New South Wales District Court CITATION: Allan Trevor Gould v St George Area Intellectual Disability Services Ltd [2007] NSWDC 166 HEARING DATE(S): 17/04/07-19/04/07 EX TEMPORE JUDGMENT DATE : 1 May 2007 JURISDICTION: Civil JUDGMENT OF: Phegan DCJ DECISION: Verdict and Judgment for the Defendant.; Plaintiff to pay defendant's costs on the ordinary basis CATCHWORDS: contract of employment - wrongful dismissal - effect of resignation LEGISLATION CITED: Evidence Act 1995 Riordan v The War Office [1959] 1 WLR 1046 CASES CITED: Martin v Yeoman Aggregates Limited [1983] 1 CR 314 Birrell v Australian National Airlines Commission (1984) 5 FCR 447 State of New South Wales v Paige (2002) 60 NSWLR 371 PARTIES: Allan Trevor Gould [Plaintiff] St George Area Intellectual Disability Services Ltd [Defendant] FILE NUMBER(S): 1083/06 COUNSEL: Mr J Pearce [Plaintiff] Mr G Boyce [Defendant] SOLICITORS: Paul Murphy & Associates [Plaintiff] Hancock Alldis & Roskov [Defendant] JUDGMENT 1 HIS HONOUR: In this matter the defendant, St George Area Intellectual Disability Services is a non profit organisation which provides services to the intellectually disabled in the form of the conduct of group homes, of community access services, early intervention programs and respite care. The plaintiff is a person of considerable experience as an administrator and manager in the care and management of the intellectually disabled. In December 2002 he was hired by the defendant, whose board was then chaired by a Ms Mary Stewart, the plaintiff being engaged as Chief Executive Officer on a temporary basis to investigate allegations of systemic abuse which included the death of one of the defendant's clients. A number of complaints had been made about the conduct of the defendant's affairs to the National Disability Service Abuse and Neglect hotline and there were a number of acknowledged management problems. 2 The plaintiff was appointed to the temporary position by way of a letter of appointment dated 13 December 2002, and he continued in the role of Acting Chief Executive Officer until 14 May 2004. Following restructuring, including a decision to replace the position of Chief Executive Officer with that of a General Manager, the new position was advertised and the plaintiff was appointed. The contract of employment took the form of an employment agreement, which I will refer to simply by the term "contract" in the course of the judgment, a document signed by both parties and dated 15 May 2004. 3 By the time of the appointment of the plaintiff in the new role of General Manager, Mr Robert Elliott, had become, in November 2003, chairperson of the defendant's board. In the contract under the heading "Term of Employment", are the following terms which are of central importance in this case. Clause 2.1 reads: "The General Manager's employment under this agreement shall commence on 15 May 2004 for a period of three calendar years". Clause 2.2: "The parties agree that three (3) months prior to the expiry of this agreement negotiations will take place with the SGAIDS Board of Directors to determine renewal of the agreement for a further three year term". Clause 2.3: "In the event that the SGAIDS Board of Directors terminates this agreement, the equivalent of three (3) months salary for each year remaining in the agreement or part thereof, will be paid as an eligible termination payment, in addition to any annual leave or other payments owed". Clause 2.4: "The General Manager may not give less than one month's prior written notice to terminate this agreement". 4 The events which precipitated these proceedings occurred over three days from 14 February to 16 February 2005. 5 The Amended Statement of Claim which was filed in court, claims damages for wrongful dismissal which occurred, in the alternative, either on 14 February 2005 in circumstances where there was no compliance with the requirements of clause 2.3 of the contract, or on 16 February 2005, as a consequence of the service on the plaintiff of a letter dated and signed by Mr Robert Elliott. The damages sought by the plaintiff were to be calculated in accordance with clause 2.3 of the contract. 6 It was also pleaded in the alternative that the defendant, in breach of the agreement, conducted itself in a manner likely to damage or destroy the relationship of confidence and trust between employer and employee with a consequence that damage to the same extent as that sought in the claim based on breach by way of termination was pleaded. 7 I understand from the submissions at the conclusion of the case that the alternative was not pressed and that the plaintiff's claim was essentially based on the alleged termination on one or other of the two dates to which I have referred. The issues therefore which ultimately came to require resolution were: the contract repudiated in breach of the agreement by the defendant, as alleged by the plaintiff, or as alleged by the defendant: the termination a consequence of the defendant's acceptance of the plaintiff's repudiation of the agreement by resigning, in breach of clause 2.4 of the contract, on 14 February 2005. 8 Before I come to the events of that date and the days that followed, it is necessary to go back to at least briefly outline the history of the plaintiff's employment with the defendant up to that time. 9 While employed as a temporary Chief Executive Officer during the period from 13 February 2002 to 14 May 2004, it was the plaintiff's account, and this was not substantially denied by the defendant, that he had substantially contributed first of all to turning around the defendant's finances from a deficit of $23,000 in the financial year 2002-2003, to a net profit of $210,000 in the financial year 2003-2004; that he had also succeeded in re-establishing a good working relationship with the Department of Ageing, Disability and Home Care (the Department) which was the defendant's principal source of funding and which, because of events that preceded the plaintiff's appointment, had withheld some of the funds on which the defendant relied. 10 After his appointment as General Manager on 14 May 2004, the plaintiff continued to contribute to the functioning of the defendant in the same way that he had prior to his appointment. In fact in December 2004 the Board agreed to pay a sum of $7,000 by way of a cash bonus to the plaintiff because of the contribution he continued to make, as well as a bottle of what was described as "very expensive wine". 11 Although the plaintiff continued to perform his tasks as General Manager to the defendant's satisfaction, from the time of his appointment and even for a short time before that, there were emerging some signs of antagonism between the parties, particularly from the plaintiff's point of view. 12 The version of the relevant events in this particular regard vary considerably between the plaintiff and the witnesses in the defendant's case but the evidence of both tend to corroborate a degree of increasing friction between the parties. For example, in April and May 2004 at about the time of the plaintiff's permanent employment, the plaintiff had raised with Mr Elliott, who was by then the chair of the defendant's board, what the plaintiff considered to be the improper use of a service vehicle by board members at weekends. One particular matter which subsequently proved to be a source of continued disagreement between the parties was the purchase of a property at 1 Heath Street, Turrella, through a company established for that purpose by the name of Heath Holdings. The plaintiff raised a number of matters and certainly was concerned in his own mind about the propriety of this particular purchase both because the plaintiff, as he saw it, regarded the funds that were made available from funds of the defendant for the purpose of the purchase, to be an improper use of those funds, and that the impropriety was underlined by the use of the vehicle which had been established in the form of Heath Holdings. 13 He was also concerned about the plan to temporarily use the accommodation, despite the long term purpose of converting it into a facility more consistent with the general aims of the defendant, the temporary purpose of using it for cheap rental accommodation. These were matters which, in the plaintiff's mind, risked a revival of the bad relations between the Department and the defendant, which had existed before he had taken over as General Manager and which he had made a significant contribution to repairing. 14 Mr Elliott, in his evidence, denied that the purchase, as alleged by the plaintiff, had proceeded without the plaintiff's knowledge and in fact, according to Mr Elliott, the plan had been discussed at a number of board meetings at which the plaintiff had been in attendance. According to Mr Elliott, the plaintiff had actually offered alternative suggestions as a vehicle for investment, although these suggestions were ultimately not accepted by the board, a matter which the plaintiff disputed. 15 The plaintiff's evidence was that he remained ignorant of the decision to purchase Heath Street until a very late stage in the process, and that his role generally had been kept to a very limited extent, even after the purchase had taken place and he became aware of the details. He was not adequately consulted as he saw it on the repair and maintenance of the premises once they had been purchased. 16 Mr Elliott's evidence was that, contrary to the plaintiff's suspicions, there was no improper use of the defendant's funds and that no problem had ever been raised by the Department concerning the purchase of the property. 17 As to the extent to which the plaintiff, as he alleged, had been kept out of the decisions involving the purchase of Heath Street, there was evidence from two other members of the defendant's board, Mr Paul Cohen and Mrs Maryann Fitzpatrick, in affidavits which were filed in the proceedings and in evidence which was subsequently confirmed orally, that in board meetings over the period between April and September 2004 the Heath Street purchase had been discussed and the plaintiff was present at those meetings. 18 Mr Elliott did not deny that the plaintiff had raised concerns about the financing of the property although, as I have already noted, Mr Elliott's evidence was that there was no impropriety of the sort that the plaintiff suspected. Mr Elliott also conceded that there were continuing arguments over the renovations to the property between himself and Mr Elliott and that Mr Elliott had, in the end, relied on his own experience as a builder to exercise his own judgment as to the appropriate way in which to conduct the renovations, that the plaintiff was not happy with the decision which Mr Elliott made on that basis in choosing a contractor without tenders being first invited. 19 There were a number of other matters which the plaintiff identified in the course of his evidence which caused him concern about the way in which the defendant board was conducting its affairs, for example he alleged that payments were being made by the defendant without any relevant supporting documents, an allegation denied by Mr Elliott. The plaintiff also alleged that there were ongoing arguments over and above those concerning the employment of contractors for the renovations to the Heath Street property, over the respective authority of the board and the plaintiff, another allegation denied by Mr Elliott. The plaintiff also alleged that Mr Elliott had exercised improper influence over the transfer of the defendant's bank account from the St George Bank to the Bendigo Bank. Mr Elliott on his part denied that there had been any impropriety and that the transfer had been the result of a unanimous approval by the board. 20 It was Mr Elliott's evidence that up until 14 February 2007, he was generally, and in turn the board, on good terms with the plaintiff. He did acknowledge that the plaintiff had made requests from time to time for bonuses and pay rises because of the apparent dissatisfaction of the plaintiff with the level of remuneration which he was being paid under the contract. When faced with these requests, Mr Elliott had asked the plaintiff to wait for what Mr Elliott described as the annual performance review which was to take place in February 2005. There was some concern raised in the course of the proceedings about the reference by Mr Elliott to an annual performance review which did not appear to be consistent with the reference to a review in the relevant terms of the contract. However, I am not satisfied that that is a matter of any particular consequence. The reference to the review in clause 2 of the contract was clearly in anticipation of the possibility of re-employment at the conclusion of the three year contract and quite independently of the contract, the board had resolved or at least Mr Elliott had resolved in his own mind, to conduct an annual salary review quite independently of the contract. The suggestion therefore that Mr Elliott was in some way anticipating acting in breach of the contract is not a conclusion which necessarily should be reached in those circumstances. 21 As to what I have described as the emerging friction between the plaintiff and the defendant board, at least in the plaintiff's mind, it is impossible to resolve on the evidence exactly what was said by whom at any particular time. However, the evidence clearly does support a conclusion that the plaintiff was developing an increasing resentment at being excluded, as he saw it, from decisions on which he considered he should at least be consulted. This resentment appears to have had its beginnings in an incident that took place not long before the plaintiff's appointment as General Manager. On about 30 April 2004 a Ms Caroline Pinto, a person described variously as a personal relations facilitator or a human resources consultant, had been engaged by the defendant to assess the operations of the board and the relations between board members. Ms Pinto, in pursuance of that arrangement, had attended the defendant's office on 30 April 2004 and on that occasion was introduced to the plaintiff and the following conversation, according to Mr Elliott, took place at that time. Mr Elliott "Allan I would just like you to meet Caroline Pinto" Allan being a reference to the plaintiff by his first name. "Caroline is from ICDR Australia Pty Limited and Caroline is a human resources consultant and is here to evaluate the strengths and weaknesses of the board" to which Mr Elliott quotes the plaintiff as responding: "Who is she? What qualifications does she have? What does she know about disability services? I'm not having this. I resign" 22 At which point, according to Mr Elliott, the plaintiff then walked rapidly to his office. In Ms Pinto's affidavit, she attested to a further comment from the plaintiff immediately before he left the office to the following effect "I want a meeting with you", that is a reference to Mr Elliott "Now". Apart from that addition, her account of the occasion is broadly consistent with that of Mr Elliott and according to Mr Elliott, he followed the plaintiff in the direction of the plaintiff's office and a conversation then took place in the plaintiff's office in the absence of Ms Pinto and indeed in the absence of anybody else. Mr Elliott, in the course of that conversation, said this: "Allan this lady is here to examine the board members and to sort out problems between members of the board. It has nothing to do with you." And then Mr Elliott added the following words: "Allan you've got nothing to worry about. I'll see you later." 23 According to Mr Elliott, following the conclusion of that conversation, the next time he saw the plaintiff he was back to what Mr Elliott described as "his normal self". 24 Ms Pinto gave evidence that shortly after the interruption, during which this conversation in the plaintiff's office had taken place, Mr Elliott returned and joined Ms Pinto and said to her: "Allan wanted to resign but I have talked him out of it". 25 All of this, as far as any involvement of the plaintiff was concerned, was denied by the plaintiff and in fact it was submitted that the plaintiff's version of events, which in effect was that no such event took place, should be preferred, particularly in view of the fact that Ms Pinto admitted in her oral evidence that she was a friend of Mr Elliott's and that Mr Elliott had acted as her accountant. However, I do not find in Ms Pinto's evidence any indication that she was influenced by her association with Mr Elliott and, indeed, it should also be observed that while she may have been a friend of Mr Elliott's, she certainly had no direct stake in these proceedings and I am not prepared, from my own observation of Ms Pinto as a witness, to conclude that she was in some way fabricating her evidence in order to protect or assist the defendant. 26 The plaintiff's version of what happened on this occasion, while he denied any statement of the kind attributed to him and certainly denied any suggestion that he was resigning, was that he recalled Ms Pinto and Mr Elliott entering part of the defendant's premises where a difficult client was in a state of undress and he was embarrassed by the exposure of the client to a complete stranger. It was this he had objected to and nothing else. 27 That incident does indicate, and consistent with what I have already said, I broadly accept the version of events given by Mr Elliott and corroborated by Ms Pinto. As I suggested earlier, this was an early indication of the plaintiff's suspicion that he was being excluded from decisions he believed he should be involved in. It is also evidence of a tendency in the face of such suspicions to over-react to circumstances of the kind that occurred on that occasion. While he expressed his indignation at the time, he continued to harbour some resentment and suspicions of that kind which does contribute to the development of events that I have already described over the period of time following his appointment as general manager. 28 Against that background, I now come to the events of 14 February 2005. According to Mr Elliott, one of Ms Pinto's recommendations pursuant to her engagement at the end of April 2004, was the introduction of regular meetings between the board and senior management in order to improve communication between the two. This was a recommendation discussed with the plaintiff and the board subsequently resolved to schedule the first of such meetings on 14 February 2005, to be chaired by Mr Elliott. 29 Mr Cohen, whose evidence I have referred to already, gave evidence corroborating Mr Elliott's account of events in this particular regard and referred to his own suggestion that the meeting would also provide an opportunity for performance reviews of senior management including the plaintiff. 30 Both Mr Elliott and Mr Cohen gave similar evidence of a conversation which occurred on 7 February 2005 following the decision to set up the meeting on 14 February. In the course of that discussion, concern was expressed that the plaintiff appeared to be under the impression that he was to attend the meeting. That was not the intention. In the course of that discussion it was agreed between Messrs Elliott and Cohen that it would not be appropriate for the plaintiff to be in attendance because this would stifle frank discussion of his own management style as part of his performance review. 31 Mrs Fitzpatrick also gave evidence that on 11 February 2005 she had been spoken to by Mr Elliott concerning the plaintiff's attendance at the meeting, or at least more accurately the inappropriateness of the plaintiff's attendance at the meeting, and she had agreed, partly because of her own recollection of experiences with the former Chief Executive Officer, that it would be better if the plaintiff did not attend. 32 Following his discussion with both Mr Cohen and Mrs Fitzpatrick, Mr Elliott undertook to inform the plaintiff, and in the meantime also advised Mr Senaka Mendis who was then the defendant's Client Services Manager and one of the members of the senior management team who would be attending the joint meeting, that the plaintiff would not be attending. 33 Despite the decision which had been made over the days leading up to the meeting, there is no dispute that Mr Elliott did not tell the plaintiff until the morning of the meeting on 14 February, that he would not be attending the meeting. What is very much in dispute is not that it was only then that the plaintiff was told, but what followed that revelation. The plaintiff's version of events on 14 February 2005 were: it was a Monday morning, he arrived at work at the defendant's premises in the usual way at 35 Beach Street, Kogarah at approximately 9.20am. He spoke to some of the staff members and, expecting that he would be attending the joint meeting, hoped that it would not be long because, having worked late on the previous Friday and all day on Saturday, it was his intention to leave work early in order to celebrate his daughter's birthday that afternoon. At 9.45 he was approached by Mr Elliott outside his, that is the plaintiff's, office and Mr Elliott asked if he could speak with the plaintiff in private. The plaintiff opened his office, both went in, Mr Elliott closed the door and said, according to the plaintiff and I quote: "You cannot attend the joint meeting". 34 The plaintiff, because he normally chaired meetings of senior management and therefore expected to have a significant role in the joint meeting, thought this was, to use his word "extraordinary". Because of his role as the principal planner and co-ordinator of the defendant's activities, considered that he would be a significant contributor to the joint meeting. He objected to being excluded and insisted on attending. Mr Elliott refused his insistence. The plaintiff then, according to the plaintiff's version, proceeded to "unload", if I can use that term, a number of concerns that he had been harbouring about the operations of the defendant with particular reference to the Heath Street property and what had been happening in that particular regard. 35 In the course of the conversation he described Mr Elliott as becoming "hostile and combative". Mr Elliott was agitated and at one point walked up to within centimetres of the plaintiff and said directly in his face "get out, get out now". This part of the encounter was denied by Mr Elliott, particularly any element of physical intimidation, quite apart from any suggestion that he was generally hostile and agitated. At this point according to the plaintiff, he left, leaving his keys behind on his desk, distraught and shaken. 36 By way of comparison I turn to Mr Elliott's version of the same occasion. According to Mr Elliott it was about 9.40, in fact as to the initial events of that morning there is very little disagreement between Mr Elliott and the plaintiff. According to Mr Elliott he arrived, met the plaintiff outside his office, asked the plaintiff if he could speak with him. The plaintiff unlocked the office and both went in, and according to Mr Elliott, he said "Allan I'd like you not to attend the board meeting this morning". It was from this point that their respective versions dramatically part ways. According to Mr Elliott the plaintiff threw his keys on the desk and said "I've had enough, I am out of here, I resign". The plaintiff then went to the door of his office and turned back to Mr Elliott and said "Don't worry, I will get a cab to take me home" at which, according to Mr Elliott, the plaintiff stormed out. 37 That incident and the two very different versions squarely defines the issue between the parties as to the significance of what happened on that particular occasion. If the plaintiff's version of events is accepted, then Mr Elliott did, in telling him to get out and get out now, repudiate the contract of employment without good cause and the plaintiff would be entitled to damages for wrongful dismissal. If Mr Elliott's version is believed, it was the plaintiff who repudiated with his declaration of resignation, at which point the defendant was entitled to accept that resignation and terminate the contract, in which case there was no wrongful dismissal and there would be no entitlement to damages. 38 Before I proceed to further address that central question, I refer to other evidence which was given particularly close attention bearing on the question of what actually did happen in the course of that encounter between the plaintiff and Mr Elliott. First of all evidence, which it was submitted was corroborative of the plaintiff's version of events, included the record of the event insofar as it was to be found in minutes of the defendant board. In particular, the words "I resign" it was submitted were a product of recent invention and were never used by the plaintiff. In this regard, the plaintiff relies on a number of exhibits. 39 Exhibit A was in the form of Draft Minutes of a Special Meeting of the defendant board on 15 February 2005, which contain references to those events. The authorship of the minutes is unclear and also, because the minutes were never formally adopted by the board, they do not in any formal sense carry the imprimatur of the board itself. More likely than not the minutes were prepared by a Barbara Donnelly, who was a temporary member of the defendant's office staff and who acted, at least on this occasion, as the minutes secretary. Under the heading following the words "matter for discussion: Allan Gould resignation - 10am on 14 February 2005" there is a heading "Events" and following that heading is the following: "On the morning of 14 February 2005, Bob Elliott requested Allan Gould not to attend a board members and middle management meeting to be held at 10am that day." There then followed in a new paragraph, the following: "Note: this meeting was arranged to take place bi-monthly starting in February 2005 at the board meeting held last November 2004". The minutes then go on in a new paragraph: "When Bob Elliott requested Allan not to attend the meeting that morning, without any discussion Allan took his keys out of his pocket, tossed them on the table and walked out". 40 There is no real room for disagreement that, on the evidence of either the plaintiff or Mr Elliott of what happened on that occasion, that is a very incomplete and, to some extent, disjointed account of the event. There is no reference to any words used by either in the course of their conversation. 41 The next relevant document in time are the minutes of the meeting of the board on 21 March 2005, (Exhibit E), at which the minutes of the meeting of 15 February were tabled. It was recorded in the minutes of the March meeting that all board members should individually go through the minutes of the 15 February meeting to review those minutes for accuracy. There was also in evidence, (Exhibit D), a memorandum from a Ms Anne Avila, the defendant's office manager, addressed to board members and dated 23 June 2005. It referred to documents requested at the board meeting of 20 June 2005 and included in the list "Minutes of Special Board Meetings held on 15 and 16 February 2005". The version of the draft minutes attached to that memo were identical to those which were tendered (Exhibit A). 42 The significance of my referring to the version of the minutes is that there was also in evidence a different version. This was to become Exhibit B and was in the form of Minutes of the Board Meeting of 15 February 2005, supplied to the plaintiff's solicitor on 11 April 2007 under cover of a letter from the defendant's solicitor in response to a Notice to Produce. What is noticeable about this version of the minutes of the meeting of 15 February 2005 is that the minutes are in a different format and typeface, not only from the other version of the minutes of that particular occasion, but what appears to be the standard format of the minutes of the board kept over that particular period. 43 The origin of both Exhibit A and Exhibit B and their relationship with each other remain unexplained. In the, Exhibit B version, the words "I can't take this, I'm out of here, don't worry I will get a taxi home" are recorded as words used by the plaintiff on the occasion of 14 February 2005. However, conspicuously absent from those words are the additional words "I resign". 44 Another relevant consideration in the attempt to explain the existence of these different versions of the discussion at the meeting of 15 February 2005 and in turn the account of the events on the day before is that both Exhibit A and Exhibit B, which contained a further reproduction of the Exhibit A version of the minutes of 15 February 2005, were produced only just before or during the course of the hearing; well after pre-trial discovery. That fact, along with the change in the wording of the description of events of 14 February, it was submitted as part of the plaintiff's case, was symptomatic of a progressive revision of the defendant's version of events. The later editions were symptomatic of an attempt on the one hand to dress up the account to give it a more authentic appearance, but the continued omission of the words "I resign" until they were finally referred to in Mr Elliott's affidavit and affirmed by Mr Elliott in the witness box, all point to a reconstruction of events in order to put the plaintiff in a more adverse light and to attach to the plaintiff an act of resignation which did not in fact occur at the time. 45 Another conspicuous difference between Exhibit A and Exhibit B versions, was the omission in the later version of the words "Bob Elliott requested Allan not to attend the meeting that morning". This was another example, it was submitted, of a process of revision designed to put the defendant in the best possible light at the expense of the plaintiff and, at the same time, to make the plaintiff's own behaviour completely inexplicable. 46 When confronted with this evidence, Mr Elliott was unable to explain either the origin or the fate of the versions of the draft minutes. He was able to say, and there is no doubt about this, that neither version was ever formally adopted by the board. Questions therefore remain unanswered, such as to the author of the alternative versions, the reasons for the changes and the sources of the changes that were made in the later document. All of those unanswered questions, it was submitted, reinforce and justify the conclusion that the defendant engaged in a process of deliberate reconstruction. 47 Other relevant evidence on this matter comes from the defendant's witnesses, first of all Mrs Fitzpatrick. Mrs Fitzpatrick recognised both Exhibits A and B and she remembered that she had, in response to the invitation, made some suggestions as to improvements that might be made to Exhibit A and sent them back to Ms Avila. She still had a copy of Exhibit B but, as far as she recalls, Exhibit B never went to the board, in contrast to Exhibit A which was formally recorded as having been given some consideration, even if it was inconclusive, by the board. 48 She also acknowledged that neither version, as far as she knew, had been signed off as minutes but this was a matter that did not overly trouble Mrs Fitzpatrick because she never regarded them as minutes in any proper sense of the term because the meetings in question, on 15th and 16th February, were not, as she understood it, proper meetings of the board in the formal sense which required minutes to be taken and subsequently adopted by the board. 49 Mrs Fitzpatrick also gave evidence which corroborated Mr Elliott's version of events of 14 February, at least in an indirect sense. She did not claim to have ever been present in the plaintiff's office to overhear what was said but according to her, on the morning of 14 February, she received a telephone call from Mr Elliott and a conversation followed to the following effect. I should add that on that particular occasion Mrs Fitzpatrick had not been at the joint meeting of the board and senior management. Mr Elliott: "Maryann, it's Robert. Allan Gould has resigned". To which Mrs Fitzpatrick responded: "Why?". Mr Elliott: "I asked Allan not to attend the meeting. He threw his keys down on the table and said: "I'm resigning". I informed the board of Allan's resignation. The board has appointed Senaka" - that's a reference to Mr Mendis, the then Client Services Manager - "as acting General Manager". 50 This evidence was also the subject of comment on the part of the plaintiff's counsel, that as with Mr Elliott, Mrs Fitzpatrick's reference to the use of the words "I'm resigning" was a recent invention which found no support in any of the earlier records of events which had been prepared, however mysterious their origin, in the context of the defendant's record keeping. Also, the decision to appoint Mr Mendis as acting General Manager, despite its obvious importance, was not a matter which had been recorded in the draft minutes. The evidence was, and this was from Mr Elliott as well as other witnesses in the defendant's case, that the decision to appoint Mr Mendis was made in a hastily convened meeting of the board, which had taken place shortly after the joint meeting between the board and senior management had concluded. 51 In addition to Mrs Fitzpatrick's evidence of the phone call in her affidavit and in the witness box, there was also a note which she had made of the phone call between herself and Mr Elliott on 14 February to the following effect; "Bob rang to say Allan had resigned". This, at least on the face of it, was an answer to the suggestion of recent invention. However, it was plaintiff's counsel's submission that the reference to "Allan had resigned" is not the same thing as attributing the words "I resign" to him. 52 I do not find a great deal of merit in that particular submission that a hastily prepared handwritten note of a telephone conversation would not normally be set out in the form expected of an affidavit filed in these proceedings and therefore the formal deficiencies in my view do not deprive it of weight as evidence that a reference to resignation was made at the time of the conversation between Mr Elliott and Mrs Fitzpatrick. 53 In the defendant's case there is also the evidence of Mr Cohen. I referred earlier to the concern that Mr Cohen had raised in his conversation with Mr Elliott on 7 February about the plaintiff's attendance at the joint meeting. Mr Cohen's affidavit also referred to a fact which is also attested to in Mr Elliott's affidavit of Mr Mendis, (during the course of the joint meeting or not long after the meeting had started), about receiving a telephone call and asking if he could be excused from the meeting. That telephone call is one which is elaborated upon for obvious reasons in Mr Mendis' evidence. Mr Cohen also gave evidence of the request by Mr Elliott after the conclusion of the joint meeting to board members to stay back, at which point Mr Elliott had announced the plaintiff's resignation and when Mr Elliott was asked why, he said he did not know. 54 Attention was drawn to the fact that there was no corresponding reference to that particular incident in the evidence of either Mr Elliott or Mrs Fitzpatrick, however Mr Cohen did corroborate the evidence that in the course of that hastily convened meeting Mr Mendis was appointed the interim General Manager. 55 The evidence of Mr Mendis which was in an affidavit dated 7 February 2007 and Mr Mendis, as with the other deponents to affidavits, gave oral evidence and I here quote from the relevant part of Mr Mendis' affidavit beginning at paragraph seven: "I attended the meeting on or about 14 February 2005 and I recall that it commenced…" that is a reference I should add to the joint meeting - "…at about 10.20am. A few minutes into the meeting, I received a telephone call from the plaintiff in which he said to me words to the effect "Hi mate, it's Allan. I really need to speak to you. Can you come outside?" I said "Okay". I then excused myself from the meeting, saying words to the effect "Please excuse me for a few minutes. I'll be back". I then went to the administration office and asked someone at reception: "Where is Allan?". The person responded: "Allan walked out". I then telephoned the plaintiff and said to him words to the effect: "Allan, where are you?". The plaintiff responded to the effect: "I'm out in the middle of Beach Street". Then in paragraph eight Mr Mendis continues: "I went to the car park area and entered a company motor vehicle and drove it down Beach Street and found the plaintiff standing in the middle of the street on the footpath. I drove to where the plaintiff was standing and picked him up. I then had a conversation with the plaintiff to the following effect: I said: "What's going on?" Plaintiff: "I've resigned. I've had enough. I can't work with this fucking board. I'm leaving. Can you drop me off at the taxi stand?" I said: "Why are you doing this? This is not a good time for the Service, for you to resign. Why don't you come back, talk to Bob and sort things out". Plaintiff: "No. I've had enough. I've resigned." I said: "Well, why don't I drop you off at your place and we can have a talk about it?" Plaintiff: "No. Don't worry about it. Just leave me at the taxi stand. I drove the plaintiff to the taxi stand which was approximately one kilometre from the location that I picked him up from in Beach Street and then returned to the meeting. I did not inform the meeting of what the plaintiff had told me." Paragraph nine: "About 15 minutes after the conclusion of the meeting, I had a discussion with Bob Elliott to the following effect: I said: "Allan called me during the meeting. That's why I excused myself. He asked me to take him to the taxi stand. He told me that he had resigned. Is that right?" Elliott: "Yes. He resigned. He chucked his keys on the table and said "I resign"." 56 In paragraph ten of his affidavit Mr Mendis then goes on to record a later conversation that morning in which he was advised of his appointment as interim General Manager. Mr Mendis asked Mr Elliott if he would speak to the plaintiff and "Talk him out of it". Mr Elliott's response was "We will negotiate with Allan" but he still wanted Mr Mendis to take over as general manager in the meantime. 57 As already indicated in the plaintiff's version of events of that morning, he denied ever using the words "I resign" or indicating in any other way that he resigned. His evidence was that Mr Elliott had told him to get out because the plaintiff had objected to being excluded from the joint meeting. The question is, as I have already foreshadowed, which of the quite directly competing versions of events should be accepted? 58 I am satisfied that it is more likely than not that Mr Elliott did on that occasion use the words "I resign". But even if he did not, he certainly used other words such as "I've had enough" and "I am out of here" which quite unambiguously conveyed an intention to resign, combined with his hasty departure and his subsequent conversation with Mr Mendis. I cannot accept that Mr Elliott ever used the words attributed to him "Get out". There is no reason, on the evidence, for Mr Elliott to have behaved in the aggressive manner described by the plaintiff, or to have issued words indicating peremptory dismissal. Such behaviour is totally out of line with the rest of the evidence and with Mr Elliott's demeanour in the witness box. It has to be said that, as a witness, Mr Elliott was not particularly impressive in some respects. He was hesitant, he was on occasions even evasive, but I do not find in his evidence sufficient to satisfy me that he was either dishonest or dissembling. He did not have as firm a grip on the affairs of the defendant board as might have been expected of a person in his position, particularly someone who was a qualified accountant. He was clearly embarrassed by the exposure of the board's lax record keeping and his inability to explain it. However, whatever shortcomings of that kind may have been displayed, I preferred his version of events over that of the plaintiff where they were in conflict. 59 I am satisfied that, despite the unsatisfactory state of the draft minutes, the resignation, whatever the precise words used by the plaintiff, was not a product of recent invention on the part of the witnesses in the defendant's case, particularly Mr Elliott. Other contemporaneous evidence supports the conclusion that the plaintiff very clearly conveyed an intention to resign and that this intention was reported to the members of the board by Mr Elliott at the earliest opportunity in the board meeting that followed the joint meeting that morning and that there was further corroboration in the report which Mr Elliott then passed on to Mr Mendis. Whatever the exact words used by the plaintiff, they were sufficient to convey an intention to resign and I am equally satisfied that they were treated as such by Mr Elliott from the outset. 60 That conclusion is entirely consistent with my earlier observations about the plaintiff's increasing hostility to his exclusion from board decisions, as he saw it, and his tendency to over-react to situations where he perceived he was in some way under threat. There was a substantial amount of evidence of petulance on the part of the plaintiff on such occasions. The evidence of the incident involving Ms Pinto, to which I have already referred, is further corroborated in that particular respect by other evidence from Mr Mendis. In paragraph four of his affidavit Mr Mendis refers to an incident in September 2003 which goes back even earlier in the history of the plaintiff's association with the defendant. According to Mr Mendis, on that occasion he was at the office of the defendant at 35 Beach Street, Kogarah in the course of his duties as Client Services Manager, when the plaintiff approached him at about two in the afternoon and said words to the effect "Senaka, you take over. I'm resigning". Mr Mendis replied "Why?" to which the plaintiff responded: "I've had enough". The plaintiff then walked out of Mr Mendis' office and at about 7pm that evening, when Mr Mendis was leaving the premises, he noticed that the plaintiff was still there and they had a conversation of a fairly standard kind about other work related matters and the earlier conversation was not mentioned again. 61 As far as Mr Mendis' presentation as a witness is concerned, I found him a particularly impressive witness; both truthful and reliable. He was very frank about his reluctance to replace the plaintiff and convincing in putting aside any suggestion that the motivation behind his evidence was to further his position with the defendant. He had genuine reservations about his qualifications to serve the defendant as General Manager and that these reservations remained entirely unshaken in cross-examination. As in the case of Mr Elliott, and perhaps in some ways even more so, where his version of events conflicted with that of the plaintiff, I prefer the evidence of Mr Mendis. The plaintiff denied ever having had a conversation with Mr Mendis in September 2003. I accept Mr Mendis' evidence in preference to that of the plaintiff. 62 What that means is that on 14 February 2005 it was the third occasion, in what appeared to be a fit of pique on his part, the plaintiff announced his resignation using words such as "I've had enough". 63 There was some reference in the course of submissions, quite properly, to the status of this particular aspect of the evidence as tendency evidence for the purpose of s 97 of The Evidence Act. I note in this respect that there was no formal notice to adduce such evidence under 64 Section 97(1)(a) and therefore the evidence of the repeated announcements of resignation could not be used as tendency evidence as such in order to establish such words were used on the occasion in question. However, this does not exclude the evidence of his earlier behaviour having some general relevance in support of the conclusion which I have drawn about his inclination to over-react and to behave in a petulant manner on such occasions. 65 A further point relevant to the strict issue of tendency is this, strictly speaking the defendant's case was quite the opposite of what is generally and properly referred to as tendency evidence in this respect. The gist of the evidence of the two earlier occasions, when the plaintiff announced his resignation only to be found back at work almost immediately after, the impression that was conveyed was that he was not serious when he said it. On the other hand it was very much the defendant's case that on the third occasion when he said it, he was serious and he was taken seriously. In that sense, the earlier occasions are not tendency at all to indicate a serious intention to resign. 66 On the later occasion, Mr Elliott did accept that the plaintiff intended to resign and, in that sense, whether Mr Elliott or to the extent that Mr Elliott was aware of the earlier occasions, at least the second of them, he clearly attached no importance to the fact that on the earlier occasions the plaintiff clearly was not to be taken seriously. 67 There is no doubt that the evidence in Exhibits A and B can only be described as very untidy record keeping, but what can also be said is that if it was the intention of the defendant, and in particular Mr Elliott, to reconstruct events in a way that reinforced the defendant's case, then those particular exhibits totally failed in that regard and I do not accept that there was any element of deliberate reconstruction of events on the part of Mr Elliott or any of the other witnesses in the defendant's case. 68 The conclusion that the plaintiff did express an intention to resign and acted out that intention on 14 February 2005 does not, of itself, resolve the related question of whether that resignation was accepted by the defendant and the contract terminated. 69 There is some further difficulty with the evidence, again because of some apparent inconsistencies in the evidence in the defendant's case. In Mr Elliott's evidence of the conversation which he subsequently had with the plaintiff on 16 February 2005, he is quoted as having said to the plaintiff: "I've accepted your resignation", and subsequently had repeated those words in the presence of Mr Cohen. There is no reference as such to any acceptance of the plaintiff's resignation in the versions of events of 14 February in Exhibits A and B; a matter that was conceded by Mr Elliott in cross-examination. However, there is ample evidence in my view despite further uncertainty created by the inadequacy of the records contained in Exhibits A and B, that there was an acceptance by conduct on the part of Mr Elliott following the plaintiff's announcement of his resignation on 14 February 2005. The plaintiff did repudiate the contract when he announced his resignation and left the premises and everything that followed, in my view, was an indication of acceptance of that repudiation. The meeting of the board that followed, the temporary appointment of Mr Mendis, is all consistent with conduct based on an assumption the plaintiff had resigned and the defendant was proceeding on the basis that that resignation was accepted and appropriate steps were being taken to fill the void left by the plaintiff's resignation. 70 I am therefore satisfied that, not only was there a resignation, but there was an acceptance and that therefore the contract was repudiated by the plaintiff and effectively terminated by the defendant on 14 February. In those circumstances, it is not strictly necessary to revisit in any detail the events that followed on 15 and 16 February, although they were the subject of very substantial amount of evidence before me and occupied a large part of the hearing. However, some of the events that followed do offer reinforcement of the conclusion which I have reached with regard to what happened on 14th and I will therefore address, at least briefly, some of the matters that are of relevance in that sense. 71 As I have already stated, the plaintiff's case based on his version of events on 14 February, was that he was dismissed by Mr Elliott with the words "Get out". The alternative case run by the plaintiff was that, even if those words were not proved to have been used or even if they were not sufficient to amount to a dismissal, that there was quite unambiguously such a dismissal two days later when Mr Elliott served on the plaintiff a document dated 16 February 2005 which contained the following statement on behalf of the defendant board: "Mr Allan Gould, General Manager, St George Area Intellectual Disability Services Ltd. has resigned as from approximately 10am, Monday, 14 February 2005. Dr Senaka Mendis will be acting General Manager until further notice. Mr Gould's resignation was accepted with deep regret by the board." 72 The plaintiff's case was, consistently, that this was a reiteration of a false assertion of an act of resignation and, as such, amounted to a wrongful act of dismissal on the part of the defendant. It was submitted that this was a further indication of a process of reconstruction influenced at this point by advice which had been received by Mr Elliott from the solicitors for the defendant. That advice had assisted in galvanising the position which the defendant was taking, that there had been a resignation and the reference to an acceptance of that resignation was a product of advice given by the solicitors. 73 In those circumstances and because of the underlying element of invention, in fact this was an affirmation of the defendant's repudiation of the contract, not the plaintiff's. Further evidence in the plaintiff's submission that this constituted a conclusive act of termination or repudiation on the part of the defendant, was the forcible removal of the plaintiff from the defendant's premises on 16 February by police who had been called by Mr Elliott. It was also supported by the withdrawal of an earlier offer, which had been made the day before, involving an invitation to the plaintiff to meet with the defendant board in the absence of Mr Elliott. 74 As I have already indicated, there is much more evidence going to the details of events at this particular point but, in view of the conclusion I have already come to, I do not regard it as necessary to attempt to either record all the evidence or to determine in any definitive way exactly what happened from one point to the next. It is sufficient, in order to address the events of 15 and 16 February, to note that the plaintiff sought to find, in those events, a continuing corroboration of the plaintiff's view that the defendant only belatedly, and as an afterthought, had adopted the position of accepting a resignation which the plaintiff said he had never tendered. 75 There was also evidence that part of the sequence of events which influenced the position, which the parties ultimately found themselves in on 16 February, was that the plaintiff had, in the context of discussion with the defendant board about a meeting on 15 February, asked for his solicitor to accompany him. When this was refused, the plaintiff had then withdrawn that request and offered to meet the board without his solicitor being present but, at this point, the evidence was that the board was no longer interested in having the meeting at all. This meeting incidentally was, according to the defendant and the evidence of the defendant's witnesses, intended to allow the plaintiff to air his grievances which he had clearly foreshadowed in various ways, as a basis for some reconsideration of his future employment. The defendant had taken the position that until those grievances were enunciated, initially in this anticipated meeting but then subsequently the invitation was revised to one in writing, the matter simply could not be taken any further in view of the defendant's position and that in the meantime the plaintiff's resignation had been accepted and he was no longer employed as General Manager. 76 The question of the involvement of solicitors and their role in this process does not need any further investigation, however I might just say this. Mrs Fitzpatrick gave very cogent evidence on her part that the plaintiff's announcement that he wanted his solicitor to be present at any meeting with the board had been something of a watershed in the board's attitude to negotiations with the plaintiff. Her view, and I found her evidence in this respect particularly convincing, was that this changed the whole complexion of the relationship between the plaintiff and the board at that point. The board, while accepting Mr Elliott's report of the resignation, had still harboured some sympathy for the plaintiff and indeed, the evidence was that there had been a genuine interest in ironing out their differences and re-employing the plaintiff. But it appeared from what Mrs Fitzpatrick had to say that she saw the matter in a very different light when the plaintiff wanted to put the matter on a basis that involved solicitors and that this compromised the opportunity for a frank and amicable exchange between the plaintiff and the board. It was very much in her mind that that request put the matter in a very different light and hardened the board's attitude from that point on to where it no longer wanted to talk to the plaintiff and simply persisted in the invitation to the plaintiff to put his grievances in writing. 77 Mrs Fitzpatrick also gave some evidence of events over the day that followed Mr Gould's resignation. In particular a telephone conversation which I have to say from the outset is very much hearsay but it does, in an indirect way, offer just another piece in the jigsaw of evidence in this case. She was contacted by a Ms Maria Heaton, another member of the board but a relatively new member, who told Mrs Fitzpatrick that she had been contacted by the plaintiff who had reported to Ms Heaton that he, the plaintiff, had been "sacked by Bob" a reference to Mr Elliott. Later that morning after her conversation with Ms Heaton, Mrs Fitzpatrick had been contacted by the plaintiff, who complained to Mrs Fitzpatrick about Mr Elliott's behaviour, accusing Mr Elliott of making decisions on his own and with particular reference to the Heath Street property. At one point the plaintiff said to Mrs Fitzpatrick "You know Bob sacked me?". 78 As to the events on 16 February, I accept the evidence of Mr Elliott that in the course of their conversation on that occasion, the plaintiff challenged Mr Elliott to either sack him, suspend him or call the police. In fact, while Mr Elliott refused to do the former, because Mr Elliott consistently maintained that there was no basis on which he needed to sack or suspend the plaintiff since he had already resigned, he nonetheless took up the invitation to call the police and it was that which had triggered that particular sequence of events. 79 My conclusion from those particular parts of the evidence is that the plaintiff, consistent with his inclination to impetuous behaviour, regretted his impetuosity in resigning on the morning of 14 February. That within hours he, not the defendant, engaged in a process of reconstruction involving his sacking by Mr Elliott. A version of events which he first conveyed to Mr Mendis on that afternoon but reiterated when he spoke to Ms Heaton, but given the hearsay nature of that evidence, perhaps more importantly when he spoke to Mrs Fitzpatrick. That it was the plaintiff who progressively revised the events in order to protect his position and I say this with very careful consideration of the conclusion that that might lead to, as far as the plaintiff's credit is concerned. It does raise the possibility that the plaintiff engaged in deliberate dishonesty and a deliberate attempt to mislead the Court. I am reluctant to make any such finding. The conduct amounting to fraud on the part of any person, especially a party to proceedings, is a matter which has to be proved in a most conclusive way over and above the ordinary civil burden of proof on the balance of probabilities. 80 In those circumstances, I prefer to accept that the evidence does establish that the plaintiff was a victim of his own impetuosity, that in a desperate effort to salvage the dilemma of his own making he convinced himself that he had not resigned and, on the other hand, that he had been sacked. His behaviour on 16 February was an indication that he was searching for affirmation of that conclusion in challenging Mr Elliott to sack him, even if he had not done so up to that point of time. That conclusion is quite sufficient to support my refusal to accept his evidence where it was in conflict with that of the defendant's witnesses, all of whom I found to be universally honest even though there were some inconsistencies in their evidence, but these were largely on matters of relatively peripheral importance. I do not find any collusion as suggested between any of the defendants' witnesses and to the extent that there were inconsistencies, not only were they of relatively peripheral importance but, if anything, added to the authenticity of their evidence in general and the absence of any collusion. 81 Before I come to the end of the judgment, there is one other matter that requires attention. I acknowledge in dealing with this issue it was not strictly part of the plaintiff's case in any explicit sense, but it was a matter raised in cross-examination and I acknowledge, in part at least, in questions from the bench and that was the question of whether, in the face of his impetuous act of resignation, the subsequent behaviour of the plaintiff amounted to some retraction of that resignation and whether that would make any difference to the ultimate decision. 82 The relevant authorities are quite clear that, as a general principle an act of resignation, particularly where that act has been subsequently accepted, as I have found in this case it was, cannot be unilaterally withdrawn unless the withdrawal itself is accepted, of which there is certainly no evidence in this case. 83 Mr Elliott consistently adhered to the position that the resignation had been accepted from the outset and, as I have already noted, the invitation to submit grievances on the plaintiff's part, initially orally and subsequently in writing, was entirely consistent with that position because such an invitation was only made as a forerunner to the possibility of re-employment, not on the assumption of continuing employment. 84 The authorities supporting the general principle that I have summarised are to be found, first of all in the decision of Diplock J in Riordan v The War Office [1959] 1 WLR 1046 and the judgment of Grey J in the Federal Court in Birrell v Australian National Airlines Commission (1984) 5 FCR 447, as well as the New South Wales Court of Criminal Appeal decision in The State of New South Wales v Paige (2002) 60 NSWLR 371. The only exception to the general rule, on the basis of those authorities, and one which is very narrowly construed, is that the resignation is capable of withdrawal if it was offered in a highly emotional state and retracted swiftly. A proposition for which the authority is Martin v Yeoman Aggregates Limited [1983] I CR 314. 85 While the first component of that exception may apply in this case, that the resignation was offered in a highly emotional state, there is certainly some evidence to support it. There is no evidence to support a swift retraction. In fact, quite the contrary. The plaintiff has never retracted his resignation because his position has always been that he never resigned. In those circumstances it is impossible to bring the case within that particular exception and therefore, even if the argument had been pressed that there had been some withdrawal of the resignation, it would not as a matter of law have had any effect. 86 The plaintiff has therefore, for reasons that I have given, failed to make a case for wrongful dismissal and I accordingly enter a verdict and judgment for the defendant. It would, in ordinary circumstances, follow that the costs would follow the cause and the order would therefore be that the plaintiff pay the defendant's costs on the ordinary basis. ********** 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. 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