Togher & Anor v Alexander & Ors - [2019] NSWDC 221 - NSWDC 2019 case summary — Zoe

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Togher & Anor v Alexander & Ors

[2019] NSWDC 221

District Court of NSW|2019-05-24

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At a glance

Source facts

Court

District Court of NSW

Decision date

2019-05-24

Source

Original judgment source is linked above.

Judgment (66 paragraphs)

[1]

[2010] NSWCA 67 Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 Pacific Carriers Ltd v BNP Paribus (2004) 218 CLR 451 Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd [1971] 2 QB 71 Pavey & Matthews Pty Ltd v Paull (1987) 162 CLR 221 Robinson v Harman (1848) 1 Exch 850 Rush v Nationwide News Pty Ltd (No.7) [2019] FCA 496 Russell Gould Pty Ltd v Ramangkura (No.2) [2015] NSWCA 14 Seiwa Australia Pty Ltd v Beard (2010) 75 NSWLR 74 South Sydney DRLFC v News Limited (2000) 177 ALR 611 State of NSW v Lepore (2003) 212 CLR 511 Thompson v Palmer (1933) 49 CLR 507 Tomlinson v Ramsay Food Processing Pty Ltd (2015) 256 CLR 507 Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101 Ward v Eltherington [1982] Qd R 561 Texts Cited: K Fletcher, The Law Relating to Non-Profit Associations in Australia and New Zealand (LBC, 1986) Australian Concise Oxford Dictionary Bowstead & Reynolds on Agency (21st ed, 2018) Cheshire & Fifoot Law of Contract (11th Australian ed) G Dal Pont, Law of Agency (3rd ed) J F Keeler, 'Contractual Actions for Damages against Unincorporated Bodies' (1971) 34 Mod LR 615 Law of Charity (2nd ed, 2017) LexisNexis Concise Australian Legal Dictionary Restatement of Agency (3rd ed) Spencer Bower & Handley Res Judicata (4th ed) Category: Principal judgment Parties: Mr Alexander (Claimant) Mr McClure (First Cross-Defendant) Mr Harkness (Second Cross-Defendant) Representation: In person. File Number(s): 2017/166111 Publication restriction: Nil

[2]

[3]

Nature of the case

This case arises out of a failed attempt to put on a music festival in Melbourne in early 2017 and, for practical purposes, ultimately raises the question of who should bear the losses of the investment of monies made towards that failed venture.
Mr Trevor Alexander has had extensive involvement in the performing arts over the last 40 years, in several capacities, including but not limited to being a theatrical producer. In more recent years, he asserts that he also been a member of the Church of SOCIA, which is a registered (but unincorporated) charity. In this latter capacity, Mr Alexander has had dealings with Mr Malcolm McClure, a Minister of the Church; and also Mr Zenaan Harkness, another Minister. Both Mr McClure and Mr Harkness say they are members of the committee of SOCIA Church. 'SOCIA' is an acronym and abbreviation for 'Spirit of Christ in Action'. The Australian Charity and Not-For-Profits Commission Charity Register summary indicates that the charity is intended to benefit the 'General community in Australia'.
Grace Missions is another registered (and unincorporated) charity. The ACNC Charity Register records that Grace Missions is a charity that has the purpose of benefitting Aboriginal and Torres Strait Islander people, the general community in Australia and unemployed persons.
The SOCIA Church and Grace Missions: 1. share the same charity street address and landline telephone number; 2. were registered, as charities, on the same date; 3. each have Mr Harkness as the responsible 'Public officer'.
In or by March 2016 Mr Alexander says that he conceived the idea of putting on a Gala New Year's Eve opera spectacular for 31 December 2016. He says he put this idea to Mr McClure and Mr Harkness and asserts that, on behalf of the SOCIA Church, they appointed him to be the 'creative and artistic director' to bring such spectacular (and subsequent like projects) to fruition. He says this appointment was part of a verbal agreement that he entered with the SOCIA Church; by which he would essentially put together the project and SOCIA would provide the finance for it, by depositing into an account, in the name of Grace Missions, the sum of $100,000. From this fund, Mr Alexander says it was agreed that he could withdraw monies in order to meet production expenses. After the performances, and separately, his own professional fees as the artistic director would be paid.
In about May 2016, Mr Alexander held ambitions for a larger event which would extend beyond a mere performance on New Year's Eve. He wanted to have a series of theatrical performances throughout January 2017.
For Mr Alexander, the experience from the middle of 2016 until early January 2017 was not a happy one. He says that contrary to what he had been promised by SOCIA Church by Mr McClure, there was no account of $100,000 which could be used to meet production expenses. This, according to Mr Alexander, meant that, in this particular period, he had to find his own resources to fund the production expenses (predominantly, although not exclusively, by access to monies held in a company, 'Goddess Reawakening'). He says that he received further assurances (subsequent to the verbal agreement of March 2016) from Mr McClure that monies would be placed into an account and that he would be subsequently reimbursed for the payments he had made since then. Then in December 2016, there were problems with Ticketek for the event on New Year's Eve. This ultimately resulted in a lower than expected attendance on that occasion. In early January 2017, a meeting was called, which was attended by Mr Alexander, Mr McClure and Mr Harkness, and various artists who, to this point, were committed to performing events as part of a festival. Mr Alexander says that Mr McClure, on behalf of Grace Missions, represented that contracts to artists would be honoured. But very shortly thereafter, Mr Alexander asserts that Mr McClure absolved the Grace Missions of any responsibility to the artists, or, for the payment of any fees to Mr Alexander personally. He says he felt as if he was thrown under the bus.
For its part, Mr McClure and Mr Harkness, for SOCIA, and Mr Harkness, for Grace Missions, deny that there ever was any arrangement with Mr Alexander reached in 2016 or at any subsequent time, of the kind he alleges; or that Mr Alexander had been appointed as a creative director. They say that they had cautioned Mr Alexander against entering into a project without being satisfied that there was "money in the bank". This, they say, was partly the product of bitter experience: that, back in 2014, Mr Alexander purported to act as the SOCIA Church's agent in getting it to purchase a property at Warrigal. They say that the idea of the festival had occurred to Mr Alexander back in October 2015 (if not in August 2015), but Mr McClure had firmly indicated at that earlier time that the SOCIA Church would not get involved. Messrs McClure and Harkness said that, by March 2016, Mr Alexander had indicated to them that he was unable to obtain grants or other means of financing the festival. Mr McClure says that he advised Mr Alexander not to proceed until money was in the Bank.
They say that it was only in late July 2016 that SOCIA Church and Grace Missions stepped in to help out Mr Alexander. This, they also say, arose from Mr Alexander telling them that he was in financial trouble and needed help (having used up his own resources, and some of his mother's superannuation). Mr McClure explained their motive for assistance: they could see that what Mr Alexander was proposing was beneficial to the Melbourne Arts industry, and the community generally and wanted to help. The help consisted of SOCIA Church and Grace Mission agreeing to make an arrangement between themselves whereby SOCIA Church would lend up to $50,000 to Grace Missions, and for the latter entity to on-lend that total sum to Mr Alexander, on a conditional basis, and upon the presentation of approved invoices rendered by Mr Alexander. They say this arrangement was entered into on or about 31 July 2016, and conveyed to Mr Alexander in early August 2016. In this way Mr Alexander would not have direct access, or control of the monies. There was, however, a catch: according to Mr McClure and Mr Harkness SOCIA would only pay Grace Missions when there was money available.
They say that approximately $49,000 was paid by SOCIA to Grace Missions, in unequal and irregular instalments and that these sums were distributed to Mr Alexander in the period from 1 August 2016 to early January 2017 after the receipt of between 12 and 15 invoices.
The payments stopped after New Years' Day in 2017. Mr McClure and Mr Harkness say it was only soon after that, that people, such as Linda Buckley, who Mr Alexander had engaged to publicise and promote the Festival, had asserted that they had entered into contracts with Grace Missions. This had 'shocked' Messrs McClure and Harkness and they cut off further communications with Mr Alexander.
On 7 January, they received another demand from Mr Togher (see further below). Grace Missions says it agreed to utilise the last portion (about $7,000) of the $50,000 loan earmarked for Mr Alexander and refused to pay him any more. In July 2017, Grace Missions demanded Mr Alexander repay approximately $47,000 advanced to him.

[4]

Procedural background

Mr Alexander was the first defendant in a proceeding (commencing on 2 June 2017) brought by Mr Patrick Togher, and Mr Romola Togher, who, together, practised in a partnership called "Patrick Togher Artists' Management". That partnership was in the business of providing theatrical performance to appear in shows. The gist of their claim was that Mr Alexander, on behalf of Grace Missions, had procured the partnership to arrange for a number of actors to perform in one of the shows ("Some Enchanted Evening") in early January 2017. This, the partnership said, it did and Grace Missions had failed to pay its invoice. The other defendants to the proceeding were Mr McClure and Mr Harkness.
This proceeding was disposed of pursuant to a consent judgment on 12 April 2018. Mr Alexander's claim against Mr McClure and Mr Harkness is a cross-claim (filed 21 December 2017) in the proceeding commenced by the partnership. As will be seen, Mr McClure and Mr Harkness contend, as one of their defences to Mr Alexander's claim, that the effect of the disposition of the Partnership's claim (against all defendants) is to amount to an issue estoppel or res judicata which they contend precludes Mr Alexander from maintaining his claim.
By his cross-claim (21 December 2017), Mr Alexander effectively sues SOCIA and Grace Missions, through Mr McClure and Mr Harkness (as members of the committee) for breach of a verbal contract, for its failure to honour its alleged promises to provide the monies, as well as outstanding professional fees. Mr Alexander also seeks damages for loss of reputation on the basis that because Mr McClure and Mr Harkness (on behalf of the entities which they represented) breached the agreement, this has led to a loss of trust in Mr Harkness within the performing arts industry.
The parties were unrepresented at the trial. I was informed by Mr McClure that he and Mr Harkness were legally represented from late February 2018. This was until 6 May 2019 when they terminated their solicitor's retainer.
Mr Alexander brought no other claim in promissory estoppel, for (statutory) misleading or deceptive conduct in trade or commerce, arising from non-contractual promises, for breach of warranty of authority; or for a quantum meruit.
Mr Alexander had also sued the SOCIA Church and Grace Missions; however, I was informed by Mr Alexander that those entities had been removed as defendants.
It appeared to me that Mr Alexander's cross-claim was not properly constituted, in the sense that only Mr McClure and Mr Harkness were cross-defendants; when they were only two of six members of the committee of SOCIA. In my view, it was appropriate that all members of the committee at the date of the putative contract (March 2016) be added as cross-defendants. I return to this subject below when I address the topic of capacity of SOCIA and Grace Missions, as unincorporated associations, to enter into arrangements.
Mr Harkness brought a cross-claim (dated 13 April 2018), centred around Mr Alexander's failure to repay the alleged debt to Grace Missions of slightly (with interest) in excess of $50,000 arising from the arrangement set out in paragraph 9 above. Mr Alexander denies the debt and says he had no need to borrow as at July 2016.
For the same reasons in relation to the constitution of Mr Alexander's claim, I considered it appropriate to add, as an additional cross-claimant, Mr Graeme Peters, being the only other member of the committee of Grace Missions as at the date of the alleged agreement in July 2016.

[6]

Dealings prior to March 2016

Mr Alexander swore no less than four affidavits in this proceeding; although one of them was not read.
A recurring theme throughout the affidavit evidence of Mr McClure and Mr Harkness was references to earlier, undocumented (or poorly documented) commercial transactions. This had not been referred to in Mr Alexander's first affidavit.
One earlier transaction was the printing of books that Mr Alexander had written about Egypt; and a subsequent trip by Mr Alexander to Egypt. Mr Harkness said that he was not sure whether SOCIA or Mr McClure (personally) paid for the printing and said it was possible that Mr McClure had agreed to the printing of the books 'off his own bat'. (Mr McClure subsequently acknowledged that he had paid for the printing personally) As to the Egyptian trip, Mr Alexander had put a written proposal to SOCIA Church. Mr Harkness was not aware of it being considered by the committee. Nevertheless, he said, SOCIA had agreed to fund it sometime after August 2015. There was no minute of such meeting.
Another was a conveyance, or purchase by, Mr Alexander and Ms Hill, of property in Warragul, in Victoria in 2014.
An issue in that earlier transaction was whether a promise had been made on behalf of SOCIA Church, to finance the balance of the purchase price after Mr Alexander and Ms Hill had paid the deposit. In separate reasons, I rejected the use of such evidence (in Mr Harkness' affidavit) as showing any tendency on the part of Mr Alexander (for the purposes of section 97 of the Evidence Act NSW [1995]), whilst admitting it (under s 136) for the purpose of establishing the issue of whether or not Messrs McClure and Harkness agreed to enter into the transaction in March 2016. I determined that the events in relation to this earlier conveyance were relevant to the question of whether the SOCIA Church and Grace Missions likely would be prepared to lend, or provide, monies to Mr Alexander (or entities affiliated with him) for commercial or investment purposes. This was a distinction which Mr McClure and Mr Harkness did not fully comprehend and, at least in the case of Mr McClure, some cross-examination was focused upon the merits of the parties' contestable claims in relation to this earlier transaction. The gist of the evidence was Mr Harkness and Mr McClure did not trust to enter agreements with Mr Alexander because of what they regarded as his conduct in falsely representing that he had authority on behalf of SOCIA Church to enter into a transaction that he represented was financed by SOCIA Church.
Under cross-examination, Mr Alexander said that between 22 December 2015 and 6 November 2015 he was in Egypt. Thereafter, he recalled having two meetings and various phone calls with Mr McClure up to the date of the meeting in March 2016. Mr Alexander said that the idea that he articulated in the meeting on March 2016 had emerged after he had seen a show on 13 February.
In relation to these two previous events, or episodes, Mr Alexander gave some evidence in reply. After the Warragul 'fiasco', (of late 2014), he said that at no stage thereafter (whether in March 2016, or 24 July 2016) did Mr McClure, or Mr Harkness indicate that they were not prepared, or no longer prepared, to engage in any further business dealings with him. In relation to the Egyptian trip, this trip had, in fact, been financed by SOCIA, in the sum of just over $20,000.
Neither Mr McClure nor Mr Harkness cross-examined Mr Alexander in relation to the handwritten notes of meetings that had occurred in August or October 2015; although they cross-examined Ms Hill in relation to the notes. Nevertheless, the notes bore Mr Alexander's signature. Mr Alexander said that he applied his signature only on the basis of signifying his attendance at the meeting; without fully reading the notes; and in the expectation (in accordance with his experience) that the handwritten notes would be transcribed into typed form and circulated for his consideration and approval. This, he said, had not happened.
Mr Alexander further said that during the proceeding, he sought the production of the notes, even by means of filing of a notice of motion for discovery; and subsequent email requests. Despite these matters, he did not receive the handwritten notes until, virtually, the eve of the hearing.

[8]

March 2016 meeting

In his primary affidavit (23 May 2018) Mr Alexander referred to a meeting that occurred at his then residence in Drouin (Victoria) between himself and his partner (Christiane Hill), Mr McClure and Mr Harkness in March 2016. Certain parts of this affidavit were objected to and, without objection from Messrs McClure or Harkness, I granted leave and assisted Mr Alexander to elucidate, in evidence in chief, that evidence in proper form.
Mr Alexander recalled Mr McClure saying "we need to give you a position", to which he, Mr Alexander, suggested in response, "Creative & Artistic Director of Creative & Artistic Projects for Church of SOCIA Australia". Mr Alexander also recalled asking Mr McClure, "Do we need to run this through the (SOCIA) committee?" To this, Mr McClure responded "No no no, that will be fine. I've got the authority". After this, Mr Alexander says he tabled his proposal. He says that they, being Mr McClure and Mr Harkness, looked to the proposal and asked how much it would cost. Mr Alexander recalls Mr McClure saying "we'll set up the account under Grace Missions". Reference was made to a sum of $100,000 being deposited.
Under cross-examination by Mr McClure it was put that Mr Alexander had only purported to appoint himself to this position. Mr Alexander rejected this. It was also put that there was no document which Mr Alexander had put in evidence to corroborate his position that he was a creative director (or held any other office) for SOCIA Church, or Grace Missions. Instead, a number of the emails which Mr Alexander put into evidence stated that he was a creative director of the Melbourne Musical Theatre Festival (put as another self-appointment); as well as other business names that had been registered through the company of which Mr Alexander was a director, relevantly 'Goddess Reawakening'. These matters were accepted by Mr Alexander. It was further put to him that the position of creative director does not exist within SOCIA. Mr Alexander rejected this - saying that Mr McClure had appointed him.
Under cross-examination by Mr Harkness, Mr Alexander admitted that at this meeting, Mr Harkness did not (expressly) appoint Mr Harkness as Creative Director for Grace Missions. Mr Alexander said that it was Mr McClure who did so. This led Mr Harkness to ultimately say that Mr McClure did not have the authority to appoint Mr Alexander to any position on behalf of Grace Missions. It was also put that at no stage did Mr Harkness tell Mr Alexander that he was appointed as agent for Grace Missions. To this, Mr Alexander responded that he (Mr Harkness) said nothing when Mr McClure made the appointment. In response to questioning as to how many contracts Mr Alexander had signed in the name of Grace Missions, Mr Alexander thought there were up to 100 such contracts. None of these had been notified to Mr Harkness. This, Mr Alexander explained, was because that "did not seem relevant" at the time. Nor were there emails to Mr Harkness identifying a contract in the name of Grace Missions. As to this, Mr Alexander said that there were multiple emails he sent to Mr Harkness concerning his need for money. Mr Harkness put to Mr Alexander that such authority as he had from Grace Missions was limited to emailing invoices. This proposition was rejected. Mr Harkness elicited an admission from Mr Alexander that he passed on an email to himself and Mr McClure as a courtesy; in order to be open and transparent; but then put to Mr Alexander that he did not show the same openness and transparency by failing to notify himself (or McClure) the various contracts that Mr Alexander had entered into on Grace Missions, or SOCIA's behalf. Mr Alexander said that, in his experience and practice, a creative director could not practicably forward on all contracts to the underwriter of an event.
In re-examination, Mr Alexander elaborated that, in his experience, for events, or festivals of the kind under consideration in this proceeding, there is a distinction between the roles of a creative and artistic director and an artistic administrator. Typically, the role of the latter position was to do contract bookings. Mr Alexander explained, essentially, that because the underwriting was limited to $100,000, in order to make savings, he generally took on this role (as 'artistic administrator'), unless there were occasions (such as the booking of the MCEC as the venue for the NYE performance), the owner of the venue sought to directly speak with the underwriter. (Another exception was the PTMP performers). Mr Alexander intimated that Mr McClure and Mr Harkness were content to allow Mr Alexander to perform the role of administrator and that this did not require him to disclose details of every contract for every performer he was engaging (in the joint capacity) of being the creative and artistic director.
In respect to what would happen with the revenue from this (and any other) project, Mr Alexander says that he told Mr McClure that "the money should go back into the account for future projects". He recalls Mr McClure saying "Yep, that seems fair".
In relation to his own fees in connection with this project, Mr Alexander says that he told Mr McClure "I would defer all my professional fees until after the concert had finished". He says that Mr McClure responded "that's very generous of you." Mr Alexander accepts that, at this point, there was no discussion of any fixed fee for him; although he says that he told Mr McClure that he would put his fees in writing; to which Mr McClure responded "that's fine."
There were four important aspects to the parts of Mr Alexander's primary affidavit, relating to this meeting. First, Mr Alexander's position was that he took a purely voluntary appointment: meaning no salaries, wages or stipends. I found it difficult to understand what was meant by this, given his evidence about an agreement to pay him (albeit on a deferred basis) his fees. This appointment was not recorded in writing. Instead, Mr Alexander says, Mr McClure and Mr Harkness shook Mr Alexander's hands. Mr Alexander interpreted this to amount to their congratulations upon his appointment.
The second aspect of the discussions was Mr McClure tabling, or proposing, a project to establish the performance of the show 'Aida', as part of a 2016 New Year's Eve spectacular at the Melbourne Convention and Exhibition Centre (MCEC). Mr Alexander said he told Mr McClure and Mr Harkness, in response to Mr McClure's question as to cost, that if he deferred his own fees as a director, set designer and administrator until after opening, it would take an initial sum of $20,000, with around $100,000 in total, to cover the setup costs to opening night. After that, box office (revenue) would cover all subsequent costs such as his fees, other production expenses and production management fees which could all be paid post opening performance out of the box office returns. He says he provided an estimate of a potential net profit of between $1.5 - 2.5 million.
Under cross-examination, Mr McClure put to Mr Alexander that he told him not to move on with the festival until there was money in the bank, and/or that he was confident that he had the money. Mr Alexander rejected these propositions. Mr McClure also put to Mr Alexander that he had told Mr McClure that he would be able to get grants, Mr Alexander denied this: he said that one would never assume that one could get grants. Mr McClure put to Mr Alexander that in the meeting on March 2016 he had described Mr Alexander as being a "reckless bull in a china shop". Mr Alexander denied him saying this. Mr McClure again put to Mr Alexander that he advised him to make sure that there was money in the bank. Mr Alexander denies him saying this.
It was put that reference was made during the March 2016 meeting to the "Warragul" event - an unhappy transaction involving all of the protagonists. Mr Alexander responded that it was only his partner, Ms Hill who raised the reference (saying that she did not wish to have a repeat about Warragul). Mr McClure put to Mr Alexander that he told him "I don't want to see you repeat Warragul". Mr Alexander rejected this.
The third feature was a verbal agreement as to the respective roles of SOCIA Church and Grace Missions. In his primary affidavit, Mr Alexander recalled that SOCIA would 'underwrite' the event. Further, he recalled that the project was to be financed by a bank account in the name of 'Grace Missions'. Into that account a sum of $100,000 would be deposited, to deal with establishment costs. This was, (he says) it was agreed, an account that would be established with funds deposited, by 1 May 2016.
Mr Alexander was challenged by Mr McClure that it was untrue that any promise was made to set up a bank account. Mr Alexander rejected that proposition. It was put to Mr Alexander (by both Mr McClure and Mr Harkness) that it could not be the case that any such promise was made; since Mr Alexander had indicated to them that he would be seeking funding through grants. Mr Alexander explained that although he was always interested in obtaining grants, he would never budget on the assumption that they would be received. As it was, after 1 May 2016 had passed, and he had learnt that no bank account had in fact been set up, he attended various workshops in order to learn how to apply for the grants.
Separately, Mr Harkness also challenged Mr Alexander about any promise of a bank account in the name of Grace Missions in March 2016. It was put that the fact that Mr Alexander was exploring grants for the project was indicative of the absence of any promise that a bank account would be set up. Mr Alexander denied this proposition and explained that he was exploring grants since the project would be a major event for Melbourne. He further explained that the $100,000 promise was referable to underwriting of the New Year's Event. Mr Harkness also put to Mr Alexander, rather curiously, but I consider significantly, that Mr Alexander's statement in the meeting about anticipated net profit of $1 - 1.5 million might have acted as an inducement to any agreement to deposit $100,000 into the bank account with Grace Missions.
A fourth feature was, according to his affidavit evidence, in respect to the quantum of his fees (whose payment was to be deferred), such as direction, production, managing and designing, any such fee as would normally have to be allocated to a third independent person to "do the same job". I asked Mr Alexander when he budgeted for his professional fees. He said that this had occurred after the period between May and June 2016. He said that the $100,000 was not to be utilised for his fees - this was only to underwrite the event. His fees were expected to come out of the Box Office takings.
Mr Alexander said in his affidavit that he had strongly indicated to Mr McClure that his head was 'on the chopping block', in that it was important to his reputation with participants in the performing arts industry that the funds that were promised would be made available.
This arrangement was said to be verbal only. Mr Alexander asserts that the meeting had been minuted and that he and his partner, Ms Hill, requested a copy of the minutes; however that had never occurred. For their part, Mr McClure and Mr Harkness says that any meeting on March 2016 was no more than a catch up call, which explained why they did not take any notes on that occasion. They emphatically deny that any notes or minutes were taken of the meeting.

[9]

Events after March 2016

Mr McClure put to Mr Alexander that the latter had had communications with him concerning an expense incurred from Goran Docjinovic as early as April 2016. Mr Alexander disputed this, but accepted that there were communications about the progress of the Gala Event at this time (though Mr Alexander denied that there was a discussion about grants).
In re-examination, Mr Alexander referred to several conversations with Mr McClure (though not about the expenses claim of Mr Docjinovic) up to the middle of 2016. This included invitations to attend workshops for the purposes of obtaining grants and meetings with the MCEC, and an invitation to attend the venue earmarked for the (then) New Year's operatic performance.
In his primary affidavit, Mr Alexander said that by 1 May 2016 an account (with a $100,000 balance) in the name of Grace Missions not been established. His affidavit evidence was to the effect that it was not until about August 2016 that any funds had been received by or on behalf of SOCIA Church. In the meantime Mr Alexander was busy taking steps to develop the project. This included his establishing, through a company in which he and Ms Hill were directors ("Goddess Reawakening"), a registered business name, titled 'Melbourne Musical Theatre Festival'. About this time, Mr Alexander said in his evidence in chief that he rang Mr McClure and informed the latter that "it's not going to cost any money to expand into a festival because of the infrastructure costs". He recalls Mr McClure saying "How much more?" and his replying "it won't cost any more, but we're going to increase profits." He recalls Mr McClure saying "we should go ahead and do it". In June he also recalled transforming the nature of the event for New Year's Eve (not pursuing the opera 'Aida', but instead staging a concert called 'Viva Verdi'.
For much of the period between 1 May and the end of June 2016, according to his primary affidavit, Mr Alexander repeatedly enquired of Mr McClure as to why an account of $100,000 was not available for his use and, according to his evidence, repeatedly received assurances that the funds would be provided. A common explanation, according to Mr Alexander, was that Mr McClure explained that SOCIA was awaiting the receipt of a bank loan. He said that he rang Mr McClure and, with Ms Hill listening on, Mr McClure told them both that money was coming in and that if they could cover any initial costs he would reimburse them.
Mr Alexander was challenged, by both Mr McClure and Mr Harkness, under cross-examination, as to any promise of reimbursement. In response to questioning by Mr McClure, he was unable to demonstrate, by reference to the annexure is to his affidavit, any document providing written confirmation of this particular verbal commitment. He was also challenged on his assertion, in his primary affidavit, that numerous emails have been sent to Mr McClure. Given the opportunity, Mr Alexander did in fact demonstrate that there were numerous emails sent to Mr McClure that were annexed to his primary affidavit. In response to questioning by Mr Harkness, it was put that there was no arrangement to reimburse (on behalf of Grace Missions). Mr Alexander said that the arrangement was with Malcom (McClure) - it was only recently did he consider the possibility that Grace Missions was separate to SOCIA.

[10]

July 2016

In late July 2016, Mr Alexander's partner, Ms Hill, visited Germany for a period of about six weeks. In that time, Mr Alexander recalled, he utilised funds from Goddess Reawakening to meet the expenses of the project. This included payment for such things as website design and venue hire. It appears that this was unauthorised: Ms Hill was most displeased to discover, upon her return in August 2016, that Mr Alexander had withdrawn $5,000 from this entity's account. According to Mr Alexander's affidavit, he was spurred by Ms Hill to ring and press Mr McClure for money. Following this enquiry, a sum of $2,000 was deposited into the Goddess Reawakening account.
Mr Alexander made no reference in his affidavits to any loan agreement reached with Grace Missions in late July 2016. Mr Alexander accepted that there may have been a phone call in or about 23 or 24 July however that was only referable to evidence that had been given by a witness for the Messrs McClure and Harkness: Ms Buckley.
Mr McClure put to Mr Alexander that the only financial support provided was that which had been provided after a telephone call on 24 July.
Mr Harkness put to Mr Alexander that email and other messages he had sent to Mr Harkness after July were consistent with a loan agreement entered into in July 2016. Mr Alexander denied that there was any agreement in July, and denied a phone call with Mr Harkness on 24 July. He also put to Mr Alexander that he, Mr Alexander, had approached Mr Harkness on 24 July because his efforts at obtaining grants had been unsuccessful - because he was desperate for the money to 'rescue' the festival. Mr Alexander responded that, to that point, he had only spent a small amount of his own money. Mr Harkness put it to him that he had urgent invoices that required payment. Mr Alexander said that whilst invoices may have been pressing, they were not urgent. Mr Alexander accepted the proposition that the first monies received from Grace Missions only occurred in August 2016.

[11]

August - December 2016

From August to September 2016, according to his affidavit, Mr Alexander continued to make payments for project expenses: this included a deposit for the Athenaeum Theatre, office furniture and the first payment for the marketing and PR firm 'Encore' (whose principal was Ms Lynda Buckley, a witness called for Messrs McClure and Harkness).
According to Mr Alexander's primary affidavit the same pattern continued from September through to December 2016: Mr Alexander arranged for the payment of expenses for the festival (such as marketing, the band, costumes, office rent, program ads, the set for the production, symphony services) by himself or through Goddess Reawakening; Mr Alexander asked Mr McClure about the status of the monies in the bank account. Mr McClure would make assurances to reimburse Mr Alexander (or Goddess Reawakening) for the payment of expenses.
Under cross-examination Mr Alexander was referred to an email he sent on or about 22 October 2016 to the MCEC. The import of the cross-examination was that Mr Alexander had falsely represented to be acting, and or dealing with that organisation, as an agent for Grace Missions and made unauthorised statements as to its financial position. Mr Alexander rejected this.
Mr Alexander recalled that around 15 December 2016, Ticketek 'reneged' on its promise to ticket the New Year's Eve Gala concert at the MCEC. Mr Alexander said, in his evidence in chief, that he said to Mr McClure "Ticketek had pulled out of the agreement. What do you want me to do? Do we cancel the whole thing or relocate the concert?" He recalls Mr McClure asking "what are the ramifications?" to which Mr Alexander responded "we could go to the Athenaeum, but we could do a Mozart concert." He says Mr McClure said "if we cancel (the Viva Verdi) concert how much do we lose?" Mr Alexander says he responded "probably $5-6,000 (but) we could make it up to recover costs for the concert. Barry Jane from the Athenaeum promised to send out an EDM to its customer database". He says Mr McClure responded "Okay. That's good to know." When Mr Alexander asked him what to do, Mr McClure said "Go ahead and put the smaller concert on at the Athenaeum."
On New Year's Eve, prior to the concert, Mr Alexander recalls Mr McClure addressing the orchestra. In his affidavit he recalled Mr McClure thanking them for their involvement and telling them that Grace Missions looked forward to creating and supporting many more such concerts. Mr Alexander made a point of publicly acknowledging Grace Missions and Mr McClure for financially supporting the concert and supplying a baby grand piano. Regrettably, the New Year's Eve Gala performance was poorly attended. Mr Alexander attributed this to Ticketek's conduct.

[12]

Events in early January 2017

Mr Alexander said in his primary affidavit that on 2 January 2017, Mr McClure instructed him to call a meeting of all of the administrative, performance and production personnel involved in the festival for the following day. This Mr Alexander did by email.
On the next day, 3 January 2017, Mr Alexander attended a meeting with the cast and crew at which Mr McClure was present. Mr Alexander says that he introduced Mr McClure to the cast and crew as the 'Executive Producer' a description which, he says, elicited no contradiction from Mr McClure. Mr Alexander recalled Mr McClure informing the cast and crew that Grace Missions would lose $70,000 for the performance, but would still pay the artists and honour "our" part of the deal. He recalled Mr McClure telling the audience that he wanted to "try and honour what we've done, to honour Trevor and to honour you all". Nevertheless, he recalled Mr McClure saying that he had responsibility as a secretary and treasurer in his organisation (SOCIA Church) and he was not allowed to throw money away. Almost in the next breath, Mr Alexander recalled, Mr McClure said that we were trying to shore up the industry for 20 or 30 years. At about this point, Mr Alexander recalled Mr Harkness spoke. According to Mr Alexander, Mr Harkness said that he spoke as the "fiscally responsible hat to Grace Missions" and that, from its perspective, there had been a loss of $60-$70,000 as well as $80- 90,000 for Alex and his family. He said that he regarded the state of affairs as amounting to a fiscal disaster and an organisational mess and foreshadowed that he could not, in good conscience, give his consent that proceedings continue. Mr Harkness expressed his concern that his organisation might be expected to contribute another quarter of a million dollars.
Mr Alexander recalled Mr McClure making the following statement: "I've given over $1.4 million of my own money into the community, so I'm a very generous guy that likes to honour people. I do things on handshakes, right; if I say it's gonna be done it'll be done. There was no contract between the Grace Missions have with Melbourne Musical Theatre Festival, we didn't do a contract cause we're men of honour. If you got to write things down on paper then I'd be dead, that means there is no honour. But I am of the old school that says honour." and "the easy part for me to take, .. would be just, right, finished and just walk out like one of those bankers and say right again to foreclose on you or and the house, and walking out now and I don't care about anybody's feeling or anything, this is all about business is money
Mr Alexander recalled Mr Harkness then explaining that it would take time to satisfy payments and further obligations (being $50,000); but then Mr McClure interrupted him by saying "..and we are going to do it." Mr Harkness then said: "we can't honour in the short term because we're, we spent a whole bunch of money, and New Year's Eve is another 50 grand that we now have to honour, and whatever we have to honour we'll honour".
Mr Alexander recalled Mr McClure saying: "We didn't sign any contracts. We are underwriters" and "because we're already on a handshake and on honour, just going to honour the Mozart To Midnight, and with Trevor as well, we're gonna some costs and make that happen and pay. Even though we don't have too, we're going to do it".
Mr Alexander recalled, in his primary affidavit, a meeting at 7 PM on 3 January 2017 which was attended by Glenn Elston, Mr McClure Mr Harkness, Goran Djcinovic, Lynda Buckley and himself. Mr Alexander introduced Glenn Elston to Mr McClure and Mr Harkness as being the "the guys who pull the purse strings on everything"; a description which he recalled was not contradicted. What followed was, principally, Mr McClure describing what might be done to bring a lawsuit against Ticketek. Amongst other things, he indicated that there was a need for the Athenaeum to help out; and he referred to his "interest here to protect the Melbourne Musical Theatre Festival."
At a point during the meeting, Mr Alexander recalled, Mr Elston asked Mr McClure whether he could get some other contacts and Mr McClure responded "just go through Trevor, he is the agent". This response was not good enough for Mr Elston: he said that Mr Alexander was not the one writing the cheques and that he wanted to write directly to the people who were controlling the money which he believed was you (Mr McClure) and yourself (Mr Harkness).
In a subsequent discussion with Mr McClure that same day, Mr Alexander says that Mr McClure instructed him to cancel the festival save for the performance 'Some Enchanted Evening' until such time as he could secure the removal of SOCIA's piano from the premises.
On 4 January 2017 Mr Alexander notified artists and members of the orchestra from the New Year's Eve concert that there would be a meeting.
On 6 January 2017 the performance of 'Some Enchanted Evening' was cancelled. Mr Togher gave evidence of a telephone hook up with Mr Alexander, Mr McClure and Mr Harkness. After the performances of 3 of 'his' artists on the New Year's Eve, he was seeking payment for them and was interested to know what would become of the 'Some Enchanted Evening' event in which he had 4 artists performing. He learnt that this, and the other events, were to be cancelled. He was informed that there was a need to cancel because of Ticketek. He recalled Mr McClure telling him that the festival had to be cancelled as Ticketek had been derelict in its duty.
On 8 January 2017, whilst he was driving (and with Ms Hill in the passenger seat) Mr McClure rang him to say that SOCIA would no longer pay out any of the contract, that they had nothing to do with them and that it was all Mr Alexander's fault.
Mr Alexander calculated that his budgeted professional fees for services for the various productions were $113,500. He asserts that the failure (of SOPHIA and Grace Missions) to honour their contracts and promises had 'irrevocably' damaged his reputation as a man of integrity in the performing arts industry.
Mr Harkness put that, at the time that the festival had been cancelled, there were 100 unfulfilled contracts, in Grace Missions' name, made by Mr Alexander and that this had tarnished Grace Missions' name.
Both Mr McClure and Mr Harkness drew to Mr Alexander's attention a typed letter Mr Alexander wrote to Mr McClure dated 5 February 2017. The letter was in substance, a letter of demand for the sum of nearly $190,000. The letter reiterated Mr Alexander's belief that although the festival was Mr Alexander's idea, it was Mr McClure who gave the festival and the NYE (event) the go ahead, and who offered and provided financial backing and Mr McClure who ultimately cancelled the festival. The letter made repeated threats about legal and action. Mr Harkness and Mr McClure also highlighted that the letter manifested Mr Alexander's spiritual beliefs driving him.
In respect to this last point, Mr Alexander indicated, during the course of his re-examination, that the letter of 5 February 2017 was not the first time that he had conveyed his spiritual beliefs (or opinions as to how they may influence his conduct) to Mr McClure. He said that Mr McClure was aware of his affiliation with the 'Andromedan High Council' from 2014 through to March 2016.
Mr Harkness put that after the cancellation of the festival, Mr Alexander had been left with personal debts, of approximately $75,000, to Goddess Reawakening. Mr Alexander agreed with that.
Both Mr Harkness and Mr McClure put to Mr Alexander that it was because of his financial position, brought about by the cancellation of the festival, that he chose Mr Harkness, Mr McClure, SOCIA Church and Grace Missions as 'soft targets'. That was denied.

[13]

Dealings prior to March 2016

Ms Christiane Hill is Mr Alexander's partner. In her affidavit, she deposed to hosting several 'SOCIA' meetings at Drouin, in Victoria in late February and early March 2016. It emerged in the course of her cross-examination that there had been early meetings with Mr McClure and Mr Harkness, when Mr Alexander and she had resided at a different set of premises, back in August and October 2015. She agreed, after having been shown handwritten notes of them under cross-examination [1] , that Mr McClure's handwritten file notes of these 2015 meetings covered a broad range of topics. Plainly Mr Alexander and Messrs McClure and Harkness had had close contact with Mr Alexander before the events the subject of this proceeding.
One of those concerned a conveyancing transaction entered into by Mr Alexander in December 2014 at Warragul, in the state of Victoria. A dispute arose as to whether the SOCIA Church became responsible for payment of the balance of the purchase price (after Mr Alexander and Ms Hill had paid the deposit) and, if so, whether Mr Alexander had been authorised to render SOCIA Church liable in this way. I have indicated the limited use to which I ordered Mr McClure and Mr Harkness could rely upon this evidence.
Under cross-examination Mr McClure put the contents of two (4 page) handwritten notes of meetings between Mr Alexander, Mr McClure and Mr Harkness on 2 August 2015 and 7 October 2015. These notes were in Mr McClure's handwriting. Neither Mr Alexander nor Ms Hill challenged their authenticity; although they did say that they had not seen the content of the notes (or at least carefully examined them) before affixing their signatures to the notes.
The former of these notes, contained a reference to Mr Alexander making a visit to 'Vera', for the purpose of trying to arrange the sale of a Picasso painting; as a potential source of money is for ventures such as the Festival designed in 2016.
The latter note carried a notation in close proximity to a note about a prospective festival, "$$ in the bank first". Ms Hill was asked about this notation in connection with the discussion that had occurred concerning Mr Alexander's desire for a festival. She said that she understood that money would need to be in SOCIA's account. She was asked whether she recalled Mr Alexander requesting if Grace Missions could fund the festival. She answered no: she did not know of Grace Missions.

[14]

Meeting in March 2016

Ms Hill said, prior to the meeting in March 2016 that Mr Alexander had told her that he wanted to "talk about the festival". She recalled that Mr Alexander had recently attended an event at the Exhibition Centre which could be used as a venue for his festival. He had a piece of paper and a flyer to that then you in hand to present to the meeting with Mr McClure and Mr Harkness. She recalled that there was nothing actually signed: as such she recalled Mr McClure 'talking about honour and that he did not want to sign paper'. I note the resemblance between this recollection of what he said in March, and Mr Alexander's recollection of what Mr McClure later said to a meeting of musicians on 3 January 2017.
She said in her primary affidavit that Mr Alexander had stated that with most costs, such as wages and fees, these could be offset until after opening night and the project could be set up for around $100,000. She deposed that Mr McClure proposed that this, and all creative and artistic projects, would be run through 'Grace Missions'. This, she said in her affidavit, was the first time she had heard mention of that particular entity.
When she gave her evidence in chief, Ms Hill said that in March 2016 she recalled Mr Alexander bringing a proposal for a production of 'Aida'. She recalled Mr McClure asking lots of questions and in saying that he (ie SOCIA Church) could put $100,000 into a trust fund through Grace Missions. In her affidavit, she deposed that Mr McClure had proposed setting up a bank account and email addresses in the name of Grace Missions with the money deposited into that bank account by 1 May 2016, with Mr Alexander having access to the account to pay invoices, as they fell due, for the New Year's Eve event.
Under cross-examination, Ms Hill said that from the meeting on 7 October 2015 until the meeting in February or March 2016, Mr Alexander was busy creating a proposal for the festival. Asked whether this was tabled in writing, Ms Hill said that she could only recall seeing a budget in writing: this indicated an upfront cost of about $100,000. When she was challenged that Mr McClure made no such promise for funding the festival, Ms Hill said, in response: 'I looked in your eyes and you promised that this time monies were there'. She was adamant about this. She accepted that Mr McClure may have warned her to take certain steps and (although she did not agree with that) that Mr McClure had made a statement that Mr Alexander had done some "irrational things" she said it was possible that Mr McClure may have said that Mr Alexander was a 'bull in a china shop'.
She also says that she heard the term "Creative Director" being used, with reference to Mr Alexander. On that topic, specifically, she recalls that it was Mr Alexander who identified the title for himself; that there were no objections raised by Mr Harkness or Mr McClure and she saw a handshake congratulating him on his appointment. Under cross-examination, Ms Hill acknowledged that it was Mr Alexander who used those words. She recalled the sequence of events: Mr Alexander suggested the title, there was 'excitement', and then a handshake.
She also said in her affidavit that Mr Alexander had said to Mr McClure, that in creating such projects for SOCIA, it would be his (Mr Alexander's) head on the "chopping block" as he was contacting all of his industry contacts and his reputation would be at stake should the funds not be forthcoming, or the project had to be cancelled for lack of provision of the promised underwriting. She said in her affidavit that she was not convinced about this and asked Mr McClure to promise her personally that this money would be available. When she gave her evidence in chief she recalls saying to Mr McClure "Malcolm, you promise this then, money will be put into an account?" To which, she says, he replied "yes, I'll promise". She then recalls asking "who is this money coming from?", to which Mr McClure responded "we have $100,000 just coming in from (she recalled) shares and can transfer that into the Grace Missions trust for Trevor (Alexander) to use".
She said in her affidavit that she saw Mr McClure taking notes - either in a notebook or on his computer. She said that Mr Alexander and herself asked Mr McClure for a copy of the minutes of this meeting but did not receive them. She recalled that Mr Alexander was to be paid in a professional capacity. Profits were to go into the Grace Missions account so as to benefit the social community. She recalled Mr McClure saying that monies were to go into the Grace Missions account from investments.
It was put to Ms Hill that the March 2016 meeting was only a 'catch up'. Ms Hill rejected this and cited that a laptop was brought and a notebook; although she could not specifically recall who (between Mr McClure and Mr Harkness) was using the laptop or taking handwritten notes.

[15]

Events after March 2016

Thereafter, she said in her affidavit she overheard telephone conversations between Mr Alexander and Mr McClure. She said that there were many such conversations, sometimes daily and sometimes weekly and the main topic of discussion was funds. On more than one occasion she said in her evidence in chief that she heard Mr McClure making statements to the effect "I haven't got money at the moment. I will have the money from shares and will be able to cover (expenses) then."
Ms Hill gave affidavit evidence that when 1 May 2016 arrived, a Grace Missions account had still not been created. She overheard Mr Alexander ringing Mr McClure, seeking explanation and heard Mr McClure respond by telling Mr Alexander that they (Mr McClure or SOCIA) were getting a loan from the bank to cover everything and the bank kept shifting the goal posts. She says that Mr Alexander had reiterated to Mr McClure that the funds were not forthcoming, Mr McClure should just say so as he (Mr Alexander, would put everything 'on the shelf' as it was his reputation that was on the line. She was not cross-examined on this aspect of evidence.
Under cross-examination she was referred to her evidence about a bank account not being set up. Ms Hill answered that, to her knowledge, funds that had been earmarked to cover the festival had in fact been allocated into the purchase of a Cairns property between March and May 2016. She was not challenged by Mr McClure on this evidence. To the contrary, Mr McClure, when cross-examining Ms Hill, rather audaciously, then sought to do so on the premise that this had in fact occurred: it was suggested that even if an arrangement had been made as she had deposed to, back in March 2016, by 1 May she was aware that it was no longer in place.
In her affidavit, she deposed to another telephone conversation in May 2016, about two weeks later. She recalled Mr Alexander telling Mr McClure that he had spoken to several theatres and believed a musical theatre festival could be set up as well, including a New Year's Eve event, without any increase in the expected cost of $100,000; as the festival could use the same infrastructure. She says that Mr Alexander again expressed his concern about whether the original promised funding would be available.
Within a few days, Mr Alexander had registered the business name 'Melbourne Musical Theatre Festival', through a company, Goddess Reawakening Pty Ltd, a company of which she and Mr Alexander were directors. This was at a point where design work had been set up and done the festival logo and a bill had to be paid. Mr Alexander arranged for the payments to be done through Goddess Reawakening. She understood that the money had not materialised and in evidence in cross-examination, she said that it was her intention to minimise her involvement in the project (other than overhearing telephone conversations between the partner and Mr McClure).
By the end of June 2016, money had not materialised despite Mr Alexander having performed certain work, including the creation of a design. A bill had been rendered and Mr Alexander had paid it through Goddess Reawakening. At this point Ms Hill became concerned to ensure that if Mr Alexander (and Goddess Reawakening) had covered the set-up costs in the interim, SOCIA would reimburse the payments.
Ms Hill was away for a period and upon her return, she discovered that Mr Alexander had used $5000 from the Goddess Reawakening accounts around this point, Mr McClure arranged for the deposit of $2000 into the Goddess Reawakening account. When she gave her evidence in chief she said that she heard a conversation involving Mr McClure in which she asked him when monies would be reimbursed and she recalled him answering "We will do our best within 24 hours".
Under cross-examination, Ms Hill was challenged on whether she had heard that Grace Missions approved a loan for the purposes of funding the festival project. She said she understood that the only reason for any loan was that, by that point, and contrary to what had been promised, there was no account to meet the expenses.
To her knowledge, there was no Grace Missions bank account that was ever set up or received the proceeds of a loan.
On 8 January 2017, Ms Hill said, in her affidavit, Mr McClure informed them both that SOCIA were not going to pay out any of the contracts, that they had nothing to do with them and that it was all Trevor's problem. In terms of its effect upon Trevor, she recalls seeing her partner lying on the bed saying "It's all over". She said that he looked as though he had felt defeated and did not speak much at this time.
It was suggested to Ms Hill that this telephone conversation was of short duration and that she was confused. Ms Hill rejected this. She said that she was holding the phone and recalled discussion about suing Ticketek.

[18]

Dealings with Mr Alexander prior to March 2016

Mr McClure swore two affidavits (a primary affidavit of 9 June 2018 and 28 November 2018), only the last of which was responsive to Mr Alexander's primary affidavit of 23 May 2018.
Mr McClure and Mr Harkness tendered a handwritten note of a meeting they had with Mr Alexander in August 2015. Although it did not expressly, or directly, refer to or contemplate any musical festival to be produced by Mr Alexander, it did contain some matters relevant or material to how the protagonists to this proceeding might later proceed. Thus the note of this meeting indicated discussion about: 1. What might be done with the sale proceeds of Picasso paintings which it was anticipated that Grace Missions might receive. Mr McClure affixed the notation that this (the use of proceeds) was "all pie in the sky dream building which was useless" unless monies were received from her; 2. Discussion about funding other (not-for-profit causes), including vaccination awareness and homeless housing; 3. Alex (Mr Alexander)'s involvement in an 'ARTS mission', involving a Jesus and Mary Magdalene documentary. It was indicated that G.M (which I infer, was Grace Missions) is active in financing Arts Mission; although such funding was not possible "unless $ in the Bank."
In his primary affidavit Mr McClure recalled a meeting with Mr Alexander on 7 October 2015 in Mr Alexander's home in the presence of Mr Harkness and Mr Alexander's wife. He said that Mr Alexander had announced his planning for a theatre musical festival during the 2016 Christmas holidays and his applications for government grants for funding. Mr McClure recalled him asking whether "you guys" would be interested in having the (SOCIA) Church helping out with some of the funding. Mr Alexander estimated that it would cost about $100,000 but grants would cover much of that cost. Mr Harkness responded that he did not think the Church could afford to do anything it was a lot of money that the earliest that we could look at putting money was the middle or latter part of 2017.
Mr McClure prepared handwritten notes of the meeting of 7 October 2015. Mr Alexander (and Ms Hill) accept that they applied their signatures at the end of the handwritten notes. However, they say that this was only to signify their attendance; and denied having a proper opportunity to have a thorough look at them. Mr Alexander said that he expected that they would be reproduced in a typed minute and endorsed after he and Ms Hill had considered them. Mr Alexander complained that he was not provided with access to these handwritten notes until they were put to Ms Hill in the latter's cross-examination. If that be so, and it was not disputed that this was so, this would explain why Mr Alexander (and Ms Hill) did not refer to the handwritten notes of this meeting (or the August 2015 meeting) in any of his (or their) affidavits.
The notes referred to Mr Alexander's recent European trip; and a prospective Egyptian trip (starting the following Sunday). In relation to the events of this proceeding, below is reproduced the following notation, which, I note, appeared immediately above the signatures of Mr Alexander, Ms Hill, Mr McClure and Mr Harkness: "Trevor Intros his Festival concept; seeks $$ wants March 2016 as festivals starting; Zen "NO WAY" Trevor "Grants Melb City" etc. NO WARRAGUL REPEAT. G.M: $ in bank FIRST: mid 2017 (some obscure symbol) b4 considering"
I note, further below (in the section on 'Credit'), my concerns about the reliability of Mr McClure and Mr Harkness as witnesses. There were other features concerning the provenance of these notes which concerned me: 1. the handwritten notes appeared in an exercise book of Mr McClure; some of whose pages were torn out; 2. on the face of the notes, it appeared that there were additional notes included (signified by arrows pointing in different directions) that lead me to doubt whether they were recorded instantaneously during the discussion, or were added subsequently and (if added subsequently) how much later they were added; 3. there was a delay in the provision of the handwritten notes (and the exercise book) to Mr Alexander until the trial; notwithstanding Mr Alexander's asserted request to be supplied with them; 4. the notes, themselves, contained a detailed reference to many events; which explain the closeness of the commercial connections between Mr Alexander, Mr McClure and Mr Harkness prior to the events in issue in this proceeding, but were not reproduced in a typed form, with proper opportunity for Mr Alexander and Ms Hill to assent to their correctness. I am wary about the authenticity, veracity or accuracy of what was said in the meetings; as distinct from Mr McClure's reconstruction or interpretation as to what was discussed during the meetings. I do not attribute any conclusive weight as to the content of these handwritten notes.

[19]

March 2016

In his primary affidavit, Mr McClure referred to speaking with Mr Alexander three or four times after initially mentioning his idea of a festival (either in August or October 2015). But he said nothing, specifically, about any conversation with Mr Alexander in March 2016.
In his second affidavit, Mr McClure denied Mr Alexander's account of the conversation in March 2016. In particular he said he had no recollection of anyone being appointed by the Church as its Creative and Artistic Director and he never said anything to him to indicate such appointment. In contrast to his primary affidavit, where he made no reference to any meeting or discussion in March 2016, in this affidavit, Mr McClure acknowledged at least a conversation in March 2016 and Mr Alexander's reference to his idea of holding a theatre music festival, but he denied making any enquiry about the amount of money to stage the festival. He denied saying anything to indicate that Mr Alexander was appointed as an agent of the Church to establish his New Year's Eve spectacular. He denied saying anything to suggest to Mr Alexander that the Church would underwrite the NYE spectacular or that he personally would underwrite it. He also denied saying anything to suggest that creative and artistic projects could be run through Grace Missions or that Grace Missions was a trust fund set up, owned and run by the SOCIA Church. He denied indicating that a bank account could be established to cover the expenses of Mr Alexander's proposed festival, although any such account could be established (with funds deposited) by 1 May 2016 or any other date. He denied saying that any income from the proposed festival could be paid into Grace Missions account or agreeing to pay for Mr Alexander's professional services. The only time he spoke to Mr Alexander about the ability of Grace Missions to help him was on 1 August 2016 (although he later asserted that there were also conversations with him in late 2016). He also denied suggesting to Mr Alexander that SOCIA or himself would be obtaining a bank loan to help fund the festival.

[21]

July 2016

Mr McClure and Mr Harkness tendered Telstra records of phone calls with Mr Alexander. These were records of conversations sent from the landline of Mr McClure's and Mr Harkness' address ie. outgoing calls to Mr Alexander. The records show a lengthy telephone call to Mr Alexander on 24 July 2016.
In his primary affidavit Mr McClure also recounted his conversation with Mr Alexander on 24 July 2016. His recollection of the conversation was to the effect that Mr Alexander said to Mr McClure that he needed his urgent financial help to help him "rescue" his music festival. Mr Alexander said that he had bills that had to be paid otherwise the festival couldn't go ahead. In response to Mr McClure's question that he thought that Mr Alexander had already got the sponsors he needed, Mr Alexander said that those sponsors had not yet come through and that his mother had already helped provide money from her super, amounting to $70,000; which Mr Alexander had already spent on expenses for the festival.
After this part of the conversation, Mr McClure recalled in his primary affidavit, he asked Mr Harkness to join him. The material part of the balance of the conversation concerned Mr Harkness asking how much more money he would need. Mr Alexander indicated about $30,000 or $35,000 to launch. In answer to Mr Harkness's question as to what should happen if the festival failed and his capacity to repay any loan, Mr Alexander said that he was hoping that some of the grants would come through but, either way, his mother was backing him such that if it failed, his mother would sell her property and moved to Warragul. Mr Alexander again provided some assurance that if monies were lent, then because there was likely to be a lot of income from ticket sales he would be able to repay loan monies by February 2017. Mr McClure recalls that the conversation ended with his indicating that nothing could happen without getting approval, so they would have to hold a meeting with Tim (McCarthy) and Bronwyn (Hancock) to speak to them about it.
On 31 July 2016, Mr McClure says, there was a committee meeting of the Church at which Mr Harkness tabled a written loan application from Grace Missions to SOCIA for a loan of up to $50,000. A summary of the minute of that meeting is set out at paragraph 166 below.
In his primary affidavit Mr McClure recalled that on 1 August 2016 Mr Harkness invited him to join him in a telephone conference with Mr Alexander to indicate the financial accommodation. He recalled Mr Harkness saying that SOCIA had approved a loan of up to $50,000 to Grace Missions. However a lump sum distribution was not possible, so each payment would be made on a case-by-case basis. Mr McClure recalls Mr Harkness asking whether, if the festival was not successful, he still said that his mum would sell her house and repay the money. Mr Alexander answered in the affirmative.

[22]

August - December 2016

Mr McClure also recalled in his primary affidavit receiving a phone call from Mr Alexander in mid-August 2016, in which the latter said he needed some cash for urgent things like web design and advertising stationery and requesting assistance. After Mr McClure had reminded him of their agreement to send through invoices to Grace Missions, Mr McClure recalled Mr Alexander saying that this would not work for small items and he was very low on funds. Mr Alexander explained that he needed funds to be directly deposited into the Goddess Reawakening account.
Mr McClure explained that the process for the disbursing of loan monies (SOCIA Church to Grace Missions) arose when Mr Harkness passed on to Mr McClure invoices received from Mr Alexander. Mr McClure then arranged for payments to be made from the SOCIA Church bank account. The bank account records indicate that from 1 October 2016 to 5 January 2017 there were 20 payments made to various third parties in an aggregate sum of $47,973.03. Some of those payments were made to entities associated with Mr McClure (including Melbourne Opera Comp), whilst others were paid directly to suppliers to Mr Alexander (such as Symphony Services). This sum had not been repaid by Grace Missions.
In his second affidavit, Mr McClure recalled having a telephone conversation with Mr Alexander in early September 2016. He recalled Mr Alexander asking him whether there were funds available to pay for the Linden Gallery office rent. Mr McClure told Mr Alexander that he would have to pay that for himself; to which Mr Alexander responded that his mother could cover those funds. Eventually Mr McClure and Mr Harkness visited the office.
Generally, in this period, and in response to Mr Alexander's assertions of what was communicated to Mr McClure, the latter serially repeated that he did not read emails (whether or not they were, in fact, his email address); did not say anything to reassure Mr Alexander that finances would be forthcoming or that he would be reimbursed for any expenditure.

[23]

January 2017

In his second affidavit, Mr McClure recalled Mr Alexander telling the musicians on New Year's Eve at the Athenaeum Theatre, that he wanted them to meet Mr McClure and Mr Harkness from Grace Missions - they had helped us out with some of the funding for the event. Mr McClure then responded "good luck with the show. Grace Missions is pleased to help out the festival and support Trevor". He also recalled Mr Alexander thanking Grace Missions during Mr Alexander's speech, made live on stage to the audience.
After the performance and on 2 January 2017, Mr McClure recalled discussions with Mr Alexander as to the causes of the low attendance on New Year's Eve. In the second affidavit he said he told Mr Alexander that his concert was a failure and asked him how he was going to repay Grace Missions. Mr Alexander suggested, and Mr McClure agree, that it was appropriate to meet the artists.
I have noted the extracted contents of the sound recording of the meeting on January 2017 above. In his second affidavit, Mr McClure accepted that he addressed the gathering about the possibility of bringing a class action against Ticketek and the Athenaeum Theatre (to recover damages for their failure to make tickets available for sale at the festival).
At trial, Mr McClure gave some additional evidence, at about the time he opposed the tender of the sound recording, that had he known of things that Mr Alexander had done (such as signing contracts on Grace Missions behalf) he would not have spoken the way he did. He complained that he was ambushed, and that there was another part of the meeting, not recorded, which had gone ahead. He said that when he spoke he felt "incompetent". When I asked Mr McClure what he meant by the use of that word, he reiterated that he felt he was speaking on false premises (ie not being aware of material information).
In his second affidavit, Mr McClure also recalled that after the meeting with the cast and crew ended, Mr Alexander spoke with him about having a conversation with Mr Glenn Elston, the manager of the Athenaeum Theatre.

[24]

Mr Harkness' evidence

Mr Harkness tendered an email that he had sent to Mr Alexander on the topic of what was described by many as the 'Warragul fiasco'. Although I limited the use to which Mr Harkness could make of that topic in his affidavit to establishing his (and Mr McClure's) state of mind and, more specifically, willingness to deal with Mr Alexander informally in relation to commercial opportunities, it is pertinent to note the contents of the email to set out the context. The email indicated that the SOCIA Church shared Mr Alexander's vision to extend the Church (to "open up a chapter") in Warragul. It appears that Mr Alexander and Ms Hill purchased property in that area, and paid the deposit using their own funds. In the email, Mr Harkness indicated the Church's willingness to intervene and buy the property in case funds became available in the immediate future (even without viewing the property). He said that the details of how this would be purchased would more than likely involve the Church entering into an unconditional contract signed by one of the Ministers or Church office bearers. The email went on to inform Mr Alexander that he was not appointed as a Minister and did not hold any position within the Church. Thus, he had no appointment to buy church property and was not authorised to sign any contract for or on behalf of the Church.
An email that Mr Harkness sent to Ms Hill (and copied to Mr McClure) in late August 2015 was on the subject of the existence and terms of an agreement to print Mr Alexander's books. The email remonstrated with, if not chastised, Ms Hill for sending Mr Harkness and Mr McClure an invoice for printing and requesting that payment be made. Mr Harkness complained that this was a 'repeat of the (Warragul) property, an ambush, an attempt to lock Malcolm and or our Church into an action or commitment the details of which have never been agreed.'
In both of his affidavits, Mr Harkness said he recalled some conversations with Mr Alexander in the second half of 2015 in which the latter had mentioned various proposals for his theatre festival idea. He recalled Mr Alexander indicating his intention to create a theatre festival in Melbourne to launch in the 2016 end of year school holidays; and that he was seeking government grants to fund but wanted to know if Mr McClure and Mr Harkness could fund. Mr Harkness responded by asking how much would be needed; to which Mr Alexander said about $100,000 to get to the first performance. Mr Harkness responded that that was a lot of money and it was not possible for us to do that, it may be possible in late 2017 or mid-2017 at the earliest before we could begin to consider doing something like that. It was unclear to me whether, on this account, Mr Harkness was speaking on behalf of SOCIA Church or Grace Missions, or both.
Mr Harkness relied upon the handwritten note prepared by Mr McClure of the discussion on 2 August 2015, when preparing his affidavit. He also accepted that, independently, he had no strong recollection of what was said in that meeting.
Mr Harkness made no reference in his primary affidavit to any conversation with Mr Alexander in October 2015.
In his primary affidavit, Mr Harkness said he met Mr Alexander socially, once or twice, over the next few months between November 2015 and March 2016.
In his cross-examination of him, Mr McClure referred Mr Harkness to the notes of the October 2015 meeting. Specifically, he was referred to notations (by Mr McClure) to the effect that Mr Harkness said that there was 'NO WAY' that SOCIA would fund a festival then anticipated to start in March 2016. Mr Harkness could not recall whether it was he or Mr McClure who said the words "No Warragul repeat". He did recall Mr McClure saying to Mr Alexander that he needed money in the bank first before any festival could go ahead.
It was also put, and Mr Harkness agreed, that some of the matters referred to in the October 2015 notes had nothing to do with SOCIA's affairs.
Mr Harkness recalled other social contacts with Mr Alexander between November 2015 and March 2016 and some discussion on the subject of a festival. He recalled Mr Alexander informing him and Mr McClure that he was now planning to launch is festival at the end of the year; and that everything was looking great, he had written one of the plays. He said he recalled Mr Alexander saying that a New Year's Eve concert and dinner with a harbour cruise was going to work really well with the fireworks on the harbour. In response to Mr Harkness's question as to how it would be funded, he recalled Mr Alexander saying that he had downloaded some grant applications and had applied to them. He recalled saying to Mr Alexander that he thought he had bitten off more than he could chew and suggested that he delay the project for at least a year to give himself time. To this, he recalled Mr Alexander said there was plenty of time and all sorts of support for the arts community from various third parties (including the Melbourne City Council and Grants Victoria). He recalled Mr McClure reminding him of the Warragul episode; and referring to him as like a "bull in a china shop;" and advising him that he needed to get money in the bank first. To this Mr Alexander said that there was plenty of grants available and money would not be a problem.
When he was cross-examined, Mr Harkness was referred to some previous dealings he had had with Mr Alexander. He estimated that between December 2013 and March 2016, he had met or spoken to Mr Alexander between 10 - 15 times. A number of these occasions featured discussion about legal issues.
Mr Harkness said that Grace Missions was set up by Mr McClure and himself; although he did the 'paperwork'. Mr Harkness had titled himself as secretary and public officer. He said that Grace Missions had no bank account and was not in receipt of income. This meant that if Mr Harkness' version of events leading to his cross-claim was correct, SOCIA would be lending money to an entity with no income and no bank account.
Mr Harkness accepted that there were a range of issues in the August 2015 (and October 2015) notes that bore upon the business activities of SOCIA Church. This included (in the August 2015 note) the prospect of using proceeds from the sale of a Picasso painting. He was asked why there was no follow up, or official meeting within SOCIA to consider issues that arose from Mr Harkness' and Mr McClure's meeting with Mr Alexander in August 2015. In his answer, Mr Harkness differentiated between meetings that required minuting (and an agenda notified in advance) and said that for important decisions, this required a quorum of all committee members unanimously agreeing to a course of action. Mr Harkness was questioned as to whether the decisions to print Mr Alexander's Egyptian books, and/or to fund his trip to Egypt were decisions of that kind. Mr Harkness supplied no clear answer.
I asked Mr Harkness whether he differentiated the business of Grace Missions and SOCIA Church. Mr Harkness' said that he responded, somewhat curiously, and in a fashion which, I must confess, I did not fully understand, that a matter that was 'not atheistic' could be regarded as relevant to the SOCIA Church; whereas other matters were referable to Grace Missions. He instanced the alleged loan to Mr Alexander in July 2016 as an instance where it was thought necessary to distance SOCIA Church from the transaction, even though it was SOCIA's funds that were lent to Grace Missions for on-lending to Mr Alexander.
I asked Mr Harkness about the Constitution and rules applicable to both SOCIA Church and Grace Missions. He responded by saying that there was no Constitution for either entity. The SOCIA Church did have rules, in a folder, apparently under Mr McClure's possession. He later said that some of SOCIA's rules were unwritten. As to Grace Missions, there were no written rules at all, although Mr Harkness said that he (informally) applied 'model' rules which he thought applicable to incorporated associations. This may have been a reference to s 49 of the Associations Incorporation Reform Act 2012 (Vic).
It emerged through Mr Harkness' cross-examination that SOCIA does retain, at its premises, Minutes of its meetings, as compiled in a book.
Under cross-examination, Mr Alexander questioned Mr Harkness as to who else (apart from himself, Mr Alexander) was allowed to use Grace Missions name and misrepresent that it had the authority of Grace Missions. Mr Harkness responded, eventually and begrudgingly, that Mr McClure had. This was a reference to the meeting that had occurred on 3 January 2017. Mr Harkness defended this on the basis that there was a need, on that occasion for we (which I took to be a reference to Mr Harkness, Mr McClure and Mr Alexander) to present a 'united front' to the musicians and crew assembled before them on that occasion.

[25]

March 2016

Mr Harkness accepted in his second affidavit (31 October 2018) that, along with Mr McClure, he met Mr Alexander (and Ms Hill) in March 2016 at the latter's home. He accepted that some issues were discussed concerning SOCIA, though he did not identify what those issues were. Somewhat inconsistently, he said it was just a social occasion. He denied saying anything to suggest, on that occasion or any other occasion, that Mr Alexander had been appointed to the position of creative and artistic director of creative and artistic projects for Church of SOCIA Australia. He said that as the public officer of SOCIA Church, and Grace Missions, he could not recall the committee passing any resolution appointing him to such position within either organisation. In his second affidavit Mr Harkness also denied: 1. discussing with Mr Alexander about his being paid for being a set designer, director or administrator, or otherwise agreeing to pay for his professional services; 2. giving approval to Mr Alexander to establish a NYE Spectacular or any other musical event or show; 3. that SOCIA would underwrite the NYE Spectacular of any other event (and, in this respect, referred to the absence of SOCIA committee approval, until 31 July 2016); 4. agreeing to establish any bank account or deposit any funds into such account at Mr Alexander's request (and, in this respect, he also cited an absence of approval from the SOCIA committee). 5. saying anything that would lead Mr Alexander to consider that Grace Missions was part of the SOCIA Church; the latter entity of which, he said, conducted religious services for its parishioners; 6. that Mr McClure had authority to bind either SOCIA Church or Grace Missions by his own conduct; without committee approval.
Mr Alexander put to Mr Harkness that: 1. there was a meeting which he attended in March 2016. Mr Harkness agreed with this. 2. Mr McClure appointed Mr Alexander as a creative and artistic director. Mr Harkness said he did not witness this; 3. Mr Alexander had tabled a proposal for a gala event, consisting of a budget and some other brochures. Mr Harkness thought it was possible that some document was tabled and recalled the mention of the sum of $750,000, although does not specifically recall mention of a budget; 4. it was proposed that the gala event would be run through Grace Missions. Mr Harkness said that this subject was not discussed at that meeting; it was only discussed in July and August; 5. Grace Missions was a trust fund set up by SOCIA. Mr Harkness did not recall this; 6. SOCIA agreed to set up a bank account, in Grace Missions' name, into which $100,000 would be deposited, so that Grace Missions would act as underwriter. Mr Harkness denied this; 7. It was agreed that payment of Mr Alexander's fees would be deferred until after the opening night. Mr Harkness responded that there was no consideration given to support a festival so this could not be correct; 8. Mr McClure had given the go-ahead to Mr Alexander to proceed to implement the project. Mr Harkness denied this.
Mr McClure cross-examined Mr Harkness, unsurprisingly (given that they effectively held the same interests), in a fashion intended to corroborate his own evidence. Thus he elicited agreement from Mr Harkness that all positions created in the Church had to be approved by its committee; that the SOCIA committee had not created the position of creative and artistic director; that any 'appointment' of Mr Alexander to that position was made by Mr Alexander himself. Mr Harkness, led by Mr McClure, said that the March 2016 was not the first time that a festival had been mentioned by Mr Alexander. This had occurred back in October 2015

[26]

April - July 2016

In his affidavit evidence Mr Harkness referred to email communications with Mr Alexander in April and June 2016. Mr Harkness also tendered an email that Mr Alexander had sent to the plaintiffs in this proceeding, identifying Grace Missions as the entity responsible for the NYE concert. The email was curiously signed off by Mr Alexander as the 'Creative and Artistic Director of Renaissance Opera' and 'Creative and Artistic Director of Grace Missions.'
Mr Alexander cross-examined Mr Harkness on some communications, by email, that Mr Alexander had had with him in April and June 2016, concerning an 'MCEC' expansion briefing. Mr Harkness has said in his affidavit evidence that although he may have glanced at the messages he did not attribute significance to them. Under cross-examination, Mr Harkness went further: he accused Mr Alexander of engaging in a technique called 'neuro-linguistic programming'. I return to this matter later when I consider Mr Harkness's credit as a witness.
Some of the communications were on the subject of Mr Alexander's pursuit of obtaining a grant from the Ian Potter Foundation. Mr Harkness was approached by Mr Alexander with a view to assisting Mr Alexander. He also recalled Mr Alexander asking him whether there was any change in the financial circumstances. Mr Harkness informed him that Grace Missions could not consider supporting the festival until late 2017 or possibly mid 2017 at the earliest. To this, Mr Alexander indicated that his mother had a lot of money in her superannuation and would invest some of that to help him out.
In his affidavit evidence Mr Harkness recalled a telephone conversation with Mr Alexander in the company of Mr McClure on or about 24 July 2016. This was to the effect that Mr Alexander said he needed money for his festival and was seeking his and Mr McClure's help. In answer to Mr Harkness's point about other sources of finance, Mr Alexander said that none of his grant applications had yet come through. According to Mr Harkness, Mr Alexander said that he had two invoices and if they were not paid then he was "screwed," the festival would fail and his name in the industry would be mud and he would lose the money he had already invested into the festival. These were invoices for promotions and to secure performing artists. When Mr Harkness asked him how much he would need to launch his festival, Mr Alexander responded that it should be about $100,000 so, with the money he had received from his mother (which Mr Alexander had represented to be about $70,000), he would need another $30-35,000. Mr Harkness asked him that on the basis that Grace Missions or SOCIA might help him, when would he be in a position to repay the money? To this, he recalled that Mr Alexander said that the festival would launch on New Year's Eve and continue each week over the holidays. There would was going to be three or four shows each week so the festival would bring in a lot of money from ticket sales. Mr Harkness referred him to Mr Alexander's 'Warragul debacle'; to which Mr Alexander said that his mother would guarantee any money that you could loan me so you would have no problems getting the money paid back and one of his grant applications could still come through. When Mr Harkness asked how his mother could assist him further, Mr Alexander that said that she had a house in Brighton which she could sell and live with him. Mr Harkness recalled Mr Alexander saying that he anticipated the festival would be good for the Melbourne performing arts community and it would be a shame to see that die now. He asked Mr McClure what he thought. Mr McClure said that we would have to talk to Tim and the others (this being a reference to other SOCIA committee members).
Mr Alexander cross-examined Mr Harkness upon his recollections as to what was said on 24 July 2016 (unassisted by any notes or his affidavit accounts). Mr Harkness' evidence about what was said was as follows: "Mr Alexander: I need money for the festival. I have spent substantial monies from my mother's superannuation fund and she is unwilling to release more funds. There are a couple of invoices that have to be paid (one relating to PR and marketing. Mr Harkness: do you remember me saying to you I thought you were biting off more than you can chew? I said to you (back in October 2015) you should give yourself more time than you set yourself to create your festival. I thought you had plenty of grants and that you would have no problems funding your festival. Mr Alexander: is there some way that you can help me financially? Mr McClure: you're doing it again. You charged in like a bull in a china shop Mr Harkness: I can't promise that we can help you. (He recalled Mr Alexander repeated things said in the discussion in March 2016). Mr McClure: We'll have to speak to others to see what can be done. It's very inconvenient at this time. Mr Harkness: I think this will be a good fit for Grace Missions."
In his affidavit evidence Mr Harkness referred to a telephone conference call with Mr McClure and Ms Bronwyn Hancock, referring to Mr Alexander's request. The tenor of this conversation was that each of Mr McClure, Ms Hancock and Mr Alexander were sceptical about providing money to Mr Alexander in view of the 'Warragul property fiasco'; but they thought it would be appropriate to table a proposal.
So, on 31 July 2016, at a SOCIA committee meeting, Mr Harkness recalled submitting a written application for a loan of up to $50,000 to Grace Missions, for the funds to be used for Grace Missions to loan to Mr Alexander for his theatre festival. A minute of a meeting of the committee of SOCIA was put into evidence (and admissible as a business record for the committee [2] ). The minute was executed by Mr McClure, Mr Harkness and Mr McCarthy (Chairman of the committee3) on 7 August 2016. Mr Harkness abstained from voting on account of a conflict of interest. The content of the minute was lengthy. Other committee members appeared concerned about the amount of the loan and whether it was necessary in view of Mr Alexander's grant applications. There was concern about the availability of funds for the loan to Grace Missions. Mr McClure noted Mr Alexander's 'Warragul property fiasco' showed, what the minute recorded as, 'a propensity to self-delusions pursuant to his own perceived needs in the moment'. The minute recorded that the committee had unanimously passed a motion in the following terms: That SOCIA provide to Grace Missions a line of funding up to a maximum of $50,000; That those monies provided to Grace Missions will be pursuant to requests made by Zenaan (Harkness), which requests ought to be made pursuant to particular invoices sent to them by Trevor. Zen will approve or reject payment of Trevor's invoices on a case-by-case basis and if approved will accordingly request Malcolm to make payments. That SOCIA retains full discretion on a case-by-case basis as to whether or not to provide any monies to Grace Missions, the amount of money is provided, and the date(s) upon which any monies are provided, That monies loaned to Grace Missions shall be interest-free, since Grace Missions is not-for-profit That Grace Missions shall repay to SOCIA any monies loaned to Grace Missions by Fairbury 2017.
Under cross-examination from Mr Alexander, Mr Harkness agreed that there was no documented request by Mr Alexander for a loan. He said that although he had discussed bringing a loan application with Mr Graham Peters, chairman of Grace Missions, there was no minute of any such discussion. Mr Harkness said that no one from the SOCIA committee had spoken, during the meeting, about talking with either Mr Alexander or his mother. Although there was an original proposal for a $30,000 loan, Mr Harkness did not obtain Mr Alexander's authority to increase the size of loan. There had been no discussion, prior to the meeting about any conditions to the loan with Mr Alexander; nor the proposal for Mrs Alexander to act as a guarantor of Mr Alexander's loan.
According to Mr Harkness' affidavit evidence Mr McClure and Mr Harkness informed Mr Alexander of SOCIA's approval of a loan up to $50,000 and sought reassurance from Mr Alexander that the loan could be repaid by February 2017. Mr Harkness recalled Mr Alexander saying that the debt would be paid back by February - that Grace Missions would be repaid no matter what. Mr Harkness recalled Mr Alexander protesting that the requirement for him to present invoices for approval on a case-by-case basis was inefficient and could sometimes be a problem. To this, Mr McClure said that they had conditions. He recalled Mr McClure requesting that Mr Alexander keep them updated as to whether a grant would come through - if it did this would mean that Grace Missions would not need to lend money so quickly or that he could pay it back more quickly. Indeed, Mr McClure represented that if funds from grants had come through, he would not need Grace Missions any more. He sought Mr Alexander's agreement to that course; which Mr Alexander provided.

[28]

January 2017

In his second affidavit, Mr Harkness recalled that on New Year's Eve 2016, in the Athenaeum Theatre, Mr Alexander introduced himself and Mr McClure to the orchestra as being from 'Grace Missions' and who had 'been helping to fund the festival'.
Soon after the concert, Mr Harkness recalled Mr Alexander attributing the lower-than-expected turnout to problems with the booking system and an inability of patrons to book tickets online. It was thought that Ticketek, and possibly the Athenaeum theatre were to blame.
In relation to the meeting of 3 January 2017, Mr Harkness said he attended the meeting in order to support Mr Alexander in a discussion about a prospective legal action against Ticketek. This explained why he did not seek to correct Mr Alexander when the latter made certain statements - he did not want to convey the impression of a 'house divided'.
He said to Mr McClure, when the latter cross-examined him, that when he said on 3 January 2017 that we (Grace Missions) would "honour what (we) had to honour", he was trying to pull the reins on 'flamboyant liberties' exercised by both Mr Alexander and Mr McClure when they spoke to the meeting.
Mr Alexander put it to Mr Harkness that as early as 25 May 2018, if not as at 10 May 2018, Mr Alexander had been supplied with a link to the sound recording taken by Mr Wilson on 3 January 2017, or at least had opportunity to dispute the contents of a document purporting to be a 'notice to admit facts'. Mr Alexander sought to tender the notice to admit facts but I rejected the tender on the basis that the document did not comply with the court rules and amounted, in effect, as a narrative of what was said during the meeting. Be that as it may, it is plainly the case that Mr Harkness had access to the content of Mr Wilson's sound recording for a significant period of time before he gave evidence at the trial.
Under cross-examination by Mr Alexander, Mr Harkness was referred to a message on 4 January 2017 - emailed to a Grace Missions email address - in which Mr Alexander purported to supply a summary to those musicians and crewmembers who were unable to attend the meeting the previous day. On the same day, Mr Alexander had copied Grace Missions into a message sent to Mr Glenn Elston, a manager of the Athenaeum Theatre. Mr Harkness' response was to the effect that he did not receive these messages at about the time. He emphasised that in order to track Grace Missions' emails he needed to resort to the use of the Internet, and he only did this intermittently. He added that Mr Alexander, should he have wanted to have been in contact with him, could have used Mr Harkness' personal email address.
It was generally put by Mr Alexander in his cross-examination of Mr Harkness that the latter's lack of responsiveness to Mr Alexander's emails was not inadvertent but rather constituted a deliberate attempt to avoid or limit a paper trail indicating the true sequence of events. Mr Harkness accepted, curiously, that such inference could be drawn from his absence of responsiveness, but it should not be drawn in the circumstances. But he said that as at January 2017, in particular, he was in the process of defending Mr Alexander.
Mr Harkness tendered an email message from Mr Alexander to Mr Togher, a plaintiff, explaining the circumstances in which the festival had come to be closed on 3 January 2017. The salient part of the message was as follows: "… the artists were left to make the decision as to whether to continue or to be released from their contracts. Whilst most wanted to continue, because a number wanted to withdraw, and it consequently affected every single show, it was not feasible for the others to continue and reluctantly they made a decision to ask to be released from their contracts. Grace Missions acceded to their wishes and thus the other 5 shows were cancelled. We were all aware that Some Enchanted was in many ways a different proposition … However … It became clear to the executive of Grace Missions that an amicable resolution was not possible, and Grace Missions were left with no alternative but to also cancel Some Enchanted. Grace Missions shall now have internal discussions as to how to best honour the financial aspects of the contracts."
Mr Harkness also tendered an email message that his then solicitor (Mr Cameron) had forwarded to him which conveyed an email message that Mr Cameron had received from Mr Alexander on 3 May 2018. The intention was to prove that Mr Alexander had sent a threat, by reference to his indicated intention to use a sound recording and video recording of things said by Mr McClure and Mr Alexander.

[29]

Ms Buckley's evidence

Ms Lynda Buckley runs a small business (as sole trader) called 'Encore PR'. She is a publicist and promoter of functions and events. Ms Buckley swore an affidavit (7 December 2018). The gist of it was that towards the end of July 2016 she became aware that a music festival was being planned for Melbourne at the end of the year. She offered her services to Mr Alexander to help promote it. She says that she met Mr Alexander on 10 August 2016; however, under cross-examination by Mr Alexander, she did not dispute Mr Alexander's proposition to her that they had met on or about 22 July 2016. At that meeting, she recalled, Mr Alexander described himself as being the sole producer and creative and artistic director of the Melbourne Music Theatre Festival. She offered her services as public relations manager. She added that, at this first meeting, Mr Alexander suggested that rather than entering into a retainer and letter of agreement, Ms Buckley could simply render him an invoice. She asked, at this point, who would be the parties to a retainer and Mr Alexander identified it would be the Melbourne Music Theatre Festival and Grace Missions.
In late July or August 2016, Ms Buckley met Mr Alexander again and presented to him a letter of agreement and letter of retainer, in relation to the provision of her services as a publicist. The letter of agreement stated that it was made between Linda Buckley and Grace Missions. It was signed by Mr Alexander on behalf of Grace Missions. The other document did not actually have the title of retainer (the title was 'PR and marketing services agreement addendum') but the substance of the document was to set forth the terms of the agreement (including a payment schedule). This document was addressed to Mr Alexander as the artistic director and producer of the Melbourne Musical Theatre Festival & New Year's Eve Viva Verdi Concert. It was signed by Mr Alexander on behalf of the Melbourne Musical Theatre Festival/NYE 2016. Plainly, Ms Buckley did not turn her mind, at the time, to the connection (if any) between the Melbourne Musical Theatre Festival and Grace Missions. She simply did what she was asked by Mr Alexander.
Ms Buckley received several payments, but not all payments of her various invoices. The tenor of her evidence was that she was surprised when she learnt that the source of the payments was Grace Missions; rather than Mr Alexander.
The thrust of her evidence was that she became innocently enmeshed in the overriding dispute between Mr Alexander and Grace Missions, as to who was responsible for the payment of her outstanding fees. Annexed to her affidavit was email correspondence, of a very acrimonious kind, between herself and Mr Alexander in which she made assertions as to his liability (and/or the liability of the Melbourne Theatre Festival) to pay those fees. Part of the basis for her assertions in this regard was her acceptance of communications that she had received from Mr Harkness. In response, Mr Alexander claimed that it was Grace Missions' responsibility.
When she gave evidence, Ms Buckley recalled being in attendance at a meeting in the auditorium of the Athenaeum Theatre on 7 January 2017. She recalled that, at this meeting, and in the presence of both Mr Harkness and Mr McClure, Mr Alexander introduced them both as representing Grace Missions. She also recalled that Mr McClure did not say that he represented anybody else.

[30]

Ms Hancock's evidence

Ms Bronwyn Hancock has, at all material times (at least since December 2005), been the vice secretary (NSW) of the SOCIA Church. She has been a parishioner of the Church since 2004.
Telstra records tendered by Mr McClure and Mr Harkness show a lengthy call made by Mr McClure and/or Mr Harkness to Ms Hancock on 25 July 2016.
She was called by Mr Harkness and Mr McClure to prove the contents of discussion, and a minute of the discussion, at a committee meeting of the Church on 31 July 2016. I have referred to the material parts of the Minute at paragraph 166 above.
In her affidavit, she said that she attended the 31 July 2016 meeting by telephone (as she was in New South Wales). She recalled that the subject matter of discussion was a loan application that SOCIA had recently received from Grace Missions. She recalled Mr Harkness (who occupied the position of Victorian vice secretary) endorsing the application on behalf of Grace Missions as a means of helping to rescue Mr Alexander's musical festival. She recalled him using words to the effect "This festival is in Melbourne and I think it's a good community cause. If SOCIA approves the loan to Grace Missions, the money will be used by Grace Missions to lend to Trevor to pay certain of his invoices. These invoices will be considered and approved for payment on a case-by-case basis".
With reference to the minute (which she did not sign), Ms Hancock recalled in her affidavit challenging the proposal upon her concern about SOCIA's position to make any substantial loan on an urgent basis. She said she was reassured by Mr Harkness. She also said that she was 'largely' not in favour of the proposal because of Mr Alexander's 'past track record' with his 'Warragul fiasco'. Nevertheless, she recalled she reluctantly agreed because, to her mind: (i) Mr Alexander had promised to repay the money lent to him by February 2017; (ii) Mr Alexander's project had high prospects of raising substantial funds for community causes; and (iii) the loan of funds requested in relation to this matter would only occur on the basis of consideration and approval of individual invoices, one invoice at a time.
In her affidavit, Ms Hancock alluded to earlier dealings with Mr Alexander. She was concerned about what she perceived as an unsuccessful attempt by Mr Alexander to facilitate the sale of a Picasso painting owned by her friend, Viera. Otherwise the only other communications with Mr Alexander were intermittent and by telephone.
Features of Ms Hancock's cross-examination by Mr Alexander were her evidence that: 1. the SOCIA committee generally met two or three times a year. It was not always the case that an agenda was distributed before such meetings. 2. Mr McClure administered the SOCIA bank account; 3. several properties had been purchased by SOCIA across the country; 4. in order for her to be 'ordained' by the SOCIA Church she needed to pass certain 'tests' ; 5. she understood (based upon what she had been informed by Mr McClure) that the loan she agreed to in 2016 was for an investment purpose; and, further, that profits, or the return from the investment (which were predicted by Mr McClure), would flow back to SOCIA to be channelled to other projects within its charter. 6. prior to the SOCIA committee's meeting to approve the loan (which she confirmed took place in about July 2016), the committee did not think to consult Mr Alexander to make a representation of what he sought. Instead the committee acted on the basis of statements about Mr Alexander (and Mr Alexander's mother) as conveyed to them by Mr McClure and Mr Harkness; 7. some of the SOCIA's prior dealings with Mr Alexander - relating to his involvement in the sale of Picasso paintings, his undertaking an Egyptian trip, and the 'Warragul fiasco' may or may not have been discussed at committee level, but were not, at any rate, recorded in minutes. 8. other dealings by SOCIA performed by Mr McClure on SOCIA's behalf included the purchase of properties; 9. she recalled that Mr Graeme Peters, the Chairman of Grace Missions, was also a member (and Victorian resident) of SOCIA.

[31]

Mr Alexander's submissions

Mr Alexander submitted that from 2014 up to March 2016 he had had a range of commercial dealings with Mr McClure, representing the SOCIA Church. Mr McClure appeared to be the embodiment of the SOCIA Church: he was its secretary; its treasurer (or financial officer) and an ordained Minister - a position which denoted that he occupied a position of trust. On the basis of these dealings he had no reason to think that when he proposed a musical festival in March 2016 and Mr McClure expressed interest in it (to put it neutrally) there was any limitation in Mr McClure's authority arising from the status of his official positions or any other restriction imposed upon him by the Constitution or rules governing the SOCIA Church.
Mr Alexander accepts that on 7 October 2015 he had introduced the concept of a music festival (although at that time he was thinking about March 2016) and wanted to know whether SOCIA might be interested in providing funding, but that Mr McClure and Mr Harkness baulked at the suggestion. If Mr McClure's handwritten note was a guide to what was said, their thinking was that Mr Alexander should obtain money in the bank first and would only be from 2017 before they would consider his proposal further. The note also contained a reference to "G.M", which I took to be a reference to Grace Missions.
Mr Alexander's submits that in March 2016 he actually tabled a proposal for a one-off gala event on New Year's Eve 2016, for which the SOCIA Church would agree to pay for an estimated total costs of around $100,000, in order for it to receive an estimated profit of over $1 million; with such profits capable of being distributed to the Church for its other activities. In short, whereas in October 2015, he was talking about a musical event (at that stage a festival) at a conceptual level, in March 2016 he was talking in terms of money. But, he says his proposal could only come to fruition if he was appointed by the Church as its creative and artistic director; with the authority to engage and contract with a range of third parties, such as musicians, crew members and publicist. He submits that, consistent with the evidence of Mr Harkness, it would be inappropriate to burden the Church with any commitment and instead the entity Grace Missions would be used as the vehicle through which the transaction would be effectuated. He submits that it was agreed that an account would be set up, under Grace Missions' name, into which a sum of $100,000 would be deposited and which Mr Alexander could deploy to meet production expenses.
But between March and July 2016, and despite persistent enquiries from Mr Alexander of Mr McClure, no bank account was opened to which Mr Alexander could access to pay for production expenses. This was not an urgent problem up to July 2016 since by then, Mr Alexander had only paid a small amount of money ($560). But towards the end of July, Mr Alexander says, the time was fast approaching where commitments had to be made to 3rd parties, such as the engagement of a publicist to market (what had then become) a festival. Mr Alexander's submits that it was around 24 July 2016 when he indicated to Mr McClure that he needed to be assured that there was monies available to meet a substantial financial commitment to Ms Buckley (expected to be approximately $50,000), the prospective publicist.
Mr Alexander submits that, without reference to him, in late July 2016 Mr McClure and Mr Harkness appeared to prevail upon the committee of SOCIA to authorise a loan facility to Grace Missions to cover $50,000 of the $100,000 originally promised in March (noting the coincidence between the amount of the advance and the size of the publicist's projected fees). He submits that to do so, Mr McClure and Mr Harkness gave an incomplete and misleading account to the committee of the circumstances which had occurred to the SOCIA committee. He says that they procured a loan facility whose terms were completely unacceptable to Mr Alexander and, on that basis, disputes that any loan agreement was entered into between himself and Grace Missions.
From August to December 2016, Mr Alexander submits, monies were in fact being received by him, sourced by payments made by SOCIA. By itself, these circumstances could be taken as supporting the idea of a loan agreement from late July and the terms alleged by Mr McClure and Mr Harkness but, Mr Alexander submits that it merely constituted Grace Missions performance of its obligation from the agreement back in March 2016; albeit that monies were being paid haphazardly, and at Grace Missions discretion.
The New Year's Eve performance arose and there was a poor attendance. Mr Alexander submits that if the problem was his alone, rather than his and Grace Missions, he would have dealt himself with Ticketek, the Athenaeum Theatre, and the musicians to find ways to 'get bums on seats' for the projected future performances and says that he had had the experience and competence to do so. But, he says Mr McClure was insistent upon conducting a meeting, to hold out to the musicians and crew the prospect of a class action against Ticketek. This, he says, was what occurred in the meeting on 3 January 2017. He says that the representations and statements made by Mr McClure (and Mr Harkness) were inconsistent with their position that Grace Missions' only interest was that of a lender of monies to a limited amount of $50,000.
Mr Alexander submits that Mr McClure, Mr Harkness, SOCIA Church and Grace Missions (the last two entities represented by their respective committee members) breached a contract made in March 2016 by failing to pay all of the production expenses and failing to pay Mr Alexander's professional fees. Mr Alexander submits that he has established a claim for unpaid production expenses, his professional fees and an entitlement of damages for loss of reputation.

[32]

Mr McClure's and Mr Harkness' submissions

Mr McClure and Mr Harkness prepared joint written submissions and separately made oral submissions. In their detailed written submissions (in chief), essentially they submit that Mr Alexander had not proven the content of his conversation with them in March 2016. They say that even if he did, he did not establish the authority of Mr McClure or Mr Harkness to bind the SOCIA Church or Grace Missions to any enforceable agreement. They say that no such position as Mr Alexander contends for exists within the SOCIA Church or Grace Missions. They say that the terms of any such agreement were uncertain, unclear and were not supported by any consideration. I understood them to say that if there was any agreement in March 2016, its scope was restricted to a promise to produce only the performance on a single night, being New Year's Eve 2016. They adhere to their pleaded defence that the dismissal of the plaintiffs' claim precludes Mr Alexander from maintaining his claim, under either or both of the doctrines of res judicata or issue estoppel. They submit that it should be found that the only agreement was one entered between Grace Missions and Mr Alexander for the failure of the latter to repay the former the sum of approximately $50,000.
In his closing oral address, Mr McClure again took the opportunity to say, as he had done often throughout the trial, that I should disbelieve Mr Alexander because the latter had a tendency to 'assert a fact, create a narrative based on the fact and then believe the narrative' where the fact had no basis. He submitted that there was no evidence of any agreement in March 2016; even if there was a discussion. He said that every position within SOCIA needed to be approved by its committee (at least involving expenditure over $10,000). He said that he had no interest in the arts and complained that in March 2016 Mr Alexander was trying to embroil himself in the latter's artistic projects. He said that he was not lulled by Mr Alexander's projection of profits; as an inducement to binding the SOCIA committee to enter into a transaction with Mr Alexander. He dismissed Ms Hills' evidence - that Mr McClure had defrayed his promised $100,000 into a property purchase in Cairns - as the evidence of a confused woman. He disclaimed knowledge of properties owned by SOCIA Church; notwithstanding his position as its treasurer or financial officer.
When questioned as to his reasons for not adducing evidence of SOCIA's constitution or rules, or other records proving financial transactions (such as those he claimed were entered into in late July 2016) Mr McClure variously blamed his former solicitors and suggested that recently, SOCIA were engaged in discussions with the Charity regulator to reduce its compliance obligations (viz retention of financial records). He also said that he and Mr Harkness did not have adequate time to prepare their case for trial. He noted that SOCIA's rules were taken from different sources: including 'model rules' (applicable to incorporated associations) and Upmart's rules. He said that there was no constitution and justified this on the basis that we are a "young organisation" (having been registered in 2012).
Mr McClure emphasised the minute of the SOCIA committee meeting of 24 July 2016 as the best evidence of the real transaction. He submitted that Mr Alexander's production of invoices after August 2016 were consistent with Mr Alexander's acceptance that they would only be paid at Grace Missions' discretion, on a case by case basis. I suggested, in response to this, that they may have been consistent with Mr Alexander's belief in the arrangement of March 2016. Mr McClure did not dispute this possibility. Curiously, he accepted Mr Alexander's characterisation that SOCIA had accepted an 'underwriting' obligation; though he said it was limited to a maximum extent of $50,000.
Mr McClure accepted that if Mr Alexander's account of what was said in the conversation of March 2016 was to be accepted, that this information was not conveyed to the SOCIA committee before its meeting in July 2016. At the same time, Mr McClure said that there was nothing for him to convey. Mr McClure also accepted that the reference to 'G M' in the October 2015 handwritten note was an indication that if Mr Alexander's project was to be approved in concept, Grace Missions would be the appropriate vehicle.
Mr McClure submitted that his behaviour on 3 January 2017 may well have amounted to an impropriety and that he may have engaged in 'puffery', but that was no reason to accept that the statements he made on that occasion represented the true position. He reiterated that as at March 2016 he had no interest in Mr Alexander's Festival. He added that if Mr Alexander's position was accepted, then it might have been expected that as of 1 May, Mr Alexander would have bowed out upon discovery that there was no bank account, with a $100,000 balance, for which he could have access to. He said that it was inherently implausible that in March 2016 an arrangement would be made that was purely verbal.
In his separate closing oral address, Mr Harkness submitted that I should find that a loan agreement was entered into in July 2016 following emotional pressure exerted by Mr Alexander - in particular the concern that his mother would lose monies. Mr Harkness submitted that the terms of the loan arrangements in July 2016 were that: Mr Alexander could send invoices to him (on behalf of Grace Missions); that whether monies would be advanced to Mr Alexander depended upon SOCIA having the funds; that there was a $50,000 limit in what was to be advanced to Mr Alexander; the repayment was to be made by February 2017 and Mrs Alexander would act as a guarantor to the loan facility provided to Mr Alexander.
During the course of my questioning of him, in closing argument Mr Harkness accepted that Grace Missions had a statutory obligation to retain financial records illuminating financial transactions or at least the financial position of the entity as a charity (per s 55.5 of the Australian Charities and Not-for-Profits Commission Act 2012 (Cth)). He accepted, moreover, that a loan facility whereby Grace Missions would be indebted up to $50,000 (to SOCIA Church) was one such transaction about which one would expect a record. I questioned Mr Harkness why, in the absence of any written agreement between SOCIA Church and Grace Missions (or Grace Missions and Mr Alexander), and any minute of a committee meeting with Mr Peters, I should not draw an adverse inference from his failure to call Mr Peters that the latter's evidence would not have assisted Grace Missions. Mr Harkness' response was that he understood that Mr Peters was 'not in the best of health'. Mr Harkness said that he and Mr McClure shared the intention of using Grace Missions as a 'shield' to protect the Church from any dealings with Mr Alexander. I questioned Mr Harkness why I should not draw any adverse inference from Mr Harkness' deletion of notes prepared on his laptop during the conversation in March 2016. Mr Harkness could not or did not explain the circumstances of this deletion. He accepted, from my questioning, that he had made no enquiry in or about July 2016 as to SOCIA's capacity to lend up to $50,000 to Grace Missions. He also accepted that on multiple occasions he stood by, without correction, when Mr McClure made verbal representations as to his links to Grace Missions. Mr Harkness accepted that he was aware of a number of Mr Alexander's previous dealings with SOCIA. He also accepted that it was likely he who supplied to Mr Alexander email addresses for Grace Missions; although he could not say whether or not Mr McClure had also passed on Grace Missions' email address. He said that he and Mr McClure conducted their business from the same premises; comprising five rooms; and that although they may each have conducted business in their private rooms; they also had discussions and received email (and, I infer, telephone [3] ) communications.

[34]

Trevor Alexander

Mr Alexander generally gave his evidence with conviction and sincerity. Subject to the caveat I expressed above, I considered that by and large he tried to tell the truth; even if there were occasions when it appeared he was trying to fight past battles rather than focussing on the events the subject of this proceeding.
For all of his experience in the arts industry, he did not strike me as being commercially sophisticated, and he certainly was not attuned to nuances in legal form or formalities. He struck me as being a person who tried himself, and expected others, to deal with him in an honourable fashion. This was illustrated when I asked him why, when monies had not appeared (as he had expected) in an account for his use between May and December 2017, he did not seek proof from Mr McClure as what had happened with or to the (promised) bank account. He accepted that he did not probe, since he 'trusted' Mr McClure and Mr Harkness, as being Ministers of his Church. At this point, an objective bystander might regard that as surprising, but from Mr Alexander, it struck me as naïve. These matters led to him giving evidence on some matters which appeared at odds with commercial realities. There were also some instances when, he strained, somewhat, to provide explanations to questions which should have elicited short answers. This evinced a concern in him about the impact of his answers on his case.
Another curious feature of his evidence was that it emerged, in re-examination, that Mr Alexander accepted that he had lied to Mr McClure and Mr Harkness when in September 2016, he told them that he had used $30,000 of his mother's superannuation (rather than the sum of $70,000, which Mr Harkness and Mr McClure recalled as the figure that was mentioned). Mr Alexander said he did this to try to exert leverage. I was ambivalent about this disclosure. On the one hand, it is discreditable to lie to extract leverage in business dealings; albeit in a context where, if his evidence was to be believed, he was somewhat desperately seeking to procure funding after it appeared that the funding promised back in March was not forthcoming. On the other, this disclosure was not solicited by any questioning in the Court (from Mr Harkness or Mr McClure, or by myself); and it was not obvious that disclosure of this would otherwise be forthcoming. The circumstance that Mr Alexander volunteered it was creditable in one sense, as manifesting a desire to tell the truth despite what that might reveal about him.
These matters do not detract from his reliability or honesty, but they did (along with the general caveat I referred to in paragraph 208 above) require me to consider closely the probative value of his evidence as to his motives, set against other objective circumstances in the case.

[37]

Zen Harkness

It struck me as curious that, as a Minister of a Church, and who had prepared his affidavit on oath, that Mr Harkness did not swear an oath when he went into the witness box. Be that as it may, I was troubled by Mr Harkness' evidence and did not regard him being a satisfactory witness. I considered that he was evasive and prone to give explanations to questions, rather than direct answers. This was a feature of his evidence when cross-examined upon the processes of decision-making, within SOCIA Church and Grace Missions. It was also evident when he was asked about the sources of SOCIA funding and whether anybody else (apart from Mr Alexander), to Mr Harkness' knowledge, had purported to act on behalf of Grace Missions without that entity's authority. In relation to the last of these matters, Mr Harkness was well aware (having listened to the sound recording on the day prior to the question being raised) that Mr McClure had represented his authority to act for Grace Missions before a meeting of the musicians for the festival on 3 January 2017. But when the question was raised in the terms it was put, Mr Harkness prevaricated before eventually providing a long-winded and (essentially) non-responsive answer.
At one point during his cross-examination, Mr Harkness refused to answer Mr Alexander's question as to the sources of finance for SOCIA Church. The question was objected to, vociferously, by Mr McClure, but I overruled the objection. Notwithstanding this ruling, Mr Harkness initially refused to answer the question. After a period of time to reflect, he answered it.
In each of these instances, it appeared to me that Mr Harkness was more intent upon protecting his own position, and/or that of Mr McClure, than fulfilling his responsibility, as a witness, to answer the questions raised of him to the best of his recollection.
There was some strange evidence given by Mr Harkness which also cast doubt upon his general reliability. When cross-examined about his failure to respond to emails which he had been sent by Mr Alexander, his explanation was that he had learned that Mr Alexander (and his partner, Ms Hill) were proficient in something called 'neuro-linguistic programming' ('NLP'). This concept, Mr Harkness explained to me (insofar as I understood the explanation) consisted of someone, such as Mr Alexander, expressing a 'negative averment' in a communication and interpreting the absence of a response as assent to the assumptions contained within the averment; and thereby represented 'the reality' [5] . Mr Harkness's affidavit evidence provided a different explanation for his lack of responsiveness to Mr Alexander's email communications: being that he merely glanced at them and did not appreciate their significance. Mr Harkness' concern about 'neuro-linguistic programming' was not referred to anywhere in his affidavits. I took this to amount to reconstruction. More than once, Mr Harkness referred to 'NLP', as an altogether too convenient excuse for his inaction in the face of Mr Alexander's email communications to him.
Another strange item of evidence arose from Mr Harkness's distrust of Mr Alexander arising from the 'Warragul fiasco'. It will be recalled that evidence from Mr Harkness on the subject was admitted to establish his state of mind (which itself was referable to the question of the likelihood that he would contract with Mr Alexander). When asked about this, Mr Harkness characterised the event as a 'test' for Mr Alexander, in the sense of a criterion for whether he would be accepted, formally (as member) or informally, within the SOCIA Church. Upon some questioning from me, however, it was clear that Mr Harkness's view was that this was not a test which was laid down, by any rules of SOCIA, or even by any verbal requirements of Mr Harkness or Mr McClure, but simply a test which Mr Alexander set himself.
A further aspect of concern was that, when he was cross-examined by Mr Alexander, and despite multiple requests by myself that he not discuss his evidence with anyone else, it appeared that he did just that, by collaborating with Mr McClure to tender additional documentation, without any indication that he do so. I considered that Mr Harkness was too close to Mr McClure in the events of this proceeding that I could confidently rely upon the independence of his recollections.

[38]

Malcolm McClure

As was his right, Mr McClure remained in the Court-room when Mr Harkness gave his evidence. As was the case with Mr Harkness, Mr McClure chose to give his evidence by affirmation, rather than on oath, as he had done when preparing his affidavits. When asked about this by Mr Alexander, I took Mr McClure to justify this inconsistency in approach by reference to the scripture of Matthew 5:34 "But I say unto you, Swear not at all; neither by heaven; for it is God's throne", but, if that was Mr McClure's belief when giving evidence in the courtroom, it was not clear where this left Mr McClure's belief in the solemnity with which he prepared his affidavit evidence; for which he swore an oath.
Mr McClure was an unsatisfactory witness.
I was not impressed with Mr McClure's demeanour. When he gave his evidence he struck me at times as cocky, if not also smug. Sometimes he answered questions in a way bordering on sarcasm. Most often, in response to questions, he would give long, non-responsive answers; many of which consisted of his throwing barbs at the cross-examiner (Mr Alexander) and other parts of which were plainly intended to advance his cause. (This was of a piece with some of the offensive questions, and written submissions he had made about Mr Alexander, which actually or nearly bordered on assertions of criminality).
Sometimes he came up with implausible answers; as when he cast doubt upon the accuracy of SOCIA documents lodged with the ACRC; in which regard, and notwithstanding his positions of secretary and financial officer of the SOCIA Church, he sought to divert responsibility for (admitted) inaccuracies in these public documents upon Mr Harkness. A further illustration of this was when he was asked about emails that Mr Alexander had sent to him; he disputed that the email address was his; when the only sensible conclusion that could be drawn was that the email address which Mr Alexander used was something which Mr McClure or Mr Harkness had supplied to Mr Alexander. I was less than convinced that Mr McClure treated the process of his giving evidence seriously.
In addition, I was not convinced that Mr McClure was forthcoming when putting documentary evidence before the Court: he accepted that he tore about 12 pages out of the exercise book containing his handwritten notes of his, and Mr Harkness' meetings with him in August and October 2015.
A vivid example of the above features of Mr McClure's evidence arose when he responded to statements he made at the 3 January 2017 meeting of his understanding that over $100,000 had been spent in relation to the festival. The actual question raised of him in Mr Alexander's cross-examination was whether in fact he had made such a statement. It might have been expected that the simple answer was yes, he had. But Mr McClure took the opportunity (without any invitation from anyone) to explain why he said it. One of the explanations was that he was mindful of an email Mr Alexander addressed to him in several 'Grace Missions' email addresses on 13 October 2016. Mr McClure characterised the content of that email as a lie by Mr Alexander. That email did, indeed, refer to Mr Alexander's stated need for $100,000. This was a surprising attribution by Mr McClure in circumstances where his evidence (at paragraph 64 of his second affidavit) was that the email address in Mr Alexander's email of 13 October 2016 was not one of his email addresses (they were all 'Grace Missions' email addresses) and that he did not see the email (and others sent to the same email address) at the relevant time. Even more surprisingly, Mr McClure then admitted that the reference to $100,000 was referred to by Mr Alexander in his conversation in March 2016. In response to this, I referred Mr McClure to Mr Alexander's primary affidavit (paragraph 8) which was consistent with Mr Alexander mentioning costs of $100,000 in March 2016. I then reminded Mr McClure of his response (in paragraph 11 of Mr McClure's second affidavit of 28 November 2016) to Mr Alexander's evidence (at paragraph 8 of Mr Alexander's affidavit of 23 May 2018) which effectively denied Mr Alexander using (any) words to the effect set out in Mr Alexander's affidavit. After these inconsistencies were pointed out, Mr McClure blamed the solicitors involved in assisting him to put on his affidavit evidence. Generally, he said (and not just in relation to this issue), there were "inadequacies in the affidavit which should have been addressed", whilst expressing that he had now felt disadvantaged.
In the circumstances, I am unable to rely upon Mr McClure's testimony of events unless it was corroborated independently (and not by Mr Harkness).

[42]

No loan agreement was entered into by Mr Alexander in July 2016

With the issue presented in these stark terms, I am inclined to prefer Mr Alexander's version of the circumstances by which he received the funds from the Grace Missions. This is party because of the view that I take that I cannot accept that Mr Alexander entered into a loan agreement with Grace Missions in July 2016 in the terms alleged by Mr Harkness (and Mr McClure).
During his closing submissions, in response to my question of him, Mr Harkness identified the terms for loan finance to Mr Alexander in July 2016 as follows: 1. Grace Missions would lend him up to a $50,000 limit; 2. the advanced sum would not be distributed as a lump sum, and, moreover, the total amount of the advance would depend upon the funds available to SOCIA; 3. Mr Alexander could send invoices to Mr Harkness to determine which ones would be paid from the loan; 4. such monies as were advanced would be repaid by Mr Alexander by February 2017; 5. Mr Alexander's mother, Shirley, would act as guarantor for the loan finance;
First, I do not accept that Mr Alexander agreed to the conditions which the SOCIA Church had stipulated for the advances. This relevantly included, the proposition that Mr Alexander's mother, Shirley, would act as guarantor for the repayment of the loan. That would have been a very serious matter for Mr Alexander to have considered prior to deciding whether to enter into a loan agreement with Grace Missions. Even more serious was the condition that monies would only be advanced if the monies were there. It would have been intolerable for Mr Alexander to proceed in the face of uncertainty whether SOCIA was in a position to provide the funds to Grace Missions for it to disburse to Mr Alexander. Indeed, it was the uncertainty of SOCIA's financial capacity that eventually drove increasingly frantic requests by Mr Alexander for reassurance that the original agreement would be honoured.
Secondly, on Mr Harkness and Mr McClure's case, there was an element of discretion in whether SOCIA would advance the monies to Grace Missions, and thereafter Grace Missions would lend the monies to Mr Alexander. This discretion was subject to a contingency - not simply Mr Harkness' (or Mr McClure's) assent to paying invoices on a "case by case basis", but even whether the monies were available to be lent to Mr Alexander at all. A discretionary, or optional promise is one situation where the consideration for a contract fails (Cheshire & Fifoot Law of Contract (11th Australian ed) [4.16]).
The problem was illustrated with the demand by the plaintiffs in this proceeding, the Patrick Togher Partnership for payment for services. Mr Harkness and Mr McClure say that they agreed, only after a legal proceeding had been brought against them, to contribute $7,000 effectively, to paying off the Partnership, but they say that this $7,000 was part of the loan for $50,000 from Grace Missions to Mr Alexander. This event showed the problems where a lender can arrogate to itself, through a discretion, the circumstances in which monies can be advanced. More broadly, I consider that if, as I have found, Mr Alexander was authorised to act as a creative and artistic director, his authority extended to engaging third parties to enter transactions on behalf of Grace Missions. It would have been intolerable, if not unworkable, that every decision he made about the show involving spending, would be subject to the whim or caprice of Grace Missions.
Thirdly, I am not persuaded in the accounts of Mr McClure or Mr Harkness that, as at late July 2016, Mr Alexander was desperately appealing to them to "rescue" his music festival. For one thing, I accept Mr Alexander's evidence that by late July 2016, Mr Alexander had only expended $550; in preference to Mr McClure's and Mr Harkness' version, centred upon Mr Alexander's alleged representation that, by then, he had expended a substantial amount of his expenditure, source from his family, or Goddess Reawakening. I consider that Mr Alexander supplied a more plausible account. It was about this time, after he had had a recent discussion with Lynda Buckley (on or about 22 July 2016), that it was becoming apparent that Mr McClure would have to match his verbal assurances of payment with actual deeds. In other words, events had reached the point where it was no longer, or not likely to be much longer, viable for Mr McClure to effectively 'fob' Mr Alexander off with vague or non-committal assurances that monies would be available.
For another thing, the Telstra phone records tend to show that the lengthy telephone conversation that occurred on 24 July was initiated by Mr McClure (or Mr Harkness); not Mr Alexander. Had it been the case that Mr Alexander was desperately seeking financial accommodation, I expect that the calls would have been initiated by Mr Alexander.
Fourthly, no written agreements entered between Grace Missions and (a) Mr Alexander; and (b) SOCIA Church were put into evidence. Having regard to Grace Missions' status as a registered charity, and its obligations to retain records proving material financial transactions, the failure to adduce written records of the loan agreement fortifies my view that no agreements were entered into, as alleged by Mr Harkness and Mr McClure.
Put in the binary terms submitted to me by Mr McClure, by default, I would be inclined to finding that it was arrangements put in place in March 2016; and not July 2016, which explain the provision of the funds. But in fairness to Mr McClure, his submissions did also provide other independent grounds to reject Mr Alexander's account of arrangements being struck in March 2016 so it is appropriate to explain why I prefer Mr Alexander's account over Mr McClure and Mr Harkness's account.

[43]

Other reasons for preferring Mr Alexander's version of what was said in March 2016

My additional reasons for generally preferring Mr Alexander's account of the arrangements by which he was to receive monies from SOCIA and Grace Missions to Mr McClure and Mr Harkness' accounts are as follows.
First, as anticipated in my reasons for judgment for allowing the admission of the sound recording, admissions were made by Mr McClure and Mr Harkness concerning Grace Missions' commitment, as a self-described underwriter, to support the project. This was the antithesis of Mr McClure and Mr Harkness' position that Grace Missions was simply a lender of monies, swayed by the emotive pressure that Mr Alexander put upon Mr McClure and Mr Harkness in late July 2016. I agree with Mr Alexander that if all that Grace Missions perceived itself as being was a lender (who could call on a guarantee provided by Mrs Alexander) there was no particular reason why it would want to appear at the meeting on 3 January 2017 or why it would encourage, and even invoke itself, a class-action against Ticketek. Closely associated with this was what I find was Grace Missions' decision to cancel the shows in January and terminate financial support for the festival. Again, these were not powers one might ordinarily expect would be exercisable by a lender, at least on the lending terms which Mr Harkness and Mr McClure submitted arose in this case. I also give some weight to Mr McClure's and Mr Harkness' declared intentions to 'honour' contracts with musicians, and with Trevor; made throughout this meeting.
I reject the submissions of Mr McClure and Mr Harkness that attempted to throw doubt upon the probative value of the accounts of the meeting on 3 January. These attempts included arguments that they would have spoken differently had they known that they were being sound recorded, that there were additional meetings not captured by the sound recordings; and that their solicitor was to blame for their failures in their respective affidavits to respond to the extracts of the sound recordings (apparently, upon the expectation that the sound recording would be found inadmissible). Noting my views as to my lack of faith in the reliability of their evidence as witnesses, these complaints are without substance. To the contrary, I considered their statements to the musicians as an authentic, if unguarded, expression of their views.
Secondly, Mr Alexander's conduct after March 2016 was consistent with representations, or promises, made by Mr McClure and Mr Harkness as to an underwriting commitment. In particular, he sent a number of emails to email addresses supplied to him (by either or both Mr McClure and Mr Harkness) on such things as allowing them to inspect a venue and to provide assistance with Mr Alexander's attempts to obtain grants. In a number of those emails, he wanted to know when the account would be open and when funds would be provided to him. I do not regard this conduct as the conduct of a person who has a delusional grasp of what was discussed in March. But if Mr Harkness and Mr McClure regarded him as delusional in his belief as to what was promised in March 2016, it is bewildering why a simple and curt statement was not communicated by email (Mr Alexander's chosen forum for communication) by either of them to quickly disavow Mr Alexander of his beliefs in this respect.
In relation to the first and second point, above, Mr McClure and Mr Harkness submitted (in written submissions in reply) that post-contractual conduct cannot be used as an aid to the construction of a contract. True that proposition may generally may be (although it may admit of some qualification), but the issue for present purposes is not one of construction of terms - it is whether an agreement was entered at all and if so, what were its terms. Even for contracts partly alleged to be in writing, it is well-established that evidence of subsequent conduct is admissible to identifying whether a contract has come into existence and its terms (Howard Smith & Co v Varawa (1919) 26 CLR 183 at 197. The proposition carries even more force where it is alleged that the contract is only verbal.
Indeed, a striking feature of the evidence of Mr Harkness and Mr McClure was the relative dearth of email communications they put in their evidence. I counted one email from Mr Harkness and none from Mr McClure. It was plain that Mr Harkness received emails: throughout the second half of 2016, he received invoices emailed to him by Mr Alexander and arranged for payment of some of them. But I do not infer that they did not receive or read them. I agree with Mr Alexander's proposition put to Mr Harkness in his cross-examination: he did not correspond by email since he wanted to cover his tracks. As it is, I reject the evidence of Mr McClure and Mr Harkness that they were unaware of, merely glanced or did not appreciate the importance of Mr Alexander's emails to them. I find, instead that they chose not to respond (meaningfully or at all) because if they did, they perceived that this might support Mr Alexander's position as to the existence of an arrangement prior to July 2016.
Thirdly, I consider that a strong motivating factor for SOCIA Church and Grace Missions to provide financial assistance was the assurance, if not expectation, that Mr Alexander's gala performance on New Year's Eve would be likely to yield a very substantial profit. During the trial, Mr Harkness let slip a complaint, directed to Mr Alexander, that at least Grace Missions was led to believe that very substantial profits would be made. Further, Ms Hancock's evidence was that she had been informed by Mr McClure that substantial profits were predicted, and would flow back to SOCIA Church, so as to be channelled to other projects. She perceived SOCIA Church as acting much like an investor. It could not be, and was not, Mr McClure and Mr Harkness's case that they held any view as to substantial profitability of the project in late July - that would cut across their narrative that, at that time, Mr Alexander was desperately approaching them to try to rescue the project. To the contrary, I consider it most likely that expectations as to substantial profitability were generated back in March 2016 when Mr Alexander presented a budget and there was otherwise a discussion as to the anticipated costs of the project. Furthermore and/or alternatively, they may have been generated, or perhaps amplified, in May 2016, when Mr Alexander says he was trying to persuade Mr McClure and Mr Harkness to expand the project from one evening through to the month of January 2017.
Fourthly, Mr McClure and Mr Harkness had changed their positions as to whether there was any discussion, at all, with Mr Alexander and Ms Hill in March 2016. They gave no account of any conversation or discussion in March 2016 in their initial affidavits (9 June 2018 for both of them), notwithstanding that, by that date, they have not only been served with Mr Alexander's claim but also his primary affidavit (of 23 May 2018) and that of Ms Hill (also of 23 May 2018) as well. In their subsequent affidavits (31 October 2018 for Mr Harkness and 28 November 2018 for Mr McClure), they then addressed Mr Alexander's account of the discussion in March 2016. This, they commonly characterised as a mere social visit. Otherwise, their evidence was little more than denials of Mr Alexander's account (and Ms Hill's account) of what was said. As I have said, I consider it very likely that it was at the meeting in March 2016 (or, alternatively, discussion in May 2016) where the subject of estimated profits was raised. It was also in this meeting that I consider it most likely that the subject of estimated costs for production ($100,000) was also raised.
In terms of the recording of what was said in March 2016, Mr McClure and Mr Harkness also shifted ground, from a position where, apart from their initial denial of any conversation at all, it emerged throughout the trial that their position had evolved. They accepted that Mr Harkness may have taken some notes on his laptop; but Mr Harkness could not account for why any notes on his laptop had been deleted. I do not need to go so far as to consider whether or not Mr Harkness and/or Mr McClure engaged in acts of spoliation. It is sufficient, for present purposes, for me to find that Mr McClure and Mr Harkness's conduct, in the proceeding, supports the probability that a material discussion did occur with Mr Alexander in March 2016, but they did not put forward positive versions of what was said, and did not adduce notes because they feared this would not help their case.
Fifthly, Ms Hill gave evidence of her understanding that $100,000 earmarked for a bank account by May 2016 had in fact been utilised by Mr McClure to purchase a property for the SOCIA Church in Cairns in Queensland. She was not thereafter challenged by either Mr McClure or Mr Harkness with respect to that evidence (see paragraph 97, above). As I have noted, I generally found that Ms Hill was a reliable witness and such information, or perhaps revelation, would have been likely, of its nature, to stick in her mind.
Sixthly, and flowing from the last point, on the basis of the credit findings I have made, where there was a choice between competing accounts of verbal transactions (noting that the putative loan transaction in July 2016 was only evidenced, in writing, by written authorisation of the SOCIA Committee), I prefer the evidence of Mr Alexander and Ms Hill to that of Mr McClure and Mr Alexander. Thus, when they say that they agreed to the essential matters in March 2016 over a handshake, in lieu of a written agreement I accept that this is what was most likely to have occurred. I note, again, Mr McClure's statement to the musicians in January 2017 to the effect that he was of the 'old school', who would honour handshake agreements and Ms Hill's evidence that he said something very similar in March 2016.

[44]

Reservations in accepting Mr Alexander's account

I acknowledge that here are matters that cast doubt upon acceptance of Mr Alexander's account of what was said in March 2016, which I now address.
First, there were indications, from earlier dealings in 2014 and 2015, that Mr McClure and Mr Harkness had felt that the Church had been let down by Mr Alexander; and were otherwise sceptical as to his commercial judgement. This was illustrated, most prominently, by the 'Warragul fiasco', and advice given to Mr Alexander more than once, that he get money in the bank first before seeking financial assistance from SOCIA Church. There were even indications, particularly from Mr Harkness, that they wanted future dealings with him recorded in writing. There were warnings, from these early dealings, that he should not represent himself as acting for the Church.
In the same vein, I must deal with the handwritten notes of the August 2015 and October 2015 meetings prepared by Mr McClure. I have expressed above my reservations about the authenticity or accuracy of the notes, in the circumstances that they were prepared. Nevertheless, although he was not cross-examined as to their correctness, I understood that Mr Alexander did not seriously contest the material part of the contract: that is, that at least as at October 2015, Mr McClure and Mr Harkness resisted any proposition that SOCIA and Grace Missions would help him fund any festival; but rather, urged him to get money in the Bank. The question arises as to what changed between the communication of their attitude in August or October 2015 and their apparent change of position six (or eight) months later?
In my view, there was a significant difference. In October 2015, Mr Alexander was floating a non-budgeted proposal for a 'festival'. This was in a context where Mr Alexander was raising a large number of proposals, both in August and October, for activities that may raise funds for the SOCIA Church. It was not surprising that a vaguely-expressed proposal for a music festival by Mr Alexander would have been treated with scepticism; particularly in the light of prior dealings as between Mr Alexander, Mr Harkness and Mr McClure. But even so, at this time, Mr McClure and Mr Harkness did not unequivocally put the 'kibosh' on the idea for all time - they said that they would consider it, at the earliest in 2017. Further, even during the trial, Mr McClure noted his belief in Mr Alexander's intelligence, his connections to the arts community and his competence to produce a musical festival. It appears that the only doubt he, and Mr Harkness harboured in October 2015 was Mr Alexander's capacity to fund a festival.
When Mr Alexander spoke to Mr McClure and Mr Harkness again, in March 2016, Mr Alexander was better prepared. I am satisfied that he produced a written budget, setting out the production expenses, a flier (probably to do with the venue he had identified for the concert - the MCEC). Unlike the proposal expressed in October, which featured a festival, what was proposed in March 2016 was a single operatic performance on one night. Most materially, Mr Alexander spoke of the profits that would have been available for the benefit of the SOCIA Church. I accept that he mentioned the estimated figure of $1.5 - 2.5 million. I also think it likely that Mr Alexander mentioned, and perhaps even emphasised, the prospect of his obtaining grants from third party sources. In the context, I find that Mr McClure and Mr Harkness were prepared to jettison their scepticism in his capacity to fund a show and, seeing the prospective benefit of the receipt of large profits in return for projected costs which they anticipated could be manageable, they did change their position from six or eight months before and were willing to deal with Mr Alexander.
Secondly, there was the curious combination of identities in which Mr Alexander held himself out to third parties in furtherance of the project: such as his description as creative manager of 'Renaissance Opera'.
Thirdly, it was also curious to me that Mr Alexander did not press Mr McClure more than he did in the period from April through to well into the remainder of the year as to why his assurance of a bank account, with funds in it, and which he, Mr Alexander was able to access, had not materialised.
Fourthly, it is unusual for underwriting agreements to be only verbal.
I am satisfied that there were plausible answers and explanations given by Mr Alexander to each of these matters. As to the first concern, even on their case, the circumstance that SOCIA and Grace Missions were prepared to countenance the provision of $50,000 in July 2016 significantly undermines Mr McClure and Mr Harkness' narrative that Mr Alexander was not a man with whom they could do business as he was too untrustworthy. If the contemporaneous email correspondence concerning the Warragul fiasco was accurate, I would have expected that Mr McClure and Mr Harkness, being vigilant and (in discharge of) a duty of care and diligence they likely owed to SOCIA Church and Grace Missions, would not provide financial assistance to Mr Alexander except under the most secure of circumstances. Yet even in 2015, SOCIA funds were used to subsidise Mr Alexander's two trips overseas.
As to the second concern, I accept Mr Alexander's evidence, which was not challenged, that in the arts industry with which he is associated, the reputation and 'brand' name of a creative director or producer may have significance to the willingness of artists, venue suppliers, publicists and other third parties to engage in projects. Thus a person's description as the creative and artistic director of 'Renaissance Opera' is likely to have more 'cachet,' with operatic performers, than being the creative and artistic director of a church.
As to the third concern, I accept, albeit with some reservation, Mr Alexander's evidence that after his conversation with Mr McClure in March, he continued to 'trust' Mr McClure's subsequent assurances that a fund would be set up, to which he would have access; at least for the period up until late July when the time was fast approaching where he would need to back up commitments to third parties with money. Thereafter monies were, haphazardly, rolling in. It was true that the modus operandi, in terms of the process for receiving payments had changed - instead of his being able to directly access a Grace Missions bank account, it became necessary for Mr Alexander to submit invoices directly to Grace Missions. However, until January 2017, that change did not present undue difficulty or conflict and I infer that Mr Alexander, who had an emotional and financial investment in the project was willing to acquiesce to this change of arrangement in order to sustain the viability of the project.
As to the fourth concern, as I have noted, Mr Alexander did not appear to me to be prudent in his business dealings. A prudent person in his position, here, would have insisted upon the agreement being recorded in writing. But it seemed to me that in this section of the arts community, other musicians were also prepared to rely upon informal, verbal agreements. Mr McClure, on the other hand, appeared to me to be a person willing to exploit the use of verbal agreements in order to be in a position to later dispute them. There were indications in the evidence that he was well-versed or experienced in litigation and by reason of this, was familiar with the difficulties of proving undocumented transactions. He also boasted to the musicians at the meeting that he was a man who honoured undocumented transactions even when only a few days later, he dishonoured SOCIA/ Grace Missions' contract to underwrite.

[49]

The usual authority of Mr McClure as secretary, financial officer and ordained Minister to SOCIA

The ACNC Charity Register indicates that Mr McClure was appointed Secretary to the SOCIA Church prior to the events in this proceeding. By virtue of holding the office of a secretary, in general law, there is implied actual authority to do certain things. The issue was considered by the English Court of Appeal in Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd [1971] 2 QB 71. There, the plaintiff conducted a business of hiring out prestige cars. An individual (B) was employed as a secretary to the Defendant. B fraudulently misrepresented to the plaintiff that he was authorised to hire the cars and entered into transactions by which the hire occurred. The plaintiff sought to recover payment for the hire from the Defendant, but the Defendant denied that B was authorised to contract on its behalf. Before the Court of Appeal, the defendant argued that a secretary's role was 'humble' and did not extend to making contracts or representations on the company's behalf. The argument was rejected.
Lord Denning MR said that a secretary of a company was an officer of the company and had extensive duties and responsibilities, and regularly made representations on behalf of the company, and entered into contracts on its behalf, which come within the day to day running of the company's business; so much that (s)he is held out as having the authority of the company to do such things on its behalf. (S)he is entitled to sign contracts connected with the administrative side of the company's affairs, such as employing staff, ordering cars.
In a concurring judgment, Salmon LJ said that a company secretary is the chief administrative officer of the company, and as regards matters concerned with its administration, (s)he had ostensible authority to sign contracts on behalf of the company. However, Salmon LJ distinguished the conduct of signing contracts relating to the company's administrative functions (such as using a hire car to collect a customer from the airport) and the secretary's authority to sign a contract relating to the commercial management of the company, such as the sale or purchase of goods; and determined that he would not express any concluded opinion on the point.
Megaw LJ agreed with both Lord Denning and Salmon LJ.
Mr McClure asserts that he had no authority on SOCIA's behalf to agree to the arrangement proposed by Mr Alexander in March 2016, including, incidentally, an agreement to appoint Mr Alexander as the creative and artistic director. He relies, in part, (and by contrast) to the process that occurred in July 2016, where an arrangement had been expressly approved by the then committee of SOCIA Church for a loan.
There is no single, all-encompassing description of a secretary's functions or responsibilities in any organisation. The functions of a general secretary, say, of a political party may be much more extensive than the powers of a company secretary of a publicly listed company.
As to the role of treasurer or financial officer, it would be expected that the usual role of such officer would be to deal with the financial affairs of the SOCIA Church.
Here, I am considering the functions of the secretary (and financial officer) of an unincorporated not-for-profit charity. I would have expected that the usual role of secretary within the SOCIA Church would have required him to prepare reports to the ACNC, organise meetings, and maintain records. But the position is complicated by the appointment of Mr Harkness as 'Public Officer' and I would have expected some of the responsibilities of the latter position might also overlap with the role of secretary.
The minutes of the SOCIA committee meeting of late July 2016 indicated that, save for the role of Chairman, the only other descriptions of office holders were Chairman (Mr McCarthy), Vice Chairman and International Liaisons (Mr Moyle), Secretary (Mr McClure) and three other Vice Secretaries from Victoria, NSW and Queensland (Mr Harkness, Ms Hancock and Mr King, respectively).
It is conceivable, in my view, that although his formal positions were that of secretary and financial officer (not to mention ordained Minister), Mr McClure may have been permitted by the SOCIA Church committee to act as a powerful officer in the mould akin to that of a managing director of a company. I do not regard the identification of the positions of the other committee members as precluding acceptance of that view. Further, Mr McClure's failure to put in evidence of any limitations upon his authority contained within the rules of the charity does not preclude acceptance of that view either.
Persons acting in a role analogous to a managing director have very broad authority; including making decisions for the entity in the ordinary course of its business (Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549). However, managing directors do not have the usual authority to enter a transaction which cannot be characterised as an ordinary business transaction (Corpers (No. 664) Pty Ltd v NZI Securities Australia Ltd (1989) ASC 55-714.
Mr Alexander placed reliance upon Mr McClure (and Mr Harkness) being ordained Ministers of the SOCIA Church. I infer that by reason of this position, they would have had particular influence and authority within the committee, to extol the benefits, for the Church, in terms of spiritual guidance and advancing the reputation of the Church. The trips that Mr Alexander took to Egypt or Europe and the printing of books were of the kind that were anticipated to advance the learning, edification and spiritual development of the Church and its members.
I am not satisfied that by virtue of his positions as secretary, treasurer (or financial officer) or ordained Minister, Mr McClure had express actual authority of SOCIA Church, or usual authority to bind SOCIA Church to entry into an underwriting agreement with Mr Alexander in respect to a musical event on New Year's Eve.
Nevertheless, the above finding leaves open the question whether, as a matter of implied actual authority, Mr McClure, as agent had authority implied from the circumstances of any particular case (Hely - Hutchinson v Brayhead Ltd [1968] 1 QB 480 at 583) including where the principal has acquiesced to a prior course of dealing. I will deal with this matter now in a context of considering the separate point of whether Mr McClure had ostensible authority to bind the Church.

[50]

Ostensible authority of Mr McClure to bind SOCIA Church

Ostensible authority is a form of estoppel (Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 per Toohey J at 200 and per Gaudron J at 211; State of NSW v Lepore (2003) 212 CLR 511 at [108]; Di Bello v De Costi Seafoods (Holdings) Pty Ltd [2005] NSWCA 267 at [24]). The policy underlying the imposition of liability upon a principal in this context was described in Fry v Smellie [1912] 3 KB 282 at 293 as follows: "… when one of two innocent persons must suffer, the person who renders it possible for the wrongdoer to do the wrong by reason of the trust reposed in the wrongdoer, should suffer, rather than the person who suffers from the agent having that opportunity."
For the doctrine to apply here, Mr Alexander must prove that a representation [6] (of Mr McClure's authority) was made by SOCIA Church, upon which he relied upon to his detriment, such that it would be unjust for SOCIA Church to resile from the making of the representation (Thompson v Palmer (1933) 49 CLR 507 per Dixon J at 547).
In Bowstead & Reynolds on Agency, it is suggested (at [8-015) that a representation may be of two types: (a) a genuine representation by the principal of the agent's authority (such as allowing the agent to run a business appearing to be the principal's business); and (b) the principal putting the agent in a specific position carrying with it a usual authority.
For this purpose, it is clear that the representation may be inferred by conduct. In Freeman & Lockyer (a Firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 Lord Diplock said (at 503-4): "The representation which creates 'apparent' authority may take a variety of forms of which are the commonest is representation by conduct, that is, by permitting the agent to act in some way in the conduct of the principal's business with other persons. By so doing, the principal represents to anyone who becomes aware that the agent is so acting that the agent has authority to enter on behalf of the principal into contracts with other persons of the kind which an agent so acting in the conduct of his principal's business has usually 'actual' authority to enter into."
Conduct, in this sense, may be established by a prior course of dealing; as well as by equipping the putative agent with title and status. A representation of authority by the putative agent is relevant where a previous course of dealing is established (Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Company Pty Ltd (1975) 133 CLR 72 at 78; see also Bowstead & Reynolds on Agency, (21st ed) [8-014]; and G Dal Pont, Law of Agency (3rd ed) [20.18]).
Further, the High Court in Pacific Carriers Ltd v BNP Paribus (2004) 218 CLR 451 at [36], said that it is necessary to consider the conduct of the principal as a whole. Specifically, in the context of considering the agency of an officer to act on behalf of the company to enter a transaction for the latter, the High Court also said that: "It is not enough that the representation should come from the officer alone. Whether the representation is general, or related specifically to the particular transaction, it must come from the principal, the company. That does not mean that the conduct of the officer is irrelevant to the representation, but the company's conduct must be the source of the representation. In many cases the representational conduct commonly takes the form of setting up of an organisational structure consistent with the company's constitution. That structure presents to outsiders a complex of appearances as to authority. The assurance with which outsiders deal with a company is more often than not based, not upon enquiry, or positive statement, but upon an assumption that company officers have the authority that people in their respective positions would ordinarily be expected to have. In the ordinary case, however, it is necessary, in order to decide whether there has been a holding out by a principal, to consider the principal's conduct as a whole." [7]
Further, in Essington investments Pty Ltd v Regency Property Pty Ltd [2004] NSWCA 375, Hodgson JA said (at [44] - [45], (with whose judgment Sheller JA concurred): "… The representation of authority must either be made, or at least be permitted to be made, by the principal. In the present case, all the relevant representations were made by the agent, so that the real question is whether they were themselves authorised by the principal and so made by the principal, all were relevantly "permitted" to be made by the principal … In my opinion, one circumstance in which it may be said that representations are permitted to be made is where a principal knows that an agent engaged on the principal's behalf is making representations as to the agent's authority, is able to prevent such representations being made or countermand them, but does not do so. There is arguably, in the circumstances, something like a representation by silence: the circumstances call for some action by the principal to ensure that persons are not misled by the agent, and the principal does not take that action."
In his work Law of Charity (2nd ed, 2017), at [17.50] Mr Dal Pont said this about the nature of an unincorporated association: '.. The essential characteristic of an unincorporated association is that its members at a moment of time combined or banded together to form the association. Most have a constitution to provide for, enter alia, appointment of committees and offices, and the procedure for meetings, which may reflect a contract between the members inter se. Also, members are usually free to join or leave the association at will, and the Association usually subsists independently of changes in its membership. A management committee commonly administers an unincorporated association. The rights and duties of members, and any committee of Management, depend on its constitution, there are no statutory rules to fall back on as in the case of companies, incorporated associations and trusts.'
Nevertheless, there are certain statutory obligations imposed upon both SOCIA Church, and Grace Missions, as registered charities. These include obligations as to record keeping, reporting and notification to the Australian Charities and Not-for-profits Commission (ACNC) [8] . In his submissions, Mr McClure asserted that the Church had been engaged in recent communications with the ACNC with a view to reducing compliance obligations; however that was a bare statement from the Bar table and, at any rate, he did not explain how any future change to statutory requirements could avail the Church (or Grace Missions) with its compliance obligations in relation to the events of this proceeding.
Mr Harkness said that there was no Constitution for SOCIA Church; but, rather, a set of rules. Under cross-examination, Mr Harkness said that some of those rules were 'unwritten'. Such written rules, as there were, were not put in evidence before me. When I asked him about the matter during his closing address, Mr McClure agreed that there was no Constitution; he said that the SOCIA Church's written rules were taken from different sources, from the former 'Upmart' [9] rules, and rules modelled (I presume) from incorporated associations. This, again, was bare assertion. When I asked Mr McClure as to why none of the rules applicable to the SOCIA Church and/or Grace missions were not put before the court to make good his and Mr Harkness' various assertions as to the limits of their authority Mr McClure attributed this to his former solicitors' failure to prepare their case.
The looseness of standards of corporate governance was also illustrated by the strange phenomenon - attested to by Ms Hancock - that applicants for membership to the SOCIA Church needed to satisfy undocumented 'tests'. It appeared to me that it was Mr McClure and Mr Alexander whose individual or collective 'satisfaction' was required. It does not inherently surprise me that when someone wishes to join an association s/he may be granted provisional (probationary) membership for a certain period to demonstrate his or her fitness for full membership; in terms of aptitude and/or character. However it does surprise me that membership can, as appears to be the case here, be essentially within the gift of SOCIA's ordained Ministers, Messrs McClure and Harkness and determined according to whim. This is another indicia of the ascendant role that the SOCIA committee vested in Mr McClure and Mr Harkness.
In the circumstances, there was force to Mr Alexander's submission that when it came to the SOCIA Church, Mr McClure 'makes the rules as he goes along'.
It appeared from the earlier correspondence, leading up to March 2016, that the SOCIA Church, and Grace Missions had engaged in a range of transactions with Mr Alexander (and/or Ms Hill) involving the provision of finance; which were not recorded and were not the subject of notification (or at least timely notification) to the ACNC. Mr McClure and Mr Harkness relied upon this correspondence, in support of their contention that they made it clear to Mr Alexander that he should not purport to represent the Church in his dealings with outsiders. But a feature of that correspondence which they did not emphasise, was the liberality with which Mr McClure and Mr Harkness purported to make decisions for SOCIA Church and Grace Missions. Mr Harkness' email in late 2014, concerning the Warragul transaction was a clear example of a representation conveyed to Mr Alexander as to what Mr Harkness represented that the Church had decided to do. Other examples, referred to in the handwritten notes of August and October 2015, were Mr McClure and Mr Alexander's decisions to pay for overseas trips to Mr Alexander and for the printing of books. The evidence before me indicated that Mr McClure and Mr Harkness were both of an entrepreneurial bent; on the look-out for opportunities to raise funds, generally through the use of Grace Missions (to avoid any adverse perceptions to the Church, should the transactions prove disadvantageous) for the ultimate financial benefit of the Church.
Not all of these transactions, involving as they did the Church's not insubstantial expenditure on transactions entered into by Mr Alexander with a perceived benefit to the Church, were directly proven to have come to the notice of other committee members for SOCIA; or Mr Peters (the only other committee member to Grace Missions), but there were certain indications that some of them were. It appears that the Warragul transaction was. Ms Hancock also recalled being aware of other transactions involving Mr Alexander, including his role in procuring the sale of Picasso paintings, the undertaking of his Egyptian trip in 2015, but could not recall any discussion of them at committee level; nor any minute of a meeting recording committee approval of them.
The evidence also indicates a lack of any restraint, by committee rules, upon the powers of Mr McClure and Mr Harkness to commit the Church to transactions. To this finding, Mr McClure asserted that for transactions involving the expenditure of finance over $10,000, committee approval of the Church was necessary. He referred me to a notation, to that effect in the minute of the meeting for SOCIA on 31 July. True enough, the notation was made; along with a reference to other procedural matters in the minute (such as eligibility to vote). However, that mere reference does not alleviate my concern that Mr McClure and Mr Harkness wielded a significant degree of power and that such restraints, if any, as were imposed upon them by the Church's rules (whatever they were) could easily have been put aside. This appears to have been the case with Warragul (where the size of the prospective financial commitment surely would have exceeded $10,000). The ease with which Mr McClure and Mr Harkness would make decisions for the Church and Grace Missions was also indicated by Ms Hancock's evidence concerning the infrequency (2-3 times a year) of SOCIA Church committee meetings.
I find that this variety of transactions including, but not limited to Warragul - which was the most prominent example of a very substantial financial commitment undertaken on behalf of the Church and Grace Missions - were transactions evidencing that Mr McClure's authority to commit SOCIA to dealing with Mr Alexander can be inferred from the conduct of the parties and the circumstances of the case (Bowstead & Reynolds [3-042]). It was analogous to the conduct of the chairman of the company in Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549, who acted as a de facto managing director or chief executive and entered into large transactions on its behalf, for which he would sometimes report to the board, without seeking its prior authority or subsequent ratification and it was found that the board acquiesced to this course of dealing.
These transactions showed a course of dealing by which the SOCIA acquiesced to the authority exercised on their behalf by Mr McClure to engage with Mr Alexander, without proof (other than Mr McClure's bare uncorroborated assertion) of any monetary limitation upon his authority to do so (for a similar situation, see also Russell Gould Pty Ltd v Ramangkura (No.2) [2015] NSWCA 14 at [9]-[10]). Ms Hancock's evidence confirmed for me the impressions left by Mr Harkness' evidence: that Mr McClure held a position of ascendancy within the SOCIA committee; that it allowed him to engage with outsiders in a range of activities that went beyond the type of activities which would be usually expected to be formed by a secretary, or financial officer to an unincorporated charity. Her evidence was that there was very little, if any, discussion at the committee level of such things as the purchase of real properties; the financing of overseas trips; and even the approval of applicants for membership.
I have noted, already, that the circumstance that Mr McClure was secretary, treasurer/financial officer and ordained Minister to the SOCIA Church was not sufficient to generate any actual (implied) authority. But the status of those positions to an outsider (individually or aggregated) is another matter to be taken into account when considering SOCIA Church's conduct as a whole.
I also note that any representation of Mr McClure's authority was not simply made by Mr McClure, SOCIA's secretary, alone. It was made with the 'knowing involvement' of Mr Harkness, SOCIA's Public Officer. I consider that this is another indicia of the SOCIA Church holding out Mr McClure's authority. As a Public Officer to the SOCIA Church, Mr Harkness would, I take it, have the usual authority to represent to third parties the authority of other agents to SOCIA Church (Bowstead & Reynolds [8-019]).
A further matter of significance is what I regarded as the stunning evidence from Mr Harkness that not only was there no Constitution of SOCIA, but there were also unwritten rules. When an unincorporated association has no Constitution, nor a transparent set of rules that a diligent outsider may make inquiry of, it seems to me that it is inevitable that dominant members of the executive part of the association, being the committee, may take advantage of that feature to make representations of authority, to outsiders unrestrained by limitations. The Association should not then be entitled, as a matter of policy, to take refuge in unexpressed, or unclear limitations upon such authority.
Having found that through a course of dealing, it acquiesced to Mr McClure entering into transactions, the SOCIA committee took no steps to ensure that Mr Alexander (or Ms Hill) was not misled by any representation (of whatever form) by Mr McClure as to his authority to deal with Mr Alexander on behalf of the SOCIA committee.
If, as I have found, that a representation of Mr McClure's authority was conveyed to Mr Alexander, principally because of his prior dealings with Mr Alexander, in my view it is a short step to also conclude that (because of his prior dealings with Mr McClure) Mr Alexander reasonably relied upon such representation of authority so as to constitute the estoppel by representation.
I am satisfied that Mr McClure had authority from SOCIA Church implied from a prior course of dealing and/or ostensible authority to bind SOCIA Church to enter into an agreement with Mr Alexander on in March 2016.

[51]

Authority of Mr Harkness to bind Grace Missions and appoint Mr McClure as agent

There were two related or associated questions about actions undertaken on behalf of Grace Missions in this context. The first was the question of Mr Harkness' authority to bind Grace Missions to arrangement with Mr Alexander. The second question was whether Mr McClure, who was the person who generally communicated with Mr Alexander, also had authority to make decisions on Grace Missions' behalf in respect to Mr Alexander.
Many of the above considerations concerning Mr McClure's authority to act for SOCIA apply to Mr Harkness' position with Grace Missions: the absence of evidence of rules, representations of authority from Mr Harkness and the purported exercise of freedom to act with third parties. But unlike Mr McClure, Mr Harkness had very few other committee members to restrain him - only one: Mr Peters, the chairman, who was not called to give evidence by Mr Harkness.
Mr Harkness was identified on the ACNC Register not only as 'Public Officer', but as Grace Missions' sole 'Responsible person'. The Register entry defined the title of 'Responsible Person' generally as the charity's committee members. Mr Peters' name was omitted. Mr Harkness' evidence was that he appointed himself as secretary and public officer of Grace Missions.
As was the position with SOCIA Church, the rules of Grace Mission were not in evidence. Mr Harkness said that he applied the 'model rules', but he did not identify which ones or at which times.
I note also the absence of evidence from Mr Graeme Peters. I was informed from the Bar table that Mr Peters had a heart condition, but that was no satisfactory explanation as to why he did not put on an affidavit, or whether he was 'not available' to give evidence. [10] No proper evidence was put on to explain his absence (such as a medical report). I found it very significant that a transaction by which Grace Missions would (if Mr Harkness' evidence about a transaction on 31 July 2016 was true), acquire a liability to repay a $50,000 loan to SOCIA Church, when it had no bank account or other income, was not the subject of any documented approval from Mr Peters.
Mr Harkness said that Mr Peters was consulted about the loan application to SOCIA, but could not recall what Mr Peters said. He said he thought this had occurred after Grace Missions had entered into an agreement with Mr Alexander. If that be true, it indicates Mr Peters' acquiescence to Mr Harkness' unilateral exercise of authority.
It appeared from Mr Harkness' evidence that Mr Peters was not consulted about the alteration to the description of Grace Missions' 'Main Activity' within the AIS lodged with the ACNC. At least there was no minute corroborating any discussion to that effect. I find it extraordinary, as a matter of 'corporate governance,' that an alteration to the description on a public register known to be relied upon by outsiders, of Grace Missions' main activities could have occurred without any documented approval by the entity's Chairman. Plainly this material change occurred at the behest of both Mr Harkness (the only other committee member) and Mr McClure (formally, a stranger to the company, but a de facto committee member as well). Mr Peters, it will be recalled, was also asserted to be (without contradiction) a SOCIA member. I also note that Grace Missions, through Mr Harkness, filed a cross-claim [11] founded upon its contention that an enforceable loan agreement with Mr Alexander entered in late July 2016. This explained, in Mr Harkness' case, why Mr Alexander received (some) monies from Grace Missions. But if, as I have found, the monies were advanced pursuant to an underwriting agreement, it cannot be right that Mr Harkness had any lesser authority to enter into such agreement for Grace Missions than he had if the agreement was of the kind he (unsuccessfully) contended for.
In circumstances where the authority of Mr McClure to bind Grace Missions was plainly put in issue, I draw a Jones v Dunkel inference that such evidence as Mr Peters could have given would not have assisted Mr Harkness or indeed, Mr Peters, who, by reason of his position as committee member, subsequently became joined as a cross-defendant to Mr Alexander's claim. I infer, in particular, that Mr Peters acquiesced to Mr Harkness acting on behalf of Grace Missions with respect to dealings with SOCIA Church - including the latter's dealings with Mr Alexander - as he saw fit.
In the absence of rules constraining his authority and Mr Peters availability to give evidence as to any restraint upon Mr Harkness' authority, I infer that Grace Missions acquiesced to a course of dealing in which Mr Harkness, at the behest of Mr McClure, caused Grace Missions to be used as what might be regarded as the 'public face' of SOCIA's commercial activities (Hely - Hutchinson v Brayhead Ltd [1968] 1 QB 480 at 583). I find that it can be inferred or implied that Mr Harkness had implied authority to commit Grace Missions to enter into an arrangement with Mr Alexander to underwrite the event in March 2016 (and further, to vary the nature of the event in May 2016).
No curbs were imposed upon Mr Harkness' authority to use the entity in this way; and none were conveyed to outsiders such as Mr Alexander. The Charity register conveyed to outsiders that Mr Harkness (but not Mr Peters) was Grace Missions' 'responsible person' and its 'Public officer'. Mr Peters was not called to identify any limitations in his knowledge of what he was doing. To outsiders like Mr Alexander, I would expect that in his position as a Chairman, Mr Peters would appear to be no more than a figurehead; and that the real business of the charity was being conducted by Mr Harkness; in conjunction with Mr McClure.
If he did not enjoy implied authority, I consider that Mr Harkness had ostensible authority to bind Grace Missions to arrangements entered into with Mr Alexander in conjunction with SOCIA Church, and to do so at the behest of Mr McClure.
Mr Peters' acquiescence to Mr Harkness extended to Mr Harkness agreeing, or acquiescing, to Mr McClure's transactions with Mr Alexander. There is no impediment to an agent acting for more than one party to a transaction (Bowstead, [2-033]), so the circumstance that I found that Mr McClure was authorised by SOCIA Church to deal with Mr Alexander does not preclude a finding that he was (through Mr Harkness, who had implied authority to act on behalf of Grace Missions) also an agent for Grace Missions in his dealings with Mr Alexander.
There is no doubt about the closeness of connection between SOCIA Church and Grace Missions. The formal aspects (in terms of common committee membership and place of business) were referred to earlier in these reasons. One of Grace Missions' express purposes (listed in a "statement of purposes" (Exhibit C7) indicates its alignment with the SOCIA Church: "Advance and facilitate our common belief and understanding regarding our missions of grace in furtherance of the Spirit of Christ". I accept the evidence of Mr Harkness that Grace Missions was the vehicle which deployed as the appropriate entity to directly engage with Mr Alexander regarding the New Year's Eve event for 2016. Mr Harkness said that Mr McClure was involved in setting up Grace Missions. In reference to a 2016 AIS for Grace Missions he had lodged with the ACNC, Mr Harkness identified Mr McClure as one of 5 volunteers for Grace Missions. Mr McClure was formally also a committee member of Grace Missions. He said he resigned in 2013; explaining (from the Bar Table) that it was untenable to have more than two members on the governing committee that had a conflict of interest with SOCIA. This, however, had not stopped Grace Missions being used as a vehicle for SOCIA back in 2015; nor, as I find, stopped Mr McClure exerting influence upon Mr Harkness in dealings with Mr Alexander affecting Grace Missions' interests.
Mr Harkness explained that Grace Missions was a vehicle which SOCIA Church could use for engagement, or transactions, with sections of the community that did not fall within its spiritual charter. A musical gala event at the Athenaeum on New Year's Eve 2016 was, in my view, precisely the kind of event for which Grace Missions could be used by SOCIA Church (and Mr McClure in particular) as a vehicle for engagement. This is also consistent with the statement of activities for Grace Missions which was (accepting Mr Harkness' evidence at its highest, in this regard) erroneously represented by Mr Harkness as occurring in the 2016 AIS (Mr Harkness said it should have been a reference to the 2017 financial year) (Ex C7). That AIS spoke of engagement with the arts community.
Further, I note that, at least until the second half of 2016, Grace Missions had no bank account and no remunerative activities. It was, as I have found, a vehicle used to disguise or conceal SOCIA's involvement in raising funds.
It seemed to me also that, by the dealings between Mr Harkness and Mr McClure, Mr McClure bore all the hallmarks of acting as a 'shadow' committee member of Grace Missions, in an analogous sense to an officer, under section 9 of the Corporations Act 2001 (Cth) who "makes, all participates in making, decisions that affect the whole, or a substantial part of the business (of the corporation); or has the capacity to affect significantly (the corporation's) financial standing; or was a person in accordance with whose instructions or wishes Mr Harkness was accustomed to act". It also seemed to me and I so find, that for practical purposes, Grace Missions and SOCIA Church were figuratively 'joined at the hip'. Indeed, it appeared on the evidence before me to have little other raison d'etre other than to facilitate the SOCIA Church's enterprising activities, which activities were primarily driven by Mr McClure.
In the meeting of 3 January 2017, Mr Harkness had represented to the gathering that Mr McClure spoke on behalf of Grace Missions. Mr Harkness disputed that any express representation was made to this effect. I am satisfied that the representation was, at least, impliedly conveyed. One of the things which, I accept, that Mr McClure said, when he addressed the cast and crew was that "We presented 'Mozart to Midnight' and Grace Missions will lose $7000 for that performance, so we're still going to pay the artists and honour our part of the deal." To the extent that any correction was made by Mr Harkness at all to this representation by Mr McClure, it was only one of timing: that Grace Mission could not honour its promise in the short-term since it had already spent a whole lot of money and had another obligation to pay $50,000 for the New Year's Eve performance. Nevertheless, Mr Harkness said that whatever "we" - Grace Missions - had to honour, we'll honour. In this way, it may be seen that on 3 January 2017, Mr McClure and Mr Harkness were effectively working in tandem in making representations as to what Grace Missions had done in the past for the festival and what it would do in the future.
Mr Harkness sought to mitigate or otherwise explain away, the circumstances whereby, without intervention (in the form of corrective statements) on his part, Mr McClure made statements purportedly behalf of Grace Missions by saying that he did not wish to convey any division as between Grace Missions and SOCIA Church, lest it present an image of a 'house divided'. Even if that was true, that evidence however inadvertently reinforces Mr Harkness' desire to associate Grace Missions with SOCIA Church to outsiders. At any rate, the evidence was merely reconstruction: the explanation was not contained within Mr Harkness' affidavit evidence.
Mr Harkness' responses to the propositions put to him that Mr McClure was authorised to (a) influence, and even direct Mr Harkness, as to decisions for Grace Missions and (b) make financial promises on its behalf were merely that he did not recall the position. I found that evidence, on a significant and important issue in this proceeding, most unconvincing and I reject it.
I also take into account that, on the premise that Mr McClure did represent his authority to act on behalf of Grace Missions he did so in the presence and without the correction of Mr Harkness, one of two of Grace Missions' committee members. This certainly occurred at the 3 January 2017 meeting (and thus might arguably facilitate a view that there was a ratification of Mr McClure's authority), but, on the findings I have made, also occurred in or about March 2016 and thereafter.
I find that Mr McClure had implied authority from Grace Missions (through Mr Harkness) not only to represent his authority to deal with Mr Alexander on Grace Missions' behalf, and that the scope of that authority included his appointing Mr Alexander to such positions (whether creative or artistic director, or any other title) so as to enable Mr Alexander to effectually deal with third parties for the purpose of putting on the event on New Year's Eve (and the event, as it later became transformed into a festival). I note that, in this regard, this case is distinguishable from Crabtree-Vickers, where the person making the appointment of another agent had only ostensible authority.

[54]

Completeness

It is not necessary for me to accept Mr Alexander's recollection of everything said during the meeting in March 2016 in order to conclude that an enforceable agreement was entered into. But for a contract to be effective, its essential terms must be sufficiently certain. Mr Alexander identified the terms to be as follows: 1. A promise that he would be appointed as Creative and Artistic Director of the SOCIA Church; 2. A promise that SOCIA would underwrite the costs of a New Year's Eve Gala opera performance, through the use of a bank account in the name of Grace Missions, into which SOCIA would deposit $100,000 for Mr Alexander's use for payment of production expenses; 3. The profits derived from the performance would be deposited into the same bank account for the use of SOCIA; 4. Mr Alexander would charge for and render his professional fees at the conclusion of the performance. These were not be to paid from the said bank account.
I accept that these were agreed terms. In my opinion, there is also to be ascribed to the parties, an intention that: 1. in the absence of a special administrator, Mr Alexander was authorised, as an incidental aspect of his role as creative and artistic director, to engage in contracts with third parties on behalf of Grace Missions; and 2. the other parties would co-operate with each other to do all that is reasonably necessary to facilitate performance of a contract (Mackay v Dick (1881) 6 App Cas 251; Commissioner of Taxation v Sara Lee Household & Body Care (Aust) Pty Ltd (2000) 201 CLR 520 at 547).
As to both of these additional matters, I find that Mr Alexander was, at least impliedly, or incidentally, authorised to also represent Grace Missions in his dealings with the persons and entities necessary to direct and produce the show. Certainly Grace Missions, and SOCIA Church, did not undertake to perform these roles itself or themselves; nor had the competence, experience, or (probably) time or inclination to direct and produce the show. If it was necessary to decide, I would also have gone further: I am not convinced that a creative and artistic "director" customarily engages publicists or venues. I expect that these are roles usually performed by a producer, or what Mr Alexander called an "artistic administrator". If it was necessary to decide, I consider that in order for the New Year's Gala Event to occur, Mr Alexander also obtained the implied, or incidental, authority of Grace Missions and SOCIA Church, to carry out these additional roles. I accept Mr Alexander's submission that he would not have tabled a proposed to the SOCIA Church absent such an appointment. Otherwise although he may have had a responsibility, to the outside world, and the persons he needed to engage, he would not have had the appearance of having the underwriter's authority. This would likely have hindered his efforts to direct or produce the performances. He needed to have some title(s) and a title(s) affiliated or associated with the underwriter. I prefer his evidence, and that of Ms Hill, to the effect that Mr Alexander raised the title and Mr McClure and Mr Harkness "shook hands" on the proposition, in lieu of verbally expressing their assent. If there was a usual or customary role of an underwriter to perform these roles (and I am not persuaded that there was), it was impliedly delegated to Mr Alexander, who had the competence, experience and interest in performing these tasks. It was incidental to such delegation that, for the purposes of directing and producing the Event, Mr Alexander was authorised by Grace Missions to represent to others his affiliation with that entity.
There were three issues for Mr Alexander with this formulation of the terms of the arrangement.
The first issue concerned the method of calculation of Mr Alexander's (deferred) professional fees. There was no evidence as to how such fees would be calculated: there was no fixed amount, and no other stipulated basis such as an hourly rate, or instalment amounts referable to the achievement (performance) of particular milestones. But, following the cancellation of the festival, Mr Alexander has claimed the fees referable to the performance of all shows when, as I understood it, none of the shows had been performed. His evidence, in effect, was that there was no limit to what he could charge. I have difficulty in imputing to the parties to this contract an intention that SOCIA or Grace Missions would effectively write a blank cheque for any fees claimed by Mr Alexander. I will develop this point later when evaluating his claim for non-payment of his professional fees in the section on Damages.
Simply because there was no fixed sum for his fees, or any machinery, within the contract, to ascertain the basis for charging fees does not mean that any promise to pay Mr Alexander's fees (on a deferred basis) is incomplete or uncertain. The Court can imply a term in fact, so long as it meets the criteria for implied factual terms (BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282-3). I see no reason why I could not imply a term that Mr Alexander was entitled to his reasonable professional fees following performance of the shows. Whether or not that takes his claim any further is something I also consider in the section on 'Damages'.
The second and third issues concern consideration for the alleged promises, and variations to the scope of the agreement. I will now address these problems separately.

[55]

Consideration

It is trite law that for a promise to be enforceable, consideration must move from the promisee. It need not be significant, and courts will not enquire into the adequacy of the consideration (hence the so-called 'peppercorn' principle) but there has to be some 'price' paid by Mr Alexander for promises made by SOCIA and/or Grace Missions.
The issue of consideration arises in two respects in this case. First, what was the consideration for the arrangement struck in March 2016 (featuring only a Gala Event on New Year's Eve 2016)? Secondly, what was the consideration for variation of the arrangement in May 2016 (featuring a music festival for January 2017)?
Both questions require assessment of what kind of legal relationship Grace Missions had with Mr Alexander. It is important to recognise that parties cannot deem, or describe, their relationship with each other to be something which it is not (Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at [58]). The corollary is that is unnecessary for the parties to an arrangement to have even turned their mind to defining the legal nature of the relationship (South Sydney DRLFC v News Limited (2000) 177 ALR 611 at [133]-[140]).
Mr Alexander characterises Grace Missions as an underwriter. In this, he relies, in part, upon, admissions by Mr McClure (as agent for Grace Missions) and Mr Harkness (on behalf of Grace Missions) before the assembled cast and crew on 3 July 2017.
There are two categories of underwriter generally known to the law. The first is a person who guarantees the funds sought by a company issuing securities, taking up the balance should the public not subscribe to all the issued shares (Anemtech Ltd v Eyres Reed McIntosh Ltd (1986) 10 ACLR 780). Another is a person who signs an insurance policy which guarantees payment (LexisNexis Concise Australian Legal Dictionary). The critical element, and one reflecting the ordinary meaning of the word (as appears in the Australian Concise Oxford Dictionary), is an undertaking, or commitment of financial support to meet a risk, or contingency. It is usual, or at least I would expect, that underwriters prepared to make a financial undertaking, or commitment of this kind, are not doing so gratuitously, but for a financial return (commonly commission).
No evidence was put before me as to the customary practices of underwriters of community arts or musical festivals of the kind that were the subject of this proceeding; notwithstanding the recurring use (by each of the litigants) of the term "underwriter." I would be loath to readily infer that an unincorporated association such as Grace Missions (by appointment of SOCIA) would agree to act as underwriter without some reward.
Ms Hancock's evidence was that the SOCIA committee was informed by Mr McClure that it could expect to receive profits from the Festival is significant. That, I infer, was based upon a representation by Mr Alexander to Mr McClure. I have also found that Mr Alexander represented that SOCIA would receive all of the profits of the Gala Event, after production expenses (and Mr Alexander's fees) were paid. This being so, I am satisfied that the promise of profit takings was consideration moving from Mr Alexander for SOCIA Church's promise to underwrite.
As to Grace Missions' position, I consider that, in substance, it was being used by SOCIA Church as the vehicle through which the $100,000 was to be made available to Mr Alexander. I do not consider that it is necessary to distinguish SOCIA Church from Grace Missions. In practical terms, both received monetary benefit (Grace Missions directly and SOCIA Church indirectly) from its receipt of profit takings. But in Grace Missions' case, it received other, less tangible, benefits in additional ways as well. It was represented on the Charity register as being an entity devoted to support the community generally, and the arts community in particular. Because of the structure agreed to, as between Mr McClure and Mr Harkness, it was Grace Missions' name (not SOCIA) that would be 'up in lights'. It was Grace Missions' name given to the publicist, Ms Buckley, and promotional activities for the concert/festival would go hand in hand with generating publicity for Grace Missions. To this extent, there was consideration for Grace Missions' promises to Mr Alexander (and I do not need to form a view as to the commercial adequacy of this consideration).

[56]

Transformation from Gala event to musical festival

The third issue concerns the enforceability of an agreement to alter the fundamental character of the arrangement struck in March 2016, towards a musical festival in May 2017. I have noted, above, that, one of the reasons I found that Mr McClure and Mr Harkness had changed their mind from August and October 2015 was that, unlike the nebulous or vague proposals floated at that time, in March 2016 Mr Alexander presented them with a budget proposal for a single event on a single date.
Were Mr McClure and Mr Harkness agreeable to transform the event into a festival enduring through January 2017 only a couple of months down the line? I consider that it is more likely than not that they were. I consider that they were persuaded by Mr Alexander's 'pitch' in May 2016, that they were offered a larger event - a festival - but were not asked to contribute any further costs. I expect that it did not occur to them what, if any, additional risks might arise from transforming an event of one night's duration to a month long series of events. Rather, they considered that, given what Mr Alexander told them, they had nothing to lose (beyond what had been committed to in March 2016).
To transform the nature of the event in this way constituted a variation to the agreement. To be legally effective, variations to an agreement should also be supported by consideration (moving from the promise) and it is well-established that past consideration is no consideration.
Nevertheless, the law recognises that contract variation may occur informally. An example of this is where a contractual deadline is extended, after it has passed. It is not thought that this variation as to time requires new consideration. In Henderson v Curtis [2008] WASC 283, Beech J said (at [16]-[19]) that there is mutual consideration if a varied term is of mutual benefit or interest to the parties. It has been suggested that it is only where a variation imposes a new obligation that the law requires an independent consideration to be varied (Cheshire & Fifoot Law of Contract 11th Australian edition [4.33].)
In my opinion, the informal agreement to transform a one-off event to a festival running over several days was to the mutual benefit or interest of Mr Alexander and Grace Missions; and imposed no new obligation upon Grace Missions (or SOCIA).
Indeed, although there might not have been anything actually discussed to this effect (there was no evidence that there was), it strikes me as being logical that if Mr Alexander was asking for a festival over virtually a month, with no additional (substantial) production expenses, it would likely have occurred to Mr McClure and Mr Harkness that the earlier estimate as to profitability could be revised, upwards. Accordingly, in my view, the variation as to the subject matter of performance did not require further consideration.
For Mr Alexander, I consider that there was an implied promise that Grace Missions and the SOCIA Church's agreement to pay, albeit on a deferred basis, his (reasonable) professional fees until after the New Year's performance was also extended to an agreement to pay his professional fees representing his services in connection with a festival to run throughout January. I do not consider it likely that the parties would have expected Mr Alexander to expend his effort and time, in directing or producing a festival going over many days, simply on the basis of payment of his professional fees for a single night. Put another way, the additional services he would supply to transform the event were not expected to be supplied by him gratuitously.
In finding this, there is a problem for Mr Alexander in claiming damages for the failure to pay his professional fees for reasons I consider below in the section on Damages.

[60]

Professional fees

The quantum of Mr Alexander's claim was set out in paragraph 159 of Mr Alexander's primary affidavit. In summary, Mr Alexander grouped his fees under three separate headings: "Renaissance Entertainment", "Seven Dwarves" and "Melbourne Musical Theatre". Save for the last of these headings, the other headings then set out separate components for a range of shows (such as 'Some Enchanted Evening', 'Peter Pan, 'Snow White'); none of which were ultimately performed. In relation to the claim under the heading 'Melbourne Musical Theatre Festival', there were particulars provided for being a 'festival administrator' and 'set construction'.
The claim did not set out Mr Alexander's claim for fees for the one show that was performed, being 'Viva Verdi'.
Neither Mr McClure not Mr Harkness challenged the reasonableness of the quantum for professional fees claimed by Mr Alexander. They did however deny Mr Alexander's entitlement to claim professional fees.
I consider that there were fundamental problems for Mr Alexander in respect to this claim. This is in a context where, as I said at the outset of these reasons, Mr Alexander did not pursue any restitutionary claim, such as a claim for a quantum meruit, for remuneration of his services requested by Grace Missions or SOCIA Church under a contract that was unenforceable or did not materialise (per Pavey & Matthews Pty Ltd v Paull (1987) 162 CLR 221).
First, I also noted earlier that there was no agreed standard against which Mr Alexander's fees were to be assessed. It cannot be the case that there is an agreement to agree on the price. No mechanism was put in place to determine the fees and, as Mr Alexander accepted, no process for determining fees had been discussed. That deficiency could, to some extent, be overcome by implying a term that he was entitled to recover his reasonable fees. However, even on this basis, there was nothing put before the court to establish that the fees he charged for were reasonable. That might have been done, for example, by reference to Mr Alexander's past works or proof of what somebody else, in a like position to him (involving the roles he had) would have charged. In the absence of such evidence, Mr McClure and Mr Harkness have been left, only, to face a bald assertion that Mr Alexander was entitled to charge the fees that he in fact charged.
Secondly, his claim for damages for breach of contract was, in this respect, premised upon the professional fees as if the shows had been completed. But the shows referred to in paragraph 159 of Mr Alexander's affidavit were not completed. The only show that was completed, Viva Verdi, was not referred to in Mr Alexander's claim.
This is in a context where, as I have found, the consideration for the SOCIA Church's (and Grace Missions) agreement to underwrite a festival was its receipt of profit takings. There were no profit takings. I would not ascribe an intention to the parties, in May 2016 when the agreement entered into in March 2016 became varied, that SOCIA Church and Grace Missions would agree to pay for Mr Alexander's preparatory work for shows which did not ultimately materialise; and which therefore did not generate any profits. I consider, that it was open to Mr Alexander, to negotiate for payment for his professional services on an ongoing basis up to and including the performance of the shows; but he did not seek to do so. In other words, I consider that Mr Alexander took the risk of not being paid for his professional services should the shows not eventuate.
As indicated, Mr Alexander did not put before me, as he did for all the other shows that were not performed, any information as to what his fees were in respect to the one show that was performed - Viva Verdi. Had he done so, I expect that Mr McClure and Mr Harkness may have taken some issue as to whether he would be entitled to those fees, in any event, due to the consensus, all around, that the New Year's Eve performance generated, at least financially, a poor result. But at least there would be some basis for considering whether the fees were reasonable.
Where a plaintiff establishes a breach of contract of some value, courts do strive to assess loss even where it is difficult to do so (Fink v Fink (1946) 74 CLR 127 at 143). Nevertheless, damages are not awarded if the available evidence does not enable the court to rise above guesswork (McCrohon v Harith [2010] NSWCA 67 at [118]-126]) and, in circumstances where Mr Alexander could have, but did not, put evidence of the value of his work in relation to the one completed show, nor any other evidence to suggest a standard for calculating reasonable fees, I am unable to make an award of compensation for his professional fees.

[61]

Loss of reputation

On the subject of remoteness of damages for breach of contract, the 'rule in Hadley v Baxendale [13] ' is that: "Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally… From such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it"
Consistent with my general preference for Mr Alexander's account of what was said in March 2016, I find that it is more likely than not that Mr Alexander had communicated to Mr McClure and Mr Harkness that his 'head was on the chopping block', should the festival fail as a result of lack of funds. From this, I also find that SOCIA and Grace Missions were on notice, at the time of the contract, that a loss of reputation to Mr Alexander, within the arts community would result from a breach of the promise to underwrite production expenses; and that will satisfy the second limb of the rule in Hadley v Baxendale (if not also the first limb).
I also accept Mr Alexander's evidence that Mr McClure assured (and indeed, subsequently reassured) Mr Alexander that funds would be in place by 1 May 2016. It seems to me that, accepting, as I do, that a commitment to underwriting was made in March 2016, it was also likely that Mr McClure would explain the mechanism by which monies would be made available.
These findings mean that I am satisfied the requirement that SOCIA/ Grace Missions (the promisor) undertook (expressly or, perhaps more accurately, impliedly) the risk that Mr Alexander might suffer a loss of reputation if the promise was breached [14] . As a matter of fundamental principle, I see no reason why Mr Alexander should not recover damages for loss of reputation.
There are, however, some subsidiary principles that also need to be considered. Under Australian law, the usual position is that damages are not awarded in contract for injured feelings or distress. However there are exceptions to that general rule, most relevantly, including where there is breach of an express or implied promise to provide pleasure, relaxation or freedom from distress: Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 382-3, 405.
The relevant claim in this case is, more specifically, for loss of reputation. There is authority for the proposition that damages are recoverable for this head. In Baltic Shipping, at 370, Brennan J found that damages could be recoverable (at least where there is also proof of pecuniary losses) where there was a promise (express or implied) to provide publicity, or to enhance a promisee's reputation. His Honour appeared to assimilate loss of reputation with other injured feelings under the rubric of 'disappointment of mind'.
The Full Federal Court of Australia also awarded damages for an employee's loss of reputation caused by an employer's repudiation of an employment contract in Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101 at [91].
Further, in Herbert Clayton & Jack Waller Ltd v Oliver [1930] AC 209, the House of Lords awarded damages to an actor for loss of publicity arising out of a breach of a contract, in which he was to appear in public in a leading comic role. The award was founded in the application of the rule in Hadley v Baxendale, above. Although Mr Alexander was not an actor, I consider that some analogy arises. A creative and artistic director/producer, like an actor, trades in a currency of public and popular acclaim within his or her industry. Where an underwriter breaches the promise of its commitment, that is apt to naturally damage the standing of the director/producer in the eyes of the musical, or theatrical industry: the director/producer will virtually inevitably be regarded as someone who cannot be relied upon when making attempts to obtain the services of the artists crew members and others involved in artistic and musical productions.
Mr Alexander gave evidence that Mr Togher (principal of the Partnership - the plaintiff in the proceeding) told him on 4 January 2017 that the events that had occurred were "not good" for Mr Alexander's reputation. This was in a context in which Mr Togher was demanding that his artists get paid. Mr Alexander also referred to, although he did not adduce evidence of an article in an on-line publication associating Mr Alexander with opera singers losing money. Further, he mentioned that Mr Wilson, who gave evidence for Mr Alexander, had told him, in January 2017 that "They (the musicians) are not happy. It's unlikely that they will work with you again". Neither Mr Harkness nor Mr McClure cross-examined Mr Alexander, or Mr Wilson, on this evidence.
I accept this evidence and find that Mr Alexander has suffered a loss of reputation consequential from breach of contract by SOCIA Church and Grace Missions.
In terms of any quantum, there is no requirement that such damages be 'modest': Boncristiano v Lohmann [1998] 4 VR 82 at 94-5. It is plainly the case that awards of such kind are not reducible to precise mathematical calculation. Although the analogy is not, by any measure complete, when assessing the quantum of such claim, some guidance may be obtained when evaluating the general damages recoverable by claimants in defamation. One of those considerations was recently adverted to in Rush v Nationwide News Pty Ltd (No.7) [2019] FCA 496 where (at [670]) the trial judge cited approvingly the statement [15] that "the law should place a high value upon reputation and in particular upon the reputation of those whose work and life depend upon their honesty, integrity and judgement."
I am also mindful that the festival, had it run, was no small undertaking. Some high profile artists were engaged to perform in very well-known venues in Melbourne during a period where most of the community were on holidays; in the height of summer. I consider that there is a fair correspondence, or sense of proportion, as between the rewards, to all concerned, if the show was successful, and the risks of reputational damage to participants if the festival failed because of the underwriter's breach of its promise to underwrite.
In the circumstances, I consider that Mr Alexander is entitled to a sum for loss of reputation of $30,000.

[63]

SUMMMARY & ORDERS

For these reasons, and in summary, I answer the issues as follows: 1. I accept that monies were advanced, and were promised to be advanced to Mr Alexander, by Grace Missions pursuant to an agreement reached in March 2016 (and varied in May 2016), instead of a loan agreement being entered into on or about 31 July 2016; 2. I find that: 1. the parties to the contract were Mr Alexander, Mr McClure, Mr Harkness, the other committee member of Grace Missions and the other committee members of SOCIA Church as at March 2016, 2. there was legal capacity in the unincorporated not-for-profit associations of the SOCIA Church and Grace Missions, through their respective committee members, to enter into a contract with Mr Alexander in March 2016, 3. Mr McClure was authorised to bind SOCIA to an agreement with Mr Alexander; 4. Mr Harkness was authorised to bind Grace Missions to an agreement with Mr Alexander and to appoint Mr McClure to deal with Mr Alexander on Grace Missions' behalf for the purpose of that dealing; 5. The essential terms of the agreement in March 2016 were: 1. SOCIA Church and Grace Missions agreed that they would underwrite the production and performance of a Gala Event on New Year's Eve 2016 in Melbourne up to $100,000 (by a mechanism whereby SOCIA Church would deposit funds into a Grace Missions account); 2. After payment of the production expenses (estimated to be $100,000), and Mr Alexander's reasonable professional fees, all profits from the production were to be deposited into the same account, for the joint benefit of Grace Missions and the SOCIA Church; 3. Mr Alexander was impliedly or inferentially authorised to describe himself as the creative and artistic director of SOCIA and otherwise contract with third parties on behalf of Grace Missions and/ or SOCIA, for the purposes of production and direction of the show. 1. In May 2016, the parties agreed to vary the arrangement so that Mr Alexander would produce a musical theatrical festival to run throughout January 2017. 1. There was no enforceable loan agreement entered into in or about July or August 2016 between Grace Missions and Mr Alexander 2. No res judicata issue or estoppel arises from the dismissal of the plaintiffs' claims against the defendants in this proceeding so as to preclude Mr Alexander's entitlements to claim a breach of the agreement against the committee members of Grace Missions and SOCIA Church, respectively. 3. The agreement in March 2016 (as varied in about May 2016) was breached when Grace Missions and SOCIA Church failed to pay all of the production expenses referable to work performed up to cancellation of the festival on or about 7 January 2017. 4. However, the promise to pay Mr Alexander's professional fees was unenforceable as being incomplete. 5. The quantum of Mr Alexander's damages claim contains the following components: 1. Production expenses incurred, which, after deduction of the payments that were made by Grace Missions ($49,973.03), is $50,026.97. 2. Damages for loss of reputation being $30,000.
I order that within 7 days the plaintiff supply to my Associate (copying in the cross-defendants) short minutes of order to give effect to these reasons. Those short minutes will make provision for the total judgment sum, for a principal component of $80,026.97, in addition to Mr Alexander's claim for interest calculated on such principal sum, in respect to the Cross-Claim filed on 21 December 2017 and for the dismissal of the Second Cross-Claim filed on 13 April 2018. If there is any objection to the orders by the cross-defendants to Mr Alexander's claim, they are to be notified to my Associate within a period of a further 3 days. Thereafter I will make orders to dispose of the proceeding in Chambers.

Togher & Anor v Alexander & Ors

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