Sun Hung Kai Group Hong Kong and related business; CAM Group and Durban Roodepoort Deep.

Including two trips to Hong Kong within the period.

Arrangements and liaison with various members of Sun Hung Kai Group initially be telephone and by personal representation. Conferences, meetings and discussions in Hong Kong over the period. Introduction of party. Presentations and reviews.

Hotel accommodation, transport, out-of-pocket expenses, meals, telephone costs.

Herewith our invoice US$22,500.

Less amount already received by Roger Bryer 16 May 2000 US$20,000. Balance outstanding US$2,500."

32 Obviously following some query about this invoice, (again, refer to par (b)), Newshore sent another letter to DRD (Exhibit A381) care of Ms Jan Turnbull on 23 June 2000 by way of a "breakdown of costs and fees. Our invoice attached" in the following terms:

"As requested please find attached our breakdown of costs and fees for the month of May 2000 together with copies of relevant receipts and statements.

Hotel accommodation HK$ 9,916... US$1,685

Transport, meals, entertainment, courier and delivery charges, copying and out-of-pocket expenses US$4,405

Telephone and communication charges relevant US$6,410

Fees US$10,000

Total US$22,500

Less paid US$20,000

Balance outstanding US$2,500"

33 It can be seen that part of the period during which this work was alleged to have been performed is contemporaneous with the alleged period of the contract upon which Newshore now sues. Indeed it overlaps by 15 days.

34 With respect to the claim for hotel accommodation being HK$9,916 it can be seen that this figure is the sum of two hotel bills incurred by Bryer at the J W Marriott Hotel in Hong Kong for a period from 16 May to 20 May 2000 and 22 May to 24 May 2000. (See Exhibit A227 - Newshore's list of expenses claimed in this trial) and Exhibits A113 and A128 being the hotel bills.

35 The alleged balance outstanding of US$2,500 equated to about $A4,157.51 at the time. This was paid to Newshore by DRD (see Exhibit 25).

36 It strongly appears Newshore is claiming for expenses for which it has already been reimbursed. The Hong Kong hotel bill claimed in this action was claimed for and paid when this invoice was paid. Further the reference to fees of $10,000 is inconsistent. Bryer was cross-examined on this at T300 et seq. He appeared to suggest that the fees were not personal fees at all but amounted to a figure that was the total of fees he paid to other parties. It was very difficult to follow and quite frankly when Bryer was giving his evidence he was less than confident on the point.

37 Apart from this invoice, according to Bryer, Newshore rendered no other interim invoices in relation to its brief during the period in which he says it was engaged being 20 May to 30 Jul 2000. This, in spite of working 100 hours per week and paying its own hotel, travel and other expenses.

38 In my view the issues arising out of this invoice go further than a concern about double charging. They suggest a systemic unreliability in Newshore's accounting which causes me disquiet about the reliability of Bryer's assertions concerning the number of hours he worked for each of which he seeks the sum of $250.

The invoice the subject of this action - Exhibit A224

39 On about 8 August 2000 Bryer became aware that Mostert had resigned from his position as Chief Financial Officer and Head of Australian Operations for DRD. He became aware of this from a report in the newspaper (Exhibit 5 West Australian 5 August 2000). Immediately, Bryer rendered an invoice dated 8 August 2000 to DRD which is Exhibit A224. This is the invoice relating to the claim and it should be set out in full as follows:

"Please find enclosed our invoice for the period; 20 May 2000 to 30 July 2000. Invoice No 08082000 rmb.drd/3.

Arranging appointment with Sun Hung Kai Group Hong Kong, negotiations, meetings throughout May and June.

Further negotiations with Allied Group Hong Kong, May and June.

Discussions, meetings and presentations in Sydney, May and June.

Hotel expenses, telephone, photocopying, meeting room hire, travel and transport out-of-pocket expenses.

Total for this period $175,600.

Further negotiations in Sydney and Hong Kong, July together with expenses

Total for this period $14,200 (GST included in this amount).

Total $189,800 (GST inc)."

40 This invoice was sent to the directors of DRD at its West Australian address, Level 4, The South Shore Centre, 83 The Esplanade, South Perth.

41 From entries on the copy of Exhibit A224, presumably kept by Bryer it seems that copies of the invoice were faxed, presumably to DRD, on 16 and 31 August 2000 and on two other occasions in September.

42 DRD through Ian Murray, who replaced Mostert as Chief Financial Officer and Finance Director, responded on 1 September 2000 and did so by reference to an invoice dated 31 August 2000. DRD sought details from Bryer enumerated in point form as:

• "Details of the terms of your mandate.

• A full explanation of the activities that you conducted.

• Details of under whose instructions you are acting.

• Copies of agreement/contracts.

• Detailed breakdown of the invoice into cost element."

43 Mr Murray suggested a meeting "so that you can explain the full terms etc of the services that you provided to DRD."

44 This facsimile letter drew a swift response from Newshore on 2 September 2000 being Exhibit A312-313. It is plain from the letter that Bryer was very irritated by Mr Murray's request. In the fifth paragraph he states:

"Our Service Agreement with your company is a matter of record, as is our activity file, all of our reports together with a full file of correspondence have always been afforded to your Perth office and received by that office."

"At all times we have acted for officers of the company (DRD) at their request and within our prescribed mandate.

The various meetings and arrangements described in our invoice were all arranged within the prescribed guidelines and took place in the various venues also described.

A part of our brief was to introduce, arrange meetings and conduct negotiations with suitable institutional investors. This was for general investment into DRD as well as financiers and investors for the "dragon" project. All negotiations were carried out in company with officers of DRD. These investors are well known to us and through out own special relationship with these groups we were able to perform these duties."

46 Bryer then goes on to specify various places where meetings took place, presentations were made and negotiations conducted. He then identifies a number of officers of DRD namely Mike Prinsloo, Roger Kebble, Mostert and Alistair Banfield, with whom he had been dealing. Bryer then intimates that his contact with DRD's officers had reached a stage of intimate confidentiality about commercial matters and then winds up with the following four paragraphs:

"The facsimile sent by you suggests an explanation is required, we are at a loss to understand that terminology or indeed the entire tone of your communication.

We have incurred costs on behalf of the company and spent many hundreds of hours working on projects for the company. We have carried out all of our duties diligently, successfully and correctly.

As we have not been aware of you in any past dealings with the company, perhaps you may care to provide us with an explanation as to your questions.

Our account has been rendered."

47 Bryer copied this facsimile to Mr Julian Tanby Rajah who was DRD's financial controller in Perth.

48 Mr Murray responded by fax dated 11 September 2000 (Exhibit A315):

"I have requested Mr Tanby Rajah to check the Perth office files for all correspondence and notes of meetings between the parties, as referred to in your fax. If he cannot locate them he is to contact you to obtain copies.

I cannot comment on your mandate until I have seen the alleged correspondence.

I stress again that I need a detailed breakdown of your invoice into the component parts that you refer to.

The reason for the questions is that DRD does not pay invoices without a signed agreement/contract and all expenses need to be itemised and pre-approved. Contracts in excess of certain amounts need DRD Board approval.

Until I receive all the requested information DRD cannot authorise the invoice for payment."

49 This letter was followed up by another letter from Mr Mark Wellesley-Wood dated 28 September 2000 which is Exhibit 6A and addressed to Bryer. In this letter Mr Wellesley-Wood informs Bryer that the Board of DRD is holding an inquiry and that he had been appointed as chairman of the special committee investigating the matter. He refers to a copy of the service agreement and makes some adverse comments about it. He terminates the agreement and then in the penultimate paragraph states as follows:

"With respect to your invoice dated 8 August 2000, I repeat that payment cannot be authorised unless and until the information requested in my fax dated September 11 2000 is provided."

50 Mr Wellesley-Wood then refers to a concern that Bryer had been placing shares for DRD and then states:

"Additionally, it will also be necessary for DRD to sight verifying invoices for all related expenses."

"You have been contacted by Control Risks Group, investigators acting on behalf of DRD, and I require that you cooperate with them and answer their questions."

51 Bryer prepared a response dated 2 October 2000 which is Exhibit 6B, but it was apparently never sent. From references in that letter it can be seen that Newshore commenced proceedings in the Supreme Court pursuant to the Corporations Law making a statutory demand for payment.

52 It is interesting in Exhibit 6B, the unsent reply dated 2 October 2000, that Bryer describes his role as follows:

"Our role as reiterated was to introduce officers of DRD to interested parties for possible future investment in the company. All negotiations were carried out by officers of DRD." (My emphasis).

53 To a large extent the correspondence that passed between the parties at this time, to which I have made reference above, speaks for itself. None of the source documents, financial records and the like requested by DRD in the correspondence after 8 August were ever provided by Newshore or Bryer to DRD. At trial some of the documents relating to travel and accommodation expenses were put in evidence but that was the extent of it.

54 In his evidence Bryer alleged, as I have indicated, that he worked for 64 days during the claimed period between 20 May 2000 and 30 July 2000. In other words he worked for 64 of 71 days. He alleged that he was working 14 and sometimes 18 hour days at $250 per hour.

55 Bryer asserted that Newshore's account for the period was in reality some $224,000. He said however that he sent an account for only $189,800, some $35,200 less (giving a 15.6 per cent discount). He said this was in consideration of "prompt payment".

56 On any view this was a generous discount. It is very surprising, given what he says about it, that there was no reference to Newshore's generosity on the face of its invoice Exhibit A224.

57 Furthermore the invoice is sent, and the discount given, in circumstances where Bryer knew the men with whom he had been dealing, namely Mostert and Stratton, were no longer with the company. I also note that nowhere in its contemporaneous and subsequent correspondence does Newshore mention anything about having given a discount.

58 In its form and substance, the invoice A224 has striking similarities with the interim invoice rendered to DRD dated 20 June 2000 relating to work with the Sun Hung Kai Group in Hong Kong. (A380/A381 previously discussed). It is difficult to reconcile these two invoices and the amounts claimed, bearing in mind the earlier invoice was paid.

59 Looking more closely at Invoice Exhibit A224 its structure seems to me to be quite curious. There is no means of knowing how the fee is computed. There are generalised assertions relating to work allegedly completed in May and June and then the total for the period, which includes all expenses apparently, and also obviously fees, is $175,600.

60 There is then a claim for only $14,200 for July being a month in which Newshore alleges that it was engaged full-time in pursuit of DRD's interests.

61 It is not possible to reconcile Newshore's assertion that charges were rendered to DRD on the basis of days worked at $3,500 per day for July (14 hours per day at $250 per hour). The point was taken by counsel for DRD in final submissions in an analysis of amounts claimed for July. It was suggested that for the month of July, assuming only three days were taken off, this left 27 working days at $3,500 per day equals $94,500. Adding that to the claim for expenses spelt out in Exhibit A227, which might be in the region of $6,800 or so, and it can be seen the sum of approximately $101,000 should be claimed for July. Yet in Exhibit A224 only $14,200 is claimed.

62 Looking at it from another angle, given there were allegedly 11 days in May and 30 days in June worked, this amounts to 41 days. For this period the invoice reflects a charge of $175,600. Even assuming Bryer worked every day of the 41 days this amounts to $4,283 per day which, at $250 per hour, gives 17.1 hours per day worked for every one of the 41 days. That is clearly absurd.

63 Alternatively $175,600 divided by $3,500 (daily rate) equals 50.2 days. The claim for $175,600 for May/June is inherently implausible at the hours and rate asserted by Bryer.

64 I am again left with a feeling of disquiet about Bryer's assertions that he has completed the hours of work he states. Newshore's fees seem exorbitant, its claim exaggerated. What Bryer actually did is difficult to know. I would accept however that he did go to the places he says he did and expended some energies on behalf of DRD but as to how much remains a mystery.

The previous consultancy services - $247,000 paid. Invoice Exhibit A91

65 Because of the paucity of documentation in key areas in the case, the reliance by Newshore upon oral agreements and reporting, and the fact that Bryer's corroborative witness, Mostert, is of suspect independence, more than usual swings upon the assessment of Bryer, Newshore's principal witness.

66 In putting its case, Newshore relies on prior concluded dealings with DRD and seeks to incorporate certain aspects of those dealings by reference. In adopting this strategy the prior dealings become available for analysis for any legitimate forensic purpose including the inquiry as to the credit of witnesses.

67 In its case based upon an agreement in May 2000 alleged to be partly oral, partly written and partly to be implied, as counsel described in his submissions, Newshore relies upon its previous business association with DRD in the period from about August 1999 until 18 May 2000. Newshore points to this prior association both in support of its assertion that Mostert had authority to bind DRD and in relation to the methods and practices adopted by Newshore and DRD in their business dealings. Newshore asserts the earlier dealings were characterised by a lack of formal documentation, a paucity of invoice detail, and a casual if not informal working relationship. Thus, according to Newshore, there is no significance in the fact that those factors were a feature of the dealings upon which Newshore now sues.

68 Given the reliance by Newshore upon the earlier dealings it is appropriate that they be carefully examined. These dealings, described as relating to a "consultancy" assignment, are pleaded in pars 3-7 inclusive of the statement of claim.

69 Basically, as I have indicated, Newshore says that it conducted fruitful business with DRD between August 1999 and May 2000, for which it was paid the sum of $247,000 by DRD Australia at DRD's request. As specified in the particulars:

"The consultancy services were to assist in the stability of DRD's share market price by Bryer making personal representations as to the financial position and prospects of DRD to various persons in the business and financial markets, including brokers, fund managers, traders and large private buyers, in Australia, the Republic of South Africa, the United States of America, Hong Kong, Italy, France and the United Kingdom."

70 As with the alleged agreement the subject of this action, the alleged consultancy assignment was said to have been agreed orally between Bryer on behalf of Newshore and Mostert on behalf of DRD. According to Bryer there was an express oral term that he would "frequently report orally" to Mostert as to progress "in stabilising the DRD share price" (par 4 statement of claim).

71 Paragraphs 5, 6 and 7 of the statement of claim are as follows:

"5. Between September of 1999 and April of 2000 Newshore, through Bryer, provided services pursuant to the consultancy assignment and reported frequently to DRD, through Mostert.

6. It was a further express oral term of the consultancy assignment that Newshore would render its accounts to DRD for provision of the consultancy services in a simplified form and that those accounts would be paid promptly.

7. Pursuant to the express oral term pleaded in par 6 on 10 April 2000 Newshore rendered an account to DRD for the provision of the consultancy services between September 1999 and April 2000 in the sum of $247,000 and on 14 April 2000 DRD paid that sum to Newshore in satisfaction of the Newshore account."

72 In par 7 of the amended defence DRD admits receipt of the invoice from Newshore dated 10 April 2000 in the sum of $247,000 (Exhibit A91). Further DRD admits that "on or about 2000" Mostert caused "DRD Australasia Pty Ltd on behalf of DRD" to pay $247,000 to Newshore in payment of that invoice.

73 Thus it is not disputed that Newshore rendered an invoice in the said sum and that the sum was paid on behalf of DRD. DRD says nothing further about the transaction in its defence save that it denies the other allegations pleaded in relation to it.

74 Invoice Exhibit A91 was in a simplified form as follows:

"Re public relations and market research (group)

Public relations and market research on an International (sic) basis - all markets

Including Europe and US. Liaison and provision of information major private clients.

Period September 1999 to April 10 2000.

Total...$247,000.

This is to confirm our acceptance of payment of this account in the form of Durban Roodepoort Deep Limited shares to the equivalent value of Aud.$247,000."

75 In spite of the reference in that invoice to Newshore accepting shares to the value of $247,000, Newshore was paid in cash which was deposited into its account on 14 April 2000 (Exhibit A93 bank statement).

76 In his evidence about what agreement was reached concerning fees for these "consultancy services" Bryer said, at T144:

"After much discussion it was decided that a figure of roughly $100,000 per month would be the adequate remuneration for it plus any expenses that occurred as and when they occurred. That was reached because my first estimate had been an amount of $400,000 to do the job. That was rejected by Mr Mostert as being too high. He explained to me that the same estimate that he had received from a quite large firm to do the same job was roughly double that but he thought that as I am a single operator it would be best to be a more modest price, so we struck the arrangement of $100,000 per month on the days that I actually worked plus the expenses." (sic)

77 Bryer asserted that Newshore's account in the sum of $247,000 was calculated upon the basis of Bryer's agreed charge-out rate at $100,000 per month. There was no supporting documentation concerning the calculation of those fees. There were no invoices or other documents relating to expenses. How Bryer came to calculate his fees in the sum of $247,000, apart from what I have stated, is a mystery save for the oblique reference in Exhibit 4A below.

78 There is some concern about whether the amount claimed was ever indeed intended to represent a calculation based upon a rate of remuneration and time spent, such as Newshore suggests. In cross-examination Bryer's attention was drawn to Exhibits 4A, B and C. Exhibit 4A is a copy of a letter dated 5 April 2000 from a company known as Biltrad Global Investment Corporation Pty Ltd ("Biltrad") to a company known as Redbay Investments Pty Ltd ("Redbay"). Redbay is a company controlled by Bryer. The letter is in the following terms:

"This letter is to acknowledge our acceptance of your offer of cash consideration in lieu of transfer of 125,000 Durban Roodepoort Deep Limited ADR.

We agree to accept US150,000 or in preference the Australian dollar equivalent; based on current cross rates at .607 cents this equals Aud $247,000 payable to our account, which details are here."

79 There is then set out Biltrad's banking details and thereafter appears the paragraph:

"The payment of the amount detailed here is a final payment and we acknowledge that there are no other amounts or matters outstanding."

80 Exhibit 4B is a copy of a facsimile message sent by Bryer on behalf of Newshore to Mr John Stratton who was the Australian agent for DRD. It is dated 14 April 2000. It states:

"Dear John,

Please find our banking information as requested."

The banking details then appear and then it says:

"We further confirm that the amount of $247,000 was paid out on 5 April 2000 to BGIC - these funds were paid from our other account in the name of Redbay Investments Pty Ltd which details are..."

And then the banking details are given. BGIC is obviously Biltrad Global Investment Corporation.

81 In cross-examination Bryer was asked whether he caused Redbay to pay $247,000 to Biltrad. He said "No". (T254). Upon being shown Exhibit 4B Bryer was asked whether Redbay had paid the $247,000 to Biltrad and he again said "No". He was then asked:

"So when you said to Mr Stratton that it had been paid out you meant what? --- and Bryer answered - It wasn't paid. I don't know what it means.

You just told Mr Stratton that it had?---I told him it had on 5 April. I don't recall why. But it wasn't paid."

"So you told Mr Stratton on 14 April that you had paid out $247,000 from Redbay to Biltrad Global Investment Corporation when in fact you say you had not paid that payment?---I had not paid it No."

83 Bryer's attention was then taken to Exhibit A91 which is the invoice for $247,000 to which I have already made reference and in particular his attention was drawn to the last paragraph which I repeat states:

"This is to confirm our acceptance of payment of this account in the form of Durban Roodepoort Deep Limited shares to the equivalent value of Aud $247,000."

"Isn't that because what you were intending to do was to pass those shares to Biltrad?---No."

85 The transaction that occurred between Newshore and DRD that resulted in Newshore being paid $247,000 on 14 April 2000, being about a month before the agreement the subject of this litigation was said to have been struck, affords very questionable support for Newshore's case. Apart from the curious references in the surrounding documents to which I have referred, I am troubled by the lack of supporting documentation for that claim. Although an order was made that Newshore produce financial documents relevant to the matter, for example ledgers or financial statements, the company has failed to do so. This gave rise to an issue that is dealt with later in these Reasons.

86 Furthermore, it seems to me to be surprising that there is no documentation relating to the alleged agreement to provide the consultancy services, given the quantum of fees purportedly paid for them. Yet DRD through its Australian subsidiary and Mostert did indeed pay on Newshore's invoice.

87 In my view this prior transaction may afford some basis for an argument about Newshore believing Mostert had authority from DRD to authorise payment and to contract but it really does not assist me in much else. Save for the fact that it is a precedent for the charging of handsome fees on scant documentation I am not sure what else to make of it. Indeed references in the surrounding documentation cause me some concern about relying upon those parts of Bryer's oral testimony that is unsupported by documents.

The two invoices for $63,500 Exhibits 1, 2 and 3

88 A number of other matters were put to Bryer in cross-examination that seem to me to raise similar questions to those relating to the payment of the $247,000 on 14 April 2000. Prior to that date but during the relevant period Newshore had rendered invoices to DRD on two other occasions and those invoices had been paid. These payments again raise questions in my mind about Bryer's credit as a witness and also the reliability, if not validity, of his system of charging for his services.

89 It is to be noted that Exhibit A91, the invoice for the sum of $247,000, relates to a period from September 1999 to April 10 2000 and refers to "public relations and market research on an international basis". As I have mentioned this invoice was paid on 14 April 2000.

90 Exhibit 1 is an invoice dated 16 February 2000 rendered by Newshore to DRD in the sum of $63,500. That sum was paid to Newshore on that invoice on 10 March 2000 (Exhibit A92). This invoice purports to relate to "work done concerning a proposed loan from Compagnia Centro Italia Cauzioni US$200,000,000". The period for which the invoice is said to relate is from 26 January 2000 to 16 February 2000. In the body of the invoice it states:

"Travel to Rome Italy 14 days. Meetings all parties, scheduling, preparation of reports, rearrangement of assets statements, attendance at two meetings of the Board, negotiations with all parties. Re-submission of proposal. Negotiations to increase guarantee. Liaison with Ministry of Treasury. Documentation of additional assets, liaison with valuers.

All out-of-pocket expenses including translation services of further provision of background information and information packages, general translation."

91 This invoice was sent by facsimile to Stratton on behalf of DRD on 16 February 2000 - Exhibit 2.

92 On 10 April 2000 another facsimile was sent to DRD, this time care of a secretary, which states:

"Please find copy of the invoice required, as promised, the original has been sent to you today by mail." (Exhibit 3)

This facsimile was sent by Bryer. Enclosed with the facsimile is a copy of an account dated 21 March 2000 again referring to a proposed loan from Compagnia Centro Italia Cauzioni US$200,000,000 and in the identical sum of $63,500.

93 This invoice was also paid to Newshore by DRD and deposited on 21 March 2000 (Exhibit A92), being the date of the invoice. Yet the copy of the invoice is being sent to DRD some 20 days later, being on 10 April 2000 (Exhibit 3).

94 The period purportedly covered by this invoice is 17 February 2000 to 7 April 2000 inclusive. This is some 16 days after the date of the invoice; in other words it appears to be an invoice for future services.

95 The work charged for is described as:

"Finalisation and issue of guarantee, translation and additional attachments in relation to guarantee liaison with reinsurers, documentation.

Forwarding of guarantee and attachments together with appendix and approval.

All out-of-pocket expenses and including our fee."

96 It is to be noted that the two invoices, Exhibit 1 and Exhibit 3, on their face appear to cover the period 26 January 2000 to 16 February 2000 and then 17 February 2000 to 7 April 2000 respectively. The invoices refer to the same project or assignment. The work descriptions vary. The amount claimed is identical.

97 Exhibit 21 is the bundle of documents, such as there are, held by DRD that relate to these payments. The first two pages are entitled "payment voucher". The first payment voucher being p 1 refers to the payment of the invoice Exhibit 1 in the sum of $63,500. In the comments section of the document the following appears:

"Two cheques were sent to Roger Bryer. The first one being cheque No 400099 and the second one 400104. They were for the same invoice."

98 Beneath that appears the handwritten notation "New invoice being sent for this cheque."

99 The second document, being another payment voucher, relates to the payment of the second invoice.

100 In his evidence at T207 and following Bryer explained that in February of 2000 he travelled to Rome where he met Stratton and participated in meetings "to arrange a $200,000,000 facility for DRD" but which did not involve the participation of any director of DRD. Bryer's attention was drawn to Exhibit 1 which is the invoice dated 16 February for $63,500 and at the same time Exhibit A225 (which is also Exhibit 3) which is the second invoice dated 21 March 2000 again for the sum of $63,500, both of which were paid (Exhibit A92).

101 Bryer's attention was then drawn to the two payments and to his evidence the previous day that the payment of invoice Exhibit A225, (the second invoice) was identified as being paid and credited to Newshore's account on 21 March 2000. When asked the question "to what does the $63,500 relate?" (being the deposit on 10 March), the witness replied:

"The payment of one of these invoices because one's signed and one is not."

There was some confusion in the exchange between counsel and Bryer. At T215.1 he was asked whether the first credit on 10 March 2000 related to the first invoice dated 16 February and he replied:

"Presumably it does. I can't recall at the moment. But those two invoices and those two payments relate to those two invoices."

It was then put to him that the credit on 10 March must relate to the invoice that was identified as Exhibit 1 to which he agreed. However Bryer seemed troubled by the fact that the second invoice was signed yet the first invoice was not signed. However he conceded that he had been paid on each of the invoices in two sums of $63,500 but he maintained that:

"...I don't know why you've got an unsigned copy. But the answer is that I have been paid for my services.

In relation to each of these invoices?---Yes.

"Do you recall the circumstances in which these two invoices...were drawn?---Yes. I originated - sorry, I was given an assignment to liaise and arrange a $200,000,000 loan through this company...

...Can you tell me the circumstances in which you came to render the accounts? So how was it that the documents were actually created?---To create my invoice.

Yes why did you create the invoice?---So that I could be paid and it split into two parts because there are two separate things happening, not one.

I see so there were two separate parts of the service?---Yes.

Therefore there are two separate invoices?---Yes."

103 Bryer was cross-examined about his procedures in sending the two invoices to Mr Stratton and Mostert and the possibility that the second invoice was sent only following a request for a copy of it made by K Risley, a female employee of DRD. Bryer was asked at T220:

"Did you send that document to Ms Risley as a result of a request of her for an invoice?---I don't know why I sent it but its obviously a copy of an invoice I had previously sent that she couldn't find perhaps.

So if I say that the circumstances were that you were paid or Newshore was paid in relation to the invoice before it was actually received, you would disagree with that would you?---Yes of course."

104 At the end of the cross-examination of Bryer, which followed the resumption of this trial twelve months later, at T352-3, I referred Bryer to Exhibit 3, the second invoice and at T353 put the following question to him:

"In its terms it refers to a period from 17 February 2000 to 7 April 2000 and by reference to document A92 it can be seen it was paid - unless I'm missing something. A cheque presumably for that amount, cheque or cash for that amount, went into Newshore's account with the National Bank on that day, 21 March 2000. So my query is how can that be or how did that happen given the invoice refers to a period up to 7 April; in other words, 17 days in the future. I just can't quite follow - can you remember anything about it?---Yes your Honour.

What is the time - it was paid; so there we have an invoice being paid, $63,500 being paid, on 21 March for a period which still hasn't finished?---Yes I see what you're saying. I think that that is a mistake, the April is a mistake.

That's the reference on the invoice A225 or Exhibit 3?---Yes."

105 At that point counsel for DRD, Mr Martino, got to his feet and gave notice that:

"It will certainly be our submission in closing that this invoice on its face is false. Its for exactly the same amount as the earlier invoice. It was paid on 21 May (sic March) before it was sent by Newshore..."

106 Counsel for Newshore declined the implicit invitation to re-examine Bryer on this matter.

107 It is notable that so far the evidence establishes Newshore received from DRD, at least three cheques between 10 March 2000 and 14 April 2000 totalling some $374,000 which amounted to fees rendered for work of various kinds done by Bryer from September 1999 to April 2000 or about eight months of work.

108 Bryer was cross-examined about this at T222 and T223 and I reproduce the exchanges hereunder:

"If I can go back to September - August 1999...the position is as I understand your evidence, that your primary task under what you say is the consultancy assignment was the maintenance of DRD share price internationally?---That is correct.

I understand you to have said in your evidence that there were two other distinct parts of the work as well. That related to travelling to Rome?---Yes.

On the $200,000,000 loan is that right?---Yes.

And then as a distinct part of work in relation to other bits and pieces if I can call it that that relate to that issue?---Yes.

So as I understand your evidence there are really parts to the service that was provided?---At least three. There's actually more.

Well you've rendered three invoices in the period. Do you say that there is work that hasn't been invoiced?---Ongoing work such as public relations work came gratis, if you like, but there was many times that I spent addressing the share price of Durban Roodepoort Deep that I didn't render a separate individual invoice for.

But as I understand your evidence, once you got to - after 21 May of 2000, that's when you say Mr Mostert signed the service agreement?---Yes.

The work after that point in time fell into a completely distinct category from the work that was undertaken pursuant to what you call the consultancy agreement?---Yes, because it was a new assignment just prior to that service agreement which was to explore the possibility of a cornerstone investor. That had not been raised before Mr Mostert told me about it.

And you say that that arises as a result of some discussions that you had with Mr Mostert in - I think your evidence was early May 2000?---Yes."

109 The documentation raised by Bryer relating to the two invoices each for the sum of $63,500 seems to me to raise questions which have not been adequately answered. It could not be said that there is false invoicing but I have the very strong suspicion that Newshore has been paid twice for the same work. It may be that the payment was as a result of some error in DRD's procedures which, after the event, Bryer on behalf of Newshore has either failed to notice or deliberately not sought to rectify. I could not say. However I am left with some disquiet about the matter and, perhaps more significantly, about the reliability of Bryer's evidence in some respects.

110 Further documents put to Bryer in cross-examination related to invoices rendered to DRD in September and November 1999 on behalf of Vista Blue Limited, a company whose office was at 7 High Street, Fremantle and whose facsimile number was 9450 3770. Included amongst the documents was a copy of a facsimile message under the letterhead "Millennium Exposition of Wonders" which is also an entity which operates from 7 High Street, Fremantle and also has the same facsimile number. At the foot of the document with the Millennium heading appears the following:

"Millennium Exposition of Wonders and Design by Camelot are wholly owned trading entities of Redbay Investments Pty Ltd."

I note that from Newshore's letterhead it also utilises the same facsimile number 94503770."

111 The bundle of documents shown to Bryer became Exhibit 12A-F inclusive.

112 Exhibit 12A is a copy of a letter under Vista Blue letterhead dated 10 September 1999 addressed to Mostert, Chief Financial Officer of DRD. It is signed by Bryer. The letter states:

"Further to our discussions, please find outlined here a suggested itinerary and plan of purpose for our public relations activities proposed.

Our activities to occur over a 10 day period commencing 20 September 1999.

Florida USA (West Palm Beach) and other centres - New York - London. Expected meetings 56.

Proposed total fee; five per cent of achieved target less any previously paid fees.

Suggested total target 35 million shares. US$1.80-US$2.10 with an incentive of a further 1% for stock achieved over US2.10.

Method of payment; all fees are paid to this company at Smith Barney on a progressive basis. Account details are attached.

Preliminary fee; US$400,000.

Expenses; based on US$700 per day including hotel and telephone at 10 days = US$7,000.

Airline tickets Perth-Florida-New York-London-Perth.

We look forward to a future mutually rewarding and successful association."

113 I note that the reference to a target of 35,000,000 shares is the same number of shares as mentioned by Mostert in a document attached to a facsimile sent to Bryer on 28 June 2000 which is Exhibit A132 and A133. This document is described as a financial model "to reflect the mechanism of the preference share issue and redemption" and there is reference in it to preference shares issued (35,000,000 at $1 each).

114 I also note the reference in Exhibit 12A by Bryer to a preliminary fee of US$400,000. I note that Bryer, in his evidence at T144, when referring to consultancy services previously provided by Newshore (not Vista Blue), and in giving evidence about how his fee was calculated stated that his "first estimate had been an amount of $400,000 to do the job. That was rejected by Mostert as being too high."

115 These references do not seem to me to be greatly significant in themselves save that they suggest a close relationship in operations between Vista Blue Limited and Newshore through Bryer. Thus any moneys that Vista Blue received from DRD as fees for work done during the relevant period by Bryer seem to me to become relevant.

116 Exhibit 12B is a facsimile sent by Bryer to Stratton, the Australian agent of DRD, on 1 November 1999, enclosing what is described as an interim invoice. The relevant invoice is Exhibit 12C dated 1 November 1999 and it is in the following terms:

"Interim invoice; vbdrd1000.

To promotional and public relations activities carried out in Europe and USA during months of September and October 1999. Inclusive of broker and client liaison, introduction to client groups, arranging and assisting in general marketing strategy.

Continued assistance and liaison with marketing strategy.

This invoice is interim pending final verification and clarification at source final invoice to be rendered.

Total due on this invoice $150,000."

117 The invoice is signed by Bryer for and on behalf of Vista Blue Limited. It seems that Stratton authorised payment by affixing his initials and dating the invoice 1 November 1999.

118 Exhibit 12D is another invoice dated 25 November 1999 again rendered by Bryer on behalf of Vista Blue to DRD.

119 The first two paragraphs in the invoice Exhibit 12D are in identical terms to those that appear in Exhibit 12C. It then states quite briefly the following:

"Final invoice; vbdrd2000.

Total of combined invoices $250,000.

Since paid $150,000 (invoice vbdrd10000).

Balance outstanding $100,000.

Total due on this invoice $100,000."

120 Again, Exhibit 12D carries the initials of Mr Stratton dated 29 November 1999 who approved payment.

121 Exhibit 12E is a facsimile sent by Bryer to K Risley on behalf of DRD on 22 December. It is under the Millennium letterhead. It says:

"Dear Kay,

Please find attached invoice for expenses during September, October, November 1999.

Please advise if you require any changes."

122 The attached invoice dated 22 December 1999, Exhibit 12F is said to be invoice #221299exprbdrd - which appears to be the date of 22 December 1999.

123 The invoice is in the following terms:

"To expenses and costs;

Public relations activities and promotion;

Months of September, October, November 1999;

Europe-USA;

London-New York-Miami-Rome;

Travel and related costs airfares, hotels, taxis, meals, hire car, incidental expenses, business centres expended $62,190.

Signed by Roger Bryer, Director International Projects

Vista Blue Limited."

124 Bryer was cross-examined on these documents at T332-T337. When his attention was drawn to Exhibit 12A he agreed that it amounted to a proposal that Vista Blue provide services to DRD. Bryer was then taken to the other invoices for fees totalling $250,000, and for the expenses, that comprise Exhibit 12A-F and then he was asked at T333:

"Is it not the case that the arrangement for the activities referred to in the consultancy agreement...(statement of claim) was in fact the arrangement entered into with Vista Blue, not with Newshore?---I didn't hear the first part of the question, I'm sorry.

Is it not the case that it wasn't Newshore who made an agreement of the kind set out in paragraph 3 of the statement of claim; that is, assisting in the stability of DRD share market price by making representations to brokers in various parts of the world. It was in fact Vista Blue who was providing that service?---No; two separate things.

So you're saying that Vista Blue was performing promotional and public relations activities in Europe and USA in the months of September and October. Is that correct?---Yes as was Newshore."

"I take it that you were performing these public relations activities and promotions on behalf of Vista Blue?---Not I alone, of course not.

But certainly in your capacity as Director of International Projects you were involved?---Yes.

And that involved travel to USA and to Europe?---Yes.

126 Bryer's attention was then taken to what he had said at T144 of the transcript relating to August 1999 and where he described the work he would be doing as "making phone calls to stockbroker friends, that included Europe, France, Great Britain, United States" and he was reminded of his statement that his initial proposal as a fee was for $400,000 which Mostert had felt was too high. Bryer's attention was then drawn to Exhibit 12A where that is the very sum proposed by him as a preliminary fee although in US dollars. Counsel then put it like this:

"These Vista Blue documents to which I just took you including the proposal for a preliminary fee of $400,000 US in your letter of 10 September 1999, the date at which these letters were prepared and the fact that they refer to promotional activities in Europe and USA is consistent with the fact that your arrangement in this period with DRD was through Vista Blue and not through Newshore?---No. At both - at that period of time - No it was both.

Are you saying that DRD engaged you, engaged Newshore through you, for you to engage in promotional activities on its behalf at this very time in September and October 1999?---No, Vista Blue was promoting stock on the United States. Newshore could not do so.

Didn't you say at page 144 of the transcript that the work you did involved making phone calls to associates, that included the United States?---Yes.

And then having made those appointments you would begin your rounds?---Yes correct.

Presumably, that included travelling to the United States?---Yes of course it does.

Are you saying the promotional activities performed in the United States were performed by Vista Blue?---Yes.

And in other countries by Newshore?---Yes.

In other countries by Newshore?---Not every other country but mostly yes.

But isn't it the case if you look Mr Bryer at Vista Blue's invoice of 1 November 1999 for $150,000?---Yes.

That Vista Blue has charged DRD for promotional activities carried out in Europe?---Yes correct.

And yet you say that at the same time Newshore was also charging for promotional activities carried out in Europe?---Correct.

Why was it do you say that DRD retained both Vista Blue and Newshore to provide those services?---Vista Blue promoted shares only. That's what it did. It was to keep - it was to firm the share price, to make people interested, to bring the company to the attention of the stock market. In the United States it required a track record. In other countries it did not.

So you're saying that Newshore did not provide services in the United States?---No, it also provided service in the United States where no track record was required. There are certain big brokerage houses - not only brokerage houses but private clients who won't deal with a company that they don't recognise.

For what purpose would Vista Blue not meet with the brokers of that kind in the United States?---It did meet with them.

Was that you on behalf of Vista Blue meeting with these brokers?---I and others.

Well you on behalf of Vista Blue?---No. I said 'I and others' and it would involve, for example, a law firm in the United States, in New York in particular, that arranged such lobbying and introductions.

How would you decide whether a meeting that you attended was going to be charged by Vista Blue and which meeting was going to be charged by Newshore?---Because we handled a specific job which was finished ultimately by Vista Blue and then Newshore took over after that.

Alright so...?---Where it was required where there's a great deal of money to be expended on promotional activities, Vista Blue did it, because its responsibility was to pay the bill.

When do you say that the Vista Blue part of the services and the Newshore part started?---It was no specific time. It was in fact overlapped many times. It would make no difference.

You said that when the Vista Blue part of the project finished, Newshore commenced its operation?---No, it didn't commence. It was already running its operation and there may be some overlap but its of no consequence.

Vista Blue charged for expenditures incurred by it in relation to the activities in which it engaged?---Yes some of the expenses of course.

Which expenses didn't it charge?---Well its total fee was all paid to an off-shore company so it makes its own arrangements and pays its own bills."

127 Unsurprisingly perhaps, given the above, I had great difficulty in following what it was Bryer was saying about the relationship between Vista Blue and Newshore. From what he said it appeared to me that Vista Blue was a company in respect of which he was the sole or main executive. He made reference to "others" although the only detail given was the suggestion that Vista Blue conducted business by engaging lawyers and consultants. No person apart from Bryer was ever named as being involved in Vista Blue. Bryer's responses were often glib and facile but confidently expressed with more than an occasional touch of superciliousness.

128 Be all that as it may it is quite clear that DRD paid Vista Blue $250,000 for work very similar indeed to that for which DRD Australasia paid Newshore the sum of $247,000. And for a very similar if not identical period of alleged business dealings.

129 Furthermore, the evidence discloses that it was Bryer who was the sole executive of Vista Blue and Newshore. Both companies seem to have been totally under his control.

130 Including the abovementioned moneys with other payments made it can be seen that during the eight month period from September 1999 to April 2000 DRD and DRD Australasia paid to Vista Blue and Newshore about $624,000. These payments were made on sparsely detailed invoices provided by or on the instruction of Bryer. On none of the invoices was there any reference to hours spent. There are simply bald assertions of amounts owed. Neither was there any supporting documentation such as time sheets, details of hours spent on particular aspects, receipts etc, ever attached to any of the invoices.

131 It seems from the evidence that these invoices were paid following the instruction and approval of either Mostert or Stratton. This occurred with neither query nor request for substantiation.

132 I have referred to Mr Bryer's evidence in considerable detail because of the emphasis in the plaintiff's case upon the history of dealings between the parties and the reliance by Newshore upon those matters to support a favourable finding about Mr Bryer's credit as a witness.

133 For the reasons I have indicated I am prepared to accept Mr Bryer's evidence on contentious matters where it is corroborated but not otherwise. Of course, some of what Mr Bryer has stated is supported by other evidence in the nature of contemporaneous documents, for example, his travel to Sydney and Hong Kong and the like.

134 However, on the issue of hours worked and rates agreed, his evidence is not supported by any documentation or any other witness save for Mostert to whose evidence I will now turn.

135 As I have mentioned Mostert was a former director of DRD who left the company in early August 2000, following which Newshore rendered its invoice the subject of these proceedings. Mr Mostert was called to give evidence by the plaintiff. It was through Mostert that Bryer frequently dealt when conducting the business of either Vista Blue or Newshore with DRD.

136 Charles Mostert was also a witness who was impressive initially when giving his evidence in chief. In most respects Mostert's evidence was supportive of Bryer. This is certainly so as to the commercial history of dealings between the parties prior to May 2000 and as to the alleged formation of the agreement, the services agreement, upon which Newshore sues. Mostert generally supported Newshore's case that work was done pursuant to the services agreement and that Newshore had an entitlement to be paid.

137 There was clearly no love lost between Mostert and his former employer DRD. At T461 Mostert agreed that DRD was currently pursuing "very substantial claims" against him in the Supreme Court of Western Australia. Mostert could not be described as an independent witness.

138 All of the prior payments made by DRD to Newshore or Vista Blue which are not the subject of this action, were made either by DRD or DRD Australasia when Mostert was the Chief Financial Controller of DRD. As I have mentioned, Mostert, or Stratton who was another employee based in Perth, seem to have accepted Newshore's and Vista Blue's earlier accounts with hardly any query at all. Nor was there any evidence produced which established whether the fact of these payments was ever raised with DRD by either Mostert or Stratton or anybody else. In my view these matters do not reflect favourably upon Mostert given the office he held with the defendant.

139 With respect to one area in particular, I had great concerns about Mostert's credibility and reliability as a witness. This related to the issue of what was agreed with Newshore concerning the method of calculation of fees. In the fourth paragraph of the document said to be the written part of the service agreement (Exhibit A119) which was signed by Mostert as Chief Financial Officer of DRD on 21 May 2000, in the fourth paragraph, it says that it was a term of the service agreement that fees be "based on time spent".

140 In par 16 of the statement of claim it is pleaded that the agreed daily rate for the provision of services was $3,500. Alternatively, it is pleaded in par 17 and par 18 that there was an implied term that the defendant would pay the plaintiff reasonable remuneration and having regard to the complexity of the services, and Bryer's expertise and experience, $3,500 per day is alleged to be a reasonable rate. It is also claimed that that rate was consistent with the previously paid fee of $247,000.

141 In his evidence at T401, in examination-in-chief, Mostert was asked about the method of calculation of fees and he appeared to lose much of his confident presentation. He became defensive, he stuttered and he was uncertain and seemed uncomfortable. He was vague about the matter and his evidence was inconsistent with Bryer. And this was in evidence in chief. I will set out some of what he said:

"Mr Mostert can I take you back to the 1999 period and Mr Bryer on the subject of payment to him what discussion or agreement did you have with Mr Bryer as to how he or the entity in whose name he rendered the invoice was to be paid?---I looked towards Mr Bryer to discharge the services that we had agreed upon. The companies that he had used in order to receive payment for those services were at his elect. I never questioned him as to why he had chosen particular companies to receive those payments.

How did you arrange the amount of the - sorry, how did you arrange the amount of the payment of the company in whatever name it was rendered?---The amount of the payment was using a rule of thumb as a percentage of what I believed was the value of the services rendered to me. If I can explain, for market making we had issued a number of shares, those shares had a value, a market value. To maintain the market value of those shares I equated his fee to a percentage of that market value.

What was the percentage?---For market making was less than one per cent. Less than half a percent.

Okay, that's market making. What about the other function you have described?---The other function for raising funds, bench mark would be around about five to six per cent. We agreed to a fee much lower than that. Also agreed that it would cover his costs of transport, accommodation and out-of-pocket expenses.

Doing the best you can now, can you remember how much the fee was that you agreed to with Mr Bryer for the loan finance raising?---I'll have to take a guess. Three per cent, three and a half per cent. That's to the best of my recollection?

(T402) Did you have that discussion again at the time of the visits to Hong Kong and Sydney and the Auto Caps proposals?---Yes, our discussions were on an ongoing and regular basis. ...

Did you have a discussion with Mr Bryer that you can recall on about 19 or 21 May about how much was to be paid to him for producing offers, as you have described them in your evidence?---Yes. Although we had discussions on specific items, I always treated the fee as an all encompassing fee because while he was assisting us to raise finance, he also had the duties of market making, hence the fee that we had agreed on was for all three categories of service.

How much was that fee?---There were specific invoices rendered; one for $240,000 and two invoices for $63,000 that's what we had agreed upon. Plus then there was other ongoing work. As you would see from this agreement, it was for a 12 month period.

Yes was there any discussion about a fee for the Auto Caps transaction?---Not specifically. We wrapped that all up in the total fee we had paid him but the bench mark that I used in setting the total fee was approximately the three and a half per cent of the offer, of $10,000,000."

142 Counsel for the plaintiff then reintroduced the issue at T415 at the top as follows:

"Did you have any discussions with Mr Bryer about the results he had to achieve before becoming entitled to payment of a fee for the work; that's fee as separate to the expenses?---Absolutely...

(T416) Do you recall, Mr Mostert, having a discussion with Mr Bryer about the goals he had to achieve before becoming entitled to payment of the fee in relation to the Hong Kong auto caps proposals?---Yes, so for all three categories of services which he rendered, I think I made it very clear to Mr Bryer that it would be success based. The judgment of that success would really rest with myself and the company.

What is your judgment of the success?---I believe that he had discharged successfully the services which he undertook to render, that being of market making, that of placing shares for cash for company and, thirdly, of getting firm offers for re-financing the company. ...

(T422) Coming back to the question of success as you have used that term in relation to the work Mr Bryer was undertaking, what did you consider to be success in relation to both of those offers?---I believe that Mr Bryer discharged his duty. We had valid offers which measured to commercial terms. The reason for rejection was not because of commerciality but because of other reasons.

You had concluded that Mr Bryer had succeeded?---Correct.

And in the earlier fee arrangements with him that was dealt with on 3.5 per cent basis?---Approximately 3. (then was an objection)."

143 Mostert's evidence about the method of calculation of fees was not the subject of any significant cross-examination. The cross-examination mainly dealt with various alleged irregularities relating to previous accounting and payments. I have already mentioned some of these. Generally Mostert asserted that moneys were paid by DRD to Vista Blue or Newshore for work done. He said that moneys would not have been paid if work had not been done.

144 Mostert was called by the plaintiff in support of Bryer. In relation to the issues of hours worked, fee rates agreed and the like, Mostert provided no convincing support for Bryer's testimony. I do not place any more weight on Bryer's evidence about those matters having heard Mostert.

145 Mostert also stated in cross-examination that there was a file kept by him in the Perth office of DRD relating to Mr Bryer which he said was marked "R Bryer" or something very similar (T460). Mostert said it was a lever arch file. It had:

"copies of all the meetings that I have had with Bryer. This would be on A4 scrap paper as well as copies of all documentation that Bryer provided to me in terms of the services that he had rendered.

What documents did he provide to you in terms of the services that he had rendered?---Particularly with regards to the placement of shares I would have had copies of the shares that were placed as I had to reconcile at the end of the day that the proceeds which they had been paid they had received. I wanted to know of Bryer's meetings and his movements so we had talked about - discussed the progress on those discussions." (sic)

So you had information regarding shares placed and notes that he had taken?---No. Notes that I had made on our meetings."

146 This file was never produced. It allegedly disappeared some time shortly after Mr Mostert's resignation from the company in early August 2000.

147 It seems to me to be quite curious that Mr Bryer was unable to produce supporting documents to substantiate his claims of hours worked and the like, let alone notes of meetings and so on, and neither was Mr Mostert because his file had "disappeared". The unspoken allegation was that there was foul play but I think that extremely unlikely. Furthermore the evidence begs a question why the records were so informal.

148 In concluding my remarks about the evidence of Mr Mostert I think the following observation can be made. As I have mentioned Mostert was the Chief Financial Officer of DRD in Australia. It was he and Stratton who caused payments to be made of Newshore and Vista Blue's various accounts rendered to the defendant from time to time. These events occurred with his knowledge and approval. Very large sums of money were paid out to companies in which Bryer was involved. In my view Mostert's role in facilitating these dealings and in failing to require basic supporting documents and generally in not looking after the interests of DRD in the matter, further undermine his generally favourable presentation in the witness box. I do not think any more weight can be placed upon Mostert's evidence than can be placed upon Bryer's. I would not be prepared to accept Mostert's evidence on disputed matters unless it was supported by other evidence not from Bryer. Their support for each other is no support at all.

Authority - did Charles Mostert have authority to bind the defendant?

149 This issue was only briefly raised in the pleadings prior to trial. Nevertheless it is a threshold issue in the circumstances of the case.

150 In the Amended Statement of Claim there is no clear reference to the question of whether or not Mostert had authority. There are a number of assertions that the defendant acted "through" Mostert which obviously suggests that the defendant, the principal, was acting through Mostert, the agent, and this would seem to impliedly assert, or assume, that Mostert had authority.

151 In the defence at pars 3(b), 8, 9, 10(b) and 20 it is denied that Mostert had authority "to commit the defendant to any such agreement", or "to cause the defendant to enter into any such agreement" etc.

152 No reply was filed by the plaintiff prior to trial. After hearing argument on the first day of trial I made an order that the plaintiff should file a reply which was filed the following day being 17 December 2002. In that reply at par 3 the plaintiff asserts that Mostert's authority was "actual or alternatively implied or alternatively ostensible". Particulars are then provided which, apart from the reference to s 128 of the Corporations Law, appear generally to recite the evidence and then conclude with the rolled up plea that:

"By reason of the above the defendant clothed Mostert with actual, or implied or ostensible authority to enter into the service agreement."

There is no attempt at identifying what aspects of the evidence related to what type of asserted authority.

153 The only witnesses called by the plaintiff, as I have mentioned, were Bryer and Mostert the alleged authorised agent. None of the officers of DRD Australasia with whom it was alleged Mostert dealt namely Messrs Kebble, Prinsloo, Banfield and the like, were called by either party. What inferences can be drawn from the failure of either the plaintiff or the defendant to call these persons, who must have had relevant knowledge, I will refer to later.

154 A readily comprehensible explanation of the law relating to authority is to be found in Equiticorp Finance Ltd (in liq) v Bank of New Zealand (1993) 32 NSWLR 50, a decision of the New South Wales Court of Appeal reported in which, at 132 Clarke JA and Cripps JA stated:

"An agent may have actual authority to bind a principal which is quite distinct from, but may overlap, ostensible authority. Actual authority may be express or implied. ...

Actual authority arises where a principal grants, and an agent accepts, authority for the agent to perform specific tasks on behalf of the principal - in short there must be a consensual agreement between the principal and agent. 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.

Accordingly, where the question is whether the agent has 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. Ostensible authority is quite different. The question then is whether the principal has held out the agent as having authority to act on its behalf. Obviously a principal may expressly hold out a person as its agent to act on his or her behalf in a specific transaction but usually where this occurs there will have been a grant of actual authority. On the other hand there may be no evidence of a grant of actual authority and yet the principal may have so acted as to hold out the agent as having a requisite authority. In many instances the circumstances which give rise to ostensible authority may also provide a basis for inferring an actual grant of authority."

155 Their Honours then cite the well known passage from the judgment of Diplock LJ in Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 1 QB 480 at 502.

156 Thereafter their Honours briefly continued:

"We have already indicated that actual authority may be implied. It is, however, important to emphasise that the authority impliedly granted by the principal for the agent must be such as could be validly granted by express agreement. Put another way, in the specific context of company law, it must be an authority whose existence is contemplated by the company's Memorandum and Articles of Association."

157 In short, Mostert asserted he had express actual authority. His assertion was not supported by any other person from DRD nor by any relevant documentation. In Particular 3(h) of its reply the plaintiff alleged:

"At some time prior to September 1999 the defendant by letter to Mostert mandated Mostert to run and implement the whole of the defendant's business in Australia." (Stratton affidavit par 8).

158 No such letter was tendered in evidence. Neither was the Stratton affidavit.

159 There was no reference to Mostert being expressly "mandated" to enter into agreements such as that the subject of the trial in any other document. Some of the minutes of meetings of the directors of the defendant were tendered in evidence. Exhibit 14A was the minutes of the meeting of the Board dated 21 July 1999. Exhibit 13A was minutes of the meeting of 14 April 2000. Each of those minutes contained a reference to the passing of resolutions during the previous quarter which were to be ratified by the Board. A perusal of the sorts of resolutions requiring ratification reveals that the Board was informed about and had a role to play in relatively minor events in the company's business. For example, in exhibit 13A item No 7, the resolution of 9 March 2000 there is a reference to the ratification of a resolution to enter into an agreement with an advertising company to install an advertising sign at a monthly rental.

160 It seems to me that given the nature of the matters which were resolved and required ratification by the defendant Board, that it is inconceivable Mr Mostert would have been authorised as the plaintiff alleged without it being minuted. The more so, given the significance of the brief, namely a company taking steps, allegedly, to secure its somewhat precarious financial position. And yet there is no evidence it ever was. The absence of that evidence seems to me to suggest that Mostert was not ever expressly authorised to act on behalf of the defendant to enter into the agreement the subject of this action or to commit funds of this dimension to professional services. Mr Mostert's sworn word to that effect is not sufficient to persuade me that it was so.

161 The case put by the plaintiff perhaps relies more heavily on an assertion that Mostert had implied authority. The proposition briefly seems to have been that Mostert, being the Financial Director of the defendant and the CEO for the defendant's "Australian leg" (T378) at the relevant time, had authority to engage professionals. It was put that Bryer was a professional and therefore Mostert would not need to report to the Board upon such a matter.

162 The only documentary reference, and an oblique one at that, to the business of the company for which the plaintiff says it was providing services is in the minutes of a meeting of directors of DRD held in South Africa on 25 July 2000 which Mostert attended, and which occurred a few days before he resigned. (Exhibit A322-331 - par 10 on p 7 headed "DRD Australia Report"). The "Annexure B" referred to in the opening sentence, being a review for the quarter ended June 2000 tabled by Mostert at the meeting is Exhibit A316-321.

163 The minutes pick up the first two paragraphs of Mostert's review and state as follows:

"NOTED that the acquisition of Dome Resources NL had been successfully completed with DRD acquiring 98% of the shares to date. The possibility of recapitalising Dome in order to utilise it as the vehicle to drive the Australian growth strategy was discussed.

NOTED that the Board supported the discussions with a Hong Kong investor group to take an investment of approximately 22% of the issued capital in DRD. Convertible preference shares would be issued to the potential investor and this investment would assist DRD Australia to discharge a loan obligation of A$10 million to Rothschild."

164 It is implicit from the terminology that there had been some prior discussion of the acquisition of the company known as Dome Resources. The reference to the discussion with the Hong Kong "investor group", looks like new information for the Board. There is no reference to Newshore or to Bryer or the expenditure of large sums on professional fees. But perhaps it can be inferred that DRD was aware generally of the business being conducted in Australia.

165 The plaintiff's argument that Mostert had implied actual authority is attractive in some ways, however it seems to me, without going into a detailed analysis of all aspects of this issue, given the relatively scant attention placed upon it during counsel's addresses, that the strongest argument relating to Mostert having authority is that he had apparent authority. I think the matter can be put quite briefly.

166 I have already commented in great detail upon and dealt with the history of dealings between the parties. The reality of the matter is, as I have set out, that Bryer for Newshore and Vista Blue performed various commissions on behalf of the DRD, rendered substantial accounts therefor, and was paid. At all material times Bryer dealt with Mostert. It was Mostert who, according to Bryer on behalf of DRD, engaged Bryer through his various companies to perform various works and it was Mostert who according to Bryer, and in fact, caused, directly or indirectly, Bryer's earlier accounts to be paid. In my view it would have been apparent to Bryer that Mostert had authority given the history of their dealings and, again without going into the matter in any more detail, I am satisfied on the balance of probabilities that Mostert had apparent authority to bind the defendant. He may also have had implied actual authority.

167 In par 10(a) of the defence, the defendant denies that it entered into any agreement with the plaintiff as alleged or at all and then, in par 11, pleads that if it did, the agreement is void for uncertainty. No particulars were given or sought.

168 In the "defendant's outline of submissions for trial" dated 12 December 2002, at par 67 and par 68, the issue is outlined as follows:

"The alleged 'Service Agreement' is uncertain because;

(i) no definite meaning can be given to the scope of the services that fall within the terms of that 'agreement';

(ii) the alleged 'Service Agreement' is incomplete; and

(iii) there is no mechanism by which a fee can be ascertained."

169 In his oral submissions counsel for the defendant made passing reference to this issue, at T519 where he said:

"Secondly, there's no certain agreement and in particular there's no agreement as to the purpose of the agreement itself, and that's clear from the evidence of Mostert which contradicts the evidence of Bryer in that respect.

Most significantly, there's no agreement as to the rate at which Mr Bryer was to be charged, no agreement as to an agreed daily rate, notwithstanding the pleading in par 16 of the Amended Statement of Claim that an agreement was reached between Mostert and Bryer that the daily rate would be $3,500. Neither Bryer nor Mostert gave any evidence to that effect."

170 In the "Plaintiff's Outline of Submissions for Trial" dated 10 December 2002, a document to which counsel made reference in his final submissions on 5 November 2003, counsel at s C.1, pars 25 and following, pointed out that if the parties have conducted themselves on the basis that a contract exists between them, a court will readily infer that a contract has been brought into being. There was then a reference to the Law of Contract, Grigg & Davis 1987 Law Book Company at 249.

171 Cheshire & Fifoot's Law of Contract, 8th Australian ed, at par 6.5 and following contains a useful review of the law relating to uncertainty. At 6.6 the author states:

"Although the Courts have in the past sometimes taken a strict approach to the problem of uncertainty, the modern approach is, as pointed out above, generally to uphold contracts despite lack of clarity."

172 And later, after reference to Upper Hunter District Council v Australian Chilling & Freezing Co Ltd (1968) [1968] HCA 8; 118 CLR 429 at 436-7, and Meehan v Jones [1982] HCA 52; (1982) 149 CLR 571 at 589, the author states:

"This readiness to uphold bargains is reinforced if the parties have acted on the agreement."

173 Counsel, at the end of the day, did not place a great deal of emphasis on this issue in their submissions. I have already reached the conclusion that there was a contract entered into between the plaintiff and the defendant and I did so primarily upon the basis that there was no doubt Bryer for the plaintiff did indeed attend at Hong Kong and Sydney in relation to business concerning the defendant, he attended meetings, he incurred expenses including travel and accommodation and thus, although the extent is contentious, he did expend his energies as he states. He would not have done so if there had not been some agreement reached between him and the defendant through Mostert for him to provide his services. In my view, although indeed there are some matters which are far from clear, the parties did indeed enter into a service agreement as pleaded and it is not so uncertain that it should be rendered void.

The affidavit of Roger Bryer sworn 10 November 2000 - Exhibit 8

174 In cross-examination of Bryer counsel for the defendant showed to him and later tendered Bryer's affidavit sworn 10 November 2000. The affidavit was sworn in opposition to an application made in the Supreme Court to set aside the plaintiff's statutory demand made pursuant to the Corporations Act. The affidavit became Exhibit 8.

175 Counsel for the defendant made use of some references made by Bryer in the affidavit in his attack on Bryer's credit (T294 et seq). The affidavit had been sworn in the said Supreme Court proceedings before the proceedings the subject of this action were commenced in this Court.

176 In his affidavit Bryer sets out his assertions about the history of this matter, about how the alleged agreement was formed, its terms, and his assertions about performance. The affidavit contains a comprehensive summary of the oral evidence that Bryer gave for the plaintiff in this trial with some variations.

177 Counsel for the plaintiff submitted that Bryer's prior affidavit having been tendered by the defendant, the assertions favourable to the plaintiff not being challenged by counsel for the defendant became evidence of the facts stated. It was submitted the affidavit should therefore be taken as additional evidence that supported Bryer's viva voce evidence even though it was also from Bryer. Counsel for the plaintiff referred to comments in Cross on Evidence, 5th ed, at pars 17570-17575 at T567 and to the well known authority of Walker v Walker [1937] HCA 44; (1937) 57 CLR 630.

178 I had difficulty in following counsel's argument. The affidavit was tendered by the cross-examining party who had produced it to the witness. Perhaps it can be said that the affidavit, having become evidence, is evidence of the facts stated in it. Although it is an affidavit, and one sworn in legal proceedings albeit in a different court, I doubt that it is as significant as counsel asserts. It is a prior consistent statement by the witness. It is self-serving. There was no suggestion of recent fabrication. I attribute little weight to it as a document and do not agree that it is significant evidence in support of the plaintiff's case, additional to the viva voce evidence of Bryer. (See Jones v Sutherland Shire Council (1979) 2 NSWLR 206 (Ct of App) at 219).

Plaintiff's failure to discover documents relating to the "consultancy agreement" - the $247,000 payment

179 On 9 November 2001 the parties were ordered to give discovery on oath (Exhibit 27).

180 By letter dated 14 October 2002 the defendant's solicitors wrote to the plaintiff's solicitors "asking for production of the relevant financial statements of Newshore including the relevant taxation return and ledger details showing the income earned by Newshore in the financial year ending 30 June 2000" (letter referred to at T340 in cross-examination of Bryer - but never tendered).

181 In cross-examination of Bryer commencing at T339, he was pressed on the issue of the need to produce documentation particularly relating to the invoice of $247,000 rendered to and paid by the defendant. Bryer indicated in cross-examination that he did not want to produce such documents. Counsel for the plaintiff then mounted an argument upon the basis that as the plaintiff was not seeking the sum of $247,000 from the defendant, and as the defendant was not seeking that the plaintiff repay that amount, that the entire issue was a collateral issue in respect of which it was not appropriate that orders for discovery be made.

182 In response counsel for the defendant pointed out that it was the plaintiff who had caused the previous payment to be relevant to the trial by pleading the transaction that resulted in the payment and by seeking to incorporate by reference to that payment a number of important matters relating to the claim the subject of the action.

183 As I indicated during argument the issue of the payment of the $247,000 was made relevant by the plaintiff and the surrounding documentation is discoverable.

184 Without analysing in detail every exchange that took place between myself and counsel as appears from T340-344 I do not think counsel could have been in any real doubt about whether or not an order was made.

185 In the result, by the next day, Bryer, having stated that the records existed, produced none. He was examined about this at T359. His counsel did his best to control the damage but the fact remains that no documents were produced.

186 Counsel for the defendant made much of this matter in his submissions at T554-560. In essence it was submitted that the plaintiff's failure amounted to a refusal to comply with the order for discovery which should result in judgment being ordered against the plaintiff:

"Not because the conduct is deserving of punishment but because the failure to produce the document has rendered it impossible to make any judgment - impossible to have a fair trial and because the conduct would make any judgment in favour of the plaintiff in this case unsafe."

187 Counsel for the plaintiff at T602 expressed the view that there was no time limit provided for the provision of the document (even though the order was made during the trial and whilst the plaintiff's principal witness was under cross-examination) and that therefore "it was not an order or direction that required an event to happen by a time". He then said that there was no refusal to give discovery and he went on to argue that there was no prejudice in any event. In his submissions counsel made mention of the case of British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197 and wound up by saying that the failure of the plaintiff being able to produce any documentation was irrelevant.

188 Although I do not have difficulty accepting the observations made by Mr Martino, generally, I am not prepared to take the view he urges and, upon the basis of an alleged refusal to give discovery, order judgment against the plaintiff. I have already expressed my views about the lack of supporting documents generally and those views have been important in my conclusions about Mr Bryer's reliability as a witness on the issues of work done and hours spent and the like. In my view Bryer would produce these documents if he was able. The fact that he has not been able to do so strongly suggests that they do not exist even though he said they did. His lack of compliance with the order reinforces my views about his reliability as a witness.

Failure to call former office holders of the defendant namely Messrs Kebble, Prinsloo, Banfield, etc

189 Throughout the relevant period, according to Bryer, he dealt with the defendant through Mostert and, sometimes himself but usually through Mostert he dealt specifically, according to his evidence, with gentlemen named, Kebble, Prinsloo, Banfield, etc.

190 There was repeated reference in evidence to those gentlemen being aware of what it was the plaintiff was doing, in authorising Mostert to engage the plaintiff, and a whole range of other related matters.

191 Yet none of these gentlemen were called to give evidence by either side.

192 The question of whether Mostert had authority was raised by the defendant in its defence. It was denied that Mostert had authority. The evidential onus would therefore seem to fall upon the defendant. The defendant did not call the abovementioned witnesses and other things being equal it might be said that the reason lies in the fact that those witnesses could not assist the defendant on the issue. As I have already found that issue against the defendant there seems nothing further that needs be said.

193 It was the plaintiff's case, as I have repeatedly said, that it was commissioned to do work, it had specific tasks and performed work for lengthy periods of time and the like. It was the plaintiff's case that it dealt with Kebble, Prinsloo and Banfield. Yet, the plaintiff did not call any of those witnesses. One might then also take the view that those witnesses would have been called if they could have assisted the plaintiff in its case.

194 Although it is surprising that neither party called these witnesses, I do not think the fact that they were not called is of significance in the case on any undecided issue. Indeed it would seem that the particular issues in respect of which the non-calling of those witnesses might be relevant, have already been decided appropriately.

Findings on evidence of Bryer as to fees and hours

195 Having carefully considered the evidence and reviewed detailed notes I took during the hearing of this matter, which lasted seven days over a period of 12 months, I am not satisfied on the balance of probabilities that it was agreed that Newshore would be paid at any particular daily or hourly rate. Further I do not accept the evidence that Mr Bryer worked the number of hours he says he did. I am concerned that the number of hours claimed to have been worked is exaggerated and that Newshore and Vista Blue may have already been paid for some of the hours now claimed by Newshore.

196 On balance, I think that Newshore is entitled to a judgment but in attempting to work out what hours Bryer worked, which have not been paid for, the evidence is unhelpful. I am left with the choice of either dismissing Newshore's claim for want of evidence or attempting to arrive at a figure based on a reasonable approach, doing the best I can in the circumstances. Not without some hesitation I shall attempt to arrive at a reasonable figure.

197 On p 7 of these reasons I have set out the contents of a document called "Service Agreement" (Exhibit A119) which on the plaintiff's case is the "partly written" part of the agreement. The only reference to remuneration is in the fourth paragraph which says:

"Notwithstanding the final conclusion of all such negotiations it is agreed herein that the company will pay to Newshore all of the expenses incurred by Newshore together with fees based on time spent in furthering such negotiations."

198 I have already reviewed the evidence of both Bryer and Mostert as to how the plaintiff's remuneration was to be calculated and it is clear that the evidence is inconsistent. By reason of the findings I have made about the quality of the evidence adduced on behalf of the plaintiff, as I have indicated, I am not satisfied that the agreed rate was either $100,000 per month, $25,000 per week, $3,500 per day, or $250 per hour.

199 Apart from invoices which were silent on the point, there was no clear documentary support for any particular rate of remuneration or method of calculation of fees. As I have mentioned there was an absence of records of time spent. Furthermore, Mostert, who was called to give evidence by the plaintiff, was not asked in chief and gave no evidence about hours spent by Bryer.

200 In the absence of any conclusion about what was agreed concerning rates of remuneration I then turn to the question of whether it can be said that there was an implied term of the agreement that the plaintiff would be paid reasonable remuneration.

201 In my view there was an implied term of this agreement that the plaintiff would be paid reasonable remuneration for services provided. Such a term is essential to give business efficacy to the agreement. I do not think any further discussion of the law is necessary.

202 However, I have considerable difficulty in identifying what evidence can be relied upon in order to assess what would be a reasonable rate of remuneration. The plaintiff asserts that a reasonable rate of remuneration is $3,500 per day. It was argued that that rate was the basis of calculation of fees rendered in previous invoices in respect of a different agreement, for allegedly similar services, which invoices were paid by the defendant to the plaintiff.

203 For the reasons that will be obvious in these remarks I do not accept that argument. It is not clear from any previous invoices that that was the rate charged and paid. I do not accept Bryer's evidence in relation to that issue given it is unsupported by any other evidence apart from, perhaps, Mostert's evidence.

204 Bryer's evidence was that $3,500 per day was based upon a 14 hour day at $250 per hour.

205 The sum of $250 per hour, in isolation, would not seem to be excessive. The assertion that a person worked for 14 hours a day for a brief period may be plausible, it seems to me, but I do not accept that the plaintiff worked for 64 days out of 72 days, for 14 hours a day (or, according to Mr Bryer, up to 18 hours a day). I think defence counsel's observations in closing about this issue have some merit where at T525 he said:

"Your Honour it also highlights the inherent implausibility of the plaintiff's claim.

There's the proposition that a great deal had to be accomplished in a very short period of time but no evidence - no satisfactory evidence was capable of being led to identify what that imperative was. The purpose of the retainer is said to be to raise US$40,000,000 or up to $75,000,000 for the purposes of the dragon project but the only evidence given of any imperative in terms of things being done in a short period of time there's evidence that DRD needed to refinance a debt due to Rothschild and that evidence was incredibly or clearly implausible.

It was evidence to the effect that there were circumstances which if released to the market would have had a significant negative impact on the share price of DRD and an expectation that the officers of DRD would not release that information to the market. Even in relation to a debt to Rothschild in the sum of some $10,000,000 to $12,000,000 the evidence given by Mr Wellesley-Wood and Mr Murray was that there was no - first of all, had there been any circumstances which could not duly affect the price of DRD shares they would have released that information to the market but secondly there was no prospect of DRD not being able to repay that money and it was repaid and significantly, your Honour, they were not cross-examined on that evidence.

Similarly, Mr Wellesley-Wood was not cross-examined on his evidence that he had not received reports from Mr Mostert about Mr Bryer's activities. The glaringly improbable proposition that anyone would work on average 14 hours a day for 64 days over a 72 day period is a proposition which is clearly consistent with exaggeration and unreliability and inconsistent with evidence of a satisfactory nature being given and that tendency to exaggerate was apparent from the outset..."

"This is a case where not only are there no documents to support the work said to have been done, not only is there no time sheet recording what is said to have been done, not only is it the case that Mostert said that he essentially agreed with Mr Bryer's statement in his initial unsent facsimile - that his role was essentially as a facilitator and that he did not conduct negotiations, but the plaintiff has been unable to provide any clear or concise statement of the work said to be done but, instead, chooses to use very opaque and general terms such as 'modelling a suitable assignment to arrange the investment; modelling the type of instrument to be used, arranging the finalisation of an investment' and so on."

207 The Court is required to do its best to assess what would be a reasonable rate of remuneration and $250 per hour for a person who has the experience that Mr Bryer apparently has might, on the face of it, seem to be a reasonable rate. It was submitted on behalf of the plaintiff that:

"Generally a plaintiff is entitled to recover the market value of the services provided. Where services are provided by a professional they will usually be valued by reference to the commercial rate applicable to work of the type done by a person of the plaintiff's standing."

208 It was submitted that the Court should be able to have regard to the rate previously charged by the plaintiff and paid by the defendant.

209 As to that latter submission, given the views I have expressed concerning certain aspects of the previous payments made by the defendant, or its Australian "arm", I am not prepared to have regard to them as a basis for formulating a view about what is reasonable.

210 There is really very little if any evidence to assist me in this regard. Doing the best that I can, $250 per hour for an eight hour day is $2,000 per day, $10,000 per week and $500,000 per year excluding holidays. That would be a handsome annual income for a professional person, perhaps not being a leading Queen's Counsel or medical specialist. I find that $250 per hour would be a reasonable rate of remuneration.

211 It is the assessment of the number of hours that Mr Bryer worked between 20 May and the end of July that is the most difficult task. I do not accept his evidence that he worked the hours per day he claims over the days he claimed. Mostert does not support him except generally, and there is little other evidence upon which I can rely.

212 The only piece of evidence that provides an arguable basis upon which an assessment of hours, and indeed rates, could fairly be made comes from the plaintiff itself. It is the interim invoice discussed at p 12 et seq above; Exhibit A380 as expounded in Exhibit A381.

213 As I have previously noted, the interim invoice rendered by Newshore to DRD was for the period 10 May-4 June 2000, being about 25 days. Allowing for weekends that period could be said to be about 20 working days.

214 For this period, Newshore claimed and was paid US$10,000 as fees, or about A$16,600 which, over the 20 day claimed period, averages at A$830 per day, or A$4,150 per week. That is how Newshore valued its services for a period prior to the period the subject of this action and overlapping some 15 days with the term of the alleged contract now sued upon.

215 Bryer in examination-in-chief on 18 December 2002 said the interim account was rendered because the work that he was doing had become very expensive (T195). He asserted the work charged was not the same as that being sued for. I do not accept that evidence for the reasons I have already explained and also because it is inconsistent with the terms of the invoice.

216 Bryer did not say he worked any harder or longer on his brief after 4 June. He did not really differentiate between his account of the extent of the work he did that culminated in the interim invoice and the work that culminated in the invoice on which Newshore sues. Indeed, Bryer suggested the invoice was not for his services at all!

217 In cross-examination Bryer suggested the interim invoice only covered out-of-pocket expenses (T248). This flies in the face of the document. (See T300-303). I have already said Bryer's evidence about the interim invoice and his efforts to explain away what the document states were unsatisfactory.

218 In my view, $250 per hour would be a reasonable hourly rate for a person with the background and experience of Bryer, as I have already stated. Given the arithmetic suggested by the interim invoice and the average daily rate of $830, assuming $250 per hour, this amounts to three and one third hours work on average per day charged by Newshore and paid by DRD. I cannot see any reason to assume Bryer worked for longer per day, every day on average, on behalf of Newshore for DRD, from 5 June to 30 July. Assuming a five day week and an average of three and one third hours of work per day over the period amounts to a reasonable assessment in the circumstances. Thus, $830 per day, = $4,150 per week x 8 weeks (deducting for the overlap and accepting the assertions contained in par 25 of the defence) results in an assessment of $33,200.

219 Newshore submitted that the expenses incurred pursuant to performance of the Services Agreement are contained in a schedule which became Exhibit A227.

220 As counsel candidly admitted during his final submissions at T607:

"We have difficulties with some of the items in this schedule."

As will appear, that was an understatement.

221 The interim invoice - Exhibit A380-381, discussed above, was rendered for "work done during the period 10 May 2000 to 4 June 2000 inclusive. It refers to hotel accommodation Hong Kong dollars 9,916. It has references to "transport, meals..." US$4,405, to telephone and communication charges, of US$6,410, and to "fees" of US$10,000.

222 Referring to Exhibit A227 the first item relating to hotels, which is the second section, refers to accommodation at the JW Marriott in Hong Kong for two periods in May which in Hong Kong dollars (totalling Exhibits A113 and A128) equals $9,916. This is the sum referred to in the interim invoice which, indisputably, was paid. Bryer dealt with this at T288.

223 By inference the claims for airfares to Hong Kong in May would relate to the same period although they are not specified other than that they occurred in May. These items appear at the head of the list in Exhibit A227. They are not supported by any records or receipts whatsoever. They could well have been paid as part of the payment of the interim invoice.

224 I would not be prepared to make any allowance for airfares to Hong Kong because I think they could well have been paid already.

225 As for the trip to Sydney in July 2000 which was not paid by DRD I would be prepared to make allowance given there is no doubt Bryer went to Sydney and given it was not in a period covered by any other invoice. The other airfares were paid by DRD.

226 As to the claim for the Ritz Carlton in Sydney in July I would also be prepared to allow that although there was no receipt.

227 Photocopying, etc, results in a claim of $482. This is a mere estimate unsupported by documentation. I would not allow that.

228 Hertz Rentacar - given Bryer was in Sydney in July I would allow that at $585.32 although there are no receipts.

229 Private meeting room rental - there is no documentation whatsoever and I would not allow that.

230 Optus mobile accounts seem to me to be excessive. However, it is certainly plausible that there would have been some allowance for Bryer's personal mobile costs. I would allow that at $1,000.

231 Taxis, trains and ferries is unsupported by documentation. I would not allow that.K

232 The claim for away from home allowance of $300 per day for 32 days is unsubstantiated in any way. It is an estimate and I would not make any allowance for that.

233 Therefore I allow the following expenses:

1. Qantas airfare Perth-Sydney-Perth July 2000 $1,616.34

2. Ritz Carlton Sydney 11 July-17 July 2000 $1,907.30

3. Hertz Rent-a-Car Sydney 11 July-17 July 2000 $ 582.30

235 Interest from 31 July 2000 to 31 March 2004 = 3 years and 7 months = 3.58 years x 6% x $38,305 = $8,227.91.

236 There will be judgment for the plaintiff in the sum of $46,532.91.