128 In cross-examination, she agreed that, although she could not recall his exact words, Mr Stow had made a statement to the effect that "there was going to be a different franchise agreement when the roll over came, that they would be altering the franchise agreements to something centred on financial planning". She could not deny Mr Stow's assertions of what he had said.
129 At trial, Mr Attardi was evasive and unconvincing in relation to possible conversations he had had with Ms Di Pietro concerning the April meeting. Although he could not be certain that he had spoken with her at all, he acknowledged that he could have had five or ten conversations with her, which could have concerned the April meeting. He had no recollection of discussions with Ms Di Pietro about the April meeting between the receipt of the termination notice on 18 October 2005 and 7 March 2006, when the proceeding was issued.
130 Ms Di Pietro acknowledged that she had spoken with Mr Attardi since the litigation commenced, but was vague about the details. She recollected that the conversations were general in nature, and related to how she was going with her new business. In response to whether they had spoken about this litigation, Ms Di Pietro stated that Mr Attardi may have mentioned that there was "something in the wind", but she did not recall what he had said.
131 Mr Attardi acknowledged that he had telephoned Ms Farmer on three or four occasions, in order to ascertain her opinion of what Mr Stow had said at the April meeting.
132 He recalled that, in the course of an early conversation, he first asked Ms Farmer for her recollection of what Mr Stow had said at the April meeting, and then stated his own recollection.
133 Ms Farmer was uncertain and somewhat evasive in relation to her discussions with Mr Attardi, but recalled that Mr Attardi had telephoned her, asking her for her recollection of what was said at the April meeting. In contrast to Mr Attardi, she testified that Mr Attardi did not inform her of his own recollection of the April meeting.
134 Ms Farmer confirmed in cross-examination that the allegations of Mr Stow's announcement in the plaintiff's statement of claim "pretty much" reflected what she told Mr Attardi when discussing the events of the April meeting with him.
135 Mr Attardi had no recollection of any discussion with Margaret Webster.
136 I considered Mr Stow to be a precise, detailed, careful and truthful witness, who responded conscientiously in cross-examination and evinced a willingness to concede propositions apparently adverse to the defendant's case. I considered his account of his evolving aims and strategy to be credible and consistent.
137 I also considered Ms Guy to be a clear and credible witness and I am satisfied that she would have recalled, as she testified, a statement that the radical change of removal of health insurance products was intended.
138 Ms Kazantides, Mr Stow's executive assistant, had poor recall of events and issues. Her involvement in, and knowledge or understanding of, policy matters and strategies handled by Mr Stow, were apparently very limited. While I did not consider that Ms Kazantides, in preparing the agenda and minutes of the April meeting, deviated from any usual practice (upon the instructions of Mr Stow or otherwise) in order to disguise what was discussed, her limited testimony cast no light on what occurred at the April meeting.
139 While, as noted above, I considered the testimony of Mr Attardi and Ms Di Pietro and Ms Farmer somewhat evasive and unduly vague in relation to their discussion of their individual accounts of the events at the April meeting, I do not consider that they intended to mislead the Court. Ms Di Pietro and Ms Farmer acknowledged in cross-examination that they were unable to recall some of Mr Stow's statements precisely. Ms Webster clearly acknowledged that her recollection was not specific.
140 In the case of conflict, I prefer the evidence of Mr Stow and Ms Guy. Mr Stow's evidence was not only coherent, frank, precise and independently convincing, but is fortified by its consistency with contemporaneous documents. The ultimate strategy plan authored by Mr Stow, and presented to, and approved by the board of the defendant, does not advocate the removal of health insurance, general insurance or banking products on roll over, or a policy of refusing to extend the franchises after the expiry of the initial terms.
141 I accept Mr Stow's testimony that his specific aims evolved as part of a fluid process. I accept, as he testified, that other parties' strategies, while they might reflect his general goals and aspirations, did not represent specific action plans which he had unreservedly adopted and was committed to implement. I do not consider that, as at April 2005, or at any time thereafter, Mr Stow had decided to force out the franchises at an undervalue by threatening to render their businesses unviable by removing health insurance products from franchises and diverting them to the defendants' wholly owned retail network. I am not persuaded that Mr Stow deceived, or deliberately misled, the board of AU by presenting for approval a strategy materially different from, and contrary to, his real plan or subsequent statements at the April meeting. The evidence did not bear out dishonest and conspiratorial conduct on his part.
142 Further, I was not persuaded that successive drafts of business strategy documents prepared by other persons constituted convincing evidence of Mr Stow's immutable plans of action. I accept that his intentions were complex and evolving, even if he agreed with particular statements in isolation. The relevant documents presented a variety of options, often in point form or in financial "jargon", in a series of drafts. Such documents, and particular statements they contain, must be viewed with a degree of caution. They cannot necessarily be equated with final decisions or comprehensive policy statements of the defendant, the authors, or of Mr Stow. In my opinion, the best evidence of Mr Stow's views as at April 2005 is the strategy plan dated 17 March 2005, which he prepared himself and presented to the board for approval.
143 It follows from the above that I do not consider that, as at April 2005, Mr Stow also had a co-existing contingent plan subsequently to rely on "significant change" within terms of clause 26.4 of the franchise agreement, in order forcibly to eliminate at an undervalue any remaining franchisees which resisted the pressure of a threat to remove health insurance products.
144 Further, I do not consider that Mr Stow's statements that existing agreements would be honoured, but that after roll over, would be altered to be "more financial planning centric" and that he would get back to the franchisees with further details, could reasonably be construed or intended as a threat to render the franchise businesses unviable after roll over.
145 Although the plaintiff's witnesses did not dispute that Mr Stow made the statements to which he testified, the alleged statement that all other products would be withdrawn also appears inconsistent with the undisputed statement foreshadowing a "more financial planning centric" business. That expression does not, in my view, aptly describe a total withdrawal of all products other than financial planning.
146 While I accept that Mr Attardi, Ms Webster, Ms Farmer and Ms Di Pietro apprehended that it would not be possible to continue to make the same proportion of their revenue from health insurance after rollover and that Ms Webster, Ms Farmer and Ms Di Pietro chose to negotiate an early surrender, rather than to await the revelation of further details, I am not persuaded that a general announcement of the shift in emphasis, foreshadowing further details, would indicate that the businesses would be unviable after the rollover.
147 Following the April meeting, Ms Di Pietro, Ms Webster and Ms Farmer expressed interest in negotiating the termination of their franchises, as Mr Rose and Mr Ventura had already done prior to the April meeting. By late May 2005, all franchisees but the plaintiff had expressed an interest in termination.
148 Ms Farmer operated the franchise at Glen Waverley. Following the April meeting, she negotiated an end to the franchise agreement. When Ms Farmer expressed concern that it would take 12 months to purchase a new business, Travers Stow advised her that he was "happy to give her that time". She entered a sale of business agreement with AU and a deed of surrender and release. She concluded the sale of the business to AU in January 2006 for $585,000, which was a price higher than the significant change compensation.
149 Ms Webster operated the franchise in Ballarat. After the April meeting in July 2005, she surrendered the franchise for a price made up of 12 months' revenue (excluding financial planning), all capital costs incurred in establishing the business without any discount for depreciation and the purchase price she had paid for the agency and the franchise.
150 Ms Webster testified that once she had made the decision to exit, the exit had been made easy. The price paid to her by AU was enough to make her consider it seriously, without "causing jubilation". She was unsure about whether she received more from the defendant than she would have received under "significant change" compensation.
151 Ms Di Pietro operated the franchise at Box Hill. After the April meeting in July 2005, the franchise agreement was terminated and Ms Di Pietro was paid out. Ms Di Pietro testified that she had been treated fairly by AU during the negotiations. She was not bullied or pressured and was given the opportunity to gain independent advice. Ms Di Pietro agreed that the price was one she was willing to accept.
152 Mr Stow stated that when Ms Di Pietro, Ms Farmer and Ms Webster asked to exit, he was "pleased that we were arriving at ... a mutually acceptable agreement".
153 He did not discuss with Ms Farmer, Ms Di Pietro or Ms Webster their reasons for wanting to leave.
154 Mr Archibald and Mr Barker elected to continue with the defendant under new arrangements. Mr Archibald surrendered his franchise in June 2005 and concluded a new arrangement. Mr Barker surrendered his franchise in September 2005 and his company concluded an arrangement with AU to act as a financial planner, in place of his surrendered franchise. The plaintiff contended that Mr Barker was therefore within "the defendant's camp", and its failure to call him gave rise to an inference adverse to the defendant. I do not consider that the fact that Mr Barker has a contractual arrangement with the defendant warrants that inference.
155 Mr Stow prepared an Annual Operating Plan dated May 2005, which emphasised the first year of a three year strategic plan approved by the board of AU in April 2005.
156 The Annual Operating Plan relevantly stated: