TSZYU v FIGHTVISION PTY LTD & ANOR; FIGHTVISION PTY LTD v ONISFOROU & ORS

New South Wales Court of Appeal CITATION : TSZYU v FIGHTVISION PTY LTD & ANOR; FIGHTVISION PTY LTD v ONISFOROU & ORS [1999] NSWCA 323 FILE NUMBER(S) : CA 40232/98; 40231/98 HEARING DATE(S) : 27 April 1999, 28 April 1999, 29 April 1999, 30 April 1999, 3 May 1999 JUDGMENT DATE : 13 September 1999

Konstantin Tszyu - Appellant Fightvision Pty Limited - First Respondent William George Mordey - Second Respondent

PARTIES : Fightvision Pty Limited - Appellant Theodore Onisforou - First Respondent Jeffrey Fenech - Second Respondent Vladimir Warton - Third Respondent Tszyu Enterprises Pty Limited - Fourth Respondent Sky Channel Pty Limited - Fifth Respondent JUDGMENT OF : Sheller JA; Stein JA; Giles JA

LOWER COURT JURISDICTION : Commercial Division LOWER COURT FILE NUMBER(S) : 50120/95 LOWER COURT JUDICIAL OFFICER : Bainton J

Tszyu - DR Rofe QC/AJ Tudehope COUNSEL : Fightvision Pty Limited & Mordey - FS McAlary QC/AS Bell Onisforou & Fenech - R W White SC/CM Scheib Sky Channel Pty Limited - B J Gross QC Tszyu - Benjamin & Khoury SOLICITORS : Fightvision Pty Limited & Mordey - Back Schwartz Vaughan Onisforou & Fenech & Skychannel Pty Limited - Verekers Warton & Tszyu Enterprises Pty Limited - Gilbert & Tobin CATCHWORDS : CONTRACT - breach - procuring breach ; CONTRACT - novation - by express words - by conduct ; CONTRACT - option to renew - construction of clause containing option - method of exercise; CONTRACT - breach - damages - future economic loss - allowance for degree of probability of future hypothetical events ACTS CITED : Industrial Relations Act 1996 Supreme Court Act 1970 Allstate Life Insurance Company v Australia and New Zealand Banking Group Limited (1995) 58 FCR 26 Ballas v Theophilos (No 2) (1957) 98 CLR 193 Beach Petroleum NL v Johnson (1993) 43 FCR 1 Bird v Randall (1762) 3 Burr 1345; 97 ER 866 Brambles Holdings Limited v Carey (1976) 15 SASR 270 Bresatz v Przibilla (1962) 108 CLR 541 Brogden v The Metropolitan Railway Company [1877] 2 App Cas 666 Carter v Hyde (1923) 33 CLR 115 Daniels v Anderson (1995) 37 NSWLR 438 De Mattos v Gibson (1858) 4 De G & J 276 El Ajou v Dollar Holdings plc [1994] 2 All ER 685 Emerald Construction Co Limited v Lowthian [1966] 1 WLR 691 Fink v Fink (1946) 74 CLR 127 Footersville Pty Limited v Miles (1986) 41 SASR 211 Independent Oil Industries Limited v The Shell Company of Australia Limited (1937) 37 SR NSW 394 Jones Bros (Hunstanton) Limited v Stevens [1955] 1 QB 275 Malec v J C Hutton Pty Limited (1990) 169 CLR 638 Mannai Limited v Eagle Star Life Assurance Co Limited [1997] AC 749 McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 CASES CITED: Mifsud v Campbell (1991) 21 NSWLR 725 Mitchell v Mulholland (No 2) [1971] 1 QB 65 Murray v Figge (1974) 4 ALR 612 Norris v Blake (No 2) (1997) 41 NSWLR 49 Northern Territory v Mengel (1995) 185 CLR 307 Olsson v Dyson (1969) 120 CLR 365 Prudential Assurances v Health Minders Pty Limited (1987) 9 NSWLR 673 Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 Quadling v Robinson (1976) 137 CLR 192 Reardon-Smith Line v Hansen-Tangen (1976) 1 WLR 989 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 Short v City Bank of Sydney (1912) 15 CLR 148 Soulemizis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Swiss Bank Corporation v Lloyds Bank Limited [1979] Ch 548 Tesco Supermarkets Limited v Nattrass[1972] AC 153 The Commonwealth v Amann Aviation Pty Limited (1991) 174 CLR 64 Upper Hunter County District Council v Australian Chilling and Freezing Co Pty Limited (1969) 118 CLR 429 Urban Transport Authority v Nweiser (1992) 28 NSWLR 471 Utica City National Bank v Gunn (1918) 118 N.E. 607; 222 NY 204 Vickery v Woods (1952) 85 CLR 336 DECISION : Appeal No. 40231/98; 1. Appeals against the respondents, Mr Onisforou and Mr Fenech, dismissed with costs; 2. Appeals against Mr Warton, Tszyu Enterprises and Sky Channel allowed; 3. Set aside the orders dismissing the claims against Mr Warton, Tszyu Enterprises and Sky Channel and the order that Fightvision pay the costs of those respondents; 4. Judgment for Fightvision against Sky Channel in the amount of $7,310,445 such order to take effect on 27 March 1998; 5. Sky Channel to pay Fightvision's costs of its claim against Sky Channel before Bainton J and of its appeal against that part of his Honour's order which dismissed the claim but, if qualified, to have a certificate under the Suitors Fund Act 1951 in respect of this appeal; 6. Order a new trial of the proceedings against Mr Warton and Tszyu Enterprises; 7. Mr Warton to pay Fightvision's costs of the appeal between it and Mr Warton but, if qualified, to have a certificate under the Suitors Fund Act; 8. Tszyu Enterprises to pay Fightvision's costs of the appeal between it and Tszyu Enterprises but, if qualified, to have a certificate under the Suitors Fund Act; 9. The costs of the first trial between Fightvision and Mr Warton and Tszyu Enterprises to be in the discretion of the judge hearing the new trial; 10. If Fightvision does not duly prosecute a new trial against Mr Warton, Mr Warton is to have liberty to apply to this Court to have his costs order against Fightvision reinstated; 11. If Fightvision does not duly prosecute a new trial against Tszyu Enterprises, Tszyu Enterprises is at liberty to apply to this Court to have its costs order against Fightvision reinstated; Appeal No. 40232/98; Appeal dismissed with costs

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40231/98; 40232/98 CommD 50120/95

SHELLER JA STEIN JA GILES JA

FIGHTVISION PTY LIMITED v ONISFOROU & ORS TSZYU v FIGHTVISION PTY LIMITED & ANOR

In January 1992, a contract in writing, with a Russian and English language version, was made between Classic Promotions Pty Limited (Promotions), the corporate vehicle of Mr Mordey, a boxing promoter, Mr Tszyu, a boxer, and his trainer Mr Lewis. The contract was for a term of three years with an option to renew for a further two years. In November 1992 Mr Mordey decided that Promotions would cease trading and that Fightvision Pty Limited would carry on his fight promotion business. At trial it was alleged that in January 1993 the contract was novated by discharge resulting in the substitution of a new contract in the same terms between Fightvision, Mr Tszyu and Mr Lewis. The novation was alleged to have been effected by a conversation between Mr Mordey and Mr Tszyu and a further conversation between Mr Mordey and Mr Lewis. The fact of the novation was said to have been supported by numerous illustrations after February 1993 that Fightvision and not Promotions was carrying out the contract.

In January 1995 Fightvision purported to exercise the option by letter enclosing a cheque for $1. The cheque was returned by Mr Tszyu in February 1995.

Mr Mordey and Fightvision brought an action against Mr Tszyu claiming damages for breach of contract. Mr Mordey and Fightvision further claimed that the other five defendants, Mr Onisforou, Mr Fenech, Mr Warton, Tszyu Enterprises Pty Limited and Sky Channel Pty Limited had persuaded, procured or otherwise induced Mr Tszyu to breach his contract with Fightvision.

The trial Judge held that the contract had been novated, and that the option had been validly exercised and assessed Fightvision's damages at $7,310,445. The trial Judge dismissed the claims against the other five defendants.

Fightvision appealed the trial Judge's decision to dismiss the claims against the five defendants of procuring breach of contract.

Mr Tszyu appealed the trial Judge's decision, claiming that the trial Judge erred in holding that the contract was novated and that option was exercised. He also claimed that the damages awarded against him were excessive, and that after reserving judgment, the trial Judge should have granted Mr Tszyu's application to lead further evidence on damages.

Held by the Court: Mr Tszyu's Appeal (1) When searching for an intention that there be a novation of a contract, no narrow or pedantic approach was warranted, particularly in the case of commercial arrangements. Given the terms of the conversations between Mr Mordey , Mr Tszyu and Mr Lewis, and the overwhelmingly consistent pattern of conduct of the parties after the purported date of novation, there was no ground for disturbing the trial Judge's finding on novation. Upper Hunter County District Council v Australian Chilling and Freezing Co Pty Limited (1969) 188 CLR 429 applied. Olsson v Dyson (1969) 120 CLR 365, Vickery v Woods (1952) 85 CLR 336 and Brogden v The Metropolitan Railway Company [1877] 2 App Cas 666 referred to. (2) An overly strict view of the wording of cl 9 (containing the option) was not to be taken. To do so would lead to futility. To construe cl 9 in a way which would require further negotiation as to the terms of the extended period after the exercise of the option, and after the three years of the original contract had passed, achieved no sensible commercial purpose. Utica City National Bank v Gunn (1918) 118 N.E. 607; 222 NY 204 considered. (3) The letter purporting to exercise the option clearly and unequivocally manifested an intention to elect for the two year option period. A reasonable person receiving the letter and reading it against the background of the dealings between the parties would fairly understand the option to have been exercised. Carter v Hyde (1923) 33 CLR 115 and Prudential Assurances v Health Minders Pty Limited (1987) 9 NSWLR 673 referred to. (4) Mere difficulty in estimating damages does not relieve a court from the responsibility of estimating them as best it can. When liability has been established and a court has to assess damages, its approach to events that allegedly would have occurred, but cannot now occur, or that allegedly might occur, is different from its approach to events which allegedly have occurred. The latter is determined on the balance of probabilities, if the probability of it having occurred is less than it not having occurred, it is treated as not having occurred. In cases falling into the former category, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability. It would have been erroneous to apply a balance of probabilities test to the fight programme and the earnings from the fights. This would be treating as certain the past hypothetical events of promotion or co-promotion by Fightvision of bouts in which Mr Tszyu participated and earnings from those bouts as put forward in the evidence of Mr Mordey if satisfied on the balance of probabilities that those events would have occurred. The correct approach was to assess damages for loss of the commercial opportunity of promoting or co-promoting fights in which Mr Tszyu participated according to the degree of possibility or probability of such bouts occurring and bringing earnings as claimed. It is not essential, in making an assessment of damages of this kind, to express a percentage possibility or probability of the occurrence of the events necessary for claimed lost profits. Malec v J C Hutton Pty Limited (1990) 169 CLR 638 applied. The Commonwealth v Amann Aviation Pty Limited (1991) 174 CLR 64 and Norris v Blake (No 2) (1997) 41 NSWLR 49 referred to. (5) The language of "more probable than not" has a place in finding past actual events relevant to the exercise of assessing damages according to the degree of probability of past or future hypothetical events, because the past actual events are to be found on the balance of probabilities. Although there should not be a finding of past or future hypothetical events on the balance of probabilities leading to those events being treated as certain, the language of "more probable than not" may be used consistently with the principle in Malec v J C Hutton Pty Limited. The allowance for vicissitudes was a way of arriving at the degree of probability of the future hypothetical event of the exercise of earning capacity. Where the hypothetical exercise of earning capacity was controversial, the vicissitudes included allowance for the validity of the hypothesis as well as for the imponderables or chances affecting its realisation. That is why the allowance for vicissitudes was not restricted to adverse contingencies but includes positive prospects. In the present case, the trial Judge did not make an erroneous application of the balance of probabilities test. His Honour was really expressing the degree of possibility or probability that the fight program and earnings estimated by Mr Mordey would have been achieved, using as the measure for the resulting assessment of damages a reduced programme of fights and a reduced level of earnings. Bresatz v Przibilla (1962) 108 CLR 541; Mitchell v Mulholland (No 2) [1971] 1 QB 65; Norris v Blake (No 2) (1997) 41 NSWLR 49 referred to. (6) The grant of leave to re-open a case is discretionary. The guiding principle is whether the interests of justice are better served by allowing or rejecting the application. The importance of the further evidence in the proceedings and the consequences for the further hearing of the proceedings, particularly likely prejudice to the party resisting the application, are amongst the matters properly taken into account in the exercise of the discretion. Urban Transport Authority v Nweiser (1992) 28 NSWLR 471 applied. Murray v Figge (1974) 4 ALR 612 and Footersville Pty Limited v Miles (1986) 41 SASR 211 referred to.

Fightvision's Appeal (7) To constitute the cause of action for inducing breach of contract, the plaintiff must prove that the defendant intentionally procured the breach of contract. The requirement that the defendant have sufficient knowledge of the contract is a requirement that he have sufficient knowledge to ground an intention to interfere with contractual rights. Ignorance of the existence of the contract or of its terms born of inadvertence or negligence is not enough. On the other hand, reckless indifference or wilful blindness the truth may lead to a finding of necessary intention. Allstate Life Insurance Company v Australia and New Zealand Banking Group Limited (1995) 58 FCR 26 considered. Short v City Bank of Sydney (1912) 15 CLR 148, Independent Oil Industries Limited v The Shell Company of Australia Limited (1937) 37 SR NSW 394 and Northern Territory v Mengel (1995) 185 CLR 307 referred to. (8) The Court may order a new trial where the trial Judge ignored evidence critical to an issue in the case which was contrary to an assertion of fact made by one party and accepted by the Judge. Mifsud v Campbell (1991) 21 NSWLR 725 referred to. (9) On review of the evidence, even if account be taken of the evidence which the trial Judge did not refer, there was no reason to think that the trial Judge's finding that Mr Onisforou or Mr Fenech genuinely believed that there was no contract between Fightvision and Mr Tszyu was incorrect, or that there was constructive knowledge, a reckless indifference or wilful blindness, grounding an intention to interfere with Fightvision's contract. (10) A corporation acts through living persons. When a person so acts they are not acting for the company, they are acting as the company and the mind which directs their acts is the mind of the company. Knowledge imputed to a company is not treated as capable of being forgotten or lost at the death of a former company officer. There are sound practical reasons for corporate knowledge to include the knowledge of former officers and employees. There may be limits to the continuation of corporate knowledge. The knowledge of the contract between Mr Tszyu and Fightvision gained by Sky Channel through former employees was not lost or forgotten by Sky Channel once the employees left. The fact that present employees, acting as the directing mind of the company, acted on the genuine belief that there was no contract, was of no assistance, as such a belief was unreasonable, by reason of information held by a former officer which was part of the corporate knowledge, who knew that the belief was wrong. Tesco Supermarkets Limited v Nattrass [1972] AC 153, Beach Petroleum NL Johnson (1993) 43 FCR 1, El Ajou v Dollar Holdings plc [1994] 2 All ER 685 referred to. (11) It was not open to the trial Judge to make a finding about Mr Warton's belief without dealing with the evidence attacking his credibility. By apparently ignoring this evidence the trial Judge erred. This did not mean that his conclusion was necessarily wrong, as such a conclusion was open to him on the evidence, but this did not prevent this Court from interfering with the decision. The Court was not prepared to conclude that there was no reason to think that the finding that Mr Warton genuinely believed that there was no contract between Fightvision and Mr Tszyu was incorrect. (12) Tszyu Enterprises was owned and controlled by Mr Tszyu. It did little than recieving money that would otherwise have gone to Mr Tszyu personally. The knowledge of Mr Tszyu was the knowledge of Tszyu Enterprises. The implicit acceptance by the trial Judge of the belief held by Mr Tszyu that he did not have a contract with Fightvision should not be allowed to stand. (13) Where the tort of inducing breach of contract has been proved, both the tortfeasor and the contract breaker can be sued to judgment, although there cannot be double recovery. Jones Bros (Hunstanton) Limited v Stevens [1955] 1 QB 275 referred to. (14) Where the contract breaker would in any event, and without inducement, not have performed to contract, it does not follow that there is no recoverable loss when the defendant induced the breach of contract. The question is one of causation. A finding of inducing breach of contract carries with it the finding that the defendant's actions caused the breach of contract and the loss which flowed. It does not matter that the contract breaker yields readily or before the inducement was willing to break the contract. But it may be possible to establish that inducing the breach of contract was not the cause of the loss because the loss would have been suffered in any event. Jones Bros (Hunstanton) Limited v Stevens, Woolley v Dunford (1972) 3 SASR 234, Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1991) 1 VR 637 referred to.

Statutes: Industrial Relations Act 1996 Supreme Court Act 1970

Allstate Life Insurance Company v Australia and New Zealand Banking Group Limited (1995) 58 FCR 26 Ballas v Theophilos (No 2) (1957) 98 CLR 193 Beach Petroleum NL v Johnson (1993) 43 FCR 1 Bird v Randall (1762) 3 Burr 1345; 97 ER 866 Brambles Holdings Limited v Carey (1976) 15 SASR 270 Bresatz v Przibilla (1962) 108 CLR 541 Brogden v The Metropolitan Railway Company (1877) 2 App Cas 666 Carter v Hyde (1923) 33 CLR 115 Daniels v Anderson (1995) 37 NSWLR 438 De Mattos v Gibson (1858) 4 De G & J 276 El Ajou v Dollar Holdings plc [1994] 2 All ER 685 Emerald Construction Co Limited v Lowthian [1966] 1 WLR 691 Fink v Fink (1946) 74 CLR 127 Footersville Pty Limited v Miles (1986) 41 SASR 211 Independent Oil Industries Limited v The Shell Company of Australia Limited (1937) 37 SR NSW 394 Jones Bros (Hunstanton) Limited v Stevens [1955] 1 QB 275 Malec v J C Hutton Pty Limited (1990) 169 CLR 638 Mannai Limited v Eagle Star Life Assurance Co Limited [1997] AC 749 McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 Mifsud v Campbell (1991) 21 NSWLR 725 Mitchell v Mulholland (No 2) [1971] 1 QB 65 Murray v Figge (1974) 4 ALR 612 Norris v Blake (No 2) (1997) 41 NSWLR 49 Northern Territory v Mengel (1995) 185 CLR 307 Olsson v Dyson (1969) 120 CLR 365 Prudential Assurances v Health Minders Pty Limited (1987) 9 NSWLR 673 Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 Quadling v Robinson (1976) 137 CLR 192 Reardon-Smith Line v Hansen-Tangen (1976) 1 WLR 989 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 Short v City Bank of Sydney (1912) 15 CLR 148 Soulemizis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Swiss Bank Corporation v Lloyds Bank Limited [1979] Ch 548 Tesco Supermarkets Limited v Nattrass[1972] AC 153 The Commonwealth v Amann Aviation Pty Limited (1991) 174 CLR 64 Upper Hunter County District Council v Australian Chilling and Freezing Co Pty Limited (1969) 118 CLR 429 Urban Transport Authority v Nweiser (1992) 28 NSWLR 471 Utica City National Bank v Gunn (1918) 118 N.E. 607; 222 NY 204 Vickery v Woods (1952) 85 CLR 336

Text Books: Greig & Davis, The Law of Contract, 1987 at 249

ORDERS Mr Tszyu's Appeal Appeal No. 40232/98 Appeal dismissed with costs.

Fightvision's Appeal Appeal No. 40231/98 1. Appeals against the respondents, Mr Onisforou and Mr Fenech, dismissed with costs; 2. Appeals against Mr Warton, Tszyu Enterprises and Sky Channel allowed; 3. Set aside the orders dismissing the claims against Mr Warton, Tszyu Enterprises and Sky Channel and the order that Fightvision pay the costs of those respondents; 4. Judgment for Fightvision against Sky Channel in the amount of $7,310,445 such order to take effect on 27 March 1998; 5. Sky Channel to pay Fightvision's costs of its claim against Sky Channel before Bainton J and of its appeal against that part of his Honour's order which dismissed the claim but, if qualified, to have a certificate under the Suitors Fund Act 1951 in respect of this appeal; 6. Order a new trial of the proceedings against Mr Warton and Tszyu Enterprises; 7. Mr Warton to pay Fightvision's costs of the appeal between it and Mr Warton but, if qualified, to have a certificate under the Suitors Fund Act ; 8. Tszyu Enterprises to pay Fightvision's costs of the appeal between it and Tszyu Enterprises but, if qualified, to have a certificate under the Suitors Fund Act ; 9. The costs of the first trial between Fightvision and Mr Warton and Tszyu Enterprises to be in the discretion of the judge hearing the new trial; 10. If Fightvision does not duly prosecute a new trial against Mr Warton, Mr Warton is to have liberty to apply to this Court to have his costs order against Fightvision reinstated. 11. If Fightvision does not duly prosecute a new trial against Tszyu Enterprises, Tszyu Enterprises is at liberty to apply to this Court to have its costs order against Fightvision reinstated.

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40231/98; 40232/98 CommD 50120/95

SHELLER JA STEIN JA GILES JA

FIGHTVISION PTY LIMITED v ONISFOROU & ORS TSZYU v FIGHTVISION PTY LIMITED & ANOR

1 These are two appeals, 40231 and 40232 of 1998, from a decision given by Bainton J on 27 March 1998 and, as to costs, on 10 July 1998, after a hearing which extended from 24 March to 14 April 1997. The plaintiffs in the proceedings before his Honour were Fightvision Pty Ltd (Fightvision) and Mr Bill Mordey; the defendants were Mr Konstantin (Kostya) Tszyu, Mr Theodore Onisforou, Mr Jeffrey Fenech, Mr Vladimir Warton, Tszyu Enterprises Pty Limited (Tszyu Enterprises), and Sky Channel Pty Ltd (Sky Channel). 2 Logically the second appeal, 40232 of 1998, should be dealt with first. It is an appeal by Mr Tszyu from a judgment for Fightvision, against Mr Tszyu in the sum of $7,310,445. 3 Bainton J found that Mr Tszyu was in breach of a term of a contract with Fightvision not to box professionally anywhere in the world for a period of three years and thereafter, at the option of Fightvision, for a further period of two years, unless the bout was promoted or co-promoted by Fightvision. The contract was made in writing, with an English and a Russian language version, on 17 January 1992 between Bill Mordey's Classic Promotions Pty Limited (Promotions), Mr Tszyu and Mr John Lewis, who was described as "the trainer". Fightvision alleged that in or about January 1993 the contract was novated by discharge and the substitution of a new contract in the same terms between Fightvision, Mr Tszyu and Mr Lewis. In early January 1995 Fightvision purported to exercise the option. Bainton J found novation, held that the option had been validly exercised, and assessed Fightvision's damages in the amount earlier stated. 4 On appeal Mr Tszyu claimed that his Honour erred in his holdings as to novation and the exercise of the option. Mr Tszyu also claimed that Bainton J erred in failing to accede to an application brought by all the defendants that, if he found there was a valid and binding contract between Fightvision and Mr Tszyu, he should refrain from assessing damages in order to permit Mr Tszyu to proceed with an application to the Industrial Relations Commission of New South Wales in Court Session (the Commission) under the Industrial Relations Act 1996 to have the contract declared void ab initio or varied. Mr Tszyu also claimed that the damages awarded were excessive, and that, after the hearing was complete and Bainton J had reserved his judgment, he should have granted Mr Tszyu's application to lead further evidence on damages. Mr Tszyu expressly abandoned any issue of unconscionability. 5 The claims against the other five defendants, Mr Onisforou, Mr Fenech, Mr Warton, Tszyu Enterprises and Sky Channel were to recover damages for persuading, procuring or otherwise inducing Mr Tszyu to breach his agreement with Fightvision. Bainton J dismissed these claims. We will refer to this group of five defendants as the third parties. In brief, his Honour's reasons were that each of the third parties genuinely believed that there was not any relevant contract between Mr Tszyu and Fightvision. 6 The second appeal, 40231 of 1998, was by Fightvision from the judgments in favour of the third parties. Fightvision claimed that each of the third parties knew of the existence of the contract and, in particular, that the contract had been novated in favour of Fightvision, that it contained an option, and that the option had been validly exercised. 7 The third parties filed notices of contention that the decisions in their favour should be affirmed, inter alia, on the grounds set out in Mr Tszyu's appeal and that the damages awarded were excessive. On 30 April 1999 the Court refused Mr Warton leave to file a further amended notice of contention. 8 Mr Tszyu and the third parties abandoned the claim that the 17 January 1992 contract was void for uncertainty.

FACTUAL BACKGROUND AND BAINTON J'S DECISION 9 The facts in what follows are based upon Bainton J's findings. 10 Fightvision was a company controlled by Mr Mordey, who described himself as its chief executive. Mr Mordey also described himself as a boxing promoter. The accuracy of both those descriptions was unchallenged. Mr Mordey was a plaintiff but not a party to either appeal, so his claims can, for present purposes, be ignored. 11 In 1991 Mr Tszyu was an amateur boxer who later turned professional. In November 1991 he arrived in Sydney from Russia, his country of birth, to fight for a world amateur boxing title. Mr Mordey saw the fight and afterwards met Mr Tszyu, who expressed a desire to turn professional. In January 1992 Mr Tszyu and Natasha, then his girlfriend and subsequently his wife, returned to Australia. Promotions, a company Mr Mordey controlled, paid their air fares, arranged for their visas and provided them with furnished accommodation and a car. 12 Sky Channel was a company incorporated in New South Wales and a subsidiary of Consolidated Press Holdings Limited. It broadcast pay to view television. Mr Onisforou was an executive of Sky Channel, a qualified lawyer and a former practising member of the New South Wales Bar. Mr Fenech was a well known boxer and an employee of Sky Channel. When Mr Tszyu arrived in Australia Mr Warton became his manager. Mr Warton's primary business activity was that of a dealer in second hand motor vehicles. 13 Tszyu Enterprises was incorporated by Mr Tszyu in New South Wales some time before January 1995. Bainton J assumed that Mr Tszyu controlled it. Its incorporation and subsequent activities were driven by tax advice. It did little if anything beyond receiving money that would otherwise have gone to Mr Tszyu personally. 14 Mr Mordey's background was in journalism. He was initially a sportswriter: from about 1980 until about 1985 he was a publisher and until 1995 a media consultant. Since 1985 he had been a boxing promoter. Bainton J accepted his assertion that he had promoted hundreds of professional boxers since then. As Mr Mordey's credit was critical to his case, the failure by any other party to challenge that assertion, in Bainton J's judgment, demonstrated his experience in this area and his credibility. Bainton J considered that Mr Mordey had given his evidence carefully and accurately, without exaggeration, and that what he asserted was consistent with the probabilities. Wherever any of his evidence conflicted with any given on behalf of any of the third parties he preferred and accepted Mr Mordey's version. 15 Mr Mordey's experience, by the time the activities which led to this litigation began, included co-promotion of boxing with Mr Don King (described by Mr Mordey without challenge as the best known boxing promoter in the world) and with other internationally known promoters (whom he identified) in the USA and in the UK. As well, Mr Mordey promoted the Fenech/Azumah Nelson fight in Melbourne in 1992. It was, he asserted without contradiction, the biggest grossing fight in Australia. 16 Mr Mordey was an expert in this field. For Promotions he had arranged substantial purses for boxers contracted to Promotions. He was not a philanthropist; his objective was to make money for himself (or for a company which he or his family controlled). To accomplish that objective he needed to endeavour to promote bouts in which his man was successful, if not always, at least more often than not. He also needed to promote boxers of skill to attract the paying audiences. The other side of the coin was that a boxer, particularly a relative newcomer, needed a skilful and preferably well known promoter to arrange fights for him with suitable opponents and attracting as substantial a purse as could be obtained. Bainton J did not doubt that Mr Mordey approached his arrangement with Mr Tszyu on that basis. 17 The motivation of Sky Channel and those acting for it was in Bainton J's view quite different. Sky Channel made its money (in part) out of pay to view television of boxing contests. Its remuneration for this activity depended on selling the right to exhibit to hotels and the like (where watchers would no doubt wish to quench their thirsts). The better known the names of the boxers the more it could charge the hotels and other purchasers. In short, its business was to endeavour to contract for the performance of those already well known. The fact that Sky Channel, comparatively soon after Mr Tszyu arrived in Australia, attempted to seduce him away from Mr Mordey and into engagement with it was a compliment to Mr Mordey. 18 After his arrival in Australia in November 1991, Mr Tszyu fought four fights in the World Amateur Championships and won the final. Mr Mordey watched each of Mr Tszyu's fights. So did Mr Fenech. At that time Mr Fenech was contracted to Promotions. Mr Mordey was most impressed by Mr Tszyu's performance. He formed the view that, properly promoted, Mr Tszyu had the potential to become a future world champion and one of the all time greats of boxing. A meeting was arranged for lunch at Mr Mordey's home on the day after the final bout. Mr Mordey had with him Mr Fenech and Mr Fenech's trainer, Mr Lewis. Mr Tszyu had with him his Russian boxing manager, a Russian boxing coach and a Russian doctor who had come to Australia with them. 19 The conversation at this meeting was in the English language. Mr Mordey almost immediately asked Mr Tszyu to return to Australia, or perhaps to stay here. Mr Tszyu said that he declined, asserting that he wanted to spend the New Year with his family in Russia. In addition, he stipulated that if he were to return to Australia, Natasha had to come with him at Mr Mordey's expense. Mr Mordey agreed. 20 Mr Mordey provided air tickets for Mr Tszyu's and Natasha's return to Australia on 10 January 1992. They were put up initially in an apartment at Quay West and subsequently in a house at Mascot, and were provided with a car, all at the expense of Mr Mordey (or Promotions). Mr Mordey wanted a documented agreement between Promotions and Mr Tszyu. He had a form of agreement prepared in the English language and translated into the Russian language. 21 On 17 January 1992 Mr Mordey and Mr Tszyu met at the office of Mr Mordey's solicitor, Mr Tony Schwartz then of Corrs Chambers Westgarth. Mr Tszyu signed both the English language and the Russian language versions of the agreement. Promotions executed both versions under its common seal. Bainton J found that the contract contained an enforceable option to renew for an additional two years. 22 During 1992 Mr Tszyu participated in six fights, all arranged by Promotions. He won each of the fights, the last by a knockout in the first minute of the first round. His purses for them totalled $US105,000, which converted to $139,231 which he was paid. (In this judgment a reference to a dollar sum is a reference to an Australian dollar sum unless the contrary is shown.) 23 In November 1992 Mr Mordey determined that Promotions would cease to carry on business and that Fightvision would carry on his fight promotion business. This, as he recognised, required Mr Tszyu's agreement and, for practical purposes, the concurrence of his trainer Mr Lewis, who, under cl 4 of the 17 January 1992 agreement, had together with Promotions "the exclusive right" to specify the opponent, the venue, and the date of Mr Tszyu's fights. Mr Mordey asserted that, as he had in the past dealt and would in the future deal with Mr Tszyu and Mr Lewis "on a personal level", he did not expect either to object to the change. Bainton J agreed that that was a reasonable expectation. 24 Nonetheless Mr Mordey chose a hopefully propitious occasion to broach the subject with Mr Tszyu. Mr Tszyu was to fight Steve Larrimore in Memphis, Tennessee on 30 January 1993; Mr Mordey chose an occasion, Bainton J assumed before that fight, in the hotel in which they were staying to raise the subject with Mr Tszyu whose mind, Bainton J was sure, would have been primarily on the looming fight. He told Mr Tszyu that "Promotions is winding up and Fightvision will be exclusively promoting your fights in the future", and Mr Tszyu said "Okay, no problem". 25 On his return to Australia Mr Mordey told Mr Lewis, who did not go on the trip to the USA, that Fightvision was to take the place of Promotions, and Mr Lewis said, "These things do not bother me. Whatever you do is OK with me". 26 At the trial Fightvision contended that the 17 January 1992 contract was novated by express agreement between Mr Mordey for Promotions, Mr Mordey for Fightvision, and Mr Tszyu for himself. Bainton J added that the 17 January 1992 contract benefited Mr Lewis as trainer only by Mr Tszyu's promise to pay him 25 percent of his gross fee for each bout. The novation was not intended to alter that arrangement: nor did it. If there was a novation, Mr Lewis joined in it. 27 Bainton J accepted Mr Mordey's evidence of the conversation with Mr Tszyu on 30 January 1993 before the Larrimore fight and of the conversation with Mr Lewis on his return to Australia. Bainton J was not prepared to accept any of Mr Tszyu's evidence where it was in conflict with Mr Mordey's. Mr Lewis was not called. 28 There was a further reason for accepting Mr Mordey's evidence, namely that Mr Mordey did (for Promotions and Fightvision) what he told Mr Tszyu he was going to do, without a whisper of protest or dissent from Mr Tszyu. During 1993 and 1994 Mr Tszyu participated in a further seven fights, all but the Larrimore fight arranged by Fightvision. Fightvision's written submissions listed 55 examples, of varying weight, of letters, payments and things done by Fightvision which would have been done by Promotions but for Mr Mordey's decision to change his corporate alter ego. Bainton J added, to avoid any misunderstanding, that they were not all transactions in which Mr Tszyu personally participated, but they nonetheless concerned him, as, for example, hiring the venue for one of his bouts or arranging a bout with the promoter of the intended opponent, and were relevant to Mr Mordey's asserted change of corporate alter ego. Those which did expressly and directly involve Mr Tszyu included an agreement of 12 July 1993 for the fight against Livingstone Bramble, a note to Mr Tszyu which accompanied the cheque to him for $60,000 for the fight and a receipt dated 4 September 1993 bearing Mr Tszyu's signature for $US10,000 received from Fightvision by Vladimir Churnya "per contract agreement with Kostya Tszyu". 29 Bainton J said that it was obvious from this collection of documents that Mr Tszyu knew that Promotions has ceased to do anything for him and that Fightvision was doing what Promotions had earlier been doing. That could be explained on the basis either that he had expressly agreed to it as Mr Mordey contended, or that he was content to accept it, as he in fact did. His acceptance of it could only be explained on the basis that he agreed to it. No competing inference was suggested. 30 There was more. Mr Tszyu received and banked cheques drawn by Fightvision for various amounts ranging between $22,226.60 and $75,000. Those in evidence (from cheque stubs) ranged over the period from August 1993 to February 1995. Also in evidence was quite a number of documents signed by Mr Tszyu acknowledging receipt from Fightvision of meal allowances. 31 The bout agreement dated 29 August 1994 between Mr Tszyu and Fightvision for a fight against Pedro Sanchez provided for a payment by Fightvision to Mr Tszyu of $145,000. By this date Promotions had ceased to exist. It was de-registered on 6 July 1994. Mr Tszyu was paid by Fightvision. There was no evidence that he demurred when Fightvision's cheque was proffered. 32 In February 1995 Mr Sutherland, who was Mr Tszyu's solicitor, prepared a summary of facts which he handed out to Mr Warton, Mr Fenech, Mr Onisforou and Mr Tszyu. It recorded Mr Sutherland's understanding of relevant events from the execution of the 17 January 1992 contract to his letter of 28 February 1995 to Mr James McLachlan of Nine Network Australia. 33 Mr Sutherland first received instructions on or about 20 January 1994, from Mr Warton but on behalf of Mr Tszyu. In mid-1994 Mr Mordey gave Mr Tszyu a copy of a draft agreement prepared by Mr Schwartz. He said to Mr Tszyu words to the following effect: "Fightvision will be taking up the option of extending your contract and I offer you this contract. This is what Fightvision proposes." The draft agreement was not simply the agreement which exercise of the option would have effected. The parties to it were Fightvision, Mr Tszyu and Mr Lewis. Fightvision was named as the promoter. The draft agreement contained an advantage to Fightvision not in the 17 January 1992 contract (three years instead of two) and substantial advantages to Mr Tszyu not in the original contract (primarily in the purses offered, up to $1m). Mr Mordey left the draft agreement with Mr Tszyu to consider and get his own advice. 34 Some time later Mr Tszyu and Mr Warton came to talk to Mr Mordey: they had with them a copy of the draft agreement. Mr Warton asserted that there were "some things that Kostya is not happy with", and they were discussed in detail. This meeting, according to Mr Warton, lasted approximately 3 ½ - 4 hours. Mr Warton did not assert, nor did Mr Tszyu, that he queried the role of Fightvision. Indeed Mr Tszyu asserted quite specifically "We did not talk about Classic Promotions or Fightvision". 35 Mr Sutherland received instructions to review and comment on the draft agreement. Mr Sutherland said he discussed it in detail with Mr Tszyu and Mr Warton and advised Mr Tszyu in writing on 31 May 1994, suggesting a number of amendments. 36 The letter of 31 May 1994 contained the statements "The reason you are engaging Mordey is that he has particular skills in the Australian boxing industry" and "He is the principal promoter in the Australian boxing scene". The first of those statements recognised the reality that the corporate structure used by Mr Mordey did not particularly matter so long as Mr Mordey's knowledge and talents were available to it. 37 Mr Sutherland met Mr Schwartz on 21 June 1994 to discuss Mr Schwartz's draft agreement. The only reference to Fightvision in Mr Sutherland's summary of facts was his desire to add a "key man" clause, that is, provide for Mr Mordey's personal participation. 38 After that meeting Mr Sutherland prepared a draft letter to be sent to Mr Schwartz. The second paragraph of that letter said, "We understand there has been an agreement between our clients that the draft clauses you had numbered 4.4, 4.5 are deleted and a new clause proposed to the effect that the parties will negotiate in good faith, a mutually agreed purse for each fight". (Cll 4.4 and 4.5 of the draft set the remuneration in dollars which the promoter, Fightvision, was to pay for each fight). Mr Sutherland then set out his suggested amendments to Mr Schwartz's draft. The first was: "Fightvision Pty Ltd is defined as the 'Promoter'. A company search of Fightvision reveals that it is a company controlled by Craig Mordey and Gwenda Bradford. Bill Mordey is not a director or shareholder of that company. Our client is seeking to obtain the services of Bill Mordey and his particular skills and ability in the promotion of boxing in Australia. The deed as it is drafted does not perform that function. Our client requests that Mr Mordey is made a party to the deed personally. Mr Mordey's role if he were to become a party to the Deed personally could be limited to something in the form of 'Undertaking by William Mordey'. 'Mr Mordey hereby acknowledges and undertakes that notwithstanding any provision of any contract between himself and the Promoter, he will actively co-operate with the Promoter and the Fighter to ensure that the obligations of the Promoter to the Fighter under this agreement are fulfilled in every respect and that in particular Mr Mordey will save for unavoidable accident or sickness ensure that he is available to and does perform as contemplated by this Agreement'." 39 The substance of this part of Mr Sutherland's letter was that: (a) it was really Mr Mordey's skills and ability that Mr Tszyu needed; and

(b) because the contract was to be between Fightvision and Mr Tszyu and Mr Mordey was neither a shareholder nor director of Fightvision, that he should be added as an additional party. 40 As a quid pro quo Mr Sutherland also suggested: "The contracting party for Kostya should in fact be Tszyu Enterprises Pty Ltd. We are content to have a similar 'keyman' clause as that which applies to Mr Mordey. Amendments should then be made to the back of the deed reflecting the change of entity."

41 Mr Tszyu and Mr Warton approved Mr Sutherland's draft with minor amendments, and the letter was sent to Mr Schwartz on 12 September 1994. The letter set out twenty-five "suggested amendments to the deed", including substituting Tszyu Enterprises for Mr Tszyu as the contracting party. Quite substantial sums of money were involved in some of the amendments. The twenty-fourth amendment asserted "Clause 14 (I) (b) is 'an insult to Kostya' and should be deleted". It provided a right to terminate for "serious misconduct" and defined serious misconduct to include "deliberate failure to do the best of your ability in any bout which is the subject of this agreement." 42 Under cover of a letter dated 22 September 1994 Mr Schwartz submitted a new draft to Mr Sutherland. Mr Sutherland did nothing except send it to Mr Tszyu, apparently on Mr Warton's instructions. The letter was never answered. 43 Late in 1994 Mr Mordey had another discussion with Mr Tszyu and Mr Warton in which Mr Warton asserted "Kostya wants you to be his promoter and you will continue to promote his fights but he wants to negotiate his purse on a fight by fight basis". Mr Mordey said he would take that on board. 44 Bainton J regarded these interchanges between the parties as support for Fightvision's contention that the contract remained on foot but that Fightvision was now the promoter. He said that there was not in the whole of this any denial of the assertion that Fightvision had replaced Promotions. Indeed, Mr Warton and Mr Tszyu appeared to have accepted that change as not even meriting enquiry, let alone discussion. Bainton J held that the contract was novated to Fightvision. All the ingredients necessary to that novation had been established. 45 By the end of 1994 Mr Mordey, for Fightvision, had negotiated Mr Tszyu to be number one contender, which Bainton J took to mean challenger, for the IBF World Junior Welter Weight Championship. He was to fight Jake Rodriguez in Las Vegas in January 1995. Mr Mordey arranged for this championship to be televised throughout Australia by Premier Sports (erroneously referred to by his Honour as Sky Channel). The arrangement which he reached with Premier Sports conferred an enormous benefit on Mr Tszyu (and a lesser one on Fightvision). Fightvision was to get $50,000 for each of his next four fights, win lose or draw, and in addition whichever was the greater of $350,000 or 50 per cent of the pay for view amount received by Premier Sports, plus an additional $100,000 for the international rights to the four fights. Mr Mordey told Mr Tszyu of this offer. 46 Clause 9 of the 17 January 1992 agreement was in the following terms: "Prior to the termination of this AGREEMENT the PROMOTER shall have the right in consideration of paying the BOXER the sum of one (1) dollar Australian to require the BOXER to enter into a FURTHER AGREEMENT with the PROMOTER or its nominee for a period of two (2) years in respect of promotion and management of the BOXER on terms to be mutually agreed. In default of such agreement, the terms of the FURTHER AGREEMENT shall be the same as the terms of this AGREEMENT with such changes as are necessary to reflect the different duration of the FURTHER AGREEMENT." 47 On 12 January 1995 Mr Mordey wrote exercising the renewal option as follows: "Dear Kostya On the eve of your world championship with Jake Rodriguez as challenger for the International Boxing Federation Junior Welterweight Championship of the World it is necessary to have an agreement in place which will enable me to gain for you the best possible financial return for your services as a professional boxer. I acknowledge our meeting at my office in Surry Hills at which you verbally agreed that I would act as your promoter for ongoing bouts. I accept this in good faith but international promoters will not acknowledge a verbal agreement in business discussions for the future. Because of this, I refer you to our original contract and Clause Nine (9) of this agreement dated January 17th, 1992, which allows for a further promotional agreement of two years. I explained the need for this extended agreement with you in a second meeting at my office. Unless I can negotiate on your behalf it is impossible for me to offer you a deal for discussion and mutual agreement. Under the terms of our contract I enclose a cheque in the amount of One Dollar ($1.00) to activate the extension of our original agreement for a further two years. This will be, without doubt, the smallest cheque you ever receive from me." 48 The last day for exercise of the option was 16 January 1995. Mr Tszyu was in the USA on that date. On 12 January Mr Mordey personally handed to Mr Tszyu the letter just set out and Fightvision's cheque for $1 in favour of Kostya Tszyu. 49 The only time constraint on the exercise of the option was that the "requirement" had to be communicated on or before 16 January 1995. Mr Tszyu asserted that he was not "required" to enter into a further agreement before 17 January 1995. The "further Agreement" had not come into existence. There was no "default" by him in the absence of any attempt to negotiate the terms of the new agreement. This submission depended upon the cl 9 requirement to enter into the further two year agreement "in terms to be mutually agreed", with the addition that "In default of such agreement" the terms should be as before except as to date. Mr Tszyu's argument was that there could not be a default in the absence of any attempt to reach mutual agreement. "Default" meant more than "absence", so that if both parties tried and failed, the existing agreement would continue, but if one party refused even to try, the renewal clause would not operate. Bainton J found that the handing of this letter to Mr Tszyu was an effective exercise of the option. 50 On 28 January 1995 Mr Tszyu won the fight against Jake Rodriguez. Mr Mordey, Mr Tszyu and others returned to Australia a day or two later. Mr Tszyu came to Fightvision's office on 7 February to collect his money, a Fightvision cheque for $100,000 which he banked to the credit of Tszyu Enterprises. On 16 March 1995 Tszyu Enterprises banked a cheque for $20,000 from Sky Channel and on 10 April 1995 a cheque for $100,000 from Optus Administration. 51 On 6 February 1995 Mr Sutherland drafted a letter to Mr Schwartz. Before the letter was sent Mr Tszyu received an offer dated 7 February 1995 from Fightvision headed "Tabled Offers for your First Defence of the IBF World Championship". Contrary to Bainton J's finding, Mr Sutherland did not send the letter in its drafted form but amended it with the assistance of Mr Onisforou. 52 The amended letter as sent on 8 February 1995, though dated 7 February, was as follows: "As you are aware we act for Kostya Tszyu. On 12 January 1995 Fightvision Pty Ltd purported to exercise an extension of a 'further promotional agreement of two years' by payment of a cheque in the amount of $1.00. A cheque was tendered. So that there is no misunderstanding, we repeat, there is no agreement whatsoever in existence between our respective clients. We return your client's cheque. The most recent arrangement reached between our clients was that your client would be given an opportunity to promote Kostya's fights on a fight by fight basis with no obligation beyond that particular fight. On an urgent basis, that is, within 48 hours, obtain instructions from your client what it is prepared to offer with respect to our client's next fight. As a separate matter we note that 'Bill Mordey's Classic Promotions Pty Ltd' the party listed as the promoter in the contract dated 17 January 1992 was de-registered on 6 July 1994. …….. PS. Since preparing this letter we have received a copy of your 'offers' dated 7 February 1995 which our client rejects."

53 Bainton J remarked that Mr Tszyu's determination to return cheques attributable to Fightvision's actions (rather than Promotions'), did not extend to returning the cheque for $100,000 from Fightvision or the cheques for $20,000 and $100,000 from Sky Channel and Optus, all entitlements of Mr Tszyu arranged by Fightvision. His Honour found that Mr Tszyu repudiated, by Mr Sutherland's letter, the contract effected by Fightvision's exercise of the option. 54 Bainton J said that the damages which Fightvision was entitled to recover from Mr Tszyu was the profit which it would have made from promoting fights in which Mr Tszyu would have participated between 17 January 1995 and 16 January 1997. The receipts for any such bout would have come from gate money, from direct broadcasting payments, from licence fees, from pay to view television transmitters, from advertising endorsements and probably from other sources. These might continue to come in for periods, in some cases probably long periods, after the expiration of the contract period, in this case after 16 January 1997. 55 On 2 February 1995 Mr Dan Duva, a USA fight promoter, faxed to "Mr Bill Mordey, Fightvision" a letter in the following terms: "As we discussed Main Events is very interested in Kostya Tszyu. We are prepared to offer the following. You have indicated that Tszyu will not fight his first title defence until May 1995. CBS-TV in the US will begin a boxing series at the end of April 1995. I am sure we would be able to secure a CBS date for Tszyu in May 1995. I also believe that CBS would be willing to go to Australia. I believe CBS would pay $75,000 and we would secure an additional $50,000 for international TV rights (outside Australia and the US). We would turn over the entire $125,000 to you so that you could promote Tszyu's first title defence in Australia. All costs of this promotion will be your obligation and you shall also retain all revenues. Following Tszyu's first title defence we would promote Tszyu's second defence in July 1995 on the same card as Pernell Whitaker-Gary Jacobs. This card will probably take place in London. We suggest that the opponent for Tszyu be George Scott, Ray Olivera, Joey Carnache or another opponent to be approved by you, HBO and the IBF. We would pay to you and Tszyu for this bout $350,000 plus travel and hotel accommodation to be discussed. All costs of this promotion would be our obligation and we will retain all revenues. For Tszyu's third defence we will pay to you $750,000. The bout will occur prior to the end of 1995. Tszyu's opponent will be subject to the approval of you, the IBF and HBO. The site will be subject to your approval. If you desire you will have the right to promote a Tszyu title defence in Australia between the 2nd and 3rd title defence, provided that such bout does not interfere with our scheduling of the 3rd title defence. Following the third title bout (not including your promotion of a 2nd title defence in Australia) we would promote a title bout between Tszyu and Pernell Whitaker. We would pay to you $1,000,000 for the Whitaker-Tszyu fight. The site and date would be subject to our mutual agreement. For each of the above bouts you would also retain the Australian TV rights. As I have previously advised we are very interested in reaching an agreement with you. All of the above terms are negotiable. I took forward to discussing the above with you to try and reach an agreement acceptable to all parties." [The figures in this letter were US dollars.]

56 Mr Duva was an experienced and well known boxing promoter. Main Events was his corporate alter ego. As his letter indicated, he had a championship "stable". His offer for calendar year 1995 was $US2,225,000, out of which Mr Tszyu would receive his purses. Likely income for calendar year two was not the subject of any evidence - it could only be guesswork and heavily dependent on Mr Tszyu maintaining his record as unbeaten. Mr Mordey's view, and that of others, was that it was more probable than not that Mr Tszyu would remain unbeaten and would end up as world champion in his class. 57 Bainton J said that Fightvision had lost the profits it would have earned from this two year contract and was entitled to be reimbursed that loss (together with interest, strictly from each component of its loss until judgment but for practical purposes from the mid point of the period of loss to judgment), based on the assumption that the earnings from promoting a boxer already at the top would not fluctuate markedly over the ensuing two years, but making allowance in the initial calculation for the possibility (not probability) of debilitating injury. That involved a great deal of "estimation". 58 The calculation put to Bainton J by counsel for Fightvision in his final submissions asserted that the loss was $10,217,000, calculated as follows: Australian TV rights 3 fights at $350,000 $1,050,000 USA fight profits 3 fights at $US6million - $US6m convert to $A at 75 cents $8,000,000 Plus Australian fights $1,167,000 $10,217,000

This calculation was supported by the submission that it accorded with Mr Mordey's calculations. 59 What Mr Mordey first did was calculate the income to Fightvision from a world title defence in Australia. His estimate was gross income $1,195,000 and gross outgoings $805,600, leaving a profit of $389,400 "from each title fight in Australia". During the period of the option, after repudiation by Mr Tszyu, Mr Tszyu in fact fought three fights in Australia. Mr Mordey's evidence, unchallenged on this question, was that Fightvision would have derived a net income of $389,400 from each of those fights (June 1995 and January and May 1996). 60 Mr Mordey then estimated the income of a USA fight against Chavez, de la Hoya or Whitaker at $US27,300,000 and costs at $US23,095,000. The profit was therefore $US4,205,000 per fight, divided equally between each boxer's promoter. Mr Mordey also indicated his views as to what fights Mr Tszyu would have been required (by the rules of the relevant boxing body) to undertake and those which he thought should be undertaken. 61 Bainton J said that the task of estimating what profit Fightvision would have derived in the USA during the two years after the exercise of its option had Mr Tszyu not repudiated his obligations was not an easy one. During the three years of the contract, that is before exercise of the renewal option, Mr Tszyu fought 13 bouts, two in the USA and the others in Australia. Bainton J set out in his judgment, it is now agreed incorrectly, Mr Tszyu's purse for each fight and Fighvision/Promotions' profit or loss on each. The correct profit and loss figures were as follows:

Date Venue Opponent Tszyu's Profit Loss purse AUD 1992 Mar 1 Melbourne Darryl Hiles 50,000 Nil Nil Apr 2 Sydney Ned Simmons 13,188 Nil 31,346 May 7 Sydney Tony Jones 13,102 Nil 26,749 Jul 23 Sydney Juan La Porte 20,420 16,000 Nil Sep 1 Sydney Daniel Cusato 21,000 Nil 46,943 Nov 13 Melbourne Sammy Fuentes 21,292 Nil 18,827

1993 Jan 30 Memphis USA Steve Larrimore 22,000 Nil 30,800 May 14 Newcastle Larry Lacouriers 22,000 6,385 Nil Jun 18 Newcastle Robert Rivera 22,000 Nil 5,189 Aug 13 Newcastle Livingstone Bramble 60,000 54,853 Nil

1994 Jan 12 Tampa USA Hector Lopez 72,084 26,000 Nil May 2 Newcastle Angel Hernandez 100,000 50,341 Nil Aug 29 Melbourne Pedro Sanchez 45,000 Nil 123,464 $ 153,579 $ 283,318

Fightvision/Promotions' overall loss was $129,739. 62 The Rodriguez fight on 28 January 1995, which was televised in Australia by Premier Sports, produced a profit of $140,000. Taking account of this, Fightvision/Promotions' overall profit for all these fights was $10,261, not $63,189 as his Honour said. 63 Bainton J said that what was more significant than the overall profit was the increasing profits and the decreasing loss during the period, particularly in year three. The profit of $140,000 from the first ex Australia fight in 1995 was an example of the tendency towards an increase. Bainton J added that Mr Tszyu's trainer was entitled to 25 per cent of Mr Tszyu's purse which would reduce what he retained to $448,255. Again, however, Mr Tszyu's purses were increasing, a consequence of his rising reputation, so that Fightvision's profits were likely to have increased for the same reason. 64 Mr Mordey catalogued the fights he would have endeavoured to arrange and promote in the two years of the option period. He assumed that Mr Tszyu would have become a world title holder and would have defended that position, both during the relevant two years. On the estimates of income and expenditure earlier described, he considered that Fightvision would have earned about $389,400 from each of three title fights in Australia and about $US2,102,500 from each of three or four fights in the USA. The assumption was that Mr Tszyu would fight six or seven bouts in two years, much less than the thirteen bouts he had fought in the initial three years. 65 Bainton J considered these estimates conservative. Mr Duva's fax of 2 February 1995 assumed that Mr Tszyu would fight three bouts in 1995 out of Australia, and possibly a fourth in Australia. This was a particularly valuable indication, being given by an independent expert in this field. 66 In response to Fightvision's damages claim and to Mr Duva's assertions, the defendants called Mr Bert Sugar, a resident of New York. He was not a boxing promoter, but a journalist. He had been the editor of what he described as the world's two most prestigious boxing magazines, "The Ring" and "Boxing Illustrated". Bainton J recorded the impression that "if there was anything he had never known, or had forgotten, about boxing in the USA it was trivial and of no importance". Mr Sugar's view was that Mr Mordey's four USA fights proposal could not be effected, and we will later refer in more detail to his evidence in this respect. 67 In the manner to which we also will later refer in more detail, Bainton J arrived at damages calculated as - $350,000 x 2 $700,000 $389,400 x 2 $778,800 $US2,000,000 x 2 = $US4,000,000 x .75 $5,333,333 $6,812,133

His Honour awarded interest from 6 January 1997 to the date of judgment. The court prescribed rates for interest for the period from 6 January 1997 were 12% pa to 1 March 1997, 10.5% until 31 August 1997 and 10.5% thereafter. Those rates and the changes in them had not kept up with the market. Bainton J used a 6% pa flat rate for the whole of the period. The interest added was therefore $6,812,133 x 6/100 x 445/365 = $498,312. 68 Bainton J gave judgment for Fightvision against Mr Tszyu in the sum of $7,310,445 and ordered that Mr Tszyu pay Fightvision's costs of the proceedings against him. 69 In dismissing Fightvision's claims against the third parties Bainton J said: "The contract, breach whereof is asserted by Fightvision, is that said to have been made between Promotions and Tszyu, novated to one between Fightvision and Tszyu and then extended by exercise of the option, asserted to be novated to Fightvision along with the initial Tszyu/Promotions contract. I have held that novation to have been effected and that option to have been exercised, but non constat that that was or should have been apparent to Fenech, Onisforou or Sky Channel. There has been a great deal of material made available to me in the course of the hearing that could not have been, in some cases, or was not in fact, in other cases, available to Onisforou or anyone else who should be assumed to have passed it on to, or utilised it on behalf of, Sky Channel. The individuals who views require examination and analysis are Sutherland and Onisforou; Sutherland because he as a lawyer was advising Tszyu (and Warton) as to Tszyu's obligations under the document dated 17 January 1992 and pursuant to the letter of 12 January 1995 as to whether if intended to be contractual the 17 January 1992 document was enforceable at all, or by Fightvision in any event and whether, if there were an option to renew, it was validly exercised; Onisforou because he, the intermediary between Tszyu, by Sutherland, and Sky Channel as a person who was trained in the law and had practised at the bar could and should be expected to detect any error in what Sutherland was asserting apparent from other material in his possession or known to him from any source at all." 70 After referring to authority Bainton J continued: "In my opinion however it follows as a matter of logical deduction, indeed of common sense, that if the tort of inducing breach of contract cannot be made out unless it is shown that the alleged tortfeasor knows or has reason to believe that what he proposes to do will bring about a breach of contract that tort will not be committed if he believes (on reasonable grounds) that there is no contract which will be breached if his inducement are [sic] successful. Sutherland was of the view that there was no contract between Tszyu and Fightvision brought about by Fightvision's asserted exercise of the option on 17 January 1992 contract (wrongly as I have held but I have no reason to think he did not genuinely hold it). That is the opinion that he expressed to his clients and either he or they or both passed it on to Onisforou and thus to Sky Channel. Warton was aware of this view and so was Tszyu and therefore Tszyu Enterprises. As Burchett J succinctly put it in News Limited v Australian Rugby Football League Limited (1996) 58 FLR 447 at 541 'to maintain an action on this tort (inducing breach of contract) what was incumbent on the cross-claimants was to show that the cross-respondents had the intention to procure a breach of contract; that they did in fact induce it; and that damage was a consequence.' That is something different from an intention to produce a result which does bring about a breach of contract, though he who causes it does not believe that it will because he believes (genuinely) that there is no relevant contract. ….. In case it be not clear from what I have already said, the contract which Fightvision must show to sustain the tort which it charges is the asserted two year contract from its asserted exercise of the option granted to Promotions which it asserts to have been novated with the other terms of the original contract to Fightvision. Reliance on inducing a breach of ad hoc contracts for the doing of various things from time to time would probably not be remunerative to Fightvision and in any event was not attempted, most probably because it would not have succeeded. Its case simply was that it had exercised its option and there was therefore a continuation of its original contract for a further two years. Onisforou and others believed, genuinely I find, that there was not in fact any such contract: it is logically impossible to intend to cause a breach of a contract which the person so intending genuinely believes does not exist." 71 This conclusion followed from the findings that there was relevant material not available to Mr Onisforou or anyone else who might have passed it on to or used it on behalf of Sky Channel, that it was Mr Sutherland's view that there was no contract between Mr Tszyu and Fightvision brought about by exercise of the option, that this view was passed down the line to Mr Onisforou and thus Sky Channel, and that Mr Warton and Mr Tszyu, and hence Tszyu Enterprises, were aware of it. Mr Fenech's awareness of Mr Sutherland's view was not referred to. 72 In his judgment of 10 July 1998 on costs, Bainton J observed that the third parties other than Tszyu Enterprises asserted: " … that they did not attempt to induce a breach of contract, but that was because they did not believe that there was the contract on which the plaintiff sued. They plainly had the onus of establishing that exculpating factor, as it was beyond argument but that the course which they took caused Tszyu to breach his contract with the plaintiffs, if he had one. And they did that for their own, or at least for Sky Channel's, substantial financial advantage." MR TSZYU'S APPEAL 73 Generally it was in the interests of the third parties that Mr Tszyu's appeal should be upheld, and they filed notices of contention to formalise that approach. Mr Tszyu and the third parties sensibly divided the burden of the arguments amongst the various counsel appearing for them.

Novation of the Agreement 74 Fightvision needed to establish that the 17 January 1992 contract between Promotions and Mr Tszyu had been novated to it. Bainton J found that all of the ingredients necessary to effect the novation had been established. In particular, his Honour relied on Mr Mordey's evidence of his conversation with Mr Tszyu on 30 January 1993 before the Larrimore fight in the USA. As mentioned earlier, Bainton J accepted Mr Mordey's evidence that he said to Mr Tszyu "Classic Promotions is winding up and Fightvision will be exclusively promoting your fights in the future". Mr Tszyu denied the conversation, although he conceded that he would not have dissented if he had been told. His Honour preferred Mr Mordey's version and rejected Mr Tszyu's denial. Mr Mordey also said that on his return to Australia he had told Mr Lewis. Mr Lewis' reply was that he was not bothered by it. Mr Lewis was not called to give evidence and his Honour accepted Mr Mordey's evidence. 75 Bainton J also referred to the voluminous illustrations after February 1993 that Fightvision acted as Mr Mordey had stated to Mr Tszyu that it would and carried on the Promotions' contract, "without a whisper of protest or dissent from Tszyu". As set out earlier, his Honour found that it was obvious from the collection of documents that Mr Tszyu knew that Promotions had ceased to do anything for him and that Fightvision was then doing what Promotions had earlier been doing. Mr Tszyu either expressly agreed to it (as Mr Mordey said) or was content to accept it. He added further illustrations of Fightvision operating under the 17 January 1992 contract without demur from Mr Tszyu, and these were after Promotions had been de-registered. 76 His Honour also relied on the communications from Mr Tszyu's solicitor, Mr Sutherland, from around mid - 1994 when he was seeking to negotiate a new agreement with Fightvision, following the draft agreement prepared by Mr Mordey's solicitors. In the negotiations Mr Sutherland never denied that Fightvision had replaced Promotions. 77 Mr Tszyu and the third parties submitted that the conversations between Mr Mordey and Mr Tszyu and between Mr Mordey and Mr Lewis did not establish a novation of the Promotions' contract to Fightvision. Moreover, as we understand their submissions, all of the facts relied on by his Honour to support the novation were said to be equally (or more) consistent with vicarious performance of the contract by Fightvision on behalf of Promotions. Therefore, so the argument went, the material relied on by his Honour to find that the contract had been novated to Fightvision was equally consistent with the contract with Promotions remaining on foot. 78 Novation is a transaction by which all parties to a contract agree that a new contract is substituted for one that has already been made (Olsson v Dyson (1969) 120 CLR 365 at 388 per Windeyer J, which Bainton J referred to). Novation involves the extinguishment of one obligation and the creation of a substituted obligation in its place. Intention is crucial to show a novation; see, for example, Vickery v Woods (1952) 85 CLR 336 at 345 per Dixon J as his Honour then was. A novation may be express or implied from the circumstances. 79 Fightvision submitted that on 30 January 1993 Mr Mordey, as the chief executive officer of both Promotions and Fightvision, put to Mr Tszyu that Promotions was winding-up and Fightvision would be exclusively promoting Mr Tszyu's fights in the future; that Mr Tszyu did not dissent from Mr Mordey's statement; and that upon returning to Australia, Mr Mordey said much the same to Mr Lewis, who accepted the situation. Thus Fightvision's claim was that the original contract was expressly novated to it with the consent of all parties. 80 The subsequent events were relied on as confirming that the novation to Fightvision had taken place. As is only common sense, "……if the parties have conducted themselves on the basis that a contract exists between them, a court will readily infer that such a contract has been brought into being"; Greig & Davis, The Law of Contract, 1987 at 249. The learned authors refer to Brogden v The Metropolitan Railway Company [1877] 2 App Cas 666. At 679 Lord Cairns LC spoke of the correspondence between the parties being pervaded with "the expression of a feeling on the one side and on the other that those who were ordering the coals were ordering them, and those who were supplying the coals were supplying them, under some course of dealing which created on the one side a right to give the order, and on the other side an obligation to comply with the order." 81 In the present case the course of dealing was not relied on only to prove novation, but also to confirm Mr Mordey's evidence of the conversations with Mr Tszyu and Mr Lewis. The subsequent events were consistent with Fightvision being substituted for Promotions in the original contract and carrying out the remainder of the agreement. 82 In examining the evidence of Mr Mordey and Mr Tszyu, as well as others, it must be remembered that in reality Mr Mordey was the promoter. Plainly he used corporate vehicles to carry out his promotion activities. Mr White SC, who appeared for Mr Onisforou and Mr Fenech and undertook the burden of the argument on this point, accepted this as the reality of the situation. Up to 30 January 1993 the corporate vehicle Mr Mordey used for Mr Tszyu's fights was Promotions. After that, he used Fightvision as the corporate vehicle to promote Mr Tszyu. 83 In our opinion, the submission that Mr Mordey's words to Mr Tszyu and Mr Lewis were insufficient to establish novation seeks to read too much into the way in which these parties carried out much of their contractual relationships and activities. Stated simply, Mr Mordey was the promoter and Mr Tszyu was the boxer. The corporations involved were merely vehicles for the promoter to promote Mr Tszyu's fights. It is unsurprising that Mr Mordey did not know of the legal term "novation". What non-lawyers would? Mr Mordey did know, however, that it was desired to wind Promotions down (or up, it does not matter) and have Fightvision become the exclusive promoter of Mr Tszyu's bouts. He told Mr Tszyu and Mr Lewis of this, and they were agreeable. It was informal, but it had the result that all parties to the 17 January 1992 contract agreed that there should be a new contract with Fightvision in place of Promotions. 84 As we have said, Mr Tszyu and the third parties submitted that the conversations, and what thereafter occurred, were consistent with the interpretation that Fightvision was acting on behalf of Promotions, which had either delegated its functions to Fightvision or appointed Fightvision as agent. Another way the submission was put was that Fightvision was vicariously performing Promotions' contractual obligations. 85 One problem with this submission is that it was not the way in which the case was put at trial. True it is that novation was disputed, but no questions were put to Mr Mordey to suggest that Fightvision was performing Promotions' obligations under the contract, or anything like it. Nor did Mr Tszyu give evidence that that was how he saw the matter at the time. Further, it was never the subject of any submissions on appeal save a discussion of the law on vicarious responsibility and delegation hidden away in the voluminous written submissions of Mr Gross QC, who appeared for Sky Channel. This, perhaps, is a reflection on the artificiality of the argument put to the Court by Mr White. 86 In Upper Hunter County District Council v Australian Chilling and Freezing Co Pty Limited (1969) 118 CLR 429 at 437 Barwick CJ said that in searching for the contractual intention, "no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements." This equally applies, in our view, when searching for an intention that there be a novation. Given the terms of the conversations, which his Honour accepted, as well as the overwhelmingly consistent pattern of conduct of the parties after 30 January 1993, there is no ground for disturbing his Honour's finding on novation. There is little or no evidence to suggest that the parties intended that Fightvision should perform the contract on behalf of Promotions. This is an area where evidence such as accounting material between the companies, if available, would have been tendered. There was none. In our view, the appeal in relation to novation fails.

Effective Exercise of the Option 87 Mr Tszyu and the third parties contended that cl 9 of the 17 January 1992 contract was unenforceable because the Russian language version omitted a translation of the words "for a period of two (2) years in respect of promotion and management of the Boxer on terms to be mutually agreed. In default of such agreement ….". However, cl 15 of both versions stipulated that in the event of any inconsistency the English language version was to prevail. Despite submissions put to the contrary, in our opinion the language is clear and cl 9 as it appears in the English language version is the condition the parties agreed to. 88 Negotiations about a new agreement had broken down by December 1994. Prior to expiry of the 17 January 1992 contract Fightvision purported to exercise the option contained in cl 9 to bring into existence a further agreement for a term of 2 years from the expiry of the 3 year agreement. Mr Tszyu agreed that he had been served on or before 17 January 1995 with Mr Mordey's letter dated 12 January 1995 enclosing the cheque for $1 and purporting to exercise the option. The terms of the letter and the significant evidence leading up to it have already been set out. 89 Mr Tszyu and the third parties submitted that the letter purporting to exercise the option did not require Mr Tszyu to enter into a further agreement on terms to be mutually agreed or, in default of such agreement, on the existing terms save as to duration. They argued that the negotiations from mid-1994 were not negotiations for a further agreement as a step towards the exercise of the option under cl 9. The option required Mr Tszyu to enter into a further agreement, which could be a future agreement negotiated after the exercise of the option. Only in default of a further agreement being made could the terms of the existing agreement continue. According to the argument, a further agreement on the same terms and conditions as the existing agreement did not arise on the exercise of the option; that is to say, there could be no automatic exercise of the option resulting in an agreement on the same terms as the existing agreement save as to duration. 90 In essence, the submission was that the letter purporting to exercise the option did not comply with the requirements of cl 9 because it did not give Mr Tszyu the opportunity to negotiate a further agreement. Therefore, Fightvision did not exercise the option in accordance with its terms. 91 In our view, this submission should not be accepted. Clause 9 required that the exercise of the option occur prior to the termination of the 3 year period. The terms of the further agreement would be as mutually agreed or, failing agreement, would be the same as the terms of the existing agreement save as to duration. In mid-1994 Mr Mordey indicated to Mr Tszyu that Fightvision would be taking up the option to extend the agreement, and presented him with a draft agreement for consideration. Thereupon the parties spent the best part of 5 to 6 months negotiating, but were unable to agree. This negotiation was directed to an agreement for three years, not for two years, and so could not be regarded as negotiations pursuant to cl 9, but thereafter, and as required by the agreement, Fightvision gave notice to Mr Tszyu that it was exercising its option to renew the agreement. What occurred, in our view, fitted squarely into the terms of cl 9. It matters not that the 1994 negotiations were not pursuant to cl 9. The parties were not required to negotiate. If they did not negotiate and terms were not mutually agreed, there was a "default of such agreement", that is to say, a failure to reach agreement, and the terms of the further agreement were the same as the terms of the existing agreement with such changes as were necessary to reflect the different duration of the further agreement. 92 The submission of Mr Tszyu and the third parties on the inadequacy of the letter, because it did not include the opportunity for Mr Tszyu to agree on the terms of a new agreement, would lead to some curious and surely unintended consequences. They submitted, as they had to, that the opportunity to agree on terms survived the end of the period of the existing agreement, and continued for an indefinite further period before it could be assumed that the parties had been unable to agree, if that was the case, whereupon the agreement in its original form, save as to duration, sprang up again. This only has to be stated in order to emphasise that the submission should not be accepted. Such a hiatus cannot have been intended by the parties. It makes no commercial sense. The indefinite period would lead to the contract losing its value because, as Mr White accepted, it would eat into the 2 years of any further agreement. 93 The effect of the submission was that there could be a failure to agree on a further agreement after extensive negotiations, then, after the exercise of the option, there had to be a further opportunity to endeavour to agree lasting for an indeterminate time; and in the meantime there was no contract. As we have said, the parties could not have so intended. Mr White's response to the Court when taxed with the consequences of the submission, "so be it", highlighted its unreality. 94 Fightvision contended that the new agreement arose immediately upon the expiry of the existing agreement, provided the option had, by then, been exercised. The further agreement would, of course, necessarily be for a different period, and would not contain cl 9. There was no period of limbo wherein the parties were to endeavour to reach a mutual agreement without any indication as to the time within which they were to do so. Further, it was contended, it could not be said that Mr Tszyu had no opportunity to agree on new terms, since he was told by Mr Mordey some 8 months earlier that Mr Mordey intended to exercise the option, and was presented with a draft agreement to consider. Thereafter, as we have recounted, the parties spent the next 5 to 6 months negotiating, ultimately without success. 95 On behalf of Fightvision, Mr McAlary QC referred the Court to a judgment of Cardozo J in Utica City National Bank v Gunn (1918) 118 N.E. 607; 222 NY 204, cited by Lord Wilberforce in Reardon-Smith Line v Hansen-Tangen (1976) 1 WLR 989 at 996. It is worth quoting as a reminder that the search for the true legal meaning of an agreement will not always involve accepting the strict or primary meaning of it when this will make the transaction futile. When the looser or secondary meaning will give the transaction efficacy, it may be preferred. 96 Cardozo J said (118 N.E. at 608): "The proper legal meaning, however, is not always the meaning of the parties. Surrounding circumstances may stamp upon a contract a popular or looser meaning. The words 'loans and discounts' are not so clear and certain that circumstances may not broaden them to include renewals. They often have that meaning in the language of business life. …….To take the primary or strict meaning is to make the whole transaction futile. To take the secondary or loose meaning, is to give it efficacy and purpose. In such a situation, the genesis and aim of the transaction may rightly guide our choice."

97 This passage reinforces our view that an overly strict approach to the wording of cl 9 should not be taken. To do so would lead to a futility. To construe cl 9 in a way which would require further negotiation as to the terms of the extended period after the exercise of the option, and after the 3 years of the primary period have passed, achieves no sensible commercial purpose. Such a construction should not be preferred. 98 At its highest there may have been, as Mr McAlary, conceded, a slight misstatement or misdescription in the letter exercising the option. This related to the legal effect flowing from the exercise - it was stated to be an extension of the original agreement for 2 years rather than the entry into a further agreement. In practical terms, however, the new agreement was, save as to duration, on the same terms as the original agreement. We do not see that the misdescription of the legal effect flowing from the exercise of the option invalidates the exercise. It was an immaterial error which would not have the capacity to mislead. It was plain that the letter was intending to exercise the option, and the misstatement (if that was what it was) did not detract from an absolute and unqualified exercise binding the parties to perform the terms set out in the option; compare Quadling v Robinson (1976) 137 CLR 192 at 201 and Mannai Limited v Eagle Star Life Assurance Co Limited [1997] AC 749 at 767 - 768. 99 In our opinion, the letter purporting to exercise the option clearly and unequivocally manifested an intention to elect for the 2 year option period; Ballas v Theophilos (No 2) (1957) 98 CLR 193 at 196. A reasonable person receiving the letter and reading it against the background of the dealings between the parties would fairly understand the option to have been exercised; Carter v Hyde (1923) 33 CLR 115 at 126; Prudential Assurances v Health Minders Pty Limited (1987) 9 NSWLR 673 at 677. In our view, the appeal in relation to exercise of the option fails. 100 We should record that Mr Tszyu and the third parties expressly abandoned the contention that if the option were duly exercised the resulting contract failed for uncertainty.

Application to the Industrial Relations Commission 101 On 2 April 1997 Mr Tszyu applied to the Commission for orders that if there was an agreement between him and Promotions dated 17 January 1992 it be declared void ab initio, the purported novation of the agreement on or about 30 January 1993 be declared void, and the purported exercise of the option on or about 12 January 1995 be declared void. Section 106 of the Industrial Relations Act 1996 empowered the Commission to declare a contract void or vary a contract if it found the contract to be an "unfair contract". 102 On 3 April 1997, which was the seventh day of the hearing, Mr Tszyu and the third parties applied to Bainton J for an order pursuant to Pt 31 r 2 of the Supreme Court Rules that "the issue of liability in these proceedings be determined as a preliminary matter" and an order that, if by virtue of novation and the exercise of the option there was in existence a valid and binding contract between Mr Tszyu and Fightvision, the entry of any judgment in favour of Fightvision be stayed to await resolution by the Commission of the proceedings Mr Tszyu had there instituted. 103 In his reasons for judgment on the application Bainton J said that two grounds were advanced as justifying an order that liability be determined as a preliminary matter. 104 The first was the difficulty of getting Mr Sugar to Australia. His Honour said: "That difficulty was ascribable only to the failure of those on whose behalf he was engaged in leaving until such a late stage seeking to have his evidence taken by video link and failure to ensure that he was able to get to Australia in time to give evidence of use if that facility should be refused. I see no reason to delay the determination of the plaintiff's claim for relief for that reason."

In fact Mr Sugar came to Australia and his evidence was received. This ground can be ignored for the purposes of this appeal. 105 The second ground was the proceedings in the Commission. His Honour said: "The defendants submitted, first, that costs would be saved, or likely to be saved, if the issue of whether or not there had ever been, or after a determination by the Industrial Relations Commission, there would continue to be, or would be deemed never to have been such a contract as the plaintiff contended for in this action. That submission might have had some force had the application been made shortly after the proceedings commenced. It wasn't. It wasn't even foreshadowed to the judge who, as I have recorded, warned the parties that consent of all parties to the determination of liability as a separate issue would not necessarily be enough to secure the grant of such an order. By day seven of the hearing all parties had readied themselves for a hearing on all issues. Witness statements had been filed and served; the plaintiffs' case on all issues had been closed; the cross-examination of the third defendant Tszyu was completed and that of the fourth defendant, Warton, nearly so. The major part of the evidence of each was directed to the damages issue. The proceedings had been commenced as long ago as 22 June 1995." 106 Bainton J was of the view that the plaintiffs were entitled to have their case determined in the Supreme Court without further delay. That alone, in his view, was sufficient to mandate refusal of the application. His Honour went on to refer to other reasons for that refusal, namely Mr Tszyu's denial that there was any novation or new contract, the consequence of a judgment against Mr Tszyu whatever the Commission might determine, and issue estoppel as to the validity and enforceability of that contract. 107 On 8 April 1997 his Honour refused the application. He refused it again on 9 April 1997, when it was repeated. 108 In maintaining his application before the Commission Mr Tszyu was bound to accept that there was a contract on foot between Fightvision and himself, a stance contrary to part of his defence to the Fightvision claim before Bainton J. Another part of his defence to Fightvision's claim was that, if he was bound from January 1993 by an agreement with Fightvision, the Court ought not to enforce it by reason of the unconscionable conduct of either Fightvision or Promotions. As we have indicated, that defence was not pressed on the appeal. Section 105 of the Industrial Relations Act defined "unfair contract" to mean a contract, inter alia, that was "unfair, harsh or unconscionable". Apart from issue estoppel no argument was advanced to suggest that Mr Tszyu's application to the Commission would be prejudiced by judgment in the proceedings before Bainton J. That would be a matter for the Commission. 109 The applications under Pt 31 r 2 and for a stay to allow the matter to proceed in the Commission were made late in the day, and on their face appear to us to have had little merit. It was accepted that whether or not they be granted was a matter for the trial Judge's discretion. No error in the exercise of that discretion has been demonstrated. The suggestion that this Court should now set aside any part of Bainton J's judgment so that the application in the Commission should proceed is rejected.

Damages 110 If Mr Tszyu had boxed professionally in bouts promoted or co-promoted by Fightvision for the period of two years from 17 January 1995, Fightvision would have made profits. As earlier noted, it would have received income from gate money, from payments for direct broadcasting, for pay to view television transmission, and probably in other ways. It would have incurred expenses. The lost profits, the measure of Fightvision's damages, depended on what fights would have been promoted or co-promoted by Fightvision, what income would have been received from or because of those fights, and what expenses would have been incurred in earning the income. 111 As Bainton J observed, the assessment of the lost profits involved a great deal of estimation; as he later observed, the damages could not be calculated with any precision. Nonetheless the assessment had to be made. Mere difficulty in estimating damages does not relieve a court from the responsibility of estimating them as best it can: Fink v Fink (1946) 74 CLR 127 at 143; McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 at 411-2; The Commonwealth v Amann Aviation Pty Limited (1991) 174 CLR 64 at 83, 102, 125-6. 112 We have described how evidence going to the calculation of damages was given by Mr Mordey and Mr Sugar. Mr Mordey was accepted by his Honour as an experienced boxing promoter, an expert in the field, and his Honour's opinion that Mr Mordey gave his evidence carefully and accurately and without exaggeration must have extended to his evidence material to damages. As earlier noted, Mr Sugar was a journalist, not a boxing promoter, but his Honour recorded the impression "that if there was anything he had never known, or had forgotten, about boxing in the USA it was trivial and of no importance." Apart from the evidence of Messrs Mordey and Sugar, in relation to damages his Honour drew upon the offer made to Mr Mordey by Mr Duva for fights by Mr Tszyu in 1995; on the offer to Fightvision by Premier Sports for television rights to the next four fights of Mr Tszyu; on the evidence of the fights of Mr Tszyu promoted by Fightvision in the three years to the end of January 1995 and their profitability; and on the evidence of the fights of Mr Tszyu after January 1995 and their profitability. 113 Mr Mordey believed that Mr Tszyu would have become world title holder and would have defended that position during the two year period. Mr Tszyu was seen as of world title holder calibre by others at the time. We repeat in part what has earlier been recounted. In brief, according to Mr Mordey, under Fightvision's promotion or co-promotion Mr Tszyu would have participated in three fights in Australia and three or four fights in the USA over the period, six or seven fights in all and less than the fourteen fights in the period to the end of January 1995. Flexibility in the number and place of the fights was acknowledged, and in a manner which was not entirely clear the four fights in the USA ultimately became three fights. Bainton J commented that these estimates seemed conservative, particularly when Mr Duva's offer assumed that Mr Tszyu would fight three bouts in 1995 out of Australia and possibly a fourth in Australia. Mr Sugar said nothing of the three Australian fights. Also in brief, Mr Sugar considered that the fights in the USA would not have come about because Mr Mordey would not have been able to arrange them and it was unlikely that Mr Tszyu would win all of them or escape injury. 114 As to the profits from the Australian fights, we have said that Mr Mordey gave an estimate of income and expenditure leading to a profit for Fightvision of $389,400 per fight. Mr Tszyu in fact participated in three fights in Australia during the two year period, in June 1995, January 1996 and May 1996. The profits earned were much less than $389,400 per fight, but there was evidence that the fights were held at the wrong venues and not properly promoted. 115 As to the profits from the fights in the USA, which Mr Mordey said would have been co-promoted, we have said that Mr Mordey also gave an estimate of income and expenditure leading to a profit for Fightvision per fight of $US2,102,500. The estimates of income and expenditure for the Australian fights included the Premier Sports payments for television rights, under which Fightvision would get $50,000 per fight a minimum of $350,000 per fight for the Australian rights and an additional $US100,000 for the international rights: there was a possibility of a higher payment if the audience was great. The estimates of income and expenditure for the fights in the USA excluded the Premier Sports payments. 116 Bainton J's assessment of damages took up the three elements of the Premier Sports payments in respect of the fights in the USA, profits for Australian fights (which included the Premier Sports payments), and profits for fights in the USA. 117 The three Australian fights, and the Premier Sports payments of $350,000 in respect of four fights, do not seem to have been contentious. They were not questioned in this appeal. 118 As to the fights in the USA, his Honour said - "I can seen no reason to assume that the first of the fights assumed by Mordey would not have been arranged. Tszyu was fit and well and I am sure would have welcomed the challenge. Mordey's calculation for that is (a) Australia TV rights AUD350,000 (b) US profit USD2,000,000 at a conversion rate of AUD1 = USD.75 or AUD2,666,666 (which really ignores the present substantial drop in the value of the Australian dollar) The probabilities in respect of the remaining two must depend, inter alia, on the results of the first of those assumed bouts. I do however have the advantage of knowing that Tszyu was apparently fit and well in 1997, when this matter was heard, because he was in court on many occasions and in the witness box for some hours. My conclusion is that it is more probable than not that Tszyu would have fought at least four fights in the two year period, and that Fightvision's earnings for them would have been in the order of those estimated by Mordey. I also assume for the purposes of this damages calculation that two of these fights would have been in Australia and two in the USA." 119 Bainton J awarded damages against Mr Tszyu of $6,812,133 calculated in the manner earlier set out on the basis of two fights in Australia and two in the USA. 120 It will be seen that his Honour took four fights rather than six (or seven) in the two year period, two in Australia and two in the USA; adopted Mr Mordey's estimate of profits from the Australian fights; adopted Mr Mordey's estimate of profits from the fights in the USA but with a rounding down from $US2,102,500 to $US2,000,000; and accepted that there would have been the minimum payments of $350,000 by Premier Sports in relation to the four fights but did not take up the $50,000 per fight and the payments of $100,000 for international rights. 121 Mr Tszyu and the third parties said that his Honour had not adequately considered the evidence and explained the reasons for his decision, and in particular had "ignored and failed to take into account the expert evidence of Mr Sugar"; they said that his Honour had "failed to take into account adverse vicissitudes and factors and to properly discount any damages assessed to reflect same and to reflect the fact that what was lost was the chance of profits". So, it was said, his Honour had arrived at an excessive assessment. It was not suggested that no damages were payable if liability had been established. 122 The challenges to the assessment of damages went into some detail in relation to the fights which Fightvision might have promoted or co-promoted and the profits which might have been gained from the fights in Australia and the USA. As we have indicated, no issue was taken with the three Australian fights or with the Premier Sports payments. 123 To take up what has already been referred to, Mr Mordey anticipated that the three fights in Australia would be followed by three fights in the USA against Chavez, then WBC junior welterweight champion, Randall, the former WBA junior welterweight champion, and de la Hoya, described as the "golden boy" of American boxing. This would be followed by a fight against Whitaker, the WBC welterweight champion. The fights in the USA would be co-promoted. Chavez and Randall were promoted by Mr King, and de la Hoya was promoted by Mr Bob Arum. Whitaker was promoted by Mr Duva. Here in particular it was submitted that his Honour had paid insufficient regard to Mr Sugar's evidence. 124 What his Honour said, after stating his impression of Mr Sugar, was - "His view was that Mordey's four USA fights proposal could not be effected, first because he would not be able to arrange them, secondly because Tszyu was unlikely to win all of them and come through uninjured and thirdly because such a programme would be injurious to Tszyu's health and wellbeing, therefore, his future potential. Non constat however that three fights in the USA would have had that effect on Tszyu." 125 Mr Sugar had said that the programme of fights was "not only optimistic and hopeful but totally unrealistic", because it presupposed that there could be suitable and timely arrangements with three different co-promoters, that Mr Tszyu would win all the fights, and that Mr Tszyu would not be injured in any of the fights. He had described an intricate world of television ties, desired option conditions, and tactical manoeuvring for easy fights or highly paying fights, which he considered made bouts against the four named boxers unlikely, particularly because the interests of Messrs King, Arum and Duva would not be conducive to the proposed programme of fights and they would not be willing to share 50/50, and he had pointed out that a loss or an injury in one of the fights would throw the programme into confusion. According to the submission, what Mr Sugar had said (of which the foregoing is itself only a summary) was inadequately summarised and too lightly dismissed in the passage from his Honour's reasons just set out. 126 As to the profits from the fights in the USA, Mr Sugar considered that it was unlikely that Fightvision would negotiate equal sharing with any of Messrs King, Arum and Duva. Indeed, he considered that the fights against Chavez, Randall, and de la Hoya would be likely to be undercards to major heavyweight fights or other fights, with a set fee to Fightvision. Even if a share of profits could be negotiated, Mr Sugar thought the gate receipts estimated by Mr Mordey were unrealistic, both in the anticipated attendances and in failure to allow for complimentary tickets; that the estimated income from mat sponsorship and international television rights was unrealistic; and that there had been a double counting in Mr Mordey's figures in his inclusion of half the site fee payable by the owner of the venue. None of these matters, it was said, was referred to by his Honour. It was not said, but no doubt could have been, that the reduction from $US2,102,500 to $US2,000,000 was an inadequate allowance for the doubt cast by Mr Sugar on Mr Mordey's estimate. 127 As to the profits from the Australian fights, it was said that Mr Mordey's estimate assumed capacity crowds and did not allow for complimentary tickets; that the estimated gate receipts were higher than had been achieved even in major fights in Australia to that time; that promotion expenses were underestimated; and that the experience of the fights in which Mr Tszyu had participated in 1995-1996 pointed to much smaller profits. Acknowledging Mr Mordey's evidence attributing the poor profits in fact achieved in 1995-1996 to wrong venues and poor promotion, and that Mr Mordey was a more experienced promoter than the promoters of the fights in those years, it was nonetheless said that Mr Mordey's estimated profits of $389,400 per fight should not have been accepted. 128 Further, it was said that so far as his Honour had taken into account a favourable trend in Mr Tszyu's reputation and the profitability of his fights over the three years to the end of January 1995, his Honour had overlooked corrections made by Mr Mordey to the historical profit figures, some upwards and some downwards, but in particular with a significant loss in the penultimate fight in August 1994 and a reduced overall profit for the three year period. We have set out the correct profit and loss figures earlier in these reasons. His Honour had set out profit and loss figures for the thirteen fights to 17 January 1995, described as the initial three year period, and the fight in late January 1995, and had said: "Promotions'/Fightvision's profits in the initial three year period total AUD251,043 and their losses $187,854, an overall profit of $63,189, but what is more significant than that overall figure is the increasing profits and the decreasing loss during the period, particularly in year three. The profit of AUD140,000 from the first ex Australia fight in 1995 is an exemplification of that tendency towards an increase. … Again, however Tszyu's purses were increasing, a consequence I would assume, of his rising reputation, so that Fightvision's profits are likely to have increased for the same reason."

As earlier noted, the figures his Honour set out were incorrect. There was an overall profit of $10,261, not $63,189. 129 We should dispose of this last matter. Even with the corrections, there was a trend of increasing profits, but of most importance was the substantial profit from the fight in January 1995. There is no doubt that Mr Tszyu's progress was successful, his reputation was increasing, and he had become recognised as of titleholder calibre. The corrected figures provided much the same support for a profitable future as had the figures set out by his Honour. We do not regard this as a matter of significance in the appeal. 130 We see no reason to conclude that Bainton J overlooked the detail of the evidence of Mr Sugar bearing upon the fights which might have been promoted or co-promoted by Fightvision, and we certainly do not think it correct that his Honour "ignored and failed to take into account the expert evidence of Mr Sugar". 131 His Honour began with a favourable view of Mr Mordey's experience and expertise as a boxing promoter, a view which was well open to his Honour and with which there is no occasion to disagree. His experience included co-promotions with Mr King and other internationally known promoters in the USA. Mr Mordey readily enough acknowledged that there could be unexpected adverse outcomes of fights, that there were various reasons why a promotion or a co-promotion might not be possible to arrange, that the programme could be affected by injury, that a profit from any given promotion could not be guaranteed, and that sequential bouts with Chavez, Randall, de la Hoya and Whitaker was ambitious. While also regarding Mr Sugar as extremely knowledgeable about boxing in the USA, his Honour was entitled to act upon his favourable view of the experience and expertise of Mr Mordey. 132 He did not do so without regard to Mr Sugar's evidence. His summary of Mr Sugar's evidence going to achievement of the programme of fights was no more than a summary, but it encapsulated the reasons for Mr Sugar's opinion. It was not necessary for his Honour to go into detail in his reasons, and having been taken to the detail we think it clear that, with express recognition that precision in calculation of damages could not be achieved, his Honour allowed for the matters which had been brought out against Mr Mordey's programme as part of taking four fights in the two year period, two in Australia and two in the USA, rather than six (or seven) fights, a reduced profit figure for the fights in the USA and less than full account of the Premier Sports payments. In this respect, it should not be thought that Mr Sugar's evidence went unanswered. For example, his Honour had evidence that Mr Mordey had successfully co-promoted with Mr King on a 50:50 basis on previous occasions, and had a strategy designed to bring co-promotions with Mr King first, leading on to co-promotions with other promoters. 133 His Honour did not in his reasons deal with what was put to us as to the profits from the Australian fights, that is, the matters of capacity crowd and complimentary tickets, gate receipts from past major fights, promotion expenses, and Mr Tszyu's fights in 1995-1996. There was good reason for that. Mr Mordey had not realistically been challenged as to his estimate of income and expenditure, and no submission had been made to his Honour that the end result of a profit for Fightvision of $389,400 per fight should not be accepted. His Honour commented in his reasons that Mr Mordey's evidence as to the $389,400 per fight was unchallenged, and the closest thing to a challenge was obtaining Mr Mordey's agreement that a Fenech-Grove bout in June 1993 had been a premier boxing event for Australia and had not filled the venue. Mr Mordey had said that Mr Fenech was an all-time great in Australian boxing, but had recently lost, had retired, and was on a come-back: "the shine was starting to wear off Jeff". He regarded Mr Tszyu as "the best 140 pound fighter in the world". We were pressed with the example of the Fenech-Grove bout, but the challenge was not particularly effective and his Honour's comment was justified. 134 His Honour recognised that precision in calculation of damages could not be achieved. As we will explain, we consider that, amongst other things, by taking only two fights in Australia in the four year period his Honour allowed for the possibility that Mr Mordey's estimate was optimistic. Mr Tszyu can hardly complain on appeal when, in the absence of challenge, it was open to his Honour to take the full figures. 135 Nor did his Honour in his reasons deal with what was put to us as to the profits from the fights in the USA, and in this instance there was Mr Sugar's evidence to cast doubt on Mr Mordey's estimate. Nonetheless we again see no reason to conclude that Bainton J ignored and failed to take account of the evidence of Mr Sugar, or failed to pay regard to its detail. Again it must not be thought that Mr Sugar's evidence went unanswered, and some perspective on the criticism of Mr Mordey's estimate is provided by the facts that in May 1994 Mr Tszyu was advised, not by Mr Mordey, that he should seek purses for himself of $1,500,000 plus for a fight against Chavez and $1,600,000 for a fight against de la Hoya, and that the bout between Chavez and de la Hoya, in June 1996 brought purses of $US10,000,000 and $US9,000,000 respectively and a gate of $US7,000,000. Mr Tszyu's purse for his August 1994 bout had been $145,000, his highest purse to that time. The future was seen by all concerned as a big money future. 136 His Honour's assessment was made by taking two fights in the USA with profits "of the order" of those estimated by Mr Mordey, each of the total of four fights and the profits being found as something "more probable than not" and with the fights in the USA an assumption. We will return to the possible significance of "more probable than not", but in our opinion again his Honour allowed for the matters which had been brought out against Mr Mordey's estimation as part of the reduced number of fights, the reduced profit figure for fights in the USA, and less than full account of the Premier Sports payments. 137 The expression "more probable than not" has caused us some concern. Although perhaps not originally part of the challenges to the assessment of damages, in the course of argument in the appeal it was suggested that his Honour's approach to the assessment of damages was erroneous. Reliance was placed on the sentence in the passage from his Honour's reasons earlier set out, "My conclusion is that it is more probable than not that Tszyu would have fought at least four fights in the two year period, and that Fightvision's earnings from them would have been of the order of those estimated by Mordey". It was said that in this sentence his Honour had found on the balance of probabilities that the programme would have been of four fights with earnings of the order indicated, and that he had then assessed damages on the certainty that there would have been four fights with earnings of the order indicated, instead of assessing the damages by reference to a chance or possibility of there being the four fights and earnings of the order indicated. 138 In Malec v J C Hutton Pty Limited (1990) 169 CLR 638 the joint judgment of Deane, Gaudron and McHugh JJ included (at 642-3) - "When liability has been established and a common law court has to assess damages, its approach to events that allegedly would have occurred, but cannot now occur, or that allegedly might occur, is different from its approach to events which allegedly have occurred. A common law court determines on the balance of probabilities whether an event has occurred. If the probability of the event having occurred is greater than it not having occurred, the occurrence of the event is treated as certain; if the probability of it having occurred is less than it not having occurred, it is treated as not having occurred. Hence, in respect of events which have or have not occurred, damages are assessed on an all or nothing approach. But in the case of an event which it is alleged would or would not have occurred, or might or might not yet occur, the approach of the court is different. The future may be predicted and the hypothetical may be conjectured. But questions as to the future or hypothetical effect of physical injury or degeneration are not commonly susceptible of scientific demonstration or proof. If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high - 99.9 per cent - or very low - 0.1 per cent. But unless the chance is so low as to be regarded as speculative - say less than 1 per cent - or so high as to be practically certain - say over 99 per cent - the court will take that chance into account in assessing the damages. Where proof is necessarily unattainable, it would be unfair to treat as certain a prediction which has a 51 per cent probability of occurring, but to ignore altogether a prediction which has a 49 per cent probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability. The adjustment may increase or decrease the amount of damages otherwise to be awarded. See Mallett v McMonagle [(1970) AC 166 at 174]; Davies v Taylor [(1974) AC 207 at 212, 219]; McIntosh v Williams [(1979) 2 NSWLR 543, at 550-551]. The approach is the same whether it is alleged that the event would have occurred before or might occur after the assessment of damages takes place."

The joint judgment of Brennan and Dawson JJ (at 639-40) reflected a similar approach. 139 The context was assessment of damages in tort for loss of earning capacity, but the principle is the same in the assessment of damages for loss of profits in consequence of breach of contract (The Commonwealth v Amann Aviation Pty Limited at 88, 104, 116-26) and of contravention of the Trade Practices Act 1974 (Cth) (Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 349-55). The effect of this approach to past hypothetical situations on causation of loss, as distinct from assessment of damages, was considered in this Court in Daniels v Anderson (1995) 37 NSWLR 438 at 527-31. Applying what the High Court had said in Sellars v Adelaide Petroleum NL at 353 and 355, Clarke and Sheller JJA, with whom Powell JA agreed on this point, said (at 531) that "the issue of causation should be approached on the basis of proof upon the balance of probabilities with the qualification that an assessment of whether the chance which is said to have been lost had a value is to be made upon the possibilities or probabilities of the case". Causation does not arise in the present case. 140 It would have been erroneous to apply a balance of probabilities test to the programme and the earnings, treating as certain the past hypothetical events of promotion or co-promotion by Fightvision of bouts in which Mr Tszyu participated and earnings from those bouts as put forward in the evidence of Mr Mordey if satisfied on the balance of probabilities that those events would have occurred. That would have been unfair to the defendants, because it would have treated as certain a prediction of events with a 51 per cent probability of occurring. It would equally have been unfair to Fightvision to have ignored the events altogether, and so awarded no damages, if the prediction of their occurrence was given only a 49 per cent probability. The correct approach, given that causation of loss was not in issue and the task was to assess the damages for loss of the commercial opportunity of promoting or co-promoting fights in which Mr Tszyu participated, was according to the degree of possibility or probability of such bouts occurring and bringing earnings as claimed. 141 It is not essential, however, in making an assessment of damages of this kind, to express a percentage possibility or probability of the occurrence of the events necessary for the claimed lost profits, here the number of fights and the amounts of earnings. Norris v Blake (No 2) (1997) 41 NSWLR 49 was a personal injuries case involving lost earning capacity; it was like Malec v J C Hutton Pty Limited in this respect. Clarke JA, with whom Handley and Sheller JJA agreed, said (at 66-7) - " Malec was a decision of the High Court which expressed in clear terms the approach which a court should take in assessing damages in respect of hypothetical future events. However, the case did not, in my opinion, change the law, or necessitate a change in the customary way the courts in Australia approach the assessment of the impairment of earning capacity, past and future. That the courts have always taken the uncertain nature of the future into account is clear from the well established allowance for vicissitudes which, of course, represents an adjustment to take account of the imponderables or chances that lie ahead. Not only is Malec consistent with that approach, but in the majority judgment three cases are cited in which courts in both England and Australia expressed the principles in similar terms. For instance, in McIntosh v Williams [1979] 2 NSWLR 543, Moffitt P and Samuels JA said (at 550): 'Where an evaluation of a loss has to be made and the extent of the loss depends upon an uncertain event, which has not occurred by the time the evaluation is made, such evaluation must be made by reference to the chance of the event occurring, and not by reference to whether or not the occurrence was or is probable: Davies v Taylor ([1974] AC 207, at 212, 213).' Malec is important for it is a statement by the High Court affirming that the principle was correctly expressed by their Honours. It did not, however, change the way in which damages are assessed for future economic loss. On the other hand, it did emphasise the need to take account of the various possibilities which might otherwise have affected earning capacity. That this is what Malec stands for is made particularly clear by the High Court in Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485, at 498. The High Court there reiterated the proposition that where, for instance, promotion in the future may have occurred, all that had to be established was a real possibility of promotion. The court was then bound to take that possibility into account. The majority (at 499) was further of the opinion that 'damages founded on hypothetical evaluations defy precise calculation' (per Brennan and Dawson JJ in Malec at 640), and that the discount to be allowed for the possibility that the appellant's previous injury might have resulted in her impaired earning capacity was at best 'a matter of impression'." 142 Therefore the customary course of taking a hypothetical exercise of an uninjured earning capacity until retirement, then making an allowance for vicissitudes, is a way of arriving at the degree of probability of the future hypothetical event of the exercise of that earning capacity. Although in many cases the hypothetical exercise of earning capacity is not controversial, it may be, so that the vicissitudes include allowance for the validity of the hypothesis as well as for the imponderables or chances affecting its realisation. That is why the allowance for vicissitudes is not restricted to adverse contingencies but includes positive prospects: see Bresatz v Przibilla (1962) 108 CLR 541 at 544; Mitchell v Mulholland (No 2) [1971] 1 QB 65 at 77; Norris v Blake (No 2) at 73. It can make no difference in principle if a past hypothetical event is in question rather than a future hypothetical event, or if damages for loss of profits rather than for lost earning capacity is in question. 143 The language of "more probable than not" has a place in finding past actual events relevant to the exercise of assessing damages according to the degree of probability of past or future hypothetical events, because the past actual events are to be found on the balance of probabilities. Although there should not be a finding of past or future hypothetical events on the balance of probabilities leading to those events being treated as certain, the language of "more probable than not" may be used in that connection consistently with the principle in Malec v J C Hutton Pty Limited. It may be a way of expressing an allowance or part of the allowance for imponderables or chances. What was said by Clarke JA in Norris v Blake (No 2) must be understood in that way, where he referred to the need to determine the most probable course the plaintiff's career would have taken (at 75), to the likelihood of his success (at 76), and to determination of his likely earnings (at 77), before an allowance for possible greater success and earnings (at 77). 144 So where there is controversy over the validity of a hypothetical exercise of earning capacity, or hypothetical events necessary for claimed lost profits, being the hypothesis for which the plaintiff contends, to say that it is more probable than not that something less than that for which the plaintiff contends would have occurred may be a way of allowing for imponderables or chances and coming to the degree of probability of that for which the plaintiff contends. In substance, that is what was done in Norris v Blake (No 2), although with further allowance for the particular prospect of greater success. If the question is whether, on a numerical scale, a past hypothetical event would have been 1 or 10, by a finding that it is more probable than not that the event would have been 6 may be meant that there was a 60 per cent chance of its being 10. 145 What, then, of the present case? We do not think that his Honour made an erroneous application of the balance of probabilities test. He was dealing with a hypothetical six (or seven) fights over the two year period, the programme put forward through the evidence of Mr Mordey, and with Mr Sugar's view adverse to that programme; he was dealing with hypothetical earnings from the fights, and with evidence and arguments adverse to at least the earnings from the fights in the USA. We think that his Honour was really expressing the degree of possibility or probability that that programme, and the earnings estimated by Mr Mordey, would have been achieved, using as the measure for the resulting assessment of damages a reduced programme of fights and a reduced level of earnings. 146 That his Honour was doing this is indicated, we consider, in a number of ways. First, his Honour emphasised the impossibility of precise calculation; although not irreconcilable, that does not fit with treating as certain a particular programme of fights and the earnings from those fights. Secondly, his Honour referred to "at least" four fights in the two year period, which does not sit well with a finding of four fights on the balance of probabilities. Thirdly, and of particular significance, his Honour "assumed" that two of the fights would have been in Australia and two in the USA; this is the language of estimation of chance, not the language of finding on the balance of probabilities something then treated as certain. Fourthly, his Honour referred to earnings "of the order" of those estimated by Mr Mordey; in fact he took a lesser figure, which again does not sit well with a finding of earnings on the balance of probabilities. Had his Honour truly taken the erroneous balance of probabilities approach, he would most likely have found on the balance of probabilities that there would have been or would not have been the six (or seven) fights over the two year period and the particular earnings estimated by Mr Mordey, and proceeded from there. He did not. 147 There was some debate in submissions over the need to address each fight separately, striking a degree of possibility or probability of the first bout occurring and bringing earnings as claimed, then striking a degree of possibility or probability of the second bout occurring and bringing earnings as claimed, and so on for a number of fights. Schedules were prepared with various percentage possibilities or probabilities, generally decreasing for the later bouts because the prospects for each bout were subject amongst other things to the outcome of the prior bouts. The schedules proved that almost any mathematical result can be reached depending on the initial figures. Thus rationally assumed initial figures could reach dollar results either greater or less than the damages as assessed. We consider that this approach suffers from a similar difficulty to the weighted average exercise in Norris v Blake (No 2). There are too many uncertainties in the prediction of fights and earnings, so that attempted calculation in this way is unrealistic. We consider that it was open to his Honour to take a global approach, finding as his measure a reduced programme of fights and a reduced level of earnings, by what Clarke JA in Norris v Blake (No 2) described (at 67) as the traditional exercise in judgment, undoubtedly involving a measure of guesswork. 148 We therefore do not think that error has been shown in his Honour's assessment of damages, and the appeal in this respect should not be upheld.

Reopening on Damages 149 We do not accept the contention advanced by Mr Tszyu and the third parties that his Honour was in error in refusing an application to reopen to call further evidence. The third parties advanced the contention by notices of contention. We do not stay to consider whether and how this could assist the third parties to uphold the decisions in their favour, or what would flow from the contention in Mr Tszyu's appeal. 150 Bainton J reserved his judgment on 14 April 1997. On 31 May 1997 Mr Tszyu fought and was beaten by Vince Phillips in a fight in the USA. He was defeated on a technical knock out. 151 On 13 June 1997 the defendants applied to reopen their case to call evidence of that defeat. The plaintiffs opposed the application. 152 His Honour refused the application. He said - "To allow the matter to be reopened to establish the matters that are dealt with in Mr O'Brien's affidavit sworn on 19 June 1997 would be to allow evidence to be tendered which, if relevant at all, which I doubt, would be of quite peripheral relevance. It would not be a short matter because there would be a challenge, I would imagine, to each and every one of the contentions, and a desire to call evidence concerning them. Notwithstanding the fact that I have not yet delivered the judgment in the action, I do not think that this is a matter appropriate to allow the defendants to reopen to call the evidence they seek."

153 In support of the contention, it was said that his Honour was in error because the defeat was of more than peripheral relevance and, while a reopening would have enlivened further evidence on the matter from Fightvision, the importance of the evidence of the defeat was so great that that consequence should have been suffered. It was said that the defeat retrospectively cast great doubt on the projections of financial profit and loss on which Fightvision had relied, because those projections were based on an assumption of Mr Tszyu's invincibility against a succession of higher rated opponents to be fought during the two year period. A defeat, even if in the light of other evidence a one-off aberration, destroyed the assumption. 154 The grant of leave to re-open a case is discretionary. The guiding principle is whether the interests of justice are better served by allowing or rejecting the application: Urban Transport Authority v Nweiser (1992) 28 NSWLR 471 at 478. The importance of the further evidence in the proceedings and the consequences for the further hearing of the proceedings, particularly likely prejudice to the party resisting the application, are amongst the matters properly to be taken into account in the exercise of the discretion: see Murray v Figge (1974) 4 ALR 612 and Footersville Pty Limited v Miles (1986) 41 SASR 211, in which tests of whether the evidence was so material that the interests of justice required it and whether, if accepted, the evidence would most probably affect the result were applied. 155 It was not suggested that his Honour approached the exercise of his discretion in disregard of the guiding principle. Rather, it was said that evidence of Mr Tszyu's fortunes which became available only after the hearing had concluded was relevant and, for the reasons given, important, and should have been received. However, we do not think that it has been shown that his Honour's exercise of discretion miscarried. 156 The fight against Vince Phillips was four months after the two year period during which Mr Tszyu's bouts would have been promoted or co-promoted by Fightvision. The mere fact of a defeat would not mean much in the absence of other evidence, such as evidence going to Mr Tszyu's training for the fight and the training he would have received if Fightvision had been involved as promoter and otherwise going to the reason for the defeat. This is so, in our view, despite the suggestion that a defeat of itself and without investigation would destroy the assumption of invincibility. 157 As has been explained, it was already part of the defendants'cases (and accepted by Mr Mordey) that there could be an unexpected result to a fight. If evidence of the defeat by Vince Phillips were permitted, it may be asked, what then if, before judgment was given, Mr Tszyu had a convincing victory over his next opponent? This would also be evidence of his fortunes available only after the hearing and, although because supportive of his prospects against Chavez, Randall, de la Hoya and Whitaker rather than counting against his prospects and his invincibility, on similar reasoning relevant and requiring a further reopening. This is not just favouring determination of the proceedings on the evidence given prior to 14 April 1997. It demonstrates the slight materiality, without much more, of evidence of the defeat by Phillips, and the unlikelihood of it affecting the result. Unless the parties were thrust into a much more detailed examination of the fight and its implications for the programme of fights which Mr Mordey would have sought to bring about, it was correct to regard the evidence of the defeat as of little relevance, and his Honour's forecast that the reopening would not be a short matter because of the disputation and further evidence to which it would lead was amply justified. 158 Although his reasons were brief, Bainton J paid regard to the degree of relevance of the evidence the defendants wished to call and the consequences of granting leave to reopen for the further hearing of the proceedings. In concluding that it was inappropriate to grant leave, he must have meant that on doing so he thought that the interests of justice were better served by refusing the grant of leave. This was a view well open to his Honour.

Interference with Contractual Relations 159 In Short v City Bank of Sydney (1912) 15 CLR 148 at 160 Isaacs J said that to constitute the cause of action for inducing a breach of contract: " … the defendant must have induced or procured the doing of what he knew would be a breach of contract. A bona fide belief reasonably entertained that it was not a breach of contract would be fatal to the claim. If the defendant did not know of the existence of the contract, he could not induce its breach; if he reasonably believed it did not require a certain act to be performed, his inducing a party to the contract to do something inconsistent with it could not be regarded as an inducement or procurement knowingly to break the contract; if he believed on reasonable grounds that the contract had been rescinded, or performance waived, when in fact it had not, he could not be said to knowingly procure its breach." 160 In summary, the defendant must know of the contract and sufficient of its terms to know that what the defendant induced or procured the party to the contract to do would be in breach of the contract. If the defendant knew of the existence of the contract but believed reasonably that what the defendant induced or procured the party to do was not a breach, or reasonably believed that the contract had been rescinded or performance waived, the defendant had not knowingly induced or procured the breach. 161 In Independent Oil Industries Limited v The Shell Company of Australia Limited (1937) 37 SR NSW 394 at 414-5 Jordan CJ, with whom Long Innes CJ in Eq and Davidson J agreed, said: "To establish this tort it is not sufficient to prove that a third party has in fact done something which had the effect of inducing a party to a contract to break it. It must be proved that the breach was knowingly and intentionally procured: Allen v Flood [1898] AC 1 at 106-7; White v Riley [1912] 1 Ch 1 at 16; Ware and De Freville Ltd v Motor Trade Association [1921] 3 KB 40 at 91. It is necessary to establish that the third party knew of the contract, knew that the doing of a particular act by one of the parties to it would be a breach of it, and with that knowledge procured the party to do the act. …..It may be that no tort is committed unless it is established that the doing of the act was procured either with intention to procure by its means the breach of the particular contract, or at least with knowledge that the doing of the act would necessarily and inevitably involve a breach of contract: eg G W K Limited v Dunlop Rubber Co 42 TLR 376, where the act of the third party caused an involuntary breach of contract by one of the contracting parties." 162 Short v City Bank of Sydney is not mentioned in the report of the first instance judgment of Nicholas J at 398 and following, in the argument, as reported in the Full Court at 403-407 or in the judgment of Jordan CJ. 163 In Northern Territory v Mengel (1995) 185 CLR 307 at 342, in a joint judgment, five members of the High Court said that the first development of significance in the emergence of "economic torts" in the second half of the last century: " … was the recognition, in Lumley v Gye (1853) 2 El & Bl 216 at 229-30, 233-4 and 238; 118 ER 749 at 754, 756, 757, of the tort of intentional interference with contractual rights. Subsequent developments in the United Kingdom have, to some extent, impinged upon the intentional element of that tort. Liability does not depend on whether there is a predominant intention to injure (See, eg Lonrho Ltd v Fayed , [1990] 2 QB 479 at 488-9, 491-2 and 494 and the cases cited therein) and it has been held that constructive knowledge of the terms of a contract is sufficient, so that a defendant may be liable if he or she recklessly disregards the means of ascertaining those terms; Emerald Construction Co Ltd v Lowthian [1966] 1 WLR 691 at 700-1. But it is still accurate to describe the tort as one that depends on an intention to harm for that is necessarily involved if a person knowingly interferes with the enjoyment by another of a positive legal right, whether such knowledge is actual or constructive." 164 In Allstate Life Insurance Company v Australia and New Zealand Banking Group Limited (1995) 58 FCR 26 the Full Federal Court reviewed the elements of tortious inducement of breach of contract. Lindgren J, with whose judgment Lockhart and Tamberlin JJ agreed, made the preliminary observation at 37 that references to "knowledge" and "intention" in this area of discourse have been a source of confusion: "It is undisputed that the alleged tortfeasor must have 'knowledge of the contract'. All the authorities seem to speak of 'knowledge' in this context. ……… Linguistic confusion can arise in respect of the alleged tortfeasor's state of mind with respect to breach of the contract. Both 'intention' and 'knowledge' have been used in this context. But a person's 'knowledge' that what he is inducing will constitute a breach of contract and his 'intention' to induce a breach of contract by what he is doing refer to one and the same thing. After all, ex hypothesi, the alleged tortfeasor's acts are intentional, a breach of contract occurs, and the acts induce the breach. Against that background, 'knowledge' and 'intention' that the breach will result from the acts do not signify any relevant distinction."

165 At 37 Lindgren J also drew attention to an important distinction between the essential elements of a cause of action and the evidence by which these elements may be proved. His Honour said: "Although 'reckless indifference' and 'wilful blindness' are not synonymous with 'intention' or 'knowledge' (cf Richardson & Wrench (Holdings) Pty Limited v Ligon No 174 Pty Ltd (1994) 123 ALR 681 at 693-4 per Burchett J), they may, in the matrix of facts of a particular case, contribute to [or] give rise to a finding of intention or knowledge. …….. But this does not signify that such terminology may be substituted for that of 'intention' if 'intention' is a necessary element of the tort." 166 Having examined Short v City Bank of Sydney, and in particular the judgments of Barton and O'Connor JJ, the judgments in the Full Court of the Supreme Court of New South Wales which Barton and O'Connor JJ adopted to dismiss the appeal, and the decision in Independent Oil Industries Limited v The Shell Company of Australia Limited together with English cases going back to Lumley v Gye and Australian cases including Northern Territory v Mengel, at 43 Lindgren J said: "In my opinion, the authorities establish conclusively that the gravamen of the tort is intention. Although the requirement of knowledge of the contract is sometimes discussed as if it was a separate ingredient of the tort, it is in fact an aspect of intention. The requirement that the alleged tortfeasor have 'sufficient knowledge of the contract' is a requirement he have sufficient knowledge to ground an intention to interfere with contractual rights. Both this intention to interfere with contractual rights and the necessary supporting knowledge of the contract refer to the 'actual' or 'subjective' state of mind of the alleged tortfeasor." 167 At 43 Lindgren J said: "Although an alleged tortfeasor must have 'a fairly good idea' that the contract benefits another in the relevant respect, knowledge of the contract may be sufficient for the purpose of grounding the necessary intention to interfere with contractual rights although the precise term breached is not known." 168 His Honour referred to a number of cases including Emerald Construction Co Limited v Lowthian [1966] 1 WLR 691, and continued: "Cases of the kind just mentioned differ from those, like the present one, in which, according to the pleading, the alleged wrongdoer 'well knew' of the term breached. In cases of the former kind, there may be sensed to be difficulty or awkwardness in speaking of an 'intention' or of 'knowledge' that a breach of contract will result, the term which is in fact breached not being known to exist. This problem is illustrated by the different approaches taken by Lord Denning MR and Diplock LJ to such a case in Emerald Construction Co v Lowthian . In that case union officers learned of a labour only subcontract. The union objected in principle to such subcontracts. The union officers threatened the head contractor with adverse consequences if it did not terminate the subcontract. The subcontractor sought an interlocutory injunction pending final hearing. The union officers were not aware of the precise terms of the subcontract. Therefore they did not 'know' that it was not possible for the head contractor to terminate the subcontract without breaching it. It was put that in these circumstances there could not be an intention to procure a breach. Of this submission, Lord Denning MR said (at 700H - 701A): 'Even if they did not know of the actual terms of the contract, but had the means of knowledge - which they deliberately disregarded - that would be enough. Like the man who turns a blind eye. So here, if the officers deliberately sought to get this contract terminated, heedless of its terms, regardless whether it was terminated by breach or not , they would do wrong. For it is unlawful for a third person to procure a breach of contract knowingly, or recklessly, indifferent whether it is a breach or not.' (Emphasis supplied) Lord Denning continued by referring to the evidence that the officers' object was to procure termination of the subcontract, not caring how, and that this was shown by the terms of an unequivocal demand which they had made on the head contractor." 169 Lindgren J then quoted a passage from the judgment of Diplock LJ in Emerald Constructions Co v Lowthian at 703G -704C, which included the following: "But ignorance of the precise terms of the contract is not enough to show absence of intent to procure its breach. The element of intent needed to constitute the tort of unlawful of procurement of a breach of contract is, in my view, sufficiently established if it be proved that the defendants intended the party procured to bring the contract to an end by breach of it if there were no way of bringing it to an end lawfully. A defendant who acts with such intent runs the risk that if the contract is broken as a result of the party acting in the manner in which he is procured to act by the defendant, the defendant will be liable in damages to the other party to the contract." [Emphasis supplied] 170 Lindgren J observed at 44: "Lord Denning accommodated the law's general requirement that there be an intention to procure a breach to lack of knowledge of the precise contractual provision breached, by abandoning the terminology of 'intention' with respect to breach in favour of that of 'recklessness' and 'indifference (cf Falconer v ASLEF [1986] IRLR 331 at 334, par 35). Lord Diplock retained the word 'intention', holding that intention might be proved by evidence of what may be appropriately referred to as 'reckless indifference'." 171 The position may be stated, we think, as follows. The plaintiff must prove that the defendant intentionally procured the breach. The requirement that the defendant have sufficient knowledge of the contract is a requirement that he have sufficient knowledge to ground an intention to interfere with contractual rights. Ignorance of the existence of the contract or of its terms born of inadvertence or negligence is not enough. On the other hand, reckless indifference or wilful blindness to the truth may lead to a finding of the necessary intention. 172 After referring to authority, Bainton J found that Mr Onisforou "and others" believed genuinely that there was not in fact any contract between Fightvision and Mr Tszyu, and said that it was logically impossible to intend to cause a breach of a contract which the person so intending genuinely believed did not exist. As pointed out earlier, the third parties' genuine belief was found to flow from the lack of material available to Mr Onisforou and Sky Channel and Mr Sutherland's view that there was no contract, of which the third parties, other than Mr Fenech, were either told or became aware. 173 Central to Fightvision's grounds of appeal was the complaint that Bainton J failed to make any finding of fact "in this regard", but should have found, that, at all material times, each of the third parties had knowledge that: "(i) the contract between Mr Tszyu and [Promotions] had been novated in favour of [Fightvision]; (ii) that novated contract contained an option exercisable by [Fightvision] to extend the contract for a period of two years prior to the termination of the contract; (iii) [Fightvision] had validly exercised that right by the payment to Mr Tszyu of the sum of $1 pursuant to cl 9 of the contract." 174 Mr McAlary took the Court to evidence about which, on this issue, Bainton J expressed no finding and made no comment. Counsel for the third parties took no objection to this course, and referred to evidence in support of Bainton J's ultimate finding of genuine belief. 175 In Mifsud v Campbell (1991) 21 NSWLR 725 this Court ordered a new trial where the trial Judge ignored evidence which was critical to an issue in the case and contrary to an assertion of fact made by one party and accepted by the Judge. At 728 Samuels JA said: "It seems to me that this ground of appeal does not seek to establish that the learned judge's conclusion was necessarily wrong, or to seek to replace it by a finding that the plaintiff was entitled to judgment. It attacks the method by which the judge reached his conclusion. There is, I think, an analogy, which is of service in determining the present case, with those authorities which deal with the judicial obligation to give reasons."

After referring to Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 667 and the judgment of McHugh JA in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 278 and 281, Samuels JA, continued: "Similarly, in my opinion, it is an incident of judicial duty for the judge to consider all the evidence in the case. It is plainly unnecessary for a judge to refer to all the evidence led in the proceedings or to indicate which of it is accepted or rejected. The extent of the duty to record the evidence given and the findings made depends, as the duty to give reasons does, upon the circumstances of the individual case. Accordingly, a failure to refer to some of the evidence does not necessarily, whenever it occurs, indicate that the judge has failed to discharge the duty which rests upon him or her. However, for a judge to ignore evidence critical to an issue in a case and contrary to an assertion of fact made by one party and accepted by the judge - as the defendant's denial of having consumed alcohol - may promote a sense of grievance in the adversary and create a litigant who is not only 'disappointed' but 'disturbed' - to use the words which appear in the New Zealand case of Connell v Auckland City Council [1977] 1 NZLR 630 at 634. It tends to deny both the fact and the appearance of justice having been done. If it does, as in my opinion is the case here, then it will have worked a miscarriage of justice and have produced a mis-trial and resulted in what I would take to be an error of law which is reviewable on appeal. Whether it is an error of law or an error of fact, it seems to me a failure by the judge to do what the nature of the office requires."

Fightvision contended that Bainton J appeared to ignore evidence critical to this part of its claim.

Sky Channel and Mr Onisforou 176 Fightvision's submissions on appeal were directed principally against Sky Channel and Mr Onisforou. The primary case against Sky Channel was that it had actual knowledge of the contract between Mr Tszyu and Fightvision. The alternative case was that Sky Channel, through Mr Onisforou, had what was called constructive knowledge of the contract. The case against Mr Onisforou was one of constructive knowledge. 177 The way in which Fightvision's case against Sky Channel was pleaded in the amended summons was unsatisfactory. Following allegations to support the claim that Mr Fenech had knowledge of the contract, the pleading continued: "22. At the time of Fenech's conduct, Fenech was employed by Sky Channel as head of boxing and was acting as a servant or agent of Sky Channel in his dealings with Tszyu. 23. By reason of Fenech's conduct and further or alternatively Sky Channel's conduct, Tszyu breached the Fightvision agreement as alleged in C14 [a reference to para 14 of Fightvision's summary of contentions] and thereby Fenech and Sky Channel interfered with Fightvision's …… trade or business." 178 In further and better particulars Fightvision alleged that: "Sky Channel knew of the contractual and/or conventional basis of the relationship between Tszyu and Fightvision …… between 1993 and January 1995 as a result of correspondence between Fightvision and Sky Channel and communications between Mordey and Sky Channel personnel relating to the right to broadcast bouts in which Mr Tszyu was involved and which were promoted by Fightvision and/or Mr Mordey (See eg, paragraphs 3 and 4 of Supplementary Statement of … Mordey of 24 June 1996). Sky Channel communicated with Fightvision and/or Mordey on the basis that Fightvision and/or Mordey was Tszyu's promoter. Sky Channel knew that Tszyu had fought Rodriguez in Las Vegas under Fightvision's and/or Mordey's promotership and that Tszyu was conducting himself as though in a continuing legal relationship with Mordey. On or before 13 February 1995, Sky Channel, through Fenech, knew that from January 1994 in his dealings with Back Schwartz and Vaughan (solicitors for Fightvision), Tszyu's solicitor, Mr Sutherland, proceeded on the footing that Tszyu was still bound by the 1992 Agreement, which Agreement Mr Sutherland had advised should be renegotiated (see paragraph 57 of and Annexure AS45A to the Statement of Andrew Sutherland dated 24 June 1995). Sky Channel knew that neither Tszyu nor Tszyu Enterprises would warrant to Sky Channel that Tszyu or Tszyu Enterprises 'owned the Rights to each fight sufficient to grant the Rights to Sky Channel' because of the possibility that Fightvision and/or Mordey would succeed in establishing that Tszyu was contracted to Fightvision and/or Mordey (eg Sky Channel's discovered document 48). As at least February 1995, Onisforou knew that certain 'pay-TV' interests other than Sky Channel had been in negotiations with Mordey/Fightvision in his capacity as Tszyu's promoter regarding the televising of Tszyu's fights and that Fightvision and/or Mordey were negotiating on the assumption that Tszyu was contractually bound to Fightvision and/or Mordey [Sixth Defendant's Discovered Document 38]."

The proceedings went ahead with no greater refinement of the relevant issues. 179 The submissions on appeal referred in detail to the evidence about which Bainton J said little. 180 We think it helpful to look first at the evidence of Mr Sutherland who from at least January 1994 had acted for Mr Tszyu advising him from time to time about his dealings with Mr Mordey, and the evidence of Mr Onisforou whose part in the matter appears to have begun when Mr Fenech rang him on 28 January 1995 and told him that there had been a falling out between Mr Warton and Mr Mordey and that Mr Warton and Mr Tszyu were "walking". Although his Honour made no finding about this, it seems clear that, in early February 1995, after a conversation with Mr Onisforou, the then managing director of Sky Channel, Mr William North, authorised Mr Onisforou to sign up Mr Tszyu with Sky Channel. 181 In January 1994 Mr Sutherland had advised Mr Tszyu about deficiencies in the existing 17 January 1992 contract. He drafted a letter to be sent to Mr Mordey exposing these deficiencies. The communications that followed sprang from a review of the draft agreement subsequently prepared by Mr Schwartz and to be made between Fightvision and Mr Tszyu and Mr Lewis, the other parties to the earlier agreement. We have already referred to the draft agreement and to some of the negotiations and other communications to which it led. 182 The negotiations continued by letter and telephone conversations interspersed with various meetings until 29 June 1994. On that day Mr Schwartz sent to Mr Sutherland a draft deed of termination of what was described as the "Former Agreement" of 17 January 1992, to be executed by Promotions, Mr Tszyu and Mr Lewis. Apparently Mr Schwartz had given no previous indication that such a deed was being prepared, and no mention was made of Promotions winding down, though as it happened it was de-registered on 6 July 1994 (as Mr Sutherland discovered on 6 February 1995 when he conducted a company search of Promotions). 183 Negotiations continued without finality until 5 July 1994, when Mr Schwartz telephoned Mr Sutherland and said words to the effect, "The latest proposal is that our respective clients negotiate the purse on a fight by fight basis." Mr Sutherland said: "I will get instructions". Apparently Mr Warton, on behalf of Mr Tszyu, was happy with such an arrangement. Even so, negotiations over the form of a written agreement continued. 184 By August 1994, Mr Sutherland said: "I was concerned that discussions were dragging on and wanted to ensure that no contract could be implied. I believed that the old agreement had fallen away. I also thought we would end up with a written contract. There was at this time nothing that indicated to me that there would be a breakdown in negotiations. I never believed that there was a contract on the terms of the 1992 Classic Promotions Pty Limited contract with Fightvision and this was not suggested to me by anyone during any of the negotiations in which I was involved during 1994." 185 On 12 September 1994 Mr Sutherland wrote to Mr Schwartz suggesting amendments to the draft agreement. This brought Mr Schwartz's letter of 22 September 1994, with a form of contract incorporating revised terms and conditions which Mr Schwartz had informed Mr Sutherland would be on a "take it or leave it" basis. As earlier noted, there was no response: Mr Tszyu left it. 186 Then came the letter of 12 January 1995 by which Fightvision, as Bainton J found, exercised the option contained in clause 9 of the 17 January 1992 contract. The letter was under Fightvision's letterhead and accompanied by a Fightvision cheque for $1. 187 Mr Sutherland's evidence was: "When I looked at the letter, I noticed that it was on the letterhead of Fightvision, which was the same company as the company which was a party to the draft agreement which was discussed during 1994. I noticed that Fightvision was attempting to exercise the option and not Classic Promotions. I was surprised that the option was supposedly exercised by Fightvision, because in my view there was no contract between Fightvision and my client in terms of the 1992 contract with Classic Promotions. I took the view that the purported exercise of the option was invalid because the 1992 contract with Classic Promotions had been abandoned and negotiations for a new contractual relationship with Fightvision had broken down, resulting in a fresh understanding arrived at as a result of discussions between Mr Mordey, Mr Warton and Mr Tszyu whereby Mr Mordey had been promoting fights on a fight by fight basis through his appropriate company vehicle." 188 During this period Fightvision promoted two fights for Mr Tszyu, one with Pedro Sanchez on 29 August 1994 and the other, before Mr Sutherland saw the letter exercising the option, with Jake Rodriguez on 28 January 1995. Fightvision had previously promoted fights for Mr Tszyu on 13 August 1993 with Livingstone Bramble, on 12 January 1994 with Hector Lopez, and on 2 May 1994 with Angel Hernandez. 189 On 5 February 1995 Mr Warton asked Mr Sutherland to send a copy of the 17 January 1992 contract to Mr Onisforou. Mr Warton said that Mr Onisforou was a representative of the Packer organisation and "we may be able to do a deal with them". On 6 February 1995 Mr Sutherland wrote to Mr Onisforou, forwarding a copy of the contract and saying that he looked forward to meeting Mr Onisforou that afternoon. 190 Mr Sutherland said he met Mr Onisforou a few times in early February and discussed matters relating to the contractual position between Mr Tszyu and Mr Mordey, although he could not recall the exact nature or content of these discussions. To his witness statement were annexed various file notes and a copy of his letter to Mr Schwartz of 8 February 1995 (see earlier in these reasons), which letter led to a telephone conversation later that day: "Schwartz: 'What's this bullshit?' I said: 'There is no contract in existence.' He said: 'The original contract is in existence.' I said: 'Not on my instructions, our clients verbally came to an agreement to negotiate on a fight by fight basis.' He said: 'Has there been oral termination.' I said: 'Yes and by conduct.' He said: 'I will get instructions.' "

At the same time there were various communications between Mr Sutherland and Mr Onisforou and Mr Warton. 191 On 9 February 1995 Mr Sutherland received a letter of that date from Mr Schwartz confirming that the option under the original 17 January 1992 contract had been validly exercised in accordance with the contract. The letter included, "We are also obtaining instructions in relation to the de-registration of Bill Mordey's Classic Promotions Pty Limited and its relationship with Fightvision Pty Limited." 192 Mr Sutherland gave evidence that on 10 February 1995 he attended a meeting with Mr Fenech, Mr Tszyu, Mr Warton and Mr Onisforou. According to Mr Sutherland, Mr Onisforou said that he thought that Mr Mordey had a less than 1 per cent chance of success in his claims; Mr Sutherland said to Mr Warton that he did not rate the likelihood of "our" success that high. Discussion then took place about the inclusion in a draft agreement between Mr Tszyu or his company and Sky Channel of a warranty by Mr Tszyu to Sky Channel to the effect that he owned the rights to his next six fights and had not done anything to impair them. Mr Sutherland said that Mr Warton and Mr Tszyu could not warrant that Mr Tszyu owned the rights: he said "Mordey could be successful. Kostya would be in breach of contract with Sky if Mordey is successful." Mr Onisforou said that he was aware of the problem and would amend the warranty to acknowledge the difficulty. 193 Mr Sutherland concluded his witness statement as follows: "At no stage during my negotiations with Mr Schwartz was there any mention by him of the 1992 agreement with Classic Promotions Pty Limited having been novated. The first time I became aware that there was a claim that the 1992 agreement had been novated was when I read it in the Commercial Division summons issued in these proceedings." 194 Mr Sutherland gave oral evidence and was cross-examined. Despite the best efforts of the cross-examiner, Mr Sutherland did not retract. In particular, his belief that there was no contract on the terms of the 17 January 1992 contract with Fightvision, and his evidence that during the negotiations no one suggested novation to him and in particular at no stage did Mr Schwartz mention novation, remained intact. 195 Mr Onisforou's account of his conversation with Mr Fenech on 28 January 1995 was that it was to the following effect: "Fenech: There has been a falling out between Warton and Mordey. Mordey has been putting shit on Warton, so Warton and Kostya are walking. He wants to come and see you about possibly coming over to Sky Channel. Onisforou: Doesn't Kostya have a contract with Mordey? Fenech: No, it's no problem." 196 At a meeting on 4 or 5 February 1995 with Mr Warton, Mr Tszyu, and Mr Fenech, Mr Warton said: "Everything between Mordey and us [meaning himself and Kostya] is finished. You probably heard about what happened in Las Vegas. Our solicitor says that Kostya has no agreement with Mordey. Just before the title fight Mordey tried to exercise an option that was in the original contract that Kostya signed when he came out here in 1992 by giving Kostya a cheque for a dollar but the cheque was never banked. The solicitor says that because the original contract was at an end back in 1994 Mordey could not validly exercise this option. So Kostya is keen to explore whatever is out there for him. That's why we came to see you." 197 Mr Onisforou asked who the solicitor was and was told it was Mr Sutherland. Mr Onisforou then said, "I would like to speak to Sutherland about all of this and check it out for myself but presuming Kostya is free what sort of deal do you have in mind?" That was then discussed. 198 Thereafter Mr Onisforou received the draft agreement between Mr Tszyu, Fightvision and John Lewis from Mr Warton and a copy of the English language version of the 17 January 1992 contract from Mr Sutherland. 199 At a meeting on 6 February 1995 he recalled Mr Sutherland saying: "Fightvision has purported to exercise the option. But the contract which Kostya had was with Bill Mordey's Classic Promotions Pty Limited. I have just done a search of that company and the search shows it was de-registered in July last year so it no longer exists. I have done a search of Fightvision. Mordey is not a director or shareholder of that company."

He recalled Mr Sutherland also saying: "I have no doubt from the history of all my dealings with Tony Schwartz that the original contract between Mordey and Tszyu was over quite some time ago." 200 In his notes Mr Onisforou recorded, "Negotiations: Tony Schwartz: re a new contract. Imply contract at an end. Deed of termination." At the bottom of these notes he wrote "Strategy: J Mordey: (1) Andrew to send letter of No - Agreement (2) Fight by Fight basis". 201 Based on conversations and his examinations of the documents, Mr Onisforou said that he believed that: "(a) Mr Tszyu had entered into the CP Agreement with Classic Promotions on 17 January 1992. (b) Classic Promotions had been de-registered in July 1994 in circumstances which I was not aware of. (c) Fightvision had purported to exercise the option contained in Clause 9 of the CP Agreement. (d) Mr Mordey was neither a director of, nor a shareholder in, Fightvision. (e) I could not understand how Fightvision could validly exercise an option conferred on Classic Promotions. I concluded that on the facts known to me it could not. (f) Mr Sutherland had not suggested any basis on which Fightvision could exercise Classic Promotions' option. He had not indicated that there was any assignment of Classic Promotions' rights to Fightvision or agreement by Mr Tszyu to such an assignment. (g) What Mr Sutherland had told me indicated to me that the parties, by the negotiations entered into in 1994, had by implication terminated the Classic Promotions contract; and thereafter the parties had negotiated for a new contract with Fightvision; but no concluded agreement had been reached. (h) After mid 1994 the parties had negotiated the terms of each bout on a fight by fight basis." 202 Mr Onisforou continued: "Based on the information [recorded in his statement], at the end of the meeting with Mr Sutherland on 6 February 1995 I concluded that the purported exercise by Fightvision of the option in Clause 9 of the CP Agreement, was ineffective. After its de-registration, my belief was that Classic Promotions, could not exercise the option. I believed that Mr Tszyu was not bound to any contract with either Classic Promotions or Fightvision. I was of the view that because no contract existed between Mr Tszyu and Fightvision there was no legal impediment to Sky Channel contracting with Mr Tszyu if terms could be agreed." 203 Mr Onisforou went on to say that he was not aware in February 1995 of any suggested novation of the Classic Promotions' contract. He first learnt of that assertion when it was made in the plaintiffs' summons filed in the proceedings. 204 According to Mr Onisforou, at a meeting with Mr Sutherland on 9 February 1995 (probably the meeting which Mr Sutherland placed at 10 February 1995) he said: "On the material known to me at the moment, it seems to me that Fightvision has no contract with Tszyu. However there may be something which we do not know about. We should try and find out if Mordey has anything to support the existence of a contract between Fightvision and Tszyu. One way of doing this would be to encourage Mordey to bring proceedings for an injunction. Alternatively, it may be possible for proceedings to be brought to obtain a declaration that there is no contract between Tszyu and Fightvision." 205 Mr Onisforou said this conversation reflected his belief that on the material known to him he could not see how in law there could be a contract between Fightvision and Mr Tszyu. If there were facts not known to him which might cause him to reach a different conclusion, he wanted to know of them so that he could consider the whole position. He noted the letter of 9 February 1995, which he saw shortly after it was received from Mr Schwartz, and the assertion that the option was validly exercised. Mr Onisforou said, "On the facts known to me I did not understand how that contention could be correct." His witness statement went on: "I also noted the fourth paragraph of the letter in which the writer refers to 'obtaining instructions in relation to the de-registration of Bill Mordey's Classic Promotions Pty Limited and its relationship with Fightvision Pty Limited'. I regarded this relationship as possibly critical to the question of Fightvision's entitlement to exercise the option which it had purported to exercise. To my mind Mr Mordey's failure to explain that relationship in February 1995, confirmed the belief that I had that Fightvision could not exercise the option; and no contract existed." 206 Mr Onisforou concluded his witness statement as follows: "Had I been told in February 1995 of the alleged novation now asserted by the Plaintiff, I may have had a different belief. I did not learn of that assertion until these proceedings were commenced. From the meeting on 6 February 1995 I believed that when the Plaintiff sought to exercise the option, there was no contract in existence between Kostya Tszyu and Fightvision. I attended a number of meetings with Mr Tszyu and Mr Warton with Mr Fenech. Mr Fenech, I believe at the request of Mr Warton, introduced Messrs Warton and Tszyu to me. After that first introduction, in the meetings which I attended where Mr Fenech was present, he played no role in any commercial negotiations or discussions concerning the terms of any proposal. My understanding was that his role was limited to introducing the parties." 207 Mr Onisforou was cross-examined at some length. In particular, he was questioned about amendments that he had made in handwriting to the draft of the letter of 8 February 1995 sent by Mr Sutherland to Mr Schwartz and about his question to Mr Fenech, "Doesn't Kostya have a contract with Mordey?" when the matter was first raised with him on 28 January 1995. He said: "Well I was told by Mr Sutherland that it was absurd to think that Fightvision could be attempting to exercise Bill Mordey's Classic Promotion's option because Bill Mordey's Classic Promotions had no longer existed, and all of a sudden somehow Fightvision were purporting to exercise an option that was available to Bill Mordey as Classic Promotions." 208 The cross-examination followed: "Q. I understand that. I am asking you to tell us everything that you can remember being told on the 6th about the exercise of the option on the 12th? A. Everything that was said by everybody in the meeting or - Q. Every piece of information that you picked up from any source about the exercise of the option on the 12th? A. One that it was - I can't remember the wording, but it was inappropriate because it was an option that was available to Bill Mordey's Classic Promotions; secondly, that when you compared what was purported to be done by the letter or exercise of option to clause 9 of the contract, clause 9 had a methodology contemplated as being the appropriate method by way an option could be exercised, and that the letter didn't do that. Q. Anything further told about the exercise of the option? A. No. Sorry, I am indicating to you these were things that were discussed, because there is a difference of the - Q. For the purpose of my question I am asking you about any matter - any information you received? A. Right. Q. On the 6th from any person about the exercise of the option? A. Information that I received? Q. Yes? A. Okay I received - I received the option itself, which I hadn't seen I don't think before the meeting. I had available to me at the meeting the contract. And I had available to me what Mr Sutherland was giving to me which was his own legal opinion. Q. And that was all was it? A. Well, just to help you understand - Q. No was that - it's a simple question, was there anything further? A. Pardon me. Yes - that it was relying on the existence of the contract to purport to exercise - the option relied on the existence of the contract, but the contract no longer existed, as did [sic] neither did Classic Promotions." 209 Taken to his notes of the meeting with Mr Sutherland on 6 February 1995, Mr Onisforou said that there was no doubt from 6 February "that the contract was at an end in my mind." That was what he was told and the inference he drew. Later he said that on 6 February the conclusion he reached "was that for numerous reasons cumulatively and individually there was no valid agreement between Bill Mordey's Classic Promotions and Tszyu and consequently the purported exercise of the option was invalid - or incapable of being executed." He never entertained the possibility that there was a contract in existence between Fightvision and Tszyu, and said "that the person that would have known about it would have been Mr Sutherland and he didn't tell me anything about it". 210 Mr Onisforou was questioned about the fact that the exercise of the option was by Fightvision. Asked whether he considered the possibility that Fightvision was the party exercising the option, he said: "I considered the possible stupidity of Fightvision attempting to exercise an option on behalf of Bill Mordey's Classic Promotions. … In circumstances where I had never heard of the possibility of a novation agreement being executed, no-one ever saying that novation had occurred in circumstances where if I am being asked to understand the possibility of a novation by silence, then that be the case."

His legal opinion accorded with Mr Sutherland's. He sought no advice from any member of the Bar and took no written statements. He expressed the opinion that Mr Mordey's chances were about one in a hundred or negligible. It was put to him that Mr Sutherland had a totally different approach to the matter. There followed cross-examination about the variation of the warranty clause in the proposed contract with Sky Channel. 211 Bainton J found that Mr Onisforou genuinely believed that there was not any contract between Mr Tszyu and Fightvision. It is not clear whether by this his Honour meant that the contract of 1992 had come to an end or that it never became a contract between Fightvision and Mr Tszyu. However, his Honour had heard both Mr Sutherland and Mr Onisforou give evidence and accepted their evidence of their beliefs. 212 It must be borne in mind that Fightvision cannot succeed by showing that Mr Sutherland or Mr Onisforou was negligent in not engaging in further inquiry. Fightvision had to show that Mr Onisforou, either on his own account as a defendant or as the agent of Sky Channel, had knowledge in the sense earlier described that the contract alleged between Fightvision and Mr Tszyu existed. 213 The objective facts were that the 1992 contract was made in writing between Promotions and Mr Tszyu and Mr Lewis, and that the person who might have been expected to explain how it became a contract between Fightvision and Mr Tszyu never gave the explanation to Mr Sutherland or to Mr Onisforou. For what it called constructive knowledge Fightvision relied upon what was said by Lord Denning MR which Lindgren J quoted in Allstate Life Insurance Company v Australia and New Zealand Banking Group Limited and a passage from the judgment of Browne-Wilkinson J, as his Lordship then was, in Swiss Bank Corporation v Lloyds Bank Limited [1979] Ch 548 at 580. 214 We have already discussed what was said by Lord Denning. Mr White stressed the importance of the facts in Swiss Bank Corporation v Lloyds Bank Limited, which he carefully analysed. 215 With exchange control consent, Swiss Bank lent an amount of Swiss francs to a borrower so that the borrower could acquire shares in another company. The loan contract provided that the shares so acquired were to be held separately, and were to be available to provide a source of funds for the payment of interest and the repayment of the loan. By the contract Swiss Bank obtained a charge over the shares. The borrower agreed to comply with exchange control requirements. Subsequently, without exchange control consent, the borrower charged the shares to Lloyds Bank. At the time Lloyds Bank did not have actual notice of Swiss Bank's contractual claim to have its loan serviced and repaid out of the shares or the proceeds of sale of the shares. Lloyds Bank sold the shares for US dollars and then converted the proceeds of sale to sterling. By this time Lloyds Bank had actual notice of Swiss Bank's contractual claim. Swiss Bank claimed actionable interference with its contract, relying on De Mattos v Gibson (1858) 4 De G & J 276; 45 ER 108; see at 564. 216 Apart from the problem of the illegality of the Lloyds Bank charge, Swiss Bank's claim raised a question of priority between the chargees. Swiss Bank's charge was the first in time. 217 Browne-Wilkinson J held that actual knowledge of the first contract was an essential ingredient of the tort of inducing breach of contract; at 572. Ultimately his Lordship found that Lloyds Bank was liable for inducing breach of contract, not by taking a charge or by selling the shares, but by converting the US dollars into sterling. When Lloyds Bank did that, it had actual knowledge that what it was doing interfered with Swiss Bank's right to have the US dollars applied in discharging its debt; at 579. 218 Lloyds Bank was in the circumstance of a person who would be in doubt as to whether its rights under the second contract, held to be illegal, or Swiss Bank's rights under the first contract, would prevail. It was in that context that his Lordship said, in the passage relied upon at 580: "In the present case Lloyds chose not to lead any evidence as to the state of mind or beliefs of its officers when they converted the dollars into sterling. On the face of the matter, anyone seeking to decide in January 1975 whether the rights of the plaintiff or the rights of Lloyds would prevail, would have doubts as to the legal position. But in my judgment in order to escape liability for the tort it is not enough to show that there is room for honest doubt whether the defendants' or the plaintiff's rights have priority: if when such doubt exists a defendant chooses to adopt a course which to his knowledge would undoubtedly interfere with the plaintiff's contract on one view of the law, in my judgment he must at least show that he was advised and honestly believed that he was legally entitled to take that course. This case is not the same as either Smith v Morrison [1974] 1 WLR 659 or Pritchard v Briggs [1978] 2 WLR 217 in both of which the defendants led evidence showing at least an honest doubt whether their actions would in fact interfere with the plaintiff's contractual rights. Here, for all I know, Lloyds were advised that their actions probably would interfere with the plaintiff's rights but that they should take the risk. In my judgment Lloyds have not shown that they had an honest doubt." 219 Mr White submitted that it was clear from this passage that Browne-Wilkinson J was talking about a case in which the defendant knew of the existence of the contract and knew that what he did would interfere with it. The case, he said, was completely different from the present case, in which the third parties satisfied the trial Judge that they had genuine doubts (at the least) about the existence of the contract. 220 It is unnecessary for us to pass upon the correctness of what Browne-Wilkinson J said. On its face the 17 January 1992 contract, the foundation and written record of the contract the breach of which was induced, was not with Fightvision. At most the exercise of the option by Fightvision might have put a diligent solicitor acting for Mr Tszyu on notice that Fightvision claimed to stand, by novation, in the shoes of Promotions, but that would not be enough. In any event, that was never suggested. The negotiations were preceded by notice that the option in the 17 January 1992 contract would be exercised, but were for a contract not pursuant to the exercise of the opinion in cl 9 and so far as would have appeared to Mr Sutherland proceeded on the basis that there would be a new contract with Fightvision. The draft deed of termination, which was never executed, suggested that the 17 January 1992 contract remained with Promotions and that that contract would be replaced by a new contract in different terms with Fightvision, which contract was never agreed. When dispute arose in early 1995, Mr Schwartz apparently was either unable or not prepared to state the basis upon which Fightvision claimed to have replaced Promotions. 221 As we have indicated earlier, Fightvision's appeal was directed to Bainton J's apparent ignoring of evidence critical to Fightvision's case on this issue. To demonstrate that his Honour did this is to demonstrate a failure to do what the nature of the judicial office required; Mifsud v Campbell at 728. On this basis this Court can interfere and, if the circumstances require it, order a new trial on this issue. However, we are not persuaded that in the case of the claim against Mr Onisforou a new trial should be ordered on this ground. Our review of the evidence leads us to the conclusion that, even if account be taken of the evidence to which Bainton J did not refer, there is no reason to think that his Honour's finding that Mr Onisforou genuinely believed that there was no contract between Fightvision and Mr Tszyu was incorrect, or that there was the so-called constructive knowledge - that is, reckless indifference or wilful blindness grounding an intention to interfere with Fightvision's contractual rights. Accordingly Fightvision's appeal against him must fail. 222 So far as Fightvision's appeal directed to Sky Channel was put on the basis of knowledge of the contract through Mr Onisforou, it must also fail. But, as we have said, Fightvision's appeal directed to Sky Channel was put principally on the basis of Sky Channel's actual knowledge of the contract between Mr Tszyu and Fightvision. In this regard Fightvision relied particularly upon the evidence of two former Sky Channel employees, Mr Robert Lyons and Mr David Dodds. 223 In February 1995 Mr North received a telephone call from Mr Onisforou informing him that he had met Mr Tszyu and Mr Warton who told him they had no contract with Mr Mordey and they would like to do a direct deal with Sky Channel. Mr North said it would certainly be attractive to have Mr Tszyu "fixed into our programming", and asked, "Are you sure that they have no contract with Mordey?" Mr Onisforou said: "I have also spoken to their solicitor. He told me there is no contract between Kostya and Mordey. He also told me that the company which Kostya contracted with had been de-registered. Mordey has tried to exercise an option but the option wasn't valid."

Mr North said "that it would be ideal in that case if we could get Kostya signed up for a six fight deal for say two years". Mr Onisforou said: "I'll see what I can do." 224 In his witness statement Mr North said that as Mr Onisforou had informed him that Mr Tszyu was free to deal with Sky Channel he told him to proceed with his negotiations with Mr Tszyu and Mr Warton. He said that if he had been informed that a contract existed between Mr Mordey or one of his companies and Mr Tszyu, he would not have allowed Sky Channel to contract with Mr Tszyu or his company. At no time, according to Mr North, did he believe there was reason to doubt Sky Channel's entitlement to deal with Mr Tszyu or his company: "I did not intend to induce Kostya Tszyu to breach any contract." 225 Bainton J's finding seems to be that Mr North's belief was a genuine one, based on what Mr Onisforou had told him about Mr Sutherland's opinion. To repeat, his Honour said that "Onisforou and others believed, genuinely I find, that there was not in fact any such contract." 226 In cross-examination Mr North agreed that until he had the phone call from Mr Onisforou he had no detailed knowledge about Mr Tszyu. Fightvision's reliance on the evidence of Mr Lyons and Mr Dodds sought to outflank the acceptance of Mr North's genuine belief. 227 Fightvision submitted that during the two years before January 1995 it had established a close relationship with Sky Channel, developed in the course of Sky Channel televising five Tszyu fights on a "pay per view" basis under arrangements made with Fightvision. Sky Channel had negotiated the television rights to Mr Tszyu's fights with Fightvision, one fight at a time. In late 1994 it had made an offer to Fightvision, through Mr Mordey, to buy the rights to transmit "pay per view" for Mr Tszyu's next four fights. Mr Mordey related this to Mr Tszyu, asking him not to tell anyone. All agreements, negotiations and payments in relation to these fights involved Fightvision acting through Mr Mordey. Promotional material showed on the one poster the Sky Channel and Fightvision logos. Fightvision submitted that in consequence of these events in 1993 and 1994 Sky Channel well knew in January and February 1995 that, like all professional boxers, Mr Tszyu was under contract with his promoter, and that the promoter had contractual rights in relation to his promotions and fights. 228 Until late 1994 Sky Channel was the only company televising significant sporting events to clubs and hotels by "pay per view". It had the market to itself. At about that time Premier Sports (later known as Fox Sports) entered the market. Mr Dodds and Mr Lyons, who had both worked for Sky Channel, the former as managing director and the latter as head of sporting acquisitions, left Sky Channel and joined Premier Sports. There was fierce competition between Sky Channel and Premier Sports in the pay television industry. Each operator needed to sign up high profile sporting personalities such as Mr Tszyu. At the time of the Rodriguez fight in January 1995 Premier Sports was attempting to obtain Mr Tszyu's future fights in direct competition with Sky Channel. It offered to buy the rights to transmit "pay per view" for Mr Tszyu's next four fights, hence the arrangements referred to earlier in these reasons. Fightvision was a free agent, and could take future fights to Premier Sports. 229 Mr Lyons gave evidence that he had known Mr Mordey since about 1988. He had met him through his work at Sky Channel, and knew him as a promoter who had promoted Mr Fenech and Jeff Harding. Mr Tszyu's fights from his bout with Livingstone Bramble were televised by "pay per view". Mr Lyons made the recommendation to Mr Dodds about whether Sky Channel should transmit any fight which Mr Mordey offered as a "pay per view". 230 Mr Lyons said that Mr Mordey offered him the Fenech/Grove fight which took place in June 1993 at the Melbourne Tennis Centre. In doing so Mr Mordey said, "Rory, I am no longer operating as Classic Promotions. It's now Fightvision." Mr Lyons said that from that time he observed that Mr Mordey's fights were being promoted by Fightvision, and that Mr Mordey spoke for that organisation. His observation was based partly on correspondence involving Mr Mordey. Cheques for the fights from Sky Channel were drawn in favour of Fightvision. 231 At a time about August 1993 Mr Lyons arranged a meeting with Mr Mordey at his home, with Mr Dodds, to talk about Mr Tszyu. During the discussion that took place Mr Mordey said, "I've got Kostya Tszyu lined up for two years plus options." Mr Lyons said in his witness statement: "At this meeting there was another discussion about the feasibility of promoting Kostya Tszyu in his next fight with Livingstone Bramble and that Fightvision had a longstanding arrangement with Kostya Tszyu for two years and had a further option on promoting his fights. It was part of my function and duties at Sky Channel to decide sometimes on occasions after a prior consultation with David Dodds and on other occasions on my own initiative to spend funds of Sky Channel and my own executive time in relation to Kostya Tszyu and in particular, marketing Kostya Tszyu to a 'pay per view' status. It was important to my exercise of those functions and the spending of time and money, but to my understanding and belief there existed a long standing promotion arrangement between Mr Mordey on behalf of Fightvision and Kostya Tszyu." 232 Later in his witness statement Mr Lyons said: "The function I performed at Sky Channel took place on the basis that Sky Channel had the rights to transmit the Tszyu v Rodriguez fight and to my observation and perception those rights came from Mr Mordey's Fightvision. Premier All Star Sports was to start transmitting in early 1995 for the reasons already set out above. I knew that Fightvision had a longstanding arrangement with Kostya Tszyu. My strategy was to make Mr Mordey an offer to have Fightvision switch from Sky Channel to Premier All Star Sports. Because I was involved in negotiating what arrangements would apply between Fightvision and Sky Channel for the transmission rights to Kostya Tszyu's fights I knew that Fightvision only dealt with Sky Channel on a fight by fight basis. I therefore considered myself free to make Fightvision an offer for the right to transmit all of Kostya Tszyu's fights during a two year period after the Rodriguez bout, which I did." 233 Mr Lyons left Sky Channel in or before November 1994 and attended the Tszyu/Rodriguez fight as a Premier Sports' representative. He spoke to Mr Mordey about the Premier Sports offer. Mr Mordey said: "I can't sign your deal yet. Everything looks good but I have to speak to Sky Channel. You know how I do business. Whoever has the rights to broadcast the last fight gets first option on the next fight. Until I talk to Warren Wilson [from Sky Channel] after the fight, I can't give you an answer."

Sky Channel did not call Mr Wilson to give evidence. 234 Mr Dodds held the position of managing director of Sky Channel for three years until he left in October 1994 to work for Premier Sports. He said that in June 1993 Mr Mordey and Sky Channel resumed their previous relationship so as to permit bouts that were promoted by Mr Mordey to broadcast into sites that were contracted to Sky Channel. He recalled that several sites were already contracted to Mr Mordey's company Fightvision, and said they came to an arrangement whereby the next four bouts would be televised to those Fightvision sites free of charge. He was aware of the Fightvision logo being displayed on the Sky Channel posters promoting bouts which were organised by Mr Mordey, as well as being displayed on the bout mats. 235 Mr Dodds recalled a conversation he had with Mr Mordey at his home, when Mr Lyons and Mr Peter Hawkins were present, in November 1994. By that time it seems that Mr Dodds had left Sky Channel, but the evidence of the conversation was admitted with any objection to be dealt with in addresses. The conversation was to the following effect: "I said: 'How long is Tszyu contracted to you?' Bill said: 'The term of our agreement expires in January next year, however, I am about to exercise the option for a dollar which will give me another two years with him.' "

Mr Dodds said that it was his belief arising from the way he worked in their business that when dealing with boxers you would deal with their promoter: "Accordingly, one always assumed the promoter had the fighter 'tied up' to a contract." Remarkably, Mr Lyons was not asked about this conversation. 236 Bainton J did not deal with the relevance or weight of the evidence of Mr North, Mr Lyons or Mr Dodds, and made no findings about it. In particular, he did not deal with it as evidence of the actual knowledge of Sky Channel. Fightvision is justified in claiming that his Honour ignored critical evidence on this issue, and his decision is flawed as a result. 237 Section 75A (6) of the Supreme Court Act 1970 empowers this Court on appeal, and requires it where appropriate, to draw inferences and make findings of fact. There is no reason not to accept the evidence of Mr North, Mr Lyons and Mr Dodds to which we have referred. It was not undermined by cross-examination. 238 Mr Dodds' evidence of what was said to him in November 1994 about the term of the agreement and the exercise of the option was no evidence that Sky Channel knew of those matters. On the other hand, Mr Dodds' evidence showing knowledge that boxers were generally tied to promoters, that Mr Tszyu was one of Mr Mordey's boxers, and that Mr Mordey promoted fights through Fightvision, was evidence that Sky Channel knew of those matters, and Mr Lyons' evidence showing similar knowledge and about the meeting with Mr Mordey in August 1993 was also evidence about Sky Channel's knowledge. By August 1993 Mr Lyons had known since June 1993 that Mr Mordey claimed to be operating as Fightvision. In August 1993 Mr Mordey told Mr Lyons that he had Mr Tszyu signed up for two years plus options. 239 By February 1995, when the inducement occurred, Mr North had authorised Mr Onisforou to deal with and, if possible, sign up Mr Tszyu. Mr Onisforou told Mr North that he had spoken to Mr Tszyu's solicitor, Mr Sutherland, who had told him there was no contract between Mr Tszyu and Mr Mordey. He had also told him that the company which Mr Tszyu had contracted with had been de-registered and that Mr Mordey had tried to exercise an option but the option was not valid. None of this was necessarily inconsistent with Fightvision promoting Mr Tszyu's fights on a fight by fight basis: that is, without a long-term contract. We repeat that it was not enough for Fightvision to show, if it could have shown, that Mr Onisforou, Mr Sutherland or Sky Channel was negligent in not making further inquiries about the contractual relationship. To that extent Sky Channel was in the same position as Mr Onisforou. 240 But there was a critical difference. Mr Lyons, when an employee of Sky Channel, had been informed that Mr Mordey had since 1993 operated through Fightvision, not Promotions, and that he had Mr Tszyu lined up for two years plus options. He believed that there was a long standing promotion arrangement between Fightvision and Mr Tszyu, and his understanding must have been that it included at least one option. This was knowledge he had to use in his position as head of Sky Channel's sporting acquisitions. If Mr Dodds had still been its managing director and Mr Lyons had still been head of Sky Channel's sporting acquisitions in February 1995, Sky Channel would undoubtedly have been fixed with sufficient knowledge that there was a contract between Fightvision and Mr Tszyu to ground an intention to interfere with contractual rights. 241 Mr Dodds and Mr Lyons had both left Sky Channel by November 1994. Sky Channel submitted that what they knew was not part of the knowledge of Sky Channel in January 1995. 242 In Tesco Supermarkets Limited v Nattrass [1972] AC 153 at 170 and following Lord Reid discussed "the nature of the personality which by a fiction the law attributes to a corporation". His Lordship said at 170: "A living person has a mind which can have knowledge or intention or be negligent and he has hands to carry out his intentions. A corporation has none of these: it must act through living persons, though not always one or the same person. Then the person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his acts is the mind of the company." 243 In authorising Mr Onisforou to sign up Mr Tszyu, Mr North was acting as Sky Channel and the mind that directed his action was the mind of Sky Channel. The question is whether the knowledge of his predecessor, Mr Dodds, or of the former employee, Mr Lyons, was, when the decision to sign up Mr Tszyu was made, the knowledge of Sky Channel, even though at that time Mr North's knowledge was limited to what Mr Onisforou had told him. 244 We can see the force of the observation by von Doussa J in Beach Petroleum NL v Johnson (1993) 43 FCR 1 at 32 that knowledge imputed to a company should not be treated as capable of being simply forgotten or lost at the death of the director whose knowledge was imputed. In El Ajou v Dollar Holdings plc [1994] 2 All ER 685 at 706 Hoffmann LJ, as his Lordship then was, said that once knowledge was treated as being the knowledge of a company in relation to a given transaction, the company continued to be affected with that knowledge for any subsequent stages of the same transaction, whether or not it was imputed from the knowledge of a director who had in the interval ceased to be a director. We do not think this was in contest, and there are sound practical reasons for corporate knowledge including the knowledge of former officers and employees. A corporation can not cause itself to shed knowledge by shedding people, and it can not be that a head of sporting acquisitions can sign up a sporting identity whom his predecessor could not sign up simply because of the change in personnel. There may be limits to the continuation of corporate knowledge, for example, by regard to the transaction as suggested by what Hoffmann LJ said, but in the present case the knowledge of Mr Dodds and Mr Lyons in our view would persist as knowledge of Sky Channel when the question of signing up Mr Tszyu arose. 245 The further feature in the present case, however, is that Mr North, the directing mind, acted on the basis of a genuine belief which came to him from information provided to him at or about the time of the act. Does this make a difference? 246 In Brambles Holdings Limited v Carey (1976) 15 SASR 270 at 280 Bright J said: "So far I have avoided mentioning the quality of reasonableness as applied to a belief. But it seems fair to say that even if it can be alleged that the belief of one officer is the belief of a company such a belief, held by the company, cannot be a reasonable belief if the company, by reason of information held by another officer, knows that that belief is wrong." 247 The principle must apply where the belief of the first officer is unreasonable because the company, by reason of information held by a former officer which is part of the corporate knowledge as just discussed, knows that the belief is wrong. 248 Bainton J did not address this issue, and apparently treated Mr North's belief as decisive. Mr North was not asked in cross-examination how he would have reacted had he known what Mr Mordey had told Mr Lyons. However, Mr North did say in his witness statement that, had he been informed that a contract existed between Mr Mordey or one of his companies and Mr Tszyu, he would not have allowed Sky Channel to contract with Mr Tszyu or his company. 249 The issue is really not one of the reasonableness of Mr North's belief. It is one of Sky Channel's knowledge, in the context of knowledge sufficient to ground an intention to interfere with contractual rights. That Mr North had no knowledge of a contract between Fightvision and Mr Tszyu would not have mattered if Mr Lyons had still been head of sporting acquisitions, since Mr Lyons' knowledge would undoubtedly have been knowledge of Sky Channel in the context abovementioned - his responsibilities would have included signing-up Mr Tszyu, even if for some reason he was by-passed or not involved. We would prefer to ask, not whether Mr North's belief was reasonable given Sky Channel's other knowledge, but whether Sky Channel knew of a contract between Fightvision and Mr Tszyu even though Mr North did not know of it and was told that there was no contract. 250 If the issue be treated as one of the reasonableness of Mr North's belief, it seems to us that a belief which was formed without taking account of the fact that Mr North's predecessor and the recently departed head of sporting acquisitions had the knowledge we have described could not be regarded as reasonable. As a test of reasonableness, a managing director could be expected to enquire from his head of sporting acquisitions, and not restrict himself to what someone in the position of Mr Onisforou passed on from outside Sky Channel. As part of regular correspondence between Sky Channel and Fightvision, Mr Wilson, first as Sky Channel's financial controller and later as Sky Channel's general manager finance and operations, sent faxes, on 18 January 1994, 4 May 1994 and 9 January 1995, to Mr Mordey at Fightvision reconciling the subscription takings for broadcasting the Tszyu/Lopez, Hernandez and Rodriguez fights and enclosing cheques for Fightvision's share. Part of the fax of 9 January 1995 was a "Header" promoting the broadcast for the Rodriguez fight. At the top of the Header, displayed with equal prominence, were Sky Channel's and Fightvision's logos. Personally Mr North may have had a genuine belief, but Sky Channel could not be held on this account to have a reasonable belief that there was not a contract between Fightvision and Mr Tszyu. 251 On what we regard as a preferable approach, if the knowledge of Mr Dodds and in particular Mr Lyons be treated as part of the knowledge of Sky Channel as at February 1995, Sky Channel must be found to have then had actual knowledge concerning contracts between promoters and boxers generally and specifically that as at August 1993 Fightvision had Mr Tszyu signed up for two years plus options. That can be found more confidently given the unexplained absence of Mr Wilson from the witness box. With that knowledge Sky Channel caused Mr Tszyu to break the contract, as Bainton J found in his judgment of 10 July 1998. To repeat the observation of Lindgren J in Allstate Life Insurance Company v Australia and New Zealand Banking Group Limited at 37, in a passage in his judgment which we have already quoted, "a person's 'knowledge' that what he is inducing will constitute a breach of contract and his 'intention' to induce a breach of contract by what he is doing refer to one and the same thing." With the knowledge to which we have referred, Sky Channel intentionally induced Mr Tszyu's breach of contract. 252 The evidence which supports the finding that Sky Channel had actual knowledge of the contract and intended to induce a breach of it was not challenged. We are satisfied that Bainton J's finding that Sky Channel had a genuine belief that there was no contract, if that was his Honour's finding, was arrived at without taking account of the effect of particularly Mr Lyons' evidence in determining what Sky Channel's knowledge was. That being so, it is appropriate that we should find that Sky Channel had actual knowledge of the contract between Fightvision and Mr Tszyu and intentionally induced Mr Tszyu to break that contract. Accordingly, Fightvision's appeal against the decision in favour of Sky Channel should be allowed and judgment in favour of Fightvision entered against it. We will deal separately with the amount of damages recoverable against Sky Channel.

Mr Fenech, Mr Warton and Tszyu Enterprises 253 During the hearing of the appeal little attention was directed in Fightvision's oral argument to the claims against Mr Fenech, Mr Warton and Tszyu Enterprises. In the passage to which we have referred more than once Bainton J clearly enough found that these third parties genuinely believed that no contract existed. His Honour said that Mr Warton and Mr Tszyu, and hence Tszyu Enterprises, were aware of Mr Sutherland's opinion; as we have said, Mr Fenech was not told of it. 254 Mr Warton and Mr Fenech gave evidence, again evidence in relation to their knowledge of a contract between Fightvision and Mr Tszyu as to which Bainton J expressed no finding and made no comment. Fightvision's appeal again involved his Honour's apparent ignoring of evidence critical to its case as to their liability for inducing breach of contract, although the submissions were scarcely developed. 255 Mr Warton was Mr Tszyu's manager and, it was alleged, his friend and adviser. On some matters he contradicted the evidence of Mr Mordey. Bainton J said that he considered Mr Mordey to have given his evidence carefully and accurately, without exaggeration and that what he asserted was consistent with the probabilities. "Wherever any of his evidence [of what] he said or did conflicts with any given on behalf of any of the defendants I prefer and accept Mordey's version". Although his Honour did not deal in any detail with Mr Warton's evidence there were indications that in some respects he was not impressed by it, and so it can not be assumed that Mr Warton's evidence in its entirety is to be accepted. 256 In his witness statement, Mr Warton said: "I deny ever having induced or intended to induce Tszyu to breach any contract. Based on my dealings with Mordey, and the advice from Sutherland, I honestly and genuinely believed that there was no contract in existence between Tszyu and Classic Promotions with effect from mid-1994. I never believed that there was a contract between the plaintiff and Tszyu other than the Sanchez agreement dated 29 August 1994."

The Sanchez agreement was an agreement about the purse for the particular fight. Bainton J did not expressly refer to this evidence. 257 Mr Warton was cross-examined by Mr McAlary in great detail. The cross-examination covered his attendances at meetings and his knowledge of many aspects of the business dealings between Mr Tszyu and Mr Mordey or his companies. He knew about fight posters with the Fightvision logo on them. He said that to the best of his knowledge Mr Mordey was promoting Mr Tszyu's fights, but did not agree that Mr Mordey was using Fightvision; he did not recall seeing in the contract specifically for the Sanchez fight that Fightvision was to be the party to the contract being negotiated in 1994, but preferred to describe it as "a promotional company" rather than the promoter. He said he did not pay any particular attention to the drawer of cheques paid to Mr Tszyu for the fights. He denied that Mr Mordey had exercised an option to continue his promotional contract with Mr Tszyu. He was questioned extensively about the part he played in the decision ultimately taken by Mr Tszyu not to continue with Fightvision. 258 In finding that Mr Onisforou "and others" believed genuinely that there was not a contract between Fightvision and Mr Tszyu, Bainton J must have accepted Mr Warton's evidence of his belief in the passage from his witness statement earlier set out. Unfortunately, his Honour said nothing about this other evidence. The cross-examination involved, as a reading of it shows, a full scale attack on Mr Warton's credibility. It involved considerable questioning about the part he played in the breach of contract. While it was not directly put to Mr Warton that he believed that there was or might have been a contract between Fightvision and Mr Tszyu, that was inherent in the course of the cross-examination and the challenge to his credibility. With due respect, we do not think it was open to Bainton J to make the finding he did about Mr Warton's belief without dealing with this evidence, and in particular without indicating what parts of it he accepted and what parts he rejected with reasons for doing so. By apparently ignoring this evidence his Honour erred. This does not mean that Bainton J's conclusion was necessarily wrong. On the evidence it was a conclusion open to him, but that does not mean that this Court should not interfere with the decision. 259 The claim against Mr Warton is, we think, in a different position in this respect from the claim against Mr Onisforou. Mr Onisforou had no information beyond that which came from others, and was guided principally by Mr Sutherland's view. Mr Warton referred to Mr Sutherland's view, and undoubtedly it could provide grounds for accepting that Mr Warton did not believe that there was a contract between Fightvision and Mr Tszyu. But Mr Warton had, or it was contended he had, much more information, in substance knowledge that Fightvision had been acting as Mr Tszyu's promoter in place of Promotions, and there was squarely thrown up, much more in relation to Mr Warton than in relation to Mr Onisforou, whether the other evidence in the proceedings should lead to rejection of the asserted state of mind. In the case of Mr Warton, we are not prepared to conclude that, even if account be taken of the evidence to which Bainton J did not refer, there is no reason to think that the finding that Mr Warton genuinely believed that there was no contract between Fightvision and Mr Tszyu was incorrect. 260 Since there was the challenge to Mr Warton's credibility, and as we have said there were indications that Bainton J was not impressed by his evidence, and this Court has not had the benefit of seeing Mr Warton give evidence, we can not, in the case of Mr Warton, undertake the task of making findings of fact. We have no choice but to uphold the appeal by Fightvision against the dismissal of its claim against Mr Warton and direct that this be retried. The costs of the hearing against Mr Warton before Bainton J should be in the discretion of the Judge hearing the new trial. If the matter is not settled or a new trial is not duly prosecuted, Mr Warton should have liberty to apply to this Court to have the costs order in his favour reinstated. 261 In his witness statement Mr Fenech said that he recalled that in about January 1992 or very soon afterwards he found out that Mr Mordey and Mr Tszyu had done a deal. He was never told by anyone about the financial side of that deal. He remembered Mr Mordey mentioning a certain number of fights. He had no knowledge of the period of any contract between Mr Mordey, or any of his companies, and Mr Tszyu. He had no knowledge of the period of any contract. He said: "I never intended to induce or persuade Kostya to breach any contract with Mr Mordey or any of his companies. I had no interest whether a contract did or did not exist. I did not participate in any commercial or other negotiations between Sky Channel and Kostya or Mr Warton. I did not seek to persuade Kostya to breach any contract." 262 Mr Fenech was cross-examined. He agreed that he introduced Mr Tszyu to Mr Onisforou. At that time, according to his evidence, Mr Fenech worked for Sky Channel. During his cross-examination Mr Fenech adhered to his evidence that he had no view about whether Mr Mordey had an enforceable agreement with Mr Tszyu. Mr Fenech knew only what others had told him, and had only a little relevant knowledge. Put shortly, we consider that Mr Fenech is in the Onisforou position rather than the Warton position. Although Bainton J did not refer to evidence upon which Fightvision relied in its case against Mr Fenech, in our opinion there was none which would found a claim that Mr Fenech relevantly knew of the existence of the contract between Fightvision and Mr Tszyu and induced its breach. The appeal as against him should be dismissed with costs. 263 The only information the Court was given about Tszyu Enterprises appeared in Mr Tszyu's submissions and accompanying documents for this appeal, in which it was said that Tszyu Enterprises was owned and controlled by Mr Tszyu and set up probably in 1994. In a passage to which we have already referred Bainton J said: "Its date of incorporation is not established, but it must have been prior to January 1995. I assume that it is controlled by Tszyu. Its incorporation and subsequent activities are plainly driven by tax advice. It has done little if anything beyond receiving money that would otherwise have gone to Tszyu personally."

On this basis Fightvision submitted that the knowledge of Mr Tszyu was the knowledge of Tszyu Enterprises at the time of the breach of contract. 264 Bainton J found that, through Mr Tszyu, Tszyu Enterprises was aware of Mr Sutherland's view that there was no contract between Tszyu and Fightvision brought about by Fightvision's asserted exercise of the option in the 17 January 1992 contract. The "others" who or which believed genuinely that there was not such a contract seem to have included Tszyu Enterprises, and the belief of Mr Tszyu and hence Tszyu Enterprises must have been based, in his Honour's opinion, on Mr Sutherland's view. We have not been shown any place in the evidence where Mr Tszyu expressed the belief for himself. Certainly Bainton J did not refer to such evidence. 265 Mr Tszyu's belief must be considered against the background of matters which we have earlier set out. We briefly recall them. 266 Bainton J found that Mr Mordey told Mr Tszyu before 30 January 1993 that Promotions was winding up and Fightvision would be exclusively promoting his fights in the future, to which Mr Tszyu said: "OK no problem." His Honour said that there was further reason for accepting Mr Mordey's evidence in the dispute, namely that Mr Mordey did (for Promotions and Fightvision) what he told Mr Tszyu he was going to do, without a whisper of protest or dissent from Mr Tszyu. He noted that the plaintiff's written submissions listed fifty-five examples of varying weight of letters, payments and things done by Fightvision which would have been done by Promotions but for Mr Mordey's decision to change his corporate alter ego. We recall the passage in his Honour's judgment where he said: "It is obvious from this collection of documents that Tszyu knew that Promotions had ceased to do anything for him and that Fightvision was then doing what Promotions had earlier been doing. That can be explained on the basis either that he had expressly agreed to it as Mordey contends, or that he was content to accept it, as he in fact did. His acceptance of it can only be explained on the basis that he agreed to it. No competing inference has been suggested." 267 Bainton J found that in mid-1994 Mr Mordey said to Mr Tszyu words to the effect, "Fightvision will be taking up the option of extending your contract and I offer you this contract. This is what Fightvision proposes." The draft agreement was not what cl 9 of the 17 January 1992 contract called for, but there was a clear statement that Fightvision would be exercising the option. The draft agreement was a suggested alternative. 268 Mr Tszyu did not query the role of Fightvision. Bainton J said: "There is not in the whole of this any denial of the assertion that Fightvision had replaced Promotions. Indeed Warton and Tszyu appeared to have accepted that change as not even meriting inquiry let alone discussion." 269 On 12 January 1995 Mr Mordey personally handed to Mr Tszyu the letter of purported exercise of the option. 270 Against this background, a bald finding that Mr Tszyu believed that he had no contract with Fightvision must be regarded as less than satisfactory. Whatever Mr Sutherland may have believed and told Mr Tszyu, or told Mr Warton who told Mr Tszyu, there was information apparently not conveyed from Mr Tszyu to Mr Sutherland on which Mr Tszyu might have held a different belief. Mr Tszyu was also cross-examined at length. The cross-examination included putting to him various matters to be found in what we have called background matters from which it could be concluded that he believed that he had a contract with Fightvision, although such a belief was not directly put to him. 271 It will be recalled that Bainton J said that he was not prepared to accept any of Mr Tszyu's evidence where it was in conflict with Mr Mordey's. He made other observations indicating that, as with Mr Warton's evidence, he had reservations about the evidence of Mr Tszyu, in relation to his initial dealings with Mr Mordey as well as in relation to the novation of the 17 January 1992 contract, and at one point he said that there were numerous examples in Mr Tszyu's evidence of his "treat[ing] that which favours him as true and that which does not as false". 272 Once again, in dealing with the claim that Tszyu Enterprises had induced a breach of the contract Bainton J did not discuss the evidence, or lack of it, of any belief by Mr Tszyu, and therefore by Tszyu Enterprises, in the existence of the contract, beyond the advice Mr Tszyu had received from Mr Sutherland. In the circumstances we have recounted, in the absence of such a reasoning process, and in the light of what was said in Mifsud v Campbell we do not think that the implicit acceptance of a belief held by Mr Tszyu that he did not have a contract with Fightvision can be allowed to stand. Again this does not mean that his Honour's conclusion was wrong. But we think that Fightvision is entitled to have the verdict in favour of Tszyu Enterprises set aside and a new trial. The costs orders should be the same as we have proposed for Mr Warton.

Damages 273 Because he found against the claims of inducing breach of contract, it was not necessary for his Honour to consider the damages for that tort. Fightvision submitted that they were the same as the damages for which Mr Tszyu was liable for the breach of contract. The third parties submitted that there was no congruity between the damages, even that no case for damages for inducing breach of contract had been established. 274 The summons separately identified issues of the quantification of Fightvision's losses caused by Mr Tszyu's breach of contract, on the one hand, and the third parties' "unlawful interference with Fightvision's business", on the other hand. Separate claims to damages were expressed, but no figures were put on them in the summons. The various defences denied any loss. We were told, and this was not disputed, that none of the third parties advanced a submission before Bainton J that, in the event that he found they were liable for the tort of inducing breach of contract, a different measure of damages would be applicable to them. 275 Notwithstanding this, there was no concession of congruity of damages in the defences, and unless there be more we do not accept Fightvision's submission that it is not now open to the third parties to contend for a different quantification of damages. Nothing more was put to us, for example to the effect that the conduct of the hearing before Bainton J precluded the third parties from contesting that their liability in damages was different from that of Mr Tszyu. Accordingly, we consider that we should entertain their submission. In the light of what we have said, it can be treated as the submission of Sky Channel, the third party presently liable to Fightvision. 276 It was first submitted that a defendant liable for inducing breach of contract should pay damages only in the amount not recoverable from the contract breaker. According to the argument, where Mr Tszyu was liable to pay damages, the damages recoverable for inducing his breach were the difference between Fightvision's lost profits and the value of its judgment against Mr Tszyu. We do not agree. If Fightvision had recovered fully from Mr Tszyu, it could not recover again from Sky Channel. An action brought against Sky Channel after the full recovery against Mr Tszyu would fail because no damage could be shown (Bird v Randall (1762) 3 Burr 1345 at 1353-4; 97 ER 866 at 870-1). But short of that, Fightvision is entitled to judgment against both Mr Tszyu and Sky Channel, although it still can not recover against both. Both the contract breaker and the tortfeasor can be sued to judgment, although there can not be double recovery, see Jones Bros (Hunstanton) Limited v Stevens [1955] 1 QB 275 at 283. 277 It was then submitted that damages for inducing breach of contract can not be recovered if the contract breaker would in any event, and without the inducement, not have performed the contract. Jones Bros (Hunstanton) Limited v Stevens was cited. 278 In that case the defendant had employed a waiter formerly employed by the plaintiff. It had not induced him to leave his original employment, but continued to employ him after notice that he had broken his contract with the plaintiff. It was held that, where the servant would not in any case have returned to the plaintiff, no loss had been suffered for which the defendant was liable. 279 It does not follow, however, that there is no recoverable loss when the defendant induced the breach of contract. Jones Bros (Hunstanton) Limited v Stevens itself drew the distinction - see at 283: "No doubt at the present day if a servant, domestic or otherwise, breaks his contract of service he or she may put his employer to the greatest inconvenience and may cause him actual pecuniary loss. For so doing the servant is liable to an action for damages, and if a third party has enticed the breach, he too is liable. But if, not having enticed the breach a person employs that servant who would not in any case have returned to the first employer, while the servant remains liable the second employer is not, for his action has caused no injury to the original master." 280 There is a loss, and where the defendant induced the breach of contract the finding of inducement means that it was caused by the defendant inducing the breach of contract. The loss flowing from the breach of contract was caused by the inducing even if a contributing cause of the loss was the contract breaker's disinclination to perform the contract. 281 In our view, any question is one of causation. A finding of inducing breach of contract carries with it a finding that the defendant's actions caused the breach of contract and the loss which flowed. It does not matter that the contract breaker yields readily or before the inducement was willing to break the contract: Woolley v Dunford (1972) 3 SASR 243 at 290-1; Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1991) 1 VR 637 at 659. But it may be possible for the defendant to establish, according to the common sense notion of causation in March v E & M H Stramare Pty Limited (1991) 171 CLR 506, that inducing the breach of contract was not the cause of the loss because the loss would have been suffered in any event. 282 In the present case, it was submitted that this should be found because relations between Mr Tszyu and Mr Warton on the one hand and Mr Mordey on the other hand had broken down, as a result of which Mr Warton had sought the introduction to Mr Onisforou; because Mr Sutherland was of the view that there was no continuing contract; and so because Mr Tszyu would have refused to acknowledge the exercise of the option by Fightvision even if there had not been the involvement of Sky Channel described earlier in these reasons; alternatively, it was submitted that disenchantment would have caused Mr Tszyu to be unreceptive to the programme of fights proposed by Mr Mordey, so that any profits if there had not been the breach of contract would have been of a different order from the lost profits earlier discussed. 283 The difficulty with these submissions is in their evidentiary basis. Although, as we have said, the issue of non-congruent damages was available on the defences, it was not taken up. 284 There was no evidence from Mr Tszyu to the effect that he would have rejected the purported exercise of the option in the absence of Sky Channel's involvement. On the contrary, Mr Tszyu gave evidence that when he was receiving advice from Mr Sutherland in 1994 he knew Mr Mordey was "trying to achieve it for me to become the world champion", which was his (Mr Tszyu's) goal, and that he wanted to keep his contract with Mr Mordey and to "continue to deal with Bill", and the effect of his sketchy recollection of the dealings with Mr Onisforou and Sky Channel in February 1995 was that he just went along with the initial contact with Mr Onisforou and all that followed. He said that Mr Warton probably told him that it would be best to "go with" the Sky Channel offer. It is inherently unlikely that Mr Tszyu would have gone his own way without the backing of Sky Channel. Mr Tszyu did give evidence to the effect that he would not have been agreeable to the seven fight programme, but again it is inherently improbable that he would not have gone along with what was proposed by Mr Mordey, who had brought him from relative obscurity to eminence in the boxing world, in particular when what Mr Mordey proposed was less intensive than had been his lot over the three years of the initial agreement. 285 Nor was there evidence from Mr Warton, who in early 1995 might have influenced Mr Tszyu's conduct, to the effect that he would have advised Mr Tszyu to reject the purported exercise of the option in the absence of Sky Channel's involvement. On his evidence, in 1994 he was happy to have Mr Mordey continue as Mr Tszyu's promoter, and he did not discuss with Mr Tszyu whether Mr Tszyu wanted to continue with Mr Mordey. Mr Warton said that he told Mr Onisforou that Mr Tszyu was "looking to put into place a deal with Sky Channel", and that he thought that the Sky Channel offer was a better offer than that coming from Mr Mordey. This can not readily stand with parting with Mr Mordey in the absence of Sky Channel's inducing conduct. 286 When the matter was not dealt with before Bainton J in a manner appropriate to a finding that the cause of Fightvision's loss was not the inducement of the breach of contract, but an independent resolve on the part of Mr Tszyu, in whole or in part, and when his Honour was not asked to make appropriate findings, we do not think that we should make the finding on causation necessary for Sky Channel's submission; and we are not persuaded the evidence justifies such a finding. The damages for which Sky Channel is liable are the same as the damages for which Mr Tszyu is liable.

ORDERS 287 We make the following orders: Mr Tszyu's Appeal Appeal No. 40232/98 Appeal dismissed with costs.

Fightvision's Appeal Appeal No. 40231/98 1. Appeals against the respondents, Mr Onisforou and Mr Fenech, dismissed with costs; 2. Appeals against Mr Warton, Tszyu Enterprises and Sky Channel allowed; 3. Set aside the orders dismissing the claims against Mr Warton, Tszyu Enterprises and Sky Channel and the order that Fightvision pay the costs of those respondents; 4. Judgment for Fightvision against Sky Channel in the amount of $7,310,445 such order to take effect on 27 March 1998; 5. Sky Channel to pay Fightvision's costs of its claim against Sky Channel before Bainton J and of its appeal against that part of his Honour's order which dismissed the claim but, if qualified, to have a certificate under the Suitors Fund Act 1951 in respect of this appeal; 6. Order a new trial of the proceedings against Mr Warton and Tszyu Enterprises; 7. Mr Warton to pay Fightvision's costs of the appeal between it and Mr Warton but, if qualified, to have a certificate under the Suitors Fund Act ; 8. Tszyu Enterprises to pay Fightvision's costs of the appeal between it and Tszyu Enterprises but, if qualified, to have a certificate under the Suitors Fund Act ; 9. The costs of the first trial between Fightvision and Mr Warton and Tszyu Enterprises to be in the discretion of the judge hearing the new trial; 10. If Fightvision does not duly prosecute a new trial against Mr Warton, Mr Warton is to have liberty to apply to this Court to have his costs order against Fightvision reinstated. 11. If Fightvision does not duly prosecute a new trial against Tszyu Enterprises, Tszyu Enterprises is at liberty to apply to this Court to have its costs order against Fightvision reinstated.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.