Nicholas Richard Whitlam v Insurance Australia Group Limited

Nicholas Richard Whitlam v Insurance Australia Group Limited - [2005] NSWSC 83 - NSWSC 2005 case summary — Zoe

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"The delay… appears to have been occasioned by a baseless timidity in the light of…irrelevant or specious assertions by the Australian Securities and Investments Commission or media publicity, the very effect of which…. increased the spotlight of exposure on Mr Whitlam. Having induced him to retire to avoid bad publicity for the company it was unconscionable to leave him in a financial lurch, again to avoid bad publicity. He gave up his only "bargaining power" to be left at the mercy of the very board who had assuaged him into a false sense of security." The pleadings 5 It is inappropriate to repeat the record. Suffice it to say that Mr Whitlam's claims include: · a claim that the alleged unconscionable conduct entitles him to equitable compensation in terms of interest, stress and loss of the opportunity to promptly receive the retirement benefit; · a claim to a timing entitlement based on contract claims; · a claim for damages pursuant to section 82 of the Trade Practices Act 1974 (Cth) and/or section 68 of the Fair Trading Act 1987 (NSW); and · a claim that IAG's conduct was oppressive to, unfairly prejudicial to, or unfairly discriminatory again Mr Whitlam in contravention of section 233 of the Corporations Law. Article 12.15 of IAG's constitution 6 Article 12.15 of IAG's constitution had provided that IAG "may pay a former Director … a retirement benefit in recognition of past services in the amount determined by the Directors but not exceeding the amount permitted to be paid by the Corporations Law". [Emphasis added] 7 IAG has submitted: · that the payment of a retirement benefit to any particular director remained discretionary having regard to the terms of this article; and · that its board was entitled, and obliged, to exercise a discretion as to whether to make a payment to the plaintiff, and in what amount, and that this is what it did: see Sali v SPC Limited (1991) 9 ACLC 1511, at 1519-1525; NRMA Insurance Group Ltd v Spragg (2001) 38 ACSR 174, at [25]. The demutualisation 8 It is common ground that: · IAG [then and until 18 January 2002 called "NRMA Insurance Group Ltd"] was incorporated on 30 November 1999; · pursuant to the demutualisation NRMA Insurance Ltd ["Insurance"] became a subsidiary of IAG on 22 July 2000. 9 In explaining the demutualisation, it is convenient to simply repeat a portion of the summary given on 24 February 2000 by Santow J in the scheme of arrangement proceedings, Re NRMA Insurance Ltd (No 1) (2000) 33 ACSR 595 at 609-610:

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(k) Mr Ian Stanwell." 13 Of these directors evidence was given during these proceedings by Messrs Whitlam, Astbury, Cousins, Hamilton and Ross as well as by Ms Fisher. 14 Some evidence was adduced outlining the turgid history of infighting at board level for some time prior to March/April 2001. The particular protagonists appear to have been Mr Whitlam ranged against Ms Keating as well as Mr Dodd. This infighting had become daily fodder for the media and there was evidence of media statements that certain fund managers blamed the bickering for the stagnant share price and for the company's poor performance [Exhibit P 12 page 300]. Various members of the IAG board developed concerns about the impact which the infighting was having on IAG and, in particular, the perception of IAG within the professional investment community and the unwillingness of institutional shareholders to increase their shareholdings in IAG while the bickering continued. 15 It is unnecessary for this judgment to deal with the detail of the claims and counterclaims of the principal protagonists in terms of the perceived faults of one another. However against the above background, it is clear from the evidence that, on the balance of probabilities, Ms Keating could not be counted on to support any retirement payment being made to Mr Whitlam. The evidence before the court [for example given by Mr Astbury at transcript 201, to the effect that Ms Keating was unfavourably disposed towards Mr Whitlam; and given by Mr Ross - statement at paragraph 4 - who assumed that she would not support such a payment] generally appears to me to have likely understated Ms Keating's opposition at that time. 16 However, there is evidence to the effect that Mr Ross had discussed the question of Mr Whitlam's possible retirement as chairman and director of IAG with all IAG directors, other than with Ms Keating, each of whom had said to him words to the effect that they would support a payment to Mr Whitlam of the maximum [sometimes called "the full"] retirement benefit to which he would be entitled under the proposed retirement benefits policy. I therefore proceed upon the basis that on the balance of probabilities, at the material time, all other directors including Mr Dodd had stated that they would support any retirement payment being made to Mr Whitlam under the proposed policy. 17 Insofar as the other directors who did not give evidence are concerned, the evidence, even beyond that given by Mr Ross [see for example Mr Astbury at transcript 201], establishes on the balance of probabilities that Ms Callaghan, Ms Easson and Mr Stanwell were generally favourably disposed towards Mr Whitlam. This confirms the finding that they would have supported the payment to him of the maximum retirement benefit in an amount which conformed with the Retirement Policy. The facts 18 The convenient course is to move directly to the facts. The chronology is of real significance, not the least because of the extensive reliance on board papers, including advices. Attempts were made to have the Court construe the Retirement Policy by reference to such materials and to make findings as to whether or not the directors conduct was unconscionable by reference to legal advices obtained. Reliability of witnesses 19 In dealing with the evidence, it is necessary to treat with the reliability of the evidence given by a number of witnesses. Fortunately, there are not many issues where it ultimately becomes necessary for the Court to determine a critical dispute as between versions of events given by particular witnesses. Evidence of Mr Whitlam 20 Mr Whitlam is accepted as a witness who gave reliable evidence. His evidence may not be accepted in every detail, on every occasion and where it is not accepted, or not accepted in full, the judgment below makes this explicit. However the finding is that he gave his best recollections of the events which had taken place. Clearly, the course of events leading to this litigation has angered him considerably. Hence the proper approach to the evidence he has given is to test it against the contemporaneous materials and against the versions of evidence given by other witnesses. He has however in the main come through this testing process entirely unscathed. Evidence of other witnesses 21 The finding is that every one of the other witnesses who gave evidence carried out his or her best endeavours to accurately recall the events which had taken place. Where there have been inconsistencies in the evidence the approach of the Court has been to reach a factual finding on the balance of probabilities in the light of all of the evidence, both oral as well as documentary. Where it becomes necessary to single out a particular piece of evidence given by a particular witness as unreliable, the judgment makes this plain. 22 February 2001 22 On 22 February 2001, a paper was delivered to the IAG board entitled "Retirement Benefits for non-executive directors" ["the 22 February paper"]. This paper [Ex DX, tab 2] in turn attached a paper by the defendant's external solicitors, which stated, inter alia:

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"A director of [the defendant] who is also a director of [Association] will not be entitled to include remuneration from Association in determining the retirement payment payable by [the defendant] since at no time in the last 3 years was Association a related body corporate of [the defendant]." Prior to 1 April 2001 Mr Cousins 38 Mr Cousins gave evidence under cross-examination [transcript 256] that: · prior to 1 April, he had suggested to Mr Whitlam that if he resigned as chairman and director he would be paid the full amount of the retirement benefit; · the board had a retirement policy [or was about to put one in place] under which Mr Whitlam would qualify and that he could see no reason why Mr Whitlam would not be so paid; · he believed the board would support such an approach; and · the basis of his belief that the board would support it was, in part, the conversations he had had with the other directors. 39 Board papers for a meeting on 4 April 2001 were circulated to members of the board prior to 1 April 2001 and contained an agenda item to approve the Retirement Policy. 1 April 2001 - The alleged representations 40 Evidence was given by Mr Whitlam of representations said to have been made to him on 1 April 2001 broadly in the same or similar terms by identified directors of IAG. His evidence may be shortly summarised as having been informed by those to whom he spoke [or in the case of Mr Cousins, to whom Mr Whyte spoke on his behalf], that were he to resign as a director, the particular directors would support the payment to him of a full retirement benefit as set out in the board papers. The finding is that this evidence is in general terms reliable. 41 The finding is that he also asked for support from these persons in relation to any amount, additional to the retirement benefit, which he could legally be paid. It is unnecessary to reach a finding as to what was said in each case on this issue, but it is certainly not clear that there was a universal acceptance of the proposition that he could be paid an amount additional to the full or maximum retirement benefit payment. 42 As foreshadowed above, there were also meetings/conversations between Mr Whyte [speaking on behalf of Mr Whitlam] and Mr Cousins. Mr Cousins said that he would support a retirement benefit payment to Mr Whitlam if he voluntarily resigned. He also said that he believed that the majority of the board would support such a payment. 43 Mr Whitlam had directly raised with Mr Cousins the possibility of an additional payment being made to him beyond any retirement benefit because of the work that he had done as to demutualisation. Mr Cousins had said that there was no potential for any such additional payment to be made to Mr Whitlam. 44 Under cross-examination, Mr Cousins accepted that in early April 2001 at the time he was communicating with Mr Whyte, he had been having discussions with other board members. In the course of those discussions some of those board members had communicated to him that if Mr Whitlam resigned as chairman and director, as far as they were concerned he would be paid the full amount of the retirement benefit. [transcript 254]. His evidence included:

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Q. To the extent that statements by you or by other directors to the effect that if he did resign he would be paid the retirement benefit assisted that course, you regarded that as entirely proper? A. Yes." [transcript 262] 45 Counsel for Mr Whitlam has correctly drawn attention to certain internal inconsistencies in some of the evidence given by Mr Cousins. It is also true that certain sections of the evidence given by Mr Cousins, under cross-examination, appear inconsistent with the general tenor of the evidence of other witnesses, in particular where Mr Cousins under cross-examination at one point gave evidence that the retirement benefit was not being offered to Mr Whitlam in return for his resignation [transcript 271.4]. Likewise at another point under cross-examination, he gave evidence that he had not understood that on or about 1 April 2001, Mr Whitlam was speaking to a number of directors about the topic of his retirement and the retirement benefit [transcript 255.12]. Neither of these answers are accepted as reliable. 46 Somewhat curiously some of his oral evidence given under cross-examination was arguably inconsistent with his own written statement where he had said that at the time of his conversation with Mr Whyte, he was seeking to persuade Mr Whyte that it was in the interests of IAG and its shareholders for Mr Whitlam to resign as a director of IAG. 47 In my view Mr Cousins evidence does require to be carefully assessed against that given by the other witnesses. Where it conflicts with the evidence of Mr Hamilton or Mr Astbury, the evidence given by them is accepted as the more reliable. It is clearly very possible that Mr Cousins recollection is not now as sharp as it once may have been in relation to all of these conversations. He accepted that in certain instances his recollection of detail in terms of conversations was unclear (transcript 255.20 and 277.56]. In any event he accepted under cross-examination that he had had conversations with Mr Whyte on 1 April 2001, which he expected to be passed on to Mr Whitlam in connection with the payment of his retirement benefit [transcript 256.4 and 253.34]. Ms Easson 48 On the morning of 1 April 2001 Mr Whitlam had a telephone conversation with Ms Easson to the following effect: Mr Whitlam said:

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[The amended defence 26 accepts that Mr Ross made a statement substantially to the effect pleaded in a conversation with Mr Whitlam on or about the dates pleaded. The amended defence 26 further admits that any representation made by Mr Ross was made in his capacity as a director of IAG] 9 April 2001 81 As at 9 April 2001 Mr Whitlam had been a director of at least one subsidiary of IAG for a continuous period of greater than five years. Reliance 82 Mr Whitlam has given evidence that his resignation as a director on this date was also reliant on the above described representations now including the second Ross representations of 7 and 8 April 2001. 83 The Court's finding is that this evidence is reliable. This finding takes into account the evidence given by a number of the witnesses who were called as to the alternative possibilities which may have been open to Mr Whitlam were he not to resign as a director. The clear evidence given by a number of witnesses was that had Mr Whitlam determined not to resign as a director, it was possible that he would have remained on the board for a considerable time. Mr Whitlam himself was strongly cross-examined on the matter, it being put to him that he effectively had no alternative but to resign and that he would have resigned even had the subject representations not been made to him. He denied this proposition. This denial is accepted. The finding is that the reliance element in his case is clearly established. His actions were reasonable in the circumstances. He clearly relied upon the representations made to him not only as a significant factor but as the material factor in reaching his decision to resign as a director. The finding is that but for those representations having been made to him the balance of probabilities is that he would not have resigned as a director at the time when he did. The matter is returned to below. 10 April 2001 84 Prior to the meeting of IAG's board of 10 April 2001, IAG received a sign off in relation to the Retirement Policy from Mallesons Stephen Jaques. 85 The minutes of the meeting of 10 April 2001 include a statement by Mr Stanwell updating the board on developments in relation to the directors' retirement allowance since the board meeting of 4 April 2001. The minutes included a note by him "that a legal sign-off had been obtained from Mallesons Stephen Jaques, Solicitors and that sign-offs were in the process of being obtained from John Egan of Egan and Associates and Mercers (as a second, independent expert in the field)". He further advised that discussions were also taking place with KPMG (as the company's auditors). IAG board resolves that Mr Whitlam is entitled to participate under the Retirement Policy 86 On 10 April 2001, the board of IAG noted its approval of the Retirement Policy and resolved that Mr Whitlam was entitled to participate under the Retirement Policy. The IAG board decided to defer calculation of the exact amount of retirement benefits due to Whitlam under the Policy until the board meeting to be held on 3 May 2001. 87 The precise terms of the relevant minutes were in the following terms:

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Mr Whitlam who formally resigned from the Board on Monday, 9 April, will be entitled to participate in that plan. The amount of Mr. Whitlam's retirement benefit has not yet been determined. The Board will consider the amount at its May meeting and will announce it to the market at that time. It will be calculated in accordance with the plan and within the limits prescribed by the Corporations Law. It will also be certified by the Company's auditors." [See transcript 224.25] [emphasis added] 91 The reference to "extensive discussions" referred to in the ASX announcement included the discussions which the directors of IAG had with Mr Whitlam on 1 April 2001 [transcript 208.4 and 263.21]. 92 IAG received a facsimile from the Australian Securities and Investments Commission ["ASIC"] concerning the validity of board resolutions to approve the payment of certain retirement benefits to directors, including Mr Whitlam, and requesting certain documents and responses to a number of questions. 11 April 2001 93 IAG responded to ASIC's facsimile. 17 April 2001 94 IAG received a further facsimile from ASIC requesting further documents and setting out ASIC's preliminary position on the Policy and payment of benefits to Mr Whitlam. 23 April 2001 95 Mallesons responded to ASIC's further facsimile on behalf of IAG. 96 IAG received a letter from Mr Snodgrass indicating that, unless the Board gave a written undertaking to ASIC and the shareholders that there would be no payments to directors before the next general meeting, there would be a members' requisition seeking to amend the IAG constitution so as to prohibit any payment or other benefit proposed to be made to any director in connection with that person's retirement from the Board without shareholder approval. 97 IAG sent a facsimile to Mr Snodgrass indicating that the matter would be considered at the 3 May 2001 board meeting. 30 April 2001 98 IAG received a further facsimile from Mr Snodgrass. 99 During a conversation between Messrs Whitlam and Ross, Mr Ross said words to the effect:

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"These " sign-offs " were important. On 4 April 2001 the Policy had only been conditionally adopted and, if the Defendant's external solicitors had not given the sign-offs they did, then the Policy would not have come into operation. The exclusion of Association fees was a feature of both the paper prepared by the Defendant's external solicitors and attached to the 22 February board paper and of Mr Higgins' paper. From a review of these advices it is clear that, absent the exclusion of Association fees, the Defendant's external solicitors would not have provided a sign off in relation to s 200G(1)(b). It is also doubtful whether, absent such exclusion, the crucial final sign-off from Mr Egan [ Ex PX, 2-60 ] would have been given, particularly because it was that exclusion which prevented double-dipping if both Association and Insurance introduced retirement benefit policies." Pre 3 May board meeting - the KPMG calculations 110 Prior to the 3 May 2001 board meeting dealt with below, KPMG calculated the retirement benefit which it advised was equivalent to the amount set out in the Policy. Attachment B [Ex PX, 2-34] to the board papers of 2 May 2001, entitled "Retirement Benefit to Mr Nicholas Whitlam" [Ex PX, 2-13] comprised the advice from KPMG as to the correct calculation of Mr Whitlam's retirement benefit, in accordance with the Policy. 111 Schedule A to the KPMG advice provided a break down of the total payments received by Mr Whitlam during the period 1 April 1998 to 31 March 2001 from entities within the broader NRMA group, which includes payments received from Association. These amounts included payments made by those entities to the NRMA Staff Superannuation Plan on account of salary sacrifice by Mr Whitlam but excluded the notional amount of employer contributions required to fund Mr Whitlam's entitlements under the Plan [Ex PX, 2-34 to 2-35]. (KPMG later recognised that the treatment of salary sacrifice contributions was a matter of law - Ex DX, tab 54.)

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Nothing of the foregoing ilk was mentioned to Justice Santow in the application to adjourn the special general meeting. On the contrary the submissions asserted that Mr Whitlam had no legal or equitable right to be paid the retirement benefit. [Tab 25 of DX] 125 I further accept as of substance Mr Whitlam's submissions that: · notwithstanding the terms of the 2 May 2001 board paper that a relevant consideration for the board was whether Mr Whitlam had a right to be paid, for example on the basis of estoppel, but to give that advice a full investigation would be required, no legal advice was sought on that issue. There is no evidence that any director provided a complete account of the dealings between the board and Mr Whitlam [Mr Astbury at transcript 231.52-232.9, Mr Cousins at transcript 297.2-297.30, Mr Hamilton at transcript 324.49]; · that part of the board paper put a completely misconceived notion of reliance by suggesting that reliance on representations would be weakened to the extent Mr Whitlam's service preceded the introduction of the policy (PX 2-19). The fact that his service preceded the policy was completely irrelevant. 9 May 2001 - Supreme Court proceedings 126 The Supreme Court of New South Wales made orders extending the time in which to hold the extraordinary general meeting to deal with the requisition to the date of IAG's Annual General Meeting on 2 November 2001, subject to IAG undertaking that no payment would be made to, or any retirement benefit conferred on, any retired non-executive director by IAG in connection with his or her retirement from office until shareholders in IAG had an opportunity to vote on the proposed amendment to IAG's constitution contained in the Requisition. Those orders were stayed to allow Mr Whitlam to make submissions to the Court by 14 May 2001 as to whether there was any substantial injustice in allowing the meeting to be deferred. Mr Whitlam did not make any such submissions. 15 May 2001 127 The orders made by the Supreme Court took effect. 5 July 2001 128 Mr Ross received a letter from Whitlam claiming that he was entitled to a payment of $860,285 under the Policy, alleging that he had a number of causes of action against IAG in relation to the non payment of this amount, attaching a draft statement of claim and threatening to commence proceedings if he did not receive payment within 7 days. The letter was discussed by IAG Board. 11 July 2001 129 IAG sent a facsimile to Mr Whitlam providing a summary of the circumstances which precluded it from acceding to his request. 6 September 2001 130 IAG received notification from ASIC that civil proceedings against Mr Whitlam had been commenced for, inter alia, alleged breaches of his duties as an officer of IAG. ]. In a media release on that day, Mr Knott, the Chairman of ASIC, stated the following:

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(b) they are satisfied that the issues are so material they should be disqualified." 2 November 2001 132 The IAG Board concluded that it was unable to make any payment in the nature of a retirement benefit to Mr Whitlam before the ASIC proceedings were resolved. The board noted and discussed a paper attaching that written advice and at the end of that discussion IAG's chairman indicated that he would have a discussion with Mr Whitlam [Ex DX, tab 36]. 133 The proposed amendment to IAG's constitution contained in the Requisition was defeated at the Special General Meeting of IAG held on the same date. 27 November 2001 134 IAG provided Mr Whitlam with a KPMG paper outlining the quantification of his benefit. 3 December 2001 135 In a 3 December 2001 board paper entitled "Legal Update" the defendant's general counsel, Ms Gaye Morstyn, indicated that there had been an investigation into paying the amount of Mr Whitlam's retirement allowance, as calculated by KPMG, into a trust account so that interest could be paid to the plaintiff in the event that he was successful in the ASIC proceedings. This board paper attached a further paper from IAG's external solicitors on this question, which concluded that "there is a fringe benefits tax ruling on trusts which, at first blush, would make the payment of the retirement benefit amount into a trust extremely tax inefficient" [Ex DX, tab 37A]. 4 December 2001 136 In the board meeting of 4 December 2001, IAG's chairman summarised developments since the last meeting of the board, noting that Mr Whitlam had foreshadowed that he would issue legal proceedings on 7 December 2001. The chairman noted that when the board last discussed the matter, it had concluded on the basis of the 2 November 2001 legal advice, referred to above, that it was unable to make any payment in the nature of a retirement benefit to Mr Whitlam before the proceedings brought against him by ASIC were resolved. The chairman further noted that there had been no change in that legal advice as provided to the board. IAG's group secretary and general counsel, Ms Gaye Morstyn, confirmed that she had discussed the matter further with senior counsel who had confirmed that he remained firm in his opinion and could not envisage any facts which would change his advice to the Board. IAG's chairman noted that, in the course of meetings held with Mr Whitlam, he had been advised that this legal advice precluded IAG from making any payment to him under its retirement benefits policy before resolution of the ASIC proceedings and that, while this should not be interpreted as a decision not to make any payment, it was the case that the board's decision on the matter must necessarily be deferred [Ex DX, tab 38]. 11 December 2001

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"The Company could not sensibly pay into a trust the amount representing a retirement benefit for [the plaintiff] pending the outcome of current ASIC proceedings, in light of advice of Mallesons Stephen Jaques dated 21 November 2001 attached to Ms Morstyn's legal update and Mallesons subsequent advice dated 11 December 2001 tabled at the meeting". [Ex DX, tab 39]. 6 March 2002 138 Mr Whitlam elected to preserve the amount of $188,177.10 of the superannuation benefit payable on his resignation from IAG in the NRMA Superannuation Plan and to "cash-out" $10,956.25. 20 March 2002 - Superannuation benefit of $207,006.97 139 On 20 March 2002, Mr Whitlam received a superannuation benefit payment of $207,006.97 from NRMA Staff Superannuation Pty Limited ["Plan"] [ARL "the Superannuation Payment"], being a payment to which he was entitled by virtue of being a member of the NRMA Staff Superannuation Plan in his capacity as a director of IAG [paragraphs 54 and 55 of Mr Whitlam's statement]. Mr Whitlam was a member in the Defined Benefit (or DB) category of the Plan. As such his superannuation benefit was to be calculated by reference to a fixed formula contained in the Governing Rules for the Plan, as opposed to a benefit payable pursuant to an accumulated benefit plan, which is specifically referable to contributions made together with income thereon. 19 July 2002 140 The Supreme Court (Gzell J) delivered its judgment in Australian Securities and Investments Commission v Whitlam [2002] NSWSC 591. Both the plaintiff and ASIC subsequently lodged appeals in respect of Justice Gzell's judgment [Ex DX, tabs 43, 45]. 13 August 2002 141 Justice Gzell restrained Mr Whitlam from managing a corporation for 5 years and ordered that he pay a pecuniary penalty of $20,000. 28 August 2002 142 ASIC filed a cross-appeal against decision of Gzell J. 6 September 2002 143 Mr Whitlam resigned as President and a director of Association and received superannuation payment of $306,790.68 (comprising benefits attributable to Association and those rolled over from IAG). 13 September 2002 144 Mr Whitlam filed an amended appeal against the decision of Gzell J. 20 September 2002 145 The New South Wales Court of Appeal declined to grant stay of the disqualification order against Mr Whitlam pending appeal. 4 November 2002 146 Mr Hamilton sent an email to Mr Strong [PX 2-237]. This read as follows:

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"Given the continuing uncertainty of the outcome and timing of the Proceedings, it is recommended that no further decision be made until the Court of Appeal judgment is delivered, and we are confident that no further appeals will be made from it". [Ex DX, tab 46] 25 February 2003 151 The IAG Board noted the 17 February 2003 paper entitled "Mr Whitlam - Retirement Benefits" and resolved that "no further decision be made in relation [the plaintiff's] retirement benefit until the Court of Appeal judgment is delivered, and [the Defendant] was confident that no further appeals will be made from it". [Ex DX, tab 47]. 10 July 2003 152 The judgment of the Court of Appeal in Whitlam v ASIC [2003] NSWCA 183 was handed down. 5 August 2003 153 The IAG Board considered paper entitled "Nicholas Whitlam - Retirement Benefits" and decided to defer the issue pending further legal advice. 154 ASIC sought special leave to appeal to the High Court of Australia from the judgment of the Court of Appeal. 15 August 2003 155 In a 15 August 2003 board paper the defendant's general counsel noted that the effect of the Court of Appeal's decision was that "[the plaintiff] has therefore not been found to have committed any breach of his duties as a director of [the defendant]". This board paper went on to note that "It is now open to the board to make its decision on the payment of a retirement benefit to [the plaintiff]" [Ex DX, tab 50]. 19 August 2003 156 The IAG Board noted a paper dated 15 August 2003 entitled "Nicholas Whitlam - Retirement Benefits". 1 September 2003 157 At an IAG board meeting on 1 September 2003 the board resolved to pay Mr Whitlam a retirement benefit "in the amount of the maximum total retirement benefit of $637,858, as identified in KPMG's letter to NRMA Insurance Group dated 1 May 2001 (subject to any correction to that amount advised by KPMG) less the amount of any superannuation benefit paid or payable [to him] on his retirement from" IAG ("Retirement Benefit Resolution"). IAG's solicitors wrote to Mr Whitlam's solicitors to inform them of this. 1 and 10 September 2003 158 On 1 and 10 September 2003 KPMG sent two letters to the defendant, which confirmed that $637,858 was the maximum amount that could be paid to the plaintiff under the Policy and that $207,007 of that amount had already been paid to the plaintiff by NRMA Staff Superannuation Pty Ltd as trustee of the Plan [Ex DX, Tabs 52, 54]. 18 September 2003 159 On or about 18 September 2003, IAG paid Mr Whitlam the amount of $312,769 purportedly calculated as being a retirement benefit of $637,858 less a deduction for taxation withheld of $118,082 and a further deduction of $207,007 being the amount of the Superannuation Payment [see the particulars to paragraph C.42 of the Summons, paragraph 58 of the statement of Mr Whitlam dated 27 May 2004]. The letter under cover of which this amount was sent noted:

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We therefore enclose [the defendant's] cheque in the amount of $312,769 in payment of the balance of the retirement benefit". 160 IAG's case is that it was in conformity with the Retirement Benefit Resolution of 1 September 2003 that this amount was paid. The way forward 161 The convenient course would appear to be to initially deal with questions which arise outside those of calculation and statutory interpretation. The suggested insuperable obstacle facing Mr Whitlam's claim 162 IAG has submitted that even after the Retirement Policy was conditionally adopted at the 4 April 2004 board meeting, the payment of a retirement benefit to any particular director remained discretionary having regard to the terms of Article 12.15 of IAG's Constitution. The submission is that the first occasion when the board of IAG passed a resolution that a retirement benefit should be paid to Mr Whitlam was on 1 September 2003. 163 The submission is: · that the adoption of the Retirement Policy did not confer any right or entitlement on Mr Whitlam but merely set the permissible parameters for any retirement benefit the subject of a favourable exercise of discretion under Article 12.15; · when the discretion was exercised what resulted was the 1 September resolution; and · although Mr Whitlam still had no enforceable right or entitlement to a benefit in accordance with the 1 September resolution, he is in no position to complain that the amount the subject of that resolution was not large enough. 164 To my mind this submission fails to address Mr Whitlam's contract and estoppel cases. Sali v SPC Ltd 165 It is appropriate to make the point that the present proceedings are clearly distinguishable from Sali v SPC Ltd (1991) 9 ACLC 1,511 where Ormiston J had occasion to deal with a number of parameters concerning: · whether in particular circumstances resolutions concerning the payment of retirement benefits or allowances could or should be regarded as no more than the statement of a policy to be defined in the future; · the circumstance that it was not usually within the power of a board of directors to enter into any agreement for the provision of retirement allowances to ordinary members of a board. 166 There was in Sali no resolution in similar terms to that passed by the board of IAG on 10 April 2001. Likewise there are very clear differences in the constitutions of the corporate entities dealt with in Sali and that dealt with presently. Unlike IAG's constitution which contained clause 12.15, the company in Sali did not have a provision in its articles providing that the company may pay a former director a retirement benefit and that the company may enter into a contract with a director providing for the payment of a retirement benefit. 167 It is convenient to commence with the alternative contract case. The "alternative contract" case 168 The chronology makes clear that relevant representations came forward at two points in time: · the first may be described as the representations made prior to 4 April 2001 ["the representations anterior to 4 April 2001"]; · the second may be described as the representations made on 5, 7 and 8 April 2001 ["the post 4 April representations"]. Dealing with the representations anterior to 4 April 2001 169 It is strictly unnecessary to presently characterise the representations which had been made prior to Mr Whitlam resigning on 3 April 2001 [effective at 9 a.m. on 4 April 2001], as chairman of the board. There is no doubt that these representations were made by a majority of members of the board. They have been chronicled in the above reasons. 170 There is clearly a live question as to whether these representations can be said to have been made by the corporate organ. 171 The submission put forward by Mr Whitlam is that the earlier representations were made by the directors in their capacity as directors of IAG in the knowledge and belief that a clear majority of directors were making the same representations. It is contended that they were made with the intention that they be acted upon. It is contended that they therefore represented a corporate act of IAG having regard to what is put as: · their effective endorsement at the board meeting on 4 April 2004 by the authorization of Mr Ross to reinforce the same message to Mr Whitlam to secure his retirement as a director; · the extent of communication between the directors; · the fact that the knowledge of the representors was knowledge of IAG; · the fact that IAG made public reference to those discussions in an announcement to the market on 10 April 2001. 172 My own view is that the earlier representations were only representations by the individuals concerned, to the effect that if Mr Whitlam chose to resign from his position as chairman and director of the defendant, each of the representors intended to exercise his or her vote at board level to support a resolution that Mr Whitlam be promptly paid the full amount of the retirement benefit calculated pursuant to the Retirement Policy once that policy was approved. I do not see that events which only occurred on or after 4 April (ie after these representations) can be relied upon to characterise the earlier representations as corporate acts. The changed character of the post 4 April representations 173 Notwithstanding the above finding as to the earlier representations not constituting corporate acts, the holding is that Mr Whitlam indeed entered into an enforceable contract with IAG. The contract was entered into between 7 and 9 April 2001 in the communications between Mr Whitlam and Mr Ross. Mr Ross was by then acting within the authority [given to him in his capacity as acting chairman of IAG] by the majority of the directors of the board to whom he spoken. 174 These communications are viewed objectively. The relevant intention of each party is the intention reasonably understood by the other party to be manifested by that party's words or conduct. Actual intention/ expectations are not to the point: cf Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 549 per Gleeson CJ, citing Lord Diplock in Gissing v Gissing [1971] AC 886 and Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441 at 502. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 211 ALR 342 the High Court put the matter as follows at [40]:

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"This Court in Pacific Carriers Ltd v BNP Paribas (2004) 208 ALR 213 has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understanding of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement…" 175 In consideration that Mr Whitlam resign from his position as a director, IAG agreed that he would be entitled to participate under the retirement policy receiving the maximum or full benefits to be calculated in accordance with that policy, the implicit term being that he would be paid such amount promptly. Mr Whitlam accepted that offer handing in his resignation on 9 April 2001. 176 The evidence established quite plainly that it was implicit in the discussions which took place that, if Mr Whitlam resigned as a director, his retirement benefit would be paid reasonably promptly. A succession of witnesses accepted this. An inference to this effect is inescapable. 177 The evidence clearly established that following the course of events commencing with the making of the representations made before the 4 April board meeting [in reliance upon which Mr Whitlam had resigned as chairman], by 7/8 April 2001, Mr Ross, as acting chairman, had at the board meeting on 4 April been delegated a particular task by the majority of directors. The task was to approach Mr Whitlam to encourage him to resign promptly as a director and to inform him that if he did that: · IAG would by appropriate resolution accept that he was entitled to participate under the Retirement Policy by being paid the maximum or full amount payable under that Retirement Policy; · IAG would promptly pay him the full amount of the Retirement Benefit calculated pursuant to the Retirement Policy which had been adopted on 4 April 2001. 178 There is no substance in the submission that there was no intent to enter legal relations. The particular circumstances examined objectively and the quid pro quo achieved make it clear that there was such an intent. 179 The timing is important to follow. The first conversation took place at about 2 p.m. on the day after the board meeting of 4 April. Mr Ross mentioned the board meeting at the same time as giving the assurance that if Mr Whitlam was to stand down as a director he would be paid the correctly calculated amount of the retirement benefit. This was about a quid pro quo. Mr Whitlam's action in resigning only as chairman, but leaving his directorship in place pending further developments, was seen as requiring a dealing with him in order to secure his resignation from that directorship. The context in which this conversation and the conversations of 7 and 8 April took place was against the background that the board meeting of 4 April had just been held. The whole of the context was about whether and if so when his resignation as a director would come forward. The matter was very urgent in the eyes of board members. Mr Whitlam knew this. The board members may be inferred as also knowing that he had been told this. Hence, when examining the relevant communications objectively, the whole of this context must be kept in mind. These circumstances point up an intent to enter legal relations. 180 The judgment above includes the evidence given by Mr Astbury [transcript 217-218]. Standing back from the whole of the evidence [documentary as well as oral] given by all parties, the finding is that, on the balance of probabilities, prior to speaking with Mr Whitlam on 7 and 8 April 2001, Mr Ross had consulted with all directors, other than Ms Keating, and had obtained from each of them their consensus/agreement that as acting chairman, he should make the above described offer which he then made to Mr Whitlam. There is no evidence to suggest that Ms Keating would not have been present when the boardroom discussion took place although the proper inference is that she would not have acquiesced in that which was being proposed. The finding is that in the circumstances of the discussions [concerning whether or not and if so when and under what conditions Mr Whitlam should or might resign], which had proceeded between the directors inter se, as well as with Mr Whitlam, over the preceding weeks, including the discussion at the board meeting of 4 April earlier set out, Mr Ross by 7 and 8 April was acting with authority as 'the corporate organ' of IAG in making the subject offer. 181 Further support for this finding that Mr Ross was acting within authority as the corporate organ may be found in the following matters: · the words used in the amended summons [C 27] [and the subject of the admission in the defence] were that Mr Ross on behalf of IAG stated to Mr Whitlam that if he resigned from his position as director of the defendant prior to the next board meeting he would receive the retirement benefit; · the fact that at the time of the conversation Mr Ross was the chairman of IAG; · the fact that at the time of the conversation Mr Whitlam's resignation as chairman had been received but his resignation as director had not been forthcoming; · the circumstance that there is no evidence that anyone otherwise than Mr Ross spoke to Mr Whitlam following the 4 April board meeting; · the circumstance that it is inherently unlikely that Mr Ross would have made the statements without the authority of the board; · the fact that it would be unreal to expect every single matter discussed at a board meeting to be reflected in the minutes. 182 It should also be noted that: · no evidence was led from Mr Ross to the effect that he had made the statements to Mr Whitlam as personal statements without the authority of the board; · no evidence was led from any other director to the effect that the board had not authorised Mr Ross to make the statements. Precision with respect to characterising the terms of contract 183 In terms of the need as a matter of fine legal analysis to characterise the terms of the contract which had been entered into, Mr Whitlam's counsel have put forward three alternatives, commenting on each as follows:

[197]

The contract was to pay the retirement benefit in accordance with the Retirement Policy approved by the board on 4 April 2001, subject to an implied condition subsequent namely the receipt of the outstanding signoffs identified in the approval. [There is no difference between 2 and 3 in terms of outcome or effect. It is simply a matter of characterising the condition subsequent as an implied terms as opposed to a term which was necessarily a part of the contract anyway in accordance with 2.] 184 The holding is that correct analysis is put in the second of these alternatives. The contract was to pay the retirement benefit in accordance with the Retirement Policy, approved by the board on 4 April 2001, which retirement policy was itself subject to a condition subsequent, namely the receipt of the outstanding signoffs identified in the approval. In the result and as submitted, the contract necessarily had incorporated within it a condition subsequent, in the terms incorporated within the approval with the effect that if the condition was not satisfied, failure to pay the retirement benefit would not have breached the contract. On the evidence, the condition subsequent was duly satisfied by 3 May 2001. The exercise of discretion issue 185 In those circumstances it seems unnecessary to further consider the alternative submissions in terms of what thereafter occurred concerning the discretion of the board having been exercised. It is however appropriate to at least identify the competing positions on this issue. The matter concerns whether, by a particular point in time, the discretion of the board had been exercised once and for all time: · Mr Whitlam's case is that following the board meeting of 10 April 2001, the board's discretion to determine that a particular director was entitled to participate under the policy had been exercised once and for all [so that all that remained was not a further exercise of discretion in relation to entitlement to participate but rather a relatively formal matter by way of a need to resolve in a follow-up fashion that a calculation of the exact amount calculated in accordance with the policy - which by then would have been placed before the board - would be accepted and the amount therefore was to be paid to Mr Whitlam]; · IAG contends that there continued in the board an open discretion [by reference to which it might entirely tear up its earlier statement of Mr Whitlam's entitlement to participate under the policy] up until the time when the board would finally resolve to accept a particular amount calculated in accordance with the policy. The submission is that the proposition put forward by Mr Whitlam: - turns on the false premise that, once a company board has exercised a discretion, it is not entitled to re-exercise that discretion or change its mind in the light of subsequent circumstances;

[198]

also ignores the overarching requirements in clause 12.15 of IAG's Constitution. Breach of contract 186 Clearly enough the contract was breached in at least one respect in that until 18 September 2003 Mr Whitlam was paid no amount at all under the Retirement Policy. The judgment below deals with whether what he was then paid amounted to his just entitlement under that Retirement Policy. Relief for breach of contract 187 It is convenient to leave this issue to the side for the moment. It is dealt with in the judgment below. Estoppel 188 In the light of the finding that an enforceable contract came into existence it is strictly unnecessary to deal with the estoppel cause of action. However, as the matter was litigated so strenuously it does seem to me appropriate to treat with this cause of action and to do so on the basis that the contract finding be assumed to be incorrect. There may be an appeal and it does seem to be efficient to treat with and to make findings on this alternative cause of action. 189 It will be seen from what follows that the treatment given to the estoppel cause of action, from time to time overlaps with considerations already taken into account in the treatment of the contract cause of action. This is often inescapable where there are a number of matters equally germane to the two causes of action. Having said that, there is of course an absolute and dimensional divide between the elements which require to be satisfied to make good these markedly separate and very different causes of action. 190 Essentially at least one critical issue which would have arisen in terms of the claimed estoppel, concerns whether or not the evidence made good the proposition that, by reason of the representations made to Mr Whitlam up to the time he resigned as a director, he was operating on a particular assumption. The estoppel case puts that assumption as that upon such resignation (1) he would be paid and (2) IAG would be legally obliged to pay him, the retirement benefit calculated pursuant to the Retirement Policy, promptly upon his retirement. Mr Whitlam contends, and I accept, that precisely such a finding should be made on the evidence. The context and the particular words used in the 7th and 8th April conversations emphasized in the judgment justify that finding. 191 IAG denied that any such finding was open on the evidence, in turn contending: · that Mr Whitlam did no more than act upon an expectation that he would be paid the retirement benefit calculated pursuant to the Retirement Policy; · that the expectation was not of an entitlement as a matter of legal obligation. 192 It is appropriate to return to examine questions of principle. Estoppel - the principles 193 I take as a given the following propositions: · the general purpose of estoppel as explained by Dixon J in Thompson v Palmer (1933) 49 CLR 507 at 547 is to prevent "an unjust departure by one person from an assumption adopted by another as the basis of some act or omission which, unless the assumption be adhered to, would operate to that other's detriment" · the law as thereafter refined and developed may be gleaned from the decisions of the High Court of Australia in:

[205]

"In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs." Representational conduct 195 The first element concerns whether or not conduct of a representational type has been proven. Had the contract case failed on the basis that Mr Ross had not been proven in the post 4 April discussions to have acted within corporate authority, the holding would be: · that Mr Whitlam's estoppel case has been made out; · that Mr Whitlam was entitled to infer from the whole of the anterior circumstances, that after the 4 April board meeting, Mr Ross was speaking on behalf of the vast majority of board directors in so representing; · that the character of the statements which were made by Mr Ross were such as were apt to induce in Mr Whitlam a belief that he had an enforceable entitlement, against the company, to be paid the full retirement benefit if he resigned. IAG's submissions 196 It is appropriate to make clear precisely how IAG sought to characterise the suggested misconceived nature of Mr Whitlam's case. The submission was grounded upon the need to focus upon the whole of the conduct and communications.

[219]

(c) The proposed Policy which, as developed in detail, was set out in the various board papers which had been circulated, consistently contemplated that fees paid by Association would be excluded from the remuneration included in the calculation of any retirement benefit and that any superannuation benefit likely to be paid would likewise be deducted and, accordingly, any resolution by the Board would apply that exclusion in respect of the Plaintiff (because he was also a director of Association) and make that deduction." 203 IAG then submits that it was not reasonable for Mr Whitlam to act on any representation, or to form or act on any assumption, to the bald effect that, if he resigned, he would be paid a retirement benefit. The submission is that in the world of corporate governance, operating in connection with a very large listed public company with millions of shareholders, it cannot be that simple. The proposition is that if Mr Whitlam really thought that it was, then he was acting quite unreasonably and without regard for his own admittedly intimate knowledge of the principles of corporate governance. Nor, so it is said, was it in any way unreasonable or unconscionable for IAG to proceed as if Mr Whitlam would have been proceeding (reasonably) on an assumption or representation reflecting the 'Real Assumption', rather than (unreasonably) on a bald and unrealistic assumption or representation of the kind pleaded. Holding 204 In the light of all of the evidence before the Court, I reject the proposition that Mr Whitlam could not reasonably have understood or acted upon the representations made to him to the effect that if he resigned he would be paid a retirement benefit to the maximum of that calculated in accordance with the Policy [or formed or acted upon assumptions to like effect]. The fact is that the advices which he had read [and indeed received from his own solicitors] that remuneration paid to him by Association would not be included in calculating his retirement benefit, could not and did not erode or dilute the content of the substantive representation made to him. Once it had been represented to him that he would receive a retirement benefit to the maximum of that calculated in accordance with the Policy, he was entitled to rely upon precisely that representation. Earlier indications of what upon a proper interpretation of the Policy, was and was not or might or might not be included did no more than to treat with the application of the Policy. Indeed in relation to the issue of whether or not his superannuation benefit would be deducted from his retirement benefit, IAG acknowledges that his evidence was that he had not turned his mind to the fact that the advice received from the IAG external solicitors of 22 February 2001 would apply to superannuation payments which he had received in respect of the services which as a director, he had rendered to IAG or its subsidiary companies. His evidence was that he had not considered what effect that deduction would have on the amount of the retirement benefit he would receive [transcript 105.3 - 105.45]. Reliance 205 The holding on the estoppel cause of action is that: · the evidence clearly established that Mr Whitlam had relied upon the 7/8 April 2001 representation in tendering his resignation as a director of the board on 9 April 2001. · that reliance was reasonable in all of the circumstances. · Mr Whitlam acted reasonably in understanding from the statements made to him that if he resigned as a director he would be paid and IAG would be legally obliged to pay him promptly the maximum amount of the retirement policy; · the matter went beyond a mere expectation. 206 Were the finding on contract to be incorrect, such that one would have to posit a lack of authority in Mr Ross to make the post 4 April statements to Mr Whitlam, it would become necessary to look back at the entirety of the picture. Here the knowledge [not only of Mr Ross but also of each of the directors who had directly or indirectly spoken with Mr Whitlam] of their own statements prior to 4 April to him and such knowledge as they had of one another's statements to him as to payment of the retirement benefit if he resigned, including their knowledge of what was said at the board meeting of 4 April, as well as their perception of the likely persuasive or inducing effect of the whole complex of statements and their perception of Mr Whitlam's reliance or likely reliance on them ["the relevant knowledge"], would constitute knowledge acquired in the course of their acting as directors of IAG and hence knowledge of IAG. Hence if by reason of lack of authority, the holding on contract be incorrect, then consistently with the authorities the relevant knowledge was bound to be communicated to the company by the directors [see Beach Petroleum NL v Johnson (1993) 115 ALR 411 at 566-574 per von Doussa J and the authorities referred to in that judgment]. In those circumstances, the holding is that IAG was aware that Mr Whitlam had received those inducements and was likely to act on those inducements and was likely to be acting on the assumption that if he retired, he would be paid the retirement benefit. The holding is that notwithstanding that knowledge or awareness, IAG permitted Mr Whitlam to continue to act under that assumption and to act on that assumption to his detriment. Mr Whitlam's book 207 I accept that the absence of a reference to the representations in Mr Whitlam's book is of no moment. The relevant part of the book was finalized after his first statement, the draft statement of claim in July 2001 and finalized statement of claim. This claim against the company is hardly a matter of interest to readers. None of the directors who made the representations are individuals whom Mr Whitlam would wish to malign by an account of the circumstances. The proceedings were on foot and I infer that settlement was always conceivable. Departure from the relevant representation/unconscionability 208 Next in order to establish a cause of action in estoppel one would need conduct of a particular type departing from the relevant representation. It has to be shown that it was unconscionable to depart from the assumption which was induced by the relevant representation. 209 There have been many formulations of what will amount to relevant unconscionable conduct for the purpose of preventing a person/entity having made a representation from departing from that representation. It is trite that each case must be carefully examined against the particular context. 210 The findings are: · that conduct justifying this description took place. · that the unconscionability was evident at the board meeting of 3 May 2001 as soon as the board resolved [2-86]:

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that no payment would be made to, nor benefit conferred on, any retired non-executive director by the company in connection with retirement from office until the time referred to in [the above described resolution]. 211 These resolutions clearly departed from the assumption which had been induced by the relevant representations and upon the basis of which Mr Whitlam had proffered his resignation as a director. What the board was now doing was to determine to adopt a course of conduct which had the clear capacity of undermining the resolution which it had passed on 10 April 2001 [when it had resolved that Mr Whitlam was entitled to participate under the Retirement Policy but had deferred calculation of the exact amount calculated in accordance with that policy until board meeting to be held on 3 May 2001.] That the board may have been motivated in this regard by a view that it was in the best interests of the shareholders that the application of the retirement policy to any particular director be deferred until the outcome of such annual general meeting or extraordinary general meeting as would vote upon the proposed amendment to the constitution is not to the point. A clear representation having been made by IAG to Mr Whitlam and he having been induced by it to make a particular assumption and having acted upon it, the only question for consideration on the estoppel cause of action would be whether that representation was departed from and departed from unconscionably. The finding would have been (in the event the estoppel case required to be relied upon) that the evidence established that that question should be answered in the affirmative. It is one thing for a board of directors to be responsive to the directors' obligations to the shareholders and to make decisions in good faith in the best interests of the company. It is quite another thing for the board of directors to acquiesce and participate in an undermining of assumptions induced in a third party following (1) the making to that third party of clear representations by the company and (2) that third party acting to his detriment by reason of those representations. 212 It is put by IAG that the real question is whether the circumstances which existed at the time of the representations, as at 4 May and thereafter, had materially changed. The board always had, as was recognised by all parties, a fiduciary obligation in this area. IAG contends that it cannot be said that in the exercise of those overall fiduciary duties it acted unconscionably in preferring the interests of the company over those of Mr Whitlam. The contention is that to do otherwise would involve a clear breach of duty, including taking advantage of the directors' position, to obtain an advantage for Mr Whitlam to the detriment of the company. The Court rejects this analysis of the events in hand. It was too late by 3 May 2001 for the board as a matter of law to act as if the company's previous representations could be disregarded. 213 It is appropriate to return further to the position of the board in terms of what was in the best interests of the shareholders. There was abundant evidence before the Court which is accepted as reliable, to the effect that the 10 April 2001 resolution that Mr Whitlam was entitled to participate under the Retirement Policy had been passed in the best interests of the shareholders considering the circumstances which prevailed at the time. That the board members may by, 3 May 2001, have been swayed by a deep anxiety that they should not be seen to pre-empt the shareholders entitlement to consider and, if thought appropriate, pass the resolution to amend the Constitution so that no retirement benefit could be paid unless approved by the company in general meeting, simply speaks to their subjective state of mind at that time. In the cold light of day it now seems clear that there was a very high question mark concerning the suggestion that their actions on 3 May were indeed in the best interests of the shareholders. To my mind it could not be said that it was in the interests of the shareholders or the company for the board, having induced Mr Whitlam to resign his directorship on a particular promise and having then solemnly resolved that he was entitled to participate under the Retirement Policy, [effectively leaving only the formal signoffs and mathematical calculations for the future], to then entirely undermine their arrangements with Mr Whitlam. They had secured his departure as a director from him at a time when his bargaining power permitted him to be in a position to treat with the board. He no longer had any such bargaining power. To say that his interests were taken into account at the meeting of 3 May 2001 simply cannot be correct. His interests were not taken into account in any way. None of the witnesses who gave evidence could indicate to my satisfaction how his interests were taken into account. 214 Counsel for Mr Whitlam put forward the following specific references to the evidence. The references may be adopted as correct: · Mr Hamilton agreed during cross examination that it was hard to see how it was in the interests of the company to permit the shareholders to undo an arrangement which secured a benefit for them after the benefit had been received and before the consideration for the benefit had been delivered [Mr Hamilton at transcript 319.18]. If there had been a consensus view, Mr Hamilton would have supported a decision to pay Mr Whitlam the amount of the retirement benefit notwithstanding the existence of the requisition [Mr Hamilton at transcript 320.22];

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· Mr Astbury's view was that as at 3 May 2001 having regard to the assurances which had been given to Mr Whitlam, the correct thing was to pay Mr Whitlam the retirement benefit without deferral [Mr Astbury at transcript 225.35]. As far as Mr Astbury was concerned, as at 3 May 2001 the board had already exercised its discretion that Mr Whitlam should receive whatever figure he was entitled to, calculated in accordance with the policy [Astbury at transcript 225.48 to 226.4 and 228.43]. As at 3 May 2001, Mr Astbury's view was that there was absolutely no substance in the draft minute's allegation [Astbury at transcript 227.26 to 228.3] and there was no evidence of any misconduct by Mr Whitlam [Mr Astbury at transcript 227.38]. The risk of adverse media commentary and market reaction had already been considered by IAG [Mr Astbury at transcript 228.5]. At this time, the potential for shareholder dissent was something that had already been considered at the time that the assurances were made to Mr Whitlam [Mr Astbury at transcript 229.40]; · as at 3 May 2001, Mr Astbury felt bound to pay Mr Whitlam the amount of the retirement benefit [Mr Astbury at transcript 229.28 and 235.10]; · as at 3 May 2001, absent legal advice, Mr Astbury believed that the appropriate thing to do as a director was to authorise payment to Mr Whitlam of his retirement benefit in the amount set out in the calculation provided to IAG [Mr Astbury at transcript 230.41]; · in relation to Mr Cousins, absent the shareholders' requisition which was received, Mr Cousins' view was that Mr Whitlam was entitled to be promptly paid the amount of the retirement benefit [Mr Cousins at transcript 282.56]. Mr Cousins' only justification for IAG not making payment on 3 May 2001 was that since the shareholders were going to have a say on this matter one way or another, they should be allowed to have that say before any payment was made under the policy [Mr Cousins at transcript 286.27]; · during cross-examination, Mr Ross accepted that at the time of the 3 May 2001 board meeting, by making the decision that it did, there was a possibility that there may need to be another general meeting before it may be possible to pay Mr Whitlam his retirement benefit [Mr Ross at transcript 340.22] and there was the potential for Mr Whitlam not to get any benefit at all if at the second general meeting the shareholders voted against it [Mr Ross transcript 341.1]. In re-examination, Mr Ross said that his motivation in not paying the retirement benefit at 3 May 2001 was as follows [Mr Ross transcript 342.41]: · "he was concerned that the meeting would be held anyway at the cost to IAG of $1.5 million; · he was concerned at thumbing his nose at the shareholders when they had expressed a wish; and · that nose thumbing might cause shareholders to withdraw from the board the power to make retirement allowances." · in relation to the cost of the meeting, that cost would be incurred irrespective of whether IAG paid Mr Whitlam the amount of his retirement benefit on 3 May 2001 [Mr Ross transcript 342.53 to 343.7]. If the company paid Mr Whitlam the amount of his retirement benefit on 3 May 2001, it was still open to IAG to apply to the Court to defer the requisitioned meeting to the date of the annual general meeting [Mr Ross at transcript 343.44]. 215 The board acted more out of fear in terms of what might be perceived were it to follow through with its entirely proper conduct in securing Mr Whitlam's resignation as director. It was clearly able to defend, before the shareholders or the public, its actions in relation to having secured his resignation in consideration for an entirely proper arrangement for his participation under the Retirement Policy. There was never a question but that he had earned the right to so participate by receiving the maximum payment which could be made under that Policy. The board however elected not to travel that route and in doing so clearly acted unconscionably. To avoid acting unconscionably the board had to look at the whole of the situation which had developed as opposed to closing one eye to Mr Whitlam's position which it had so very clearly induced. The holding is that that eye was very clearly closed. 216 The fact that the board had received the legal advice which it had from Mr Bathurst QC does not alter the holding as to unconscionable conduct. In this regard it should be recalled that in the above described advice, Mr Bathurst had adverted to the fact that the directors could properly take into account the commercial risk to IAG of litigation brought by Mr Whitlam. 217 In terms of unconscionable conduct, the consideration given by the board to the ASIC proceedings notified to IAG on 6 September 2001 [the allegations made in the proceedings relating to the alteration of draft board minutes of IAG and Mr Whitlam not voting certain proxies at an annual general meeting of Association] would furnish no further or different defence to the matter already dealt with in relation to the shareholders requisition. Again the matter would stand upon that the fact that the 10 April 2001 resolution that Mr Whitlam was entitled to participate under the Retirement Policy had been reached in the best interests of the shareholders considering the circumstances which prevailed at the time. As already mentioned the board had secured his departure as a director from him at a time when his bargaining power permitted him to be in a position to treat with the board. He no longer had any such bargaining power. And here again the anxiety of the board was simply misplaced. 218 The submissions put forward by Mr Whitlam suggest, and I accept, that further parameters with respect to the ASIC proceedings worthy of mention included the following: · the matters raised in the civil penalty proceedings only concerned conduct in part related to IAG and was a claim involving draft minutes [cf Bathurst advice at paragraph 1.5(b)]; · that claim involved no loss to IAG; · even the trial judge (who was later reversed on appeal on the question of whether there was any contravention at all) found that in relation to the claim involving IAG, Mr Whitlam acted honestly and exercised his discretion to relieve Mr Whitlam wholly from liability in relation to the contravention and further stated that ASIC should not have brought the case in relation to Mr Whitlam's conduct as a director of IAG [Judgement of Gzell J in ASIC v Whitlam handed down on 19 July 2002];

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· further, IAG itself considered that there was nothing in the ASIC complaint about Mr Whitlam's conduct in relation to the draft minutes. On 28 November 2000, the IAG board resolved that a letter be sent to ASIC correcting ASIC's misapprehension that minutes of any meeting of the board had been in any way altered, except to correct draft minutes before they had been adopted by resolution of the board in accordance with the normal and proper course. That letter was subsequently sent [PX 1-285]. 219 Nor does the fact that advice was taken by the board in reaching its decision mean that it did not act unconscionably in deferring the payment of Mr Whitlam's retirement benefit to him. Whether and if so to what extent advice taken by the board was based upon accurate instructions concerning the representations made by IAG and earlier dealt with in this judgment is not disclosed on the evidence. Advice given on incorrect or incomplete instructions could not be relied upon as a defence to unconscionable conduct. [cf transcript 324.45] 220 But as I have already said the matter would stand or fall on the board having secured Mr Whitlam's departure as a director from him at a time when his bargaining power permitted him to be in a position to treat with the board and thereafter failing to honour the arrangement which had been made with him. 221 Clearly Mr Whitlam in resigning his office as director acted to his detriment in reliance upon the subject representations and the assumptions resulting therefrom. Relief in relation to the estoppel cause of action 222 The issue of relief is dealt with below. The statutory contract claim 223 Having regard to the holding on the alternative contract claim it seems unnecessary to deal with the statutory contract claim. That claim would in any event have failed as it relies upon what is put forward as a contractual right springing, not from any communications, representations or assurances made to Mr Whitlam prior to his resignation as a director, but from the resolutions passed following that resignation. The claim is simply misconceived there being no contractual right in Mr Whitlam seen to flow from any of the matters pleaded in the contentions at [7], [25], [30], [31], [32], [33], [35], [36], [37 (a)] and [37 (b)]. The Trade Practices Act/ Fair Trading Act causes of action 224 In the light of the finding sustaining Mr Whitlam's case as to contract and if that be incorrect, the finding sustaining his alternative case as to estoppel, it seems unnecessary to deal in any detail with the Trade Practices Act/Fair Trading Act causes of action. 225 It is appropriate to note that IAG strongly denied that any representations as alleged were made in "trade or commerce" within the meaning of the Trade Practices Act or the Fair Trading Act. Rather the statements are said to have been made to Mr Whitlam in connection with the internal corporate governance of IAG. The proposition is that they were in no sense statements made by IAG in the course of activities or transactions which, of their nature, bear a trading or commercial character: cf. Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594, at 603-604, as recently explained by the Full Federal Court in Village Building Co Ltd v Canberra International Airport Pty Ltd (2004) 210 ALR 114, at [41] - [54] as follows:

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(3) The section was not intended to impose, by a side-wind, an overlay of Commonwealth law upon every field of legislative control into which a corporation might stray for the purposes of, or in connection with, carrying on its trading or commercial activities. What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character. Such conduct includes promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, be they identified persons or merely an unidentifiable section of the public. In some areas, the dividing line between what is and what is not conduct "in trade or commerce" may be less clear and may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character: at 604." 226 In Martin v Tasmania Development and Resources (1999) 163 ALR 79, at [70]-[77], Heerey J held that a communication to an employee asserting that termination of his employment was required on operational grounds was not a dealing of a trading or commercial nature. 227 My own view is that the present circumstances may be said to include a dealing of a trading or commercial nature. It is unnecessary to repeat the context in which the representations came forward. What was involved was a quid pro quo of a commercial nature. 228 There is however substance in IAG's submission that it had reasonable grounds for making the subject representations given the evidence that a clear majority of directors had intended to support a payment to the Mr Whitlam in accordance with the Policy [Ex D2, para 4, Mr Astbury transcript 203.10; Ex D2, para 2, Mr Cousins transcript 256.24; Ex D3, para 4, Mr Hamilton transcript 316.58; Ex D4, para 4; Ex D5, para 5, Ms Fisher transcript 352.56]. The board did in fact proceed to resolve that the Policy should extend to Mr Whitlam. 229 In the circumstances the holding is that there were reasonable grounds for the making of the subject representations at the time they were made. 230 No misleading or deceptive conduct within the meaning of the Trade Practices Act or the Fair Trading Act has been demonstrated to have occurred. Unconscionable Conduct 231 It does not seem to me to be necessary to deal with the separate cause of action claiming unconscionable conduct. The alternative contract claim has been upheld. The estoppel claim has been dealt with upon the assumption that the holding with respect to the alternative contract claim would be seen to be incorrect. In so dealing with the estoppel claim, the Court has upheld Mr Whitlam's proposition that the element of unconscionability which is required in terms of the estoppel claim was proven to have taken place. The oppression claim 232 Likewise in the circumstances of the above holdings it is unnecessary to deal with the oppression claim. Claim for stress and anxiety 233 Mr Whitlam has made a claim to damages for distress and anxiety caused by the delay in receipt of his retirement benefit. 234 The claim extends to include the costs of a holiday in Italy to which Mr Whitlam and his wife travelled from 8 May 2001 to 23 May 2001. The cost of that holiday was approximately $16,000. Mr Whitlam's claim was that he would not have taken that holiday in the absence of the statements made to him by the directors of IAG regarding the payment of a retirement benefit. Finding on claim for stress and anxiety 235 Mr Whitlam clearly believed he had an entitlement to receive the benefit and that it was improper for payment of the benefit to be delayed for such a considerable time and then to be paid in a lesser amount than that to which he believed he was entitled. That having been said this is not a circumstance in which the relief by way of an order that the correct amount to which he was entitled be paid to him together with interest can be seen to fall short of what is adequate relief to compensate for the breach of contract. 236 Each parameter of the claim is rejected. The subject stress and anxiety cannot be sheeted home to the delay in payment of the retirement benefit. The real issues were of far more significance. The whole of the context which faced Mr Whitlam has to be borne in mind it appearing as Mr Whitlam's book makes clear, that:

[235]

(c) whether 2/3 of the directors fees paid to Mr Whitlam in respect of his tenure on the board of Association should have been included in the calculation of the benefit as fees from Insurance under both section 200G(2) and the policy. The superannuation payment deduction 244 It is convenient to commence by setting out certain factual background material. What follows is taken directly from Mr Whitlam's final written submissions and is accepted as a reliable summary of that which is borne out by the evidence before the Court: Factual background · On 19 March 1997, Mr Whitlam applied to become a contributor to the NRMA Executive Superannuation Plan ("the Executive Plan") as governed by its Trust Deed and Rules, electing to contribute to the Executive Plan at the rate of 5% of his salary [Application to Form PX1 at 1-39]. His effective date of joining that fund was 1 April 1997 [Member Exit Advice 2-208]. The Executive Plan Member Booklet stated that contributory members' contributions "will be member deemed contributions ie contributions paid by NRMA as part of your Salary package, which are deemed to be member contributions"(1-5) and "As a contributory member you can choose to have NRMA-financed contributions of either 3% or 5% of your Salary credited to the Plan as member deemed contributions. These Standard Contributions … are credited to your Member Contribution Account.(1-7) · As a 5% contributing member of the Executive Plan he was entitled to a retirement benefit calculated as 21% x years of service with one or more NRMA companies (total months/12) x Final Average Salary or FAS (being the average of the member's three highest annual salaries over the last 5 years of service). See the Executive Plan Member Booklet at 1-8, 1-9 and 1-4. · The William M Mercer Pty Limited ("Mercer") Report on the Actuarial Review of the Executive Plan as at 1 July 1997 identified the trustee of the Executive Plan as NRMA Superannuation and identified Association as one of the employers under the relevant trust deed. (1-85 at 1-92). It stated that: "Contributory members may contribute at the rate of 3% or 5% of salary. In practice, all member contributions are paid by salary sacrifice, or are deemed to be paid."(1-113) As at 1 July 1997, it was estimated that there was a surplus of greater than $65 million of plan assets over estimated liabilities to members of the plan (1-90), it was noted that the Company had made member deemed contributions over the previous 3 years (1-96) and it was recommended that the Company (ie Association and its related companies) may suspend its contributions to the plan but it was noted that the Company intends contributing at the rate of 6% of salaries from 1 July 1997 (1-91). · There was a separate Mercer report as of 1 July 1997 in respect of the Plan (1-40) with the same Company definition as employer and the same trustee (1-47), the same recommendation and note as to future contributions from 1 July 1997 as the Executive Plan report (1-45, 1-46), although in this case it also recorded that all Company contributions had previously been suspended as of 1 July 1996 (1-51). · In a letter dated 27 May 1999, Mercer noted that the membership and assets of the Executive Plan were transferred into the Plan effective 1 January 1999 (1-265). There was a surplus of $268 million of combined plan assets over estimated liabilities to members as at 1 January 1999 (1-269). The letter recommended that the Company could suspend all contributions to the Plan but noted that in practice, NRMA had chosen to contribute to the Plan at the rate of 6% of salaries (1-272). · The rules of the NRMA Superannuation Plan were amended, inter alia, to facilitate the transfer of members of the Executive Plan to the Plan (3-481 at top of 3-482). The amended rules introduced a definition "Transferred Member" being a former member of the Executive Plan who transferred to the Plan on 1 January 1999 (3-499). Mr Whitlam elected to become a Defined Benefit Member (or DB Member) under the Plan (1-501). Under the amended Plan rules, a DB Member was entitled on his Voluntary Early Retiring Date to a lump sum benefit for Contributory Service on and from 1 January 1999 calculated as 21% (21/100) x months of service with any one or more of the companies within the Organisation/12 x FAS (being the average of the DB Member's 3 highest Plan Salaries out of the last five years of Service while a DB Member). See clause 5.10(a) (3-507); definition of Contributory Service or C (3-489); definition of Service (3-498); definition of FAS (3-492); definition of Voluntary Early Retiring Date (3-500). The effect of those rules reflected the earlier statements in the Executive Plan Member Booklet referred to above. Further, the effect of those rules was that in calculating the FAS and hence the retirement benefit, the salaries from all or any of the companies forming one of the identified employers over the preceding period of 5 years could be used provided that continuous employment with the group of companies over that period could be identified (even if that meant one year with company A, another with company B etc). · The Mercer report as at 1 July 2000 (1-337) recorded a surplus of Plan assets over liabilities of in excess of $271 million (1-342). · IAG's auditors, KPMG, reported on 1 May 2001 (2-1), that Mr Whitlam was a contributing member of the Defined Benefit category of NRMA Superannuation Plan (2-3 para 4). It continued (2-4): "Membership of this category required Mr Whitlam to make contributions from his own remuneration in order to attract the benefits promised to members of this category of the Plan on their retirement. Mr Whitlam chose to satisfy this obligation (as he was entitled to) by instructing NRMA group payroll to pay a portion of his total pre tax remuneration into the Plan to fund these contributions. The salary sacrifice payments into the Plan have been separately identified in Schedule A." See also the document at 1-501. · A total of $36,187 is identified in KPMG's schedule A (2-6) for Mr Whitlam's salary sacrifices up to 9 April 2001. This figure is consistent with the figure of $34,154.06 as "Member Contribution" amount as at 30 June 2000 in Mr Whitlam's NRMA Superannuation Plan Benefit Statement as at 1 July 2000, [Ex P13 3rd Tab] the difference between that figure and the KPMG figure reflecting the differences in dates. Equally consistently, NRMA Superannuation's letter of 19 August 2004 to Mr Whitlam said "your own contributions were paid on a salary sacrifice basis" (3-295). · As at 3 May 2001, IAG had legal advice that the definition of Voluntary Retirement under the rules of the Plan in force as at 3 May 2001 in combination with the definition of Service contemplated that retirement from Service involved retirement from all NRMA employer companies under the Plan which included both Association and IAG and that there was no mechanism for distinguishing an amount payable by reference to service with one employer as opposed to another [Letter Abbott Tout to Association 30.4.01 PX1 at 1-485; letter NRMA Superannuation to plaintiff 2.7.01 at 2-170; see also Plan Rules 3-62 and 3-476]. The board of IAG was told that retirement from IAG alone would not trigger any entitlement in Mr Whitlam to a superannuation payment [KPMG letter of 1.5.01 included in board papers at PX1 2-37 (penultimate paragraph); 2.5.01 board paper at 2-15 (last complete paragraph)], that one of their legally available options was to make an immediate payment of the then identified sum of $637,858 and that if it chose to do so there would be no deduction of any amount for superannuation [2.5.01 board paper at bottom PX1 2-15 to top 2-16 (para (a)); Mr Astbury XXM at transcript 225/19]. · Subsequent to the deferral of the payment to Mr Whitlam on 3 May 2001, the rules of the Plan were amended in March 2002 [Letter NRMA Superannuation to plaintiff 5.3.02 PX1 2-200; see also 2.1.02 letter at 2-199]. The relevant amendment to the rules took the form of an addendum to the rules. The deed of amendment appears at 2-238 and following and the consolidated rules incorporating that addendum appear at 3-62 with the addendum at 3-127 to 3-129. The effect of the addendum relevantly was that subject to clause 5 of the addendum, where a member of the Plan terminated his engagement as a director of IAG but not Association (see definition of Principal Company at 3-72), he would be entitled to a lump sum benefit (Relevant Member Benefit) which firstly determined the benefit that would have been payable under the Rules in respect of that member as if the termination was a termination of Service with the Company (ie effectively, a termination of all service with all companies) (Step 1). Next, that figure is multiplied by 1 minus the fraction represented by that figure as the denominator and the benefit calculated by excluding FAS salary referrable to, in this case, IAG (Step 2). In other words, the addendum recognised that in its absence there was no mechanism for allocating the calculation of the FAS and hence lump sum benefit by reference to individual employer companies covered by the Plan. Further, the addendum introduced such a mechanism designed to give an entitlement to a lump sum benefit on retirement from IAG based on IAG connected salary. Clause 3 of the addendum permitted the member to roll over that IAG calculated benefit into the Plan. Clause 4 of the addendum provided that subject to clause 5 of the addendum, the lump sum to be paid to the member on his subsequent retirement, in this case, from Association, was to be calculated excluding the salary attributable to IAG. Clause 5 afforded a discretion in the Trustee with the agreement of relevantly IAG and Association and the member to adjust the benefit payable on retirement from IAG (in this case) and the future benefit payable on retirement from Association if such adjustment would be fair and equitable and in accordance with relevant law. · On about 20 March 2002 NRMA Superannuation paid Mr Whitlam the sum of $207,006.97 (Ex P5 para 54). The calculation of that sum appears in the NRMA Staff Superannuation Member Exit advice at 31 May 2001 (2-157). That amount comprised a preserved benefit of $196,050.72 and a cash benefit of $10,956.25. The preserved benefit was rolled back into the NRMA Superannuation Fund (P5 para 56). The calculation of the total amount appears to represent the calculation of salary referrable to IAG fees and its subsidiaries having regard to a comparison of the FAS figure in the exit advice and the breakdown of fees earned by Mr Whitlam appearing in Schedules B and C to KPMG's letter of 1 May 2001 (2-7, 2-8). In other words, the calculation appears to reflect the effect of the March 2002 addendum. · On his resignation from the board of Association on 8 September 2002, Mr Whitlam received an amount of $306,790.68 from NRMA Superannuation which included the rolled benefit of $196,050.72 plus accumulations on that bringing that amount to $199, 984.35 (P5 para 57; Plan Member Exit Advice at 8 September 2002: Ex P13 1st Tab). A comparison between the FAS figure in the exit advice and the KPMG schedules indicates that the lump sum benefit represented in that total payment (ie a little over $100,000) was calculated by reference to Association related salary, again consistently with the addendum. · Absent the addendum, no amount would have been payable under the Plan on Mr Whitlam's retirement from IAG but the amount payable on his retirement from Association would have been calculated by reference to the combined fees related to both IAG and Association such that the lump sum benefit would have at least been the total of $207,006.97 and the incremental benefit referrable to Association fees in the order of $100,000 included in the payment from NRMA Superannuation on 8 September 2002. · The Mercer report as at 1 July 2003 of the IAG and NRMA Superannuation Plan (formerly NRMA Superannuation Plan) (3-1) recorded a surplus of plan assets over liabilities of greater than $128 million (3-5). It identified IAG and Association and their associated companies (together defined as "the Company") as employer companies under the Trust Deed (3-8). It stated at 3-13: "We understand that Company contributions to the Plan (other than salary sacrifice contributions) were suspended throughout the period from 1 July 2000. Company contributions arising from salary sacrifice arrangements have been suspended from 1 November 2002." · On 18 September 2003 IAG paid Mr Whitlam an amount of an amount of $312,769 representing the KPMG calculated figure of $637,858 less the NRMA Superannuation figure received on 20 March 2002 of $207,006.97, and less tax withheld. · By fax dated 7 November 2003, NRMA Superannuation confirmed that employer contributions to the Plan between 9 April 1998 and 9 April 2001 (excluding salary sacrifice contributions) were $7,875 for Association and $10,575 for Insurance (2-265). · The effect of the foregoing evidence is that the superannuation payment of $207,006.97 was paid from a fund which had been in massive surplus since the date of Mr Whitlam's commencement of membership. Further, since the effective date of the demutualisation on 24 July 2000, up until the date of his resignation as director of both IAG and Association, only salary sacrifice contributions had been made by any relevant company. Dealing with the issue 245 There are two arguments put forward by counsel for Mr Whitlam. To my mind the second and alternative submission is pervasive and is correct. The convenient course is, however, to first set out the primary submissions. The submissions put forward on behalf of Mr Whitlam The primary superannuation argument 246 The submissions in support of the first argument were as follows:

[239]

· It may be noted that the payment of such benefits to such a superannuation fund qualifies that superannuation fund as a prescribed superannuation fund for the purposes of section 200B(1)(c) (see the combined effect of sections 200B(2) and (3)). · Thus, to the extent that there were any contributions by IAG or any associate of IAG to the superannuation fund administered by NRMA Superannuation which were solely for the purpose of enabling or assisting the superannuation fund to give Defined Members such as Mr Whitlam a benefit in connection with their retirement from office, such amounts are excluded from the payment limit. · The KPMG letter of 1 May 2001 indicates that a total of $65,775 of employer sponsored funding of superannuation contributions were included in the amount of the retirement benefit being notional contributions for the Defined Benefit category of which Mr Whitlam was a member (Ex PX1 2-4 3rd para; 2-8 schedule C). These are amounts which fall within section 200F(b) and hence are not subject to the prohibition under section 200B. Therefore in calculating the payment limit they are excluded. That should have released an additional $65,775 of the amount withheld by reference to the superannuation payment. [It will be seen from the reasons that follow, Mr Whitlam's submission fails to give recognition to the fact that these are only notional contributions] · A further qualification on the payment limit is found in section 200G(4). The effect of that section is that in determining the value of a pension or lump sum payment (in this case the $207,006.97) for the purposes of section 200G(1)(c) which is to be added to the amount of the putative retirement benefit in order to assess whether the combined total exceeds the payment limit set out in section 200G(2), one must "disregard any part of the pension or lump sum payment that is attributable to" certain types of contributions. · The first contributions to be disregarded are contributions made by Mr Whitlam (section 200G(4)(a)). The salary sacrifice contributions are clearly contributions which were made by Mr Whitlam. He was obliged to make the contributions under the Plan. He was treated as having made the contributions on the basis of salary sacrifice contributions. Thus, the $36,187 of salary sacrifice contributions should have been paid to Mr Whitlam as of 3 May 2001 in addition to the retirement benefit payment. KPMG was clearly very hesitant about including those payments in the calculation of the payment limit [KPMG Letter 10.9.03 2-255 at 2-256]. · The defendant's argument that section 200G(4) has no application to a defined benefit scheme lacks logical appeal. The Plan received contributions from Mr Whitlam by way of salary sacrifice. It received at least some contributions from Insurance for the purposes of funding the Plan in its application to Mr Whitlam. Many superannuation plans have benefit clauses which are defined by clauses which introduce a calculation of benefits otherwise than by a proportionate division of existing assets. The defendant's approach to the meaning of "attributable" would lead to inconsistent and highly technical outcomes. On one view, it could be said that the whole of the defendant's payment was attributable to Mr Whitlam's salary sacrifice contributions because they represented his contributions which were a condition of the payment of his benefit. NRMA Superannuation could not entertain a position in which it agreed to pay benefits which it could not fund and it did not do so. The subsection invites a consideration as to what contributions are attributable to the fund from which the payment was made. · The second contributions to be disregarded are contributions made by a person other than the company (section 200G(4)(b)(i)). This paragraph is subject to the effect of section 200F(b) described above. In other words, if the company contributions were to a superannuation fund solely for the purpose of paying Mr Whitlam a retirement benefit, such contributions are already excluded by section 200G(1) from the payment limit. The "company" referred to in this section is IAG. The evidence is that no contributions were made by IAG in any event other than possibly salary sacrifice contributions Salary sacrifice contributions are contributions by Mr Whitlam. If, contrary to that view, they are contributions by IAG they are within the section 200F(b) exception in any event.

[241]

· The fourth contributions to be disregarded are contributions made by an associate of IAG or an associate of a company which was a related body corporate of IAG at the time the contribution was made (section 200G(4)(b)(iii)(A) read with the definition of relevant body corporate in sub-paragraph (b)(ii)) "in respect of the payment of the pension, or the making of the lump sum payment …".. NRMA Superannuation paid the lump sum. There is no evidence to suggest that it made or would have been likely to have made any contributions to the Plan. Thus, even if NRMA Superannuation could be regarded as an associate of IAG or Insurance in respect of the payment of the lump sum to Mr Whitlam (see section 15), it is of no consequence. · The fifth contributions to be disregarded are contributions made by an associate of IAG in respect of the making of the contribution (section 200G(4)(b)(iii)(A)). This excludes contributions by anyone prior to 24 July 2000. The evidence indicates that no contributions have been made since that date other than salary sacrifice contributions. · The sixth contributions to be disregarded are contributions made by an associate of a company which is a related body corporate or was a relevant related body corporate of IAG at the time the contribution was made (section 200G(4)(b)(iii)(A) read with the definition of relevant body corporate in sub-paragraph (b)(ii)). The latter part of that expression has no application because IAG commenced on 24 July 2000. The other part warrants consideration. Insurance is a related body corporate of IAG. The question arises as to whether Insurance was an associate of, for example, Association "in respect of … the making of the contribution". The language is important. It does not refer to contributions, for example, by a company which was a related body corporate of a related body corporate of the relevant company at the time of the contributions. One would have expected that sort of extension to be included in subparagraph (4)(b)(ii). Rather, the language of associate in respect of the making of a contribution directs one's attention to section 15, the acting in concert definition of associate. There is nothing to suggest that to the extent that, for example Association made contributions to the Plan, it made those contributions in concert with Insurance. That would be a matter on which one would expect IAG to lead evidence on if it could assist its case, insofar as Insurance is in IAG's camp. Furthermore, the evidence as to contributions made at all by Association referable to Mr Whitlam's payment is limited to an amount of $7,875. · In short, no part of the fund from which the $207,006.97 was paid is referrable to any contributions by IAG or a relevant associate or related body corporate of IAG. There is nothing surprising in this outcome on the basis of the evidence. The object of the section is clearly directed at ensuring a company's assets are not applied in the payment of a retirement benefit beyond the statutory limit. If the payment comes from other sources, although subsection 200G(1)(c) would prima facie catch such a payment, it would be excluded by section 200G(4) if the contributions were not attributable to IAG resources. · Finally to the extent necessary, the capacity lies quintessentially with IAG to prove that contributions were made by it or its related bodies corporate or its associates in that regard. Available inferences favourable to the plaintiff may be more comfortably drawn to the extent there are evidentiary deficiencies having regard to the Blatch v Archer and Jones v Dunkel principles. The alternative superannuation argument 247 The convenient course, having identified the integers which underlie the first of the two arguments, is to deal with the second of the alternative arguments put and in doing so to accept as correct each of the following propositions which came forward from Mr Whitlam's counsel: · If IAG had paid the retirement benefit on the date it ought to have done, namely at least by 3 May 2005, it would not have made any deduction for a superannuation entitlement. That conclusion follows from the advice and board paper information referred to earlier. · Although the board was presented with options for delay of the payment "until the possibility of an amendment to the Rules of the fund… is fully explored" [2.5.01 board paper at 2-15 of DX para (d;)], pursuit of that option would have been inconsistent with the obligation to pay the retirement benefit promptly. No IAG director suggested in evidence that amendment of the rules of the Plan was a reason to defer payment of the calculated sum. Although the board resolved to request consideration of an amendment to the rules of the plan to allow a benefit to be paid to a director who retired from either company without retiring from the other, the resolution was in general terms and not framed as a precondition to the payment to Mr Whitlam [3.5.01 board minutes at 2-85 as reflected in the terms of the NRMA Superannuation letter of 2.7.01, a copy of which appears at 2-170 of PX]. The relevant amendment to the rules of the plan was not effected until 5 March 2002 [Letter NRMA Superannuation to plaintiff 5.3.02 PX2-200; see also 2.1.02 letter at 2-199]. · Thus, absent the deferral on 3 May 2001, IAG would have paid Mr Whitlam the sum of $637,858 less tax without deduction for superannuation. · IAG attempts to answer this contention by asserting that the payment of the full $637,858 would have prevented the payment of the superannuation payment on a later date. [In other words that the payment of the amount of $207,006.97 by IAG would have prevented NRMA Superannuation from making a payment to Mr Whitlam for a similar amount.] That assertion is not made out. · As mentioned above, under the pre addendum rules of the Plan, upon his retirement from Association, Mr Whitlam would have been entitled to a lump sum under the Plan calculated by reference to salary earned from all employer companies under the Plan including IAG. That would have been a payment in connection with his retirement from Association, not IAG and hence the payment of the $637,858 would not have been relevant to any section 200G calculation of the payment limit. The mere fact that the formula under the Plan for calculating his Association lump sum payment permitted reference to IAG salary would not have made the payment one in connection with his retirement from the IAG board. It is simply a calculation of an amount of money only payable in connection with his retirement from the Association board.

[245]

251 Mr Whitlam's argument in regards to whether the superannuation payment would have been in connection with Mr Whitlam's resignation from IAG can be simply put. The calculation of the retirement benefit would have looked at remuneration earned up until his resignation from Association. Depending on the date of Mr Whitlam's resignation from Association, it was entirely possible that this calculation would not have taken into account any remuneration from IAG. That, in the present case, it did take into account remuneration received from IAG was a mere happenstance. Hence the inclusion of salary from IAG in the calculation should not be taken to indicate any connection between the retirement from IAG and the benefit paid by NRMA Superannuation. 252 On the particular facts of the present case, in my view upon the proper construction of the words "in connection with" as used in the above described sections, any superannuation payment which Mr Whitlam would have received from NRMA Superannuation after his retirement from Association cannot be regarded as having been received "in connection with" his retirement from IAG. The factors supportive of this conclusion are: · Mr Whitlam's retirement from IAG and from Association are wholly independent events. Contrast this with the situations in both Claremont Petroleum NL v Cummings and Lincoln Mills (Aust) Ltd v Gough. Indeed, the facts suggested that Mr Whitlam's retirement from IAG would have resulted in him being able to continue to serve on the board of Association for a longer period of time. · Wilcox J [at 274] expressed the view that the words 'in connection with' did not necessarily require a causal relationship between the two things. · In both Claremont and Lincoln Mills, the Courts were dealing with the phrase 'in connection with' in legislation very similar to that which is relevant to the present case. In Lincoln Mills, the statute operated against 'compensation…(received) as consideration for or in connexion with his retirement from such office' [at 199]. At issue was whether the benefit was paid in connection with the defendant's retirement from his office as director. In finding for the defendant, Hudson J said, "[t]he defendant's right to receive it and the company's obligation to pay it was in no way dependent upon his loss of or retirement from the office of director" [at 199]. Reading Claremont in the light of Lincoln Mills, use by Wilcox J of the word "necessarily" seems to me to leave open the possibility that in a given circumstance, the lack of a causal nexus between the two events under consideration may be determinative. This does not detract from the wide import of the phrase, and does not suggest that the true character of the nature and circumstances of the payment is not to be fully investigated: cf Lincoln Mills at 199. · It should be noted that in Commissioner for Superannuation v Miller (1985) 63 ALR 237, the Full Federal Court held that the words 'connected with' in the Superannuation Act 1976 (Cth) were 'concerned with questions of causation.' [per Davies J at 238, Beaumont J at 244 and Pincus J at 247] · Depending upon the interval between retirements from Association and IAG, there was present both a possibility that on Mr Whitlam's retirement from Association, the retirement benefit calculation could have included none, some or all of his remuneration from IAG during the relevant three/five period. There has been no suggestion that Mr Whitlam resigned from Association when he did in order to take the benefit of including his IAG salary in the superannuation benefit calculation. · Hence, the timing of the superannuation payment was independent of when Mr Whitlam's resignation from IAG occurred. Indeed, the timing was wholly dependent on his resignation from Association, which as earlier held was an independent event from his IAG resignation. 253 For those reasons the holding is that the whole of the amount of $207,006.97 ought to have been added to the lump sum payment to Mr Whitlam on his retirement from Association. Reverting to the primary superannuation argument 254 In all of the circumstances it is strictly unnecessary to deal with the first of the arguments. It may however be appropriate, without deciding the issue, to shortly indicate the difficulties which seem to me to arguably arise from that analysis. 255 In my opinion, the plaintiff has misconceived the proper construction of sections 200B, 200F and 200G. In closing submissions, the defendant proposed its interpretation of the sections in question. In what follows, I have adopted much of the defendant's submissions on this issue, and have also elaborated on some nuances that were not addressed in either submission. Employer contributions of $65,775 256 The submission was as follows:

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"The KPMG letter of 1 May 2001 indicates that a total of $65,775 of employer sponsored funding of superannuation contributions were included in the amount of the retirement benefit being notional contributions for the Defined Benefit category of which Mr Whitlam was a member (Ex PX1 2-4 3rd para; 2-8 schedule C). These are amounts which fall within section 200F(b) and hence are not subject to the prohibition under section 200B. Therefore in calculating the payment limit they are excluded. That should have released an additional $65,775 of the amount withheld by reference to the superannuation payment." 257 I was not entirely clear at to what the plaintiff meant in stating that "in calculating the payment limit [the subject contributions] are excluded". On my analysis, the effect is simply that the $65,775 does not form any part of the payment limit. Perhaps that was being suggested. However, the following sentence in the plaintiff's submissions "That should have released an additional $65,775 of the amount withheld by reference to the superannuation payment" does not seem to follow, as the evidence clearly shows that Mr Whitlam's retirement benefit included the $65,775. 258 The finding in favour of the alternative superannuation argument makes it unnecessary to further deal with this issue. Salary sacrifice amount 259 The defendant's reply to this submission is that the $36,187 cannot be regarded as salary sacrifice contributions from Mr Whitlam. The defendant's submissions in this regard are accepted and set out below. 260 It has not been shown that any contributions were "made by" Mr Whitlam himself within the meaning of s200G (4)(a). To the extent that he relies upon contributions made by IAG in respect of (and at the request of) Mr Whitlam, on a "salary sacrifice" basis, the result of salary sacrifice is to eliminate the gross income so sacrificed as income to which Mr Whitlam is entitled. It is remuneration which Mr Whitlam elects to forego in consideration of other benefits: see Wood v Federal Commissioner of Taxation (2003) 51 ATR 1227, at [12], summarising the effect of Taxation Ruling TR 2001/10. Those notional contributions cannot be regarded as having been by Mr Whitlam himself, where he had elected not to receive the remuneration from which they were funded. The benefit he received (apart from a tax benefit - see below) was that IAG would make contributions to the Plan in respect of Mr Whitlam. But those contributions were not "made by" him, since he had foregone the remuneration from which they were funded. 261 Mr Whitlam cannot have the tax benefit resulting from foregoing income, and then claim the contrary for the purposes of s 200G of the Corporations Act. In other words, in accordance with well established legal principle (see, e.g., VACC Insurance Ltd v BP Australia Ltd (1999) 47 NSWLR 716, at [32]), he cannot approbate and reprobate. As Schedule A to the KPMG report of 1 May 2001 shows [Ex PX, 2-39], Mr Whitlam received, apparently without complaint, group certificates showing an income figure net of the amounts which were contributed by IAG and its related bodies corporate to fund his superannuation payment. Presumably he submitted tax returns showing that he had derived the lower figures and thereby incurred lower tax. He cannot now contend that the income so sacrificed was really his money after all and thus money contributed by him to the Plan. Operation of Division 2 of Part 2D.2 262 The intent of Division 2 of Part 2D.2 of the Corporations Act 2001 is to prevent a company from paying a retirement benefit to a director which Parliament considers excessive. The Act achieves this by imposing the general requirement that retirement benefits cannot be paid without the approval of members. In order to minimise the burden to business, the Act provides exceptions to this general requirement. These exceptions allow, inter alia, for a benefit to be paid without member approval when: · that benefit is paid in connection with that person's retirement from the company; · that benefit is paid for past services which the person rendered to the company or its related bodies; and · the payment does not exceed a "payment limit" determined by a formula set out in the statute 263 In approaching these sections, one must distinguish between two types of benefits. The first is the benefit that is given by the employer company to the superannuation fund. The Act treats this benefit independently of how this benefit is later transferred, whether in whole or in part, to the retiring director. These first type of benefits are the subject of sections 200F and the definition of "prescribed circumstance" in subsection 200B(3). The second is the benefit that is given by the superannuation fund to the retiring director. These second type of benefits are the subject of section 200G, and particularly subsection 200G(4). 264 Once this distinction is recognised, the framework of Division 2 of Part 2D.2 becomes relatively simple to understand. Benefits given by employer companies to superannuation funds 265 First, the phrase "in connection with" is one of wide import. Its application to the current case is critical to Mr Whitlam 's alternative superannuation argument which was explained above and it is not necessary to repeat the earlier reasons. I accept IAG's submission that the wide definition of "in connection with" picks up benefits given to superannuation funds by employer companies where that benefit impacts upon the obligation due to the retiring director. 266 This benefit given by the employer company may have no effect on the quantum of the benefit received by the retiring director, and there is a risk of double-counting (that is, of inclusion in the payment limit both when paid by the employer company and later when paid by the superannuation fund) if this benefit is picked up at this first transaction. As such, sections 200F(1)(b) and 200B(3)(a) ensure that this first payment, from the employer company to the superannuation fund, do not fall within the section 200B general prohibition. 267 Section 200F(1)(b) states that the section 200B(1) prohibition does not apply to benefits given in "prescribed circumstances". Section 200B(3)(a) describes a prescribed circumstance as occurring where:

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the benefit first referred to in paragraph (a) or (b) is taken to have been given in prescribed circumstances." 268 The concluding words of 200B(3) make it clear that it is the benefit transferred from the employer company to the superannuation fund which is to be considered. 269 Up to this point, IAG's submission on this matter has been adopted. It is appropriate to go further in analysing the proper application of section 200B(3)(a). 270 It was not made clear on IAG's submissions whether it is put that 200B(3)(a) applies to all benefits given by an employer company to a superannuation fund or whether it applies to only certain types of transactions. In my view, the words of section 200B(3)(a) make clear that it is intended to operate only against certain types of transactions. The words "solely for the purpose of enabling or assisting the superannuation fund" demonstrate that not all benefits given by employer companies to superannuation funds will be caught. To my mind, the use of the words "enabling or assisting" means that only those benefits given by employer companies to superannuation funds which do not affect the quantum of the obligation due from the superannuation fund to the retiring director will have been given in "prescribed circumstances". An interpretation where other benefits are included within the definition of "prescribed circumstances" - that is, where the benefit given by the employer company to the superannuation fund, in effect, increases the superannuation payout otherwise due to the retiring director - ignores the fact that Parliament has chosen to use the specific words "solely for the purpose of enabling or assisting". Such payments do more than enable or assist a payment, and ought not to be construed as having been given in "prescribed circumstances". 271 Here, IAG gave a $10,575 benefit to NRMA Superannuation, purportedly in relation to Mr Whitlam's future retirement, although no detailed evidence was given on the matter. This payment would not have affected the quantum of any payment that NRMA Superannuation would have to pay to Mr Whitlam, and on the above analysis, would appear to have been given in prescribed circumstances. Benefits given by superannuation funds to retiring directors

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(a) a contribution made by the person; or (b) a contribution made by a person other than: (i) the company; or (ii) a body corporate (a relevant body corporate ) that is a related body corporate of the company, or that was, when the contribution was made, such a related body corporate; or (iii) an associate of the company, or of a relevant body corporate, in respect of: (A) the payment of the pension, or the making of the lump sum payment, as the case may be; or (B) the making of the contribution" 274 The approach taken by Mr Whitlam has been to attempt to "attribute" the whole of the superannuation payment to these three sources, and in the process, show that the whole amount should be disregarded. This is not how section 200G operates. 275 It is possible that either some or the whole of a superannuation payment cannot be attributed to a contribution made by any person. In my opinion, once a connection between the superannuation payment and retirement has been drawn, the proper approach is to take as the starting position the presumption that the whole of a superannuation payment falls within the words "all other payments" within section 200G(1)(c). The next step is to inquire whether any part of this superannuation payment is attributable to contributions made by any of the two sources in section 200G(4)(a) or (b) and if so to disregard these amounts. 276 In my view, the proper construction of the complex of provisions within section 200G does not permit the task to be approached by asking, first, whether any part of a payment is attributable to contributions made by the retiring individual, secondly, whether any part is attributable to contributions made by the company, related body corporate or associate (in the circumstances listed in section 200G(4)(b)(iii)(A)-(B)), then thirdly, to disregard the balance of what has not been allocated in the first and second steps. 277 A defined benefit scheme, as in the present case, shows why the incorrect approach should not be adopted. 278 Here, the superannuation benefit is referable to three variables: · The time served with the employer; · The "Final Average Salary" ['FAS'] being the average of the retiring directors three highest annual salaries over the past five years; and · A constant value determined by the percentage contributions made by the retiring director during his time of employment. 279 Clearly, the first two variables operate independently of any contribution made by any person to the superannuation plan. Mr Whitlam submits that if the proper approach to section 200G(4) is taken, the whole of the superannuation payment should be disregarded because the third variable is referable to contributions made by the employee. However, this approach is misconceived.

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(b) the contention that such an examination on the evidence before the court makes good the proposition that those committee fees were so paid and/or that subsequent dealings between Association and Insurance show that Insurance made a payment to or permitted a set-off in respect of Project Outlook Implementation Committee fees; (c) the contention that the proper approach to the construction of the Retirement Policy is: - to import the statutory concept of "remuneration" to be found in section 200G so that the reference to "directors fees, employer contribution to superannuation, committee fees and fees for extra services received from [IAG] and its subsidiaries" should not be read literally but should incorporate the wider definitions to be found in the legislation; and - not to read the phrase "received from" found in the Retirement Policy as involving a departure from the plain use of the word "from" in section 200G(2)(b). 290 As to (a) this is simply a matter of impression. In my view the Retirement Policy is required to be construed by reference to the express terms used within it. However if it were appropriate to go outside of the terms of the Retirement Policy and to consider the board papers in the context of which the Policy came into being, then it is clear that those papers expressly made the point that fees paid by Association were to be excluded. 291 In the light of the answer to (a), the matters raised in (b) are simply irrelevant. In any event, it appears that the subject obligation to make payment of committee fees to committee members was a joint obligation of both Association and Insurance: "A covenant by two that they or one of them would pay is merely a joint covenant at law": Glanville Williams, 'Joint Obligations', Butterworth and Co, 1949 at 40. Internal arrangements between Association and Insurance were no more than that. The obligation of these companies to Mr Whitlam remained a joint obligation. Hence there is a fundamental misconception in Mr Whitlam's proposition that it is possible to sheet home to Association and to Insurance liability to pay to committee members only identified aliquot shares. 292 As to (c), I would accept that where a particular part of the board resolution as [in adopting a Retirement Policy] could be seen to include terms of art/specialised usage plainly referable to the terms used in a statute, it would likely be appropriate to construe the subject of such resolution consistently with the material provisions/scheme of such statute. However, in the present circumstances, the terms of the Policy do not use terms of art/specialised usage and in truth a close examination reveals that there is a real departure from the statutory wording. No mention is made in the Policy of any deduction for "employer superannuation contributions plus earned interest" which the scheme of Div 2 of Part 2D.2 requires. Importantly the term "total remuneration" is not used in the Policy in relation to directors who have served for more than five years. Further when the term "total remuneration" is used in the Policy (in regard to directors who have served more than three, but less than five years), no reference is made to the types of income which are listed in relation to directors who have served for more than five years. 293 Further it may be noted that section 200G refers to payments from the company and related bodies corporate. The retirement Policy refers to the company and its subsidiaries. This suggests that IAG purposely adopted a narrower approach in framing its Retirement Policy. 294 The court cannot under the guise of construing the Retirement Policy, engage in what would amount to a speculative rewriting of the Policy. Association directors' fees

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297 The plaintiff has sought to attribute his directors' fees between Association and Insurance based on the amount of time he spent managing the separate entities. In light of the above findings there is no occasion for the Court to determine the propriety of this manner of splitting the directors' fees between services on the boards of both companies. Relief Breach of Contract 298 Mr Whitlam has made good his entitlement to relief in terms of the wrongful deduction of his superannuation entitlements under the NRMA Superannuation Plan 299 Subject to the possible need to adjust the deductions for tax, for the reasons given above: · the correct calculation of the amount of the retirement benefit pursuant to the retirement policy was $519,775.97; · the holding is that this amount ought to have been paid to Mr Whitlam by 17 May 2001 [in my view, a reasonable time for payment of the benefit being a fortnight after the meeting on 3 May 2001]. 300 Hence Mr Whitlam has made good an entitlement in terms of his breach of contract claim to be paid: · the amount of $207,006.97 wrongfully deducted as his superannuation entitlements under the NRMA Superannuation Plan; · Interest accordingly payable: · on the sum of $312,769 from 17 May 2001 to 18 September 2003; and · on the sum of $207,006.97 for the period 17 May 2001 up to date of payment pursuant to the order which is to be made. [Presumably the quantification of the precise interest amount will come forward by agreement, in the absence of which the matter may be the subject of further submissions by the parties] 301 No submissions were advanced with respect to whether or not the deduction for tax which formed part of the calculation of 18 September 2003 would have to be adjusted in light of the findings such as those now made. The parties have leave to address on that issue. Estoppel 302 By reason of the holding of liability for breach of contract there is no occasion for relief in terms of the alternative estoppel claim to be considered. Declaratory relief 303 In the circumstances there is no utility in the Court travelling outside the above reasons in terms of the making of a declaration as to the proper construction of the Retirement Policy. Short minutes of order 304 The parties are to bring in short minutes of order at which time submissions as to costs will be taken. I certify that paragraphs 1 - 304 are a true copy of the reasons for judgment herein of the Hon. Justice Einstein given on 23 February 2005

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