December 2003
234 On 2 December 2003 Sent resigned[46] as a director of the board of Primelife.
235 On 4 December 2003 Primelife served on Mainpoint a call option exercise notice in relation to the Point Cook option. On 5 December 2003 Sent wrote to Flood at Primelife, acknowledging receipt of the call option exercise notice and stating that "[w]e regard your purported exercise of the call option as invalid and ineffective".
2004
236 On 14 October 2004 Primelife commenced the Point Cook proceeding.
237 On 28 October 2004 Primelife submitted a planning application to the Wyndham City Council in relation to the Point Cook property.
238 On 9 November 2004 SBA wrote a letter to Wyndham City Council advising that "Mainpoint, as the registered proprietor of the land, expressly does not consent to and objects to Primelife filing and lodging any application or attempting to deal with the Point Cook land".
239 On 12 November 2004 Mainpoint Developments filed its defence and counterclaim to the Point Cook proceeding. Also on that day there was a telephone conversation between Appel of SBA and a representative of the Wyndham City Council in which the council is said to have confirmed that, as a result of Mainpoint Development's objection, Primelife's town planning application would be held in abeyance. On 15 December 2004 a letter from SBA to the Wyndham City Council was sent reiterating the objection to Wyndham City Council dealing with Primelife's application.
D: VIDEOTAPING OF BOARD MEETINGS
240 Primelife submitted that Porter had wilfully disobeyed three direct instructions from the Board, namely, that the board meeting of 27 June 2003 not be videotaped, that the board meeting of 16 July 2003 not be videotaped and that the videotaping equipment be removed from Primelife's offices. Primelife further submitted that Porter lied to the Board on 27 June 2003 and again on 16 July 2003 in relation to whether the board meeting was then being recorded. Primelife submitted that Sent had failed to ensure that the videotaping of board meetings ceased and that the video recording equipment be removed. Primelife further submitted that Sent had lied to the Board on 27 June 2003 and again on 16 July 2003 in relation to whether the board meeting was then being recorded. Primelife submitted in the alternative that, if Sent did not know that the meetings were then being recorded, his ignorance of the same constituted wilful neglect of duty or gross incompetence. Primelife submitted that the above conduct of the plaintiffs constituted serious misconduct. The plaintiffs submitted that they had not deliberately lied to the Board or deliberately disobeyed its instructions.
241 I am satisfied that when de Crespigny asked whether the board meeting of 27 June 2003 was being taped and recorded[47] and Sent replied "Not now" and Porter replied "No", the answers were false and they each knew that they were false. Further, when de Crespigny repeated the question whether it was happening now and Porter replied "No. We did it selectively" and "that we ... feel need to be ... recorded ... we have done it in the past but it's been a selective process...", the answers were false and they each knew that the answers were false. They were each deliberately lying and acquiescing in each other's lies. They both knew that everything that happened in the boardroom was being continuously videotaped and that the equipment, that is the camera (and the video recorder), was "running" or "rolling". I do not accept that either of them had in mind, as they suggested, a distinction between recording or videotaping the meeting and subsequently keeping or saving such recording before it was overwritten but, even if they did, their answers were still false, or at least seriously misleading, and they knew it.
242 I am further satisfied that, when, during the board meeting of 16 July 2003, de Crespigny said to Walker that the previous board meeting was not being taped[48] and Sent made the comment "They're not taped unless you want it taped", Sent's comment was knowingly false and misleading because he knew that the videotaping was a continuous process and not selective. There was no instruction from the Board at the previous meeting to turn off the tape (presumably because they had been told that the meeting was not being recorded) and there was no instruction from the Board at the previous meeting to remove the recording equipment. There was thus no reason for Sent to believe that Porter had turned off the recording equipment, or had it removed, and there is no evidence that they had any conversation on the subject between the two board meetings.
243 The Board having decided at the 16 July 2003 meeting that meetings should not be taped and that all recording devices should be removed from the building, I am satisfied that Porter did not forget to turn off the equipment but intentionally left it running, thus disobeying the Board's decision. That is to say, even if Porter had formed an intention to turn off the equipment after the 27 June meeting but had forgotten to do so (all of which I doubt), she was present when the relevant discussion occurred at the 16 July meeting, said nothing at the time and intentionally did not, either then or when she subsequently left the boardroom, turn off the equipment.
244 I should add that, when Legge left the meeting and repeated the question about recording the meeting to Porter in Sent's presence, Porter had a further opportunity to tell the truth and to turn off the equipment but she did neither.
245 I would accept that not every deliberately false statement by an executive officer to a board of directors and not every deliberate act of disobedience to the directions of a board would necessarily constitute serious misconduct, but, in the present case, on a matter of obvious importance to the Board and going to the security and confidentiality of its deliberations, the plaintiffs acted deceitfully and, additionally, in Porter's case, disobediently. Their conduct was fundamentally destructive and subversive of the trust which must exist between a company, through its board of directors, and its chief executive officers and demonstrates that their loyalty and cooperation as employees could not be relied upon. I am therefore satisfied that the said conduct of Sent and Porter constituted serious misconduct.
E: CASH PAYMENTS TO GATTO AND A&M
246 In short, Primelife submitted that Sent's misconduct under this heading consisted of receiving cash from Primelife for which Sent failed to properly account and purportedly paying such cash to Gatto or A&M. Primelife submitted that Porter's misconduct under this heading consisted of facilitating the provision to Sent of cash from Primelife for which Sent had failed properly to account.
Relevant facts
247 The evidence shows that in or about October 2000 certain payments commenced to be made by Sent from Primelife's funds. There were in the end a total of 82 cheques, 66 made payable to cash and 16 made payable to A&M, with a total value of $234,650. There was extensive cross-examination as to the circumstances surrounding the drawing of these cheques, and many lists and tables were put in evidence, but the precise details seem to me to be substantially immaterial other than to establish the general course of conduct.
Gatto's "general retainer"
248 Sent testified that, in the year 2000 (it would seem, on the evidence, in or about October 2000), he was told by a number of developer acquaintances that Gatto had expertise in dealing effectively with building unions, that he telephoned Gatto and that he "introduced myself to him".[49] Sent told Gatto that he wished to engage him (or his company A&M)[50] to assist Primelife with its negotiations and relationships with the construction unions. At Gatto's invitation, Sent met him at a restaurant and he offered Gatto "a watching brief asking him to monitor the company's construction sites and try to identify and resolve any issues before they escalated into disputes" that might disrupt construction on any of Primelife's projects. Gatto said that "he would keep his ear close to the ground and deal with any threats to the company including finding out and letting Sent know if any site employees were stealing from the company". According to Sent, Gatto said that the payments to him had to be made in cash. Sent said to Gatto that he would need invoices or receipts for Primelife's records and Gatto said that he would provide those on payment. Sent said to Gatto that he would pay him $1500 per month as a retainer. Gatto said that "he did not get out of bed for $1500". Sent asked him to nominate his best price and he responded "$6000 per month". According to Sent, after further negotiation, they agreed on a monthly retainer of $4000 which would apply "for the year" and then be the subject of review. Gatto said that in addition to his monthly retainer, Sent would have to pay him additional amounts for specific problems that occurred from time to time and that tasks such as negotiating site allowances or lifting black bans would be the subject of a separate fee to be negotiated.
249 Sent testified, vaguely, that he informed Legge of his intention to enter into an arrangement with an industrial consultant (although he did not mention A&M or Gatto). According to Sent, he told Legge that cash payments would be required but that invoices would be provided and Legge said something to the effect that it did not matter as long as there were receipts. I am unable to accept this evidence or that Sent had any conversation of this kind with Legge at or about the time when Sent first entered into the initial arrangement with Gatto. I am satisfied that Sent did have a conversation, at a later time, with Legge about cash payments to an unnamed industrial consultant in the circumstances referred to later below.[51] However I should say at once that having seen and heard Legge give evidence I am satisfied that he did not and would not have said to Sent that it did not matter if Sent made cash payments without invoices as long as there were receipts.
250 Sent described the mode of payment to Gatto. In the first week of each month he would pay in exchange for an invoice. This normally happened at a restaurant where a number of people were lunching with Gatto and he was invited to come. Prior to each luncheon appointment he would ask Porter to organise cash for the payment. In some cases he signed cheques for cash and on some occasions others signed cheques for cash and he would later be provided with the resulting cash by Porter or someone else in an unmarked envelope. At some stage during the lunch with Gatto they would meet away from the table and Sent would hand him the cash or cheque and receive the invoice. Sent testified that Gatto handed him an invoice when he gave him the cash payment "on every occasion". Sent said that after returning from the meeting he handed the invoice either to Porter or to someone else in order that it be forwarded to Primelife's accounts department. Porter, in her evidence, confirmed that Sent on some occasions gave the invoices to her and that on other occasions she saw him give invoices to his personal assistant or to other members of staff.
251 Gatto testified that, through his company A&M, he provided services to a lot of builders who paid him a retainer to look after their union problems and to avoid union hostilities - he was a sort of middleman or buffer. He said that Sent asked him "to be his eyes and ears as far as Primelife is concerned" and he (Gatto) asked to be paid in cash. In cross-examination Gatto said the initial brief was to be the eyes and ears: "I want you to look after my company. Anything you hear that is detrimental to Primelife or me or the building, whatever, I want you to report back to me." Gatto then added "or anything to do with Sent". He then said that there was no specific mention of building or construction projects at the outset, but not long afterwards they were mentioned. Gatto said that building matters were raised when the figures went to $6600. Then he changed his evidence and said that it was "from day one" to do with building, but that he did not "get his teeth into it" until later because there was not much happening.
252 On or about 3 October 2000 Porter asked Holzer to cash a cheque in the amount of $4000 drawn on the account of Williamstown Range, a subsidiary of Primelife. Porter did not tell Holzer what the cash was for - but did tell her not to go to the next door NAB branch (on the corner of William and Collins Streets), rather to go to some other branch of the NAB. Holzer returned with the cash, placed it in a Primelife envelope and handed it to Porter. Porter told her not to put the cash in a Primelife envelope but in a plain unmarked envelope. After this occasion many similar transactions occurred at the instance of Williams or Porter in which Holzer similarly participated.
253 From about late 2000 Porter also began approaching Daniele from time to time and asking him to prepare cheques that were payable to cash. At first she told him that Sent needed the money but did not say why. The cheques were initially drawn on the account of Williamstown Range. Porter said that an invoice would be provided later. Daniele either prepared the cheque or instructed one of the employees in the accounts department to do so. On some occasions Porter instructed Daniele to cash the cheque and give her the cash, which he did.
254 Daniele testified that he was responsible for overseeing the Primelife accounts section from October 2000 until early 2001. About twenty people worked in that section during that period. There were a lot of transactions and many hundreds of invoices per week. About half a dozen staff members were involved in invoice processing.
255 Daniele testified that it was Primelife's usual procedure when it purchased goods or services from a third party to obtain an invoice before it paid for those goods or services and if a consultant of some sort was engaged it was usual for the consultant to provide time sheets.
256 Daniele described the process involved with the A&M invoices: when the cheque was raised without an invoice, data would be keyed in at that date and subsequently the invoice would be attached behind any voucher or remittance advice. The code for the payment might be decided on instructions from Williams or Porter - the code could be altered at any time such as when the invoice came in or when the accountants later looked at the matter. Daniele saw a number of the invoices and was familiar with the name A&M.
257 Daniele testified as to a number of cheques in 2000 that he prepared or arranged to be prepared. He testified that on 10 January 2001 Porter asked him to arrange for a cash cheque payable to A&M. He did not know of the company or what it did and there was no invoice. Daniele testified that there were other cheques in 2001 also drawn on the account of Williamstown Range. The payments were ultimately recorded as "Consultant - other". In May 2001 he organised a cash cheque to be drawn on the account of Primelife but the payment was said to be for the benefit of Williamstown Range. In June 2001 he organised a cash cheque in respect of mediation and arbitration. He was not involved with a number of subsequent cheques. Then in August 2001 he organised a cash cheque on Primelife's account - still entered as being for the benefit of Williamstown Range.
258 Daniele testified that on 8 November 2001 Williams asked him to co-sign four cash cheques totalling $6000 that Porter had requested.
259 Daniele later co-signed some other cheques when Williams or some other signatory was not available.
260 Williams testified that in late 2001 Porter asked him to come to her office. Porter told him that Sent had a relationship or an understanding with a consultant who had influence in the building industry and required payment for his services and advice. She said that Primelife was required to pay cash of about $6000 to this consultant and instructed him to draw a cash cheque in that amount. Williams believed that this was the first time that this had occurred and therefore did not take any steps to ascertain whether there had been any previous cash payments. When Williams told Porter that he would require an invoice she said that payment was to come first and an invoice would follow later. This was contrary to the usual practice in the accounts department whereby cheques were drawn to specific payees on the basis of a purchase order, invoice or cheque requisition form. Williams said to Porter that this was a highly unusual arrangement and she replied in substance that this was Ted's way of doing business and he believed it was money well spent to support the building and construction program that they were facing as a company in the next few years. Williams testified that in his career as a chartered accountant this was the first time he had been asked to draw a cheque to cash for a public company to pay for services but he complied as the instructions came from the Deputy CEO and, effectively, the CEO.
261 I note that Sent testified that he did not ever check the invoices provided to him by Gatto and that he left that to Primelife's accounts department. Of course Primelife's accounts department had no means of checking the invoices because there was no other documentation provided.
262 Williams decided to use a number of cheques rather than one. This idea originated with Williams - he said the reason for it was that he felt it was an unusual arrangement and he did not want any unnecessary interference or inquiries from the bank. When the cheques, dated 8 November 2001, were ready, Williams took them to Porter who asked Holzer to join them. Either Porter or Williams suggested that Holzer take the cheques from Williams and go to four separate branches of the National Australia Bank for the purpose of cashing the cheques.
263 On 9 November 2001 (the next day) Porter instructed Williams to organise cash cheques in the sum of $4000, saying that the sum of $6000 had been for an earlier period and that this amount was required for the current period. He then drew three cheques that were co-signed by Porter and that were left with her. Subsequently Williams received an invoice relating to "arbitration and mediation" for the month of October 2001.
264 The next instructions received by Williams were on 7 December 2001. Porter asked for a cash cheque for $5000 for consultant's fees. Williams drew four cheques in varying amounts. I note that Williams proceeded to give evidence of the history of the drawing on Porter's instructions of the subsequent cheques payable to cash or to A&M, covering the period from December 2001 until August 2003. On 11 August 2003 the last cash payment was made to Gatto or A&M, by cheque payable to cash for $6600.
265 Porter could not explain why cheques were banked at different branches of the same bank and did not know whether it had anything to do with reporting requirements of banks where large sums were drawn. Porter said this was Williams' idea in any event. Porter wrote "Okay to pay" on the invoices even though they always came in after the payment had been made. Porter instructed that the cash should always be placed in an unmarked envelope because it would not look good if an envelope containing cash with Primelife's name was found and people would call for an explanation.
266 Williams said that no requisitions were drawn up for cheques: if it was a computer generated cheque there would be a remittance advice, if it was a hand drawn cheque there would be no remittance advice but the payment would be posted to a ledger and a code determined by him would be applied to it. The accounts section would try and match invoices later received with previously drawn cheques. In relation to the allegedly missing or misplaced invoices, Williams testified that he had never seen the originals of the invoices that were now said to be duplicates of such invoices.
267 Sent testified that on 7 December 2001 he received $5000 from Primelife and paid Gatto $4000 in respect of an invoice for $4000. Sent said that the remaining $1000 was reimbursement to himself for the cost of tips and beverages incurred by him at various lunches with Gatto and his associates. I accept Sent's evidence in this regard.
268 Sent testified that Gatto resolved other problems, from time to time.[52] On one occasion, when the company was involved in the construction of a retirement village in Essendon, a worker had fallen from the first floor of the building and had been seriously injured. The union had shut down the site as a result. Sent asked Gatto to try and resolve the situation and work resumed the next day. Sent, in his evidence, gave a number of other examples of problems on specific sites which had been quickly resolved after he had spoken to Gatto.
269 Sent testified that, in about late 2002 or early 2003, Primelife was experiencing problems at a site in Donvale where the builder's difficulties with the union had resulted in the union stopping all work at the site. At one of their monthly meetings Sent asked Gatto whether he could do something and he said that he would do so for an extra fee. They agreed on a payment of $10,000 in cash, payable by two instalments. Sent said that he paid the first instalment of $5000 on 11 April 2003 and the second instalment on 6 June 2003. Porter confirmed that the cheque dated 11 April 2003 was arranged by her after Sent told her of the required payment and that it related to resolving a problem at the Donvale project (as was the cheque dated 6 June 2003).
270 Porter was cross-examined about cash given to Sent in May 2003 before he went overseas in early June 2003. She said it related to special assignments or work that A&M or Gatto did. There was a total cash payment of $50,000 by means of five cheques in May. It was later established that there was a total sum of $60,000 in cash withdrawn and given to Sent prior to his going overseas, as follows: $15,000 (in April), $40,000 (in May) and $5,000 (in June).
271 Sent described Gatto as having a "remarkable relationship with the union". Sent said that in his estimation Gatto was a lobbyist with the unions. There is no evidence to the contrary although it does not appear from the evidence how or why Gatto had achieved this relationship with the unions. I accept Sent's evidence that he retained Gatto in order to achieve a good relationship between Primelife and the unions and on the terms as to payment described by Sent. I accept the evidence that the intended benefit to Primelife of retaining Gatto related to the maintenance of a good relationship with the relevant unions involved in Primelife's construction activities both in general and in relation to any problems that might arise on specific building sites. I am not confident that the Court has been provided with a full account of the contents of the relevant conversations between Sent and Gatto and, more particularly, the means by which Primelife's relationship with the unions might be enhanced by Gatto's services. I am satisfied that Sent made the payments to Gatto or to A&M in the manner described by him and I am satisfied that he made those payments for what he perceived to be the benefit of Primelife and that he did not use any of the cash received by him for other purposes or for his own purposes.
Gatto's "site allowance retainer"
272 Sent gave evidence in relation to the site allowance negotiation and his payments to Gatto which I broadly accept, unless otherwise indicated.
273 Sent said that there were no actual arbitrations or mediations conducted by A&M but then said that there was one "mediation" that he attended. He detailed problems in early 2001 with the union (CMFEU) in relation to site allowances. A dispute arose in relation to whether or not Primelife's buildings should be characterised as commercial or residential as that characterisation affected the site allowance.[53] The issue arose at first in relation to Lexington Gardens. Thompson told Sent that there had been several discussions with representatives of the CFMEU as to whether a retirement village was a commercial project or a domestic project or partly each - the union considered it to be totally a commercial project. In his evidence, Sent described a meeting at the union headquarters with a number of "highly placed union people" to whom he was introduced by Gatto. Sent testified that "Gatto ... said this is the chap that I've been talking to you about, he is a friend of the union, and he keeps to his word and he then shook their hands and went out." Sent said he then had a discussion with them and subsequently Gatto called him and said that the transaction should be done.[54]
274 Sent expanded on the above evidence as follows. In 2001 Primelife was involved in the construction of two retirement villages. Thompson, the project manager at one of the sites told Sent that the union was seeking a site allowance substantially above the existing allowance. Site allowances were calculated on a per hour/per man basis and their were 75 workers on the particular site with an estimated construction period of 200 eight-hour days per annum for three years. The union's claim would have added significantly to the construction costs and was likely to have led to similar claims on other projects. According to Sent, he asked Gatto to negotiate with the unions on the company's behalf. Gatto said that he would do so, but required a separate fee payable in cash. According to Sent they agreed, after negotiation, on a fee of $50,000 per annum for each of the three years in relation to which the site allowance would be paid. Sent testified that Gatto arranged a meeting for him with a number of union leaders. After introducing Sent to them, Gatto and his associate left. Sent made an offer at the meeting and the union officials were "non-committal" in his presence, but some short time after this meeting Gatto said to Sent "Ted you will get your deal". Shortly afterwards Thompson reported to Sent that the deal as proposed had been put into effect and an agreement signed. The same site allowance arrangement was applied to the other site and later to other Primelife construction sites during the relevant three year period.
275 Tudor operated a commercial building company called B & H Tudor Pty Ltd and was an experienced and licensed builder. After initial employment as construction manager, Tudor was approached by Thompson of Primelife in mid-1999 to become the builder for Primelife on all of its projects under a construction management agreement. This continued until 2004 although Tudor took on less work after some time in 2002 when he became very ill.
276 Tudor attended regular site meetings at about 14 Primelife projects and also attended weekly meetings at Primelife's construction offices in Morwell. In addition he attended site meetings where a specific issue arose. The CFMEU members constituted the majority of the workforce on the various sites.
277 According to Tudor, a handwritten agreement was entered into in 2001 and signed on site, fixing the site allowance for Lexington Gardens (Springvale) and all Primelife building sites. The compromise was the result of negotiation over several weeks between Tudor, Thompson and the CFMEU (one Doyle signed on behalf of CFMEU). Tudor conceded in cross-examination that he did not know what if anything had happened behind the scenes. Tudor had never met Gatto and had never heard of A&M. He said that, to his knowledge, Gatto was never on site and played no role in negotiating the site allowance. The handwritten agreement was in place at the time that building at the Waterford Valley site (Knox) commenced. The CFMEU tried to renegotiate but Primelife told them that agreement had already been reached.
278 Sent was apparently aware that Thompson and Tudor had entered into a handwritten agreement with the union in relation to site allowances (Sent said that this was after he had his meeting with the union officials in Carlton). Sent said that he had not seen the handwritten agreement but that he was told that there was an agreement. Sent testified that the union argued that this agreement only applied to Lexington Gardens but with the help of Gatto they had it committed to all the sites. Sent said that he was not actually present when Gatto did anything.
279 Sent testified that he paid Gatto the first sum of $50,000 in cash from his own money in early 2001. He said that he paid Gatto in cash in a restaurant in Carlton. He got the cash from his safe at home ($20,000) and the rest from banks (by a series of withdrawals, using cheques). He carried the cash to the meeting in a "bag".
280 According to Sent, he told Legge that he had paid $50,000 in cash from his own money, saying that he should be reimbursed by Primelife and that he told Legge that the guy who assisted in the negotiations was a gambler and had been paid in cash. I accept that evidence. Sent testified that Legge then said that he would approve an increase in Sent's salary for the year ending 30 June 2001, for that year only, by $100,000 to compensate him for the sum he had paid to Gatto. I also accept that evidence. Sent explained that the $100,000 in pre-tax income was broadly equivalent to the $50,000 payment that he had made (given his marginal rate of taxation). Sent testified that this explained the memorandum from Legge dated 11 June 2001 to a person in Primelife's accounts department advising that "the Board of Directors has approved an increase of $100,000 per annum in the salary of the Managing Director, effective for the current financial year."
281 Legge gave evidence about a conversation with Sent which, I am satisfied, was the very conversation in 2001 concerning which Sent testified as above set out, although Legge's recollection of the conversation was a little different. Legge testified that Sent told him, in late 2000 (or early 2001), that he had personally been paying a person who was dealing with the unions and that Primelife should pay for this in future as it was his view that this was for Primelife's benefit. Sent also referred to the monthly payments to Gatto. According to Legge, Sent told him that he had in the past used cash and Legge said that he should not be involved in cash transactions and that Primelife would need a proper contract, invoices and supporting documentation. According to Legge, he told Sent not to take money out of Primelife by way of cash other than that, if he wished to make a proper claim for expenses for meals or entertainment, this should be submitted and processed. Legge testified that he did not know that cash payments subsequently continued to be made by Primelife to any such industrial consultant. Sent denied that Legge told him not to be involved in cash transactions and testified that Legge said only that Sent would need to get receipts.[55]
282 I am satisfied that Legge's account of the conversation, although incomplete, is substantially accurate and that the conversation occurred shortly after Sent had paid Gatto $50,000 in cash. The timing of the conversation and Sent's need for it is apparent, in my view, because Sent wanted to obtain reimbursement for the cash paid out by him and this is when the one-off salary increase was agreed upon (although Legge did not remember this part of the conversation). The accuracy of Legge's recollection that Sent told him that he had in the past used cash is supported by the fact that, on the evidence, this was the only occasion when Sent paid a very substantial cash amount to Gatto from his own money. I accept Legge's evidence that he was given no indication that Primelife would be making any cash payments itself in the future, but I think that Sent's mentioning to Legge of his past payments of cash, and that he was paying a gambler, supports the probability of Legge's version that he told Sent that Primelife should not be involved in cash transactions and that Primelife would need proper documentation. Further, I considered Legge to be an honest witness.
283 Sent said that apart from the first year's payment of the "success fee" for the site allowance, he got an invoice for each and every payment made to A&M.
284 Mary Swane, who is employed by Primelife and has been so employed for about six and a half years, was called to give evidence on behalf of Primelife. In 2001 she was Primelife's payroll manager. It is unnecessary to refer to the detail of her evidence. However, having heard her cross-examined, I am satisfied that, on Porter's instructions, she put into effect the necessary mechanisms for achieving payment to Sent by way of cash or shares of the one-off salary increase of $100,000 recorded in the memorandum dated 11 June 2001.
285 Sent testified that another five cash payments were made to Gatto in the period April to May 2003 making up the sum of $50,000 then due in relation to the site allowance agreement. Porter confirmed that Sent instructed her that cash instalments totalling an annual payment of $50,000 needed to be made and this included $10,000 paid on or about 1 May 2003.
286 On 16 March 2006 Porter sent to her solicitors certain documents not previously discovered. One of these documents[56] was an undated letter from A&M to Primelife addressed to Sent. The letter commenced: "This letter is in response to your request that I clarify details in relation to my agreement with Primlife (sic) for services in respect of the Rowville and Springvale projects. This agreement is separate to the contract I currently have for the provision of general advice and assistance on industrial relations for all other Primelife projects which is charged at the agreed rate of $6,000 per month plus GST." The letter went on to refer to this separate contract as being "for the negotiation of site allowances, management of work conduct to create productivity and the cessation of work stoppages". The letter, bearing Gatto's name, but unsigned, also referred to Primelife having saved hundreds of thousands of dollars during the period of "my consultation". This letter was clearly devised, after the event, to evidence the existence of the arrangements between Sent and Gatto. However I am broadly satisfied of the existence of those arrangements without deriving any assistance from this letter.[57]
The Royal Commission
287 On 29 August 2001 a Royal Commission was established under the Royal Commissions Act 1902 (Cth) to enquire into and report on a number of matters in relation to the building and construction industry, including:[58]