Sheffield v Brambles Australia Limited and another

SECOND RESPONDENT: Brambles Industries Limited FILE NUMBER: 4136 of 1999 CORAM: Peterson J CATCHWORDS : Unfair contract - supplementary judgment to that of 18.1.02 - termination of employment of senior executive - assessment of just compensation - share option plan - premium option scheme - discretion of board to permit exercise of outstanding option - rate of salary to apply to payment in lieu of notice LEGISLATION CITED : Industrial Relations Act 1996 CASES CITED : Westfield Holdings Limited v R G M Adams [2001] NSWIRComm 293 (Unreported) 21 December 2001 HEARING DATES: 04/02/2001; 04/03/2001; 04/04/2001; 04/05/2001; 04/06/2001; 05/01/2001; 10/05/2001 DATE OF JUDGMENT: 05/24/2002

APPLICANT Mr M J Kimber SC with Mr A R Moses of counsel

SOLICITOR Abbott Tout SYDNEY. LEGAL REPRESENTATIVES: RESPONDENT Mr H J Dixon SC

SOLICITOR Corrs Chambers Westgarth SYDNEY.

LINDSAY JOHN SHEFFIELD v BRAMBLES AUSTRALIA LIMITED AND ANOR.

Application under s106 of the Industrial Relations Act 1996.

1 The principal judgment in this matter was delivered on 18 January 2002. It responded to a summons for relief brought under s106 of the Industrial Relations Act 1996 ('the Act') relating to what was held to be an unfair contract under which the employment of a senior executive was terminated. One of the claims for relief related to share options forfeited by reason of the termination of employment, the terms of the particular options scheme and the decision by the Board of the Directors of the first respondent not to exercise, in the applicant's favour, a discretion to award some or all of the forfeited options.

2 After the submissions in the principal proceedings had been completed but before judgment was given, the Full Bench of the Commission in Court Session delivered judgment in Westfield Holdings Limited v R G M Adams [2001] NSWIRComm 293, 21 December 2001 (unreported) which considered, on appeal, the appropriateness of an order made at first instance to order payment of the value of all share options to accrue over a five year period, after the service had been terminated 18 months into that period. I considered it appropriate, the matter of share options having received attention by the Full Bench, that the parties to these proceedings should be given an opportunity to consider and address on the influence, if any, of the Full Bench decision upon the decision making process in this matter.

3 It is convenient that I now repeat what was said in the judgment of 18 January 2002 with respect to the claim for share options: I now turn to a consideration of the claim with respect to share options. Options were issued to the applicant under the Brambles Option Incentive Plan. The terms of clause 14 (set out in para.12 hereof) permit an employee, departing for any reason, to "exercise all your outstanding options in the 60 days after the cessation of employment". The applicant's options then outstanding, in the sense that they were available due to the passing of time, were exercised by him within the period of sixty days following the termination of his employment. The term "outstanding options" in clause 14 appears to have two meanings. In the original Plan, it appears that "outstanding options" may be not only those vested but not exercised but also those not yet vested. Clause 2.1, Definitions, of the Plan, defines "outstanding options" as "options which have not yet been exercised". This definition is equivocal. That it may embrace both vested and unvested options seems to be supported by clause 4.1, Exercise of Options, which refers to outstanding options not yet exercisable, in the following way: The options shall not be immediately exercisable but shall become exercisable in the manner stated on the face of the option certificate PROVIDED THAT all outstanding options which, by virtue of the provisions of this clause, are not yet exercisable, shall become immediately exercisable… The claim concerns premium options received by the applicant under terms which caused such issue to lapse upon termination of employment, subject only to the discretion of the board of directors of the second respondent to grant an early exercise. The issues which arise in respect of the options claimed are, firstly, the validity of clause 8 of the premium option terms, which prescribes that the option shall immediately lapse upon the cessation of employment except where the directors bring forward the exercise or expiry date of outstanding options. Secondly, the failure of the option incentive plan and the premium option issue to take into the account the differing circumstances which may pertain to the termination of a participating employee. Thirdly, the matter of the exercise of discretion by the board in declining to grant the applicant an extension of time. The effect of clause 8 of the premium option terms is to apply the lapse on termination effect, which contrasts with clause 14 of the Brambles option incentive plan which affords a sixty-day period after termination to exercise options. It appears from the evidence, particularly of Mr Corben, that clause 8 was promulgated by the directors in reliance upon clause 17 of the Plan which provides: Upon the issue of any options, the Directors of the Company may impose (and are deemed always to have had the power to impose) at their discretion, conditions restricting the exercise of those options to circumstances which reflect improved performance, by any target dates specified by the Directors, in the Company's share price and/or earnings per share and/or dividend yield and/or total return to shareholders over and above those prevailing at the time of issue of the options. This Clause 17 prevails over Clause 14. The fundamental argument in favour of invalidity of clause 8 is that it does not reflect the circumstances prescribed by clause 17 for restricting the exercise of options, namely those "which reflect improved performance …….". There is no evidence that the introduction of clause 8 had ever been the subject of specific approval by the shareholders of the second respondent. Indeed, Mr. Corben, having been company secretary of the second respondent since approximately 1984, had no recollection of that having occurred. Thus its validity is dependent upon its reliance on clause 17. The respondent's position was that the premium option terms were entirely consistent with the objective of the shareholders and the provisions of clause 17 of the Brambles Incentive Plan. I consider this view to be correct. Viewed as a whole, the premium option terms are primarily conditioned upon the achievement of particular performance targets identified in those terms. The options were to become available, each year commencing from the second anniversary of the date of issue of the options, at the rate of twenty percent per year. The exercise of twenty percent of the holder's options was contingent upon the company's annual diluted earnings per share exceeding a particular cents per year figure (or such other figure as might be set from time to time by the board). If the applicant's argument that clause 8(b) (the lapse provision) was invalid was correct, and had the effect that such options would become exercisable upon the termination of employment, the obvious and fundamental objective of the premium options issue would fail. Namely, in the case of the termination of an option holder the performance requirements of the grant would be rendered nugatory. This would defeat the express intention of the shareholders in approving clause 17 of the Brambles Incentive Plan. I consider the imposition of a requirement that in order to exercise premium options the holder must be in employment (subject to the discretion of the board) is consistent with clause 17 and accordingly not invalid. It seems to me that the two remaining questions posed for decision on the subject of share options, namely the failure of the Option Plan to react to differing circumstances of termination, and the exercise of discretion in this case by the directors, ought be treated as one issue. The terms of the Plan applicable to non-premium options seem to have a curious effect when employees are terminated for different reasons. For example, clause 14 would give the retiree no different treatment to an employee dismissed for misconduct. If the benefit is itself fair (as there is here no reason to doubt), then that would seem to be to the advantage of the defaulter and not the disadvantage of the retiree. However, contrasting the theoretical defaulter's benefit with that afforded to the applicant, there appears to be a clear disadvantage accruing to the applicant, in that he would receive nothing in respect of unvested options while the defaulter would receive all of his unvested options, although under a different grant. In these circumstances it appears obvious that the discretion referred to in clause 2.8 (b), relating to premium options, assumes considerable significance. Regrettably, here the exercise of that discretion seems to have miscarried. The factors taken into account by the board in declining to grant the applicant an advance of his vest date were: (a) that he was not "a long-serving employee", yet he had longer service than Mr. Mulligan, who was given an advanced date, thereby permitting him to exercise his options. His service was almost as long as a number of other executives who also received a favourable exercise of discretion. (b) that he was being terminated by Brambles, but in circumstances where there was at least a misunderstanding on Brambles' part about his willingness to remain. His treatment contrasts with that afforded an executive senior to him who was terminated for poor performance yet given the opportunity to exercise 50% of his premium options. (c) that he was not retiring from employment. He was never advised this was a factor the board would pay regard to and, while he then had no such intention to retire, the vagaries of employment circumstances today for the former executive may visit that very result upon him. Nevertheless, the board has treated other executives as having 'retired' where there was fairly obviously no intention to be bound to retirement. These former executives, including the former Chief Executive, were able to receive their full options and then move on to other positions or, in at least one case, return to consult to Brambles. The applicant also raised in argument factors which the board did not pay regard to but which Mr. Corben accepted in evidence were relevant to the exercise of the board's discretion. These were: (a) Ill health, redundancy, changing job requirements. While the applicant was clearly in poor health at the time, this was not referred to, whereas Mr. Mulligan was treated as being ill when later he was terminated, although he denied this was the fact. He was also made redundant, as was another executive whose application for the early exercise of premium options was approved. (b) The applicant's overall contribution to the company.

(c) Future employment prospects. (d) The number of options which would vest in any notice period the applicant may have been permitted to work out. (e) The immediate loss of benefits and the personal circumstances of the applicant. These features satisfy me that the applicant was dealt with harshly in the context of his employment, the terms of the option plan and the history of the respondent's treatment of other executives. In substance, he was treated as though he was the cause of his own difficulty when, in truth, he was largely a victim of circumstance. I am satisfied that the applicant has made out a case for a remedy on this issue. The summons for relief seeks variation of the contract and the terms of the option plan to put the applicant in the position he would have been in had the discretion been exercised in his favour. Subject to my assessment of the degree of success he should have in that respect, I consider that form of remedy is justified. I am troubled somewhat by the idea that all options should be treated now as available for exercise. My inclination is that something less than 100% ought be awarded. However, I am now conscious of the judgment of the Full Bench of the Court in Westfield Holdings Limited v R G M Adams (Unreported, 21 December 2001, NSWIRComm 293) which considered this question in the circumstances of that case and with reference to a number of other decided cases. It seems desirable that the parties should have an opportunity to address further submissions on that case and subject. I am also aware that the applicant has requested an opportunity to be heard on the matter of the level of any monetary order given the variations in share price which have occurred since the date of termination. In these circumstances I will hear the parties on these questions and also costs at a date to be fixed.

4 The submissions advanced for the applicant on this point were to the effect that the Commission ought award 100 percent of the options or a percentage very close thereto. In the alternative, it was submitted that a monetary award reflecting 50 percent of the share options would be regarded as the absolute minimum possible given the earlier application of that percentage by Brambles in the case of a poor performer. Further, in the alternative, if the Commission were to adopt a proportionality approach, then the applicant should be regarded as having served 52.6% of the vesting period for the first grant of options on 28 November 1997, and 40.3% of the vesting period for the second grant of options on 12 June 1998. These percentages are achieved by including the 12 months' notice period extended by the judgment to the benefit of the applicant.

5 It was submitted that a grant of 100 percent of options was justified having regard to the respondents' practice. Even in the case of a senior executive being displaced for poor performance, the opportunity to exercise 50 percent of his premium options was extended. The respondents misunderstood that the applicant had service to qualify him as a "long serving employee". The respondents regarded him as not retiring from employment yet retirement was never a prerequisite for the favourable exercise of discretion. The respondents took an erroneous view about the applicant's willingness to remain with Brambles.

6 It was submitted that there is every basis for believing that had the Board of the respondents moved forward on the basis of proper and accurate information, i.e. that the applicant was sufficiently "long serving"; that he was being terminated because (through no fault of his own) he had become "in every sense, a supernumerary" and had otherwise taken into account the factors that Mr Corben accepted were relevant to the exercise of that discretion. Namely, the applicant's ill health, his overall contribution to the company, his future employment prospects, the number of options which would have vested in any notice period that the applicant may have been permitted to work out, his immediate loss of benefits and the personal circumstances of the applicant, then the directors would have exercised their discretion in favour of the applicant, and awarded 100% of his options. This is a fortiori given the respondents' well established practice of granting 100% of available options, save in circumstances of poor performance.

7 In Westfield Holdings v Adams, Hungerford J had made a factual finding that the applicant, Mr Adams would not have accepted Westfield's offer of employment had he been advised that there was a five year qualifying period under the particular option scheme which would give no entitlement if he was made redundant before the effluxion of five years.

8 As to the appeal decision in Westfield Holdings v Adams, it was submitted for the applicant that it did not constitute some general or binding authority on trial judges in s106 cases to the effect that a proportionality approach is necessary in the context of orders to correct unfairness in the terms and or operation of share option schemes. An important feature of that case, it was submitted, was that the Full Bench found that Hungerford J had failed to give proper weight to the fact that the applicant could have but did not make any inquiries of his own as to the existence of significant restrictions to the share option entitlements.

9 The reliance by the Full Bench upon the applicant's own conduct as relevant to the ultimate discretionary decision is of no relevance here. There is no counter-balancing factor of conduct by the applicant which would or could support a reduction in what might otherwise be regarded as an appropriate monetary order to compensate for unfairness in the operation of the share option scheme.

10 The submissions advanced for the respondents on the effect of the Westfield Holdings v Adams judgment was that while there may be circumstances where fairness might require an entitlement of share options in excess of that proportion of the vesting period served prior to termination, the approach adopted in that case of proportionality is justified in the present matter. The approach of the Full Bench was to judge the Westfield scheme without the unfairness arising from misrepresentation on the one hand and the counter-balancing failure to inquire on the other hand. The other authorities considered in Westfield Holdings v Adams did not support more than a proportionality approach; nor does the Westfield judgment.

11 It was submitted that it is crucial here, as it was in Westfield Holdings v Adams, to pay regard to the purposes of the share option scheme. Here, as has been found by the Commission in its judgment of 18 January 2002 (at para 56): "Viewed as a whole, the Premium Option Terms are primarily conditioned upon the achievement of particular performance targets identified in those terms. It was submitted that if the options would become exercisable upon termination employment, the performance requirements of the grant would be rendered nugatory and the express intention of the shareholders in approving the changes to the scheme would be defeated."

12 In Westfield Holdings v Adams the Full Bench said in a similar context: The purpose of the appellant's share option scheme was to link the performance of executives to the growth and expansion of the appellant. In other words, the better the executive performed in contributing to the creation and growth in shareholder wealth, the greater the reward. Whilst the respondent's position became redundant through no fault of his own, we think that from the time he ceased his employment with the applicant he also ceased his contribution to increasing shareholder wealth. It seems to us that any award flowing to the respondent from this contribution would, like his salary, also cease at the time of termination. (at p.186)

13 As to the comparison made with the position of the senior executive who had been asked to leave Brambles and was afforded 50 percent of his options under the Premium Option Scheme, it was pointed out that he held options under three issues in respect of which he had completed service within the three vesting periods of 78.9%, 34.4% and 27.7% respectively. The Board permitted the exercise of those options as to 100%, 40% and 20% respectively. It was the combination of these three entitlements which amounted to approximately 50% of the total but, seen separately, there was a proportional reduction granted consistent with the purpose of the Performance Option Scheme.

14 It was also submitted that there is a material difference between the case of that executive and the applicant on the one hand and the other executives under consideration on the other. The other executives were not required to be replaced. It was submitted it cannot be presumed or assumed on an objective basis that the Board would treat the senior executive in this manner but would, or ought to, have treated the applicant significantly more favourably, as is now suggested by the applicant.

15 The respondents submitted that the proceeds of options ought be assessed on the basis that the applicant had testified that he would have sold all options available to him as soon as it was possible to do so. Assuming the Board had exercised its discretion in his favour on 1 July 1999, and it would have taken approximately two weeks to process the options, the closing share price for the five trading days up to and including 15 July 1999 should be taken as the relevant figure. That closing share price is $39.462. The exercise prices of the first and second grants were $28.67 and $30.84 giving resultant benefits of $10.792 and $8.622 per option/share.

16 The applicant's position with respect to the valuation of the options is that either the share price at the date of termination ($43.30) or that at the expiry of the extended period of notice awarded by the Commission of 12 months ($49.16) ought be adopted. The differential between those prices and the exercise option prices of $28.67 and $34.84 would then apply.

Conclusions 17 Having now considered the submissions advanced by both sides concerning the effect of Westfield Holdings v Adams I have concluded it does not provide a necessary guide to follow in the assessment of the compensation for forfeiture of share options in this case. The relevant features of that case which, as I understand it, affected the limitation to a proportional approach were the two counterbalancing matters of inducement on one side and lack of care for matter of forfeiture, when well-experienced in that respect, on the other, plus the terms of the option plan. The approach taken in those circumstances cannot stand as an immutable guide for a case with different facts.

18 The various approaches to the assessment of the options order advanced by the parties are: The Applicant - 100 percent - A percentage approaching 100 percent The Respondents - Proportionality, that is, a straight proportional reflection of that proportion of the vesting period actually served. This would give: - Of the initial grant of 8,700 options granted on 28 November 1997, 20 percent of the options exercisable on the second anniversary (28 November 1999). The service ended on 3 May 1999 thus giving 1,740 options from 28 November. - Of the second grant of 12,000 options granted on 29 June 1998, again up to 20 percent of the options were exercisable on 29 June 2000 (2,400 options). The Applicant - If proportionality is applied, the period of service utilised should include the 12 months' notice period awarded as fair.

19 The reasoning which has led me to conclude by my earlier judgment that the applicant should have an order favourable to an appropriate extent, fundamentally depends upon the findings with respect to the termination and the understanding of the Board of the second respondent at the time it considered his share options.

20 Here, there is no element of inducement to take employment or any misrepresentation in such a context. The applicant received the substantial benefit of participation in the non-premium option plan and was entitled to exercise all options available to him under that plan, whether vested or not, on termination. The Premium Options Plan was separate and special for more senior staff. Its objectives were more concerned with an executive's contribution to performance of the company than the non-premium option plan, which reflected overall performance.

21 Were one considering the fairness of the Premium Option Plan absent the findings of fact to which I have referred, then it may be that a straight proportionality approach would commend itself. The reasoning of the Full Bench in Westfield Holdings v Adams (see the passage cited at para.12 hereof) would seem apposite in that context. However, here the findings are replete with features which drag one away from the concept of proportionality. In particular, the treatment by the respondents of other departing senior executives is directly inconsistent with that view of the Premium Option Plan. The applicant has objected to the attempt by the respondents in their supplementary submissions on this issue to include fresh documentary evidence concerning the approach adopted to the senior executive who left upon request over poor performance. The respondents contend that this presents the true picture as one constituting a proportionality approach rather than a simple 50 percent of share options as Mr Corben had testified. I intend to rely upon this material for the reason that while 50 percent was the approximate average of the proportional approach in respect of three separate grants of options, the very adoption of an approach based on proportionality in that context demonstrates to my mind its inaptness in the context of the applicant's different circumstances.

22 To leave the applicant with less than an averaged 50% of his share options in circumstances where there was no reason to treat him as a poor performer would be unfair indeed. The more relevant context in which the assessment of his options must be made is that of the executives who were granted 100 percent of their share options when, even nominally, retiring from employment, or terminating on grounds of ill health but at more advanced ages.

23 I do not consider the approach urged for the applicant to be appropriate, namely, that the Commission should determine what the Board of the second respondent would have been likely to do had it been properly informed about the applicant's circumstances. Rather, I consider the approach must be to determine what would be, in the court's assessment, a fair and just compensation in the light of the surrounding facts as found. Those facts, including the generous approach of the respondents in the cases I have referred to, suggest to me that an ungenerous approach would be inappropriate. However, I find difficulty in the view that it would be appropriate for the court to order that the applicant should receive 100 percent of the options he would have received had circumstances been different. Bearing in mind the vicissitudes of life, it seems to me that the assessment of a just sum here requires some reduction to allow for the possibilities that may have emerged had the applicant not been terminated as he was at the time. It is impossible to know whether he would have ultimately qualified for the whole of the premium options. What is known is that he was denied that opportunity. It seems to me that in this context and bearing in mind that proportionality would give 52.63% and 40.3% of the two grants, an award of 80 percent of the applicant's premium share options would be appropriate.

24 As to the price at which the options ought be compensated, the three prices advanced relate to the date of termination, 5 July, and a date 12 months after termination. It does not seem to me reasonable to utilise a share price applicable 12 months after the date of termination when what has been complained about by the applicant was the failure by the Board to exercise its discretion in his favour at or near the point of termination. As the applicant has submitted, there has been no explanation for the delay between his earlier request for the exercise of the share options which was made on 31 March 1999 and the decision of the Board made on 1 July 1999, after service had ended on 3 May 1999. No explanation has been proffered as to why the Board did not consider the matter expeditiously. I would not accept the proposition that the respondents had hoped that the applicant would forget this issue. Nevertheless, there appears to be no reason why the matter could not have been attended to more expeditiously to enable a coincidence with the termination. Accordingly, I consider that the share price of $43.30 applicable at the date of termination ought be utilised for the purpose of calculating compensation. It follows that compensation should be quantified at $221,440.80 on this account, being 80 percent of the total differential between $43.30 and $28.67 in respect of the initial grant and $43.30 and $30.84 in respect of the second grant.

25 There are two further issues which have been raised by the applicant in its supplementary submissions which are required to be dealt with. The first relates to the rate of salary which ought be utilised in respect of the 12 months' notice period and thus a payment in lieu thereof. The applicant has submitted that while the Commission decided (see judgment of 18 January 2002 para. 42) that the full package rate of $329,000 was not to be used for the payment in lieu of notice, in effect, no substitute rate was nominated. It was submitted that the base salary of $150,000pa, together with a cash allowance of $30,000, a company car valued at $27,500pa and a grossed-up after tax housing allowance of $35,000, equating to $67,960, and a telephone allowance of $1,942pa. Accordingly, it was submitted that the rate of $277,402 should be utilised for the purposes of notice. I note also that the applicant submitted, entirely contrary to the judgment, that an order for the gross sum should be paid despite the fact that Brambles had paid $75,000 (the equivalent of six months at the annual base rate of salary of $150,000pa) on account of notice. The attempt to support that proposition pays no regard to the fact that the notice period was increased to 12 months, not an additional 12 months.

26 The respondents submit that the applicant's submissions on this point are an attempt to have the Commission depart from a determination already made in para. 48 of the earlier judgment.

27 The respondents' submissions in this respect are clearly right. Paragraph 48 of the judgment discussed the issue of the rate at which the notice period should be paid and attributed to it the base rate of $150,000, together with the value of the relocation allowance. The combination of those two elements would give a rate for notice purposes of $196,025 before tax. That is the annual rate which is to be utilised for the purposes of the order. The figure of $196,025 incorporates $46,025 on account of the relocation allowance for reasons which I will now explain.

28 As to relocation expenses, Exhibit 7 dealt with the actual costs involved which total $34,826. The parties agree that tax will be payable on the sum ordered so that, in order to ensure that an amount in that sum is actually received by the applicant, it is necessary to gross the figure up to incorporate the level of tax. The applicant contends that the top marginal rate should be utilised for this purpose. Given that the tax payable on the payment which arises from termination will be as the respondent's have submitted, without contest, taxed at 31.5%, it would be inappropriate to use the marginal tax rate, as the applicant had urged, because he would achieve in his hand a sum greater than that necessary to cover the relevant costs. Accordingly, the sum necessary to allow a reduction by way of tax at the rate of 31.5% is $45,796.20.

29 The same principle must apply in relation to the relocation allowance awarded for 12 months. This allowance was paid to the applicant to offset the additional costs involved in his moving into the Sydney real estate market. The sum was $35,000 pa after tax. In an ordinary employment year that would of course require a grossing-up by the top marginal tax rate but, given this will now constitute a payment resulting from termination, the 31.5% rate should apply, giving a gross sum of $46,025.

30 Each of the last two items, namely relocation expenses and the relocation allowance payable in Sydney, are distinguishable from the position which attaches to an annual rate of salary. The two allowances are after tax amounts whereas the annual salary rate is a before tax amount.

31 Finally, the amount payable in respect of superannuation should be as the respondents have submitted, $31,704.80. That amount is 50 percent of the loss suffered by the applicant and represents the amount to which para. 63 of the judgment of 18 January refers.

32 The Commission orders that: 1. The contract of employment of the applicant with the first respondent dated 20 February 1997 is varied by: (a) deleting cl.6.3; (b) deleting from cl.15, Termination of Employment, subcl.(b) the word "base"; (c) deleting from cl.9 of Schedule A thereto the words "SIX months" and substituting therefor the words "twelve months". 2. The collateral arrangement whereby the applicant became a registered holder of share options under the premium option terms and conditions is varied to provide that upon the termination of the applicant's employment, the applicant will be entitled to be paid a sum representing 80 percent of the difference between the strike price ($28.67) of options granted on 28 November 1997 but not vested and the share price applicable at the date of termination ($43.30) and 80 percent of the difference between the strike price of $30.84 for those granted on 29 June 1998 but not vested and the said share price of $43.30. 3. The contract of employment is varied to provide that in the event that payment in lieu of notice on termination of employment the applicant will be entitled to credit in respect of relocation allowance and relocation expenses. 4. The respondents to pay the applicant the sum of $419,966.80 comprising: In respect of share options $221,440.80 Loss on superannuation $ 31,704.80 Pay in lieu of notice including relocation allowance $196,025.00 Relocation expenses $ 45,796.20 Sub-total $494.966.80 Less Notice Paid $ 75,000.00 Total $419,966.80

33 Interest shall run on that amount at the Supreme Court rate from the date of commencement of the proceedings, 3 August 1999, until 24 May 2002.

34 It may be appropriate that the order for the payment of the money be divided appropriately and relevantly between the two respondents. One possibility is that the first respondent should pay the amounts relevant to the termination of employment and the second respondent the amount referable to share options. I would make such order in that regard as may be indicated as appropriate; otherwise the liability should be joint and several.

35 In the ordinary course costs would follow the event. The applicant has sought an order for costs. The respondents seek leave to deal with that question once compensation has been finally assessed. In the absence of any other countervailing matter, the usual order should apply. I will hear the parties on that matter if it be necessary.

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