Plaintiff v Defendants

CORPORATIONS - Winding up on just and equitable grounds - Where company solvent and profitable - Where there has been a falling out between shareholders, but no practical deadlock in the conduct of the affairs of the company - Whether buyout order could be made under s 467(4) of the Corporations Act 2001 (Cth) - No basis to conclude it would be just and equitable for the company to be wound up - Jurisdiction to make a buyout order not enlivened - Corporations Act 2001 (Cth) ss 461, 467.

CORPORATIONS - Winding up on just and equitable grounds- Whether buyout order falls within the scope of an 'other order' identified in s 467(1)(c) of the Corporations Act 2001 (Cth) and could therefore be made under that subsection where winding up jurisdiction not enlivened - Where winding up jurisdiction not enlivened and winding up application has failed, s 467(1)(c) does not empower the Court to nevertheless make a buyout order - Corporations Act 2001 (Cth) s 467(1)(c).

1 The plaintiff (Premier) holds just over 30% of the ordinary shares in the eighth defendant (Skytraders). Premier is the corporate vehicle by which Terry Vickers holds his interests in Skytraders. Skytraders is an aircraft operator whose principal business involves the provision of air transport services to a number of Commonwealth and State government departments.

2 Since it secured a contract with the Australian Antarctic Division (AAD) in mid-2003, Skytraders went on to secure a further contract with the AAD for inter-continental transport (between Australia and Antarctica), as well as contracts with the Australian Border Force (ABF) and Victoria Police. Skytraders' business has grown to the point where, in the 2020 financial year, its revenue was over $48 million, it held assets of over $47 million and its net profit before tax was over $13 million. Skytraders' staff also grew to over 106 employees, including 55 full time employees.

3 Premier took a transfer of shares in Skytraders on 3 June 2003. Mr Vickers had been appointed to the board of directors of Skytraders the day before, on 2 June 2003. He remained a director until 14 October 2019, when a resolution to remove him was passed at a meeting of shareholders called by the second defendant, Scarp Nominees Pty Ltd (Scarp). Scarp is owned and controlled by the first defendant (Mr Mackay). Mr Mackay, with Scarp, controls over 50% of the ordinary shares in Skytraders. Mr Vickers' removal from the board was initiated by Mr Mackay shortly after Mr Vickers' executive role in the Skytraders business ended in contested circumstances.

4 The initial transfer of shares in Skytraders to Mr Vickers, and his appointment to the board, followed Skytraders' success in securing a contract with the AAD (the contract was signed on 13 June 2003).

5 For many years, Mr Vickers and Mr Mackay worked together (alongside others) to develop and operate Skytraders' business. They enjoyed considerable success in that venture and have each received millions of dollars in dividends since the company first began paying dividends in 2016. Premier brought this proceeding on 1 October 2019, after Mr Vickers' operational roles as Chief Pilot and Director of Operations ended, and Scarp had served a notice calling a shareholders' meeting to remove Mr Vickers from the board. The cessation of Mr Vickers operational roles and his ejectment from the board, formed the focus of the Premier's oppression case, but it also pleaded a vast array of other complaints, each of which is addressed below.

6 Before returning to Premier's contentions in this proceeding, it is appropriate to set out some further background concerning the shareholdings in Skytraders and the various parties to the proceeding.

7 Before Premier became a shareholder, all of the ordinary shares in Skytraders were held by Mr Mackay and Andrew Niemeyer, who were also the directors. At the same time as shares were transferred to Premier, Mr Mackay restructured his affairs so that he held some shares personally, and the balance of his majority interest through Scarp.

8 By the time Premier initiated this proceeding on 1 October 2019, the ordinary shares in Skytraders were held as follows:

(a) 60 shares were held by Premier;

(b) 21 shares were held by Mr Mackay personally;

(c) 80 shares were held by Scarp; and

(d) 34 shares were held by the third defendant, Sallab Pty Ltd (Sallab).

9 As well as joining Sallab to the proceeding, Premier joined John Sharp as the seventh defendant. Premier alleged that Mr Sharp was the true controller of the Sallab shares and a de facto director, despite ostensibly having sold shares previously held through his controlled entity, Ashby Park Investments Pty Ltd (Ashby Park), to Sallab in 2013. Mr Sharp and Sallab were jointly represented in the proceeding and tendered documentary evidence (although they elected not to proceed to call Mr Sharp and Sam Ballas, the director, shareholder and secretary of Sallab). Sallab and Mr Sharp adopted the submissions made by Mr Mackay, Scarp and Skytraders (referred to as the Mackay parties) and otherwise confined their participation to issues directly concerning them.

10 Skytraders also had the following performance shares on issue:

(a) 10 E class shares were held by the sixth defendant, 6Platforms Pty Ltd;

(b) 10 F class shares were held by the fifth defendant, Edisto Pty Ltd;

(c) 1 G class share was held by Scarp;

(d) 1 H class share was held by Premier;

(e) 1 I class share was held by Sallab; and

(f) 10 L class shares were held by the fourth defendant, Deep Section Investments Pty Ltd.

11 The fourth defendant is an entity associated with Daniel Burnaby, Mr Mackay's nephew through his former wife. Mr Burnaby is the Director of Commercial and General Counsel of Skytraders. He has worked at Skytraders since 2007, commencing in the role of 'Commercial Executive' and assuming the title of 'General Counsel' in 2008. Mr Burnaby became 'General Manager Commercial' in 2011. The fifth defendant is an entity associated with Matthew Ide, the Director of Engineering, Head of Aircraft, Airworthiness and Maintenance Control and the Head of Design. The sixth defendant is an entity associated with Anthony DeAngelis, the CFO of Skytraders. Those entities hold non-voting performance shares. The fourth to sixth defendants did not participate in the trial, and were excused other than in respect of any relief that might be granted to Premier and in respect of costs.

12 Omitting title changes, which are not presently relevant, Mr Vickers was Skytraders' Chief Pilot - a role with statutory significance and responsibilities under the governing Commonwealth aviation-related legislation - and Director of Operations. He was based in Melbourne. Mr Mackay is the CEO, and is based in Sydney. Mr Mackay's focus was on general corporate matters, administration and finance.

13 After some years of apparent harmony and prosperity, by 2016, relations between Mr Vickers and Mr Mackay were not at their peak. Mr Mackay and Mr Vickers communicated less frequently. In this period, Mr Vickers also butted heads with Mr Burnaby. Mr Vickers was unhappy with what he perceived to be Mr Burnaby (who occupied a commercial position) interfering in operational matters, which Mr Vickers considered to be his domain. After an incident concerning Mr Burnaby and Mr Vickers' daughter, Sarah Vickers (then the Operations Manager) in late 2016, Mr Vickers and Mr Burnaby patched up their relationship in April 2017, after which tensions receded, only to flare up again in 2019. From at least late 2016, Mr Vickers was unhappy with the way Skytraders was being managed in some respects, and was also looking to his future, mindful of his advancing age and the demands of his operational role. Mr Vickers consulted solicitors at various points from late 2016.

14 It was common ground that, on 26 August 2019, Mr Vickers and Mr Mackay had a heated conversation, following which Mr Vickers absented himself from operational matters and cleared out his office a day or two later. On Mr Vickers' account, he took leave to consider his position and his options, but had not resigned. On the Mackay parties' account, Mr Vickers had resigned. There were substantial factual disputes about what occurred during the call between Mr Vickers and Mr Mackay, a subsequent call Mr Vickers had with Mr Burnaby, and events in the period leading up to, and following, 26 August 2019. After some debate (conducted by correspondence) between Mr Vickers and Mr Mackay about what had happened, on 13 September 2019 Mr Mackay directed Mr Vickers not to involve himself in operational or management matters, and directed that he was not to take any further action or function as Chief Pilot or Director of Operations.

15 Premier commenced this proceeding seeking relief under s 233 of the Corporations Act 2001 (Cth) (Corporations Act) on 1 October 2019. At that time Mr Vickers was still a director of Skytraders, but he was removed as a director on 14 October 2019 at the meeting requisitioned by Scarp on 20 September 2019.

16 While Premier has amended its case more than once since it commenced the proceeding, at no stage has the relief sought included the reinstatement of Mr Vickers to his operational roles, or his reinstatement to the board of directors. Rather, Premier has sought an order that the other shareholders purchase its shares in Skytraders. In substance, the contention has been that Mr Mackay and Scarp should buy Premier's shares; it was not seriously contended that Sallab, or the holders of the performance shares, should be subject to a buyout order. Alternatively, Premier sought an order for a buy-back of Premier's shares, or, as a further alternative, an order that Skytraders be wound up under s 461(1)(k) of the Corporations Act, ie, wound up on the just and equitable ground.

17 It is convenient in these reasons to use the expression 'oppressive conduct' (and 'oppression') to refer to conduct of the kind referred to in s 232(d) or (e) of the Corporations Act, ie, conduct of the affairs of Skytraders that is contrary to the interests of members as a whole,[1] or oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity. As detailed below, Premier contended that all of the conduct complained of was oppressive within s 232(e), but only a sub-set was contended to be oppressive within s 232(d).

18 Premier contended that there was a 'Shareholding and Directorship Agreement' (the SDA) between Mr Mackay and Mr Vickers, formed between August 2000 and September 2001. Premier alleged that there were terms of the SDA to the effect that:

(a) upon joining Skytraders, Mr Vickers would be responsible for operations while Mr Mackay would be responsible for administrative management; and

(b) while Premier remained a shareholder of Skytraders, Mr Vickers would be entitled to a seat on the board of Skytraders.[2]

19 Premier also ran an alternative case, namely that Mr Vickers 'understood and reasonably expected that as an owner of and as a person responsible for the operations of Skytraders, he would be entitled to a seat on the board of Skytraders'[3] (the Expectation).

20 Premier's principal allegations of oppression related to the termination of Mr Vickers' roles as Chief Pilot and Director of Operations, and his ejection from the board of directors. It further contended that management, including Mr Mackay and Mr Burnaby, were interfering in operational matters in a way that had the potential adversely to affect safety and which was contrary to the separation of responsibilities agreed under the SDA.[4]

21 In addition to these principal allegations, Premier also contended that a range of other conduct was oppressive and justified the grant of the relief sought. It is fair to say that the other conduct complained of was wide-ranging, and included complaints concerning conduct that occurred a number of years before 2019. Broadly, the conduct complained of concerned certain alleged financial irregularities, most of which Premier contended it only uncovered after examining Xero files in the context of the proceeding, and conduct concerning the employment of, and actions of, Mr Mackay and his relatives who were employed in the business. The complaint about family members was narrowed during trial so that the objection to the fact of employment of Mr Mackay's relatives fell away. At a high level, the thrust of the complaint was that Mr Mackay's relatives had been interfering in operational matters, contrary to the agreement Mr Vickers had with Mr Mackay about their respective areas of responsibility.

22 Allegations of oppressive conduct were also advanced concerning sponsorship payments made by Skytraders' insurance broker to polo club entities associated with Mr Mackay (who is a polo enthusiast) and to an entity running a rowing regatta in named for Mr Sharp's grandfather, payments made by Skytraders to Scarp for use of its premises in Sydney, the treatment in the accounts of certain cars used by Mr Mackay, use of credit cards by family members of Mr Mackay for private purposes, and the withdrawal of Mr Vickers' access to Skytraders' offices, computer networks and records.

23 Premier's pleaded case did not distinguish between which alleged conduct constituted oppression on the basis that it was contrary to the interests of members as a whole, as distinct from, being oppressive, unfairly prejudicial or unfairly discriminatory to Premier. In final submissions, Premier clarified that the instances of conduct that it contended were contrary to the interests of members as a whole (as well as being unfairly prejudicial to Premier) were those exposing the company to a tax audit or to a safety examination by CASA and the financial allegations.[5]

24 For the reasons set out below, I have rejected Premier's contention that there was oppressive conduct. Premier has not established the SDA for which it contended. While I am satisfied that Mr Vickers reasonably expected he would be appointed to the board, granted a substantial minority shareholding and take up the operational role he subsequently held, in the circumstances as they were in August and September 2019, it was no longer reasonable for Mr Vickers to expect that Mr Mackay would refrain from exercising his majority power to eject Mr Vickers from the board, or that he would remain in his operational role, able to return if he so chose. I have also considered whether the events concerning the cessation of Mr Vickers' operational role and his removal from the board involved oppressive conduct, quite apart from the alleged SDA and Expectation. In my view, they did not.

25 So far as the other matters said to have involved oppressive conduct are concerned, I have concluded that none of them involved oppressive conduct. I have also assessed the conduct complained of as a whole, but have concluded that the course of events as a whole does not reveal oppressive conduct.

26 While Premier advanced, in the alternative to its oppression case, a contention that Skytraders should be wound up on the just and equitable ground, it was not suggested that the winding up case would have any basis if I rejected the oppression case, as I have. Accordingly, there is no basis upon which to award relief to Premier and there would be no utility in extending (and delaying delivery of) these Reasons by addressing the dispute as to the value of Premier's shares in Skytraders.

27 The principles to be applied in determining whether conduct falls within s 232 of the Corporations Act are well established; the real issues commonly lie in the application of the principles to the facts. Nevertheless, the applicable principles, and those of particular relevance given the nature of the events relied upon by Premier, may be briefly stated.

28 First, the conduct in question is to be assessed objectively, through the eyes of a commercial bystander.[6] For the purposes of s 232(e), the plaintiff must establish that there has been commercial unfairness, namely conduct that is so unfair that reasonable directors considering the matter would not have thought the decision fair.[7]

29 The concept of 'fairness', which is central to the application of s 232(e), has been elucidated in a number of cases. Justice Robson set out a helpful summary in Re SRW Nominees Pty Ltd:[8]

[34] The phrase 'oppressive to, unfairly prejudicial to, or unfairly discriminatory against' is a compound expression.[9] The words should be 'considered merely as different aspects of the essential criterion, namely commercial unfairness'.[10]

[35] In Re Companies (Western Australia) Code,[11] Murray J of the Supreme Court of Western Australia said the concept of 'unfairness' takes many forms and may include:

the harm suffered as a result of the conduct of management, the prejudice caused, the lack of reasonable commercial justification for the course taken, or simply in the decision making processes within the company.[12]

[36] In Re Ledir Enterprises Pty Ltd,[13] Black J of the Supreme Court of New South Wales noted that s 232(e) is concerned with conduct that involves 'commercial unfairness' or 'a departure from the standards of fair dealing, or where a decision has been made so as to impose a disadvantage, disability or burden on the plaintiff that, according to ordinary standards of reasonableness and fair dealing, is unfair.'[14]

[37] The test for commercial unfairness has an objective standard.[15] It requires an assessment of whether objectively, in the eyes of a commercial bystander, there has been unfairness.[16] As Brennan J stated in Wayde v New South Wales Rugby League Ltd:[17]

The court must determine whether reasonable directors, possessing any special skill, knowledge or acumen possessed by the directors and having in mind the importance of furthering the corporate object on the one hand and the disadvantage, disability or burden which their decision will impose on a member on the other, would have decided that it was unfair to make that decision.[18]

[38] Evidence of conduct having been engaged in deliberately, knowing it to be unfair or not in good faith is persuasive, but not necessary.[19] As Sackar J of the Supreme Court of New South Wales stated: 'although proof of some improper purpose or ulterior motive may well make the finding of oppression irresistible, the absence of such motivation will not and cannot in and of itself defeat [sic] charge of oppression.'[20]

[39] If the directors or a majority membership conduct the affairs of a company such that they advance their own interests or the interests of others of their choice, to the detriment of a minority shareholder, that conduct will ordinarily fall within the ambit of the oppression section.[21]

[40] Therefore the court is required to determine whether, on the balance of probabilities, an objective commercial bystander would be satisfied that the affairs of the company were being conducted unfairly. This inquiry is not assessed in a vacuum: the context is relevant to assess the fairness of the conduct.[22]

30 Secondly, fairness is not to be assessed in a vacuum, but having regard to the context in which the conduct complained of occurred.[23] That context includes the business, the conduct of the aggrieved party - which may be such that the conduct complained of is not unfair, or may affect the relief to be granted - and the nature of the relationship between the people participating in the business.[24] In many cases, there may be an agreement or understanding between those engaged in business with one another. Such an agreement or understanding will often be important in assessing whether the conduct in question constitutes oppression.[25] Such agreements or understandings may result in the aggrieved party having a 'legitimate expectation' about the basis upon which he or she would participate in the management of the company.[26]

31 Where the parties have conducted business as a quasi-partnership, exclusion from management is a 'classic hallmark' of oppression, but will not constitute oppression in every case. It is trite to observe that persons may participate in all manner of partnerships; characterisation of an enterprise, conducted through a corporation, as a 'partnership' or 'quasi-partnership' does not determine the roles of the respective partners. As Young J observed in Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd, 'the mere fact that a company is a quasi-partnership is insufficient to raise a legitimate expectation that each partner will be able to take part in management'.[27] On appeal, Spigelman CJ stated that, while it may be accepted that the existence of irreconcilable differences among persons involved in what is, in effect, a partnership 'will destroy the personal relationship involving mutual confidence, that lies at the heart of the partnership analogy', such irreconcilable differences do not, of themselves, constitute oppression or unfair prejudice.[28]

32 Where constraints on the exercise of legal rights (such as the rights of the majority) arise from understandings between those associating themselves in a business venture, the focus is on the understandings between the members at the time they entered into association. Nevertheless, later events may also found promises (which need not be legally enforceable as a matter of contract) which cannot, as a matter of justice and equity, be ignored and which may support the characterisation of conduct as oppressive in the circumstances.[29]

33 Likewise, expectations, once formed, are not immutable. Whatever the equitable constraints on the exercise of power that may initially have existed, those constraints are responsive to the circumstances; they may alter in their content, or cease altogether. The most frequently cited statement of principle is the following statement of Austin J in Tomanovic v Argyle HQ Pty Ltd:

[W]hile it is recognised that conduct may be oppressive if inconsistent with the "legitimate expectations" of shareholders, expectations are not immutable. The non-fulfilment of expectations will not establish oppression, if there has been some good reason for the extinguishment of the expectation: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672, at [85], [86] [175]; [2001] NSWCA 97; Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342; (2009) 71 ACSR 343, at [96]; [2009] NSWSC 342 per Barrett J.[30]

34 While Austin J's statement of principle has been frequently cited, and no issue was taken with it by the New South Wales Court of Appeal,[31] it warrants some elaboration by reference to the cases cited by Austin J. With respect, the paragraph of the judgment of Spigelman CJ in Fexuto that more helpfully exposes the need to identify a 'good reason' for expectations to change, and the need to consider who bears responsibility for the emergence of irreconcilable differences, is paragraph 90 (paragraphs 85 and 86, being the paragraphs of Fexuto cited by Austin J in Tomanovic, simply refer to the reasoning of the trial judge, which the Chief Justice did not embrace in all respects). There, Spigelman CJ observed that:

There will be circumstances in which the emergence of irreconcilable differences will cause the court to conclude that an understanding or expectation as to participation in management should be taken to have ceased, in a manner not entitling the person excluded from such participation to relief under the statutory provisions. That would be so where the court decides that it is the person excluded who is responsible for the breakdown in the relationship. This appears to have been the case in Guerinoni v Argyle Concrete & Quarry Supplies Pty Ltd [2000] WASCA 170; (2000) 34 ACSR 469. See also Belgiorno-Zegna v Exben Pty Ltd [2000] NSWSC 884; (2000) 35 ACSR 305 esp at [142], [151].[32]

35 In Fexuto, Spigelman CJ went on to consider the findings below and concluded that:

I am not prepared to hold that the deterioration of the relationship was the responsibility of Bob Bosnjak to such a significant extent that Fexuto became disentitled from relying on his exclusion from day-to-day management as an element in the judgment of oppression or unfair prejudice.[33]

36 Thirdly, where there is an overwhelming identity of interest between shareholders and directors, that constitutes a contextual circumstance which may mean that conduct of directors which might otherwise be in breach of duty (whether statutory or fiduciary) will not be conduct that is not in the best interests of the company as a whole, or unfair.[34] Similarly, conduct undertaken with the acquiescence or consent of the aggrieved person does not provide the basis for an oppression claim.[35]

37 Fourthly, sub-ss 232(d) and (e) constitute distinct grounds for the award of relief in respect of oppressive conduct.[36] Conduct can be contrary to the interests of the members as a whole even if it does not involve commercial unfairness.[37] Whether conduct is contrary to the interests of members as a whole is to be assessed objectively and by reference to whether the conduct adheres to accepted standards of corporate behaviour or is in accordance with how reasonable directors would act in attending to the affairs of the company.[38]

38 Fifthly, oppressive conduct may arise from a series of events, or from a single act or omission.[39] It is not necessary that the oppressive conduct be continuing at the time of trial, although the cessation of the oppression will be relevant to whether there is any occasion for, or utility in, making an order under s 233.[40]

39 Sixthly, mismanagement or poor management does not, of itself, constitute oppressive conduct.[41]

40 Seventhly, s 232 does not regulate or provide a remedy for 'family law' style disputes dressed up in a corporate guise, and the regime does not provide for some kind of corporate 'no fault divorce' allowing a shareholder to require other shareholders to purchase its shares simply because there has been a breakdown in the trust and confidence between the shareholders.[42] However, a breakdown in personal relations can be one of several factors that together lead to a conclusion that oppression has been made out.[43]

41 Eighthly, conduct undertaken in compliance with a company's constitution can still be oppressive, but it will only rarely, if ever, be oppressive if the action in question was mandated by the constitution (cf being discretionary).[44]

42 Finally, the grant of a remedy for oppressive conduct is discretionary. Remedies for oppressive conduct will be moulded to bring an end to the oppression and to compensate the person oppressed for the effects of the oppression.[45] The focus will be on the appropriateness of the remedy at the time of trial, and not at the time when the application was filed.[46]

43 Premier called the following lay witnesses, each of whom was cross-examined:

(a) Mr Vickers, former director, Chief Pilot and Director of Operations of Skytraders as well as the owner and controller of Premier's shares in Skytraders;[47]

(b) Rex Booth, formerly the Training and Checking Manager at Skytraders;[48] and

(c) Wally Meyer, formerly the Operations Manager at Skytraders.[49]

44 Premier also relied on an affidavit of Anthony Schiavello of BDO Corporate Finance (East Coast) Pty Ltd.[50] He deposed to having been contacted by Mr Vickers' lawyers on 3 September 2019 and having met with Mr Vickers on 4 September 2019 regarding the preparation of a valuation for use in an anticipated oppression proceeding. Mr Schiavello was not required for cross-examination.

45 The Mackay parties called the following lay witnesses, each of whom was cross-examined:

(a) Mr Mackay, the CEO and original co-founder of Skytraders, and controller of the majority of shares in Skytraders;[51]

(b) Matthew Ide, the Director of Engineering, Head of Aircraft, Airworthiness and Maintenance Control and Head of Design as well as the Acting Safety and Quality Manager (when required) at Skytraders;[52]

(c) Daniel Burnaby, the Director of Commercial and General Counsel at Skytraders;[53]

(d) Duncan Mackay, the General Manager - Sales and Marketing at Skytraders and elder son of Mr Mackay;[54]

(e) Calum Mackay, Commercial Executive at Skytraders and younger son of Mr Mackay;[55]

(f) Anthony DeAngelis, the CFO of Skytraders;[56]

(g) Jorn Gronset, the current Chief Pilot (and a former Deputy Chief Pilot) at Skytraders;[57] and

(h) Garry Studd, Deputy Chief Pilot at Skytraders.[58]

46 While witness statements for John Sharp and Sam Ballas (the ostensible principal of Sallab) were filed, they were not called by Mr Sharp and Sallab. Mr Sharp and Sallab adopted the submissions of the Mackay parties other than on issues specific to the interests of Mr Sharp and Sallab, on which they made their own submissions and tendered documents.

47 The lay witness statements were voluminous, running to over 600 pages.

48 Premier and the Mackay parties each called expert valuation evidence. Premier called John Dawson of Korda Mentha Forensic. The Mackay parties called Meredith Chester of PricewaterhouseCoopers Australia. Mr Dawson and Ms Chester prepared a number of reports,[59] including a joint report. They gave evidence concurrently and were cross-examined.

49 Attacks on credit abounded in final submissions. Premier contended that Mr Mackay's evidence was generally unreliable, and impugned the evidence of Duncan Mackay, Calum Mackay, Mr Burnaby, Mr DeAngelis, and Mr Ide, on the basis that their interests were aligned with those of Mr Mackay. It submitted that their evidence was 'engineered to serve the interests of Norman Mackay'.[60] Additional contentions were made concerning the reliability of specific aspects of the evidence.

50 The Mackay parties impugned the credit of Mr Vickers. They did not have 'any particular quarrel with the evidence of Rex Booth', but criticised Mr Meyer's evidence.[61]

51 I address matters of credit and conflicts in the evidence progressively below. However, by way of overview, I have significant reservations about the reliability of much of Mr Vickers' evidence, and also have reservations about Mr Mackay's evidence. I do not have the same reservations about the evidence of Duncan Mackay, Calum Mackay, Mr Burnaby, Mr DeAngelis, and Mr Ide. While Mr DeAngelis let his frustration at repetitive questioning get the better of him on occasions, I accept his evidence on matters concerning the way in which the books of Skytraders were run, and the steps taken in respect of the various financial irregularities asserted by Premier. As detailed below, I have some reservations about aspects of Mr Meyer's evidence, but found Mr Booth to be a generally honest witness.

What was the agreement or understanding between Mr Vickers and Mr Mackay?

1. In about or between August 2000 and September 2001, Norman Mackay and Terry Vickers agreed that:

(a) Terry Vickers would assist Skytraders in submitting a tender for the establishment of air services sought by the Commonwealth for the Australian Antarctic Division (AAD);

(b) if the tender was successful, Terry Vickers:

(i) would join Skytraders and be responsible for establishing and managing the operations of the business while Norman Mackay would be responsible for administration and financial management of Skytraders; and

(ii) would receive shares in Skytraders and would have a seat on the board of Skytraders

(the Shareholding and Directorship Agreement).

1. There were terms of the Shareholding and Directorship Agreement including to the effect that:

(a) upon joining Skytraders, Terry Vickers would be responsible for operations while Norman Mackay would be responsible for administrative management; and

(b) while Premier Aviation (the nominee company of Terry Vickers) remained a shareholder of Skytraders, Terry Vickers would be entitled to a seat on the board of Skytraders.

1. Alternatively to the matters in 14 above, Terry Vickers understood and reasonably expected that as an owner of and as a person responsible for the operations of Skytraders, he would be entitled to a seat on the board of Skytraders.

53 Premier pleaded that the removal of Mr Vickers as a director was in breach of the SDA, alternatively was contrary to the Expectation, and constituted oppressive conduct. Premier pleaded that Mr Vickers' engagement as Chief Pilot and Director of Operations had been terminated and that this termination constituted oppressive conduct.[62] There was some ambiguity in Premier's opening as to whether or not it contended that the termination of Mr Vickers' operational roles was contrary to the SDA (alternatively the Expectation) (in addition to his ejection from the board being contrary to the SDA, alternatively the Expectation).[63] However, Premier's closing squarely put the case on the basis that both the termination of Mr Vickers' operational roles and his removal from the board were contrary to the SDA (alternatively the Expectation).[64] No objection was taken to the slight disconformity between this position and the literal terms of the pleading,[65] which did not allege a breach of the SDA or Expectation in connection with the termination of Mr Vickers' operational roles.

54 It is important to note, at the outset, that determining whether the SDA existed, or whether Mr Vickers had the Expectation asserted, does not answer the question whether or not conduct said to have been in breach of, or contrary to, the SDA or Expectation, was oppressive. The existence of agreements or understandings between persons who join in corporate enterprises are matters of context in which the commercial fairness of conduct complained of is to be assessed.[66] Just as conduct can be oppressive even if it does not contravene any agreement, or disappoint any understanding, conduct which does do so is not, ipso facto, oppressive. The enquiry into the existence of agreements and understandings must not be allowed to distract from the need to address the statutory question, namely whether the conduct in question is of the kind stipulated in s 232(d) or (e) of the Corporations Act.

55 In view of the nature of the enquiry demanded by the statute, fixing on whether the basis of Mr Vickers' participation in Skytraders came about by reason of a 'contract' he entered with Mr Mackay (which would be enforceable as such) or by reason of an understanding or expectation on the part of Mr Vickers which formed the substratum of a quasi-partnership relationship, is perhaps less important than the conduct of the trial would indicate. Nevertheless, as the parties argued the case on those two bases - the SDA and the Expectation - and their existence (if found) would constitute a matter of context in which the actions complained of fall to be assessed, I will address both aspects.

56 As noted above, the SDA for which Premier contended had two terms. The first term provided that Mr Vickers 'would be responsible for operations while [Mr Mackay] would be responsible for administrative management'. It is convenient to refer to this as the 'demarcation term' as Premier contended that certain conduct which involved interference in operational matters was in contravention of this term.

57 Given Premier's contention in closing that terminating Mr Vickers' operational role was contrary to the SDA,[67] it follows that the effect of the demarcation term (as advanced by Premier) was to secure Mr Vickers' operational role (cf merely preventing Mr Mackay or others involving themselves in operational matters).

58 The effect of the second term contended for was to guarantee Mr Vickers a seat on the board while Premier remained a shareholder, which board seat was not contingent on Mr Vickers occupying an operational role.

59 Determination of whether Mr Vickers and Mr Mackay entered into the SDA as alleged (necessarily involving the terms alleged) requires consideration of the history of Mr Vickers' and Mr Mackay's engagement between 2000 and mid-2003.

60 Mr Vickers and Mr Mackay crossed paths professionally in the early 1990s when both were, in different capacities, involved in air freight operations.[68] Skytraders was the general sales agent for DHL. Mr Vickers, through corporate entities, supplied personnel to operate an aircraft supplied by DHL. For a period, work for DHL was undertaken under an AOC obtained by Premier Airlines Pty Ltd (Premier Airlines). That company was held as to 50% by Mr Vickers and his wife, and as to 50% by Mr Mackay. After DHL obtained its own AOC, Premier Airlines was deregistered, but Mr Vickers continued to supply services to DHL through another company until 1999.[69] Around this time, Mr Vickers was also involved in providing consulting services in the aviation industry internationally.

61 There was no suggestion that Mr Mackay's involvement of Mr Vickers in the AAD opportunity was an act of charitable benevolence. It is therefore, not necessary to address the conflict between the evidence of Mr Mackay, which portrayed Mr Vickers as struggling for work, and Mr Vickers' evidence, which portrayed his consulting services as much in demand.

62 Whatever the health of Mr Vickers' consulting business, the documents establish that Mr Mackay had contacted Mr Vickers in relation to the AAD opportunity by 21 August 2000, when Mr Mackay emailed Mr Vickers. Mr Mackay's email referred to the AAD tender process, then expected to close on 11 September 2000. Mr Mackay said 'we would like to beef up our technical expertise. when do you return to oz?'[70] Mr Vickers responded favourably a couple of days later, attaching his resume.[71]

63 In late 2000, Mr Mackay journeyed on an ice-breaker to the Antarctic region with the AAD and other potential tenderers. Skytraders had been shortlisted as a provider around the middle of 2000.[72] The trip was a familiarisation and information-gathering trip to allow short-listed enterprises to experience the conditions prior to the formal Request for Proposal (RFP) stage, and also to assess potential runway locations for the intercontinental link. At that stage, the AAD was investigating both an intercontinental link, from Australia to the Antarctic continent, and an intra-continental service, ie, flights within Antarctica. The ice-breaker arrived back in early February 2001. As well as engaging closely with the AAD staff on-board, while he was on the ice-breaker, Mr Mackay engaged in email correspondence with Mr Vickers, providing information to him, and seeking his views on various matters.

64 On 30 January 2001, Mr Mackay sent Mr Vickers a long email. Amongst the points covered were the following:

(a) a statement by Mr Mackay that his commitment to Lynden (being Lynden Air Cargo, sometimes referred to as LAC) related only to the intercontinental link, and not to the intra-continental air service; and

(b) a suggestion to Mr Vickers that he read certain AAD reports and 'once having done so i [sic] invite your interest in joining us in a bid for the intra service'.[73]

65 Mr Mackay's reference to LAC related to the fact that, after the AAD invited Expressions of Interest in about 1999, Mr Mackay got LAC involved in developing the intercontinental aspect of the AAD opportunity. However, LAC was no longer involved by the time Skytraders presented to the AAD in October 2001.

66 Mr Mackay's evidence was to the general effect that his engagement with Mr Vickers in the period prior to arriving back in Australia on the ice-breaker (which was on 8 February 2001) was sporadic and peripheral.

67 While the AAD did not issue its formal RFP until 25 July 2001,[74] work to progress Skytraders' proposal was undertaken at least in March 2001, when Mr Vickers made enquiries relating to the price and ski options for the C-212 aircraft, as well as the potential for underwing fuel tanks to be fitted.[75] Responses to the RFP were due on 21 September 2001.

68 After the release of the RFP, work naturally picked up, and it was common ground that Mr Vickers was closely involved in developing the proposal to use the C-212 for the intra-continental component as part of Skytraders' response to the RFP (the Response). Mr Vickers' evidence was that between January 2001 and the release of the RFP, he exchanged 'six or seven hundred emails' with Mr Mackay and others in relation to the AAD project.[76] Even allowing for a degree of exaggeration, I accept that Mr Vickers was deeply involved in developing Skytraders' Response, albeit his input was focused on the areas in which he had expertise.

69 The engagement between Mr Vickers and Mr Mackay included spending a week at Mr Niemeyer's residence in Leura in the Blue Mountains in early to mid-September 2001. Mr Vickers' and Mr Mackay's evidence diverged as to the contribution made by Mr Vickers to the Response prior to that week. According to Mr Mackay, they met in the Blue Mountains to work on an aspect of the Response, which Mr Mackay had asked Mr Vickers to assist in (but Mr Mackay had already worked on the other parts of the Response).[77] According to Mr Vickers, he had already 'essentially finished the tender response' and worked on the finer details, with Mr Mackay focused on checking the grammar of the Response.[78]

70 Their diverging views on this point was not isolated, but reflected a general difference in their evidence on their respective contributions to the Response and the associated presentation made to the AAD in Hobart in October 2001. Mr Mackay's evidence generally portrayed Mr Vickers as lacking any specific talents or experience relevant to the AAD tender. He emphasised Mr Vickers was a jet pilot with no polar flying experience and that the kind of AOC Mr Vickers had obtained was just a standard AOC. That said, Mr Mackay did acknowledge that Mr Vickers made an important contribution to the Response.

71 Mr Vickers' evidence portrayed Skytraders, prior to his involvement in the AAD proposal, as a relatively small air freight broker with declining prospects, which was performing poorly financially, and which had no operational experience as an airline.[79] Mr Mackay and Mr Vickers also had different recollections about whose idea certain initiatives were (such as the proposal to use a certain jet aircraft for inter-continental flights to Antarctica) and who delivered which parts of the presentation to the AAD in Hobart. Resolution of the issues in this case does not require me to make findings of fact determining whose recollection is to be preferred on these disputed points.

72 The one matter, carriage of which Mr Mackay unstintingly credited to Mr Vickers, was development of the proposal to use the C-212 aircraft fitted with skis and the associated calculations relating to range and payload. As it turned out, there were significant problems with the C-212s, the skis and the calculations, which meant that the aircraft could not fly to Antarctica to service the intra-Antarctic needs of the AAD as it should have. It could not carry the anticipated payload and could only make the journey in certain conditions, limiting its utility to the AAD. The AAD ultimately cancelled the contract in or around 2012,[80] after it had effectively 'mothballed' the aircraft in September 2011, in advance of the 2011/2012 season.[81] Premier did not accept that Mr Vickers was to blame, or was solely responsible for the C-212 proposal. Mr Mackay was cross-examined on a number of emails showing him to have had involvement in liaising with the AAD regarding the C-212s and the skis.[82]

73 It was unclear what forensic purpose the extensive blame game concerning the ill-fated C-212s and the skis served. Even taking Mr Mackay's version at its highest, the most it could show is that Mr Vickers made errors in calculations, which only came to light well after Mr Vickers' company, Premier, received shares, Mr Vickers became a director in June 2003 and Mr Vickers assumed an operational role in Skytraders. As such, the narrative concerning Mr Vickers' errors (assuming the errors were ultimately his and not the product of faulty calculations from third party suppliers), the ultimate loss of the AAD intracontinental contract many years later, and the reputational damage occasioned by the C-212s not performing as required by the AAD, cannot logically inform the basis on which Mr Vickers and Premier came into Skytraders in the first place. Specifically, that narrative has no bearing on whether or not there was a contract or understanding of the kind for which Premier contends.

74 With that digression, I return to the narrative. Mr Mackay's evidence was that there was some discussion between him and Mr Vickers about the basis on which he was to be compensated for the work he was doing during the week they spent at the home of Mr Niemeyer at Leura in the Blue Mountains.[83] His evidence was that he did not initially contemplate that Mr Vickers would be made a shareholder for a few reasons. First, Mr Mackay saw Mr Vickers as simply providing a consulting service. Skytraders' limited financial resources were put to Mr Mackay in cross-examination as inconsistent with the notion Skytraders could pay Mr Vickers on a consulting fee basis. Mr Mackay's evidence in response to this line of questioning was largely non-responsive, focusing on the fact that the AAD did do business with Skytraders, apparently thereby demonstrating financial wherewithal beyond that apparent from Skytraders' accounts.[84]

75 Secondly, Mr Mackay referred to the fact that any remuneration linked to the success of the AAD tender would be some years hence, once funds were flowing under a contract with the AAD. Thirdly, Mr Mackay noted that he was not the sole shareholder in Skytraders and the agreement of the other shareholder, Mr Niemeyer would be required to introduce a new shareholder. That said, Mr Mackay stated that he did discuss compensation based on a 25% share of profit, if and when Skytraders won the AAD contract.[85] According to Mr Mackay, Mr Vickers raised being paid by way of dividend in these conversations, but no commitment was made; Mr Niemeyer was not present for the week in Leura and, as noted, Mr Mackay's view was that Mr Niemeyer's agreement would be required to introduce Mr Vickers as a shareholder.

76 Mr Vickers disputed Mr Mackay's account of their week at Leura. His evidence was that the basis upon which he was to be remunerated was not discussed that week. His evidence was that the discussions about him receiving a 25% shareholding and seat on the board had commenced from August 2000.[86] However, Mr Vickers accepted in cross-examination that he had not reached any agreement with Mr Mackay that there would be a separation between their responsibilities (of the kind pleaded) in August 2000.[87] Mr Vickers was not able to identify with any precision when it was that he and Mr Mackay agreed to separate their responsibilities in the manner for which Premier contended:

Just to press you on this, are you able to identify a month or a year where you think you had this settle discussion with Mr MacKay about the separation of responsibilities?---No, I can't.

Could that have been, in fact, in 2001?---No, no.

Are you saying that - - - ?---I don't believe so. I believe we had a very clear understanding very early on of what we both brought to the party.

Are you saying, therefore, that the agreement you had with Mr Norman MacKay about a separation of responsibilities was some time in calendar year 2000?---I would, I would think so.[88]

77 On Mr Mackay's account, after Skytraders was named as the AAD's preferred supplier in February 2002, he made contact with Mr Vickers again, who was interested in being involved.[89] Mr Mackay explained that Mr Niemeyer was not enthused about the new direction Skytraders was taking, and wanted to continue to run an air freight operation part time. This meant Mr Niemeyer took the air freight operations into another company. With Mr Niemeyer and Mr Mackay having effectively decided to split the business, that facilitated Mr Vickers taking remuneration by way of a shareholding in Skytraders, which would have been tax-effective for him. Mr Niemeyer agreed with Mr Mackay that his shareholding could be diluted to allow for Mr Vickers to take shares, while allowing Mr Mackay to remain the majority shareholder.[90]

78 While Mr Mackay said he considered Mr Vickers to be merely a consultant, or someone who was providing services, rather than a 'business partner', he said in his witness statement that he agreed to give Mr Vickers 25% of the shares in Skytraders, in part because he was having treatment for a potentially serious medical condition and 'needed to put something in place for my children as that was the principal purpose in spending a life building Skytraders'.[91] Quite how giving Mr Vickers a substantial shareholding would assist in Mr Mackay's broader aspirations concerning the company and his family, in the event of continued ill health, was not explained.

79 Despite Mr Mackay's general view that Mr Vickers did not have any unique skills, he accepted in cross-examination that he did not go to the market to obtain the technical input Mr Vickers provided, but only approached Mr Vickers.[92]

80 According to Mr Mackay, he offered Mr Vickers a 25% shareholding and stated that retaining control was a base requirement. On the account given by Mr Mackay in his first witness statement, Mr Vickers contacted him a few days later and said words to the effect of, 'If I'm not getting a guaranteed seat on the board, then I want to make up for that by a higher shareholding'. Mr Mackay said in his first witness statement that he thought about it for a few days, and then agreed to give Mr Vickers 30% but reiterated that he wanted to keep majority control.[93] These discussions were said to have occurred in March and May 2003.

81 It was not clear on Mr Mackay's account what happened between February 2002 and March 2003; implicitly, on his evidence, the matter of Mr Vickers' participation or remuneration was not directly addressed for a year, all the while activity was continuing apace following Skytraders having been named the preferred supplier. In my view, that is implausible. It is implausible that Mr Vickers having raised taking a shareholding by at least the Leura meeting in mid-2001, the matter was not progressed until March 2003 and that Mr Vickers worked on the AAD project in the vague hope that he would be offered shares at some point, or remunerated by some other means.

82 Mr Mackay's account changed in his second witness statement. There he said that he did not 'precisely recall the reason for the increase from 25% shareholding to 30% shareholding, other than that it arose from negotiating several different issues', including the need to maintain majority control.[94] In cross-examination, Mr Mackay struggled to reconcile the two accounts he gave in his first and second witness statement, ultimately positioning the second account as additional (cf contradictory) evidence.[95]

83 I pause here to note that, despite Mr Mackay's emphasis in his evidence on maintaining majority control, maintaining majority control by holding more than 50% of the shares is not inconsistent with having reached an agreement or understanding with Mr Vickers for him to have a board seat associated with Premier's shareholding. Nor are the terms of the company's constitution (and before it the company's memorandum and articles of association), which permitted the removal of a director by a majority vote, necessarily inconsistent with the existence of an agreement or understanding of the kind for which Premier contended. In many circumstances, agreements or understandings can be reached which involve someone not exercising powers they would otherwise have under the company's constitution. Indeed, when Mr Mackay exercised his personal and corporate majority to remove Mr Vickers from the board, that was the only occasion on which he exercised his majority power.[96] In cross-examination, Mr Mackay was asked whether he had ever, before 2019, raised with Mr Vickers use of his (Mr Mackay's) majority rights under the company's constitution. The relevant passage of evidence is as follows:

Your position has always been as I understand it that the constitution provided you as the majority shareholder with a right to remove any director, is that right?---That is correct.

What I want to ask you now is whether, until 2019, you had any discussion with Mr Vickers about the use of that power?---Sorry, prior to what - before 2019?

Yes?---I think there was discussion of it in 2003.

And what discussion was that?---Oh, I really don't recall - 20 years earlier. 20 years ago.[97]

84 Based on such vague and uncertain evidence, I am not prepared to proceed on the basis that there was a discussion between Mr Vickers and Mr Mackay in 2003 concerning Mr Mackay's exercise of majority powers in the company's constitution. Further, the variability in Mr Mackay's apparent level of recollection of conversations and events between 2000 and 2003 was notable. While his witness statements were drafted conveying distinct recollection of conversations in the early 2000s, when cross-examined, Mr Mackay frequently made observations to the general effect that the events of 2001 to 2003 were a long time ago, and he did not recall specific matters. Mr Mackay's lack of recall of events occurring 20 years ago is perfectly understandable, but his frequent recourse to a lack of clear recollection in answering questions in cross-examination makes me cautious in relying on his evidence where he purported, particularly in his written evidence, to recount clear recollections of events and discussions with Mr Vickers in 2001 to 2003. In addition, Mr Mackay's readiness in refuting Mr Vickers' evidence of contact having occurred regarding the AAD in 2000, only to recant when Mr Vickers subsequently located emails substantiating contact having occurred in August 2000, further suggests to me that Mr Mackay's recollection of the detail of events occurring so long ago was not strong.

85 That is not to say I rely readily on Mr Vickers' recollections of that period either. Both Mr Vickers and Mr Mackay were not particularly impressive witnesses. They were both often non-responsive - even belligerent - in their answers to questions in cross-examination. Both were prone to making self-serving speeches. While I do not consider either gave consciously untruthful evidence, they were both acutely alive to where their interests lay and my impression, having observed both give evidence for more than three days each, was that their recollections had been (I assume unwittingly) moulded over the course of time and in light of their falling out.

86 Ultimately, however, the details of Mr Mackay and Mr Vickers' differing recollections of the events of 2000-2003 is not decisive. Senior counsel for the Mackay parties did not dispute that there was an agreement between Mr Mackay and Mr Vickers that he would get a 30% shareholding and a board seat. As counsel observed '[o]bviously, that was agreed between you at some point'.[98] Rather, what counsel for the Mackay parties suggested to Mr Vickers was that there was no agreement involving the kind of division of responsibilities pleaded.[99] In responding to this line of questioning, Mr Vickers highlighted that both he and Mr Mackay had their respective areas of expertise. As Mr Vickers put it, it was clear what each of them 'brought to the party'.[100]

87 Further, Mr Vickers accepted in his evidence that he did not have a conversation with Mr Mackay in which it was agreed that, even if Mr Vickers did not continue in his operational roles, but remained a shareholder, he would continue to be entitled to a board seat.[101] With counsel and Mr Vickers talking over one another at points, the transcript is somewhat muddled. However, having heard the evidence as it was given, it was clear to me that the thrust of Mr Vickers' evidence was that the board seat was linked to the shareholding, and that the agreement he had with Mr Mackay did not link the board seat to his operational role.[102] As stated by Mr Vickers '[t]he directorship went with the sharehold[ing] - it was not connected to the, to the, the concept that I was working as chief pilot'.[103]

88 Under cover of his third witness statement, Mr Mackay produced an unsigned document, apparently retrieved from some kind of archived server, with meta-data indicating a date of 5 June 2003, and the document creator being Mr Mackay's then assistant, Jennifer Pinkus.[104] Mr Mackay stated in his third witness statement that '[t]he document was drafted to reflect what had been agreed between me, Mr Niemeyer, and Mr Vickers in or about June 2003. ... I believe the document would have been signed by me and each of Messrs Niemeyer and Vickers in or about June 2003'.[105]

89 The unsigned document in question was headed 'Agreement' and contained the following text:

This Agreement is made on the 5th days [sic] of June, 2003 between Skytraders Pty. Ltd. (A.B.N.31 001 851 921) a company duly incorporated in N.S.W. and having its registered office at 14/809 Pacific Highway, Chatswood, N.S.W. 2067 hereinafter called the Company and Premier Aviation Holdings Unit Trust of 551 Whitehourse Road [sic], Balwyn, Victoria, 3103, hereinafter referred to as 'the Shareholder'.

Whereas it has been agreed by the parties that 60 shares in Skytraders Pty. Ltd. comprising 30% (thirty percent) of the company share capital will be issued to the Shareholder, it is further agreed that the Shareholder will have no ownership of assets nor responsibility for liabilities incurred prior to this date.

The Shareholder further acknowledges that his entitlement to future assets and incomes from the Company will derive exclusively from its involvement in the contract entered into for the provision of an Airlink to the Australian Antarctic Division and such other activities as may from time to time be agreed by the parties. Specifically this agreement will not entitle the shareholder to any part of future profits, which may be derived from Skytraders pursuit of its traditional activities in the airfreight industry.

90 In cross-examination, Mr Mackay was less certain about the document having been signed than his third witness statement would suggest. When it was put to him that Mr Vickers' evidence was that he had not seen it, Mr Mackay retreated somewhat to the safe harbour of his memory of events of 2003 not being strong enough, and conceded he was making assumptions about a series of events.[106]

91 In my view, the existence of this unsigned document does not materially advance either side's case. At most, the document was directed to ensuring that Premier would have no entitlement to assets or income relating to (or liabilities associated with) the existing business of Skytraders in air freight. That was not a point in dispute between Mr Vickers and Mr Mackay in this proceeding. Rather, they both gave evidence to the effect that they had agreed Mr Mackay would continue to be entitled to income from a freight component which remained with Skytraders (the Tasman Cargo Airlines contract). This separate entitlement to the income from Skytraders' contract with Tasman Cargo Airlines spawned a range of other disputes between Mr Mackay and Mr Vickers/Premier related to unorthodox accounting procedures adopted to account for their part of the business.

92 The unsigned 2003 document simply does not address the subject matter of Mr Vickers' board seat and/or his operational role. Accordingly, I do not regard it as probative in determining the factual question of the basis upon which Mr Vickers came to have a board seat and came to assume the operational roles he held.

93 The Mackay parties did not ultimately dispute that Mr Vickers and Mr Mackay entered into an agreement. In particular, the Mackay parties accepted that Mr Vickers and Mr Mackay had entered into an agreement as stated by Premier in paragraph 9 of its closing submissions. There, Premier contended that:

Norman Mackay and Terry Vickers agreed that if the tender was successful and Skytraders selected, Terry Vickers:

(a) would take a 25% shareholding (subsequently increased by Norman Mackay to a 30% shareholding) in Skytraders;

(b) Terry Vickers would be appointed as a director of Skytraders; and

(c) Terry would undertake the roles of Director of Flying Operations ... and Chief Pilot and would be responsible for the operational and engineering side of the venture and getting the necessary approvals including the Air Operators Certificate (AOC).

The Mackay parties also accepted in oral closing various other 'unexceptional' references to 'the agreement' in Premier's written closing submissions.[107]

94 However, the Mackay parties contended that the agreement between Mr Mackay and Mr Vickers was not reached between 2000 and September 2001, which was Premier's pleaded date range, but was instead reached by June 2003. They also contended that the agreement between Mr Mackay and Mr Vickers was fully performed by mid-June 2003 when Mr Vickers had assumed an operational role, had been appointed to the board and had been allocated shares via Premier. The agreement between them, it was said 'fell away when it was implemented'.[108]

95 The concession made in oral closing submissions went beyond the more limited concession made in the Mackay parties' written closing submissions, by which the Mackay parties accepted that the 'true position' was that Mr Vickers and Mr Mackay had reached an 'understanding' that, if the AAD tender was successful, Mr Vickers would receive a seat on the board and shares in the company.[109]

96 Of the two qualifications the Mackay parties put on their acceptance of Premier's contention in paragraph 9 of its submissions, the first is of no real consequence - it does not matter on the facts of this case whether any agreement was reached by September 2001, or only by a time shortly before June 2003 when the events of performance occurred - but the second qualification is of considerable significance and robs the concession of much of its significance.

97 The effect of the second qualification is that, on the Mackay parties' analysis, the moment after Premier received a transfer of shares in Skytraders, Mr Vickers was appointed to the board and Mr Vickers adopted his operational roles, the agreement was 'spent' such that Mr Vickers had no on-going entitlement to a seat on the board and could be unilaterally removed from his operational roles. Premier disputed this, contending that the SDA was an ongoing contract.[110]

98 In my view, Premier has not established that Mr Vickers and Mr Mackay entered into the SDA. In my view, the bystander observing the interactions between those two men and the efforts they undertook to secure the AAD contract for Skytraders, would not conclude Mr Vickers and Mr Mackay entered into a contract which:

(a) guaranteed Mr Vickers a seat on the board while his associated company held a 25% or 30% interest, but irrespective of all manner of events and circumstances that could occur in the future, including Mr Vickers no longer having an operational role;

(b) prevented Mr Mackay from having any involvement in operational matters other than in the 'chain of command a CEO sense'[111] (which was the basis upon which Premier attempted to reconcile the role of Mr Mackay as CEO with the demarcation term pleaded); or

(c) secured Mr Vickers' executive and operational role while Premier remained a shareholder.[112]

99 Mr Vickers and Mr Mackay did not discuss what was to happen if they had a falling out in the years to come,[113] or what would occur if one of them was no longer working in the business in an executive capacity (whether by reason of age or for other reasons). That much is not surprising. In the early 2000s Mr Vickers and Mr Mackay were younger men focused on developing a venture, the ultimate success of which was not known. The events which have come to pass - namely the breakdown in the relationship between Mr Vickers and Mr Mackay - is only one of the myriad of potential complications that could have, but were not, addressed between Mr Mackay and Mr Vickers when they were formulating their relationship in relation to Skytraders and actively pursuing the AAD contract. Mr Vickers conceded in cross-examination that he did not have a conversation with Mr Mackay in which they discussed that Mr Vickers would remain entitled to a board seat even if he ceased to be the Director of Operations or Chief Pilot, provided he remained a shareholder.[114]

100 In the absence of an express discussion of any right to be held by Mr Vickers to a board seat while Premier was a shareholder, can such a right be inferred from the parties' dealings with one another?[115] Again, I can discern nothing in the course of Mr Mackay's dealings with Mr Vickers which would cause an objective bystander to conclude that Mr Mackay was committing himself not to exercise his majority rights to control the board of Skytraders, even if he had a falling out with Mr Vickers, or Mr Vickers left the operational side of the business for any reason. The right of a majority shareholder to control the board of a company under its constitution is a thing of value. While I accept that Mr Vickers worked hard to develop and secure the AAD work - ironically a matter supported by the C-212s proposal for which Mr Mackay blamed him - I do not consider that any commitment to relinquish the majority right to control the board can be inferred from the parties' conduct.

101 Nor do I accept that an ongoing entitlement to a board seat while Premier remained a shareholder is to be implied 'to give business efficacy to the relationship between Norman Mackay and Terry Vickers'.[116] Such a term is not, in my view, so obvious that it goes without saying.[117] It does not 'go without saying' that someone in Mr Mackay's position, as the person controlling the entity pursuing the AAD opportunity, would agree to relinquish his majority control of the composition of the board with no provision for the circumstances in which he could assert majority control. Nor would such a term be necessary to give business efficacy to the contract. An agreement by which Mr Vickers was to assume an operational role, receive shares and a seat on the board would not have been ineffective in the absence of a guarantee that he would remain entitled to that board seat irrespective of whether he remained in an operational role (and irrespective of the any future rupture in his relationship with Mr Mackay as the majority shareholder or all manner of other future contingencies such as misconduct).[118]

102 Accordingly, Premier has not established that the SDA had the term pleaded at FASOC 14(b) guaranteeing Mr Vickers a board seat for as long as Premier remained a shareholder. For the avoidance of doubt, I note that I have, in considering whether the terms contended for have been established, not separately addressed whether there was any contract between Mr Mackay and Mr Vickers at all. As noted, the Mackay parties did not ultimately contend there was no agreement between the two men, but contended that the agreement they reached was fully performed by mid-2003, leaving no ongoing obligations. Further, given I have rejected the term contended for on grounds other than there being no contract at all, there is no utility in considering whether Mr Vickers had a different contract with Mr Mackay from the one alleged by Premier.

103 The Mackay parties also urged the court to reject the SDA for which Premier contended on the basis that the demarcation term was inconsistent with Mr Mackay being the CEO with general oversight of the affairs of Skytraders. In this regard, the Mackay parties relied on Premier's concession that it was part of the arrangement that Mr Mackay would be CEO and have general oversight. As Mr Vickers conceded in his evidence, he never discussed a formal separation of responsibilities with Mr Mackay; rather, their respective areas of responsibility were clear based on what each 'brought to the party', which each of them understood.[119] The high point of Mr Vickers' evidence concerning what was actually discussed between him and Mr Mackay concerning the division of their responsibilities was his answer when it was put to him that he and Mr Mackay did not have a discussion with the effect that Mr Mackay would not interfere with operations but would leave that to Mr Vickers alone. Mr Vickers responded:

I would put to you that it was (indistinct) that went, I'll take care of all these things and you attend to that.[120]

104 Even if words to that general effect were spoken, or that is the position they conveyed to one another indirectly, it falls far short of establishing a contractual term with the substance contended for by Premier. As Mr Vickers also said in his evidence, he and Mr Mackay did not have a 'fixed fence' around operational and administrative matters.[121] For his part, Mr Mackay accepted that Mr Vickers was to be responsible for the operational role, while he carried out the administrative role.[122]

105 However, in my view, the consensus that emerged between Mr Vickers and Mr Mackay that Mr Vickers would be 'responsible for operations' does not establish the contractual term of the SDA for which Premier contended. To agree (implicitly or explicitly) that Mr Vickers would be 'responsible' for operational matters does not carry with it:

(a) a correlative restraint on the CEO becoming involved in operational matters but having to confine himself to 'administrative management';

(b) any constraint on the business of Skytraders developing in the future such that other persons would have operational involvement whether or not they reported to Mr Vickers or his subordinates; or

(c) a guarantee that Mr Vickers would not be deprived of his operational role for any reason in the future.

106 Those matters were not agreed explicitly. Each of those matters is also an incident of the demarcation term as advanced by Premier, even if not explicitly exposed in the pleaded form of the term contended for.[123]

107 The demarcation term also cannot be implied according to the BP Refinery test. It does not 'go without saying' that, with Mr Vickers taking on the operational roles of Chief Pilot and Director of Operations, the CEO of the whole business would confine himself to 'administrative management', if that conveys staying out of anything that might be characterised as 'operational'. Nor does it 'go without saying' that Mr Mackay would constrain himself not to act to remove Mr Vickers from his operational role if future circumstances justified doing so, or that the development and future operations of Skytraders would be structured so that (at least below the CEO level) it would operate in silos with commercial personnel having no involvement in operational matters.

108 Premier also sought to draw some peripheral support from the fact that the form of the regulations governing civil aviation in the 'early days'[124] imposed safety obligations on the Chief Pilot and did not require the CEO to have the qualifications of a Chief Pilot. However, in my view, that does not avail Premier as the responsibility imposed on the Chief Pilot under the regulatory regime does not necessitate or logically compel a contractual term of the kind contended for by Premier requiring the CEO to keep out of operational matters.

109 Accordingly, in my view, Premier has not established that Mr Mackay and Mr Vickers entered into an SDA with the terms contended for.

110 In any event, as the factual analysis below reveals, Mr Mackay was not involved in most of the matters which are alleged to have constituted oppression and which were alleged by Premier to involve interference in operational matters. Where others, such as Mr Burnaby and other members of the executive committee were involved in matters said by Premier to intrude into Mr Vickers' operational sphere, their conduct was appropriate.

111 The next question is what reasonable expectations Mr Vickers would have had concerning his board seat and control of operational matters. Regrettably, the Expectation was pleaded by Premier in a rolled up manner, and without particulars. The rolled up manner in which the Expectation was pleaded gave rise to a dispute, addressed below, concerning the features of the Expectation pleaded and whether the Expectation linked the board seat to both Mr Vickers' continued operational role and his ownership (via Premier) of shares in Skytraders.

112 As noted above, when a person alleges actions taken constitute oppressive conduct, the focus is on the expectations they can reasonably have held as the venture was being formed.[125] That said, expectations may reasonably be developed in the years following the initial formation of a business venture. In my view, it is not necessary, on the facts of this case, to consider whether the arrangement between Mr Mackay, Mr Vickers, Mr Niemeyer (and subsequently Mr Sharp, and possibly Mr Ballas) is aptly characterised as a 'quasi-partnership'. The question of what expectations Mr Vickers held can be addressed without unnecessarily venturing into such issues of characterisation.

Mr Vickers' reasonable expectations by mid-2003

113 As is apparent from the factual analysis of Mr Mackay and Mr Vickers' dealings between 2000 and 2003 set out above, both worked hard to develop the Proposal and ultimately secure the AAD contract. Such expectations as Mr Vickers formed arose from his work on the transaction with Mr Mackay, and their interactions. Neither Mr Sharp, nor his predecessor Mr Niemeyer, was involved in the dealings between Mr Mackay and Mr Vickers which are central to the understanding on which Mr Vickers came to participate in the Skytraders business. This was acknowledged by Premier in its oral opening, when it rightly stressed that the case turned on the relationship between Mr Vickers and Mr Mackay.[126] Mr Vickers' evidence was also that what happened with the other shareholders coming and going did not affect his view as to the arrangement and understanding that he had come to with Mr Mackay.[127]

114 Given the effort Mr Vickers put in, without remuneration, it was reasonable for him to expect that he would be allocated (via a controlled company) a substantial minority shareholding (whether it was 25% or 30% of the shares in Skytraders is not presently important), that he would be appointed to the board of Skytraders, that he would become Chief Pilot (subject to CASA approval) and would have primary carriage of operational matters, with Mr Mackay focusing on financial, commercial and administrative matters. It was also reasonable for him to expect that the status quo would continue as Skytraders moved from the phase of pursuing the AAD opportunity, into the period of executing the initial phase AAD contract (providing intracontinental services) and positioning the company to work towards the second, anticipated, phase involving the intracontinental link.

115 However, I do not accept that the consensus that arose between Mr Mackay and Mr Vickers concerning their roles in the business involved any understanding that Mr Mackay, despite being CEO, would have no involvement in operational matters. As CEO, Mr Mackay necessarily had oversight of the entirety of the Skytraders' business. Further, the notion that the operational aspects of Skytraders' business could be operated in a self-contained 'silo' controlled by Mr Vickers alone defies common sense. On the contrary, as noted above, the practical and working allocation of responsibilities between Mr Vickers and Mr Mackay was much looser, according to Mr Vickers' own evidence. Nor, in my view, could Mr Vickers have had any reasonable expectation that he alone would always control all operational aspects of Skytraders irrespective of the way in which the company developed from its initial small base. Further, I do not consider that Mr Vickers could have had any reasonable expectation that his executive operational role would be secured for all time while Premier remained a shareholder.[128]

116 Turning then to the Expectation case in relation to the board seat: as noted above, the Mackay parties took a pleading point in relation to the way which Premier pleaded its Expectation case in relation to the board seat. They contended that, by pleading that Mr Vickers 'understood and reasonably expected that as an owner of and as a person responsible for the operations of Skytraders, he would be entitled to a seat on board',[129] Premier's alternative case was limited such that it only contended Mr Vickers was entitled to a seat on the board if he retained his operational role. In that regard, the Mackay parties drew a contrast between the Expectation case and the SDA case, which they accepted contended for a board seat linked only to the continuation of Mr Vickers' shareholding through Premier.

117 Premier did not accept that this position properly reflected its pleaded case. In opening, it put the position as, in effect, representing a continuum, acknowledging that the Mackay parties' position would be stronger on the board seat issue if Mr Vickers elected to remove himself from executive involvement, but would not be 'overwhelming' as a retreat from day-to-day management had been on the table as Mr Vickers and Mr Mackay got older.[130] In closing, Premier refuted that its pleading was properly read as conditioning Mr Vickers' expectation that he would remain a director on him continuing to hold his operational executive role.[131]

118 In my view, while paragraph 15 of the FASOC was not pleaded in the clearest of terms, Premier did not plead a case that was limited in the way for which the Mackay parties argued. On a fair reading of the FASOC, the Expectation case was advanced as an alternative to the SDA case, but conveying substantively the same position; in short, either there was an 'agreement' between Mr Vickers and Mr Mackay (being the SDA as alleged) or Mr Vickers reasonably expected substantively the same position to hold, even if it could not be said that Mr Mackay had 'agreed' to that position. The language used by Premier in paragraph 15 of the FASOC, and reflected in parts of its written closing submissions, conveys that Mr Vickers expected a number of things, which were linked, but it does not convey any acceptance by Premier that there could be no complaint about Mr Vickers' removal from the board once he no longer had an operational role.

119 Nor do I consider that there is any prejudice to the Mackay parties in not confining Premier's case in the manner urged upon me. The Mackay parties came to court to defend a case which, albeit under the rubric of the SDA, involved the proposition that Mr Vickers' board seat was not dependent on him continuing in an executive capacity. This was reflected in the submissions made by the Mackay parties in closing that, in the absence of an agreement securing Mr Vickers' board seat, '[a]ll it can ever be is some kind of legitimate expectation' that Mr Vickers would retain a board seat even without an operational role as the holder of a substantial minority shareholding.[132] The Mackay parties also tendered evidence regarding Mr Mackay's reasons for removing Mr Vickers as a director. That evidence was only relevant to the Expectations case if the reasonableness of Mr Mackay's actions in removing Mr Vickers from the board was an issue.

120 In my view, as at mid-2003, Mr Vickers' had a reasonable expectation that he would be allocated shares, be appointed a director and become Chief Pilot and Director of Operations. It was not in contest that that is what he and Mr Mackay agreed would happen, and it did happen. At that time, Mr Vickers' was entitled to reasonably expect that the status quo would be maintained as Skytraders prepared to perform the initial contract with the AAD to pursue other opportunities.

121 However, what is important is not only what Mr Vickers would reasonably have expected initially and in the ensuing years, but what he could reasonably have expected when, many years later, tensions between himself and Mr Mackay developed and ultimately erupted as they did. Expectations, however legitimate they may be when formed, are not immutable.[133] As addressed below, whether or not Mr Vickers could reasonably maintain an expectation that he would continue to occupy his operational roles and to retain his board seat, depends on the facts, as they developed, particularly from 2016. Those matters are addressed below.

122 At one point, the way in which Premier opened its case suggested it sought to draw some positive, albeit, collateral support from the Mr Sharp/Sallab issue by suggesting that Skytraders was a company in which 'there is no passive investor'.[134] This point was advanced more forcefully in closing submissions as follows:

In the alternative, and if the Court finds against the Plaintiff on the Shareholding and Directorship Agreement, as identified above, Skytraders operated as a quasi-partnership between Terry Vickers, Norman Mackay, Andrew Niemeyer (initially) and later John Sharp. This quasi-partnership existed from the very beginning of each of their relationships. In the case of Terry Vickers and Norman Mackay it arose from the fact that they came together to work collaboratively to win the AAD contract. Alternatively, a quasi-partnership arose from the cooperative and collaborative manner in which Terry Vickers, Norman Mackay, Andrew Niemeyer (initially) and later John Sharp worked together over the years to develop Skytraders into a highly successful and profitable business...[135]

123 Nevertheless, Premier did not submit that the expectations Mr Vickers reasonably had in mid-2003 were augmented or materially changed over the subsequent years. On the contrary, it contended that the legitimate expectation existed 'from the very start' and was not thereafter 'disturbed'.[136] Further, in closing submissions, Premier submitted that, if Premier was correct about the Expectation, it 'obtained him [Mr Vickers] from the very start with Mr Niemeyer as a director, [and when Mr Sharp came in in 2005] ... we say there's continuity of the quasi partnership so that the legitimate expectation was not in the slightest bit disturbed'.[137]

124 In large part, Premier's reliance on subsequent events was defensive, to head off a submission that the passive role of Mr Ballas and Sallab undermined the Expectation case. However, the Mackay parties did not contend that whatever expectations Mr Vickers may have reasonably held were materially changed either by the events relating to Mr Sharp's entry into the business and shareholding through Ashby Park, or the ostensible sale of Ashy Park's shares to Sallab in 2013 and Mr Sharp's apparent conversion from director to 'consultant'. Counsel for the Mackay parties expressly stated in closing that they did not contend that those events in 2013 'evaporated' or in any way affected the Expectation case,[138] while also noting that it was Mr Vickers' evidence that the arrangements he had were only between himself and Mr Mackay (not the other individuals involved: on Premier's case Mr Niemeyer and Mr Sharp).

125 To the extent that events post-dating mid-2003 were said to be relevant to Premier's Expectation case, they do not advance its position.

126 Contrary to Premier's submissions (referred to at paragraph 122 above), there was no suggestion on the evidence that Mr Niemeyer played any material operational role in the Skytraders business relating to the AAD contract once Mr Vickers came on board. Rather, the evidence was that Mr Niemeyer went into semi-retirement and transitioned Skytraders' residual freight business into anot[139] company.139 There was also insufficient evidence regarding the role played by Mr Sharp in developing the Skytraders business for me to conclude that his involvement constituted a three-way quasi-partnership (even putting to one side the capacity in which he acted and who was the beneficial owner of the shares held in the name of Sallab). The evidence did not extend much beyond general evidence that Mr Sharp worked his contacts to help secure governmen[140]ontracts,140 for which he was paid success fees i[141]ny event.141

127 Moreover, even assuming Mr Sharp was a de facto director and beneficial shareholder, that fact would not be of material relevance to the existence of a quasi-partnership from 2005 given the question of whether Mr Mackay knew of the 'true position' of Mr Sharp (as contended for by Premier) was never explored with Mr Mackay in cross-examination. This raises the possibility that one alleged quasi-partner (Mr Mackay) did not know that Mr Sharp was not merely a conduit to Mr Ballas. It would be a strange state of affairs for a quasi-partnership to exist if one alleged quasi-partner (Mr Mackay) did not know whether another individual (Mr Sharp) was his quasi-partner or merely a consultant and conduit to Mr Ballas.

128 As already noted, Premier's submission in closing was that the Expectation arose initially between Mr Vickers and Mr Mackay and continued thereafter. It did not contend that a new, different or augmented Expectation came to be formed at some point after 2003.

129 In any event, in my view nothing occurred later which could have given rise to any firmer expectation on Mr Vickers' part that he alone would control all operational matters than existed in mid-2003 when the business was in its infancy and only a three or four man operation.[142] In fact, as addressed further below in relation to Mr Burnaby, subsequent events only go to show that the Skytraders' business did develop and grow, and that it developed and grew in a way which saw it secure other lucrative government contracts, appoint Mr Burnaby to a role which Mr Vickers himself acknowledged involved cross-over between the commercial and operational functions within the company,[143] and institute an executive committee (also referred to as the executive team) below the level of the board.[144]

130 Premier pleaded that the 'employment and actions of the family members of Norman Mackay in the business created conflict in the relationship between Terry Vickers and Norman Mackay'.[145] By its closing submissions, Premier excised its complaint about the employment of the family members, and refined that part of its case to the actions of the family members. The particulars to the FASOC raised four matters - the Gary Studd incident, the team building event, disciplinary action being taken against Lachlan Hare, and directions having been given by Mr Burnaby to operational staff in Melbourne concerning Calum Mackay - as well as a further particular stating '[t]his led to an argument between Norman Mackay and Terry Vickers' during which Mr Mackay is stated to have said Mr Vickers promised to give his shares to Mr Mackay's children. Quite what the 'this' is which 'led to' the argument is not clear from the pleading, but it is sufficiently clear from the conduct of the case that Premier's contention was that Mr Vickers' call to Norman Mackay on 26 August 2019, which was connected with the Lachlan Hare disciplinary action, was the call during which the argument referred to took place. More generally, as it was conducted, Premier's case was that the other family-related incidents complained of contributed, at different times, and in different ways, to Mr Vickers' sense of grievance and tensions with Mr Mackay and Mr Vickers' concern that Mr Mackay's relatives were interfering in his (Mr Vickers') operational domain.

131 Premier further pleaded that the actions of the family members were oppressive by themselves, or in combination with the other matters complained of.

132 The incident alleged, as recorded in the particulars to the FASOC, was as follows:

In February 2016, Norman Mackay demanded that Terry Vickers immediately terminate the employment of Garry Studd, the Deputy Chief Pilot. Norman Mackay stated that this was because his sons, Duncan and Calum Mackay, had informed him that Garry Studd had made disparaging comments of Skytraders. Upon investigation, the allegation against Garry Studd was unsubstantiated. No disciplinary action was taken against Garry Studd.[146]

133 Duncan Mackay is Mr Mackay's son. He started working in the Skytraders business in 2016. Before working at Skytraders Duncan Mackay completed a graduate program with AMP Capital Investors Ltd (AMP) and, subsequently, worked for AMP on a full-time basis in the company's Sydney, London and New York offices.

134 It was common for new employees of Skytraders to go on a 'familiarisation flight'. After Duncan Mackay commenced with Skytraders, the CFO, Mr DeAngelis - and not Mr Mackay, as asserted by Mr Vickers in his evidence[147] - arranged for Duncan Mackay to go on such a flight with Gary Studd.[148] Mr Studd had extensive polar flying experience prior to commencing with Skytraders in 2004, including having been awarded the British Polar Medal in 1986 for services to Antarctic aviation.[149] It was Mr Studd's experience flying in the Antarctic which lead Mr Mackay and Mr Vickers to meet with him in the United Kingdom.[150] The meeting was held after Skytraders had won the AAD contract, but before it had approval from CASA to fly to, and in, Antarctica.[151] CASA had never regulated flights in the Antarctic before, and it was considered that having Mr Studd's expertise would assist in obtaining CASA approval to fly in the Antarctic.[152] Mr Studd was a senior and important member of Skytraders' pilot group.

135 The purpose of the familiarisation flight was to enable new employees to become familiar with Skytraders' operations and its network of suppliers.[153] According to Mr Vickers, upon the return of the flight, he received a 'frantic' call from Mr Mackay insisting Mr Studd be sacked, on the basis that it had been reported that Mr Studd had told Duncan Mackay that he did not like working at the company, hated the company, and was about to go back to England, making Mr Studd bad for morale. Mr Vickers spoke to Mr Studd, who reported that he had made some comments to Duncan Mackay about the realities of flying long distances over water, as compared to the variation involved in flying in Europe. Mr Vickers concluded Duncan Mackay had interpreted Mr Studd's observations as revealing he was unhappy working for Skytraders. According to Mr Vickers' account, he then rang Mr Mackay back and told him it seemed there had been a miscommunication and he would not be sacking Mr Studd.[154]

136 On Mr Studd's evidence, Mr Vickers told him, in the presence of Mr Booth, that Mr Mackay 'wants to get rid of you' and 'wants you sacked'.[155] Mr Booth's evidence was that, during that conversation, Mr Vickers said Mr Mackay had said 'I want him [Mr Studd] gone'.[156]

137 In cross-examination, Mr Vickers confirmed he had no objection to Duncan Mackay passing information back to his father,[157] Mr Mackay, and that, while Mr Mackay wanting Mr Studd sacked was (in Mr Vickers' view) interference with operational matters, he never told Mr Mackay to back off out of operational matters and never mentioned the incident again until it was included in Premier's Statement of Claim.[158]

138 Each of Mr Mackay, Duncan Mackay and Mr Studd gave evidence concerning the incident. Mr Mackay denied having told Mr Vickers to sack Mr Studd.[159] According to Mr Mackay, Duncan Mackay reported to him that it seemed Mr Studd was not enjoying his career, accordingly, Mr Mackay then raised this with Mr Vickers to see if the latter knew why Mr Studd might be unhappy.[160] According to Mr Mackay, he heard nothing further about the matter until it was referred to in Premier's Statement of Claim nearly four years later.[161]

139 The accounts given by Duncan Mackay and Mr Studd were generally consistent. They were both honest witnesses, who gave their evidence in a straightforward manner. I have no hesitation in accepting their evidence. According to their accounts, Duncan Mackay - perhaps reflecting youthful enthusiasm - had said to Mr Studd that he must never tire of the view (Duncan Mackay's account) or that Mr Studd must have the 'best office in the world' (Mr Studd's account), and, in response, Mr Studd sought to give Duncan Mackay a realistic, and not overly rosy, picture of what flying for Skytraders involved. In that vein, he referred to some of the strains put on pilots by having to operate at short notice, without an organised 'on call' roster.[162]

140 I accept Mr Mackay's evidence that he did not demand Mr Vickers sack Mr Studd. Given the importance of Mr Studd to Skytraders' operations and Mr Mackay's obvious regard for Mr Studd's abilities and experience in polar flight operations,[163] it is objectively unlikely that Mr Mackay would peremptorily demand he be sacked on the basis of the matters reported to him by his son, Duncan Mackay. The fact that Mr Vickers said to Mr Studd, in the presence of Mr Booth, that 'Norman wants to get rid of you'[164] does not persuade me that I should prefer Mr Vickers' evidence on this issue. Rather, Mr Vickers making that statement is consistent with what I perceived to be a tendency on Mr Vickers' part to overstate matters, or blow them out of proportion (eg, his views in relation to the introduction of Calum Mackay into the Melbourne operations department detailed below). I consider it more likely that Mr Vickers exaggerated Mr Mackay's reaction when speaking with Mr Studd than that Mr Mackay actually said he wanted Mr Studd sacked.

141 Premier's contentions in relation to the Studd incident fail at three further levels. First, as I have found there was no SDA containing the demarcation term, there was no contractual term obliging Mr Mackay to have nothing to do with operational matters. Nor, as I have found above, did Mr Vickers have any reasonable expectation that the CEO of Skytraders would have nothing to do with operational matters. Secondly, and in any event, the events, as they occurred, did not involve Mr Mackay trammelling on Mr Vickers' area of operational responsibilities or undermining his position. Even if, contrary to the foregoing, Mr Mackay had thought Mr Studd should be sacked, he did not sack Mr Studd, but instead relayed his view to Mr Vickers, who (on his account) investigated and successfully defused the situation. Mr Mackay did not then press any suggestion Mr Studd be sacked. Thirdly, the incident, having been dealt with more than three years before Premier commenced this proceeding, was never mentioned again. Mr Vickers never raised with Mr Mackay any concern at the Studd incident amounting to interference by Mr Mackay in operational matters or otherwise being inappropriate in any way. At most, it was a passing incident, which was resolved, and not mentioned again. The conduct was not oppressive.

142 Further, Mr Vickers' complaint that the incident involved Duncan Mackay interfering in operational matters cannot be sustained in light of Mr Vickers' acceptance that it was appropriate for Duncan Mackay to report back his concerns to Mr Mackay.[165]

143 Premier's particulars regarding the team building event state as follows:

In December 2016, at a team building weekend, Dan Burnaby verbally abused Sarah Vickers, Operations Manager and daughter of Terry Vickers.[166]

144 Ms Vickers was the Operations Manager and daughter of Mr Vickers. Her abilities and hard work were recognised within Skytraders, but she had difficulties in getting along with some of her colleagues. Mr Vickers accepted as much.[167]

145 Mr Burnaby and Ms Vickers were formerly friends,[168] even socialising outside work. However, their friendship did not endure, and their working relationship was also difficult. In the period leading up to the team building event on 12-13 December 2016, Mr Burnaby was concerned that Ms Vickers' actions were affecting many people within Skytraders, and something needed to be done, including because Mr Vickers, who was both Ms Vickers' father and her direct report, was not dealing with Ms Vickers' behaviour.[169]

146 Whoever had the idea - Mr Vickers said it was his idea, rather than Mr Ide's - it was decided that a two day team building workshop would be held in an attempt to improve morale and working relations in the operations department of Skytraders. Mr Vickers was not at the team building event until after the group activities were halted on the second day for reasons set out below.

147 Participants completed a Hogan Personality Inventory Test and a questionnaire. One of the questions invited participants to summarise any issues he or she had identified while working at Skytraders. Mr Burnaby, wrote as follows in answer to that question:

Five years ago Skytraders had the most cohesive and best performing team I have ever worked with, and it was an absolute pleasure to work for the Company. However a culture of bullying, setting people up to fail, wrongly attributing fault, withholding information and general poor behaviour has been fostered by the Operations Manager and, given that her father is the Director of Operations, this behaviour has gone largely unchecked and staff have no avenue to resolve issues. Some of the Company's most capable staff now keep their head down, limit their profile in the Company and avoid showing initiative due to fear of reprisals from the Operations Manager.[170]

148 Mr Burnaby also wrote as follows, in answer to a question asking what would improve the culture of the team:

Implement a structure to ensure that the Operations Manager is accountable for her behaviour and implement team building exercises to repair the damage that has been done in order to return the team to the highly effective and happy team it use[d] to be.[171]

149 In answer to the same question, another participant wrote:

The culture is very much based on blame when something doesn't go to plan. Not all of the information is made available to the team. The Operations Manager being the daughter of the Director of Operations makes for an interesting dynamic that does not always have a positive affect [sic] on the culture of the wider team. Issues are often dealt with in a confrontational manner. Much work is needed to address any perceived bias and improve collaboration and team work.[172]

150 On the first day, group exercises were conducted focused on the results of the personality tests. After that day's activities had concluded, the moderator (Jamie) raised with Mr Ide that some of the feedback related directly to Ms Vickers. Jamie suggested, and Mr Ide agreed, that the feedback should be raised with Ms Vickers before the next day's activities, so as to give Ms Vickers options on how the second day's activities should be conducted.[173] Jamie met with Ms Vickers privately and then Ms Vickers contacted Mr Ide to speak with him. Ms Vickers told him that she had been given some options by Jamie and had elected to keep the feedback in and proceed with the day's activities as planned because she wanted to deal openly with the issues. Ms Vickers declined Mr Ide's offer to let her father know about the feedback and participate in the second day's activities.[174]

151 Mr Ide checked in with Ms Vickers during the course of the morning on the second day, and she again declined his offer to contact Mr Vickers.[175] Mr Ide's evidence was that, at a point when Jamie brought everyone in the small groups back together, Ms Vickers became angry and started blaming people for writing the negative feedback about her. She initially singled out the pilots, and then accused Nicola, the cabin crew manager, of writing the feedback.[176] That greatly upset Nicola, who left the room in tears. An exchange along the following lines then occurred between Mr Burnaby and Ms Vickers:

Mr Burnaby: Sarah, I imagine that this is exactly the sort of thing that the comments were written about.

Ms Vickers: You're not without fault here.

...

Mr Burnaby: I never professed to be.[177]

152 Mr Burnaby's account of his exchange with Ms Vickers was consistent with that of Mr Ide.[178] Mr Meyer, a witness called by Premier, also generally agreed with Mr Ide's recollections.[179] Mr Vickers agreed that this exchange did not constitute verbal abuse.[180]

153 Ms Vickers was also upset at this point, and the meeting was adjourned for lunch. Ms Vickers then accepted the offer to call Mr Vickers over to the venue. After Mr Vickers arrived, he discussed events with Jamie, Ms Vickers and Mr Ide. While Mr Vickers initially wanted to meet with the participants one by one, he was persuaded to meet with them as a group.[181] The group was then reassembled, and Mr Vickers made some remarks. Mr Ide's evidence was as follows:

Terry then gathered the group and said how the team building exercises was flawed and how Jamie's approach to the feedback discussion had been no good. Terry gave this speech while both Sarah and Jamie were in the room.

...

Terry then went through the feedback and wanted people to comment specifically on it if they wished to. Nobody spoke. The meeting was then abruptly disbanded, without any suggestion on whether the event would resume.[182]

154 Although the Mackay parties had - quite fairly given lack of specificity in the particulars and the terms of Mr Vickers' second witness statement - understood Premier's contention to be that Mr Burnaby had verbally abused Ms Vickers during the portion of the event when Mr Vickers was not present, in his oral evidence, Mr Vickers explicitly, and repeatedly, stated that the complaint that Mr Burnaby had verbally abused his daughter related to the events that occurred when he was present on the second day.[183] To confuse matters further (given Mr Vickers' evidence about his true complaint), Premier's written closing submissions addressed the 'incident' during which the anonymous feedback regarding Ms Vickers was aired in the group setting (when Mr Vickers was not present), and not the subsequent portion of the event when Mr Vickers was present.[184]

155 In any event, returning to the portion of the meeting when Mr Vickers was present: Mr Vickers disputed Mr Ide's account that no-one spoke after Mr Vickers addressed the group. Over an extended series of questions, senior counsel for the Mackay parties sought Mr Vickers' account of what Mr Burnaby had said that constituted verbal abuse of Ms Vickers while Mr Vickers was present.[185] Mr Vickers was not able to recall what had been said. As best I can glean from Mr Vickers' evidence, and noting that he was emotionally affected when giving his account, Mr Vickers' evidence was that Mr Burnaby had said Mr Vickers knew what the problem was, it was Ms Vickers, and he (Mr Vickers) protected her.[186] While Mr Vickers said that was not all that was said, he was not able to recall anything else.[187]

156 Ms Vickers went on sick leave after the team building event, and gave notice of her resignation on 23 February 2017.

157 Over some weeks after the team building event, Mr Vickers conducted an investigation, trying to uncover the source of the feedback about his daughter. He had one-on-one meetings with people to find out who wrote the feedback. Mr Vickers initially suspected the pilots. Mr Burnaby told Mr Mackay before Christmas 2016 that he was the author of the feedback.[188] Ms Vickers subsequently found out the feedback had been written by Mr Burnaby. In her resignation email, Ms Vickers cited the 'attack on [her] by Daniel Burnaby in the team building course in December' as a reason for her resignation.[189] It was not clear on the evidence when, or how, Mr Vickers was informed that the comments were made by Mr Burnaby. However, at the latest, he was aware by 23 February 2017 following receipt of Ms Vickers' notice of resignation.

158 As part of his activities in the aftermath of the team-building event, Mr Vickers obtained written feedback from attendees regarding the team building event. Having received a draft of Mr Booth's account by email, Mr Vickers edited it, and sent it back to Mr Booth with the covering email stating 'Hi Rex, Would you be prepared to go this far.' The version Mr Vickers sent back had the following additional text, added in red font:

While I did not attend the second day, I have seen the documents and had discussions on the content and outcome of the day. While everyone except one person provided essentially positive feedback, the disparaging comments about Sarah were designed with only one purpose. [sic] to attack her in the most brutal way. This has been done in a way that I have never seen before and suspect this has caused great angst amongst the course participants on the part they played in the attack.

Company wide it is known who facilitated this and it a very much to the for [sic] talking point. While there has been significant suspicion and some general dislike brought about by Dan Burnaby's manner, [t]here is little actual respect caused by how he presents himself at times, I fear that this lack of respect will now be taken to a new level where Safety may be called into play.

I'm sorry how this has played out for Sarah and hope she is well and can move forward.[190]

159 Mr Booth adopted Mr Vickers' revised version. Although Mr Booth did not agree in cross-examination that these passages had been added by Mr Vickers,[191] in my view the written record puts it beyond question that Mr Vickers added them, and Mr Vickers quite openly accepted that he did add them.[192] As if scripting Mr Booth's account and criticisms of Mr Burnaby were not bad enough, Mr Vickers then relied on Mr Booth's supposed safety concerns in a conversation he had with Mr Mackay and Mr Sharp on 21 December 2016. Mr Vickers secretly recorded the conversation. In discussing the team building event, the following exchange took place:

MR VICKERS: Yep, yep. So, personally, like I say, my personal opinion. I mean he's done - whether you want to admit it or not, he caused this as played out - so, the way it has. And so because it's been perceived to be so appalling in the company, it will play out for Duncan in a little way and a degree of suspicion and - and stuff. I'm just - it's just straight up and, I mean, I'm really disappointed even Rex said he put safety on his email there, if that ever came out.

MR MACKAY: He did what?

MR VICKERS: That it's a safety issue.

MR MACKAY: Oh.

MR VICKERS: If that ever became visible - - -

MR SHARP: Does that go on a file?

MR VICKERS: M'mm?

MR SHARP: Does that go on a file?

MR VICKERS: We've got it. I mean, I don't know - you know, again, I mean I don't think so. But it's, you know, it's one of those things that if something did happen and people come in, then - then - then they'd start to talk then and interview people.

MR SHARP: (Indistinct).

MR VICKERS: Yeah, yeah. That's the issue and that could be catastrophic. Not that I think it will. You know, this is one of those things that, you know, culture and things, so. Anyway, let's - let's end it there.[193]

160 In the context of the discussion as a whole, and having regard to the wider ambit of the evidence in the proceeding concerning Mr Vickers' periodic references to CASA potentially grounding the fleet (if it apprehended the company was dysfunctional such that safety may be affected),[194] it is clear that what Mr Vickers was referring to was the harm that might befall the company if Mr Booth's safety concerns and the cultural issues exposed, were to come to come to CASA's attention.

161 The secretly recorded 21 December 2016 conversation also took place in a period of time when Mr Vickers was very unhappy with how the company was being run, and was consulting lawyers. Mr Vickers had had his lawyers prepare a draft letter - never ultimately sent - on 19 December 2016.[195] Mr Vickers said he did not think the letter drafted alleged oppression.[196] Whether or not the draft letter alleged oppression, it was one of the matters discussed,[197] and by early March 2017, Mr Vickers' lawyers were finalising letters of demand and were in touch with Mr Sharp's lawyers in relation to a possible oppression proceeding.[198]

162 Mr Vickers also had had discussions with Mr Sharp about an oppression proceeding. However, Mr Vickers did not initiate an oppression proceeding at that time. He explained that:

I decided that it would be better to resolve the matter and, you know, I - which I did and it worked very, very well for quite some time. I was very happy.[199]

163 What Mr Vickers did to resolve the matter was to meet with Mr Burnaby to bury the hatchet. Their discussion took place on 5 April 2017. After a short exchange between Mr Burnaby and Mr Vickers, Mr Ide was called in to attend as Mr Burnaby's support person. Mr Vickers also secretly recorded this conversation. After they made peace with each other and agreed to put the episode with Ms Vickers and the team building event behind them, Mr Vickers invited Mr Burnaby to drive out to his farm, which they did later that day, continuing their conversation; Mr Vickers did not record the rest of the day.

164 Premier relied on the following exchange during the secretly recorded meeting as constituting a concession by Mr Burnaby as to the verbal abuse:

Terry Vickers: I know a lot about those courses. And that... you know, one of the problems we had there was we had a gay flight attendant, fucking out of his depth, running it. Instead of shutting things down, decided, well, you know, we'll push forward with certain things and whatever. We made a mistake in that the scenario that they wanted was framed in terms of operations, and therefore it looked like it was about operations. Those things are normally what you do is you, you...And that was just a mistake. It wasn't, you know I'm not saying, it was just a mistake. What they normally do after all these sorts of things is, you know, we're going to run a hotel, you put everyone on equal footing, you know you try and work together. And yes, all the issues of interactions that are in the company, you know, 'I don't like this, I don't like that'. Supposedly they come out and but that's how it wasn't. And what this ended up was, is that this was all about Sarah, and you drove right through it. My view of what you did was, and not just mine, Rex went to press on it. Luckily, he didn't put it in the safety system was, that... this was all about, let's throw a girl in the middle there in a public assassination. And that's what, whether you intended it that way, that's what happened.

Dan Burnaby: That wasn't my intention.

Terry Vickers_:_ No, but that's what happened there.

Dan Burnaby: I understand that.[200]

165 After Mr Vickers and Mr Burnaby resolved their differences, and after Ms Vickers had left the company, working relations between them improved. That happy, or at least happier, state of affairs did not last. As addressed below, further incidents occurred in 2019 which Mr Vickers considered involved Mr Burnaby interfering in operational matters.

166 The presence in the pleading of the team building event as an instance of oppression is both peculiar and unsustainable given Mr Vickers' evidence in cross-examination that there was never any oppression relating to the team building event at all:

Do you still believe that all of these events, the team building event, was oppressive conduct by the Norman MacKay interests against your company, Premier?---I never concede - it's never - there's never been any suggestion that the team building event was any - had anything to do with oppression.[201]

167 In any event, it is plain that there was no verbal abuse of Ms Vickers by Mr Burnaby at all, either during the portion of the team building event when Mr Vickers was not present, or at the part when he was. The evidence Mr Vickers gave of what Mr Burnaby said when he (Mr Vickers) was present, did not go beyond Mr Burnaby saying that Mr Vickers was protective of his daughter. That is plainly not verbal abuse of Ms Vickers.

168 As noted above, Mr Vickers conceded that what Mr Burnaby said during the portion of the meeting when Mr Vickers was not present was not verbal abuse.

169 While the development and execution of the team building event may not have been well-conceived in hindsight, and it might have been naïve for Mr Burnaby to believe his feedback could be productively used in that setting, Mr Ide and the moderator, Jamie, handled the situation as best they could. Ms Vickers bravely, it might be said, elected to proceed with the original format of the second day, notwithstanding the feedback. But it was also Ms Vickers whose accusations - against persons who turned out to be innocent - that derailed the second day.

170 I reject the contention by Premier that the response made by Mr Burnaby when Mr Vickers raised the team building event with him during the conversation, which he secretly recorded, on 5 April 2017 'ought to end the debate about whether or not Burnaby said something that was a public assassination of Sarah Vickers'.[202] Mr Burnaby's response (set out at paragraph 164 above) was simply a conciliatory statement. Mr Burnaby denied that he, in effect, apologised to Mr&#[203]Vickers.203 Further, the context surrounding Mr Burnaby's statement 'that wasn't my intention' shows that what he was responding to was Mr Vickers having raised the manner in which the feedback about Ms Vickers was shared, and the events of the portion of the meeting when Mr Vickers was not present, being the events on which Mr Booth supposedly 'went to press' including the scripted safety concerns.

171 Further, to the extent that the team building event may be relied on by Premier as background going to the development of tensions which boiled over in August 2019, it is hard to see how the event materially contributes to the narrative. Mr Vickers patched up his relationship with Mr Burnaby in April 2017. Moreover, Mr Vickers never held Mr Mackay responsible for what occurred at the team building event,[204] meaning that the whole episode did not contribute to tensions between the two of them, even if it did contribute to Mr Vickers' store of grievances.

172 Those events that do have wider relevance do not reflect well on Mr Vickers. In particular:

(a) Mr Vickers' willingness to tinker with Mr Booth's account of the event, even to the extent of somehow deriving a safety issue out of the way in which the team building event unfolded; and

(b) his contrived reliance on Mr Booth's supposed safety concerns in his secretly recorded conversations with Mr Mackay and Mr Sharp and with Mr Burnaby, at a time when he was actively considering his legal options with his legal team;

do him no credit. Quite the opposite; those events contribute to my reservations about his credit generally and propensity to exaggerate.

August 2019 directions to operational staff: Calum Mackay

173 Premier alleged that, in August 2019 Mr Burnaby and Calum Mackay, being the youngest son of Mr Mackay, attended the Melbourne office and:

gave directions to operational staff without consulting with and obtaining the authority of Terry Vickers. This was contrary to the Shareholder and Directorship Agreement, and had the potential to adversely affect the safe operations of Skytraders.[205]

174 In its opening submissions, Premier expanded on this allegation, stating that Mr Burnaby and Calum Mackay had 'ensconced themselves in the operations department' during their attendance in Melbourne in August 2019.[206] In closing submissions, it was contended by Premier that Mr Burnaby 'directed' Chelsea Slapar, who was fairly new to the company and occupied a very junior position, to 'train Calum Mackay'. It was submitted that it was 'inappropriate and reckless' for them to try and have such an inexperienced staff member 'train' Calum Mackay in operations.[207]

175 Calum Mackay had previously worked casually at Skytraders and, after completing a Bachelor of Commerce degree at the University of Sydney, as well as a two year graduate program outside of Skytraders, began working at Skytraders on a full-time basis with the title 'Commercial Executive' in January 2019. The role of 'Commercial Executive' was not a senior position in the company. Calum Mackay primarily worked from the company's Sydney premises in his full-time role.

176 Calum Mackay gave evidence that it was discussed between Mr Mackay, Mr Vickers, the executive team and himself, that he would travel to the Melbourne office on a fly in, fly out basis, to support the operations team temporarily during a 'busy flight period' while another staff member, Lachlan Hare (discussed further below) was on leave.[208] The plan for Calum Mackay to attend the Melbourne office and assist while Mr Hare was on leave was detailed in a document prepared by the executive team in relation to Mr Hare,[209] which anticipated that Mr Hare would be stood down for a period after an initial disciplinary meeting. That document was emailed to Mr Mackay and forwarded to Mr Vickers. Mr Vickers was aware of the plan for Calum Mackay to spend time in the Melbourne office.

177 Calum Mackay and Mr Burnaby gave evidence that additional conversations took place between each of them and Mr Vickers in relation to Calum Mackay's attendance at the Melbourne office.[210] Mr Vickers' disputed this. He denied he had 'any conversations with Dan Burnaby approving Calum Mackay's attendance in the Operations department' or any discussions with anyone else in respect of Calum Mackay assisting the operations team whilst Mr Hare was on leave.[211]

178 Whatever conversations were or were not had, it appears that Mr Vickers and Mr Meyer, who at this time was the Operations Manager, were not aware of exactly when Calum Mackay would be arriving and were not prepared or expecting Calum Mackay when he arrived on 19 August 2019.[212]

179 Mr Burnaby, who was based in Hobart, also attended the Melbourne office on 19 August 2019. That was a coincidence. Mr Burnaby's purpose in attending the Melbourne office that day was not connected with Calum Mackay's arrival. Rather, he was in Melbourne to attend a meeting with Mr Ide and to work on a presentation to the AAD.[213] Nevertheless, Mr Burnaby and Calum Mackay entered the office together. At that time, Mr Vickers and Mr Meyer were already in a meeting.

180 Mr Meyer gave oral evidence that he had received a text from Ms Slapar, whilst he was in the meeting with Mr Vickers, stating words to the effect of 'what's going on, these guys [Mr Burnaby and Calum Mackay] have just walked in and told me that they're taking over' or 'they are here to learn all about operations'.[214] The text message itself was in evidence in this proceeding. It read 'Dan Burnaby and is it Callum [sic] are in and apparently Callum [sic] wants the run down in ops?!'.[215] Mr Meyer replied to Ms Slapar, instructing her to 'just provide a general overview of your role and tasks. Don't discuss anything that you haven't been tutored in .. problems, txt me back'.[216] Ms Slapar did not report any issues.

181 Mr Vickers considered that it was 'inappropriate and reckless' for both Mr Burnaby and Calum Mackay to direct that a junior staff member teach them both the processes in operations,[217] and that it was this conduct which constituted interference with operations by Mr Mackay and his relatives.[218]

182 Mr Burnaby and Calum Mackay did not deny that Mr Burnaby may have used words in effect asking Ms Slapar to 'show [Calum] everything' or to 'show [Calum] the ropes'.[219] However, Mr Burnaby noted that any comment was made in a 'shorthand way, after introducing Calum'.[220] As Mr Burnaby stated in cross-examination, he introduced Calum Mackay to Ms Slapar 'because I knew Chelsea and he didn't'.[221] Calum Mackay could not recall any specific words or phrases used, but acknowledged that something may have been said along the lines of asking Ms Slapar to teach him everything because he 'was in Operations to assist in whatever capacity was required'.[222]

183 Mr Burnaby agreed that he had sat in while Ms Slapar talked Calum Mackay through the 'Leon' software system, but he was not otherwise involved with the operations department on this day as he had 'other things to do'.[223] The reason he sat in while Ms Slapar explained the software system was because it was new technology to Skytraders and Mr Burnaby, who had previously worked in the operations department, was not familiar with its processes and was 'simply interested in how it was utilised'.[224]

184 Mr Vickers' evidence was that Mr Burnaby and Calum Mackay's attendance came at a time when he had 'growing concerns' that Mr Mackay and his relatives were 'seeking to have a greater direct involvement in the operations division'.[225] Nevertheless, it appears from his evidence that Mr Vickers' primary concern was with the manner in which Calum Mackay's arrival occurred (particularly the instruction to Ms Slapar), rather than the fact that Mr Mackay's son was to come to Melbourne and assist. In particular, Mr Vickers stated that, had he known Calum Mackay was going to come to Melbourne when he did, he 'would have set up an induction for him in accordance with the training regime in the company to make sure that all mitigators that come about in operations are known and followed'.[226]

185 Further, Mr Vickers stated that he felt Mr Burnaby and Calum Mackay's attendance was undermining his responsibilities as Chief Pilot and could cause 'disruption and suspicion among the operations staff' and had the 'potential to impact ... wellbeing and the safety of flights'.[227]

186 The pleaded complaint made about Calum Mackay's attendance in Melbourne was that Mr Burnaby and possibly also Calum Mackay - the particulars are not clear on whether it was one or both of them - 'gave directions to operational staff without consulting with and obtaining the authority of Terry Vickers'. There is no evidence Calum Mackay gave directions to operational staff. The only 'direction' Mr Burnaby is alleged to have given operational staff concerning Calum Mackay was the instruction - more aptly a request - that Ms Slapar show Calum Mackay the ropes, or like words. That was, in no way, anything more than an appropriate courtesy extended by Mr Burnaby to Calum Mackay given that Mr Burnaby had at least met Ms Slapar, Calum Mackay had arrived in the Melbourne office to help out, and both Mr Vickers and Mr Meyer were otherwise occupied. That did not constitute any interference in management by Mr Burnaby (let alone an interference at the behest of Mr Mackay), or in any way jeopardise the safe operations of Skytraders. Mr Meyer quickly and properly confirmed to Ms Slapar by text message that she should confine her introduction to Calum Mackay to areas within her role. Nor was there any evidence that Calum Mackay's attendance at the Melbourne office, or the manner of his introduction on arrival, caused any disruption to Skytrader's operations or had any negative impact on staff wellbeing.

187 The attendance of Calum Mackay in Melbourne, including the manner of his introduction and the interaction between Mr Burnaby and Ms Slapar, was quite unexceptional. Those events were not contrary to the reasonable expectations I have found Mr Vickers held and did not, in any event, involve an interference in operations, let alone one with the negative consequences for which Premier contended.[228] It also is not otherwise conduct that can be characterised as being commercially unfair to the interests of Premier, or otherwise adverse to the interests of the shareholders of Skytraders as a whole. It was not oppressive conduct.

188 The events concerning Calum Mackay's attendance in Melbourne do not become oppressive conduct (when otherwise they lacked that quality) by virtue of a passage of the evidence given by Mr Mackay in cross-examination, which Premier emphasised. Mr Mackay acknowledged that he wanted both his sons to 'familiarise themselves' with the operations team, and other areas of the company generally, given the relationship between himself and Terry Vickers had 'started to deteriorate a bit' in the preceding year.[229] Mr Mackay's reference to the status of his relationship with Mr Vickers was fleeting in the context of the passage of the cross-examination. While fleeting answers can be revealing, it was hard to understand from the examination of Mr Mackay how the standing of that relationship informed what occurred with Calum Mackay, and the answer Mr Mackay gave was not then explored in the evidence. Mr Mackay's evidence was that he was not the person who arranged for Calum Mackay's attendance in Melbourne, although he was aware of it, as a father.[230] As noted above, Calum Mackay's attendance in Melbourne had been foreshadowed in the executive committee's paper concerning Mr Hare. Further, it was Mr Vickers' evidence that he did not object to Calum Mackay's attendance in Melbourne per se,[231] but the manner in which it was executed.[232] The manner in which Calum Mackay's arrival in Melbourne occurred, including Mr Burnaby's introduction, had no logical or factual connection with whatever desires Mr Mackay had to see his sons obtain more familiarity with Skytraders' operations, to the extent that desire itself was connected with the deterioration in Mr Mackay's relationship with Mr Vickers.

Interference in operational matters by Daniel Burnaby

189 In its written closing submissions, Premier raised a number of matters which it contended constituted interference by Mr Burnaby in operational matters. In those submissions, Premier criticised Mr Burnaby as being unduly commercially focused, without giving proper regard to operational limitations or requirements. It cited three instances in 2019 where Premier contended Mr Burnaby had made promises to the ABF without consulting operations staff adequately or cut across directives from operations staff. First, it contended that, in April 2019, Mr Burnaby intervened in operations to inform representatives of the ABF that a flight from Port Moresby to Christmas Island could carry a full payload of passengers without first consulting operational staff when, due to flight path requirements and fuel loads, the payload was restricted to a lesser number of passengers.[233]

190 Secondly, Premier contended that in June 2019, operational staff were informed that they were not to talk to representatives of the ABF about an aircraft designated VHP which was on restricted hours while it was awaiting a replacement engine (as only Mr Burnaby was to have those communications) thus restricting the information that Mr Meyer could relay to the ABF.[234]

191 Thirdly, Premier contended that in September 2019, Mr Burnaby took it upon himself to arrange a pilot to fly from Melbourne to Christmas Island at a time when the pilot (Mr Booth) was not permitted by regulation to fly and where Mr Meyer had already made enquiries with Mr Booth and informed the ABF that the flight could not leave at that time.[235]

192 These events were not pleaded by Premier, or referred to in its particulars, as instances of oppressive conduct. It is unclear from Premier's written closing submissions whether it sought to rely on those matters as instances of oppressive conduct, or as further background illustrating the tensions building within Skytraders and the dangers, as Mr Vickers perceived them, of commercial persons interfering with operational matters. In oral closing submissions, Premier sought to meet the objection that these allegations were unpleaded by directing attention to paragraph 23(a) of the FASOC, which contended that the actions of Mr Burnaby were 'adversely impacting the operational affairs of Skytraders'.[236] The actions of Mr Burnaby in question were not particularised.

193 In my view, it was not open to Premier to rely on these as instances of oppressive conduct as the oppressive conduct relied upon was pleaded and particularised, but these matters were not referred to in the pleading at all. The introduction of these further allegations as instances of oppressive conduct would not merely be a matter of adopting a liberal reading of pleaded allegations, but would introduce wholly new allegations outside the pleaded case. I do not consider that the terms of paragraph 23(a) of the FASOC properly put the defendants on notice that they would have to meet a case that these actions of Mr Burnaby constituted oppressive conduct. In circumstances where specific conduct of Mr Burnaby was particularised in paragraph 22 of the FASOC, a reasonable reading of the pleading would not have indicated to the defendants that paragraph 23 was referring to other conduct, not mentioned anywhere in the pleading. On the contrary, paragraph 23 reads as picking up on the conduct pleaded in paragraph 22. Nevertheless, I will address, as briefly as possible, each of the three matters raised so far as they are relied upon by Premier as general background illustrating interference by Mr Burnaby, which Premier considered contributed to tensions in the company, including tensions between Ms Vickers and Mr Burnaby.

194 However relied upon, none of these three events illustrates any inappropriate interference by Mr Burnaby in operational affairs, let alone any interference carrying with it a safety risk or in any other way capable of being characterised as oppression, or otherwise supportive of Premier's oppression case.

195 An important piece of evidence as to each of these three alleged instances of interference on the part of Mr Burnaby, is the email that Mr Vickers sent to the entire staff of Skytraders advising them of Mr Burnaby's new role of 'Manager - Commercial and Legal' in 2011. In that email, Mr Vickers said:

Dan Burnaby is taking on the role of Manager - Commercial and Legal. This change of emphasis is brought about by the need to move from a marketing role to a contract liaison and commercial management role. This position is seen by the board as being on equal footing from an organisational design point of view as say the Director of Operations Position and Engineering Managers Position. Part of this role will be to agree and define customer needs and to define service standards and as such he will effectively be giving direction to other sections of the company to meet these requirements and these should be complied with. If you can't then that should be taken up jointly with Dan and the line manager for your particular area. I want to emphasis [sic] that this is seen as senior position in the company.[237]

196 As is clear from this email, Mr Burnaby occupied a role which, to Mr Vickers' knowledge, and with his then apparent endorsement, would involve him giving directions to other sections of the company in relation to meeting customer service standards and needs. In my view, the contention that Mr Burnaby inappropriately interfered with operational matters is unarguable in light of this email. Further, I do not consider that the facts disclose inappropriate interference by Mr Burnaby, for the reasons set out below.

April 2019 information regarding possible payload from Port Moresby to Christmas Island

197 Mr Meyer gave evidence that he, like Ms Vickers, found Mr Burnaby to interfere in operational matters. His evidence was that Mr Burnaby informed ABF staff a flight could take 120 passengers when, having regard to constraints on the flight path, a lesser number of passengers could be carried. The flight path constraints arose from the need to have enough fuel to reach an identified emergency landing place, but where nominating Indonesia for such a landing was not an option when carrying detainees.[238]

198 While Mr Burnaby did not recall the incident,[239] he went on to explain that,[240] from Port Moresby to Christmas Island, there are a number of ways that a flight can be conducted and that choosing the route - which can affect permissible payloads - involves weighing up and trading off various constraints and priorities. To illustrate the point, Mr Burnaby explained that, while you would not typically identify Jakarta as your alternative landing airport when carrying persons in custody, Jakarta could be selected if the client ultimately wanted to carry the higher payload and accept the complications of dealing with Jakarta in this way, or alternatively could fly via Darwin. While Mr Burnaby's evidence exposed the way in which a client's desire for a higher payload can be accommodated through route planning choices, his evidence also emphasised that it would be the pilot in command on the day who would run the flight plans with operational staff, and who would ultimately have responsibility for planning and approving the flight.

199 Having regard to Mr Burnaby's explanation, coupled with his senior role in dealing with the ABF, I am not satisfied that Mr Burnaby did anything more than inform the ABF of the potential payload for the flight in question and did not interfere in operational matters in an unsafe way. While it may well have been aggravating to Mr Vickers and his team that Mr Burnaby had planted the idea of a higher payload with the ABF, which suggestion they had to walk back with the client, it was not outside the bounds of Mr Burnaby's role to engage with ABF as he did.

June 2019 restriction on communications regarding VHP

200 In its closing submissions,[241] Premier relied on the evidence of Mr Meyer concerning a phone call made by Mr Mackay to Mr Vickers while Mr Meyer was present, in which Mr Mackay said that Mr Burnaby was to be involved in all discussions with the ABF about an aeroplane (designated VHP) which was awaiting a replacement engine. According to Mr Meyer's evidence, Mr Mackay had said that only Mr Burnaby was aware of the 'story' he had told the ABF about this aeroplane and only he could keep track of the lies that had been told.[242] The suggestion that Mr Mackay believed Mr Burnaby to have been telling lies was not put to Mr Mackay or Mr Burnaby. It was not in dispute that the flying hours of the aeroplane awaiting a replacement engine needed to be managed closely.[243]

201 I cannot discern anything untoward or in any way unfair to Premier or Mr Vickers in Mr Mackay giving instructions to control the lines of communication with an important client (the ABF) regarding a somewhat delicate operational matter. It was, after all, Mr Burnaby who had the senior level commercial relationship with senior ABF personnel. It is also not apparent why this matter has been characterised by Premier in its closing submissions as being interference in operational matters by Mr Burnaby, when the instruction was given by Mr Mackay.

September 2019 potential flight from Melbourne to Christmas Island

202 The first thing to note about the incident in question is that it occurred after Mr Vickers had cleared out his office and was, in his view, on leave, having nominated Mr Gronset Acting Chief Pilot in his absence. The second thing to note about the incident is that, being on leave, Mr Vickers had no first-hand knowledge of the matter, but raised it as something that had been reported to him. The evidence given by Mr Burnaby reveals that nothing untoward or unsafe occurred at all. Nor did his actions extend beyond the role that Mr Burnaby had at the time.

203 On Mr Burnaby's evidence, the facts are these:[244] the ABF made an enquiry of Skytraders whether an aircraft could be available that evening for a potential flight. According to Mr Burnaby, at that stage, the details of the flight, including the destination, were not known.[245] Mr Burnaby received a call from Mr Meyer, who was then the Operations Manager, advising him that he had told the ABF the aircraft was not available for a flight as no crew was available. Mr Burnaby then discussed with Mr Meyer the availability of specific pilots, being two pilots Mr Meyer had not covered when explaining to Mr Burnaby who was not available and why. It should be noted that pilots have limits on their 'duty hours' and it is an important safety and regulatory matter that they stay within their permitted hours. Mr Meyer said Mr Booth had had a medical (medicals are included in 'duty hours'), but Mr Meyer was not able to advise Mr Burnaby how much time Mr Booth had available or how much rest he required before he could fly again. Mr Meyer was not able to say why another pilot, Troy Fleet, was not available. Mr Burnaby said to Mr Meyer that he would make some inquiries with ABF, Mr Booth and Mr Fleet. Mr Meyer acknowledged that Mr Burnaby would be doing this.

204 Mr Burnaby then made enquiries directly of Mr Booth, Mr Fleet and the cabin crew manager, Nicola. Mr Booth advised he had some duty time available, or could do a split duty, Mr Fleet said he was available, and Nicola confirmed a cabin crew was available. Mr Burnaby then told the relevant ABF contact that Skytraders 'might' be able to do the flight, but he needed to check a few things. He then called Mr Meyer again to update him on his discussions with Mr Booth and Mr Fleet, during which call Mr Meyer did not give any reason why the flight could not proceed within the parameters of Mr Booth's available duty time. Mr Burnaby then called the ABF contact back again, stating that the aircraft could be made available, subject to duty limitations affecting one pilot, and that operations would make a final assessment when advised of the proposed schedule. Mr Burnaby then left it to the ABF contact and Skytraders' operations department to liaise. He did not hear of the matter again until it came up in Mr Vickers' witness statement.

205 As it happens, the ABF decided it did not need the flight in any event.[246]

206 Mr Meyer's evidence differed from Mr Burnaby's.[247] He said that Troy Fleet was available, but Mr Booth was definitely not (and it was a two pilot operation). He said Mr Booth was not allowed to fly until 4:00am the next morning and he had advised the ABF of this. He says he contacted Mr Burnaby and told him that no crew was available that evening, but the flight could leave at 4:00am. From the way in which he recounted the narrative in his evidence, that would appear to have been the end of the discussion he had with Mr Burnaby; Mr Meyer did not refer in his evidence to Mr Burnaby pressing the matter in that call. Mr Meyer stated that he was later informed by Mr Booth that Mr Burnaby had contacted him and asked him to fly that night. Mr Meyer's evidence was that he was very concerned that Mr Burnaby had 'gone behind my back'.[248]

207 In cross-examination, Mr Burnaby stated that, insofar as Mr Meyer's account suggested that Mr Burnaby had 'cut across the line of operations' or acted without Mr Meyer's approval or knowledge, Mr Meyer's account was inaccurate.[249] Further, Mr Burnaby stated that he was 'astounded' that, if Mr Meyer genuinely had a safety concern arising from this incident, it was not recorded in the Skytraders' safety system.[250] Premier's position on the safety log generally was that it was not intended to record systemic risks such as might be posed by this kind of interference, but to record specific operational incidents such as a particular safety check being missed, stairs to the aircraft not being moved correctly, and like matters.

208 The mobile phone account for Mr Meyer's phone was in evidence. It recorded an outgoing call to Mr Burnaby but, obviously enough, did not establish what other calls Mr Burnaby made.

209 Mr Burnaby was cross-examined at some length on his account, but maintained his evidence. I accept him as a witness of truth, who gave his evidence in a direct manner, without steering his account in the direction of what might be perceived to be the interests of his current employer. He had a good and detailed recollection of the events in question. By contrast, I have some reservations about the evidence of Mr Meyer. While he generally gave honest evidence, he was clearly loyal to his personal friend, Mr Vickers. There was a palpable air of regret when cross-examination required him to reveal information obviously unhelpful to Mr Vickers.

210 Mr Burnaby had the high level commercial relationship with the ABF. He was justifiably concerned that an important client was being told an aircraft was not available when (in his view) the availability of two of Skytraders' pilots had not been properly assessed prior to the ABF being advised the aircraft was not available. All Mr Burnaby did was make some enquiries, let the ABF know the aircraft could be made available, subject to some constraints and subject to operations' final assessment. There is nothing in that series of events which involved Mr Burnaby interfering in Skytraders' operations department outside the remit of his commercial role in ensuring an important client was not being told 'no' unnecessarily. Mr Burnaby did not instruct, or even suggest, Mr Booth fly outside his permitted hours.

211 Further, the proposition underlying the complaints about Mr Burnaby interfering in operational matters - namely that Mr Burnaby should not give any instructions to operational staff - is flatly contradicted by Mr Vickers' own email when advising all staff of Mr Burnaby's new role of 'Manager - Commercial and Legal' in 2011, set out above.

212 Accordingly, I do not consider that this incident supports the general contextual narrative advanced by Premier to the effect that Mr Burnaby's interference in operations was of legitimate concern to Mr Vickers due to safety implications, and contributed to tensions.

213 The particulars of the allegations concerning the treatment of Mr Hare are in the following terms:

In August, 2019, Norman Mackay and Dan Burnaby took disciplinary action against Lachlan Hare, Operations Officer. Lachlan Hare reported to Terry Vickers. The disciplinary action was against the advice and wishes of Terry Vickers.[251]

214 It is not clear why Mr Mackay is named in the particulars as being a person who 'took' the disciplinary action as the evidence advanced by Premier did not assert any involvement on the part of Mr Mackay beyond approving the actions of the executive team (whose origin is explained below) and the terms of a warning letter to be issued to Mr Hare.[252]

215 Mr Hare worked in the operations department of Skytraders. He reported to Mr Meyer, who in turn reported to Mr Vickers. Mr Hare was not a senior employee. Part of his job involved the nitty gritty of making arrangements for ABF flights. This involved frequent contact with ABF personnel when a flight was being arranged. By all accounts, Mr Hare was a personable individual, and got on well with his ABF counterparts, including by engaging in social banter. As noted below, Mr Hare took his relaxed, sociable approach too far for someone in a client-facing role, resulting in some of the matters raised in the disciplinary action against him.

216 Mr Burnaby occupied a senior position in the company. He, along with Mr DeAngelis (the CFO), Mr Ide and Duncan Mackay, comprised the executive team (also referred to as the executive committee). The members of that group were the most senior employees of Skytraders below the level of Mr Mackay and Mr Vickers, both of whom were also directors. The broader context in which the executive team came to be formed was an acknowledged need within the company to improve its internal governance and to introduce more organised corporate structures, including a number of committees.[253] These initiatives were taken against the background of Mr Vickers having made no secret of his desire to reduce (or even ultimately cease) his day-to-day operational involvement in the company, and take on a more advisory role, as well as spending more time on his farm.[254] Mr Vickers and Mr Mackay were not getting any younger (to state the obvious). In 2019, Mr Vickers and Mr Mackay were both in their late 60s. Mr Mackay encouraged the formation of the executive team, mindful that there were 'two older persons at the helm, and some enormously competent younger persons coming through'.[255]

217 In his evidence-in-chief, Mr Vickers stated that he was not entirely comfortable with the formation of the executive team, and sought an assurance it would not interfere with management of the company.[256] Other witnesses denied that assurance was sought or given.[257] Mr Vickers' evidence proceeded to articulate a complaint that the executive team had operated beyond its limited remit in becoming involved in the performance management of Mr Hare. He considered it an overstepping of the role of that group and 'an intrusion into my area of management'.[258] In a change of view, which was never explained, in cross-examination, Mr Vickers' position changed and he disavowed any suggestion that the executive team was involving itself in Mr Hare's performance management, saying it was rather 'a couple of people showing up' and did not involve the execution of executive team decisions.[259] In closing submissions, Premier reverted to its starting position, and identified the executive team as being responsible for the disciplinary actions.[260]

218 In my view, whether or not the contested assurance was given is not to the point. Even if such an assurance had been given in relation to the general functions of the executive team, as the narrative below sets out, Mr Vickers was kept abreast of what was occurring in relation to Mr Hare and did not seek to stop the process. Nor did Mr Vickers take any 'jurisdictional' point (as counsel for the Mackay parties put it in cross-examination), by telling those involved in the disciplinary proceedings that they were exceeding the remit of the executive team.

219 Before delving into the narrative concerning Mr Hare, it is important to note the concerns which Mr Vickers contended arose from that incident, as illustrative of the reasons why he (and therefore Premier) considered that interference by Mr Burnaby and others in operational matters was damaging to the operations of Skytraders. In his first witness statement, Mr Vickers explained the concern as follows:

The introduction of Norman Mackay's children and nephew to the business led to increased conflict and dispute. For some time, this had occurred in management of the business without impacting on the operations division and therefore on me. However, Dan Burnaby in particular sought to interfere with operational matters. When he did so, this had a significant impact on the safety and well-being of pilots, ground crew and other operations staff, and the operations of Skytraders generally. One particular matter of significant concern, and which led to the current shareholders dispute between myself and Norman Mackay, was the treatment of one of my operations staff, Lachlan Hare by Dan Burnaby and others.[261]

As such, it was not only the mere fact of 'interference' (as Mr Vickers saw it) in operational matters that was of concern, but also the impact on the wider staff and safety of Skytraders' operations. Similar safety concerns were raised by Mr Vickers in relation to alleged interference in operational matters relating to Calum Mackay's introduction to the Melbourne office (addressed above), and other incidents of alleged interference by Mr Burnaby (not pleaded, but addressed above as context).

220 As noted, Mr Burnaby had a commercial, senior-level relationship with ABF. In that context, ABF personnel raised concerns about Mr Hare with Mr Burnaby on two occasions in June 2019.[262] Mr Burnaby raised these with the executive team in late June 2019. Mr Burnaby subsequently became aware of a number of other performance issues involving Mr Hare. Mr Burnaby's evidence was that there were discussions in June and July 2019 involving Mr Vickers, Mr Mackay and the executive team through which a consensus emerged that a formal process should be initiated, the executive team was to take the lead in that process, and Mr Hare was to be removed from a client-facing role.[263]

221 On 1 July 2019, Duncan Mackay, on behalf of the executive team, sent a paper to Mr Mackay, outlining concerns about Mr Hare and a proposed course of action.[264] Mr Mackay forwarded the paper to Mr Vickers the same day.[265] The paper included a draft letter to Mr Hare, which detailed a number of performance issues. As the issues in this proceeding concern the involvement of the executive team (and particularly Mr Burnaby) in disciplinary matters concerning Mr Hare, the approach taken to those disciplinary issues and whether the disciplinary process was pursued against Mr Vickers' advice and wishes, it is not necessary to set out the detail of the disciplinary matters. I do not consider the extensive submissions made by Premier in closing concerning whether or not the disciplinary complaints were well founded, and criticisms made of Mr Ide's evidence and whether he mixed up references to two planes, to be relevant.

222 Mr Vickers stated in his second witness statement that he did not recall having read the draft report provided to him and denied that he discussed the report and issues concerning Mr Hare with Mr Mackay after the draft report was circulated.[266] Mr Mackay said there had been multiple discussions between them. Mr Vickers and Mr Mackay gave conflicting evidence about whether Mr Vickers had indicated Mr Hare ought to be sacked due to having referred to Mr Burnaby as a 'Hobart turkey' (Mr Burnaby being based in Hobart) and the Sydney personnel as 'Sydney clowns' (Mr Vickers denied this was the case).[267] Mr Ide's evidence was that Mr Vickers had only voiced a view that Mr Hare ought not be sacked by reason of statements he made to the ABF alone.[268]

223 Mr Mackay's account was supported by the evidence of Mr Ide and Mr Burnaby. Mr Ide gave evidence of Mr Vickers himself having told Mr Ide that he (Mr Vickers) had multiple discussions with Mr Mackay, and also that Mr Vickers had suggested to Mr Ide that Mr Hare's name calling ought to result in the termination of Mr Hare's employment.[269] Mr Burnaby's evidence was that he had participated in a number of conversations with Mr Vickers, including conversations in which Mr Mackay also participated, in which the situation with Mr Hare was discussed.[270] Mr Burnaby also gave evidence that Mr Vickers had said Mr Hare 'should be gone' due to the name calling.[271] Duncan Mackay recalled Mr Vickers initially saying that he wanted to transfer Mr Hare for the name calling, but then later saying, when 'fired up', that Mr Hare 'should go'.[272] Duncan Mackay also gave evidence of Mr Mackay having confirmed to him that Mr Vickers, having received the 1 July 2019 paper, was in agreement with the proposed action.

224 There was also a conflict in the evidence concerning whether or not, having received the executive team's paper, Mr Vickers praised the work undertaken by Duncan Mackay and Mr Ide in a discussion on 2 July 2019. Duncan Mackay said he did;[273] Mr Vickers said he did not.[274] In his evidence, Mr Vickers accepted that he had been party to at least one discussion with Mr Ide and Mr Burnaby about Mr Hare's performance issues, being a discussion he said occurred 'in June 2019', although on Mr Vickers' evidence he 'advised they were doing the wrong thing'.[275] Mr Ide's evidence was that this was in fact a meeting which occurred on 2 July 2019, and which was attended by him and Duncan Mackay.[276] Mr Ide's evidence was also that Mr Vickers had told him on a number occasions that he was supportive of Mr Hare being brought in for a formal meeting and a warning, but that he did not want to be present at the meeting.[277]

225 The meeting with Mr Hare took place on 8 August 2019. Mr Burnaby and Mr Ide were in attendance. Mr Vickers was aware the meeting was being conducted that day, and spoke to Mr Burnaby and Mr Ide. According to Mr Meyer, Mr Vickers reported being aware of the meeting when Mr Meyer called him after being told by Mr Hare that he had been summoned to a meeting.[278] On Mr Burnaby's account, Mr Vickers stopped by and said words to the effect of '[b]e careful guys', which Mr Burnaby took to be a reference to the potential for a Fair Work claim.[279] Mr Ide gave evidence to the same effect.[280] Mr Vickers did not dispute this account, but said he also told them he thought they were doing the wrong thing.[281] When Mr Vickers' account was put to Mr Burnaby in cross-examination, Mr Burnaby specifically denied that Mr Vickers had told them that he thought they were doing the wrong thing.[282] Mr Vickers' account was not put to Mr Ide directly, however Mr Ide did give more general evidence that Mr Vickers did not disapprove or disagree with the issuance of a formal warning.[283] Mr Vickers did not tell Mr Meyer, in their conversation that afternoon, that he (Mr Vickers) had told Mr Ide he was opposed to the meeting, but did report to Mr Meyer that he had told Mr Burnaby that it was not appropriate to have the meeting and that it should not go ahead.[284]

226 Mr Vickers' first witness statement also acknowledged that he did not direct Mr Burnaby and Mr Ide to stop their actions against Mr Hare.[285] He acknowledged in cross-examination that, despite his stated reason being that he believed Mr Burnaby and Mr Ide were acting with the authority of Mr Mackay, he did not take the matter up with Mr Mackay.[286]

227 The disciplinary meeting with Mr Hare did not go to plan. He became very upset. Mr Burnaby and Mr Ide left the room to allow Mr Hare to compose himself. They returned to the room when they saw a car leaving that they thought might have been Mr Hare's only to find him still in the meeting room and in great distress. Mr Hare's mother was called and he went on sick leave to obtain support. Mr Vickers accepted in cross-examination that, upon being told what had occurred, he had suggested to Mr Ide and Mr Burnaby that Mr Hare may in fact have 'put on' his emotional response.[287] The nature and severity of Mr Hare's reaction was not anticipated, and Mr Vickers said he did not think 'anybody could've anticipated what happened here'.[288] Mr Ide and Mr Burnaby said Mr Vickers congratulated them on how they handled the situation;[289] Mr Vickers denied this.[290] Nothing turns on whose recollection on that point is correct.

228 Mr Hare then went on a period of sick leave. The alleged operational interference involving the introduction of Calum Mackay to the Melbourne office occurred during this period. As already noted, the plan for Calum Mackay to come to the Melbourne office for experience and to support the office in a busy period, when Mr Hare was to be stood down, was referred to in the 1 July 2019 paper concerning Mr Hare.[291]

229 Mr Hare was due to return to work on 26 August 2019. Mr Vickers was aware of that fact and he had a conversation with Mr Burnaby and Mr Ide the Friday before, the contents of which are disputed. Mr Vickers was aware that it was intended that Mr Hare would be given a formal letter upon his return.[292] Mr Mackay's evidence was that he spoke with Mr Vickers on 20 August 2019 and advised him the letter was coming out.[293] He was firm in his evidence that Mr Vickers was involved in all aspects of the events concerning Mr Hare and never indicated any opposition of which Mr Mackay was aware.[294] Subject to the (disputed) points at which Mr Vickers said he did tell those involved they were doing the wrong thing, the evidence that Mr Vickers never indicated any opposition is consistent with Mr Vickers' evidence in cross-examination that he did not stand in the way of the process with Mr Hare going forward and 'should have been stronger'.[295]

230 Mr Burnaby also gave evidence confirming that Mr Vickers was aware when Mr Hare was coming back to work, and that Mr Burnaby would be meeting with him. His evidence was that, when Mr Vickers was giving Mr Burnaby a lift to the airport on 23 August 2019, he told Mr Vickers that he would be coming back to Melbourne on Sunday to meet with Mr Hare first thing on Monday.[296] Mr Vickers did not dispute that he was aware a letter was to be delivered to Mr Hare upon his return to work.[297]

231 The letter to be delivered to Mr Hare upon his return was circulated in draft by Duncan Mackay to Mr Mackay and Mr Vickers at 6:20pm on Sunday, 25 August 2019.[298] Mr Mackay reviewed and approved it at 9:01pm that evening,[299] but Mr Vickers did not respond, apparently because it was a Sunday evening. While the email was sent on a Sunday evening, it was Mr Mackay's evidence that Mr Vickers was generally a bit unresponsive.[300] Given Mr Vickers was aware that Mr Hare was to return on the Monday, it may be thought that, if he was concerned to review the letter and would take umbrage if the executive team proceeded without his approval, he might have checked his emails that evening. In the event, Mr Vickers did not review it until after things 'blew up' with Mr Mackay the next morning.[301] Although Mr Vickers had not responded to the draft letter, Mr Burnaby and Duncan Mackay proceeded with the meeting with Mr Hare the next morning (Mr Ide had gone hiking, out of mobile range in the meantime).

232 This second meeting with Mr Hare, initially at least, also did not go to plan. Mr Burnaby had been in contact with Mr Hare concerning his return to work, and had advised him they would need to 'close out' the discussion from 8 August 2019 when he got back.[302] When he arrived, Mr Hare was called in to the meeting with Mr Burnaby and Duncan Mackay, however Mr Hare said the meeting could not proceed as Mr Meyer was supposed to be his support person and he was not available until the afternoon.[303] Mr Burnaby and Duncan Mackay then rang Mr Mackay to let him know what had happened and to query the situation given they had not been told by Mr Vickers or Mr Meyer that there was to be any delay in the meeting and there were concerns about whether it was appropriate for Mr Meyer, as Mr Hare's direct report, to be his support person. Ultimately, it was considered that Mr Meyer would not be an appropriate support person, and Mr Hare nominated his father instead.

233 The meeting then proceeded that afternoon. The meeting went smoothly and Mr Hare's father thanked Mr Burnaby and Duncan Mackay for the fair way in which the matter had been handled. Mr Hare also later sent Mr Mackay an email apologising for his behaviour and thanking him for the way the company handled the situation.[304] Mr Hare remained employed by Skytraders until mid-2020 when he took up a position in Bowral, NSW, with the company Mr Meyers had moved to in January 2020.

234 Having regard to the above evidence, I reject Premier's contention that the disciplinary process was undertaken without Mr Vickers' knowledge or consent or otherwise constituted oppressive conduct. Where there is a conflict between the evidence of Mr Vickers and that of Mr Ide, Mr Burnaby or Duncan Mackay, I prefer the evidence of the latter three witnesses. They all appeared to me to be honest, straightforward witnesses. I also prefer the evidence of Mr Mackay over that of Mr Vickers in relation to the nature and extent of discussions concerning the disciplinary process. While, as indicated elsewhere, I do have some reservations about aspects of Mr Mackay's evidence, on this issue he did not appear to have any 'axe to grind'. Rather, it was my impression, having observed his evidence, that while Mr Mackay had some personal concerns about Mr Hare - particularly relating to his unprofessional standard of dress while in a client-facing role - he was content for the disciplinary process in relation to a relatively junior employee to be led by the executive team. Mr Mackay also appropriately ensured that Mr Vickers was kept informed by forwarding the initial paper prepared by the executive committee. By contrast, in his evidence, Mr Vickers was at pains to distance himself from the process and disavow having gone along with it. By way of example, Mr Vickers claimed both in his written evidence,[305] and claimed in cross-examination[306] that he was not familiar with the executive team's report on Mr Hare, but he in fact forwarded the report to Mr Meyer,[307] and later conceded in cross-examination that he would have read that paper.[308]

235 As cross-examination of Mr Vickers proceeded, it emerged that his opposition to the disciplinary action against Mr Hare was driven by a view that most of the matters being raised as conduct issues were contrived, and that Mr Burnaby and others were discomfited by Mr Hare's close relationship with ABF and wanted to drive him from the company on confected grounds.[309] Although it was not entirely clear from his evidence, it appeared that Mr Vickers formed the view at some stage that the executive team were 'lining up' Mr Hare for disciplinary action because Mr Hare's close relationship with ABF was in some way threatening to those above him. If Mr Vickers really had that opinion at the time, it beggars disbelief that he did not 'stand in the way' of the process being adopted in relation to Mr Hare, whom he said in his written evidence, was doing a good job.

236 Even if Mr Vickers was not as firmly in agreement with the proposed course of action as Messrs Mackay, Ide, Burnaby and Duncan Mackay perceived him to be, he did not, on his own evidence, 'stand in the way' of the disciplinary process going forward with Mr Hare, or directly tell those involved to stop. Clearly Mr Vickers knew, at the very least, the key features of the process that was in train. Counsel for Premier acknowledged in closing submissions that Mr Vickers 'knew what the executive team were up to'.[310] Premier cannot now be heard to complain that the disciplinary action in relation to Mr Hare constituted oppressive conduct because it 'went against the wishes and advice of Mr Vickers'.

237 In any event, in my view, the conduct concerning Mr Hare could not on any view be characterised as oppressive conduct as it was simply an instance of the executive team, including Mr Burnaby as the executive responsible for the company's legal matters - of which a disciplinary action that could ultimately lead to the termination of an employee's employment would be a prime example - taking a structured approach to a matter of employee performance which had gone beyond routine performance management.[311] The mere fact that Mr Hare was an employee in the operations department does not change that, particularly when the Director of Operations, Mr Vickers, was kept informed of what was to occur and the performance management plan had already been discussed by Mr Ide with Mr Hare's direct report, Mr Meyer.[312]

238 In closing submissions, the Hare incident was characterised as undermining Mr Vickers by the reason of the executive committee not waiting for Mr Vickers' response to the draft letter to Mr Hare, which had been circulated in the evening of Sunday, 25 August 2019. It was said that proceeding with the plan to deliver the letter to Mr Hare with only the approval of Mr Mackay, but without Mr Vickers' approval of the letter, was inconsistent with the functioning of the executive committee as only an advisory committee.[313] I do not accept that submission. As noted, Mr Vickers was well aware of what was taking place in relation to the disciplinary process. For better or worse, the executive team had carriage of the process and Mr Vickers did not seek to stand in the way or stop it. Mr Vickers was aware that the meeting with Mr Hare and delivery of the disciplinary letter was to occur on the Monday morning. While it was undesirable that the draft letter was circulated the Sunday night before Mr Hare's return the next morning, there was no evidence Mr Vickers took steps to seek a draft of the letter earlier or enquired as to its whereabouts prior to the weekend. The decision to proceed without Mr Vickers' approval of the letter was reasonable in the circumstances and did not undermine Mr Vickers.

The cessation of Mr Vickers' operational role and removal from the board

239 Premier contended that Skytraders terminated Mr Vickers' engagement as Chief Pilot and Director of Operations. While there is substantial, and important, context, the chain of key correspondence giving rise to the alleged termination is as follows. First, there was a letter to Mr Vickers, signed by Mr Mackay, on 11 September 2019 stating that Mr Mackay 'regretfully' accepted Mr Vickers' resignation.[314] Then, about an hour later, Mr Mackay emailed CASA advising that Mr Vickers had resigned (which claim was then contradicted in an email from Mr Vickers to CASA later that same afternoon).[315] After Mr Vickers wrote to Mr Mackay on 12 September 2019,[316] Mr Mackay sent a letter to Mr Vickers on 13 September 2019. That letter stated, in unequivocal terms, that from 16 September 2019, Mr Vickers was not to undertake any action or functions as Chief Pilot or Director of Operations.[317]

240 As the case unfolded, the essential contest was between:

(a) Premier's contention that Mr Vickers never resigned - either in the call with Mr Mackay on 26 August 2019 or a subsequent call with Mr Burnaby that morning - but, after a heated phone call with Mr Mackay in the morning of 26 August 2019, took some leave to consider his position only for Mr Mackay to force him out and contrive a 'notice period' from his having gone on leave; and

(b) the Mackay parties' contention that Mr Vickers resigned to Mr Mackay in the 26 August 2019 phone call, confirmed his resignation in the subsequent call to Mr Burnaby, and vacated his office (thus confirming his intentions) with the notice period being the way in which Mr Vickers' public statements that he was taking leave could best be reconciled with his resignation.

241 There was no factual controversy concerning the removal of Mr Vickers' from the board. Scarp served a notice calling a meeting and obviously had the numbers for the resolution removing Mr Vickers to pass. But there was some controversy about Mr Mackay's reasons for considering it appropriate to remove Mr Vickers from the board.

242 Before proceeding, it is necessary to say something further about CASA as its attitude and powers form part of the backdrop to the relevant events. Skytraders' operations as an airline were governed by a raft of complex legislation and by instruments known as Civil Aviation Orders (CAOs), administered by CASA as the responsible regulator. It was common ground between the parties that CASA had the power to 'ground' Skytraders, which would have been catastrophic to Skytraders' business. It was also not in dispute that indications that the holder of an AOC was internally dysfunctional would be a matter of significant concern to CASA, and could result in an airline being grounded. CASA also had to approve individuals for appointment as Chief Pilot - an essential position, the responsibilities of which, and requirements for which, were detailed in the relevant CAO - and those suitable to be an Acting Chief Pilot.

243 To put the events of 26 August 2019, and the ensuing days, in context, it should be recalled that, on his account, Mr Vickers was deeply unhappy with how the disciplinary proceedings in relation to Mr Hare had been initiated and handled, and that he was further aggrieved by the manner in which Calum Mackay had arrived in the Melbourne office, which involved Mr Burnaby asking Ms Slapar to show Calum Mackay the ropes.

244 Mr Vickers consulted again with his lawyers the day Calum Mackay arrived in Melbourne, 19 August 2019. Mr Vickers said the consultation was triggered by Mr Burnaby's introduction of Calum Mackay, following which Mr Vickers wanted to get what was going on in the company 'sorted out'.[318] He denied he went to see the lawyers about commencing an oppression proceeding.[319]

245 The next day, Mr Vickers asked Mr DeAngelis to send him Skytraders' Constitution and various other corporate documents.[320] Also on 20 August 2019, Mr Vickers asked Calum Mackay to buy him 10 packing boxes,[321] which Calum Mackay did, and which Mr Vickers later used to pack up his office on 27 or 28 August 2019. [322] Mr Vickers said he asked Calum Mackay to buy the boxes because he wanted to do some archiving of files in his office and it was just a coincidence that happened the day after he saw his lawyers.[323] I do not accept that explanation. It is clear from Mr Vickers' evidence that he was highly agitated about the state of affairs within the company when he went to see his lawyers on 20 August 2019. He was clear in his own mind that he had to do something and that he could not allow things to continue as they were; he had to bring matters 'to a head'.[324] Mr Vickers' desire to bring matters to a head is consistent with Mr Vickers having requested corporate documents of Mr DeAngelis the next day. The explanation that the boxes were required to engage in routine archiving is not plausible in light of the surrounding circumstances. Premier's counsel also conceded in closing that it would be a fair inference that Mr Vickers might have 'feared the worst' in terms of how things would pan out[325] and did not press the 'archiving' explanation.

246 The next event in the contextual chronology is the circulation of the draft letter to Mr Hare to Mr Vickers and Mr Mackay in the evening of 25 August 2019, to which Mr Vickers did not respond before Mr Hare returned to Skytraders early in the morning on 26 August 2019, to be met by Mr Burnaby and Duncan Mackay.

Telephone discussion between Mr Vickers and Mr Mackay in the morning of 26 August 2019

247 26 August 2019 was an eventful day at Skytraders. As set out above in relation to Mr Hare, 26 August 2019 was the day of his return from leave, which commenced with issues arising concerning his request that Mr Meyer be his support person. When that issue arose, Mr Burnaby and Duncan Mackay - who was participating as Mr Ide was on a hiking trip - called Mr Mackay.[326] Mr Mackay then phoned Mr Vickers and left a message for him.[327] Far from side-lining him, Mr Mackay endeavoured to consult with and involve Mr Vickers.

248 Mr Vickers returned Mr Mackay's call at about 8:21am.[328] They gave conflicting evidence about what was said during a telephone call. Mr Mackay's evidence in chief was as follows:

To begin with, the conversation was in words to the following effect:

Me: "Morning Terry, I've just had Dan and Duncan on the phone saying they've tried to meet with Lachie this morning and give him the letter, but Lachie wouldn't go into the boardroom without Wally as his support person. I've since spoken with Wally, and he doesn't want to do it".

Mr Vickers: "We've discussed this sort of thing before Norman. You're interfering with Operations".

Me: "What do you mean Terry? We've been discussing what we're doing with Lachie for ages and I'm just as accountable for Operations as I am for everything else".

Mr Vickers then started a lengthy assertion as to why he did not agree with what was proposed with Mr Hare, and claiming that I should also not be talking to Mr Meyer. Mr Vickers' words seemed to me to be too formal, too structured, and too rote. This gave me a very odd feeling that Mr Vickers was reading from a prepared text. Mr Vickers then seemed to unwind and adopt a more informal, and typical conversational style.

However, in doing so he became increasingly aggressive in tone and volume. Even though my nearly 20 years of experience with Mr Vickers taught me that he could be extremely hot headed and could readily fly off the handle, this took me aback; it was very vitriolic, and personal. In that respect, the conversation continued in words to the following effect:

Mr Vickers: "I've got problems with Duncan. I've had enough of him".

Me: "I don't understand Terry. You've told me many times that Duncan is fantastic, and that when the time comes he can look after my interest in the company. Now you're telling me you won't work with him".

Mr Vickers: "Duncan's shit to work with and Dan's behaviour is crap too. He's attacked Sarah. I hate that arsehole Dan. He has to go, because I just won't work with him. I've had enough. So, that's it Norman, I'm gone. I'm not going to continue with the company with those kids there".

Me: "Where is this coming from?"

Mr Vickers: "Norman, you and I have different objectives here. I know you're looking to leave a dynasty behind you. I just want to retire, get my money, and get out of this bloody company".

Me: "Terry, I don't know what any of that has got to do with what's happening with Lachie this morning, and who he has as a support person".

Mr Vickers: "You, and your whole fucking family - Duncan, Calum, and Dan - have fucked the company! And you're continuing to do that with this Lachie thing".

Me: "But you agreed to every bit of it. Anyway, why would I want to fuck the company if I'm trying to leave a dynasty, as you call it?"

Mr Vickers: "You can stick your dynasty up your arse**. I'm leaving, and I'm not coming back. I won't work with your kids anymore. I've organised a way to sell my shares, I'm not giving them to your fucking kids".**

Me: "What do you mean, 'give them to the kids'? I've never said you have to sell your shares to the boys".

Mr Vickers: "Not sell, you said give".

Me: "When did I ever say or suggest that?".

Mr Vickers hung up the phone at that point. By that time he had become increasingly agitated and hysterical, raising his voice, and seeming to trip on his words a bit.[329]

249 In his first witness statement, Mr Vickers' evidence in chief regarding the conversation was as follows:

At about 7.30am on 26 August 2019, I received a call from Norman Mackay. I called him back, and Norman Mackay seemed agitated. He said that Lachlan Hare had refused to go into a meeting with Dan Burnaby and Duncan Mackay without a support person also attending, and that Lachlan Hare had shown up at work in Melbourne to work in operations. I said I was not surprised Lachlan Hare refused to attend the meeting without a support person given what had happened previously. The discussion became quite heated and I said that they (meaning Burnaby and his children) were 'fucking the company' and that 'we needed to sort out the shareholding'. By this I meant that it was time to get in place a proper corporate structure. Norman Mackay responded angrily and said words to the effect that 'you promised to give my kids your shares, I remember you doing it'. I had never said this to Norman Mackay, so I suspected that he was angling to have me give up my interests in Skytraders to his kids and nephew so that they would eventually take over the running of the business. I knew at that point I had a major issue and hung up.[330]

250 Mr Vickers also responded directly to Mr Mackay's account of the conversation in his second witness statement as follows:

[138] In response to paragraph 316, I did not say the words that Norman Mackay ascribes to me. When told that Lachlan Hare had refused to go into the meeting without a support person, I said words to the effect, "I don't blame him [Lachlan Hare] after what happened the first time."

[139] In response, Norman Mackay did not use the words set out in paragraph 316, namely he did not say "What do you mean Terry? ..." What he did say was "It's all going wrong" in an agitated way. I agree that we discussed why I did not agree with the approach that was being taken with respect to Lachlan Hare. However, to the contention that I was reading from a prepared text, I say that this is incorrect. Like Norman Mackay, I had also been showering, and I called him back immediately after I finished showering.

[140] In respect to the continuation of the conversation, I did not say to Norman Mackay that I have got problems with Duncan and that I have had enough of him. I did not say what was then ascribed to me. I did not make any reference to Duncan being shit to work with or Burnaby's work is shit. I did not say the things ascribed to me.[331]

251 Mr Vickers was cross-examined on the conversation. In cross-examination, he expanded on his evidence, explaining that he raised with Mr Mackay his extreme unhappiness with the way in which Mr Burnaby and others had handled Mr Hare. He said he told Mr Mackay he had 'had enough of this' and that 'fundamentally I'm saying [to Mr Mackay] I'm not going to sit here and have this go on. I - you know, it's just not going to happen to the staff. To which he responded, and I just hung up.'[332]

252 In relation to his evidence that he said to Mr Mackay that they needed to 'sort out the shareholding ', Mr Vickers rejected the suggestion that, by that, he meant that he wanted to sell, and Mr Mackay need to buy, his shares. Rather, Mr Vickers' evidence was that his comment related to his view that the company's corporate governance and structures needed to be addressed so that the company did not continue being run in the interest of Mr Mackay and his family members.[333] Whatever Mr Vickers subjectively intended to convey, a reference to sorting out the 'shareholding' would reasonably be understood as referring to the topic of who holds shares in Skytraders.

253 Mr Vickers also maintained his evidence that Mr Mackay had said to him that he should give his shares to Mr Mackay's children. On Mr Vickers' account, that suggestion had been raised before by Mr Mackay, but it appears Mr Vickers construed a reference by Mr Mackay to leaving the shares to those that remain as 'implying his kids'.[334] Mr Vickers could not imagine why Mr Mackay would ever think he [Mr Vickers] would gift his shares to Mr Mackay's children, despite having five children of his own, but maintained that Mr Mackay did do so and that he had not misunderstood Mr Mackay.[335] Mr Vickers also gave evidence that, on a previous occasion when Mr Mackay made a similar suggestion, he had said 'Oh fuck yeah, Norman. Fuck off.'[336]

254 When Mr Vickers was pressed on why it was such a rupture for Mr Mackay to have renewed the suggestion Mr Vickers give his shares to Mr Mackay's children when it was clear Mr Mackay could not force him to and he had previously readily rejected that suggestion when it was made, Mr Vickers' evidence was that it was 'now between us a real issue of trust' and that the breakdown of trust was a serious matter given he was the second most senior person in the company.[337] The trigger for the breakdown was, according to Mr Vickers, the loss of trust as the issue regarding Mr Hare could have been dealt with.[338]

255 Mr Vickers rejected the suggestion he indicated he was leaving the company and not coming back.[339]

256 Mr Mackay was also extensively cross-examined on this conversation. He agreed that Mr Vickers had said Mr Burnaby and Mr Mackay's sons were 'fucking the company', but denies that Mr Vickers made a general reference to sorting out the 'shareholding', although he referred to having found a way to sell his shares.[340] He maintained his evidence that Mr Vickers said he wanted to retire and get his money out.[341]

257 Premier relied on Mr Mackay's acceptance that Mr Vickers had not used the word 'resign' in their conversation. Given its importance, I set out that passage of the cross-examination:

Well, he didn't use the word 'resign' at all, did he?---He did not use the word resign, no.

And he didn't say anything about taking leave, did he?---No.

And he didn't say anything about giving a period of notice at the expiration of which he would leave the company, did he?---Um, I don't believe he did in that conversation, no.

So there was no express resignation, there was no period of notice, and there was no suggestion of taking leave as far you recall from this conversation, is that right? ---That's correct.

And the conversation remained heated and Mr Vickers hung up on you, is that how it ended?---That is correct.

Now as I understand your case, you say that everything that was said by Mr Vickers during that conversation is tantamount to a resignation?---He left no grey area.

There was no grey area. As far as you were concerned it was a resignation with immediate effect, was it?---Well, he then concluded that he was going to take the three weeks of leave, so it became a resignation effective in three weeks' time, pursuant to a letter which I sent in - I think on 13 or so of September.

Well we're jumping ahead a little bit at this stage?---Yes.

We're still at around about 8.30 in the morning on 26 August?---Yes.

When you finished your conversation with Mr Vickers - different versions there may be, but neither version includes any resignation notice or leave, does it?---I think that's probably a fair comment, yeah.

...

Well, you immediately - well at the end of this telephone conversation you had the distinct impression did you that Mr Vickers had resigned, is that right?---Yes, absolutely. Absolutely.

Did you take that as a resignation of chief pilot and director of operations?---Yes.

Did you clarify that with Mr Vickers when you had this heated conversation?---Um, no it wasn't a conversation which gave rise to that detail. I tried to call him later, but he never did return my call.

No, and you never wrote to him an email or other communication by which you queried what exactly it was that he was resigning from - chief pilot? Director of operations? Both? Or something else?---I thought he was fairly clear that he was resigning from any association with Skytraders from an operational standpoint.[342]

Phone call between Mr Vickers and Mr Burnaby on 26 August 2019, overheard by Duncan Mackay

258 After he hung up the call with Mr Mackay, Mr Vickers telephoned Mr Burnaby. Duncan Mackay, who was with Mr Burnaby when the call came through, gave evidence that he could overhear what Mr Vickers said to Mr Burnaby.[343] Mr Burnaby gave evidence that Mr Vickers said:

Norman and I have just had an argument. I have just resigned to Norman.

...

I will not be back. You will not see me again. I'll have to come back to clear out my office. Then I will not return. You will not see me again except when I come back to clear the office.[344]

259 Mr Burnaby was clear in his evidence that Mr Vickers had not resigned to him, but was reporting that he had resigned to Mr Mackay.[345]

260 Mr Burnaby also gave evidence that Mr Vickers made veiled threats, stating:

By rights I should be grounding the fleet... I know things...[346]

261 Mr Burnaby's account of the conversation was corroborated by Duncan Mackay.[347] Duncan Mackay recalled overhearing Mr Vickers say words to the effect of 'I know things, I can go to CASA and ground the fleet' and '[b]y rights I can ground it'.[348] Both Mr Burnaby and Duncan Mackay were cross-examined and maintained their evidence.[349]

262 Mr Vickers denied the accounts of Mr Burnaby and Duncan Mackay. His evidence was that he called Mr Burnaby to enquire about Mr Hare and said nothing about having resigned or having had a fight with Mr Mackay.[350]

263 I accept the evidence of Mr Burnaby and Duncan Mackay in relation to this phone call. As noted above, I found them both to be credible witnesses. Mr Burnaby was not, in my view, a partisan witness; for example, he did not attempt to explain away matters that were put to him to suggest that his account was inconsistent with the actions Mr Mackay subsequently took (referred to below).[351] They both had good recollections of the conversation. In my view, Mr Vickers' account that he called only to discuss matters concerning Mr Hare and his return to work that day is inherently implausible. Even on his own account, he had just had a very heated conversation with Mr Mackay and was agitated about issues concerning the company that were much larger than the logistical issues concerning Mr Hare and who would be his support person.

264 Mr Burnaby and Duncan Mackay then called Mr Mackay around 9am. Mr Burnaby and Duncan Mackay gave evidence to the effect that their conversation included a discussion in which Mr Mackay confirmed that Mr Vickers had resigned to him.[352] Mr Mackay's evidence was consistent, although in slightly different terms as he recounted that Mr Burnaby said to him that Mr Vickers had said 'I've just resigned to Norman ...' and Mr Mackay responded to the general effect 'I still don't understand it. All this over Lachie?'.[353]

265 Mr Vickers' statements to Mr Burnaby about grounding the fleet were reported to Mr Mackay in this call.[354] Mr Mackay was cross-examined on what was reported to him and maintained his evidence, as well as giving evidence that Mr Vickers had said similar things before, and that he (Mr Vickers) had said such things to Mr Sharp as well.[355]

266 Mr Vickers' advising Mr Burnaby that he had resigned was also significant from Mr Mackay and Mr Burnaby's point of view, as, according to Mr Mackay, Mr Vickers had a history of threatening to resign, but this was the first time he had advised a staff member (Mr Burnaby) (as opposed to a board member), that he had resigned.[356] One of the instances of earlier resignation to which Mr Mackay referred was Mr Vickers' letter of December 2016 to Mr Mackay and Mr Sharp in which he indicated a desire to step back from his operational role and enjoy the fruits of success.[357] While that letter was not a resignation per se, and Mr Mackay overstated it in his evidence, I accept that Mr Vickers had in the past made (at least) threats to resign to Mr Mackay.[358]

Text message and voicemail of Mr Mackay after the call

267 Just after the call with Mr Burnaby and Duncan Mackay, Mr Mackay called both Mr Sharp and Mr Ide. He did not get hold of either of them and left a voice message for Mr Ide.[359] The text of the voice message to Mr Ide was as follows:

Matt, Hi, Norman, um can you give me a call? I'm very sorry to interrupt your um holiday, um, but I've um, Dan's just told me that Terry has...is going to resign with immediate effect. The whole Lachie thing has um erupted this morning and um yeah (laughs) as you can gather he's not a happy chappy. Um so yeah if you could give me a call that would great, thanks Matt bye.[360]

268 The text message to Mr Sharp (sent at 9:09am) read as follows:

Please call me ASAP. Terry has just advised Dan of his resignation.[361]

Second call between Mr Mackay and Mr Vickers on 26 August 2019

269 Mr Vickers then telephoned Mr Mackay again at 10:10am, thinking he had called Mr Sharp. Before he realised his error, Mr Vickers said that he had spoken again with Michael Lanyon (who was his lawyer) and also that '[w]e are all organised and ready to go. Can you give me the contact details for your lawyers? We need to get on with this', at which point Mr Mackay spoke and Mr Vickers promptly hung up.[362]

270 Mr Vickers agreed that Mr Mackay's account of this conversation was broadly correct. He explained that he had spoken to Mr Sharp earlier in the day, after his first conversation with Mr Mackay. Mr Vickers said he and Mr Sharp had agreed that their respective lawyers would be in communication to 'discuss the circumstances following my earlier conversation with Norman Mackay'.[363] Mr Vickers accepted he had called his lawyers before placing the mis-directed call to Mr Mackay, but disputed that his statement about being 'organised and ready to go' referred to being ready to proceed to issue an oppression proceeding.[364]

271 Having regard to this context, which shows that Mr Vickers had been exploring issuing proceedings, including oppression proceedings, for some time, and Mr Vickers' increasing dissatisfaction with the way in which the company was operating over time, I do not consider that the statement 'we are all organised and ready to go' meant nothing more than that Mr Vickers and his legal team were ready to meet with Mr Sharp and his legal team.[365] On the contrary, in my view he was referring to his team being ready to commence legal proceedings, in which he was hopeful Mr Sharp would join. Even if Mr Vickers did intend to refer to no more than arranging a meeting of lawyers, what was objectively conveyed by the statement was not so limited. The comment was coupled with the statement '[w]e need to get on with this', clearly conveying something was afoot.

272 As it happens, Mr Vickers and his legal team did meet with Mr Sharp and his legal team on 3 September 2019. While the proceeding was not issued until 1 October 2019, that slight delay is explained by the need to obtain a valuation prior to issuing the proceeding. Mr Vickers proceeded to brief an expert on 4 September 2019 to obtain a valuation for use in issuing oppression proceedings, aware that it would take a couple of weeks to obtain the valuation.[366]

273 On 27 August 2019, Mr Vickers met with senior pilots and operational staff at a café in Essendon. The meeting had been called by Mr Vickers. It was attended by Mr Gronset, Mr Studd, Mr Meyer and Mr Booth. Each of them gave evidence about that meeting and had slightly differing recollections of what was said. However, their accounts were largely to the same effect in relation to three points.

274 First, they (with the exception of Mr Meyer)[367] gave evidence about statements Mr Vickers made about the need for the pilot group to maintain morale.[368]

275 Secondly, (with the exception of Mr Meyer)[369] they were each left in little doubt that Mr Vickers was leaving and probably would not return. Mr Booth was asked in cross-examination whether Mr Vickers had said his departure may become more permanent due to his dispute with Mr Mackay. In answer, Mr Booth said Mr Vickers had intimated that it may end up with him leaving and that he understood Mr Vickers to be referring to his operational role with the company (cf his board role).[370] Mr Booth recalled everyone leaving the meeting 'shellshocked'.[371] Mr Studd's evidence was that Mr Vickers said words to the effect 'I'm going away. I've had enough ... The company will implode.'[372] He recalled Mr Vickers saying words to the effect of 'depending how things work out with me and Norman, [I] may not be back'.[373] Mr Gronset's recollection was similar. He recalled Mr Vickers saying that his leave 'may become more permanent because of the circumstances with Norman. I may not be back.'[374] Mr Gronset's impression, based on what Mr Vickers had said at the meeting, was that the likelihood of Mr Vickers coming back 'wasn't great'.[375]

276 Thirdly, most of those attending the meeting recalled Mr Vickers making reference (whatever the precise language used was) to the company 'imploding'[376] and to the potential for CASA to take action which would prevent Skytraders continuing to operate if it became concerned that a dispute between senior management at Skytraders may adversely affect safety.[377]

27 or 28 August 2019: Mr Vickers emptied out his office

277 On 27 or 28 August 2019, Mr Vickers vacated his office at Skytraders. He removed all files and all personal effects, even to the extent of removing framed certificates that hung on the wall and personal photographs.[378] All that was left was a bottle of whiskey belonging to Mr Mackay, which had been left in the centre of the desk. Mr Vickers agreed that he had never emptied out his office in such a wholesale fashion before.[379] Mr Gronset regarded the empty office as a 'definite ... indication that Mr Vickers would not come back'.[380] In cross-examination, Mr Booth was asked whether, having seen Mr Vickers' empty office, he drew the conclusion that Mr Vickers was 'probably not coming back', to which Mr Booth responded '[o]ne has to say it looked that way'.[381]

278 Mr Burnaby gave evidence that, after Mr Vickers cleaned out his office, the staff were under the impression that Mr Vickers was gone.[382] For Mr Burnaby, Mr Vickers clearing out of his office confirmed that Mr Vickers was unequivocal in his resignation. As stated by Mr Burnaby in cross-examination, '[h]e'd mentioned in his conversation with me on 26 August that the only time he'd be coming back was to clean out his office, and that's exactly what he'd done.'[383] Mr Mackay also referred to Mr Vickers having vacated his office is a factor contributing to the destabilisation of the business, along with the Biloela incident (referred to below),[384] putting him in a position where he needed to address the staff on 4 September 2019 to reassure them and stabilise the situation. As detailed below, it was in that meeting with the staff that Mr Mackay informed them that Mr Vickers had resigned.

Mr Vickers' email correspondence with CASA and staff

279 On 27 August 2019, Mr Vickers emailed CASA advising that he would be on leave to 'attend to some personal business matters' until 16 September 2019 and that Mr Gronset would be Acting Chief Pilot in his absence.[385] While he copied the pilots to his email, he did not copy Mr Mackay. Later the same day, Mr Vickers sent an email via Skytraders' general distribution lists to all staff. His email said he would be on leave for the next three weeks 'while I attend to some matters' and also stated that '[i]f absolutely needed or if anything of any safety nature pops up I can be contacted on my mobile at any time.'[386] Mr Mackay's evidence was that this email was the basis on which he considered that Mr Vickers' resignation would take effect on 16 September 2019 (being the date three weeks after 26 August 2019).[387]

280 Transporting detainees for the ABF was an important part of Skytraders' work. Skytraders was tasked with transporting a high-profile Tamil family being deported from Melbourne on 29 August 2019. In a major breach of security, protesters gained access to the hangar and interfered with the flight departing. Australian Federal Police, ABF personnel and Skytraders successfully dealt with the protesters and the flight was ultimately able to depart for Darwin. Nobody told Mr Mackay that evening about this very serious incident, which attracted publicity, involving prime-time news, drones above the Skytraders hangars, as well as AFP vehicles and personnel. Mr Mackay remained unaware of the incident until the morning of 30 August 2019.[388]

281 Mr Mackay was, quite understandably, very unhappy and concerned that he was not informed about this serious incident promptly despite its obvious potential to damage Skytraders' reputation and client relationships. According to Mr Mackay, pursuant to the safety management system, communications about the incident should have gone by the Acting Chief Pilot, but Mr Meyer, who was First Officer on the flight, communicated with Mr Vickers instead. Mr Mackay blamed Mr Vickers for not telling him about it, and his failure to tell Mr Mackay about the Biloela incident was one of the matters raised by Mr Mackay in his evidence as informing his decision to initiate a shareholders meeting to remove Mr Vickers from the board (although referred to by Mr Mackay in that context as illustrating Mr Vickers' disengagement).[389]

282 In his evidence, Mr Mackay proceeded on the basis that Mr Vickers had countermanded the usual communications procedure to ensure that communications went to him. In support of this view, Mr Mackay referred to Mr Vickers' email of 27 August 2019 to all staff and pilots, referred to above, in which Mr Vickers said '[i]f absolutely needed or if anything of any safety nature pops up I can be contacted on my mobile at any time'.[390] In my view, Mr Mackay's characterisation of Mr Vickers' email as constituting a 'direction' to Mr Meyer, countermanding Skytraders' usual procedures, was unjustified; the email from Mr Vickers relevantly did no more than let the staff know he could be contacted if need be. Obviously something went wrong that resulted in Mr Mackay not being informed when he should have been, but I am not satisfied that Mr Vickers was to blame.[391]

Mr Mackay's meetings with CASA and with the pilots

283 Mr Mackay's evidence was that Mr Vickers had earlier said to him that the pilots would follow him if he left Skytraders. Mr Mackay therefore thought he needed to meet with key staff to see if they would stay.[392] They all assured him they did not intend to depart.[393] Mr Mackay's evidence was that, during a conversation with Mr Gronset, he said words to the effect of '[i]n case you have not heard yet, Terry has resigned', to which Mr Gronset responded 'I know Terry has gone because he told us last week at Essendon that he was going and wouldn't be back'.[394] While Mr Gronset did not recall the conversation in the same terms as Mr Mackay, it was clear from his evidence that Mr Gronset had a number of conversations with Mr Mackay and generally had a poor recollection of what was discussed when. His final response in relation to Mr Mackay's evidence that he told the key staff that Mr Vickers had resigned was that 'it could well be; I just can't recall myself ...'.[395]

284 Mr Mackay also wanted to test the waters with CASA to see how the regulator would react to Mr Vickers no longer being Chief Pilot, but to do so in a way that would not alarm CASA and which would avoid 'air[ing] dirty linen'.[396] While the wisdom of being anything other than straightforward with a regulator might be questioned, when Mr Mackay met with CASA on 3 September 2019 (with Mr Burnaby, Mr Ide, Mr Gronset and another individual), he told CASA that Mr Vickers was coming up for retirement and asked if Mr Gronset could act in his place.[397] The response was generally favourable. Premier submitted in closing that this 'emboldened' Mr Mackay to tell staff Mr Vickers had resigned the following day.

285 Mr Ide gave evidence that the way in which Mr Vickers' departure would be presented to CASA had been discussed internally before the meeting with CASA.[398] While Premier was highly critical of those involved for not being entirely candid with CASA, I do not regard their lack of candour with CASA as a reason to doubt the veracity of their evidence generally. Given CASA's power to ground Skytraders, and the evidence that indications of disharmony among senior personnel could well be a matter of real concern to CASA, Skytraders was in a delicate situation and sought to ascertain CASA's attitude to Mr Vickers no longer being the Chief Pilot. Only one of Skytraders' two next most senior pilots (Mr Gronset) had an approval to act as Chief Pilot which was not linked to Mr Vickers' ongoing position with Skytraders.

286 Nor was the advice to CASA that Mr Vickers was coming up for retirement inconsistent with the evidence of Mr Mackay, Mr Burnaby and Duncan Mackay that Mr Vickers had resigned. The position was explained by Mr Burnaby in his evidence when asked about the conflict between the 'retirement' message to CASA and the position that Mr Vickers had resigned:

Mr Mackay wanted to get an understanding, um, of what our situation was before advising of the resignation, and if he'd been advised that it was going to be Armageddon for the company, he was going to make a decision as to whether he was going to beg Terry to come back.[399]

287 Clearly, if Mr Mackay understood Mr Vickers had not resigned but was only on leave, he would not need to 'beg Terry to come back'.

288 Mr Vickers' other daughter, Rebecca Vickers, stopped attending Skytraders for work on 3 September 2019.[400]

Mr Vickers and Mr Sharp's meeting with their legal teams on 3 September 2019

289 3 September 2019 was also the day when Mr Sharp and his lawyers met with Mr Vickers and his lawyers. File notes of the meeting, taken by Mr Vickers' solicitors, were in evidence.[401] Those file notes include a number of notes indicating that Mr Vickers was not returning to Skytraders and wished to realise cash for his shares, but was aware that a sale of the whole of Skytraders was not possible because Mr Mackay wanted to hand Skytraders on to his children. The Mackay parties relied on the various notes concerning Mr Vickers having decided to leave Skytraders and not return as supporting their contention that Mr Vickers was, for the purposes of minority discounts in oppression remedies, a 'willing leaver'.[402] The Mackay parties did not rely on the contents of the file notes as a communication with the company so as to support their contention that Mr Vickers had resigned (a position which was not surprising given their neutral stance on the question of whether Mr Sharp was or was not a de facto director of Skytraders).

290 File notes of the meeting also record the following against the underlined heading 'Strategy':

- personal liability unless he tells CASA of:

- breakdown in [relationship] chief Pilot

- material event required to tell CASA.[403]

291 In context, these notes are to be understood as referring to the obligations on Mr Mackay as Chief Executive Officer under the relevant civil aviation rules. Having regard to the evidence concerning the risk that CASA would be concerned by a breakdown in the personal relationship of the senior individuals in Skytraders, the identification of these matters in connection with the 'strategy' suggests that Mr Vickers had in mind that the potential for CASA to react badly would give him some leverage in his dealings with Mr Mackay.

292 The use of CASA as a point of leverage by Mr Vickers is also supported by emails sent by Mr Vickers the next day in which he alerted his lawyers to CASA having linked Mr Gronset's approval to act to Mr Vickers' leave, saying 'Ha, CASA Zhave [sic] linked the extension to me. We might just slow this down further.' In response to his lawyer's response 'Ha indeed ...', Mr Vickers said '[t]hey are going to want an exit interview when I resign'.[404] Mr Vickers said in cross-examination that, by 4 September 2019, he had formed the view that it was unlikely that his issues with Mr Mackay would be resolved and had decided he would probably have to resign.[405] While Mr Vickers' email referred to resignation in the future tense, I do not consider that is probative of where matters stood between Mr Vickers and Skytraders because, at the time of sending that email, Mr Vickers had only told CASA that he was on leave, and had not said anything to CASA about not returning, or resigning. It is also evident from the file notes of the 3 September 2019 meeting with the lawyers that consideration was being given to the timing of executing the strategy, with the notes recording some critical government work being undertaken by Skytraders that week.[406]

293 Following the meeting involving the legal teams, Mr Vickers' lawyers arranged for Mr Vickers to meet with BDO, who were instructed the next day to prepare a valuation for the purposes of anticipated oppression proceedings.[407]

4 September 2019: staff advised Mr Vickers had resigned

294 Mr Mackay assembled the staff of the Melbourne office and the hangar in the morning of 4 September 2019 and informed them Mr Vickers had resigned. According to Mr Mackay's evidence, in the wake of the Biloela incident, and with Mr Vickers' absence and empty office, there was a need to stabilise the company and give staff assurances.[408] Mr Vickers was aware that the staff had been told he had resigned, but did not raise it with Mr Mackay and refute the suggestion.[409]

295 After a week of silence, Mr Mackay sent a letter to Mr Vickers dated 11 September 2019. In that letter, Mr Mackay stated (inter alia):

Dear Terry,

It is more than two weeks since we last spoke and I am aware that you have now confirmed to a number of senior Skytraders Management and Executives that you will not be returning to Skytraders after your three weeks of personal leave.

Your letters to both CASA and Skytraders personnel were dated 27th of August and therefore the company will take the effective date of your resignation to be the 17th of September. It is clear to me based on your having emptied your office and on your discussions with others relayed to me that your resignation from the company is conclusive and I regretfully accept that fact. Accordingly, the purpose of this letter is, among other things, to accept your resignation as Chief Pilot and Director of Operations with effect from the 17th of September 2019.[410]

296 While the sincerity of Mr Mackay's profession of regret in accepting Mr Vickers' resignation is doubtful, nothing turns on that point. Mr Mackay accepted in cross-examination that he had consulted his lawyers on the content of the 11 September 2019 letter.[411] In cross-examination, Mr Mackay and Mr Burnaby explained that a decision was taken to treat Mr Vickers' three weeks leave as his notice period as it was necessary to put some firm date on the termination of his role, Mr Vickers had told staff he was on three weeks leave (thus treating the leave as notice would allow a measure of consistency) and allowed a period of time to assess the situation with CASA.[412]

297 Mr Mackay also sent an email to CASA (copied to Mr Vickers) in which he stated that Mr Vickers had 'indicated his intention not to return following the completion of the notified 3 week period of personal leave'.[413]

298 This advice to CASA was quickly refuted by Mr Vickers, who (having received a call from CASA), emailed CASA saying 'I have not resigned as chief pilot of Skytraders' and that he would 'address Norman's incorrect email with the company'.[414] Mr Vickers' follow up with the company was in the form of a letter to Mr Mackay sent on 12 September 2019 (although mis-dated on its face as 11 August 2019). In that letter, Mr Vickers took issue with Mr Mackay having sent the email to CASA without having first discussed it with him. After setting out some earlier events, Mr Vickers stated:

I believed that it would be best to take that brief period of leave, due to a breakdown in trust between the principal parties in the Company, brought about in part because of management's interference in operations, against my wishes, and also what I believe is the manipulation of the Company to the benefit of one shareholder's interest and to the detriment of the others.

Responsibly, and entirely appropriately, I believed that the safety of the Company's operations was best served by my not being involved in day to day operations whilst I was doing this.[415]

299 Mr Vickers also indicated he was continuing to consider his position.

300 Mr Vickers' letter prompted the final salvo from Mr Mackay, a letter sent on 13 September 2019. After setting out the basis upon which Mr Mackay considered Mr Vickers had resigned, and noting various matters concerning CASA, Mr Mackay stated:

I now direct you not to further involve yourself in any such operational or management matters. You are currently relieved from all duties, being on leave, and once that leave ends you are no longer the Chief Pilot or Director of Operations.

...

For the sake of absolute clarity, I confirm the Company's position as follows: between now and the 16th of September you may continue your leave and are to take no further action or undertake any function as Chief Pilot or Director of Operations. On and from the 16th of September your resignation becomes effective.[416]

301 Despite the unequivocal terms of Mr Mackay's letter, Mr Vickers emailed all staff on the evening of Sunday, 15 September 2019 stating (inter alia) that he remained a director and the Chief Pilot.[417] Mr Mackay responded in turn later that evening, emailing all staff stating (inter alia):

I would like to make the Company's position perfectly clear as follows:

1. Terry is no longer the Skytraders Chief Pilot or Director of Operations.

2. For absolute clarity, Terry has been notified by a Letter of Direction dated 13 September 2019 that he is to take no further action or undertake any function as Chief Pilot or Director of Operations up until the end of his notification period and will cease to hold the position of Chief Pilot and Director of Operations on 16th September 2019.

...

4. In accordance with the Letter of Direction referenced above, Terry Vickers is not authorised to represent the company in any function as Chief Pilot or Director of Operations. All staff are reminded that under the Company Confidentiality policies and applicable federal legislation (including the Privacy Act and the Crimes Act) that staff are not authorised to discuss Company operational or management matters with persons not authorised to receive such information.[418]

302 In considering the consequences of the events set out above, it is important not to lose sight of the issue to be addressed. The issue for the Court is whether the actions in question, which, on any view, resulted in the cessation of Mr Vickers' operational role, constituted oppressive conduct. In my view, focusing wholly on whether or not Mr Vickers 'resigned' - in the sense that word is used in an employment context - distracts from the real issue. That is not to say that what Mr Vickers said in the critical conversations, and the context borne of both his actions and those of Mr Mackay, is irrelevant; on the contrary, those matters are of critical importance to the oppression enquiry. But the oppression enquiry is not resolved simply by asking whether or not Mr Vickers 'resigned'.

303 Having regard to the foregoing narrative of events, including the observations and findings expressed in the course of setting out those events, I am not satisfied that the cessation of Mr Vickers' operational role involved oppressive conduct. Whether or not there was oppressive conduct is to be assessed objectively.[419] Whether or not Mr Mackay's actions had the necessary element of commercial unfairness cannot be assessed by reference to whatever views Mr Vickers privately held and whether, in his own mind, he was going on leave and keeping his options open to consider his position (Premier's position) or was clear in his own mind by no later than 4 September 2019 (and likely before given nothing of moment happened between 27 August 2019 and that date) that he was not returning (the Mackay parties' position).

304 It is also important not to assess events coloured by the manner in which employment relationships more typically come to an end in less heated and volatile circumstances, such as where an employee decides to move on and submits a tidy letter of resignation. Mr Vickers and Mr Mackay were not 'employees' of Skytraders in the conventional sense. They were not paid salaries, but (from 2016) received reward through dividends by reference to their relative shareholdings.

305 Having regard to the foregoing narrative, my conclusions on the key issues are as follows.

306 First, I am satisfied that, whatever the precise words used by Mr Vickers in his conversation with Mr Mackay on 26 August 2019, he conveyed to Mr Mackay that he would not be remaining in his operational role as Director of Operations and Chief Pilot. However, given Mr Mackay's evidence that Mr Vickers had resigned to him (or threatened to resign) on several occasions in the past, but had ultimately stayed on, the first conversation on 26 August 2019 cannot reasonably be regarded as conclusive by itself. Importantly, Mr Vickers then phoned Mr Burnaby and told him he had resigned to Mr Mackay. I accept Mr Burnaby's evidence, and that of Duncan Mackay, in relation to that conversation. Mr Vickers' conveying his resignation beyond Skytraders' other director(s) and to an employee, albeit a senior one, set this resignation apart from Mr Vickers' earlier resignations or threats to resign. It reasonably confirmed Mr Mackay in his view that Mr Vickers was serious this time and was not coming back.

307 In that context, the debate (which attracted some attention during trial) as to whether or not the handling of the Hare matter, and the issues that arose in conducting the follow up meeting with Mr Hare on 26 August 2019, were really so difficult or important to precipitate the heated conversation between Mr Mackay and Mr Vickers which ensued, is not to the point. In any event, as Mr Vickers' evidence unfolded, it was clear that the breakdown was (for his part at least) precipitated by what Mr Vickers perceived as Mr Mackay's insistence that Mr Vickers give Mr Mackay's children his shares. I do not accept that Mr Mackay said words to the effect 'you promised to give my kids your shares'.[420] As submitted by the Mackay parties, it was well known to Mr Mackay that Mr Vickers had five children of his own. The idea that Mr Mackay would think Mr Vickers would simply give shares in the company - which were very valuable and which value he had spent a large part of his working life developing - to Mr Mackay's children, is preposterous. Rather, in my view, Mr Vickers' recollection has become confused and he has elevated inferences that he earlier made (noted above) into recollections of a position taken by Mr Mackay in circumstances where it was clear Mr Mackay saw his development of Skytraders over decades as the legacy he would leave to his sons, who had become involved in the business.

308 Even if Mr Mackay did make that suggestion, it was Mr Vickers' evidence that he had shown himself in the past to have no hesitation in telling Mr Mackay what to do with that particular idea.[421] In light of that, it is not apparent why the repetition of a suggestion - earlier emphatically rejected by Mr Vickers on his evidence - would precipitate such a breakdown in trust as to justify Mr Vickers suddenly going on leave to consider his options and seeing it as necessary to remove himself from day-to-day operations to preserve the safety of the operations of Skytraders.

309 It is likely that Mr Vickers' reaction in that phone call was affected by his simmering dissatisfaction with the way the company was being run. Having regard to the totality of the evidence, it was my impression that Mr Vickers felt threatened by the younger generation in Skytraders, particularly Mr Burnaby, and had a growing number of resentments relating to the events addressed earlier in these reasons (and the Sydney premises rental, discussed below), most of which he failed to raise directly with Mr Mackay, and which thus continued to fester all while he sporadically consulted lawyers.

310 Secondly, I am not satisfied that I should reject Mr Mackay and Mr Burnaby's evidence about what Mr Vickers said on 26 August 2019 based on the contents of Mr Mackay's voicemail to Mr Ide, text message to Mr Sharp and 11 September 2019 letter. In each of those communications, Mr Mackay referred to Mr Vickers having informed Mr Burnaby (or 'others' in the 11 September 2019 letter) of his resignation, rather than referring to Mr Vickers having resigned directly to him. Mr Mackay's evidence was that he regarded Mr Vickers' resignation on this occasion as different from previous occasions due to Mr Vickers' having called Mr Burnaby confirming his resignation.[422] He explained that this was why he used the language he did in his text message to Mr Sharp.[423]

311 Thirdly, Mr Vickers' misplaced call to Mr Mackay on 26 August 2019, when he thought he was calling Mr Sharp, clearly indicated that Mr Vickers was doing more than merely going on leave. While the call did not reveal quite what Mr Vickers was doing, Mr Vickers saying words to the effect of '[w]e are all organised and ready to go. Can you give me the contact details for your lawyers? We need to get on with this' would have objectively supported Mr Mackay in his understanding that Mr Vickers was not coming back (cf merely being on leave), but was readying himself to proceed with some significant action, whatever that was.

312 That impression would also have been reinforced by the information provided to Mr Mackay by Mr Sharp about just what it was that Mr Vickers was planning, namely an oppression proceeding.[424] Given that the commercial unfairness of Mr Mackay's actions is to be judged objectively, the fact that Mr Sharp was not cross-examined on the veracity of his report to Mr Mackay of his conversation with Mr Vickers does not mean that Mr Mackay's evidence about what Mr Sharp told him is irrelevant. Given what had earlier occurred between Mr Mackay and Mr Vickers directly, I consider it reasonable for a CEO and director in Mr Mackay's position to have taken into account what Mr Sharp told him (to the extent the multiple conversations to which Mr Mackay referred occurred before Mr Vickers was finally removed from his operational role).[425]

313 Fourthly, whatever ambiguity remained concerning Mr Vickers' decision to leave his operational roles after his calls with Mr Mackay and Mr Burnaby on 26 August 2019, that ambiguity was laid to rest by his complete vacation of his office. Even if Mr Vickers privately thought he was just clearing out his belongings to avoid them being tampered with, and had in mind that he could restore them if he and Mr Mackay patched up their differences, the important point is what the complete vacation of his office objectively communicated. As set out above, it was (quite fairly, in my view) regarded as indicating Mr Vickers was not coming back, whatever he had said in emails or at the Essendon café about going on leave. That was how Mr Burnaby, Mr Mackay and Mr Gronset understood it, and, as stated by Mr Mackay, the empty office was also contributing to the rumours and destabilised atmosphere at Skytraders, which needed to be addressed by making Mr Vickers' status clear with the staff.

(a) Mr Mackay reasonably had the impression Mr Vickers had resigned to him (albeit not using the word 'resign');

(b) Mr Vickers told Mr Burnaby, overheard by Duncan Mackay, that he had resigned to Mr Mackay and would only be back to clear out his office;

(c) Mr Vickers duly did clear out his office, completely;

(d) staff at Skytraders' Melbourne premises had seen Mr Vickers' empty office, had concluded Mr Vickers had gone and this situation was destabilising to the staff (together with the Biloela incident);

(e) Mr Vickers had intimated to Mr Mackay in the misplaced call that he was planning to take some steps involving Mr Sharp; and

(f) Mr Vickers had made veiled threats about getting CASA to ground the airline;

there was no commercially unfair conduct in Mr Mackay telling the staff on 4 September 2019 that Mr Vickers had resigned.

315 Further, in circumstances where (in addition to the matters just referred to):

(a) staff had been told by Mr Mackay on 4 September 2019 that Mr Vickers had resigned, and Mr Vickers, who was aware that the meeting had taken place, had not contacted Mr Mackay to refute that claim;

(b) the advice given by the CEO, Mr Mackay, to CASA that Mr Vickers had resigned, was publicly contradicted by Mr Vickers directly to CASA;

(c) CASA was Skytraders' principal regulator; and

(d) CASA was expected to be seriously concerned about a breakdown in relations at the senior level of Skytraders (a situation which would be laid bare by the public contradiction just referred to);

Mr Mackay's subsequent letters of 11 and 13 September 2019, by which he formally relieved Mr Vickers' of any continuing operational role, did not involve commercially unfair conduct. It was conduct that was commercially justified and which reasonable directors may have taken and was not oppressive.

316 Finally, for the avoidance of doubt, given the conclusions I have reached above concerning the existence of the SDA, Mr Mackay's actions, as referred to above, were not oppressive on the basis that they were in breach of the SDA. In my view, the events I have referred to above also mean that Mr Vickers could no longer reasonably expect to remain in the roles of Director of Operations and Chief Pilot.

317 There was no doubt that Mr Mackay had the power, and the numbers, to remove Mr Vickers from the board, pursuant to article 13 of Skytraders' constitution.[426]

318 Scarp (under Mr Mackay's control) requisitioned a general meeting by notice dated 20 September 2019.[427] The meeting was to take place on 14 October 2019. The notice proposed a single resolution removing Mr Vickers as a director. The accompanying explanatory statement contained the following explanation for the proposed resolution:

The current directors of the Company are Terrence Patrick Vickers and Norman Farquhar Mackay.

The Calling Member and another shareholder are of the view that to ensure the organisational stability and ongoing delivery of safe operations by the Company, the continuing service of Terrence Patrick Vickers as a Director of the Company is not in the best interests of the Company.

The Calling Shareholder is also of the view that, Terrence Patrick Vickers no longer holding the role of Chief Pilot of the Company nor having an ongoing active role in the business of the Company, it is appropriate and in the interests of the Company that he cease to be a Director of the Company.

On that basis, Members will be formally asked to exercise their rights as shareholders under the Constitution to remove him as a Director.[428]

319 The minutes of the meeting record that the resolution passed, with Mr Mackay voting for himself and Scarp, and Sallab by proxy.[429]

320 Although Premier only commenced its proceeding on 1 October 2019, by then the notice of meeting had been issued and the writing was on the wall, given Mr Mackay's majority control. Nevertheless, at no time has Premier sought the reinstatement of Mr Vickers to the board. In opening, counsel for Premier said (in answer to my having raised that the relief sought did not include the reinstatement of Mr Vickers):

No, the breakdown is too substantial for that. There's no doubt that Mr Vickers has proposed, before he was removed as a director, that the governance of the company should be completely rejigged. But absent some appetite to negotiate about that, then that will go nowhere.[430]

321 In his evidence, Mr Mackay detailed his thinking on the removal of Mr Vickers as follows.

322 First, he considered that Mr Vickers, having resigned from his management positions, was:

...behaving in what I considered was an increasingly dangerous, and erratic way, and appeared intent on wreaking havoc on the company to achieve his own ends. There was a real possibility, and I had a real apprehension, that Mr Vickers would use his position as a Director to create deadlock on the Board, as well as chaos and confusion amongst our staff and customers.[431]

323 Mr Mackay had, earlier in his first witness statement, detailed a number of events in the past couple of years which he considered showed increasingly strange and erratic behaviour on Mr Vickers' part. Those events included secretly recording a meeting with Department of Defence personnel in Canberra, only for his covert recording being discovered (despite being denied by Mr Vickers when confronted) and Skytraders suffering significant embarrassment.[432] Mr Mackay also referred to two incidents (in 2018 and 2019) in which Mr Vickers took positions in contract negotiations with government entities which Mr Mackay considered contrary to Skytraders' interests.[433]

324 Secondly, Mr Mackay considered that Mr Vickers had been dishonest and prepared to contradict him in the communications with CASA, staff and senior executives.[434] He considered Mr Vickers' conduct to be dishonest and a deliberate attempt to unsettle Skytraders' employees and in disregard of the company's interests.

325 Thirdly, Mr Mackay pointed to Mr Vickers failure to alert him to the Biloela incident as demonstrative of a lack of engagement and, in light of Mr Vickers' threats to ground the airline, a deliberate withholding of information so as to increase the risk of harm to the company.[435]

326 Fourthly, Mr Vickers' email communications with his solicitors (which were available to Mr Mackay as they were on Skytraders' server) in relation to CASA on 4 September 2019 caused him to believe he was dealing with an 'orchestrated campaign' and conspiracy by Mr Vickers to impede Skytraders continuing to fly.[436]

327 Fifthly, Mr Mackay referred to a number of discussions with Mr Sharp between 26 August and 20 September 2019 to the following effect:

John Sharp: "Terry has told me that he is going to launch an oppression case against you to boost the sale of his shares which he then plans to force you to purchase".

Me: "When it comes to bastardry, he's in a league of his own! Did he say anything else?"

John Sharp: "Yes, he also said he was going to advise CASA that the airline is dysfunctional to get them to ground it to increase the pressure on you to pay him a high price. He also said he would encourage the pilots to resign".

Me: "He is despicable. I need to advise my lawyers. Have you discussed this with Sam? What is your view on the way forward?"

John Sharp: "I told Sam that my advice is that you guys need to get Terry off the board as soon as possible as he is going to do substantial damage to Skytraders".[437]

328 Those discussions took place against the backdrop of other evidence (in particular of Mr Burnaby's call with Mr Vickers in the morning of 26 August 2019) where, to Mr Mackay's knowledge, Mr Vickers had intimated he could, or might seek to, have the airline grounded.

329 Premier contended in closing that the removal of Mr Vickers as a director of Skytraders was:

(a) contrary to the SDA; or, alternatively

(b) contrary to the Expectation (namely Mr Vickers' 'understanding and legitimate expectation that as an owner of Skytraders, he would be entitled to a seat on the board of Skytraders and to exercise a say in the management and affairs of Skytraders').[438]

330 The Mackay parties' principal contentions on the removal of Mr Vickers from the board were that:

(a) the removal was not contrary to the SDA because there was no such agreement;

(b) the removal was not contrary to the Expectation as it was pleaded in a way that linked Mr Vickers' seat on the board to his continuation in an operational role such that the removal of Mr Vickers from the board at a time when he no longer held an operational role was not contrary to the Expectation pleaded (and Mr Mackay's reasons for removing him are irrelevant); alternatively

(c) Mr Vickers' expectation of a seat on the board was not immutable and, by September 2019, Mr Vickers could not legitimately expect to remain on the board of Skytraders in the circumstances, which included his abrupt departure as Chief Pilot and Director of Operations, his decision to divest Premier's shares and his increasingly erratic behaviour extending to threats to have CASA ground the airline.[439]

331 The Mackay parties submitted that Mr Mackay had given unchallenged evidence that he removed Mr Vickers as a director of Skytraders because of:[440]

(a) his increasingly dangerous and erratic behaviour,[441] including increasingly strange behaviour in the period following his daughter's resignation;[442]

(b) embarrassing correspondence to CASA contradicting Mackay as Chairman and CEO;[443]

(c) Vickers' failure to raise the Biloela incident;[444]

(d) Mackay becoming aware of Vickers' email containing statements 'they are going to want an exit interview when I resign' and 'we might just slow down this further';[445] and

(e) conversations with Sharp wherein Mackay was told 'Terry has told me that he is going to launch an oppression case against you to boost the sale of his shares which he then plans to force you to purchase' and 'he was going to advise CASA that the airline is dysfunctional to get them to ground it to increase the pressure on you to pay him a high price'.[446]

332 Premier refuted the suggestion that Mr Mackay's evidence was unchallenged on those matters. It also submitted that, as the Mackay parties had not specifically pleaded Mr Mackay's reasons for removing Mr Vickers from the board, but had only relied on the validity of the resolution, it could not rely on the reasons of Mr Mackay notwithstanding that they were set out in the evidence. Premier submitted that, in any event, Mr Vickers had not threatened to breach his duties to the company so as to justify ejecting him from the board.[447]

333 Premier is correct insofar as it notes that the matters set out in Mr Mackay's witness statement concerning his reasons for deciding to initiate the removal of Mr Vickers from the board were not enumerated specifically in its Further Amended Defence. However, I am not persuaded that the Mackay parties are precluded from relying on the reasons advanced by Mr Mackay for the removal of Mr Vickers from the board for the following reasons.

334 First, the manner in which the Mackay parties' defence refers to the notice of general meeting at paragraph 31, reflects the terms of the FASOC to which they were responding, including the reference at paragraph 31 of the FASOC to the notice of meeting, and paragraph 34 by which Premier pleaded that it was by virtue of the removal of Mr Vickers being contrary to the SDA or the Expectation, that his removal was oppressive. As I have found against Premier on the existence of the SDA as pleaded, and as legitimate expectations are not immutable, there is no avoiding the need to assess the full factual context in which Mr Vickers was removed from the board. Necessarily, this includes the series of events referred to by Mr Mackay. The commercial unfairness of ejecting Mr Vickers from the board cannot be assessed in a factual vacuum which excludes those events. In addition, having allowed Premier to advance a case based on expectations that does not limit it to a contention that Mr Vickers' expectation of a board seat depended on remaining in his operational role (see paragraphs 116 to 120 above), it would be unfair to preclude the Mackay parties from advancing reasons why the removal of Mr Vickers was justified other than that Mr Vickers was no longer in [448]se operational roles.448

335 Secondly, and in any event, the matters referred to by Mr Mackay do not fall outside the terms of the explanatory statement in the notice of meeting. As noted above, the explanatory statement made reference - albeit in a shorthand fashion - to the need to ensure 'organisational stability and ongoing delivery of safe operations'. Mr Mackay's evidence, to which no objection was taken, addressed the need, in his view, to remove Mr Vickers from the board in the interests of Skytraders.

336 Thirdly, I do not consider there is any prejudice to Premier in having regard to the reasons advanced by Mr Mackay for removing Mr Vickers from the board. Premier submitted an additional four page submission in closing in which it refuted the Mackay parties' submission that Mr Mackay's evidence regarding his reasons for removing Mr Vickers from the board was unchallenged.[449] In that note, Premier referred to the passages of witness statements of Mr Vickers which it submitted showed those matters had in fact been 'addressed' by Mr Vickers.

337 Fourthly, the way in which the pleading contention was put by Premier in its closing submissions arose from its own contention that Mr Vickers had not committed or threatened to commit any breach of his duty of loyalty to Skytraders.[450] It was in that context that Premier raised the contention that no breach of duty had been pleaded. While Premier is correct that no breach of duty on the part of Mr Vickers was pleaded, the submission again misses the point that the factual circumstances in which Mr Vickers was removed from the board of Skytraders have to be examined in considering whether his removal involved oppressive conduct. That does not necessarily require characterising Mr Vickers' conduct as involving the actual or threatened breach of his duties.

338 Returning to matters of substance, the contention that the removal of Mr Vickers from the board constituted oppressive conduct runs into an initial hurdle. As referred to above, Premier's opening explained its failure to seek reinstatement of Mr Vickers to the board in terms which acknowledged, unequivocally, that Mr Mackay and Mr Vickers' relationship was such that they could not function together as a two person board. Once the relationship between Mr Vickers and Mr Mackay had broken down, and Mr Vickers had permanently left his operational roles (however that came about), the only alternative would have been for Mr Mackay to leave Mr Vickers on the board, but that is the very circumstance which Premier has acknowledged was unworkable. Nevertheless, the emergence of irreconcilable differences (which make the continuation of a functioning working relationship impossible) does not mean that the conduct of the majority (in procuring the removal of the minority's nominee) cannot be oppressive. As set out above (see paragraphs 33 to 35 above), it is necessary to consider how the irreconcilable differences emerged and the impact of the events in question on whether or not it remained reasonable for the ejected director to expect to retain a seat on the board.

339 While I was initially somewhat troubled by Mr Mackay's haste in removing Mr Vickers from the board before seeing whether they could sensibly function together as board members, having regard to the totality of the evidence and Premier's acknowledgement just referred to, I consider that waiting for a further clash to take place at the board level would merely have delayed the inevitable. The long and short of it is that, in circumstances where:

(a) Mr Mackay and Mr Vickers could not work together as board members;

(b) Mr Vickers had made veiled threats to ground the airline and was seeking to use CASA as leverage;

(c) Mr Vickers was publicly undermining the CEO through his emails to CASA and Skytraders' staff contradicting Mr Mackay; and

(d) Mr Vickers was clearly preparing to take legal action against the majority shareholder and/or the company,

Mr Vickers could not have continued to hold any reasonable expectation that the majority shareholder would refrain from exercising rights under the constitution to control the composition of the board. As such, and given I have found against Premier on the existence of the SDA (which would have guaranteed Mr Vickers a board seat indefinitely come what may), I do not consider that the removal of Mr Vickers from the board constituted oppressive conduct by virtue of being inconsistent with the SDA or Mr Vickers' reasonable expectations.

340 Of course, conduct can be oppressive even if it does not involve the breach of an agreement or the disappointment of an expectation reasonably maintained. However, for the same reasons, I consider that the removal of Mr Vickers from the board did not involve oppressive conduct. It was not commercially unfair in the circumstances. If it is necessary for me to express a conclusion on who was responsible for the breakdown, in my view the final breakdown in Mr Vickers' and Mr Mackay's relationship was largely Mr Vickers' doing by virtue of the matters referred to in paragraphs 314-315 and 339 above and 345-346 below.

341 In light of that reasoning, the reasons Mr Mackay advanced for removing Mr Vickers from the board recede in importance, as does the significance of the pleading contention referred to above. Nevertheless, I will address the principal reasons advanced by Mr Mackay in his evidence and by the Mackay parties in submissions.

342 In relation to the approach taken by Mr Vickers in contract negotiations in 2018 and 2019, while Mr Mackay's ire at Mr Vickers making statements at odds with Skytraders' proposals and his own negotiating position is understandable, there are many ways in which contract negotiations can be conducted. Pointing to ways to cut costs for the client may be seen to build rapport and trust with the client, even if the company being represented will not make as much money from the contract as otherwise it would. As such, I do not consider that the conduct of Mr Vickers in those two negotiations lends material support to the justification for removing Mr Vickers from the board based on erratic behaviour.

343 Mr Vickers' conduct in the 2017 meeting with the Department of Defence in which he secretly recorded a meeting with government officials is in a different category. To say that Mr Vickers' conduct was ill-judged is an understatement; it was breathtaking and patently damaging to Skytraders' interests. Were it not for the concession by the Mackay parties in closing that, the incident having occurred in 2017, it did not loom large in Mr Mackay's decision to remove Mr Vickers from the board in 2020, I would have considered the incident alleged to give considerable support to the contention that Mr Vickers had engaged in erratic behaviour, and his continuation as a director, clothed with the authority that position carries, posed a risk to Skytraders. I also note that, while not known by Mr Mackay at the time, Mr Vickers had continued his habit of secretly recording conversations, including conversations with his fellow director, Mr Mackay.

344 For the reasons set out above, I do not consider that Mr Vickers countermanded the usual safety procedures, resulting in Mr Mackay not being informed of the Biloela incident. Mr Vickers was (on his view) on leave or (on Mr Mackay's view) had just resigned and, at best, was on leave during a period of notice during which Mr Gronset was Acting Chief Pilot. At most, the fact that Mr Vickers did not communicate with his fellow director about such an important event lends some, albeit limited, support to Mr Mackay's position that Mr Vickers was disengaged.

345 I do, however, regard the correspondence sent to CASA by Mr Vickers flatly contradicting the CEO's email to the regulator as conduct that may fairly be regarded as contributing substantially to a view that Mr Vickers was undermining the company. As noted above, it was a strong theme of Mr Vickers in his interactions with others that CASA getting wind of a breakdown in relationships at the senior levels of an AOC holder could lead it to be concerned about the stability, and in turn safe operations, of an airline. It is hard to conceive of a circumstance that exposes internal disagreements more starkly than issuing a contradiction of a CEO's email on an important subject directly to CASA.

346 I am also satisfied, based on the evidence, that it was part of Mr Vickers' strategy to use his position as the Chief Pilot approved by CASA and the threat posed by the potential for CASA to ground the airline, as leverage. While Mr Mackay was not aware of all that is revealed by the file notes of the meeting with lawyers on 3 September 2019 when he initiated the removal of Mr Vickers from the board on 20 September 2019, he was aware of Mr Vickers' emails to his lawyers of 4 September 2019, which suggested that Mr Vickers was using CASA as a point of leverage. By 20 September 2019, Mr Mackay had also been informed by Mr Sharp of Mr Vickers' strategy to use CASA as leverage,[451] and was aware of the statements made by Mr Vickers to Mr Burnaby in the morning of 26 August 2019. These matters constitute substantial support for the view that Mr Vickers ought not remain on the board.

347 For the foregoing reasons, in my view the removal of Mr Vickers from the board did not constitute oppressive conduct.

348 In addition to advancing allegations of oppression arising from the conduct of Mr Mackay's family members, the cessation of Mr Vickers' operational roles and his removal from Skytraders' board, Premier alleged that various 'financial irregularities' constituted oppressive conduct. To put those allegations in context, some features of the financial arrangements with Skytraders should be noted.

349 Skytraders maintained loan accounts associated with each of Mr Mackay, Mr Vickers, Mr Sharp and Sallab. Personal expenses were paid for on company cards, and the expense allocated to the various loan accounts. This practice was adopted as Messrs Mackay, Vickers and Sharp were not paid salaries and, according to Mr Vickers, Mr Mackay was reluctant for the company to declare a dividend until he had resolved the tax effective structuring of his personal affairs.[452] Although salaries were not paid, consulting fees were charged by Mr Mackay's family trust, Premier and Thenford Consulting (Mr Sharp's company).[453] Consulting fees paid to Thenford Consulting ($503,604) were treated as if they had been paid to Sallab when the income reconciliations were undertaken.[454]

350 Skytraders did not pay a dividend until the end of the 2016 financial year. It then paid a dividend of $25 million. The various loan accounts were squared off against the dividends at that time and when subsequent dividends were paid.

351 At the time the 2016 dividend was paid, the loan balances were as follows:

(a) Freight: $567,748;

(b) Mackay Family Trust: $3,059,667;

(c) Norman Mackay: $524,556;

(d) Premier: $3,622,548;

(e) 'Sallab 2' (being the designation for the loan account associated with Mr Sharp via his company, Thenford Consulting)[455]: $155,289;

(f) Sallab: $403,819.[456]

352 The Sallab loan account recorded an advance of $350,000 and interest.[457]

353 Two further matters of context should be noted. First, the various financial irregularities were added to Premier's oppression proceeding after its commencement, and after Mr Vickers' employment had ended and he had been removed as a director. They are not matters that contributed to Mr Vickers and Mr Mackay falling out in August 2019. Secondly, and relatedly, it was Mr Vickers' evidence that the financial irregularities were added to the claim after his son combed over the Xero accounts which were made available to Mr Vickers and Premier after Mr Vickers' access had initially been terminated on a date around 22 November 2019.[458] There is no indication in the evidence that Premier raised these matters and sought an explanation before including them in its Statement of Claim. Nor is it obvious why Premier persisted in taking many of these claims to trial despite having received Mr DeAngelis's witness statements explaining them, and where no real challenge was mounted to his evidence. Premier did not make any submissions in closing regarding a number of the alleged irregularities, despite not having conceded them.

354 From the inception of their relationship, it was agreed between Mr Vickers and Mr Mackay that Mr Mackay would continue to receive income generated from the Tasman Cargo Airlines (TCA) business. That business was part of Skytraders' air freight operations, which predated Mr Vickers' involvement in the company. The need to distinguish income and expenses relating to the TCA business from the income and expenses of the rest of Skytraders' operations led to what the CFO, Mr DeAngelis, described as practices that were not 'textbook accounting'.[459] Specifically, a ledger was created, called the 'Freight ledger' which recorded transactions associated with the TCA business. There was also a loan account designated 'Freight'. The TCA business (or Freight business, as it was commonly referred to in the evidence) had a dedicated bank account, albeit held in the legal name of Skytraders.

355 The unorthodox accounting method of running two general ledgers for one company was not desirable, but was adopted at the instigation of Mr Vickers.[460] It was Mr Vickers' suggestion that 'freight be run as a separate entity and only consolidated for end of year purposes.'[461] Mr DeAngelis was relieved when the TCA business concluded in 2017 and the unorthodox accounting practices involving the Freight ledger could be terminated.[462] There was nothing clandestine in the existence of the Freight ledger;[463] it was an inelegant accounting solution to a problem borne of the agreement that Mr Mackay could retain the TCA income, while being responsible for expenses associated with that part of the business.

356 While much was made by Premier of Mr Vickers not being aware of the contents of the Freight ledger (such that he reasonably supposed all personal expenses were being recorded in one of the many loan accounts), it was Mr Vickers' choice not to take up the offer of access to the Freight ledger.[464] That said, Mr Vickers would have been entitled to assume that the Freight ledger and the Freight loan account were being administered appropriately such that the main Skytraders business was not ultimately bearing the cost of supporting the TCA business, or bearing the costs of Mr Mackay's personal expenses, whether or not Mr Vickers chose to avail himself of the opportunity to access detailed information.

357 Skytraders was the legal entity with the TCA contract. This meant that a single tax return was submitted for Skytraders, which included assessable income and deductions referable to both the TCA business and Skytraders' main business. Running effectively two businesses through one legal entity created other accounting issues relating to allocation of fringe benefits tax and other costs, and having (at least for a time) separate asset registers.

Premier's complaints regarding the Freight ledger

358 Premier advanced two principal complaints in relation to the Freight ledger. First, it contended that Skytraders was exposed to the risk of an audit by the ATO on the basis that Mr Mackay's private expenses appear on the Freight ledger.

359 Secondly, it contended that Skytraders had 'funded' the Freight ledger to the tune of $176,703 in the period 1 July 2014 to 30 June 2016. This was defined as the 'Freight Subsidy'. Premier contended that Mr Mackay had personally benefitted, and Skytraders had suffered detriment, to the extent of the Freight Subsidy.

Private expenses charged to freight ledger and ATO audit risk

360 It was not in issue that a great many personal expenses of Mr Mackay appear on the Freight ledger. It was also clear that the Freight ledger and Skytraders' main ledger were combined to represent the overall position of Skytraders in its end of year accounts. The evidence included consolidation worksheets tracking the profit and loss of the main Skytraders ledger and the Freight ledger.[465]

361 Premier's thesis was that personal expenses appearing in the Freight ledger were therefore claimed as deductions against assessable income by Skytraders, exposing the company to the risk of audit and penalties. However, the evidence was that Skytraders left it to its external accountants to decide which expenses should be claimed as deductions when Skytraders submitted its tax returns.[466] There was no evidence that tax returns had been submitted that included personal expenses as deductions against assessable income, despite a subpoena having been issued by Premier to Skytraders' former external accountants, Martin Co. Given the task allocated to the external accountants, I do not consider it open to me to infer that personal expenses were claimed as tax deductions, such that the Mackay parties' failure to call a witness from Martin Co ought to attract an adverse inference.[467]

362 In the absence of any proof that personal expenses were deducted, the risk of an ATO audit is theoretical, and the risk of penalties or other adverse consequences even more remote. As such, in my view, Premier has not made good the contention that Mr Mackay exposed Skytraders to the risk of investigation, audit and enforcement action by the tax authorities.[468]

363 Amounts recorded in all director/shareholder-related loan accounts maintained by Skytraders were offset when dividends were paid, effectively paying out those loans. Loan account entries were detailed and visible to Mr Vickers when the CFO circulated paperwork relating to the issue of dividends and the balance to be paid after loan accounts were cleared.

364 Premier's complaint was not about the contents of the Freight loan account (which was paid off periodically), but the Freight ledger. Its thesis was that private expenses were being allocated to the Freight ledger which should have been, but which were not, recorded in the Freight loan account. While it is not difficult to understand how that hypothesis developed, it was not borne out when the CFO, Mr DeAngelis, explained some of the intricacies of how the ledger was run.

365 The Freight ledger and the Freight loan account did not mirror one another. As explained by Mr DeAngelis, Mr Mackay had a company credit card in respect of the Freight business, and amounts paid on that card would be recorded in the Freight ledger,[469] along with transactions on the two Freight-related bank accounts, any manual entries and a number of other types of entries.[470] Mr DeAngelis also gave evidence that the accounting staff would periodically undertake reconciliations between the Freight ledger and the Freight loan account and, where necessary, create a 'balancing journal' entry to record net position, but did not create such balancing entries line by line.[471] Accordingly, no conclusions can be drawn from examining the Freight loan account and trying to identify specific items of personal expenditure appearing on the Freight ledger but not on the Freight loan account. In any event, Mr DeAngelis explained that any personal expenses of Mr Mackay that were paid for from the Freight-dedicated bank account were already being paid for from funds to which Mr Mackay alone was entitled, therefore they did not need to be recorded in the Freight loan account.[472]

366 Mr DeAngelis also gave evidence that, where the Freight ledger showed accumulated losses in a particular year, the 'subsidy' for that year (being amounts borne by Skytraders, but in respect of the Freight business) would be brought across to the Freight loan account.[473]

367 Some issues explored in cross-examination were also explained by Mr DeAngelis in ways that showed end of year figures in consolidations could not be relied on for some forensic purposes, as they would not reveal transactions during the year.[474]

368 Sums passing through the Freight ledger were small in comparison to the whole of the Skytraders business, making up 0.56% of Skytraders' total expenses.[475]

369 Mr DeAngelis explained that, when the Freight business closed and the Freight ledger could be retired in the 2018 financial year, a reconciliation was performed, which identified that Mr Mackay owed the company $48,884.25.[476] This was discharged by the amount owed to Skytraders being offset against a larger amount owed by Skytraders to Mr Mackay's interests in connection with the Sydney premises rental. However, the relevant point for present purposes is that:

(a) a reconciliation was performed; and

(b) the net owing to Skytraders was dealt with in a way that did not leave the company out of pocket such that the main Skytraders businesses ultimately subsidised the Freight business.

370 The only basis upon which Premier contended that there remained some 'subsidy' which advantaged Mr Mackay at the expense of Skytraders, was by performing the calculations set out in Premier's closing submissions as follows:

In FASOC # 35(d), the Plaintiff analysed the Freight ledger as follows: to the starting balance at the end of FY2014 of $201,647 was added Tasman Cargo revenue of $187,556 and other source revenue of $3,824 and private expenses of Norman Mackay of $500,941 were deducted. The balance of $176,703 was defined as the "Freight Subsidy".[477]

371 The footnote to the figure of $500,941 in personal expenses stated 'Totalled from entries at CB.14597-14726'. The reference was accordingly to over 100 pages of the Court Book containing printouts of the Freight ledger. No attempt was made to identify which entries had been selected for inclusion in the $500,941 figure. I would not be prepared to rely on Premier's calculation for this reason alone. However, Premier's calculation also suffers from the following additional flaws:

(a) the figures set out do not in fact add up to $176,703 in any case;

(b) the starting figure of $201,647 is the cash position of the Freight business in a balance sheet, but the subsequent steps in the calculation then add and subtract figures that would be expected to be recorded in a profit and loss statement; and

(c) the calculation ignores the evidence of Mr DeAngelis to the effect that regard could not be had only to end of year figures if trying to understand the position of the Freight ledger vis-à-vis the Freight loan account and the ultimate reconciliation and netting off conducted in 2018.

372 I accept that Skytraders did not maintain and present a neat record which would have allowed intra-year transactions to be identified and forensically examined. Nevertheless, I am satisfied, based on the explanations of Mr DeAngelis, that although the accounting treatment was far from tidy, it did involve a system whereby the operating deficits of the Freight business were ultimately properly accounted for such that Skytraders did not subsidise Mr Mackay's freight business to his benefit, but at Skytraders' expense.

373 Accordingly, I reject Premier's contentions regarding the Freight ledger.

374 The FASOC identified four loan account transactions that were said to be 'unexplained and or unauthorised': [478]

MARTINCO - 2015 YEAR END JOURNALS Glenquarry Park Investments

375 Each of these entries was satisfactorily explained by Mr DeAngelis. In one instance, there was an accounting error, but it was rectified.

376 The $48,884 entry was a credit applied to account for the fact that rent payable by Skytraders for its occupation of Mr Mackay's the Point Piper property had been underpaid by Skytraders due to an administrative error. There was a 'catch up' payment, calculated at the end of the lease, and Skytraders' debt was discharged, in part, by the direction of this credit to the Freight loan account.[479] In closing submissions, the only complaint that was apparently maintained about this amount (in addition to the over-arching complaint about the Sydney premises rental as a whole) was that there had not been a specific journal or other document produced by Mr DeAngelis in respect of it.[480] In my view, Mr DeAngelis has adequately explained this amount and how it was treated.[481] Skytraders also produced an accounting record documenting the way in which that sum was credited to the amount owing in respect of the rental of the Sydney premises.[482]

377 The $39,740 entry reflected a credit applied to the Freight loan account when, at the suggestion of his senior accountant, Mr DeAngelis approved the consolidation of the fixed asset registers in 2016.[483] Consolidating the separate fixed asset registers hitherto maintained by the Freight and main Skytraders business was considered advantageous because it would eliminate the need to run depreciation in two separate registers and undertake associated end of year processes. The effect of the consolidation was that Skytraders acquired assets to its fixed asset register, triggering the credit being applied to the Freight loan account. That was an inadvertent side-effect of the register being consolidated, which Mr DeAngelis did not pick up on at the time. When the matter was complained of in the Statement of Claim, Mr DeAngelis investigated it, recognised the error, and arranged for Scarp to pay $39,740 to Skytraders in February 2020.[484] Accordingly, although Premier was correct to identify this as a transaction which benefitted Mr Mackay at the expense of Skytraders, it was the result of an inadvertent error on the part of accounting staff, and was rectified promptly once raised. Accordingly, the making of the initial error does not constitute oppressive conduct.

378 The $80,000 entry was explained by Mr DeAngelis as follows:

When the Company stopped providing consulting fees to Messrs Mackay, Vickers, and Sharp, a reconciliation payment was made. The $80,000 paid to Glenquarry Park Investments Pty Ltd on or around 1 July 2015, was part of this reconciliation. The reconciliation is set out in an attachment to an email sent by me to Messrs Mackay, Vickers, and Sharp on 19 December 2017, as part of the payment of a dividend, being dividend 13, declared and made in or about 18 January 2018. At CB [3048] of the Court Book is a copy of that email and the attached work paper, which I prepared, and which constitutes the reconciliation.[485]

379 The working papers to which Mr DeAngelis referred show that consulting fees totalling $1,281,072.80 had been paid or credited to Mr Mackay's family trust or Glenquarry Park between 1 July 2014 and 31 December 2017.[486] That amount, necessarily including the $80,000 in question, was then recorded as part of the 'shareholder income' referable to the Mackay Family Trust as part of the 'total benefit received' and netted off against the allocation of profit due to each shareholder.[487] Accordingly, the entry in question is neither unexplained, nor one which inappropriately benefitted Mr Mackay as it was netted off against profit allocations when dividends were paid out. Premier made no submissions in closing in respect of this amount, but did not concede it either.

380 In respect of the $2,539 entry, Mr DeAngelis' evidence, which was not challenged, was that:

There were employees who did work for Mr Mackay in the Freight business. The expense for these employees were allocated to the 'Freight' ledger. Employees working within the 'Freight' ledger were required to be covered under Skytraders' workers compensation insurance. This was because the ultimate legal entity of 'Freight' was Skytraders. ...

The journal processed by Sophia Ma was a standard end of year reconciliation between amounts paid and accrued between the Skytraders' and the 'Freight' ledger, as at 30 June 2015. At page CB [2152] of the Court Book is the Xero journal generated to show the reconciliation for $2,539 on 30 June 2015.

These reconciliations were made at the close of each financial year, to ensure amounts that were 'Freight' ledger expenses, or Skytraders' expenses, were properly allocated, and paid for by the economic unit that had incurred them.[488]

381 Mr DeAngelis was not cross-examined on his explanation. It appears that Mr Vickers was correct, in his evidence,[489] to question Mr DeAngelis' reference to an entry being made to the Freight ledger when the journal referred to contained reference to the Freight loan account. However, the question of whether (in light of double entry bookkeeping) the 'credit' to that account stood to Mr Mackay's benefit was not explored with Mr DeAngelis in cross examination. In any event, in light of:

(a) Mr DeAngelis' evidence that the staff were alert to the need to allocate expenses associated with the Freight business so that they were appropriately borne by Mr Mackay's interests;

(b) the trivial amount in question in the context of the Skytraders' business; and

(c) the lack of any indication Mr Mackay had any knowledge or involvement in this expense allocation;

there is nothing in this line item which supports Premier's oppression case. Premier made no submissions in closing in respect of this amount, but did not concede it either.

382 Premier's contention was that, whereas the provision of motor vehicles was not part of the entitlements enjoyed by directors and managers of Skytraders, Mr Mackay caused or permitted Skytraders to purchase, depreciate and write off motor vehicles for his private use. The motor vehicles in question were:

(a) a Porsche, acquired for $95,740 in August 2010 and disposed of for $0 on 30 June 2017 when the accounts of Skytraders identified the value of the vehicle as being $13,272; and

(b) a BMW X6, acquired for $99,031 in May 2012 and disposed of for $0 on 30 June 2017 when the accounts of Skytraders identified the value of the vehicle as being $15,631.

(a) the two vehicles were paid for using funds in the freight bank account and were recorded as assets in the Freight ledger;

(b) expenses associated with the vehicles were allocated to the Freight ledger;

(c) Mr Vickers was aware of the vehicles and the way in which they were accounted for so that the expenses were born by the Freight ledger (or loan account) since at least August 2013; and

(d) the fixed asset register associated with the Freight business was consolidated with the main Skytraders fixed asset register to avoid the need to run depreciation in two separate asset registers, there was an error in the accounting method by which this was done, which was rectified when it was raised by Premier in this litigation.[490]

384 Contrary to Premier's submissions,[491] it was not unclear based on Mr DeAngelis' evidence whether Skytraders had 'subsidised' Mr Mackay in respect of the vehicles. Skytraders' main business had not subsidised Mr Mackay as the costs were allocated to the Freight ledger or loan account. Further, any remaining uncertainty about whether or not Skytraders' claimed depreciation on Mr Mackay's cars,[492] is irrelevant given Mr DeAngelis explained that fringe benefits tax had been paid on the vehicles and in fact it was Mr Mackay who was personally worse off by virtue of the cars being held within the business (as compared with the cars being held in his own name).[493]

385 In its closing submissions, Premier contended that it had made out its pleaded allegation that Mr Mackay 'caused or permitted Skytraders to purchase, depreciate and write off motor vehicles'.[494] That may be so, but it is not to the point. As Mr DeAngelis explained in his evidence, the costs of the vehicles were allocated to the Freight side of the business, the benefit and burdens of which rested with Mr Mackay. As such, the purchase and subsequent treatment of the private vehicles does not support Premier's oppression claims.

386 Premier contended that the rental fees paid to Scarp by Premier for occupation of the Sydney premises owned by Scarp were:

(a) not authorised by Skytraders and were without the knowledge of Mr Vickers; and

(b) were to the benefit of Mr Mackay and Scarp and/or to the detriment of Skytraders.[495]

387 In its closing submissions, Premier pointed to the lack of board records approving the rental fee. It also pointed to evidence of Mr DeAngelis in cross-examination concerning the strength of his recollections regarding conversations involving Mr Vickers, and submitted that the 'vague evidence' of Mr DeAngelis 'does not establish that Terry Vickers knew about any such weekly rental obligation, let alone that he approved it'.[496]

388 Mr Mackay and Skytraders' administrative staff were based in Sydney. The Sydney-based staff, numbering about half a dozen,[497] occupied premises owned by Mr Mackay (through Scarp) in Point Piper, Sydney for approximately three years while Skytraders' premises at Woollahra were being renovated. While it was originally anticipated that the renovations would only take seven or eight months - meaning that Skytraders was looking for short term accommodation - the project ultimately took three years due to disputes with the builder and architect.[498] Mr DeAngelis gave evidence that it was difficult to find suitable short term accommodation with parking on acceptable terms (rental level and make good obligations).[499]

389 While the Point Piper property was not an ideal solution, from Mr DeAngelis' viewpoint, it had some favourable features: the rent was cheaper than other options, it provided flexibility (in terms of the period of occupation), had parking, and did not come with onerous terms.[500] The rental ($2200 per week, including GST) was calculated based on rental of similar properties in the area, and subsequently supported by a valuation in June 2018.[501] Payment of the rent was not handled seamlessly, with payment accidentally being made monthly (not weekly) initially, and a reconciliation at the end of the 2020 financial year identifying an underpayment of $172,200.20, which was addressed through a combination of a payment to Scarp and credits to Scarp's loan account with Skytraders.[502]

390 Mr Vickers was aware the Sydney team was occupying the Point Piper premises, having been notified of the move and having attended there personally.[503] Mr Vickers did not dispute that he was aware that the Sydney team was occupying those premises.[504] Premier did not assert that the rent was above market rates; rather, Mr Vickers' complaint was that 'I was not consulted, and I did not approve or authorise, this fee'.[505] Mr Mackay's evidence was to the contrary. He stated that he discussed the rent with Mr Vickers prior to any payment of rent being made. Mr DeAngelis' evidence was that the monthly bank transfers started some months after the move into the Point Piper premises, probably in early 2018.[506] Mr Mackay also referred to a meeting having been held at the Point Piper premises, attended by Mr Vickers, amongst others, in which the rental was discussed, Mr DeAngelis explained the amount of the rental charge and Mr Sharp responded that it sounded fair.[507] According to Mr Mackay's evidence, Mr Vickers did not say anything.[508] This evidence was generally supported by Mr DeAngelis.[509]

391 In his second witness statement, Mr Vickers accepted he knew of the move to Point Piper, and that the premises were owned by Scarp, but denied he knew rent was being charged until Skytraders received an invoice for $123,514.28 (inc GST) on 30 June 2018.[510]

392 In cross-examination, Mr Vickers was asked why, if he was shocked about the invoice, he did not raise his concern with Mr Mackay or Mr DeAngelis. His answer, when the question was put a third time (after two non-responsive answers in which Mr Vickers raised concerns at a lack of consultation given Mr Mackay's conflict of interest) was that 'I didn't [raise a complaint]. I just didn't.'[511] Mr Vickers also gave evidence in cross-examination that he and Mr Sharp had discussed their concerns at the rental charges but that, at the meeting at which the rental charge was raised by Mr Sharp and Mr DeAngelis explained the charge, he and Mr Sharp accepted it. Mr Vickers' evidence was as follows:

What's your version of what Mr Sharp said?---John was quite concerned about it.

Did he then accept the explanation that was given by Mr DeAngelis?---The horse had bolted, Mr Collinson.

No, I'm just asking for facts. Did Mr Sharp say words or indicate whether he accepted the explanation given by Mr DeAngelis?---Yes. We accepted it. There's no question.

You accepted it?---Yeah.[512]

393 Mr Vickers' recollection was that when Mr Sharp raised the charge, he clearly indicated he was unhappy about it, and Mr Mackay's response was to the effect 'that's pretty much how it is',[513] apparently indicating an unwillingness to reconsider the charge.

394 Shortly before this evidence, Mr Vickers also made reference to Mr Sharp having raised the charge and 'it was just basically virtually shouted down anyway' and that, to raise a complaint about the charge would be 'fighting battles'.[514]

395 Although it was not clear on the evidence when in 2018 the meeting took place,[515] according to Mr Vickers' evidence, he and Mr Sharp accepted the charge. There is no evidence that any ongoing dissatisfaction with the rental was raised by Mr Vickers before the proceeding was issued. Mr Vickers' acceptance of the rental charge does not mean the charging of rental by the CEO for the benefit of a personal company cannot constitute oppressive conduct (particularly where it is clear from their evidence that Mr Mackay has an arrogant, dominant, and domineering manner and Mr Vickers was reluctant openly to challenge Mr Mackay). Nevertheless, in my view the rental charges do not constitute oppressive conduct on the basis that:

(a) contrary to Premier's contentions, the charges were 'authorised' by Skytraders when Mr Vickers and Mr Sharp were made aware of the rental and accepted them, albeit that the approval was informal (and perhaps given by Mr Vickers with some resentment)[516] and the charges were made with Mr Vickers' knowledge;[517] and

(b) contrary to Premier's contention that rental fee was 'to the detriment of Skytraders',[518] the Sydney staff needed accommodation, obtaining that accommodation was clearly going to cost money, whoever the landlord was, and there is no evidence that the amount of the charge exceeded a reasonable market rent for those premises, or that suitable premises were available on the market at a lesser charge in the circumstances about which Mr DeAngelis gave evidence.

38. Further or alternatively:

(a) Norman Mackay has caused Skytraders to provide per diems and pay expense claims for transactions and or purchases by him and his family members that are not associated with the operations of Skytraders including:

(i) flat screen televisions;

(ii) photographic equipment;

(iii) purchases from a gun shop in Bowral, New South Wales;

(iv) personal entertainment expenses including entrance fee and annual subscription fee to the Australian Club of New South Wales ($13,000), Royal Motor Yacht Club of New South Wales and Royal Prince Edward Yacht Club ($7,971);

(v) undertaking valuation of shares in Skytraders by Furey Consulting on or about 16 December 2014, which valuation was for purposes personal to Norman Mackay; and

(vi) undertaking taxation advice from Titan Partners on or about 30 September 2014, which taxation advice was for purposes personal to Norman Mackay.[519]

397 Premier contended that these expenses were not authorised by Skytraders, were made without the knowledge of Mr Vickers and were to the benefit of Mr Mackay, and his related entities and/or to the detriment of Skytraders.

398 The complaint made about payments made to Furey Consulting and Titan Partners was not pressed by Premier in its closing submissions.[520] Despite the other items pleaded not being formally conceded by Premier, no submissions were made on them in Premier's written or oral closing submissions. Nevertheless, as they have not been conceded, I address each pleaded expense claim below.

The flat screen TV and the photographic equipment

399 Mr DeAngelis explained that Skytraders had a somewhat unorthodox means of paying bonuses. Employees used their corporate credit cards to purchase items of their choosing and the resulting expenses were allocated to an unused travel expense account to keep track of the bonus payments.[521] Mr DeAngelis verified that the TV and photographic equipment expenses were bonuses paid in this manner. He also detailed bonus payments made to Mr Vickers' daughter, Ms Vickers, in the same manner (which included a fridge from Harvey Norman).

400 Mr Vickers accepted Mr DeAngelis' explanation in cross-examination.[522]

Purchase from gun shop in Bowral, New South Wales

402 On 6 April 2019, Calum Mackay purchased ammunition for clay pigeon shooting from a gun shop in Bowral, New South Wales. The cost of this purchase was $223 (inc GST). On 8 April 2019, Calum Mackay sent an email to the Skytraders finance department requesting the expense be reimbursed, attaching the relevant receipts and describing the purchase as being 'for an upcoming Executive Committee event'.[523] Skytraders subsequently reimbursed Calum Mackay for the expense.[524]

403 Calum Mackay gave evidence that the purchase was made on his personal credit card, at Duncan Mackay's request, and related to a clay pigeon shooting team building exercise to be undertaken at an executive team event that was planned to occur in April 2019 at a farm owned by Mr Mackay. Calum Mackay's evidence was that, while most of the activities to be undertaken at the event were business meetings, there were also 'team building exercises', such as the clay pigeon shooting. As Calum Mackay considered the expense to relate to a 'company activity', he claimed a reimbursement for the expense by emailing the receipt to Skytraders' finance department on 8 April 2019, as detailed above. The executive team event did not ultimately occur due to the passing of Duncan Mackay's mother in law and the pregnancy of Mr DeAngelis' wife.[525] Calum Mackay's account was supported by the evidence of Mr DeAngelis, Mr Mackay and Duncan Mackay.[526]

404 Mr Vickers gave evidence that the gun shop expense was not a 'proper business expense'[527] and, after reviewing Mr Mackay's explanation of the expense, that there had been no approval by the board.[528] In cross-examination, Mr Vickers stated that he did not know whether the expense was in relation to a company activity, but did not 'quibble' with the explanation of the expense provided by Calum Mackay.[529] Mr Vickers accepted that he would not expect the board to be required to approve the expenditure of $223 on clay pigeon shooting ammunition.[530]

405 There is no substance to the allegation concerning this $223 expense. It was a legitimate business expense, not requiring board approval.

406 Premier alleged that Mr Mackay had caused Skytraders to pay personal entertainment fees, for his own benefit, in the form of entrance fees and annual subscription fees to the Australian Club of New South Wales, the Royal Motor Yacht Club of New South Wales and the Royal Prince Edward Yacht Club, and further that these payments were made without the knowledge of Mr Vickers and were to the detriment of Skytraders.[531]

407 It was Mr Vickers' evidence that these fees were paid on a corporate credit card in the period between July 2014 and November 2018,[532] and that there had been 'no discussion and no authorisation given by the board for Skytraders to pay private club memberships'.[533]

408 There was no dispute that Mr Mackay was a member of the clubs in question. However, it was Mr Mackay's evidence that the clubs were used for business-related entertainment, and that the expenses associated with personal use of the clubs was not charged to Skytraders.[534] Mr Mackay's evidence was that:

'[m]y practice is to each month, by reference to my diary and my recollection of my attendances at the relevant club in the previous month, identify those expenses that are business related, to separate them from personal expenses and occasions had at these clubs.'[535]

409 Mr DeAngelis noted that payment of the club fees had been ongoing since before he joined the business in 2013 and, although he did not have any discussions with Mr Vickers about the fees to confirm their nature,[536] from his perspective the fees were 'typical for a business in terms of a business development expense'.[537] He also confirmed that Mr Mackay would, on a monthly basis, identify which club expenses were personal and have his personal expenses debited to his loan account in the Skytraders' balance sheet.[538]

410 The evidence of Mr Mackay and Mr DeAngelis was not challenged in cross-examination and no submissions were made in closing in support of the pleading on this issue.

411 While the line between personal and business expenditure may not always be clear, Premier has not made out its contention that the expenses were not legitimate business expenses of Skytraders. I am also not of the view that the lack of formal approval by the board renders the charging of those expenses to Skytraders oppressive conduct. My impression, from the evidence as a whole, was that the company was operated relatively informally, with frequent contact between Mr Vickers and Mr Mackay. It was not a company whose board met formally with great regularity, or which had a practice of business expenses routinely requiring approval by the board.

Payments by Skytraders' insurance broker to Mackay-related polo club and Sharp-related rowing regatta

412 Skytraders took out insurance through an aviation insurance broker, 'BMG Aviation' (BMG). Damian Hooper, National Head of Aviation at BMG, gave evidence. While he was not involved at the time the relationship between Skytraders and BMG's predecessor, Lea Aviation, commenced, he became responsible for managing Skytraders' account in 2010.[539]

413 BMG paid amounts to Folly Lodge Polo Club, operated by Folly Lodge Polo Club Pty Ltd, and then to Glenquarry Park Polo Club, operated by Glenquarry Park Investments Pty Ltd and then by Scarp Nominees Pty Ltd all Mackay-related entities. The amount paid was $25,000 per annum including GST. BMG also made payments to the organiser of the JB Sharp Memorial Regatta Series in the amount of $10,000 per year. JB Sharp was Mr Sharp's grandfather, and Mr Sharp was the patron of the regattas.

414 There was no allegation that the funds paid to the polo clubs were not used to defray the costs of the polo clubs, or were somehow channelled back to Mr Mackay personally. Similarly, there was no allegation that the funds paid to the regatta organiser were not used in connection with the regattas or were otherwise funnelled back to Mr Sharp.

415 The complaint advanced by Premier evolved over time. The plea in the FASOC (which is unchanged since the original version of the Statement of Claim, save for a minor typographical change) is that:

(i) made by the insurance brokers, it is to be inferred, to ensure continuing business with Skytraders;

(ii) not authorised by Skytraders and were made without the knowledge of Terry Vickers;

(iii) were not offered or made to Premier Aviation; and

(iv) to the benefit of Norman Mackay, Folly Lodge Polo Club and or John Sharp and or to the detriment of Skytraders and or Premier Aviation.[540]

416 In its written opening, Premier characterised the payments as 'secret commissions'. It referred to payments having been made under the 'guise of a sponsorship'. That contention was maintained in closing, but developed with a corporate governance overlay to the effect that it was not the sort of arrangement that should persist without a board decision, and a responsible board would have sought to have the discount applied to the premium.[541]

417 In opening, Premier further developed its case to contend that, due to the terms of Skytraders' contract with the AAD, a portion of these payments should have been credited back to the AAD, but was not, resulting in a risk that the AAD could terminate the contract.[542] In closing, this contention was maintained, albeit in a slightly different form, with Premier submitting that the amounts paid as sponsorship 'might have been provided as a credit to Skytraders rather than a personal payment to the benefit of Norman Mackay and John Sharp'.[543]

418 In opening, Premier did not contend that the premiums to Skytraders would have been lower, absent the sponsorship payments being made by BMG, but left the door open, saying that Mr Hooper could be asked about that possibility.[544] In closing, it submitted that the money 'might have reduced brokerage fees or premiums paid by Skytraders'.[545] Premier also pointed to any reduction in insurance costs benefitting the AAD through a reduction in the cost base of the cost-plus contract.[546]

419 In response, the defendants'[547] principal contentions were as follows:

(a) despite swearing in an affidavit filed when the proceeding was commenced on 1 October 2019, that he only recently found out about the payments, Mr Vickers now accepted he knew about them since at least 1 December 2016 and never raised any issue about them before commencing the proceeding;

(b) there was no evidence that, nor was it put to Mr Hooper that, the insurance costs would have been reduced had the payments not been made;

(c) the asserted reputational damage that might flow from a credit not being applied to the AAD contract was a long bow to draw when BMG's sponsorship activities were routine; and

(d) the funds did not benefit Mr Sharp personally as they went to the regatta.[548]

420 So far as Premier's case drew a causal link between the making of the sponsorship payments and the continued receipt of business from Skytraders, the contention has some support. Mr Hooper quite frankly accepted that Skytraders was an important client, and the sponsorships were connected with Skytraders' ongoing business.[549] However, the mere fact that a commercial entity sees fit to spend some of its funds on sponsorship activities, and chooses to spend its sponsorship funds on such activities where it sees a collateral benefit in the form of continued business from a client, does not, in my view, render the sponsorship payments 'financial inducements' with the connotations of bribery implicit in Premier's submissions.

421 Further, given Premier did not even ask Mr Hooper in cross-examination whether the brokerage fees or premiums would have been any lower had the sponsorship payments not been made, I reject the contention that Skytraders' interests have suffered harm due to insurances costs being higher than they otherwise would have been.

422 I also reject the contention that amounts received by the entities operating the polo clubs and the rowing regattas ought to have been credited back to the AAD under the relevant contracts. Those amounts are not payments or credits 'received by' Skytraders for the purposes of the AAD contract. In my view, so far as the contention of oppressive conduct rests on the contention that Skytraders was exposed to jeopardy in the form of the cancellation of its contact with the AAD, or even significant harm to the relationship with the AAD arising from the sponsorship, the contention fails. There is simply no basis on which such a finding could be wrested from the ordinary commercial sponsorship activities of Skytraders' insurance broker.

423 That leaves the question of whether any other feature of the payments support a contention that the sponsorship arrangements involved oppressive conduct. Premier's case raises two such features:

(a) the sponsorship payments being arranged without Mr Vickers' knowledge and without the approval of Skytraders; and

(b) Mr Vickers not likewise being offered a similar opportunity to have a charity or community event of his choosing supported by BMG sponsorship.

424 The second matter can be disposed of readily. Despite the terms of Premier's FASOC, Mr Vickers' evidence was that he would have refused any such sponsorship. His evidence was as follows (in the course of cross-examination by counsel for Sallab and Mr Sharp):

I put to you the substance of your complaint at p55 of the court book is that you didn't get the same offer or any part of that offer for a sponsorship type arrangement. That's the case, isn't it?---I think the assertion there is I didn't know about it and it certainly wasn't offered to me and John's confirmed that (indistinct words) witness statement.

Your complaint was that you didn't get the opportunity to get some of that money?---Well, it clearly is not part of Skytraders, yep.

But it's also the case that you've never told Mr Sharp or anyone else that you have an association or relationship with a charity or not for profit endeavour?---I have - I don't need associate anything. I would not have taken this if it was put before me.[550]

425 I do not consider that not being offered an opportunity that would have been declined anyway constitutes oppressive conduct.

426 I also note that, in his second witness statement, the reason Mr Vickers gave for saying he would have declined any opportunity to have a charity of his choosing supported in a similar way was that he would have taken the view that money should have been put back in to the business in the form of reduced premiums or reduced brokerage, noting that many of Skytraders' contracts are 'cost plus' contracts.[551] However, as already noted, Premier made no attempt to prove the premium or brokerage would have been reduced had no sponsorship been provided by BMG to the polo clubs or the regatta organiser.

427 That leaves the issue of Mr Vickers' knowledge of the sponsorship arrangements and Skytraders' approval of them. On Mr Vickers' evidence, he first became aware of the sponsorship payments when he was informed of them by Mr Sharp in December 2016. His evidence was as follows:

In December of 2016, I had a conversation with John Sharp and he said words to the effect that he and Norman Mackay 'were receiving money from BMG'. John Sharp informed me that he was directing the money he was receiving to a rowing club as charity. He also told me that the money Norman Mackay was receiving was being paid through Folly Lodge Polo Club, an entity associated with Sam Ballas, and then used to pay Norman Mackay's polo and farm expenses.[552]

428 Mr Mackay disputed Mr Vickers' account, saying that, in 2010, he raised the intention of LEA (the predecessor of BMG) to start sponsoring the polo club, noting LEA asked if there was other 'stuff' Mr Sharp or Mr Vickers thought might fit their profile. On Mr Mackay's evidence, Mr Sharp raised the regatta, but Mr Vickers said nothing came immediately to mind but he would think about it.[553] Mr Mackay also said Mr Vickers would have known of the sponsorships as they were discussed at dinners and lunches organised by BMG or LEA and were openly discussed. Mr Vickers disputed that he was made aware of the sponsorships in 2010 or would not have had a charity in mind given his interest in the Royal Children's Hospital.[554]

429 Mr Hooper gave evidence that he attended an overnight event at Glenquarry Park in early 2011. The event was a meet and greet allowing LEA to introduce BMG, who was taking over from it, to Skytraders. Mr Mackay was the host. Mr Hooper stated that, at some stage, the sponsorships were discussed amongst those in attendance, including Mr Vickers.[555] When cross-examined on this evidence, Mr Hooper agreed he could not specifically recall whether Mr Vickers was a participant in the discussion about the sponsorships.[556]

430 While the evidence supports a conclusion that there was nothing clandestine or secretive about the sponsorship arrangements, I accept Mr Vickers' evidence that he did not know about the sponsorships until 2016. If they were mentioned in his presence years earlier, the references were casual and he did not pick up on them. I am not prepared to find that Mr Vickers knew about the sponsorships in 2010 based on Mr Mackay's account of a conversation between him, Mr Sharp and Mr Vickers. When Mr Mackay was cross-examined on that matter, he appeared to me to be somewhat uncertain and reliant on repeating what was in his witness statement and drawing support from the fact that Mr Sharp had put on a witness statement corroborating him (noting that, at that stage of the trial, it was still expected Mr Sharp would be called).[557]

431 However, I do not accept that the fact that the sponsorship arrangements were entered into without Mr Vickers being formally advised of them, either when they were first entered into or when they were renewed each year in conjunction with Skytraders renewing its insurance policies, constitutes oppressive conduct. Mr Vickers had no involvement in negotiating Skytraders' insurance policies.[558] As I have said, there was nothing secretive about the sponsorship arrangements. Putting aside the initial conversation referred to above, there are still a number of matters, to which Mr Mackay directs attention in his witness statement, that meant he believed Mr Vickers to be aware of them.

432 Mr Vickers raised no objection when he did become aware of the sponsorships in 2016, despite his claim to have been 'shocked, absolutely shocked' when learning of them.[559] If he was really that shocked, and considered the sponsorship payments to be financially or reputationally harmful to Skytraders, he would be expected to voice his concerns. The fact that he did not leads me to conclude he was not shocked and did not consider them harmful. As Mr Vickers conceded, Mr Mackay had no idea Mr Vickers was unhappy with the arrangements Mr Mackay had with the insurance brokers until the matter was raised in Premier's Statement of Claim.[560] Mr Vickers' only response as to why he did not raise the issue with Mr Mackay was that 'I have in my mind at that point already a serious point of conflict' with Mr Mackay.[561] I do not accept Mr Vickers' explanation. On his account he learned of the sponsorships in December 2016. At that point, he was in the throes of dealing with the fallout of the team building event, but he never held Mr Mackay responsible for that, so the team building event cannot be the point of conflict with Mr Mackay in question. So far as other matters were on the table between Mr Mackay and Mr Vickers, they were being discussed amicably, as his secret recording of their conversation on 21 December 2016 reveals.[562]

433 As noted above, Skytraders was not a company that operated with great formality; expenses were not routinely approved by the board. Accordingly, I do not consider that the sponsorship payments constituted oppressive conduct on the basis that they were not formally considered and approved by the board. If there was anything untoward about the sponsorship payments - which I do not consider has been established - Mr Vickers acquiesced in the making of the sponsorship payments since 2016 and cannot, years later, make out a claim of oppression in those circumstances and where Premier has not established that the sponsorship payments had any adverse financial or reputational impact on Skytraders.

Payment of Mr Mackay's personal legal fees by Skytraders

434 Premier alleges that Mr Mackay caused Skytraders to pay legal fees incurred in respect of work performed for the benefit of Mr Mackay or Scarp relating to the shareholder dispute with Premier. Specifically, Premier alleges that:

(a) on 19 September 2019, Skytraders paid $11,000 to William James Pty Ltd (William James);

(b) on 3 October 2019, Skytraders paid $12,612.76 to Walter Baden Pty Ltd (Walter Baden); and

(c) on 30 October 2019, Skytraders received a further invoice for $12,559.80 from Walter Baden.

435 The relevant invoices and payment confirmations were exhibited to Mr Vickers' first witness statement.[563]

436 Premier alleges that the payment of these fees was conduct of the affairs of Skytraders or acts or omissions by or on behalf of Skytraders that were contrary to the interests of the members as a whole or oppressive to, unfairly prejudicial to, or unfairly discriminatory against Premier.[564]

437 The Mackay parties accept that the fees were incurred, but deny that they were incurred for, or substantively for, the shareholder dispute with Premier. Their position is that the legal fees related to requests by Premier or Mr Vickers to access the books of Skytraders, allegations by Mr Vickers that he had been unfairly dismissed by Skytraders, and work that predated, or substantively predated, the commencement of this proceeding or any demand made prior to the commencement of this proceeding.[565] In other words, the Mackay parties submit that the fees were incurred for work not related to the shareholder dispute.

438 Mr Mackay gave evidence that, notwithstanding his denial that the invoices related to the shareholder dispute with Premier, Scarp has paid Skytraders an amount equivalent to the invoiced amounts.[566] Premier did not dispute that Skytraders had been reimbursed by Scarp.

439 I will first deal with the two Walter Baden invoices, before moving to the William James payment, as the former shed light upon the latter.

440 The Walter Baden invoice paid on 30 October 2019 includes a description of the services provided by Walter Baden between 4 and 20 September 2019.[567] In cross-examination, Mr Mackay stated that all of the work described in this invoice prior to 11 September 2019 related to the preparation of the resignation acceptance letter sent to Mr Vickers on 11 September 2019.[568] Further, it is apparent from the descriptions contained in the invoice regarding the balance of the work (between 11 and 20 September 2019) indicate that the work related to considering Mr Vickers' response to the 11 September 2019 resignation acceptance letter,[569] a letter from Logie-Smith Lanyon on 17 September 2019, on behalf of Mr Vickers, principally alleging unfair dismissal,[570] Mr Vickers' and Premier's requests to access the books of Skytraders under ss 290 and 247A of the Corporations Act respectively, and advice related to the removal of Mr Vickers as a director.

(a) the issues concerning Mr Vickers' executive roles were matters of direct concern to Skytraders;

(b) Mr Mackay (as discussed elsewhere) perceived Mr Vickers' continued presence on the board a risk to Skytraders' stability and operations;

(c) the legal work also addressed the company's obligations to provide documents to Mr Vickers and Premier; and

(d) Mr Vickers had not yet commenced his oppression proceeding in September 2019;

I do not consider it unreasonable that the legal costs were initially borne by the company.

442 The 30 October 2019 Walter Baden invoice relates to services rendered between 25 September and 23 October 2019 and contains descriptions of those services.[571] As with the earlier Walter Baden invoice, it appears that the work conducted prior to 1 October 2019 principally related to Skytraders' response to Logie-Smith Lanyon's 17 September 2019 unfair dismissal letter and to Mr Vickers' and Premier's requests to access the books of Skytraders.

443 Following 1 October 2019, it does appear that at least some of the work related to this proceeding. For example, various entries on or shortly after 1 October 2019 (when this proceeding was commenced) include references to 'pleadings'. Other entries refer to the letter sent by Logie-Smith Lanyon, on behalf of Mr Vickers and Premier, on 7 October 2019, which relates to this proceeding.[572] Logie-Smith Lanyon's 7 October 2019 letter alleged that the scheduled meeting to remove Mr Vickers as a director was an act of further oppression. Accordingly, following 7 October 2019, the work recorded in the Walter Baden invoice in respect of the removal of Mr Vickers as a director became related to the shareholder dispute, as it had been put in issue by Mr Vickers. Accordingly, in my view, a substantial portion of the legal fees recorded in the 30 October 2019 Walter Baden invoice related to work performed for the benefit of Mr Mackay or Scarp relating to the shareholder dispute with Premier. To the extent that Mr Mackay's evidence is contrary to this finding, I reject that evidence. The narrations in the invoice are clear.

444 In respect of the 19 September 2019 payment to William James, the payment confirmation in evidence is a trust account statement,[573] showing the payment of $11,000 into the William James trust account by Skytraders, and the application of that money to the payment of an invoice for $2,407.90 on 10 October 2019, and an invoice for $2061.40 on 15 November 2019 (ie, $4,469.30 in total). The statement shows that the balance of the $11,000 paid into trust, being $6530.70, was refunded to Skytraders. The statement does not disclose the nature of the services provided by William James or the matters to which those services related.

445 While the 30 October 2019 Walter Baden invoice contains narrations that indicate the involvement of William James after the commencement of this proceeding, in matters that appear to relate to this proceeding, that does not necessarily mean that the money paid into the William James trust account by Skytraders was applied to the fees charged in relation to this work. For example, the Walter Baden invoices also show the involvement of William James in the preparation of the response to Logie-Smith Lanyon's 17 September 2019 unfair dismissal letter (indeed, the response was sent on William James' letterhead).[574] It could be that the fees related solely to that work and other work unrelated to the shareholder dispute. It simply is not clear on the material before me. Accordingly, Premier has not shown that the $4,469.30 charged by William James related to legal fees incurred in respect of work performed for the benefit of Mr Mackay or Scarp Nominees relating to the shareholder dispute with Premier.

446 Returning to the second invoice from Walter Baden, it is well settled that the use of company funds to defend an oppression proceeding that is in essence a fight between competing shareholders can constitute oppression in itself.[575] I have found that a substantial portion - as best as can be gleaned, approximately half of the fees recorded in the 30 October Walter Baden invoice (approximately $6,300) - related to fees incurred in respect of the shareholder dispute. In this case, the payment by Skytraders of fees incurred in respect of the shareholder dispute was inappropriate and technically might constitute oppressive conduct. However, in the circumstances of this case, having regard to the fact that Scarp has since repaid Skytraders for the fees, that the quantum of the improperly paid fees was relatively small, occurred only in the month following the commencement of this proceeding, and that, initially at least, there was no clear line between advice given to Skytraders and advice given that more directly related to the dispute between Mr Vickers and Mr Mackay, I do not consider the payment of the legal fees to be oppressive. Further, as there is no detriment to Skytraders given the fees have been repaid, I would in any event not exercise the court's discretion to award relief under s 233 of the Corporations Act based on this matter alone.

Termination of access to office, information, network and email

(a) by letter dated 13 September 2019, it requested that Skytraders make certain books of the company available for inspection (13 September 2019 request) and that Skytraders did not permit Premier to inspect all of the books identified in that request;[576]

(b) by email on 15 September 2019,[577] Mr Mackay sent an email to the staff of Skytraders (15 September 2019 email to staff) directing them that they must not provide company information to Mr Vickers;[578] and

(c) between 16 and 23 September 2019, Skytraders withdrew Mr Vickers' access to its physical premises and certain digital systems and records.[579]

448 In its closing submissions, Premier recited various events under the heading 'Withdrawing and or restricting access to offices, computer networks and records'. It referred back to that section later in its submissions as part of a summary submission contending that the facts traversed were matters of commercial unfairness and/or contrary to the interests of members as a whole.[580] No attempt was made to elaborate on how or why those matters were commercially unfair or contrary to the interests of the members as a whole.

449 The Mackay parties' submissions in closing were no more helpful, consisting only of the following three sentences:

282. The Mackay defendants' evidence on this issue is given by Mackay (CB511, [385]-[388]). Vickers' access to Skytraders' systems and premises was revoked in accordance with Skytraders' policy on 16 September 2019 when his departure took effect. Nevertheless, Vickers has had full access to Skytraders' financial systems thereafter.[581]

450 In addition to the pleaded allegations, in submissions, Premier also complained that Skytraders had:

(a) refused to provide Premier with access to categories of critical documents as required by order of the Court made on 21 February 2020;[582] and

(b) failed to produce regular shareholder reports and documents relating to the renewal of government contracts, the latter being relevant to the expert valuation evidence in this proceeding and which documents obtained by Premier on subpoena indicated had been renewed.[583]

451 It is not clear to what plea, if any, these further allegations relate. In any event as any failure to comply with an order of the Court as to discovery was a matter to be pursued within the framework of the proceeding, by raising it with the judge managing the proceeding, I do not consider it necessary or efficient to extend these reasons by addressing non-compliance with a Court order as though it were a pleaded instance of oppressive conduct.

452 The forensic thrust of the second unpleaded complaint is not clear. In Premier's closing submissions, it had the tenor of a complaint about discovery, as well as collateral criticism of some aspects of the expert evidence relied on by the Mackay parties.[584] In oral closing submissions, it was said to be relevant to the transparency and openness of the Mackay parties in this proceeding and to ongoing oppression.[585] To the extent the criticism relates to discovery, it ought to have been advanced through management of the proceeding. To the extent it was directed to the expert evidence, for reasons which will by now be clear, I consider Premier has failed to make good its oppression claim, and it is not necessary to address the expert evidence. To the extent it was a general critique of the Mackay parties, it goes nowhere.

September 2019 withdrawal of access to Skytraders' physical premises and certain digital systems and records

453 From 16 to 23 September 2019, Skytraders withdrew Mr Vickers' access to its physical premises and certain digital systems and records. Specifically, Skytraders took the following steps:

(a) on or about 16 September 2019, it cancelled Mr Vickers' company email account;

(b) on or about 17 September 2019, it cancelled Mr Vickers' key card access to the company premises; and

(c) on or about 23 September 2019, it cancelled Mr Vickers' access to monitor online payments and transactions undertaken by the company,

(collectively, the withdrawal of access).

454 Premier alleged that the above steps were taken notwithstanding that Mr Vickers remained a director. The Mackay parties contended each of those steps was reasonable and justified following Mr Vickers' resignation taking effect on 16 September 2019, and that such steps were in accordance with Skytraders' policy (although no written policy was identified).

455 Mr Vickers gave evidence that his ability to monitor online payments and transactions undertaken by Skytraders was cancelled on 23 September 2019 and that his 'read only' access to Skytraders' Xero accounts was withdrawn sometime after 22 November 2019, but was reinstated (along with access to the Freight ledger and HiFlite ledger, which access he had not previously had) sometime after 5 June 2020.[586]

456 Mr Mackay gave evidence that Mr Vickers' access to Xero was withdrawn to 'ensure the integrity of access to Skytraders' books' and to 'ensure proper protocols were in place to ensure this data was not otherwise at risk of dissemination to persons outside Skytraders', but that from about 9 October 2019, Mr Vickers had access to a data room containing company documents requested by him[587] (albeit, at least initially, without the ability to download or print).[588]

457 Mr DeAngelis gave similar evidence that Mr Vickers' Xero access had ceased after he ceased being a director but that his access was restored on or about 15 June 2020. Mr DeAngelis explained in cross-examination that Mr Vickers' access to Xero at all times (including prior to his departure) had been 'read only', as it was 'too dangerous' to grant anyone other than the finance team non 'read only' access, as otherwise changes could be made to the accounts without the finance team knowing.[589] Mr DeAngelis also noted that from about 9 October 2019, Mr Vickers had access to a data room containing documents he requested.

458 I do not consider the cancellation of Mr Vickers' Skytraders email address or the cancellation of his access card to constitute oppressive conduct. Such steps were entirely consistent with the position reached by mid-September 2019 that Mr Vickers was no longer in any operational role. Even on Premier's case, Mr Vickers had been ousted from his operational role at that stage. A person with no operational role has no need for a company email address or card to access company premises.

459 Although the withdrawal of access to financial information occurred relatively quickly after Mr Vickers' departure, I do not consider it to be oppressive in circumstances where:

(a) on either side's case, there had been a major falling out between Mr Vickers and Mr Mackay;

(b) Mr Mackay held concerns (discussed elsewhere above) that Mr Vickers may take actions to harm the company;

(c) on either side's case, Mr Vickers was no longer in an operational role and:

(i) Mr Vickers was a former director only when his Xero access was terminated;

(ii) Mr Vickers was a director only when his capacity to monitor the banking transactions was terminated on 23 September 2019;

and where the Corporations Act does not mandate that the information to which directors and former directors (or shareholders for that matter) are entitled must be provided through access to 'live' online systems; and

(d) the company reasonably quickly established a data room containing documents requested by Mr Vickers.

460 It is common ground that, on 13 September 2019, Premier sent Skytraders a request that Skytraders make certain books of the company available for inspection. Premier alleges that Skytraders did not permit Premier to inspect all of the books identified in the request. Skytraders says that it complied with all requests made in accordance with the relevant provisions of the Corporations Act for access to any books as that term is defined in the Corporations Act.[590] Notably, the 13 September 2019 request was made by Mr Vickers in his capacity as director of Premier - ie, as a shareholder of Skytraders - not as a director of Skytraders.[591] In a response from Mr DeAngelis on 19 September 2019,[592] he referred to a request made under s 290, which appears to have been made by Mr Vickers on 17 September 2019; no distinction was drawn in the correspondence between the requests under s 247A and s 290.

461 Premier was, it appears, dissatisfied with the information it received and made an application in this Court seeking documents pursuant to s 247A. That application was disposed of by a judge of the Court making orders for the production of documents.[593]

462 Mr Vickers gave evidence that Skytraders did not permit him to inspect all of the books identified in the previous request.[594] In his first witness statement, Mr Vickers identified the documents which had not been provided to him as documents related to:

(a) leases;

(b) sponsorship or any other payment arrangement provided by any supplier to Skytraders, to any directors, associate and/or associated company of any director or associate; and

(c) payments to directors, associates or any relation of a director.[595]

463 Mr Mackay denied that Mr Vickers was 'refused access to any legitimate request for information or access to books of Skytraders that he had an entitlement to.'[596] Mr DeAngelis gave evidence that from about 9 October 2019, Mr Vickers had access to a virtual data room containing the documents requested by Mr Vickers.

464 Mr Vickers did not particularise the documents - the non-provision of which Premier contends constitutes oppression - to any greater extent than just referred to. While Mr Vickers referred to correspondence, which he said identified the deficiencies in document production, it was not clear to me from the correspondence referred to what documents specifically had not been provided and why the non-provision constituted a deficiency amounting to oppression.[597] In that regard, it is also relevant to note that, as set out above, Premier pursued its dissatisfaction with documents produced by bringing an application under s 247A of the Corporations Act, which is precisely the course made available to it under the Corporations Act.

465 In respect of the types of documents referred to at paragraph 462 above, I simply do not have the evidence before me to determine whether the documents sought in all cases existed in forms not already made available to Mr Vick[598] earlier,598 whether Skytraders failed to provide the information requested by Premier in its 13 September 2019 request and, if so, whether the failure to provide that documentation has the hallmarks of commercially unfair conduct. Therefore, Premier has not discharged its burden and, as such, I do not consider the alleged general non-compliance with the 13 September 2019 request constitutes oppressive conduct.

466 On 15 September 2019, Mr Mackay sent an email to the staff of Skytraders which stated, inter alia:

[Mr Vickers] is no longer the Skytraders Chief Pilot or Director of Operations.

...

[Mr Vickers] is not authorised to represent the company in any function as Chief Pilot or Director of Operations. All staff are reminded that under the Company Confidentiality policies and applicable federal legislation (including the Privacy Act and the Crimes Act) that staff are not authorised to discuss Company operational or management matters with persons not authorised to receive such information.[599]

467 Premier alleged that, by this email, Mr Mackay directed that staff of Skytraders must not provide company information to Mr Vickers. The Mackay parties denied this characterisation. Mr Mackay contended in his evidence that the email was simply a 'reminder' to staff that they were not authorised to discuss company operational or management matters with persons not authorised to receive such information.[600]

468 I do not accept Mr Mackay's explanation that he was simply reminding staff of their duties and authorisations. In context, the 'reminder' appeared immediately following a statement that Mr Vickers was not authorised to represent the company as Chief Pilot or Director of Operations. The obvious inference is that Mr Vickers is a person who is not authorised to receive such information and that the 'reminder' is directed specifically at warning staff not to provide information to Mr Vickers. Further, the references to the 'Privacy Act' and the 'Crimes Act' preventing disclosure are likely to have had a chilling effect on staff, discouraging any disclosure to Mr Vickers.

469 However, the fact that I have found that the 15 September 2019 email to staff was, as alleged by Premier, in effect a direction not to provide Mr Vickers with information, does not ipso facto make the email oppressive. As at 15 September 2019, however the termination of Mr Vickers' operational roles came about, it was clear his executive involvement in the company was at an end. Further, as at 15 September 2019, it was clear that Mr Vickers was contemplating issuing proceedings, and, as set out above, Mr Mackay was concerned that Mr Vickers may take action that would be harmful to the company. In these circumstances, it was reasonable for Skytraders to protect itself by ensuring that Mr Vickers and Premier accessed information through official channels (as they in fact did through requests made citing s 247A and s 290 of the Corporations Act), rather than by the 'backdoor' through staff. Accordingly, I do not consider the 15 September 2019 email to staff to constitute oppressive conduct.

470 As detailed above, I have concluded that each of the specific instances of conduct complained of by Premier did not constitute oppressive conduct within the meaning of s 232 of the Corporations Act. Nor, in my view, is this a case where oppressive conduct in the whole arises from a series of incidents, none of which rises to the level of constituting oppressive conduct when considered in isolation.

471 Approaching the facts complained of globally, there is no doubt that Mr Vickers was deeply unhappy about aspects of the way in which Skytraders was being run. But, for the most part, he did not articulate his objections. Rather, it appears he allowed his private resentments to build and fester, occasionally complaining about Mr Burnaby's perceived interference. Mr Vickers' failure to raise his objections and complaints as the events in question arose may, at least to some extent, be explained by an unwillingness to challenge Mr Mackay on any issue on which Mr Vickers understood Mr Mackay to have a different view (including as to whether Mr Burnaby should be reined in). That unwillingness may itself be explained (again to some extent) by Mr Mackay's domineering and dominant personality, as was apparent from his demeanour in giving evidence.

472 Nevertheless, Mr Vickers' failure to articulate his disagreement with many of the matters complained of means that the commercial unfairness of the actions complained of must be assessed taking into account that Mr Mackay, in particular, was not made aware of the extent to which Mr Vickers felt that the manner in which the company was being run was unfair to him and Premier, or resulted in interference in operational affairs posing safety risks to the company. The evaluation of whether the impugned events as a whole constituted commercial unfairness must also be considered in light of the ebb and flow of events over the relevant period, given the events complained of were peppered across a number of years and specific events had been dealt with and closed (at least for those not privy to Mr Vickers' private thoughts).[601] In conclusion, standing back and assessing the impugned conduct as a whole, Premier has not established that the events complained of were oppressive under either limb of s 232.

473 In its FASOC, Premier alleged that Mr Sharp remained a director of Skytraders within the meaning of s 9 of the Corporations Act, notwithstanding the cessation of his formal appointment as a director on about 28 June 2013. It also alleged that Mr Sharp was the beneficial owner and/or controller of the shares in Skytraders that are formally held by Sallab. That shareholding represents over 17% of the ordinary shares in Skytraders.

474 Premier's theory on this point was that Mr Sharp caused Ashby Park to transfer its shares to Sallab at an undervalue on the basis that Sallab would hold the shares for him, thereby putting them beyond the reach of Mr Sharp's wife in divorce proceedings.

475 There is a substantial body of evidence before the Court suggesting that Premier is correct that Mr Sharp is the true economic owner of the Sallab shares. That evidence includes:

(a) the fact that, as at 30 June 2013, Skytraders had cash at bank and cash on deposit of $11,750,001 and positive net assets of over $16 million,[602] yet the purchase price for shares representing over 17% of the ordinary shares was only $350,000;[603]

(b) evidence of the operations of Skytraders including the provision of 'shareholder reports' to Mr Sharp;

(c) Mr Sharp's role in the company, which did not change at all when he apparently sold the shares he held through Ashby Park to Sallab, including his continued attendance at director and shareholder meetings;

(d) emails and activities that refer to and treat Mr Sharp as though he was a shareholder of Skytraders;[604] and

(e) provision of statements of the dividends to be issued to shareholders to Mr Sharp (and not Mr Ballas), the treatment of one of the loan accounts, 'Sallab 2', as a proxy for a loan account recording amounts spent by Mr Sharp and credited to his loan account in the same way as the loan accounts for Mr Vickers and Mr Mackay operated,[605] and the recording, in dividend-related documents of Thenford Consulting (Mr Sharp's vehicle) being entitled to a 17.4% share of the dividends.[606]

476 Most telling of all is the evidence of Mr Sharp's own words in his meeting with Mr Vickers on 12 November 2019 in which they discussed this proceeding and the possibility of selling their shareholdings or the company.[607] Mr Vickers secretly recorded that conversation. A transcript of the conversation was in evidence. At the that meeting, Mr Sharp referred to 'my seventeen and a half', obviously a reference to the 17.5% shareholding ostensibly held by Sallab, referred to the value of 'my shareholding' if it were to be purchased,[608] and to a desire to see 'my shares having a good solid value so that I can sell them at some point'.[609] This conversation occurred more than six years after the ostensible sale of Ashby Park's shares.

477 There is, however, a formal record of the share transfer to Sallab and there are records showing Sallab did duly transfer the $350,000 in official consideration. The existence of documentation that is consistent with a genuine sale having occurred is entirely unsurprising. It would be expected that anyone proceeding with a sale on the basis Premier alleged would ensure the obvious paperwork was in order. Likewise, the fact that Skytraders paid dividends to Sallab in the first instance,[610] is of limited relevance without an exploration of the very substantial body of subsequent financial transactions between Sallab (or Mr Ballas) and Mr Sharp (or his related interests and family).[611]

478 While the veracity of the transfer and the question of undervalue was apparently in dispute in the Family Court proceeding between Mr Sharp and his former wife, I do not make anything of the conclusion reached in the Family Court proceeding for two reasons. First, s 91 of the Evidence Act 2008 (Vic) prohibits the use of a judgment in another proceeding to prove a fact that was in issue in that proceeding. Second, it is far from apparent that the documentation produced in this proceeding was before the Family Court.

479 Nevertheless, notwithstanding my scepticism regarding the transaction and Mr Sharp's position, the anterior question is whether it is necessary to make findings on Premier's pleaded contentions that Mr Sharp was a de facto director of Skytraders from about 28 June 2013 onwards and was the beneficial owner of the shares in Skytraders formally held by Sallab.[612]

480 In my view, it is not necessary for this Court to make findings on those matters in order to determine the oppression case advanced by Premier. Had the Mackay parties contended that Sallab's passive shareholding undermined Premier's alternative Expectation case,[613] it would have been necessary to determine whether Mr Sharp was in fact a de facto director who remained actively engaged in the business and was the beneficial holder of Sallab's shares. However, as I have noted, at paragraph 124 above, the Mackay parties did not contend that subsequent events concerning Mr Sharp and Sallab undermined Premier's Expectation case on the basis that Skytraders was a company in which shareholders (viz Sallab) could and did hold passive shareholdings.

481 Further, and as addressed above at paragraphs 124 to 129, I do not consider that subsequent events, including the status occupied by Mr Niemeyer or Mr Sharp, could assist Premier. For these reasons, in my view it is not necessary to make findings on Mr Sharp's position in order to dispose of that part of the case either.

482 It was never satisfactorily explained just why Mr Sharp was joined to the proceeding. No oppression was alleged stemming from his actions (or those of Sallab). Mr Vickers rejected the suggestion Mr Sharp was joined to embarrass him and to maximise pressure to settle.[614] The only explanation advanced by Mr Vickers was that he believed that Mr Sharp remained the beneficial owner of the shares held by Sallab on the basis that, in his view, the transaction by which Ashby Park, the entity controlled by Mr Sharp, sold its shares to Sallab was a fabrication.[615] That explanation is not persuasive given that, as a party, Sallab would be bound by the outcome of this proceeding, whoever it holds its shares for.

483 Given my conclusions above, it is also not necessary for me to determine the admissibility of the decision of the Family Court proceedings between Mr Sharp and his former wife.[616] Mr Sharp and Sallab sought to tender the decision, but objection was taken by Premier.

484 Premier has not established that there was oppressive conduct. Accordingly, it is not necessary to address the relief that would have been appropriate had the oppression case succeeded.

485 In closing submissions, counsel for Premier expressly confirmed (in answer to a question I asked of him) that, if I found against Premier on oppression, it did not contend that it had a residual winding up case which may still be advanced. In this regard, Premier did not contend that there was conduct which, if not oppressive, still enlivened the Court's jurisdiction to wind up Skytraders on the just and equitable ground.[617]

486 However, the Mackay parties, recognising that success in defeating the oppression case would leave them in the unhappy position of having Premier continue to be a shareholder,[618] explored in submissions whether there was a basis upon which a buyout could be ordered as a less drastic remedy to winding up Skytraders.[619] Skytraders is a profitable business and it is well-established that courts are extremely reluctant to wind up solvent companies.

487 Before considering whether there would be a less drastic remedy to winding up Skytraders, as the submissions of the Mackay parties rightly pointed out, the question is whether there is a proper basis for me to form an opinion that 'it is just and equitable that [Skytraders] be wound up'. While observing that whether such an outcome is just and equitable is a question of fact, to be decided in each case on the unique circumstances of the case, the Mackay parties submitted that the decided cases nonetheless identify a number of categories in which the jurisdiction to wind up on the just and equitable ground has been enlivened.

488 Of the categories identified, the Mackay parties submitted that only the ground of deadlock in the conduct of the affairs of Skytraders was eligible for consideration. However, as the Mackay parties noted, 'in reality, there is no deadlock in the conduct of the affairs of Skytraders' now that Mr Vickers no longer has an operational role and has not sought reinstatement to the board in Premier's prayer for relief. The Mackay parties' closing submissions also traversed the facts, making the point that there was also no serious deterioration in the relationship between Mr Vickers and Mr Mackay prior to 26 August 2019, which might be characterised as constituting a deadlock or breakdown.

489 I agree with the submission made by the Mackay parties that the circumstances of this case are such that there is no basis upon which I could conclude that it would be just and equitable for Skytraders to be wound up. While there has been a breakdown in the relationship between Mr Vickers and Mr Mackay, it is not impeding the commercial operations of Skytraders.[620] Nor, as already noted, did Premier contend that there was a basis to exercise the winding up jurisdiction if I concluded that the case in oppression fails.

490 Given the unhappy stalemate attendant on a loss on the oppression case, and the Court's inability to direct a purchase of Premier's shares under the winding up jurisdiction, the Mackay parties ventured a novel suggestion. They contended as follows:

Notwithstanding the unavailability of s 467(4), it is submitted that jurisdiction to order a buyout of Premier's shares is found in s 467(1)(c) which states that "on hearing and winding up application the Court may... make any interim or other order that it thinks fit". There is no reason to conclude that the orders of the kind identified in s 233(1), in particular a buyout order, do not fall within the scope of the expression "other order". [621]

491 Counsel for the Mackay parties conceded that they were unable to find any record of a case in which a court has ordered the buyout of shares in circumstances where the court has not otherwise concluded that the winding up jurisdiction has been enlivened.

492 I reject the argument advanced by the Mackay parties. It amounts to a contention that, despite concluding that it is not just and equitable that Skytraders be wound up, this Court has the power to, and ought to, order a buyout of Premier's shares simply because it brought (and failed in) an application to have the company wound up on the just and equitable ground.

493 There is limited case law on the extent of the power conferred by s 467(1)(c). As Young J noted in Alati v Wei Sheung, '[a]lthough a comparable section has been in the Companies or Corporations Acts from the middle of the nineteenth century, there has not been any Australian case considering the extent of the court's power in those 150 years.'[622] His Honour observed that the provision is expressed in wide terms.[623] The Mackay parties relied on the observations of Young J as supporting a generous interpretation of the provision. Section 467(1)(c), and the observations made by Young J in Alati, were referred to in Host-Plus Pty Ltd v Australian Hotels Association,[624] but it was not necessary in that case for Hansen J to consider the submissions made about the ambit of s 467(1)(c).[625] Finally, reference was made to s 467(1)(c) in Re Renex Founder Hold Co Pty Ltd.[626] In that case, there was a dispute whether the Court had the power to direct a valuation in an oppression proceeding. Justice Delany considered there was such a power, stating:

As discussed during the hearing I consider there are two separate sources of power that enable the Court to order a valuation of the company; the first being s 467(3)(f) of the Act and the second, the Civil Procedure Act 2010 (Vic) ('the CPA').[627]

Contrary to the written submissions of the Mackay parties, Delany J did not rely on s 467(1)(c) to order a valuation.

494 In any event, and without venturing any concluded views on the outer bounds of s 467(1)(c), I do not accept that s 467(1)(c) empowers this Court to direct a buyout in the circumstances of this case. Where a winding up application has been taken to trial and has failed, I do not consider that any construction of s 467(1)(c) is open which would permit the Court to award final relief which is the self-same relief that may have been ordered (as a less drastic alternative to winding up) under s 467(4). Clearly the power conferred by s 467(1)(c) must be exercised judicially. The proposition that a buyout should be ordered merely because it would be convenient given the shareholders have fallen out - but where there is no jurisdictional basis to so order under s 467(4) given the failure of the substratum of the winding up application - lacks any juridical basis. It is an invitation to the arbitrary exercise of power.

495 Premier's originating application dated 1 October 2019 will be dismissed with costs. Any party seeking to make submissions that any special costs order be made is directed to do so in writing within seven days of delivery of these reasons.

PREMIER AVIATION HOLDINGS PTY LTD (ACN 104 968 354)

[1] Premier advanced its case based on the conduct complained of being conduct of the affairs of Skytraders.

[6] Aqua-Max Pty Ltd v MT Associates Pty Ltd [2001] VSCA 104; (2001) 3 VR 473, [54] (Brooking, Charles and Chernov JJA); Wayde v New South Wales Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459 (Wayde), 472 (Brennan J); Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 (Morgan), 704 (Young J); Endoline Pty Ltd v Drapac [2012] VSC 156, [272] (Ferguson J); Zomojo Pty Ltd v Hurd (No 2) (2012) 299 ALR 621; [2012] FCA 1458, [508] (Gordon J); Donaldson v Natural Springs Australia Ltd [2015] FCA 498 (Natural Springs), [246] (Beach J).

[7] Wayde, 473 (Brennan J); Morgan, 704 (Young J); Joint v Stephens (2008) 26 ACLC 1467; [2008] VSCA 210 (Joint), [134]-[135] (Nettle, Ashley, Neave JJA).

[8] [2019] VSC 547 (SRW Nominees), [34]-[40] (internal footnotes reproduced as in the original).

[9] Joint v Stephens [2008] VSCA 210, 53 [134] (Nettle, Ashley and Neave JJA).

[10] Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692, 704 (Young J). See also Joint v Stephens [2008] VSCA 210, 53 [134] (Nettle, Ashley and Neave JJA); Hillam v Ample Source International Ltd (No 2) [2012] FCAFC 73; (2012) 202 FCR 336, 337 [4] (Emmett, Jacobson and Buchanan JJ).

[11] (1990) 3 WAR 166.

[13] [2013] NSWSC 1332; (2013) 96 ACSR 1.

[14] Ibid 53 [178]. See also Morgan v 45 Flers Ave Pty Ltd (1986) 10 ACLR 692, 704 (Young J); Wayde v New South Wales Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459, 472 (Brennan J).

[15] Wayde v New South Wales Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459, 472 (Brennan J).

[16] Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692, 704 (Young J).

[17] [1985] HCA 68; (1985) 180 CLR 459.

[19] Australian Institute of Fitness Pty Ltd v Australian Institute of Fitness (Vic/Tas) Pty Ltd (No 3) [2015] NSWSC 1639; (2015) 109 ACSR 369, 434 [471] (Sackar J). See also Wayde v New South Wales Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459, 470 (Brennan J); Campbell v Backoffıce Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304, 360 [176] (Gummow, Hayne, Heydon and Kiefel JJ); Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104; (2011) 288 ALR 310, 361 [217].

[20] Australian Institute of Fitness Pty Ltd v Australian Institute of Fitness (Vic/Tas) Pty Ltd (No 3) [2015] NSWSC 1639; (2015) 109 ACSR 369, 434 [471].

[21] Re Bright Pine Mills Pty Ltd [1969] VicRp 121; [1969] VR 1002, 1011 (O'Bryan, Smith and Pape JJ); Re Companies (Western Australia) Code (1990) 3 WAR 166, 191 (Murray J).

[22] O'Neill v Phillips [1999] UKHL 24; [1999] 1 WLR 1092, 1098 (House of Lords) (Lord Hoffmann).

[23] O'Neill v Phillips [1999] UKHL 24; [1999] 1 WLR 1092 (O'Neill v Phillips), 1098 (Lord Hoffmann).

[24] See the authorities collected by Sifris J in Exton v Extons Pty Ltd [2017] VSC 14; (2017) 53 VR 520 (Exton), 526-7 [49]-[54].

[25] O'Neill v Phillips, 1099-101 (Lord Hoffmann).

[26] O'Neill v Phillips, 1101-2 (Lord Hoffmann); but note that it is important not to elevate 'legitimate expectation' to a cause (cf a consequence) of equitable restraint on legal rights: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672; [2001] NSWCA 97 (Fexuto), [421] (Priestley JA).

[27] (1998) 28 ACSR 688; [1998] NSWSC 413, 703 (ACSR), quoted with approval in Exton, 532‑3 [42] (Sifris J)

[29] O'Neill v Phillips, 1101 (Lord Hoffman); SRW Nominees, [49] (Robson J).

[30] [2010] NSWSC 152 (Tomanovic), [39(c)] (emphasis added).

[31] Tomanovic v Global Mortgage Equity Corp Pty Ltd (2011) 288 ALR 310; 84 ACSR 121; [2011] NSWCA 104, [140] (Campbell JA, Macfarlan and Young JJA agreeing).

[32] Fexuto, [90]. This passage was quoted by Barrett J in Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342; (2009) 71 ACSR 343 (Nassar); [2009] NSWSC 342, [96], being one of the cases and passages in turn cited by Austin J in Tomanovic.

[35] Exton, 534-5 [46] (Sifris J) quoting Tomanovic, [39] (Austin J, citing John J Staff (Real Estate) Pty Ltd v Robert R Andrew (A'Asia) Pty Ltd (1991) 6 ACSR 63, 66 (Young J)).

[36] Exton, 531-2 [39] (Sifris J). See also Turnbull v National Roads and Motorists' Association Ltd (2004) 186 FLR 360; 50 ACSR 44; [2004] NSWSC 577, [32] (Campbell J); Shelton v National Roads and Motorists' Association Ltd (2005) 51 ACSR 278; [2004] FCA 1393, [25] (Tamberlin J); Szencorp Pty Ltd v Clean Energy Council Ltd (2009) 69 ACSR 365; [2009] FCA 40, [59] (Goldberg J); KGD Investments Pty Ltd v Placard Holdings Pty Ltd (2015) 110 ACSR 379; [2015] VSC 712, [27] (Almond J).

[37] Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304, 360 [176] (Gummow, Hayne, Heydon and Kiefel JJ); Australian Institute of Fitness Pty Ltd v Australian Institute of Fitness (Vic/Tas) Pty Ltd (No 3) (2015) 109 ACSR 369; [2015] NSWSC 1639 (Australian Institute of Fitness), [82]-[85] (Sackar J); Exton, 531-2 [39] (Sifris J).

[38] Australian Institute of Fitness, [84] (Sackar J), citing Goozee v Graphic World Group Holdings Pty Ltd (2002) 170 FLR 451; 42 ACSR 534; [2002] NSWSC 640, [42]-[44] (Barrett J).

[39] Natural Springs, [248]-[249] (Beach J).

[41] Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (1998) 28 ACSR 688; [1998] NSWSC 413, 740 (ASCR) (Young J); Ananda Marga Pracaraka Samgha Ltd v Tomas (No 6) (2013) 300 ALR 492; [2013] FCA 284, [417] (Dodds-Streeton J); Natural Springs, [250] (Beach J).

[42] Natural Springs, [250] (Beach J), citing O'Neill v Phillips, 1104 (Lord Hoffman, with whom the four other members of the House of Lords agreed).

[43] Tomanovic v Global Mortgage Equity Corp Pty Ltd (2011) 288 ALR 310; 84 ACSR 121; [2011] NSWCA 104, [199] (Campbell J, Macfarlan and Young JJA agreeing).

[44] Medical Research & Compensation Foundation v Amaca Pty Ltd (2004) 51 ACSR 587; [2004] NSWSC 1227, [29] (Young CJ in Eq); Grant v John Grant & Sons Pty Ltd [1950] HCA 54; (1950) 82 CLR 1, 20 (Latham CJ); Natural Springs, [251] (Beach J).

[45] Vigliaroni v CPS Investment Holdings Pty Ltd (2009) 74 ACSR 282; [2009] VSC 428, [85] (Davies J), citing Szencorp Pty Ltd v Clean Energy Council Ltd (2009) 69 ACSR 365; [2009] FCA 40, [71] (Goldberg J); Natural Springs, [270] (Beach J).

[46] Szencorp Pty Ltd v Clean Energy Council Ltd (2009) 69 ACSR 365; [2009] FCA 40, [69]-[71] (Goldberg J).

[47] First witness statement of Terrence Patrick Vickers dated 26 August 2020 (Vickers I); second witness statement of Terrence Patrick Vickers dated 5 March 2021 (Vickers II); and third witness statement of Terrence Patrick Vickers dated 27 October 2021 (Vickers III).

[48] Witness statement of Rex Holroyd Booth dated 5 March 2021 (Booth).

[49] Witness statement of Ian Wallace Meyer dated 5 March 2021 (Meyer).

[50] Affidavit of Anthony Schiavello sworn 23 February 2022.

[51] First witness statement of Norman Farquhar Mackay dated 13 November 2020 (Mackay I); second witness statement of Norman Farquhar Mackay dated 9 February 2022 (Mackay II); and third witness statement of Norman Farquhar Mackay dated 22 February 2022 (Mackay III).

[52] First witness statement of Matthew Myles Ide dated 10 November 2020 (Ide I); and second witness statement of Matthew Myles Idea dated 9 February 2022 (Ide II).

[53] First witness statement of Daniel Richard Haworth Burnaby dated 10 November 2020 (Burnaby I); and second witness statement of Daniel Richard Haworth Burnaby dated 9 February 2022 (Burnaby II).

[54] First witness statement of Duncan Farquhar Mackay dated 13 November 2020 (Duncan Mackay I); second witness statement of Duncan Farquhar Mackay dated 9 April 2021 (Duncan Mackay II); third witness statement of Duncan Farquhar Mackay dated 9 February 2022 (Duncan Mackay III); and fourth witness statement of Duncan Farquhar Mackay dated 14 February 2022 (Duncan Mackay IV).

[55] First witness statement of Calum Haworth Mackay dated 6 November 2020 (Calum Mackay I); and second witness statement of Calum Haworth Mackay dated 9 February 2022 (Calum Mackay II).

[56] First witness statement of Anthony John DeAngelis dated 12 November 2020 (DeAngelis I); second witness statement of Anthony John DeAngelis dated 9 April 2021 (DeAngelis II); third witness statement of Anthony John DeAngelis dated 13 July 2021 (DeAngelis III); fourth witness statement of Anthony John DeAngelis dated 15 December 2021 (DeAngelis IV); and fifth witness statement of Anthony John DeAngelis dated 9 February 2022 (DeAngelis V).

[57] First witness statement of Jorn Olav Gronset dated 5 November 2020 (Gronset I); and second witness statement of Jorn Olav Gronset dated 9 February 2022 (Gronset II).

[58] Witness statement of Garry Studd dated 5 November 2020 (Studd).

[59] First Dawson expert report dated 5 March 2021; Chester expert report dated 9 April 2021; Chester valuation critique dated 9 April 2021; Second Dawson expert report dated 10 December 2021 and Joint Expert Report dated 10 December 2021.

[60] Premier's closing submissions, [324].

[63] Premier's opening submissions, [106].

[64] Premier's closing submissions, [370]-[377].

[66] See the authorities discussed at paragraphs 30-31 above.

[67] Note also the contention that the issue for the Court was whether the agreement between Mr Vickers and Mr Mackay was 'in perpetuity...until somebody got too old or whatever': T1601.

[74] Due to delays on the AAD side, explained in its letter to Mr Mackay dated 4 May 2001: CB.841.

[79] Vickers I, [38], [65]-[67]; T251.21-26.

[80] The exact date on which the contract was terminated is not entirely clear. On 19 March 2012, the AAD sent a letter to Skytraders stating that it wished to cancel the contract related to the C-212s, but did not by that letter terminate the contract: CB.1681. In his first witness statement, Mr Mackay stated that the contract was then cancelled 'in or about 2012'. In cross-examination, he stated that the contract was terminated in 2013: T750.1-9. Nothing turns on whether the contract was terminated in 2012 or 2013.

[82] CB.14060, CB.14062, CB.14065, CB.14066; T730.30-T738.13.

[102] In his second witness statement, Mr Vickers stated he 'never had a discussion with Norman Mackay about a "guaranteed" seat on the board.': Vickers II, [55].

[103] T252.20-22. This is not easy to reconcile with the position taken by Mr Vickers in his second witness statement, where he went on to say that it was his understanding that, with a 25% ownership interest, he would be entitled to a senior management role and management rights (in the form of a directorship and the role of Chief Pilot) associated with his ownership: Vickers II, [55]. It may be that the reconciliation lies in Mr Vickers' understanding he would have a directorship and operational role because he was to be a 25% shareholder, but accepting that his board seat did not arise by reason of having a senior managerial role.

[104] CB.14592; Mackay III, [1]-[2].

[107] T1505.25-T1506.2. The relevant references were the reference in the last sentence of paragraph 15 and the references in paragraphs 37, 57, 59, 61, 65 and 71 of Premier's written closing submissions.

[109] Paragraph 54 of the Mackay parties written closing submissions read: 'The true position is that Vickers and Mackay reached an understanding that, if the AAD tender was successful, Vickers would receive a seat on the board and shares in the company. There was no agreement as to the precise terms on which this would occur. Mackay and Vickers devoted their energies to winning the tender and running the company, which they did with enormous success for many years.'[footnotes omitted]

[110] While, in opening, Premier disavowed reliance on characterising the SDA as a 'contract' (T36.1-19), in closing, it embraced the Mackay parties' concession that there was a contract, albeit a more limited one. Premier submitted that 'what we have on both sides of the coin seems to be a recognition that there was a contract. There was an offer and there was acceptance, there was consideration': T1599.2-6. Premier went on to submit that, if I accepted the Mackay parties' contention that the contract was completed and fully executed in 2003, 'we would have to then move to a legitimate expectation': T1599.6-13. Submissions were also framed generally by Premier in terms of the SDA being a contract: eg, T1599.31-1600.4, T1600.20-22, T1600.29-30, T1603.13-20, T1636.16-19, T1644.15-20. The presentation of the SDA as a contract was also consistent with the manner in which it was pleaded, including particulars stating the basis upon which the SDA existed and certain terms were to be implied (FASOC [13]-[14]).

[112] Cf Premier's closing submissions, [370] where it was submitted that 'while Premier Aviation held its shares in Skytraders, Terry Vickers was entitled to hold the positions of Chief Pilot and Director of Operations'.

[115] A contract may be inferred from the acts and conduct of parties in the absence of words: Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110, 11,112, 11,117 (McHugh JA), recently cited by the Court of Appeal in Danbol Pty Ltd v Swiss Re International SE & Ors [2020] VSCA 274, [76] (McLeish, Niall and Sifris JJA).

[117] For a term to be implied, it must be reasonable and equitable, necessary to give business efficacy to the contract, so obvious that 'it goes without saying', and capable of clear expression; and it must not contradict any express terms of the contract: BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 (BP Refinery), 282-3 (Lord Simon, Viscount Dilborne and Lord Keith). The test in BP Refinery continues to be applied, eg Knight v Mayart Pty Ltd [2022] VSCA 36, [80] (McLeish, Sifris and Kennedy JJA).

[118] As referred to in argument: T1502.

[123] The matter referred to concerning persons other than Mr Mackay also not having operational involvement was a feature of Premier's case as it contended actions of Mr Burnaby involved interference in operations. See also paragraphs 53 and 57 above.

[125] O'Neill v Phillips, 1101 (Lord Hoffman); SRW Nominees, [49] (Robson J).

[126] At T28.21-28, counsel for Premier said 'So these concepts of legitimate expectation or expectations quasi-partnerships are all labels. What we plead is that there was an agreement. And I think it's fair to say that if we don't satisfy Your Honour that Mr Vickers and Mr Mackay agreed on a particular relationship, then we will fail in establishing that there was anything other than a constitution that governed the relationship.'

[128] Cf Premier's closing submissions, [377] where Premier submitted that 'Terry Vickers therefore held, and was entitled to hold, a legitimate expectation that while Premier Aviation held its interest in Skytraders, he was entitled to participate in the management of Skytraders. That participation included his employment as Chief Pilot and Director of Operations, and the entitlement to a seat on the board.'

[133] See paragraphs 33 to 35 above.

[135] Premier's closing submissions, [375] (footnotes omitted). See also T1607.19-26.

[139] Mackay I, [82], [101], [151]-[163], [196], [222]; T690.3-19 (Mackay), T553.30-T554.2 (Vickers).

[140] Vickers I, [77]; Vickers II, [191]; T781.26-31, T894.21-26 (Mackay); T948.4-16 (Ide); T1251.4-12 (DeAngelis).

[141] Eg, CB.3051 recording 'success fee'.

[144] While there was a conflict on the evidence regarding the bounds of the executive team's function and how it was to operate, the point for present purposes is that, as the Skytraders business grew, its structures and operations changed, and did not change in a way that carried with it a greater preclusion on others having operational involvement than existed in 2003.

[146] FASOC, [22(a)]; see also plaintiff's opening submissions, [47(a)].

[150] Vickers II, [35] and [60]; N Mackay I, [178]-[179], [257]; Mackay parties' opening submissions T144.29-T145.1.

[152] N Mackay I, [177]-[178]; Vickers II, [35] and [60].

[163] T927.19-29; N Mackay I, [179] and [257]; see also D Mackay I, [35(d)].

[164] Studd [62]-[64], Booth [27]-[28].

[167] T319.30-T320.1; T334.21-24; T339.1-14; T359.16-24.

[168] Until about 2013: T1041.23-29; Burnaby I, [95].

[170] CB.2519-CB.2532 (extract at CB.2531).

[171] CB.2519-CB.2532 (extract at CB.2532).

[172] CB.2519-CB.2532 (extract at CB.2532).

[184] Premier's closing submissions, [114]-[115].

[194] The evidence on Mr Vickers' statements regarding CASA grounding the fleet are addressed at paragraphs 260-261, 265, 276, 327-328 below.

[198] CB.2888; T339.27-T340.18; T350.4-T353.25.

[200] CB.2837-CB.2838 (emphasis added).

[206] Plaintiff's opening submissions, [47(b)].

[207] Premier's closing submissions, [139].

[210] C Mackay I [27-28]; Burnaby I, [275(a)(iv)]; T1071.12-T1072.12, T1073.19-21 and T1074.20-T1075.7 (Burnaby); T1146.20-25 (C Mackay).

[211] Vickers II, [272]; T405.12-T407.5.

[212] T310.4-T311.2 (Vickers); T640.4-18 (Meyer); T903.30-T904.24 (N Mackay); Vickers II [276].

[213] C Mackay I, [30]; D Burnaby I, [275(a)(v)]; T1073.14-18 (Burnaby).

[219] Burnaby I, [275(a)(v)]; C Mackay I, [32]; T1071.4-11 (Burnaby); T1147.7-14 (C Mackay).

[228] Given I have rejected Premier's contention that the SDA existed, these events do not constitute a breach of the alleged SDA.

[231] T398.25-T399.9 (Vickers). Note also Calum Mackay's evidence that he had discussed coming in to the operations department with Mr Vickers, who was enthusiastic: Calum Mackay I, [28] (although the specific conversation was disputed by Mr Vickers).

[233] Premier's closing submissions, [132].

[234] Premier's closing submissions, [133].

[235] Premier's closing submissions, [133].

[236] FASOC, [23(a)]; T1672.30-T1673.4.

[241] Premier's closing submissions, [133].

[243] Mr Ide explained these matters: T969.21-T970.21.

[244] Burnaby I, [279(d)] sets out the evidence here summarised.

[245] Mr Burnaby's evidence was that ABF only wanted an aircraft to be made 'potentially' available for an unidentified short domestic flight: Burnaby I, [279(d)(iii)]; T1063.11-24. Mr Meyer's evidence (on which he was not cross-examined) was that the flight was to fly from Melbourne to Perth: Meyer, [37]. Nothing turns on whether the flight was for an unidentified domestic route, or for a flight to Perth.

[252] Mr Vickers corrected the initial version of his first witness statement to remove reference to Mr Mackay having been at a meeting where Mr Vickers says he voiced his disagreement with proposed action against Mr Hare: Vickers I, [107]; T204.26-T205.3.

[253] D Mackay I, [46]-[56]; CB.3032-CB.3042, CB.3445-CB.3454.

[254] On 20 December 2016, Mr Vickers sent a letter to Mr Mackay and Mr Sharp to this effect: CB.2541-CB.2542. See also Mackay I, [296]; Vickers II, [130]; T360.31-T362.3 (Mr Vickers); T625.19-29 (Mr Booth).

[257] Duncan Mackay III, [2(b)]; Ide II, [2]; Mackay II, [4].

[260] Premier's closing submissions, [185].

[261] Vickers I, [104] (emphasis added).

[266] Vickers II, [120]; Mackay I, [283].

[267] Mackay I, [283]; Vickers II, [120].

[269] Ide I, [121], [123]-[124].

[275] Vickers I, [107]; Vickers II, [118] (but now apparently re-including Mr Mackay in the discussion when reference to him was deleted from Vickers I, [107]).

[287] Ide I, [134]; Burnaby I, [217]; T388.2-7.

[289] Ide I, [134]; Burnaby I, [217].

[292] T393.23-25 (Vickers); T1092.25-30 (Burnaby).

[295] Eg T379.27-T380.7; T384.19; T421.19-22.

[297] T393.23-25, T416.6-13 (Vickers); T1092.21-31 (D Mackay). See also Mackay I, [307]-[309]; Vickers II, [136].

[312] Ide I, [127]. Note also it was Mr Ide's view that Mr Meyer had failed to manage Mr Hare's performance and the situation had gone beyond the point where it could be addressed by Mr Meyer conducting a performance appraisal: T1009.22-26; T1010.20-25; T1016.18-20.

[316] CB.4071-CB.4072 (the letter appears to be erroneously dated 11 August 2019).

[326] Burnaby I, [228]; Duncan Mackay I, [91]; Mackay I, [311].

[329] Mackay I, [316] (emphasis added).

[330] Vickers I, [118] (emphasis added).

[334] T428.14-29. See also T430.27ff where Mr Vickers inferred that Mr Mackay was referring to his children in referring to 'these youngsters' on another occasion.

[342] T831.18-31-T832.1-15; T833.1-16 (emphasis added).

[345] T1097.27-31; T1099.12-14; T1100.7-T1101.20.

[349] T1099.4-T1102.7 (Burnaby); T1140.1-T1142.20 (Duncan Mackay).

[350] Vickers II, [142]-[143]; T440.23-T441.21.

[352] Burnaby I, [236]; Duncan Mackay I, [99].

[356] Burnaby I, [233]; T837.2-T838.5 (Mackay); T1101.21-T1102.7 (Burnaby).

[357] Mackay I, [296]; CB.2541-CB.2542.

[363] Mackay I, [326]; Vickers II, [144].

[366] In opening submissions, counsel for Premier referred to paragraph 5.2 of the Supreme Court of Victoria's Practice Note SC CC 8: 'Oppressive conduct of the affairs of a company', which required the supporting affidavit to set out a preliminary estimate of the value of the shares: T200.7-18. Mr Vickers accepted he was aware in retaining the valuer on 4 September 2019 that it would take a couple of weeks to obtain the valuation: T438.7-21.

[367] Mr Meyer's evidence was that Mr Vickers said words to the effect of 'I want to see it continue for you guys': Meyer, [15]-[18].

[368] Booth, [21]-[22]; T623.7-15 (Booth); T1265.6-14 (Gronset); T1281.25-31 (Studd).

[369] Mr Meyer's evidence was that Mr Vickers had not said or suggested that he was resigning during this meeting Meyer, [17]. He was not cross-examined on this aspect of his evidence.

[376] Studd, [77]; Gronset II, [2].

[377] Booth, [21]; T623.7-T624.25 (Booth); T653.13-T655.10, T659.22-T660.14 (Meyer); T1265.15-24, T1266.13-T1267.3 (Gronset). While Mr Studd could not recall whether adverse action by CASA was discussed at this meeting, he was likewise alive to action CASA might take if it became aware of problems in management: T1281.25-T1282.10.

[388] Mackay I, [334]-[335]; T868.16-20; T869.3-13.

[390] T858.7-11; T869.14-T870.22; CB.4015.

[391] Neither of the two versions of the safety manual in evidence (2016 and 2019: CB.2463 and CB.3687) provided clear instructions on who was to be notified in the event that there was an Acting Chief Pilot. It is also not clear on the evidence whether the 2019 manual (which has a 30 August 2019 date in its footer) was in effect at the time of the Biloela incident: CB.3687.

[402] Mackay parties closing submissions, [15]; T1471.31-T1473.10.

[407] Schiavello, [4]-[5]; T436.30-T437.18.

[408] Mackay I, [358]; T868.10-T869.2.

[410] CB.4065-CB.4066 (emphasis added).

[412] T849.27-T852.23; T856.13-24; T857.18-T858.6 (Mackay); T1122.26-T1124.18 (Burnaby).

[419] Wayde, 472 (Brennan J); Morgan, 704 (Young J); SRW Nominees [37], [40] (Robson J). See also paragraph 28 above.

[421] See paragraph 253 above.

[425] Mr Mackay referred to having had 'a number' of conversations with Mr Sharp between 26 August 2019 and 20 September 2019.

[426] That clause provided 'Subject to the Corporations Act, the Company in general meeting may by ordinary resolution remove any Director, and if thought fit, appoint another person in place of the that Director': CB.5689.

[437] Mackay I, [374] (emphasis added).

[438] Premier's closing submissions, [227].

[439] Mackay parties' closing submissions, [217]-[218].

[440] Mackay parties' closing submissions, [214(a)-(e)].

[445] Mackay I, [373]; CB.4055; CB.4057.

[447] Plaintiff's closing submissions, [353]; T1595.6-18.

[448] If Premier's Expectation case was confirmed so that Mr Vickers' expectation of a board seat could not survive the termination of his operational role, there would be no need to consider Mr Mackay's reasons for removing him as part of the Expectation case.

[449] Titled 'Plaintiff's closing submission in response to Mackay parties' paragraph 214'.

[450] Premier's closing submissions, [353]; Premier's closing submission in response to Mackay parties' paragraph 214,[4].

[451] For reasons noted above, it is not relevantly to the point that Mr Sharp did not give evidence as Mr Mackay's actions are to be judged by the information available to him, which included what he was told by Mr Sharp, with whom he had a long-standing business association.

[459] T1170.7-30; T1231.26-28; T1242.15-20; T1256.12-27.

[460] Cf Premier's closing submissions, [233], Mr Vickers' involvement in the accounting practices being established, as they were, was not raised against Premier as justifying deduction of personal expenses.

[461] CB.1630; DeAngelis I, [47(d)], [51]; DeAngelis IV, [13].

[463] Cf Premier's closing submissions, [230(c)].

[464] T1203.22-29; DeAngelis I, [30]; DeAngelis IV, [22]; CB.1811.

[467] Cf Premier's closing submissions, [237(g)]. Note also that Mr DeAngelis had made an enquiry of Martin Co but had not heard back by the time of giving evidence: T1200.19-22.

[477] Premier's closing submissions, [239] (footnotes omitted).

[483] DeAngelis I, [83]. The fact that Mr Mackay's Porsche and BMW were held under the Freight asset register in the first place is addressed elsewhere in these reasons.

[490] DeAngelis I, [56]-[59], [75]-[85].

[491] Premier's closing submissions, [248(d)].

[492] Premier's closing submissions, [248(c)].

[494] Premier's closing submissions, [249]-[250].

[496] Premier's closing submissions, [256].

[501] DeAngelis I, [99]. Mr Mackay also gave evidence of a real estate agent's rental assessment having been obtained in February 2017 at $1,900-$2,100 per week: CB.2785; N Mackay I, [377(c)].

[516] Cf Premier's submission highlighting the lack of formality: Premier's closing submissions, [254]-[255].

[517] Assuming, most favourably to Mr Vickers, that he first became aware of the rental charge when he saw the June 2018 invoice, it remains the case that he and Mr Sharp acquiesced in the charge being levied. Given that the June 2018 invoice was for the period back to 2 June 2017 (ie, the start of the arrangement), rental was not being paid by Skytraders before Mr Vickers became aware of the charges.

[520] Premier's closing submissions, [261]; T1533.26-T1534.5

[526] DeAngelis I, [130]-[134]; D Mackay I, [120]; Mackay I, [383(b)(i)]; CB.6143-CB.6146.

[534] N Mackay I, [377(e)], [383(b)(ii)].

[542] Skytraders' original contract with the AAD was a 'cost plus' contract, and Skytraders was obliged, in substance, to credit back amounts constituting 'Credits' to the AAD, where the term 'Credits' was defined as 'payments or credits received by the Contractor [which was Skytraders] in relation to the 'Services or the Rechargeable Costs' [which included insurance] such as 'credits, refunds or adjustments from suppliers': CB.1485. Skytraders' current contract contains a similar definition of 'Credits' defining them as 'payments or credits received by the Contractor such as, without limitation: ...(c) credits, refunds or adjustments from suppliers in relation to the Aircraft or the Services...': CB.6020.

[543] Premier's closing submissions, [275].

[545] Premier's closing submissions, [275].

[546] Premier's closing submissions, [277].

[547] The sponsorship payments was an issue on which Mr Sharp actively participated in at trial.

[548] Mackay parties' closing submissions, [274]-[281]; Sallab and Sharp closing submissions, [47]-[60].

[550] T551.23-T552.6; Vickers II, [318].

[554] Vickers II, [171]-[175], [318].

[563] Vickers I, [173]; CB.5313 (19 September 2019 payment into William James trust account), CB.5190-CB.5194 (3 October 2019 Walter Baden invoice), CB.5232-CB.5236 (30 October 2019 Walter Baden invoice).

[568] T913.30-T916.11; CB.4065-CB.4066; CB.4071.

[575] Re D G Brims & Sons Pty Ltd [1995] QSC 53; (1995) 16 ACSR 559, 591-2 (Byrne J); Slea Pty Ltd v Connective Services Pty Ltd (No 9) [2022] VSC 136, [716]-[721] (Robson J); Vigliaroni v CPS Investment Holdings Pty Ltd [2009] VSC 428; [2009] 74 ACSR 282 (Davies J).

[577] While the FASOC pleads that this email was sent on 16 September 2019, the email, which is in evidence, was in fact sent on 15 September 2019: CB.4079-CB.4080.

[580] Premier's closing submissions, [[283]ff, [384].

[581] Mackay parties' closing submissions, [282].

[582] Premier's Opening Submissions, [87]; Premier's closing submissions, [21] and [289]-[290]; CB.14228-CB.14230.

[583] Premier's Opening Submissions, [88]; Premier's closing submissions, [291].

[584] Premier's closing submissions, [291]-[292].

[586] Vickers I, [160]-[161], [170]-[171].

[587] Mackay I, [388(a)]-[388(d)].

[591] That this was the basis on which the request was made is confirmed by Premier's reservation of its right therein to commence a proceeding requiring Skytraders grant access to its books under s 247A of the Corporations Act (which section applies to shareholders) rather than ss 198F or 290 of the Corporations Act (which sections apply to directors).

[593] CB.14228-CB.14230 (Order of Connock J); T1689.25-T1690.24.

[597] Vickers I, [156]; CB.5197-CB.5199; CB.5209-CB.5210. Although there is a table containing categories at CB.5198, the extent to which those categories have been provided is not clear given that the covering email at CB.5197 states in reference to the categories listed in the table, 'some of which was produced for inspection and some of which was not'.

[598] For example, Mr Vickers received a great deal of information over time concerning payments to directors in the form of consulting fees, and payments via the various loan accounts maintained by Skytraders.

[601] Eg, in early 2017, Mr Burnaby and Mr Vickers buried the hatchet concerning the team building event. Eg, the Studd incident had been dealt with and defused. Eg, the objectionable method of the introduction of Calum Mackay into the Melbourne operations department did not derail his visit, and Mr Vickers' himself proceeded to make use of Calum Mackay's services. Eg, the Sydney property rental was raised in a meeting and agreed to by Mr Vickers and Mr Sharp.

[602] CB.6629-CB.6635. Cf the ostensible purchase price for the shares, being $350,000.

[603] CB.1817. While counsel for Mr Sharp and Sallab made the point (T1562.10-23) that the sale agreement was struck in April 2013, before the FY13 accounts were finalised, it was not submitted that the FY2012 accounts suggested such a radically different position as would make $350,000 a comprehensible sale price. Skytraders' 2012 balance sheet shows net assets of over $9 million, and cash on hand of close to $8 million: CB.1701-CB.1702.

[604] See, eg, CB.2941 (being an email dated 7 September 2017, where Mr DeAngelis arranges for a new company, Hiflite Pty Ltd, to be established, stating 'The shareholding of Hiflite Pty Limited will be owned by Norman [Mackay], Terry [Vickers] and John [Sharp]'s SMSFs in the same ratio as the holding is in Skytraders.'); CB.2857, CB.3196 (each being shareholder meeting minutes, showing Mr Sharp as an attendee).

[607] CB.5244-CB.5286, especially at CB.5280.

[610] A matter relied on by Mr Sharp and Sallab in their closing submissions.

[611] I note here that Premier relied in closing submissions of detailed banking records showing transactions between those two sets of interests.

[613] On the basis that a passive shareholder was inconsistent with the quasi-partnership thesis underpinning Premier's expectation case.

[615] T554.29-T555.10. Aside from this explanation, Mr Vickers explained that the decision of who to join to the proceeding was primarily made on the basis of legal advice: T536.26-T537.17; T554.25-T555.23.

[616] Counsel for Mr Sharp and Sallab sought to rely on the decision (in which the contention that the transaction between Ashby Park and Sallab was a sham was rejected) to counter evidence of Mr Vickers as to his suspicions regarding the bona fides of that transaction: T1576.30-T1579.29.

[617] Cf Nassar, [97]-[98] (Barrett J).

[618] While Skytraders continued to pay healthy dividends after Mr Vickers and Mr Mackay fell out (and thus dividend payments were not the subject of complaint in this proceeding) it does not take much imagination to foresee future points of conflict if Premier remains a shareholder.

[619] See, eg: Timesgarden Pty Ltd v Shi [2022] NSWSC 331, [208] (Rees J).

[620] Byrne v AJ Byrne Pty Ltd [2012] NSWSC 667, [80] (Black J), referring to Tomanovic, [49]-[51] (Austin J).