Supreme Court New South Wales Medium Neutral Citation: John Frederick Hillam v Ivan Peter Lewis [2012] NSWSC 640 Hearing dates: 14, 15, 16, 17, 18, and 21 May 2012 Decision date: 12 June 2012 Jurisdiction: Equity Division Before: Sackar J Decision: Paragraph 156 Catchwords: Contract, negotiations, oral contract, alleged declaration of trust, contract construction, commercial context, purpose and object of the transaction, lack of contemporaneous evidence, credibility of witness, alleged admission Cases Cited: Allen v Carbone (1975) 132 CLR 528 Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd [1988] 18 NSWLR 540 Cubillo v Commonwealth (No 2) [2000] 174 ALR 99 Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317 Fox v Percy (2003) 214 CLR 118 Helton v Allen (1940) 63 CLR 691 Lym International Pty Ltd v Marcolongo and Another [2011] NSWCA 303 Pegela Pty Ltd v Oates [2010] NSWCA 186 Prenn v Simmonds [1971] 1 WLR 1381 Ryledar Pty Ltd v Euphoric Pty Ltd [2007] 69 NSWLR 603 Taylor v Johnson (1983) 151 CLR 422 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 Watson v Foxman (1995) 49 NSWLR 315 Category: Principal judgment Parties: John Frederick Hillam - plaintiff Ivan Peter Lewis - first defendant Mintech Resources Pty Ltd - second defendant Goldus Pty Ltd - third defendant Mawson Gold - fourth defendant Razorback Iron Pty Limited - fifth defendant Royal Resources Limited - sixth defendant Representation: Counsel: M Condon - plaintiff K Odgers - 1 - 4 defendants R Foreman - 5 & 6 defendants Solicitors: Allsop Glover - plaintiff Kelly & Co - 1 - 4 defendants Squire Sanders - 5 & 6 defendants File Number(s): 2010/48042 Judgment 1In his amended summons the plaintiff seeks a declaration that the first defendant holds on trust for him 10% of the shares in each of the second defendant, the third defendant and the fourth defendant. 2Further the plaintiff seeks a declaration that the first defendant holds on trust for him 10% of any benefit derived from his shareholding in each of the second defendant, the third defendant and the fourth defendant. 3The plaintiff in addition seeks an order that the first defendant pay him the sum of $282,000 referable to geological and consulting services provided. 4The plaintiff also has a claim for damages or equitable compensation and an account of profits. 5Further and in the alternative the plaintiff seeks a declaration that the second defendant holds 10% of the Mintech assets (other than EL 4267) subject to an equitable charge to secure payment by Mintech of the value of the plaintiff's contributions to the Mintech assets. 6The first to fourth defendants deny that the plaintiff is entitled to the relief sought. 7The proceedings as originally cast sought relief against fifth and sixth defendants. The plaintiff settled with these defendants on the first day of the trial, and they accordingly withdrew from the proceedings and took no further part. Background Facts 8The plaintiff is a geologist having graduated with honours from the University of Adelaide in 1975. He worked for a number of mining companies over the years in Western Australia and overseas, and in 2008 the possible opportunities for trading in iron ore for export excited his attention. 9The first defendant is the sole director of the second, third and fourth corporate defendants and at various times has been a shareholder in each of those entities. He was for many years a member of Parliament in the South Australian House of Assembly and Speaker of the Parliament during 2002 to 2005. Since leaving the Parliament he has been engaged in entrepreneurial activity in connection with the mining industry. 10Each of the defendant corporate entities hold various mining assets. The second defendant at the time of events surrounding the dispute in these proceedings: Mintech Resources Pty Limited (Mintech), held the following tenements: EL 4267 (formerly EL3143 to June 2009), ELA 138/05, ELA 101/107 (which was converted to EL 4773 on 13 September 2011, but set aside on 22 December 2011) 11The third defendant, Goldus Pty Limited (Goldus) holds EL3927, EL3997, ML5337, ML5471, ML5485, ML5486, ML5546, ML5550, ML5759, ML5886, ELA116/07 and MPL28. 12The fourth defendant Mawson Gold NL (Mawson Gold) holds ELA 2225/09 and ELA 99/07. 13EL 3143, EL 3927 and EL 3997 were exploration licences to explore for all base metals in an area known as Razorback Ridge, in South Australia. Razorback Ridge contains very substantial iron ore deposits. 14In or about May 2008 the plaintiff was introduced to representatives of a Japanese trading company, Sojitz Australia. Having busied himself to make certain searches at ASIC and the Primary Industry and Resources South Australia (PIRSA) he discovered not only the existence of the first defendant but of Mintech. 15Mintech was entitled to explore for all base metals including iron at Razorback Ridge and Iron Peak for a period of 5 years. 16Both the plaintiff and the first defendant agree that they commenced dealing with each other in or around July 2008. The plaintiff made contact with the first defendant indicating to him that he was a geologist and that he acted for a Japanese company Sojitz Australia and informed the defendant that there were funds available to be used by way of investment in a joint venture in relation to Razorback Ridge. 17In early August 2008 the plaintiff attended at PIRSA and purchased a number of reports concerning Razorback Ridge and also maps of the area. Having considered the material he formed the view that there was potential for the development of a mine at Razorback Ridge and that it may be commercially viable. 18Again in early August the plaintiff and the first defendant together with a representative of Sojitz made a site visit to the Razorback Ridge area. 19At or about the same time the first defendant emailed a proposed Memorandum of Understanding to the plaintiff in relation to a potential joint venture with Mintech. That Memorandum of Understanding was never executed. However one of the essential features of the agreement was that the plaintiff (described in the MOU as the third party) was to acquire a 10% interest in a successful joint venture were it to occur. In that event he was also to have a right to appoint a director to the board of the joint venture entity. 20The plaintiff asserts that in late August and/or early September 2008 he and the defendant agreed in a conversation that if he was able to procure a joint venturer to replace Sojitz then the terms of the Sojitz proposal would apply to a joint venture with any other party and in particular the plaintiff and the parties associated with him would acquire 10% interest in the joint venture. 21Also the plaintiff asserts that in late August and/or early September 2008 the first defendant requested the plaintiff to provide geological and consulting services. The plaintiff further asserts that from late August until early November the plaintiff assisted the first defendant in negotiations with potential funders and/or joint venturers in respect of the Razorback Ridge project. The plaintiff also asserts that he expressly raised with the first defendant the question of being paid for his work and he asserts the first defendant agreed with such a proposition. The plaintiff also asserts however that he and the first defendant made an arrangement whereby the plaintiff would not be paid consulting fees until either the second or third defendant had obtained sufficient funding in connection with the Razorback Ridge project. 22The first defendant disputes that any agreement of the sort asserted by the plaintiff was in existence as at November 2008. 23On 6 November 2008 the plaintiff sent an email to the first defendant enclosing what he described as a guide for possible quotation for the provision of geological and consulting services and expenses for "internal discussion only". The document purports to be a quotation for expenses to be incurred for 2009 for the provision of a number of services including laser mapping field work and the like, and clearly is intended to cover a number of employees including the plaintiff himself. The total estimated expenditure excluding GST was said to be in the order of $1.245 million. 24On 16 November 2008, the first defendant sent an email to the plaintiff informing him that he had entered an agreement with a company called New Rise Properties (New Rise) to act as a broker in an attempt to arrange funding. A Mr Manthorp was the principal of that company. 25Further in the same email the defendant stated (my emphasis): Also, forgive me for saying it, but I fear I have not got my head around my ethical obligations of payment to you somehow. Your frank précis of that responsibility to prompt my memory will be welcome and appreciated. 26On 17 November the formal agreement was executed with New Rise and the plaintiff witnessed the first defendant's and Mr Manthorp's signature on the document. Mintech and the first defendant were relevantly the parties along with Mr Manthorp and others. The agreement contained a number of salient terms and conditions. In particular that New Rise/TQM Enterprises (an entity associated with Mr Manthorp) were to receive a shareholding of 3% of the equity in Mintech effectively upon the raising of capital. 27On 23 November 2008 (at 12.17pm) the plaintiff sent an email to the first defendant. That email is in the following terms (my emphasis): I have to got out for two more meeting today for your project and rather than talking on the phone I will give our my thought so that you can think about it what you would like. Originally we talked about 10% if I brought a major company into the project but I think we have moved way beyond that now. Parr A 3% A. In th case of the first $1.1 million work that I quoted for a years work 1 This could contained up to $200,000 for Maptech for the program training and laser mapping. WE may wish to do a second fill in of laser mapping. 2. $250000-$350000 airborne study 3. Equipment hire vehicle caravan, food running costs, field assistant, staff %150,000 4. My fee 5. $120,000 to special staff member Mr. P. Originally you said if we put up $650,000 then we could have 3%. Out of the first $2,000,000 can you pay me $450,000 up front first and I will internally fund the rest ie $650,000 therefore you can be assured that this work will be complete. I also wish to remain the geologist on the project and play a long term active role. If we decide we want to hire other people apart from Mark Davies they work under me. I will not stand in the ay of somebody more experience because I wish to play other roles in helping you get this project started. Part B raising $6-$12 million and all amount in the future that you may wish top raise in near future ask can for 4%. Part C 3% to bring Mitsubishi, Sojitz or another party into the last part of the deal can I ask for another 3%. This part can be anyone but we will need to work as a team in order to successful in this last parts and it may also mean that we have to fly overseas to meet with these companies. If it is Mitsubishi or any body else that Mikio is involve with come of board I have a gentleman's agreement with him to share this part I will not break this agreement with Mikio. 28The defendant responded by email a few minutes later (12.21pm): I forgot to say at all time I will try to get the best deal for you that involve the least equity. I think you already know that from our conversations. 29The first defendant asserts that a conversation took place between himself and the plaintiff on 28 December 2008 which involved the entry of the plaintiff and the first to fourth defendants into an agreement. 30In particular on 28 December 2008 the first defendant was in Bougainville. He says that he rang the plaintiff for the purposes of checking on the status of negotiations with New Rise. During the conversation he discussed the provision of geological services. He says that he told the plaintiff he could not pay him there and then for geological services but he was prepared to pay at the rate of $20,000 per month for full time work. He also says that he stated that he had no geologist on PIRSA's files for the company's licenses and he would like to tell PIRSA that the plaintiff was the relevant geologist. He then says that he told the plaintiff that he would be paid as soon as "you or someone else" comes up with a successful deal and the companies receives funds. The first defendant says that the plaintiff agreed to that proposal. 31The first defendant says it was agreed the plaintiff was to provide all geological services that may have been required by PIRSA in relation to the exploration and exploitation licenses EL3143, EL3927 and EL3997. The first defendant further asserts that in the course of the same telephone conversation he stated explicitly that if the plaintiff was able to secure a potential investor that puts "me" in funds then he was prepared to give a 10% shareholding in the company or companies which entered into an agreement with a potential investor, and actually receives funds as a result of the agreement. He said in the course of the conversation he told the plaintiff that he estimated that he needed $250,000 as an upfront payment on the signing of the Memorandum of Understanding or similar document and at least $5 million on signing an agreement. He insists that he told the plaintiff that if he could get that arrangement the plaintiff would in return receive 10% shareholding in the company or companies that benefited from such a deal. He asserts he explicitly asked the plaintiff whether he was satisfied with that arrangement, to which he said the plaintiff said he was. 32The plaintiff denies that such a conversation ever took place, or that such an agreement was ever made. 33Attempts to raise finance had up to that point been unsuccessful. For example there had been negotiations with a Mr Bevitt and an entity called Coffey Resources. That eventually came to an end in about late January 2009. 34The first defendant sent a long email on 19 January 2009 to a Ms Susan Watson, the exploration coordinator at PIRSA. In the course of that email which dealt with a series of matters not immediately relevant to this litigation the first defendant said: This missive will serve to reassure you that John Hillam of Sydney is a geologist who has contracted with me as sole director of Mintech Resources, Goldus and Mawson to do/manage an exploration program on our ground this year worth over $1.2 million. Getting him to quote and accept and then keeping him has not been easy with all the bastardry that has been undertaken by people beating up phurphys in the media and trying to steal the company (s) from us. But he has signed and has already done considerable work since the middle of last year when he stopped work on the ground as the result of the earlier September fraud attempt by Birdseye and his associates. He is back on file since just before I left and now needs access to recent (last 3 years) reports we have filed. Please let him have access to that material. 35On 23 February 2009 the plaintiff sent an email to the first defendant. It contained the following (my emphasis): I am increasing becoming very disillusioned with this task and having to listen to all these crap people time and time again. I must have meet more than 30 different lots by now and one by one they are all pretenders who have nothing. I too have wasted a lot of my time for no results during all this time. I am also becoming worried about the fact that I have no agreement with you at all. 36On 23 February the first defendant responded by making suggestions as to how he might deal with questions of calculations and expenditure. 37On 24 February the first defendant sent an email to the plaintiff which contained the following: John You have said "The more I look into this project I feel that I have more to hide. "WHY? For god's sake man, you KNOW THE F>>>>>Reasons!! Swanson, Birdseye, Stephens Russel-Taylor all trying to con me or blatantly steal it!!! What am I supposed to try and do? I've hidden nothing from you. EVER! What's more I've spelt out tyhe procedure you'd be advised to follow to save time talking to F>>>>>TYRE KICKERS! If they can't prove funds they are a F...waste of your good time, eh? They're jackals working out how to get a bone for nothing. PISS THEM OFF!! YOU DO HAVE AN AGREEMENT WITH ME. Stick to your knitting and stop fussing, wherein you are putting blinkers on your vision of what is there. Thank you for what you're doing. PETER. 38The plaintiff responded on 24 February 2009 by email but the content of that email is directed entirely to technical matters. 39During this period the plaintiff was attempting to complete the 2007 and 2008 annual reports for EL3143 and the six monthly expenditure reports. These were required under the Mining Act and Regulations. The plaintiff communicated with Ms Watson of PIRSA from time to time to inform her that the various required materials were being completed. He collaborated with the first defendant for the purposes of preparing these reports. 40Also during this period in late 2008 and early 2009 there is little doubt both the plaintiff and the first defendant were in straightened financial circumstances. 41On 1 March 2009 a proposed work program and budget in support of the application for the renewal of EL3143 was lodged with PIRSA. The application was granted on 22 June 2009 and the new exploration licence was issued on that day. 42By the end of March 2009 the plaintiff asserts that he had prepared a number of reports for Goldus of a similar nature to that which he had prepared for Mintech covering the year 2008. 43The first defendant however was overseas until around about 15 March 2009 when he travelled to Sydney from Port Moresby via Cairns. He stayed at the plaintiff's home until 18 March when he returned to Adelaide. 44On 16 March 2009 when the first defendant was staying with the plaintiff the plaintiff asserts that he had conversations with the first defendant not only about the daily rate he should be charging but he also asserts that the discussion centred around a person called James Chu. In particular the plaintiff asserts the following conversation took place: Plaintiff: "If they are becoming involved we need to clarify our agreement. We need to make a formal agreement about my 10%". First Defendant: "That is fine however if James is to be involved in the company I will have to give him the same amount of equity as you. James has 3% in Mintech. I will have to give him another 7%" 45The first defendant denies having a discussion with the plaintiff along these lines. 46On 18 March the plaintiff prepared a long discussion paper which included a detailed proposal and sent it to the first defendant. Amongst other things the plaintiff stated as follows (my emphasis): At this time no formal agreement is yet recorded between the parties apart from the PIRSA record that John Hillam is now the geologist on file. This arrangement could easily change by either party's disagreement or departure. ... Summary of Mintech Resources offers to investors and brokers. Ian Manthorpe and Tina 3% equity in Mintech if they raised $6 million from other parties. 10% equity in Mintech and 5% in Goldus for $6 million capital from Bevitt and others. Mikio was offered 3% equity for an investment of $650,000 JH offered to spend $650,000 part of $1.1M spend if $450,000 was paid first for a 3% equity in Mintech and Goldus Iris group ask for a 10% success fee (reduce to 5%) for raising $2-6 million WA drilling group were offered 20% equity for $6 million including contra drilling work. Pre sell $4m gold at 20% discount 2.5% success fee to JH for gold sale (no success fee for seller is being offered at this time). Tina and Ian offered 1% success fee and 2% equity for a $300 million investment in JV (also 50% of the JV for the investor) I would like to discuss at this time a workable and long term agreement. In such an agreement I would seek a 5 year contract to Mintech and Goldus whereby this would be a long term work and incentive package based on fees paid for my time and work and an equity package based on achievements made. ... You may wish to start by listing what you would feel comfortable for certain achievements or benchmarks and a JV agreement with a major party is obviously be a major achievement that we would all be working towards. ... Note I accept your offer for a 2.5% success fee for hopefully raising $4 m by pre-selling gold from the Teetulpa alluvial fields as part of this wider package. Further to the agreement 1.5 year agreement 2.3% equity in Mintech and Goldus upon signing and subject to success of capital raising by pre-selling $4,000,000 worth of gold 3.additional 2% equity in Mintech and Goldus if contract remains in forces at 1st November 2010 within that time a JORC standard being obtained at either Iron peak and or Razor back ridge 4.Additional 2.5% equity in Mintech and Goldus upon successfully completing a joint venture agreement or other eventuality (such as public float, bank loans) for the provision of the mine development. 5.Free carriage of Mintech's equity into the JV 6.Contract fee of $100 per hour. Daily field rate of $1000 per day and office rate of $800 per day to be re-evaluated after the end of each 12 months. 7.All external cost at the company's expense. 8.Payment of $80,000 for prior work and $100,000 payment to the end of March 2009 subject to completion of outstanding reports at EL 3997 and EL 3927. 9.Success fee of $100,000 for raising $4,000,000 by pre-selling gold contracts 10.6 months termination payment based on full contract for early termination by the principal. Termination payment of 24 months full contract fees after 1 November 2010. 11.After 1 November 2010 all incentive that has been agreed remain in force independent of termination, death or disability assignable in the case of death to JH airs (sic) and successors. 47On the same day a few minutes later the plaintiff sent an email to a Mr Christopher Fisher (of Envisage, another finance broker) amongst other things an email that states: I have made a draft contract with Peter Lewis in Sydney with regard to my continuing involvement as he is staying with me. 48On 1 April 2009 the first defendant wrote to the plaintiff by email. This email concerned another entirely different arrangement concerning business opportunities in gold trading in Bougainville. Amongst other things he stated: I will continue to trade with the profits as I must make A$20 m to cover off all my existing debts and obligations and current and impending obligations during the forth-coming six months before the end of June. I really appreciate your work and support as well as the loyal forbearance you have demonstrated to date..... Please don't think too badly of me for telling you that half of my share in the deal is a fair thing for your part in baiting the hook to get a taker of the deal in providing finance for it. I had to conceive the scheme and see to it that it can work for win: win outcomes for all of us. I do not want you to conclude that I think I have offered you too much. I have not. I don't resent sharing equally with you, the profit of the trading, during the term of the trading contract. Lets see if we can make an uncomplicated deal for the six week term , eh? Peter 49On 25 April 2009 the first defendant travelled to Sydney and again stayed with the plaintiff until around 2 May. 50During his stay with the plaintiff on this occasion the first defendant and the plaintiff had a number of discussions concerning their joint activities. The first defendant asserts for example that during one of these discussions he said to the plaintiff that if the plaintiff could find a third party to sign his gold trading deal on completion of the deal he would give the plaintiff a commission of 50% of the total profits of the deal. He says the plaintiff accepted that offer. 51The plaintiff asserts during this time he was having discussions with the first defendant concerning what he describes as his equity participation in the companies. He asserts that during one of the discussions the first defendant said to him: We have an agreement. You have 10% in all my companies. As soon as we get a deal we can document it properly 52The first defendant on the other hand denies such a conversation as the above took place, but he does accept the plaintiff said to him that he had done a lot of work for the companies and that he wanted a percentage equity in the companies "around 20, 40 or 50 percent for all my hard work". The first defendant asserts that he said to the plaintiff: As it stands we have agreed that you will be entitled to 10% equity upon a successful deal. If I were to increase your equity share to 20% or 30% then to be fair and not to dilute the equity held by James Chu which is currently 3% I would need to increase James' equity and others like him to match your equity. There is no way that that will happen. 53The first defendant also asserts during the course of this conversation he said to the plaintiff: We have already agreed that you will receive $20,000 per month for your geological services and if you are able to bring in cash from a successful deal then you will be entitled to a "success fee" of 10% equity in the company or companies that benefit. I cannot pay you anything at the moment as there is no cash. I need a successful deal before I can pay you anything. I need no less than $5 million and around $20 million to $25 million would be more desirable. I need to pay other creditors too. 54The first defendant asserts that the plaintiff said: That is settled. I can get somewhere with that. 55The plaintiff denies such an agreement was ever made and that the first defendant made those statements. 56Both the plaintiff and the first defendant appear to agree that the plaintiff continued to press the first defendant for something in writing by way of a comfort letter. 57On 1 May 2009 the first defendant prepared and handed a copy of a letter of the same date to the plaintiff whilst he was again staying at the plaintiff's home. That letter reads as follows: Dear John Re: Professional Services Since you first contacted me in August last year on behalf of a group of prospective investors, the development of our relationship and in particular, through your professional services provided to both Mintech Resources and Goldus and undertaken without rancour or reservation for the last seven months have been very much appreciated. Thank you for your patience in allowing these companies to continue to receive the benefit of those services for the contractual arrangement whereby we have the benefit of these services without having to make cash payments they would otherwise have had to meet from scarce resources, which would have proved embarrassing if redirected to you. I therefore write to confirm our conversation(s) that We acknowledge our debt to you and will pay you a gratuity for your professional services [to cover all your costs] of $20,000 per month as soon as we have success in our cash raising programme [whether through sale of equity, or sale of assets or both]. We will put a new agreement in place with you for your services following the completion/settlement of whatever deal we get so that it is relevant in that [as yet unknown] context. You have agreed to accept an equal share of my part in the gold trading programme I am undertaking in the 'Programme for Peace' I initiated on behalf of the World Peace Council in my work in Bougainville. That work [in quest of peace] is aimed at getting a rapid cash flow into the community at the grass roots level [of the communities which have the traditional land ownership] in those areas which have gold-bearing gravels in the streams. That should result in the sale of -1 tonne of gold and yield us a net income before tax of at least - $1.2m over the next six months or so if we can kick it off quickly [before the beginning of June]. I trust that we have rapid success for the sake of all concerned. Yours Sincerely 58Towards the end of May 2009 the first defendant again returned to Sydney and stayed with the plaintiff until around mid July. 59At or about this time there were discussions ongoing with a company known as Geneva Manor Pty Ltd (of which a Mr Christopher Fisher was the principal). On 12 June a Memorandum of Understanding was signed between the first defendant and each of his corporate entities (Mintech, Mawson Gold and Goldus). The Memorandum of Understanding recorded the proposed sale by those corporate entities of the first defendant to the proposed purchaser, Geneva, for the sum of $40 million. That sale did not in turn proceed. 60For reasons that are unexplained on 4 June 2009 the plaintiff asked the first defendant to print yet another copy of the 1 May letter he had given him earlier on that date. On 4 June the first defendant forwarded an additional copy of the document to the plaintiff. 61On 13 June the first defendant asserts he sent an email to the plaintiff (which the plaintiff accepts he got for the first time on only 9 July). The communication allegedly sent on 13 June is in the following terms (my emphasis): Saturday 13th June 2009 Dear John As a corollary to the foregoing comments and undertakings on my part of 6 weeks ago [above] I am compelled to remark that I am disappointed that we haven't found a taker [for any kind of structure] in the deal we seek. We both know that must turn around now. Notwithstanding the disappointment and anxiety, I set down here for your protection in the event that I suffer some mis-adventure before I can get the following beneficial interests in our ground (or more particularly, the Companies which control it) to you. If we can get a deposit in excess of $250k by COB Tuesday in a deal which delivers us $5m in cash on any terms acceptable to the mining industry companies controlled by me by the end of June, AND if we can then secure some franchise or rights to act as sole agent for the Ukraine ground-penetrating passive electro-magnetic mineral exploration technology (PMRSE), which you can then make compatible with Vulcan survey IT I will happily provide you with 10% of my beneficial interest as at this time in Goldus, Mawson Gold and an equal percentage of shares to my interests in the newco exploration company we then establish to undertake that work. I also agree and believe that you should pursue the option of doing a PhD on the process of establishing the software to make Vulcan & PMRSE compatible with one another and accordingly, be the CEO of that newco. I think we should name that newco XMIN/CyberTECH or XPCybertech or XPMINTECH or X-P-$Minus to encompass the ideas that it is a "cybernetic systems mining and exploration technology" business. All of the foregoing will be subject to the usual performance arrangements. In the event that you want to sell some or all of your equity, or either of us wants to dissolve our relationships, we each tell the other, In consequence, that triggers a process in which we then both have 28 days to prepare a detailed bid for the other person's interests. The bids shall be put in a sealed envelope and lodged with the Solicitors [currently Kelly & Co] of Mintech or Goldus [as the case may be] by 4pm 28 days after notice was given. The solicitor on the file will open the envelope[s] containing the bid[s]. The unit prices for the respective interests are compared in silence by the solicitor without disclosing them to either party [whether present or not] or their representative witnessing the procedure. If the bids differ in unit value more than 10%, the higher bid is announced and the successful bidder has seven days to pay the other party. If he fails to do so the other party has seven days to pay his bid [lower] price. If perchance the two prices are within 10% of each other [per unit] then the prices are not disclosed and the two parties have a further seven days to review and resubmit their bid in sealed envelopes. The highest bidder of that bid wins & pays within 7 days. In the event the winning party fails to make the payment the other party has 7 days to pay the lowest of any of the four bids. If that fails the process is at an end for at least 6 months. As soon as I have funds in hand sufficient to enable me to do so, I will discuss this with you and form the company as well as have Kelly & Co put this arrangement into a formal Contract document. 62On 14 June whilst staying at his home the plaintiff alleges that he said to the first defendant: I want my interest documented. He asserts that the first defendant responded: You have 10% interest in all my companies. The Geneva Manor deal is for $45 million and this will give you $4.5 million. If we go with Howard Renshaw you will get more. I will ask Nina to issue 10% shares in all my companies including Mintech, Goldus and Mawson Gold NL if that makes you feel more comfortable. 63The first defendant denies this conversation and asserts that the only relevance of the Geneva Manor deal to the plaintiff was that if this particular deal came off, the plaintiff would be paid for his consulting fees. 64In the meantime the parties had been negotiating with a company called Bligh Street Capital Partners (Bligh Street). That was a company associated with the Honourable Mr Neville Wran and Mr Albert Wong. The plaintiff and first defendant with others attended a meeting at Bligh Street on or about 16 June 2009. At that meeting it is asserted by the plaintiff Mr Wong said to the first defendant: Who are the shareholders in Mintech? The plaintiff asserts that the first defendant said: I control the majority of the shares and as sole director I can execute a contract on behalf of Mintech without getting approval from other shareholders. The other shareholders are James Chu who has 3%. I hold 3.1% in trust for another person. John Hillam has a substantial beneficial interest in all my companies including Mintech and there are a few other small beneficial interests. 65The first defendant denies that the above was said at this meeting. He remembers attending such a meeting but that the meeting was preliminary only and there was no discussion about shareholders. The first defendant does assert however that at one meeting with Messrs Wran and Wong at some point prompted by the plaintiff he did say: A great of good work has been done by Hillam and Hillam will receive a substantial benefit from the success of this deal 66On 25 June Mintech and Bligh Street executed what is described as a term sheet agreement. The agreement was signed by both the plaintiff and the first defendant. Relevantly the term sheet included the following statements: It is proposed to incorporate a new entity Mawson Metals Group (MMG) and to list it on the ASX. BSCP has been mandated to assist and co-ordinate the capital raising and listing process for MMG on behalf of Peter Lewis and Mintech. Mintech is desirous to vend in its mining tenement EL4267 and designated additional areas into MMG and to raise new working capital of approximately $10M for exploration and drilling to establish a JORC compliant iron ore resource over a period of 18 - 24 months and to have its securities listed on the ASX. It is agreed that Mintech or interests associated with Peter Lewis will own 70% equity in MMG and BSCP (Messrs Albert Wong and Neville Wran) will have 20% with the investing public holding 10% on completion in the Company. Mintech and Peter Lewis will also be entitled to nominate directors to the board of MMG (including Peter Lewis and John Hillam) given their controlling shareholder interests in the Company. MMG will issue a prospectus to raise approximately $10M in working capital. New share equating to approximately 10% of MMG will be issued to the new investors. 67The plaintiff asserts that on 8 July he received a series of emails which contained an email from the first defendant to Mr Wong which indicated amongst other things "James is the only other registered shareholder of Mintech". As a result the plaintiff says he spoke to the first defendant and asked him when he (the first defendant) was proposing to transfer the shares as agreed. He asked the first defendant had it been done yet and the first defendant said: No it has not been done yet because I am here and I have not been back to Adelaide The plaintiff asserts he said: Well can you confirm in writing that you will do it He asserts the first defendant said: Yes I will send you an email 68The first defendant denies the plaintiff's version of events but asserts the plaintiff requested something in writing so he could show his creditors. 69On 9 July the first defendant sent an email to the plaintiff with the subject "your comfort". The email contained the text of the 1 May 2009 letter and the letter dated Saturday 13 June 2009. Further at the bottom of the second page of the communication is the date "Thursday 9 July 2009" and then the following text (with my emphasis): Just now quite by accident when looking for the, I discovered what I have previously composed but thought lost under the title $Mintech_Goldus Letterhead in a scrambled alpha-numb file on C: Drive. As nothing of consequence has materialised and in response to your request for something to comfort and to protect your interests over and above what is contained in the letter of 1 May [above], I will see Andrew Corletto as soon as possible on my return to Adelaide and proceed with the transfer of equity to you in the Mintech structure as outlined above, with further performance- based transfers in Goldus and Mawson, "if as and when" we get them into commercial production. Lets hope that Bob Ells is more honourable that these other types like Rory McDee..., Vince Keller. Cawwood, David's dudes, Frank & William, all of whom deceived you about having cash in hand to invest and/or who have some kindergarten ideas of what venture capital is all about, as well as Boris who said he has money but turns out his pockets to reveal nothing but a few hopeful connections down the track. Sincerely peter 70On 9 July the first defendant was again staying at the plaintiff's house. The plaintiff says as a result of receiving the email he had a conversation with the first defendant. He says he told the first defendant that the email was "not what we have agreed". He told the first defendant he alleges that there was an agreement that he would have 10% in each of the defendant's companies and that they were to set up an exploration company where each were to have 50%. The plaintiff insists the first defendant agreed that he would instruct Andrew Corletto (the defendant's solicitor) to issue the 10% shares when he (the defendant) got back to Adelaide. The plaintiff again asserts that the first defendant also agreed to get "Nina" (the first defendant's accountant) to issue the shares in Mawson Gold and Goldus "to you". The plaintiff also asserts that the first defendant said he would defer setting up any exploration company (as had been discussed) and indicated that there was no money for it at the moment but that it would be done when it was required. 71The plaintiff made what he asserts is a contemporaneous note of the alleged conversation of 9 July in a diary. He said in his evidence that the diary had been given to him by his wife and she had suggested that he make contemporaneous notes of important things. I will return to this diary entry later in this judgment. 72The first defendant stayed it seems with the plaintiff until 11 July when he returned to Adelaide. He denies the conversation asserted by the plaintiff, on 9 July 2009. 73On 12 July the plaintiff sent an email to the first defendant in the following terms: (Ex D2). Thanks for this information. Later week everything was in such a rush that I did not have much time to read this letter in full. Some comment that you may wish to consider. I have spoken with Ritchie today and ask him to organize a meeting with Albert and Neville about BOB Ells for Monday this week. This will crystallize Bob Ells into doing something whatever that maybe is still unknown at this time. Therefore while our needs involve raising a significant amount of money very quickly in order to remove those irritation that we have at this time the process that Neville and Albert have agreed to will resulted in $10 million being raised $8 million for the project and $2 million to you off the table within the next 90 days. We both have to address how we can survive during this time. In relation to the Gold trading this opportunity will still be available for years to come even if it were not on an exclusive basis. Give the inability of the King to organize his affair better than he has over the last 6 months it is more than likely that He will achieved nothing much in the next 6 months either leaving this opportunity still in your hands. Therefore perhaps you don't need to be so impatient in having to deliver on your Bouganville promises as soon as you may wish or like to. The gold trading will still be there in the future after you get the $2 million and this can wait a bit longer if it was necessary. Disappointing to you perhaps but another 3 months is not too long to wait when you consider that 3 - 4 months has already gone by already. Regards John Hillam 74On or about 20 July the plaintiff and the first defendant were staying at the Peterborough Hotel in South Australia. There was allegedly a discussion between the plaintiff, the first defendant and a Mr McDonald (another broker) who had been involved with MMG and a possible IPO. The plaintiff asserts some negotiations were taking place between Mr McDonald and the first defendant. In a private conversation between the plaintiff and the first defendant the plaintiff asserts that the first defendant again confirmed that he (the plaintiff) had 10% in the companies. The first defendant denies such a conversation although he accepts conversations did take place at or about the relevant time between himself, the plaintiff and Mr McDonald. 75During the balance of July the plaintiff and the first defendant were from time to time concerned in attempting to do all they could do to assist Bligh Street in the raising of capital. The parties were also working on obtaining a valuation of EL4267. The first defendant continued to negotiate with other parties interested in investing in the Razorback Ridge project, one such entity was Ausmon. The first defendant had offered to sell Mintech for $60 million to the principal of Ausmon, Mr Boris Patkin. Again that transaction in turn did not go ahead. 76On 28 or 29 July the plaintiff asserts he had a conversation with the first defendant in which he said: Peter I have not received any document regarding my shares yet. What is happening? The plaintiff in his affidavit does not record what if any reply the first defendant said. 77At about this time the plaintiff was communicating with Mr Robert Pyper (a valuer at a company called Minnelex) with respect to a valuation that was being prepared in relation to EL 4267. From an email from the plaintiff to Mr Pyper dated 29 July it is clear that at that time discussions were being undertaken on the basis that a value of approximately $160 million was a possible outcome in relation to that tenement. 78On 30 July 2009 the first defendant sent an email to the plaintiff and a copy to Nina. The subject of the email is stated as "Mintech and Goldus shares". The email states as follows: Please send Nina the name and address of the person/entity into which we must now place your beneficial interest of 10% in Mintech. I have not been well this afternoon. Giddy as hell in fact. I became ill during my composition of that letter to Boris. I tried to be polite in keeping him in the swim but did not want him to think that it is all hunky dory. It is not. Had another bloke lurking outside too. Peter 79In early August 2009 the plaintiff had discussions with Mr Wong of Bligh Street concerning an advance to Mintech Resources of some funds. Bligh Street advanced the sum of $250,000 in August 2009. 80The plaintiff acknowledges that on 14 August 2009 he was paid $65,000 by Mintech having previously received another $5,000. 81On 3 August 2009 the first defendant sent a long email to the plaintiff (along with others). The email in part states as follows (with my emphasis): If this deal with AUSMON succeeds by completing through the payment of the deposit of cleared funds before 4pm tomorrow, I confirm my commitment to you that, after settlement you will get 2% of the proceeds net of all costs to our side for your work in getting it done. That extra reward is in addition to the beneficial interests of 10% I promised you in Mintech for other efforts to help me/us hold it all together during these last 10 months. As you know it always follows that your 10% dividend will be calculated simultaneously with that to be paid to all other shareholders but comes after all creditors costs, reimbursements and outlays in Mintech have been met and provisions for taxes and contingencies have been determined. Such payments include your outstanding Consultancy Fees as well as your 2% 'success fee', both of which will have already been determined in that sequence and paid 82On 5 August and in the course of communicating with the plaintiff and other potential investors the first defendant stated the following in an email: John H is the geologist on file with PIRSA and he has a significant beneficial interest in the project as well as my full support in the good work he has been doing on many aspects of the commercialisation process to date. He has been working at it with increasing commitment through thick and thin for the last 10 months. He has all the background data and documentation relevant to it. He is no less trustworthy. You will first need to speak to him if you want information about the technical detail and data background of the project. 83On 29 July 2009 Mr Pyper prepared a draft valuation report valuing the magnetite project at between $130 million and $190 million with a preferred value of $160 million. 84By late August early September 2009 the plaintiff asserts that he was again concerned about moneys due to him for consultancy fees and also the lack of documentation in relation to his shares. 85By 23 August 2009 relations between the plaintiff and the first defendant were breaking down. On that day the plaintiff sent an email to the first defendant requesting as a matter of urgency that a number of things be done including documentation including his 10% interest in Mintech and the 10% "beneficial interest agreed" to be granted in Goldus and Mawson Gold with a new exploration company to be formed on a 50/50 basis. In the same email the plaintiff asked when the first defendant would address the $130,000 alleged to be unpaid as at the date of the email "for the last 12 months work for Mintech and other companies". The first defendant responded on the same day accusing the plaintiff of displaying "continual paranoia and ill founded accusations". 86On 31 August 2009 the plaintiff sent an email to the first defendant, Mr Andrew Corletto and Mr Albert Wong. In that email the plaintiff stated as follows (my emphasis): I note despite my earlier request more than a week ago none of these matters have been addressed or completed. Gentleman before I continue to do unpaid work for Mintech, MMG or any other company controlled by the Honourable Peter Lewis it is essential that my personal situation is satisfied and that the matters addressed below be undertaken, confirmed and or ratified. While I understand that in the case of shares in MMG this cannot be completed at this time until the final share structure has been decided and this will probably have to be completed at a later time but this should not prevent a written undertaking WRT the same and confirmation that under the Macquarie's proposal I would personal received 10% of Mintech's allocation with the same later rights as Mintech and similarly for any other proposal which could be finally accepted by all the parties. I am also aware that Ritchie Vereker who was given a 3% interest in Mintech for his part in bring Wran and Partners into the MMG IPO also wishes to have this interests transferred on a pro-rata basis to MMG. In the matters of Goldus Pty Ltd and Mawson Gold NL and my 10% shareholding, nothing should prevent this from happening right away. In the matter of the new exploration company a 50:50 share between Hon Peter Lewis and myself, this can be formally acknowledged prior to its formation. In the matter of $130,000 still to be paid to me acknowledgement of this debt can be undertaken, I assume it would be paid in full upon Peter receiving part or all of the balance of $2,000,000 payment that is to be made under the Wran and partner IPO agreement signed in June 2009. Nothing short of this would be acceptable. In the matter of my appointment as Executive director to MMG, nothing is preventing this from happening at this time. I trust that these matters can be completed ASAP as it will be essential that all these matters be addressed before I embark on any further work in SA from this Friday onwards. 87Through his broker, Mr McDonald, the first defendant had become acquainted with the CEO of Royal Resources Limited (Royal) (Royal was previously the sixth defendant in the proceedings) a Mr Marcus Flis, and had commenced discussions for the purposes of selling shares in Mintech, Goldus and Mawson Gold to Royal and entering an exclusive option agreement with the sixth defendant. This was all undertaken, the plaintiff asserts, without his knowledge on 11 September 2009. 88On 16 September 2009 Royal issued an announcement to the Australian Stock Exchange concerning the agreement to acquire the shares in Mintech. 89On 17 September 2009 the plaintiff sent an email to the first defendant. In that email amongst other things the plaintiff said as follows (my emphasis): I should not need to remind you that you have an existing and outstanding payment obligation to me for the balance of $130,000. This is for work completed up to May 2009. Notwithstanding the above I need to have ALL of the $130,000 paid in full and at this time. I note that a prior undertaking to pay $130,000 out of the outstanding amount of $200,000 several months ago was not paid as agreed. Only $70,000 was ever paid on that occasion 90In or around mid September 2009 the plaintiff ceased performing geological services. 91Proceedings were commenced in February 2010. The Contentions of the Parties 92The plaintiff alleges in broad terms that at all relevant times he had binding oral agreements with the defendants to the effect that he was entitled to consulting fees agreed at $20,000 per month and in addition, effectively for all of the work he had undertaken in relation to the various tenements, he was entitled to 10% equity in each of the three corporate defendants. 93In broad terms the first defendant agrees that there was a binding agreement between the plaintiff and the defendant. Further he agrees the agreement was oral and it is accepted that the plaintiff was entitled to be paid consulting fees at $20,000 a month. Any agreement which entailed the provision of equity however in any of the corporate entities was contingent upon the plaintiff arranging the requisite finance as agreed and was in effect to be a success fee for having done so. The Legal Principles 94Both the plaintiff and the defendants assert here that whatever contract was in existence at any relevant point in time, it was an oral contract. 95Whether or not parties intend to enter a contract and, if so its terms, is to be determined objectively having regard to the language used by the parties and which is said to constitute the contract. The High Court has repeatedly affirmed this proposition: Allen v Carbone (1975) 132 CLR 528; Taylor v Johnson (1983) 151 CLR 422; Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd [1988] 18 NSWLR 540; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165. 96As Campbell JA said in Ryledar Pty Ltd v Euphoric Pty Ltd [2007] 69 NSWLR 603 at 655: 262. For the purpose of deciding whether a contract has been entered, or what construction it bears, the common intention that the court seeks to ascertain is what is sometimes called the "objective intention" of the parties. That is the intention that a reasonable person, with the knowledge of the words and actions of the parties communicated to each other, and the knowledge that the parties had of the surrounding circumstances, would conclude that the parties had, concerning the subject matter of the alleged contract: Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at 461 [22]; Toll (FGCT) Pty Ltd vAlphapharm Pty Ltd (2004) 219 CLR 165 at 179 [40]; Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 8961 All ER 98; Taylor v Johnson (1983) 151 CLR 422 at 429; Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 549-550. 263. There is also authoritative recognition that a factor to be taken into account in deciding whether a contract has been entered and if so what are its terms is "the purpose and object of the transaction": Pacific Carriers Ltd v BNP Paribas (at 462 [22]); Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (at 179 [40]). In Pacific Carriers Ltd v BNP Paribas (at 462 [22]), the joint judgment of Gleeson CJ, Gummow J, Hayne J, Callinan J and Heydon J recognised the appropriateness of taking into account the purpose and object of the transaction, and continued (at 462 [22]): [22] ... In Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 350, Mason J set out with evident approval the statement by Lord Wilberforce in Reardon Smith Line Ltd v Hansen-Tangen [1976] 1WLR 989[1976] 3 All ER 570: "In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.'?" 264. But the purpose and object of the transaction is itself ascertained objectively - it is ascertained by considering what a reasonable observer, in the situation of the parties, would conclude was the purpose and object of the transaction. In Prenn v Simmonds [1971] 1 WLR 1381[1971] 3 All ER 237, Lord Wilberforce noted that Lord Blackburn's judgment in River Wear Com­missioners v Adamson (1877) 2 App Cas 743 at 763 had said that the task involved in construction required one to "... inquire beyond the language and see what the circumstances were with reference to which the words were used, and the object, appearing from those circumstances, which the person using them had in view". (Emphasis added). 97One of the important factors to be taken into account in deciding whether a contract has been entered (and if so what are its terms) is obviously the purpose and object of the transaction. But that purpose and object is itself ascertained objectively - it is ascertained by considering what a reasonable observer in the situation of the parties would conclude was the purpose and object of the transaction. 98As the Court of Appeal (Gleeson CJ, Hope and Mahoney JJA) said in Australian Broadcasting Corporation at 550: The case involves the objective determination of the intention of the parties from a consideration of a series of communications exchanged by them in the context of their dealings over a period of time. In those circumstances it is both appropriate and necessary to have regard to the commercial circumstances surrounding the exchange of communications and, in particular to the subject matter of those communications: Allen v Carbone (1975) 132 CLR 528 at 531-532. Furthermore, as was noted earlier, it is proper to have regard to communications between the parties subsequent to the date of the alleged contract to the extent to which those communications throw light upon the meaning of the language which is being considered for the purpose of determining whether it expresses an intention one way or the other upon the critical matter. At the least, such subsequent communications will often form part of the context in which the particular exchanges in question are to be evaluated. 99In Prenn v Simmonds [1971] 1 WLR 1381 at 1385 Lord Wilberforce said: ...The commercial or business object of the transaction objectively ascertained may be a surrounding fact,...evidence of the negotiations or of the parties intentions ....ought not be received and evidence should be restricted to evidence of the factual background known to the parties at or before the date of the contract including evidence of the genesis and objectively the aim of the transaction. 100In this case both the plaintiff and the first defendant, for the particular contracts they contend existed at relevant points in time, rely as the source of those contracts upon conversations which took place between them allegedly at various times. 101In Watson v Foxman (1995) 49 NSWLR 315, McLelland CJ in Equity said, in the context of discussing amongst other things allegations of breach of contract at 318: Where the conduct is the speaking of words in the course of a conversation it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore human memory of what was said in a conversation is fallible for a variety of reasons and ordinarily the degree of fallibility increases with the passage of time particularly where disputes or litigation intervene and the processes of memory are overlaid often subconsciously by perceptions of self interest as well as conscious consideration of what should have been said or what could have said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. Each element of the cause of action must be proved to the reasonable satisfaction of the court which means that the court "must feel an actual persuasion of its occurrence or existence. 102Such satisfaction is "not...attained or established independently of the nature and consequence of the fact or facts to be proved" including the "seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description or the gravity of the consequences flowing from a particular finding". Watson at 319, citing Helton v Allen (1940) 63 CLR 691 at 712. 103In the present case there is no contemporaneous document evidencing what the plaintiff or the first defendant said in terms of the alleged conversations which are put forward as constituting the various contracts. There are, as is obvious from above, a number of emails passing between the parties which clearly provide the context in which their respective allegations must necessarily be viewed and which are relied upon by the plaintiff, in particular, relevantly as admissions. 104In a case of a contract which is partly or wholly oral, admissions of a party are admissible for the purposes of ascertaining what terms were orally agreed. In Lym International Pty Limited v Marcolongo (2011) NSWSCA 303 Campbell JA said at [139] - [143]: 139. Third, where a contract is oral, post-contractual conduct may be used to ascertain the subject matter of the contract. Such use of subsequent conduct is justified when it is "relevant, on an objective basis, to the identification of the subject matter of the contract or the determination of the necessary terms, as distinct from deciding the meaning of words". Such subsequent conduct is relevant in that way when "what was done later [is] a basis for inferring what was agreed when the contract was made, or as establishing later additions or variations", citing Browne LJ in Ferguson v John Dawson & Partners (Contractors) Ltd [1976] 1 WLR 1213 at 1229. 140. I respectfully agree with Spigelman CJ's analysis. Other authority that where a contract is partly written and partly oral, the terms of the contract are to be ascertained from the whole of the circumstances as a matter of fact is collected in Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234; (2009) 261 ALR 382 at [90]. 141. There is a vast difference between the task that is involved in interpreting a wholly written contract, and the task involved in finding what has been agreed in a contract that is not wholly in writing. The difference between those tasks in itself makes a vast difference between the circumstances in which post-contractual conduct can be relevant for the respective tasks. 142. Where there is a contract that is wholly in writing, there is no doubt what the contract is - it is the writing. The task of interpretation is ascertaining the meaning that the bystander who knows all the relevant surrounding circumstances would understand from the parties using the words in that writing. The admissibility of evidence for interpreting a wholly written contract is decided by reference to whether it is able to assist in ascertaining the meaning that the bystander who knows all the relevant surrounding circumstances would understand from the parties using those words. Save in the case of post-contractual events providing retrospectant evidence of a surrounding circumstance that was known to the parties at the time of contracting, the view favoured in this court is that post-contractual conduct cannot assist in that task, and thus is not admissible, or if admitted cannot legitimately be used in that task: the cases cited by McColl JA in County at [161] ([118] above). 143. By contrast, the task in ascertaining what are the terms of a contract that is not wholly in writing is quite different - the task is finding as a fact what the parties have agreed. A range of post-contractual conduct could be relevant to ascertaining what the parties have agreed. For example, their conduct in carrying out the contract could itself be objective evidence of what they had agreed, an admission of one of the parties could assist in ascertaining what they have agreed, and business records created to record or report on the contract rather than carry it out could also assist in that task. 105A little earlier in the same judgment Campbell JA said at [122]: 122. However Tomko v Palasty [2007] NSWCA 258 deals, though not exhaustively, with that topic. Basten JA at [13]-[14] (with whom Mason P agreed) held that post-contractual conduct can be used for that purpose when that conduct is an admission. Einstein J at [68] (with whom Mason P also agreed) similarly held that: " ... subsequent communications may legitimately be used against a party as an admission by conduct of the existence or non-existence, as the case may be, of a subsisting contract, where an issue concerns whether a particular person was a party to that contract." 106Young JA in Pegela Pty Ltd v Oates [2010] NSWCA 186 said at [78] - [80]: 78. However, it is admissible to show that there is in fact and in law a contract (see eg Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9251) identifying the subject matter of the contract (and, at least to some extent), the terms of the contract. 79. Perhaps the starkest example of the latter situation is the American case of Wrigley v Cornelius 44 NE 406 (1896) (162 Ill 92 SC) where the fact that the purchaser of art prints ordered 10,000 frames to fit them from another source showed that his contract with the seller of the prints was indeed for 10,000 as claimed rather than for 5,000 pleaded by the defence. 80. Further, post contractual utterances may be admissible because they admit facts from which a conclusion of law may be drawn, Dovuro Pty Ltd v Wilkins [2003] HCA 51; 215 CLR 317, 340 [69] -[71] approving a passage from the decision of the Full Federal Court in Eastern Express Pty Ltd v General Newspapers Pty Ltd (1992) 35 FCR 43, 68 that: "an informal admission as to a matter of fact, by words or conduct which is made by a party or a privy, is admissible evidence against that party of the truth of its contents." 107It will become important in this case to identify precisely what admissions are of true relevance and significance on the part on the plaintiff and/or the first defendant. In Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317 Gummow J stated at [70]: Different questions arise where, as here, the suggested admission includes a conclusion which depends upon the application of a legal standard. In Grey, Glass JA considered an admission sought from a witness to the effect that he assigned certain choses in action at law or in equity. His Honour said: "By extorting from a party an admission that he was negligent or that he was not provoked or that his grandfather possessed testamentary capacity there is added to the record something which is not merely of dubious value but by definition valueless owing to the witnesses unfamiliarity with the standard governing his answer". 108This statement of law had the support of the majority in Dovuro. McHugh J at [40] and Heydon J at [177] expressly agreed with Gummow J in this respect. Gleeson CJ at [25] said: I agree with what is said by Gummow J as to the care that needs to be taken in identifying the precise significance of admissions, especially when made by someone who has a private or commercial reason to seek to retain goodwill of the person or persons to whom the admissions are made. Common sense may dictate that they be used with caution by a fact finder. And it is always necessary for the fact finder to consider precisely what it is that is being admitted. If the driver of a motor vehicle says to an injured passenger; "I am sorry I let you down" that may not mean much, or anything. If the driver says "I am sorry, I was going too fast" that may be very different. The statement that the appellant ["failed"] in its duty of care to inform growers as to the presence of these weed seeds cannot be an admission of law and it is not useful as an admission of failure to comply with a legal standard of conduct. There is no evidence that the author of the statement knew the legal standard. 109Where the credibility of witnesses is, as here, a central issue for the Court, it is as well to recall what Gleeson CJ, Gummow and Kirby JJ said in Fox v Percy (2003) 214 CLR 118 at 128 - 129, [30] - [31]: 30. It is true, as McHugh J has pointed out, that for a very long time judges in appellate courts have given as a reason for appellate deference to the decision of a trial judge, the assessment of the appearance of witnesses as they give their testimony that is possible at trial and normally impossible in an appellate court. However, it is equally true that, for almost as long, other judges have cautioned against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses. Thus, in 1924 Atkin LJ observed in Société d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana"): " ... I think that an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour." 31. Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical. 110However as O'Loughlin J explained in Cubillo v Commonwealth (No 2) [2000] 174 ALR 99 at 147 - 149, [118] - [123]: 118. Before commencing a detailed analysis of the evidence in this case, I desire, in the first instance, to make clear the approach that I have taken to the evidence of a witness where I have found some, but not all, aspects of the evidence of that witness to be unreliable. Simply because I find against a party or a witness on one issue and reject some part of the evidence of that person, it does not mean that what remains is tainted, or otherwise lacks probative force, with the consequence that I should dismiss all the evidence of that person. The principles enunciated in the cases indicate that the trial judge is entitled to believe part of the evidence given by a witness and to reject the rest. After making an assessment of the evidence, after utilising the advantage of having seen and heard all the witnesses, and after forming an impression of each, the confidence that the judge reposes in a particular witness is assessed accordingly. Where evidence has a logical probative value, a judge will rely on it; where it contains discrepancies, displays inadequacies, is tainted or otherwise lacks probative force, the judge will, in all probability reject it or, at least, not rely on it. I mention some authorities that support those propositions. 119. In Dublin, Wicklow & Wexford Railway Co v Slattery (1878) 3 App Cas 1155, the observations of Lord Blackburn, who dissented on the main question on appeal, support the view that a judge may believe part of a witness' evidence and disbelieve another part. He observed (at 1201): "The jurors are not bound to believe the evidence of any witness; and they are not bound to believe the whole of the evidence of any witness. They may believe that part of a witness' evidence which makes for the party who calls him, and disbelieve that part of his evidence which makes against the party who calls him ... " 120. In Australia the same principle applies. In Christmas v Nicol Bros Pty Ltd (1941) 41 SR (NSW) 317, the Court considered a motion to set aside a jury verdict for the defendant in an action for negligence against a company and its employee arising out of the employee's negligent driving. Jordan CJ, who delivered the judgment of the Court, observed (at 322): " ... it would be for the jury who saw and heard the witnesses to decide whether they accepted their evidence. They were perfectly at liberty to reject the whole of their evidence, or to accept some and reject the rest, however intimately it might be associated with what they accepted, unless there is something to show that reasonable men could not take up such an attitude: Ward v Roy W Sandford Ltd (1919) 19 SR (NSW) 172 at 185; Hammer v S Hoffnung & Co Ltd (1928) 28 SR (NSW) 280 at 282-283." 121. A trial judge is not restricted in his or her assessment of a witness. By this I mean that if, on peripheral issues, the trial judge reaches conclusions adverse to the credibility of a party, it does not necessarily follow, consistently with such conclusions, that these must be findings adverse to that party on the issues that are central to the determination of the matter. There is no rule of law or practice that states that an adverse finding on any aspect in the evidence of a witness means that the whole of that witness' evidence must be rejected. 122. In S v M (1984) 36 SASR 316, a case that concerned a contest between a mother and a father for the custody of their ex-nuptial child, Walters J made observations about the extent to which a trial judge is at liberty to believe part of the evidence given by a witness and to reject the rest. Walters J, noting that the case was a custody contest, remarked (at 319-320): " ... it would not be right to say that in determining the weight and credibility to be given to the evidence of a witness, one should reject his or her entire testimony if parts of it are found to be untrustworthy, or even false and mendacious. Because part of his or her evidence is unreliable, it does not follow that other parts of it are unreliable and that the whole of his or her evidence should be disbelieved. So often, in a case of this kind, the interests or bias of one party and his supporting witnesses may exercise on their minds an influence of which they are unconscious and which leads them to give distorted, but yet not deliberately false, accounts of the matters to which they depose in evidence. It seems to me that in making his findings of fact, a trial judge is not bound to believe the whole of the evidence of any witness; he is at liberty to believe part of the witness's evidence and to reject the rest ... I think I am free to accept or to reject the whole of the testimony of the applicant or the respondent, as the case may be, or to accept some part of it and to reject the rest, however intimately it might be associated with what I have accepted." 123. A similar conclusion has been reached by this Court. In Flint v Lowe (unreported, Federal Court, Full Court, No 488 of 1995, 23 June 1995) Nicholson J (with whom von Doussa J agreed) said (at pp 11-12): "It is always the case that the jury or judicial officer charged with the duty of finding whether a charge is established beyond a reasonable doubt may accept whole or part or none of the evidence of any witness. Once the complainant's credibility on that issue was accepted, the evidence would not be tainted by the rejection of other evidence". Discussion 111The plaintiff specifically pleads that in late August and/or early September 2008 he and the first defendant agreed (the first defendant orally representing matters to him) that if the plaintiff was able to secure a replacement joint venturer on the same terms as the Sojitz proposal then the plaintiff and parties associated with him would acquire 10% interest in the joint venture. 112The plaintiff also asserts that he had an initial consulting agreement with the first defendant to provide geological services from about 10 November 2008. The plaintiff accepts that he and the first defendant agreed that the plaintiff would not be paid those fees until one of the corporate entities of the first defendant obtained funding. 113The plaintiff also asserts that on 18 January 2009 and 24 February 2009 the first defendant acknowledged he had an enforceable agreement with the plaintiff. 114On 1 May 2009 the plaintiff asserts that he agreed to a further consulting fee arrangement whereby he would be paid $20,000 a month from August 2008 for at least one year for providing geological and other consulting services. He relies upon the letter from the first defendant of that date. 115Importantly however the plaintiff alleges that between 24 April and 2 May 2009 a further equity participation agreement was entered into. It was simply that the first defendant would transfer 10% shareholding in each of Mintech, Goldus and Mawson Gold to the plaintiff (or the equivalent interest in any corporate entity that acquired any of those companies or mining interests). The plaintiff asserts that prior to the transfer of those shares the first defendant was to treat the plaintiff as having a 10% beneficial interest in those corporate entities. It is also asserted by the plaintiff that he and the first defendant would have a 50% interest in a proposed mining exploration company. The plaintiff asserts the consideration for this arrangement was the plaintiff's past and continuing provision of geological services. The plaintiff also alleges the oral agreement contained an implied term to the effect that the first defendant would not take any steps to frustrate or thwart the plaintiff from obtaining those interests. In the alternative between the same dates the plaintiff alleges that the first defendant promised to transfer to the plaintiff 10% shareholding in each of the corporate entities and a 50% interest in a proposed mining exploration company. 116The plaintiff of course bears the onus of persuading me that the oral arrangements referred to above were indeed made. 117Apart from the emails which have passed between the parties from time to time as I have already observed there is no contemporaneous corroboration for the plaintiff (except for alleged admissions of the first defendant). 118So far as the consulting arrangement is concerned, there is no doubt there was such an arrangement. Both the plaintiff and the first defendant agree on this. The only question that appears to be outstanding is the precise quantum that the first defendant currently owes the plaintiff. I will return to this matter separately. 119In relation to the allegation by the plaintiff that he had an oral agreement in relation to his equity participation in one or more of the first defendant's corporate entities I have to say I not only have grave reservations about the plaintiff's credit in a number of respects, and I am unable to accept that such an arrangement existed in an unqualified sense. I am firmly of the view that at all relevant times whatever negotiations were taking place and/or for that matter whatever arrangement might ultimately have been arrived at, each was predicated upon the plaintiff introducing some form of capital injection into one or more of the corporate entities. I am therefore firmly of the view that his agreed equity participation was always discussed in the context of it being a success fee and/or as an incentive for him bringing an investor or investors to the table. He never did so. 120To begin, the email of 23 November 2008 which the plaintiff sent to the first defendant clearly indicates that as at that date discussions which had taken place had been predicated upon the 10% equity being available to the plaintiff on the basis that he "brought a major company into the project". There is no doubt that he was purporting in that email to set out the detail of his understanding and stating unequivocally that he wished to remain the geologist on the project and play a long term active role. He clearly had a sense that he could make a considerable sum of money if he remained associated with the first defendant particularly given the quality no doubt as he had assessed of the Razorback tenement and the potential return if he was able to forge an arrangement. 121It is noteworthy that the arrangements or proposed arrangements which the first defendant was attempting to enter into with other persons, with whom he hoped might raise capital, also involved success fee arrangements. The first defendant of course asserts (which the plaintiff denies) a detailed conversation with the plaintiff on 28 December 2008. The first defendant asserts that it was made clear during the conversation that any arrangement made with the plaintiff in relation to a 10% shareholding was always on the basis that it would be paid as a success fee upon the raising of funds. Although I have reservations myself about the credit of the first defendant in a number of respects I am inclined to accept his version of these events and that such a conversation took place and I so find. I do so because the surrounding circumstances, in particular the arrangements the plaintiff discussed in his earlier email of 23 November 2008 and the kind of arrangement or arrangements the first defendant was seeking to enter with other third parties, supports the fact that what he was discussing with the plaintiff and indeed others was a capital raising, in turn for which there would be some success fee offered. It should be observed the plaintiff and the first defendant were total strangers before July 2008. The first defendant was going to pay the plaintiff for his geological services. It seems to me much more probable at all relevant times that the first defendant would have linked equity to success. 122The plaintiff's email to the first defendant of 23 February 2009 does nothing whatsoever to support the plaintiff's case. In that email of course he expresses the view that he was becoming worried about the fact that he had no agreement with the first defendant "at all". Although this gives rise to an inconsistency given the first defendants assertion about the discussion he had with the plaintiff on 28 December 2008 this would not be the only inconsistency in the narrative. Although there was nothing in writing, there was an agreement (at a minimum) in place, it does seem to me, namely that the plaintiff would be paid for his geological and/or consulting services although he may not have even regarded that as a binding arrangement at the time. As I have found the first defendant did make it clear on what terms he was prepared to deal with the plaintiff. 123The defendant's response on 24 February 2009: "You do have an agreement with me", is entirely consistent with the first defendant's version of events. It of course does beg the question. 124On 18 March 2009 in his discussion paper the plaintiff is at pains to say again that "at this time no formal agreement is yet recorded between the parties". I am of the view and so find that that was not only a reference to third parties but the position between the plaintiff and the first defendant. It is also clear from the balance of that email that the plaintiff indeed wanted the first defendant to consider a 5 year agreement with an incentive package. What is important again about this email is that at least as at 18 March, so far as equity participation was concerned, the plaintiff considered that that was a matter for negotiation however in the context of an incentive regime upon successful capital raising. 125It is clear in my mind from the first defendant's email of 1 April 2009 that the 50/50 deal in relation to the exploration company was again entirely dependent upon the raising of capital. The first defendant asserts that during April when he was staying with the plaintiff he made clear to the plaintiff that, so far as the gold trading deal was concerned, upon completion of a deal the plaintiff would get 50% commission of total profits. Again by reason of the surrounding materials and in particular the first defendants email of 1 April I am inclined to accept the defendants version of those events, and his denials of the plaintiff's assertions to the contrary. 126Insofar as the plaintiff asserts that during this period when the first defendant was staying at his home and the first defendant acknowledged an agreement of 10% equity in "all" of the first defendants companies, even on the plaintiff's version of that conversation ([110], the plaintiff's affidavit 23 April 2010) the better view in all the circumstances is that the equity participation was contingent upon getting a deal done: We have an agreement. You have 10% in all my companies. As soon as we get a deal we can document it properly. 127The first defendant denies that any such conversation took place and that equity was always discussed as part of a success fee. I am inclined to accept the first defendant and I reject the plaintiff's assertion to the contrary. 128The plaintiff asserts that on 16 March 2009 he discussed his remuneration for consulting and geological services with the first defendant. It is plain and obvious that both parties had numerous conversations about that matter. Further although the plaintiff does assert that reference was made during that conversation to his "10%", again, even on the plaintiff's version of that conversation, it is at best equivocal. In my view given its context I find that conversation would have been in the context of it being a success fee arrangement tied to a successful capital raising. 129The comfort letter of 1 May from the first defendant again does no more in my view than support yet again that the first defendant had made an arrangement to pay consulting fees to the plaintiff. That letter makes plain that even the actual payment of the consulting fees was going to be contingent upon capital raising through the sale of equity or a sale of assets or both. The reference to the gold trading program again makes it plainly apparent that the arrangement was contingent upon getting the project off the ground. 130The first defendant asserts that on 13 June he sent an email to the plaintiff in the terms referred to above. I do not accept his evidence on that. The plaintiff denies receiving it and I accept the plaintiff's evidence. It is plain from his later communication of 9 July that he had composed the letter of 13 June on or about that date. He may well have thought he sent it, but in fact he had lost it somewhere in his system and decided to send it instead on 9 July 2009. This is however important, because although he did not send it on 13 June, and I so find, it is clearly a reflection of not only events which had occurred prior to that date but the kind of deal that he was then intending to offer the plaintiff. It is not an admission which assists the plaintiff, quite the contrary. 131The plaintiff asserts of course that on 14 June whilst the defendant was staying with him he asked the defendant that his interest be "documented". He asserts that the first defendant said "you have 10% interest in all my companies". Again in my opinion even on the plaintiffs own version of events ([123] of his affidavit of 23 April 2010) it is tolerably clear that the 10% was going to be upon the basis of a successful deal with Geneva Manor. Insofar as the plaintiff asserts that this was an acknowledgement and an admission by the first defendant as to the 10% equity participation, in my view it is more probable than not that any such conversation again took place in the context of a success fee arrangement and I so find. As I have said although I am of the view that the first defendant's email of 13 June was not sent to the plaintiff on that day the contents of it corroborates entirely that at or about that time, the arrangements being discussed between the two in relation to equity participation clearly involved 10% being contingent upon the raising of capital; namely an immediate injection of $250,000 and a $5 million cash injection. I have no reason to consider the email of 13 June was not an accurate reflection of the first defendant's state of mind and of discussions he had with the plaintiff and indeed of the offer he had intended to make at that point. It is entirely inconsistent with any offer of equity participation other than in the context of a successful capital raising. Insofar as the plaintiff's evidence suggests otherwise I reject it. 132The term sheet agreement signed by the plaintiff and the first defendant on 25 June with Bligh Street again, in my mind, does not advance the plaintiffs case in relevant respects. Although it refers to "their controlling shareholder interests in the company" that phrase is in the context of a new corporate entity being brought into existence and a capital raising of approximately $10 million. I find nothing in that document which corroborates a suggestion by the plaintiff that the first defendant had agreed to give him 10% equity participation as alleged, at least in an unqualified sense. 133On the morning of 9 July the first defendant sent an email to the plaintiff at approximately 10.18am. In his affidavit (23 April 2010, [141]) the plaintiff says that when he received the email he read it quickly and said to the first defendant "it is not what we have agreed". He then alleges that the first defendant effectively acknowledged that fact and said that he would instruct his solicitor to issue 10% of the shares in Mintech when he got back to Adelaide. The first defendant of course denies such a conversation. 134The plaintiff goes a step further however and asserts that on 9 July he made a contemporaneous note "following this meeting", ([142]). A copy of his diary for the days 9 - 12 July inclusive was tendered in evidence. All of these days are on one page. 135There is a great deal of handwriting (most of which is that of the plaintiffs) on that page. Importantly the notes for 9 July read as follows: "Thursday evening in our house. Lewis in our house Thursday night/came from Melbourne. We talked about shares in Mintech/Mawson Gold and Goldus. He said "I will instruct Andrew Corletto to issue your 10% share in Mintech upon my return. I said "good". He said "I will instruct Nina to issue 10% share in Goldus and Mawson NL to you because she can do this by herself. I don't need to pay Kelly & Co for this if Nina does it. I said "thanks, what about the exploration company 50/50 between the two of us. He said "We will do this later when it is required" 136The first defendant accepts that he must have had discussions with the plaintiff during this period but denies the conversation that the plaintiff asserts he had with the first defendant about the email not recording what had been agreed, but also the exchange alleged to have been recorded in the plaintiff's handwritten notes. 137There is a note adjacent to the entry for Sunday 12. What is written is "11 July" and then "See Lewis email confirmed". 138When the plaintiff gave evidence on some of these matters he appeared to be somewhat confused. The following exchange took place: His Honour: Q: It is a few pages on from 1237? A: Thursday evening in our house, correct Q: Do you see below the words "Thursday evening in our house" You appear to have written "Lewis in our house Thursday night". Do you see that? A: hmm, hmm Correct Q: If those notes are virtually contemporaneous with the event, doing your best from the note it would appear to indicate that you are suggesting that Mr Lewis was in your house on the evening of 9 July and during the evening when you had dinner or whatever he made the statements you attribute to him in the note? A: Well my recollection is that Mr Lewis left on 9 July Q: But that is not what your note says, is it? A: No it does not Q; Lewis in our house Thursday night A: True Q; And above that "Thursday evening in our house"? A: Ok Q: I am not trying to tell you what it is because you are the person who made the notes. I am trying to understand your evidence. And it would follow if that is correct that you had the email of 9 July which had been received by you at a quarter past ten that morning by the time Mr Lewis was sitting at your table having dinner? A: Well I might be confused. But it is not how I remember it. I remember I received the email after he left. So that would have to be the 10th. 139I cannot accept that the plaintiff's so called contemporaneous note was made on 9 July. I consider the more probable explanation is that the note was recorded at some point later when the plaintiff tried to recall what he thought might have been said in a conversation with the first defendant. If the note was contemporaneous in my mind there would be no reason why the plaintiff would have written adjacent to the words July 9 Thursday, "Thursday evening in our house". Nor would he have written "Lewis in our house Thursday night/came from Melbourne". These remarks, suggestive of the past tense, indicate that they were written (and I so find) at a point sometime subsequent to the 9 July. 140The next thing which is entirely odd about these events is that although the plaintiff asserts in his affidavit that he drew the first defendants attention specifically to the 9 July email not being "what we agreed", there is no reference in his handwritten note for the diary entry 9 July suggesting that it was the email that triggered the conversation, and a need at least on the plaintiffs part to clarify and/or correct what he asserts the arrangement was. The reference in the diary note for 9 July to the email "See Lewis email confirmed" is likely to be a reference to the first defendant's email of 9 July. This does not suggest the plaintiff thought it to be inaccurate. 141Most importantly however in his email to the first defendant of 12 July there is no reference whatsoever to the conversation which the plaintiff asserts took place on 9 July with the first defendant in which the agreement was clarified, and no suggestion that the email of 9 July was inaccurate in some way. What is more important about these events is that this was at a time when the plaintiff was, I believe, starting to be quite wary of what if any arrangements he might have had with the first defendant. His wife had given him this diary encouraging him to keep contemporaneous notes of important things in his commercial interest. This was not a time for a confidential diary note, it was a time for plain speaking. That is not what the plaintiff did. I do not accept that these events as asserted by the plaintiff took place on 9 July. 142I do not regard the note as a contemporaneous reflection of what was discussed. I cannot believe that if the plaintiff who was then on his guard as it were would fritter away the opportunity he had on 12 July, a day or so after this alleged conversation took place, and not record the contents of the conversation whereby arrangements had been clarified, especially having gone to the trouble of making a so called contemporaneous diary note. The fact that he did not take that opportunity speaks volumes, and in my mind makes it improbable that such a conversation did take place as he asserts. To that extent and insofar as the first defendant denies such a conversation took place I am inclined because of the surrounding materials to accept the first defendant's denial. I reject the plaintiff's account. 143I should add that the email of 12 July relates entirely to attempts that the plaintiff was then making to raise capital and his acceptance that time was running out and that both he and the defendant needed to raise a significant amount of money very quickly. 144What is equally important of course is that in the email of 9 July the first defendant does say that he will see Andrew Corletto as soon as he returns to Adelaide and to proceed "with the transfer of equity to you in the Mintech structure as outlined above with further performance-based transfers in Goldus and Mawson, "if and when" we get them into commercial production too". This makes it abundantly clear that equity participation was upon a capital raising, and that any written agreement would be drafted accordingly. 145The first defendants email of 30 July 2009 must clearly be construed again in this context, namely that the first defendant was prepared to place a structure (undoubtedly including documentation in place) in accordance with his email of 9 July. It is plain and obvious from that email that the transfer of any equity was contingent upon the raising of capital and was regarded as performance based. Seen in context the first defendants email of 30 July does not assist the plaintiff. 146Likewise the first defendant's email to the plaintiff of 3 August must be seen in the same context in my opinion. The whole arrangement including the 10% is predicated upon the fact clearly and expressly stated by the defendant "If this deal with AUSMON succeeds by completing through the payment of cleared funds by 4pm tomorrow..." Not only was the plaintiff then to get his 10% upon that event occurring but an additional 2% as an extra reward. Again seen in context I do not regard that as assisting the plaintiff's case. 147The plaintiff was undoubtedly becoming impatient and clearly wanted something in writing. This is evident from his email to the first defendant of 31 August 2009. But again it does not alter my view as to the arrangement which I consider was made between the relevant parties, namely that equity participation was contingent upon capital injection and upon success being achieved and the plaintiff having made a real contribution towards that end. 148The plaintiff's wife gave evidence. Although her affidavit was filed late I granted the plaintiff leave to rely upon it. She said in her affidavit that the first defendant often stayed with she and the plaintiff and during that time she would engage in conversation with the first defendant. On at least four occasions she said (concerned that the defendant was not paying her husband for his work) she asked how things were going. She said she told the defendant a document was needed "between you and John". She said she emphasised how hard her husband had been working. On each occasion the defendant she said assured her that "John has 10% in all my companies". 149There are numerous problems with this evidence. The date and more importantly the context in which each conversation allegedly took place is absent. There is no note or other record which corroborates these alleged conversations. 150Upon my analysis of the contemporaneous materials there is no support for the proposition that the first defendant ever made such an unqualified representation. Indeed in his affidavit of 17 May 2012 the first defendant denied he said such things to the plaintiff's wife. The first defendant did concede that the only matter he disputed in her evidence was the unqualified assertion the plaintiff had 10% of his companies. He consistently denied saying that and, given the materials I have otherwise examined, it seems to me that that is more probably correct. I accept his denials. I do not accept the plaintiff's wife in the sense that the first defendant would have simply said that the plaintiff had 10% of his companies. Indeed in all the circumstances I regard it as glaringly improbable. 151It was the plaintiff's wife who clearly was concerned about keeping a diary, it seems, so important things could be recorded, yet she kept no record herself. I reject her account as asserted. Consulting Fees 152As I have already said it is clear to me (indeed the whole case was conducted on this basis) that the first defendant owes money to the plaintiff for outstanding consulting fees. The real issue is precisely what that amount should be. The plaintiff claims $282,000. The plaintiff asserts that he commenced work for the first defendant or his interests in about August 2008 and continued until September 2009; a period of 14 months. This calculation is arrived at by reason of a number of invoices sent by the plaintiff to the first defendant after having given credit for amounts the plaintiff acknowledges he has otherwise received. (See para 76 FACLS). 153There seems no doubt that the parties agreed that the plaintiff would be paid $20,000 per month. It also seems to be common ground that the condition precedent for the payment of the outstanding fees by reason of the letter of 1 May 2009 was the sale of equity or sale of assets. It is asserted by the plaintiff that that has been achieved with the agreements with Royal. I accept that that was the arrangement, and that condition precedent has been satisfied. 154The first defendant although he accepted in his evidence that he had offered the plaintiff $240,000 (as I understood him to settle the entire case) asserts that the plaintiff is only entitled (given the amounts already paid) to $130,000. That he had seemingly falsely swore to the contrary on 4 November 2009 in proceedings in South Australia is now not to the point. 155On two occasions and immediately prior (or so it seems) to the plaintiff ceasing work sometime in September, or perhaps early October 2009, the plaintiff sent two emails: one dated 31 August 2009 and another 17 September 2009. In the first the plaintiff asserts expressly that he was then owed $130,000 which he reiterates in his email of 17 September 2009. Doing the best I can on the evidence available I see no reason why the plaintiff should not be taken at his word. The better view of the evidence which I prefer is that the plaintiff was actually doing geological work from about November/December 2008 and ceased in about August/September 2009. He was the one who had been involved in the work of the preparation of reports and matters of the sort and at a time when he wrote those emails he would have made, in my opinion very likely, the maximum claim to which he thought he was legitimately entitled. It happens to accord with the first defendants calculation (10 months approximately X $20,000 less $70,000 equals $130,000). The mere fact that the first defendant was prepared to offer in full settlement of the litigation an amount of $240,000 is in my mind not relevant to the question of precisely what the plaintiff is entitled to under the consulting arrangements. In my opinion in all the circumstances it is fair and reasonable that the plaintiff be awarded the sum of $130,000. Conclusion 156In accordance with my findings I propose to award the sum of $130,000 in relation to the consulting fee agreement. I otherwise dismiss the plaintiff's claim. 157I would invite the parties to prepare short minutes to reflect my reasons and to have the matter relisted so the question of costs can be determined. ********** Amendments 13 June 2012 - typographical error Amended paragraphs: paragraph 104 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. Decision last updated: 13 June 2012