Mende v Kundrun

1. [1]

   LEEMING JA: The active litigants both at first instance and in this Court were Mr Hans Juergen Mende and Mr Fritz Kundrun, who are equal co-owners of AMCI Investments Pty Ltd (AIPL). The ultimate issue in this litigation is whether Mr Jamie Frankcombe’s employment, as Head of Australian Coal Operations, with AIPL was terminated by letter dated 6 August 2025 by Mr Mende, purportedly acting on behalf of AIPL and pursuant to his authority as Executive Chairman of AMCI Group LLC, a Delaware company also co-owned by Messrs Mende and Kundrun. The primary judge held that the letter did not terminate Mr Frankcombe’s employment, and issued declarations to that effect: In the matter of AMCI Investments Pty Ltd [2025] NSWSC 1019.

2. [2]

   Mr Mende purported to appeal as of right. He advanced three principal submissions, namely, that the primary judge erred in finding that (a) Mr Mende lacked express actual authority to terminate Mr Frankcombe’s employment, (b) Mr Mende lacked implied actual authority to terminate his employment and (c) in any event such authority was withdrawn by correspondence from Mr Kundrun. No case based on ostensible authority was advanced. I did not understand it to be disputed that, in order to succeed in his contention that he could, personally by his own unilateral act, bring Mr Frankcombe’s employment with AIPL to an end, Mr Mende needed to establish either (a) or (b) as well as (c) of those submissions. In any event, that must be the position as a matter of logic, for only if Mr Mende had authority from AIPL on 6 August 2025 could he cause AIPL to exercise its contractual power of termination, and it was not suggested that the contract of employment was terminated in some other way.

3. [3]

   According to Mr Mende, his appeal was principally about the application of the law to undisputed facts, although there was a challenge to some of the findings made by the primary judge which he was content to “tread rather lightly over” in oral submissions. As will be seen below, the respondents took a different approach, and took the Court to each and every document upon which Mr Mende had relied in his written submissions.

4. [4]

   The appeal spawned additional procedural issues.

   1. (1)

      First, AIPL and Mr Frankcombe were parties to the litigation at first instance, with neither playing an active part. But Mr Mende did not join them to the appeal, although he asked this Court to make orders declaring the contractual relations between them to have been validly terminated. Rule 51.4(1)(a) of the Uniform Civil Procedure Rules 2005 (NSW) conforms to the ordinary position at general law (see for example John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 at [131]) in requiring every person who is directly affected by the relief sought to be joined. The Court put in place directions whereby they would be served and could if they wished be heard after the hearing. On 19 December 2025, in accordance with those directions, the solicitor for the appellants advised that AIPL and Mr Frankcombe had been served and did not oppose being joined to the appeal and would submit to the Court’s decision. I propose that AIPL and Mr Frankcombe be joined to the appeal, and that each be relieved from all other requirements under the rules (including filing notices of appearance).

   2. (2)

      Secondly, the respondents maintained that there was no appeal as of right. That submission is powerful if all that is considered is the position of AIPL’s shareholders, who are not themselves directly affected by whether or not there is a contract between the company and Mr Frankcombe. But AIPL and Mr Frankcombe are now, belatedly, parties to the appeal, and the contract of employment which is at the centre of this litigation requires payment of an annual salary of $1,100,000 by AIPL to Mr Frankcombe. After their joinder, the appeal involves a matter at issue amounting to or of the value of $100,000 or more within the meaning of s 101(2)(r)(i) of the Supreme Court Act 1970 (NSW). The appeal is therefore competent, and Mr Mende’s fallback application for leave need not be addressed.

   3. (3)

      Thirdly, it was said that the appeal lacked utility, because of a further act by AIPL after the judgment of the primary judge had been delivered, confirming Mr Frankcombe’s appointment. However, Mr Mende said that that further appointment was flawed if his appeal succeeded. In light of the conclusion I have reached, it is unnecessary to address that any further.

The structure of AIPL and the AMCI Group

1. [5]

   AIPL is an Australian company whose shareholding is equally divided by Mr Mende (whose shares are held by him personally) and Mr Kundrun (whose shares are held either personally or by the second respondent, 2010 FRK CRT Investments Ltd, a company controlled by him). Formerly, AIPL was a subsidiary of AMCI International AG, a Swiss company.

2. [6]

   For many years, Messrs Kundrun and Mende have been directors of AIPL. Their addresses are given, in the company’s ASIC search, as Florida in the United States and Zuoz in Switzerland respectively. Mr Frankcombe was appointed as a director in April 2025. Mr Jose Spilimbergo Delamanha, whose address is stated to be in Singapore, was appointed a director in May 2025, and he has at all times been a party to the proceedings, at first instance and on appeal, represented by the same firm and counsel as Mr Mende.

3. [7]

   Australian proprietary companies must have at least one director resident in Australia: Corporations Act 2001 (Cth), s 201A(1). According to the ASIC search, Mr Frankcombe was appointed a director on 15 April 2025, and Mr Stuart Terry was appointed a director on 13 May 2025. Previously, from 20 March 2025, Mr Terry had been an alternate director. Mr Terry had filed a submitting appearance before the primary judge.

4. [8]

   Mr Frankcombe was employed by Employee Service Agreement dated 20 August 2024 between AIPL and himself. At that time, AIPL’s board comprised four directors: Mr Kundrun, Mr Mende, Mr Brian Douglas Beem Jr (a resident of Nashville, Tennessee) and Mr Patrick Joseph Christopher Murphy, an Australian resident. The agreement was executed by Mr Brian Beem, who was described as the authorised representative of AIPL.

5. [9]

   Mr Murphy ceased holding office as a director on 27 March 2025 and Mr Beem ceased holding office as a director on 30 May 2025.

6. [10]

   The Agreement authorised both employee and employer to terminate without cause on six weeks notice and also conferred a right of termination by the Employer without notice in certain circumstances. This latter power was purportedly exercised by Mr Mende on 6 August 2025, giving rise to this litigation.

7. [11]

   Mr Frankcombe was appointed “Head of Australian Coal Operations”. Although AIPL owns, indirectly, interests in various Australian iron ore projects, the appeal proceeded on the basis that it owned no Australian coal assets. Instead, various interests in Australian coal mines are owned, not by AIPL, but by subsidiaries of a different company co-owned by Messrs Mende and Kundrun, AMCI Group LLC.

8. [12]

   AMCI Group LLC is a “series limited liability company” incorporated in Delaware, which owns various “series”, which were referred to in argument as subsidiaries. The overview in A Gonzales and J Griffith, “Challenges of Multi-State Series and Framework for Judicial Analysis” 42(3) Journal of Corporation Law 101 at 102-104 (2017) and the more detailed commentary by J Leahy, “Series LLCs: Statutory Ambiguities, Potential Litigation, and Proposed Clarifications” 27 U of Pennsylvania Journal of Business Law 443 (2025) suggest that describing the series as “subsidiaries” may be a little loose. The latter noted at 448 that “a series within an LLC is deliberately designed as an indeterminate entity, sometimes functioning as a separate legal person and sometimes not”. However, nothing turns on this question of foreign law for present purposes. It was accepted that some of the series own interests in coal mines in Australia. There was evidence that prior to around 2020, AIPL ceased to be a subsidiary of AMCI International AG, which seems formerly to have been the company which owned assets throughout the world, and that this was done for “commercial issues in terms of change of control under the shareholder agreements of [two iron ore joint ventures] and tax related issues”.

9. [13]

   Some eight months after being appointed as Head of Australian Coal Operations, Mr Frankcombe was appointed a director of AIPL. In evidence were draft minutes of a meeting dated 28 April 2025 which stated, “The directors clarified that the approval of Jamies appointment as director in this meeting had ratified his appointment effective from 15 April 2025” [sic]. What precisely occurred at that meeting was not the subject of submissions, but a notice of meeting of directors, signed by Mr Mende and dated 10 April 2025, proposed that the purpose was to “[c]onfirm the appointment of Mr Jamie Frankcombe as permanent director (replacing Mr Patrick Murphy as former director of AMCI Investments) and local resident director in Australia in the following entities: AMCI Investments Pty Ltd …”.

10. [14]

    It should also be noted that, according to the minutes, on 22 April 2025 AIPL’s board did not pass a resolution that no material action be authorised to be taken by any director of AIPL or subsidiary companies without a vote by the board of AIPL. Of this, the primary judge said at [19] that “[t]he failure to pass the latter resolution did not confer any authority upon Mr Mende which did not otherwise exist”. This was one of Mr Mende’s criticisms of his Honour’s reasons.

11. [15]

    It is important to distinguish the company which is named “AMCI Group LLC” from the group of companies comprising AMCI Group LLC and its subsidiaries, and to distinguish both from AIPL, despite the similarity of their names. That is why I have adopted the same terminology as the primary judge and referred to the latter as AIPL.

12. [16]

    AIPL is not a subsidiary of AMCI Group LLC. However, both AIPL and AMCI Group LLC are owned directly or indirectly by Mr Mende and Mr Kundrun in equal shares.

13. [17]

    Mr Mende is and has at all relevant times been the Executive Chairman of AMCI Group LLC. Article 1 of the Amended and Restated Limited Liability Company Agreement for that company dated 31 January 2020 provides that “the Executive Chairman will have the unqualified and complete authority and responsibility over the day-to-day operations of the business of the company and each series”. The same article provides that some matters are reserved for the board, but those matters do not include terminating the employment of any officer or employee. Indeed, Article 1 provided that the Executive Chairman may “create any other officer [sic, scil office or] position (including a chief executive officer, chief financial officer, chief operating [officers], or any other offices), appoint an individual to serve in that office, and delegate to that officer any of the Executive Chairman’s authority and responsibility”.

14. [18]

    An Employment Agreement between AMCI Group LLC and Mr Mende dated 30 August 2014 recited that AMCI Group LLC and its series desired to continue to employ Mr Mende as Executive Chairman, and if requested “to assume the highest management officer position of each of its subsidiaries and other affiliated entities under common control with the Company”. The document defined “Group” to extend to such “other affiliated entities under common control with the Company” and conferred on Mr Mende “authority and responsibility for all operations of the Group”. Prima facie AIPL would appear to be an “affiliated entity under common control with AMCI Group LLC” within the meaning of Mr Mende’s employment agreement.

15. [19]

    At around the same time that Messrs Frankcombe and Terry joined AIPL’s board, there was correspondence from Mr Kundrun and (to a lesser extent) Mr Terry concerning the way decisions were being taken by the company. Both sides relied on the correspondence: Mr Mende in effect as admissions that Mr Mende had express or implied authority, and Mr Kundrun in support of the reasons of the primary judge that such authority as Mr Mende had was withdrawn.

16. [20]

    The most important correspondence was as follows. By letter dated 2 April 2025, the solicitors acting for Mr Kundrun and 2010 FRK CRT complained about certain steps taken by Mr Mende and Mr Delamanha because they did not have authority to bind AIPL, stating that:

17. [21]

    By email dated 21 April 2025, Mr Kundrun advised the board that:

18. [22]

    On 15 May 2025, Mr Kundrun wrote to the board complaining that “the group more generally is being run in a way that is, by accident or design, unfair to me as a director and a 50% shareholder”. He added that:

19. [23]

    On 20 June 2025, Mr Kundrun distinguished AIPL and AMCI Group LLC, and said that “No one director has the right to make unilateral decisions about matters like the frequency of our meetings …”.

20. [24]

    Notwithstanding the correspondence in the preceding four months, Mr Mende acted unilaterally in purporting to terminate Mr Frankcombe’s employment. By letter dated 6 August 2025 on the letterhead of AMCI Group LLC, Mr Mende purported to terminate Mr Frankcombe’s employment, saying:

21. [25]

    The letter also required Mr Frankcombe to take steps to resign as a director of AIPL and its subsidiaries, in accordance with a provision in his employment agreement.

Procedural background

1. [26]

   The proceedings at first instance were commenced by summons filed on 18 August 2025 and heard on a final basis on 2 September 2025. Evidently, the parties adhered to a highly expedited timetable, which is understandable in light of the uncertainty of board composition of a company whose equal shareholders were evenly divided.

2. [27]

   The primary judge reserved and delivered reasons for judgment and made orders only three days later, on 5 September 2025. The declarations concerned Mr Frankcombe’s positions both as employee and director, but the latter is consequent upon the former, and the parties sensibly proceeded in this Court on the basis that what mattered was Mr Mende’s purported authority to cause AIPL to terminate Mr Frankcombe’s employment.

3. [28]

   The primary judge held that Mr Mende (a) lacked express authority to terminate Mr Frankcombe’s employment with AIPL, (b) lacked implied authority, and in any event (c) held that any authority that had been conferred upon him was withdrawn by the correspondence summarised above. The most convenient course will be to elaborate his Honour’s reasons when addressing the submissions advanced in support of the grounds of appeal.

Did Mr Mende have express authority to terminate Mr Frankcombe’s employment?

1. [29]

   As recently encapsulated by Lords Reed, Lloyd-Jones and Kitchin in The Law Debenture Trust Corporation plc v Ukraine [2024] AC 411; [2023] UKSC 11 at [38]:

2. [30]

   Actual authority may be express or implied. The starting point is the general rule that, absent express conferral of authority, a director has no implied authority to act unilaterally and instead directors “can act only collectively as a board and the function of an individual director is to participate in decisions of the board”: Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 at 205; [1990] HCA 32. A director of an Australian proprietary company who is its sole director and shareholder is given a broad conferral of authority by s 198E of the Corporations Act 2001 (Cth) but that is not the present case. Many companies have power to delegate authority to a director (especially, a managing director), as indeed did AIPL, but this was not relied upon. A managing director will be impliedly authorised to do all such things as fall within the usual scope of that office (Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549 at 583, and see Hawksford v Hawksford [2005] NSWSC 463; 191 FLR 173 at [68]), but Mr Mende was not AIPL’s managing director.

3. [31]

   Instead, Mr Mende pointed to his position as Executive Chairman of another company, AMCI Group LLC. The first issue in this appeal is whether the Company Agreement of AMCI Group LLC, and in particular, Article 1, conferred power on Mr Mende to terminate Mr Frankcombe’s employment by AIPL. Dr Ward SC, who appeared at first instance and in this Court for Mr Mende, emphasised that Mr Frankcombe’s title accurately reflected his involvement in managing Australian coal assets, all of which were owned by series companies whose activities were within the width of the authority conferred by Article 1. He also referred to the conferral of “unqualified and complete authority over the day-to-day operations of the business of the company” in the Article upon Mr Mende as Executive Chairman. The submission was elaborated thus:

4. [32]

   The primary judge rejected this submission, noting that it was necessary to find some conferral of authority by AIPL. That authority could not be found in the articles of the AMCI Group LLC Company, in circumstances where AIPL was not a series company, or a subsidiary of the Delaware company, as the primary judge observed at [41] and reiterated at [50] and [51] when responding to slightly different ways in which Mr Mende’s submission was advanced.

5. [33]

   Contrary to Mr Mende’s submission, the fact that subsidiaries of the Delaware company own interests in the Australian coal assets which were managed by Mr Frankcombe did not entitle Mr Mende to bring to an end the contractual relations between AIPL and Mr Frankcombe. Instead, it is necessary to identify some separate basis whereby authority is conferred on Mr Mende by AIPL.

6. [34]

   It is not to the point that AMCI Group LLC has conferred a very large authority upon Mr Mende, nor that that authority extends to the day-to-day operations of assets including coal mines in Australia, which related to the work done by Mr Frankcombe. The question is straightforward. It is whether the contractual relations between AIPL and Mr Frankcombe can be brought to an end not by AIPL itself, acting by board resolution or members’ resolution, but by Mr Mende’s unilateral act. Mr Mende’s case was one of actual authority, either express or implied. If that case is to be made out, it requires a conferral of authority from AIPL upon Mr Mende, such that Mr Mende by his own act can alter the contractual relations of AIPL. The invocation by Mr Mende of the breadth of authority conferred upon him by another company, AMCI Group LLC, does not affect the answer to that question.

7. [35]

   I have been relatively verbose in dealing with this basic point because Mr Mende maintained that the concision of the primary judge’s reasons bespoke error. It was said:

8. [36]

   I do not accept that this is a valid criticism. Concision where concision is possible is valuable and indeed preferable, as Gleeson JA observed with the agreement of Bell CJ and Macfarlan JA in Rialto Sports Pty Ltd v Cancer Care Associates Pty Ltd [2022] NSWCA 146 at [63]. Some submissions may and should be rejected concisely because they are misconceived in law, and in such cases perfectly adequate reasons will be given by stating the misconception. The proposition that the breadth of authority conferred upon Mr Mende by the Delaware company can produce the result that there is an express conferral of authority upon him to bind AIPL is an example. It was not suggested that the separate corporate structures of AIPL and AMCI Group LLC were a sham and in truth there was a single partnership between the two men, or that AIPL was in fact a subsidiary of AMCI Group LLC, or that Mr Frankcombe was in fact employed by AMCI Group LLC despite the terms of his written contract, or that the board of AIPL had no separate function. No such submissions were made, nor could they have been made in the absence of such a case having been put and indeed pleaded at first instance, and then the allegation would have been subject to a heightened standard of proof, for there is a “strong and natural presumption against holding a provision or a document a sham”: National Westminster Bank plc v Jones [2001] 1 BCLC 98 at [59] (Neuberger J); see also Lewis v Condon; Condon v Lewis (2014) 85 NSWLR 99; [2013] NSWCA 204 at [62]-[63] and Coshott v Prentice (2014) 221 FCR 450; [2014] FCAFC 88 at [64]. Once it is accepted that the starting point is that AIPL and AMCI Group LLC are two separate companies, the width of authority conferred by one upon Mr Mende has no bearing on the authority conferred on him by the other.

9. [37]

   For completeness, I would add (as Mr Giles SC who appeared in this Court but not at first instance for Mr Kundrun observed) that it is not the case, contrary to Dr Ward’s submission, that AIPL “does not do anything in relation to coal in Australia”. That is because AIPL has formally contracted with “AMCI Group LLC, Series 23”, pursuant to a written contract said to be effective from 1 October 2024, to provide services to that company, and in particular to deploy Mr Frankcombe to manage “the Fitzroy coal operations and business”. The contract was executed by AIPL by its then Managing Director, Mr Murphy. The result of that contract is that AIPL by its officer Mr Frankcombe was providing services to manage the Australian coal assets which were ultimately owned by AMCI Group LLC.

Did Mr Mende have implied authority to terminate Mr Frankcombe’s employment?

1. [38]

   The second and most substantial aspect of the appeal was the challenge to the rejection by the primary judge of Mr Mende’s submission that he had implied authority to terminate Mr Frankcombe’s employment.

2. [39]

   The dispositive reasoning of the primary judge on this point (and also the third point concerning withdrawal of authority) is at [35]-[39], which are best reproduced in full:

3. [40]

   A deal of evidence had been served concerning (I infer) Mr Mende’s involving himself in the affairs of AIPL, but it was rejected as inadmissible, and no appeal was sought to be brought from those rulings. Nonetheless, it was said that what remained was sufficient.

4. [41]

   The submissions advanced in writing and orally in support of this ground were expressed at a level of generality. That reflected the evidence, which was directed in general terms to Mr Mende’s involvement in decision-making. But it is one thing for a person to be a key decision-maker in the company, and another thing entirely for that person to be able, by his own unilateral act, to bind the company contractually.

5. [42]

   It was not disputed that whether authority is to be implied and, if so, its scope, will turn upon “a close analysis of the evidence before the court which is relied upon to support the implication of actual authority”, as it was put in Equiticorp Finance Ltd (in liq) v Bank of New Zealand (1993) 32 NSWLR 50 at 134.

6. [43]

   The starting point for a case based on implied authority to exercise on AIPL’s behalf its power of termination would be other instances of Mr Mende unilaterally binding the company. At one stage, it was in fact put that Mr Mende had by his own signature bound AIPL:

7. [44]

   Mr Giles said this was not so, and after taking the Court to every document referenced in the appellants’ written submissions, established that none of them went so far. In reply, Dr Ward very properly acknowledged that that was not his clients’ case.

8. [45]

   Next, it will be seen that Mr Mende was not personally involved in executing the contract of employment; as noted above, it was signed by Mr Beem on behalf of AIPL. Nor did Mr Mende unilaterally cause Mr Frankcombe to be appointed a director of AIPL: this was done by a formal board resolution. It is of course not conclusive on the issue of implied actual authority that Mr Mende did not exercise the authority he claimed to have from AIPL in order to bind AIPL to the contract of employment, or to appoint him as a director. However, it might be thought that if Mr Mende had power unilaterally to bring the employment relation between AIPL and Mr Frankcombe to an end, thereby obliging Mr Frankcombe to resign as a director, it would have been natural for his appointments to those positions to have been brought about in the same way.

9. [46]

   Instead, Mr Mende’s submission was there had been a “consistent practice of [Mr Mende] acting for and on behalf of [AIPL] over several years”, and “lots of evidence of Mr Mende being in a position such that the company would not take decisions without Mr Mende’s approval”. It is perfectly easy to appreciate that a corporate decision might not be made without the approval of a director and 50% shareholder; there must be many proprietary companies in Australia where that is the case. As was pointed out in argument, the issue is not whether Mr Mende was a shadow director of AIPL. The question is whether he had implied actual authority, which is to say, whether he by his own act could cause AIPL to be bound. The fact that a company might only proceed to bind itself after taking steps to ensure that Mr Mende was content with that course is quite different from whether Mr Mende had impliedly been given actual authority to bind the company.

10. [47]

    No doubt counsel’s submissions were framed as they were because of the quality of the evidence available to him. In fact the evidence relied upon is mostly focussed upon the significance of Mr Mende as a decision-maker, as opposed to whether he could bind the company. Thus Mr Mende relied upon evidence that “all senior employees of the AMCI business and management of AMCI operational assets sought the approval of Mr Mende before taking significant positions and would not act on those decisions without Mr Mende’s approval”. That does not speak directly to whether Mr Mende could bind AIPL. Nor does the evidence that all senior employees reported to Mr Mende.

11. [48]

    The high point of Mr Mende’s case based on evidence of corporate practice was said to be evidence of two instances of “Significant Commercial Decision Making” where it was said that “Hans Mende made or his approval was the basis for significant commercial decisions”. They were said to be the “Onslow Project” and the “South Galilee Coal Project”. AIPL was not a party to the latter, and thus the evidence bearing on it says nothing about any implied conferral of actual authority. The Onslow Project is a little different. It appears that “Non-Binding Heads of Agreement” were entered into dated 22 December 2021, to which AIPL was not a party. However, a “Binding Project Development Term Sheet” dated 26 August 2022 was subsequently entered into, and AIPL was a party to that. It was said that the contract was entered into by Mr Mende or at his “direction or approval”. There are a number of difficulties with this evidence. For one thing, precisely what Mr Mende had done was not explained in the evidence. For another, counsel for Mr Mende was unable to identify what right or obligation AIPL assumed by being made a party. For a third, the written contract contained an “entire agreement” clause (cl 23) which superseded any earlier representations and understandings, and the written document which constituted the parties’ agreement was executed not by Mr Mende, but instead by Mr Murphy as director and witnessed by AIPL’s secretary. The document accordingly does not support the inference that Mr Mende had implied actual authority; the company became bound because of the act of a director other than Mr Mende and the company secretary.

12. [49]

    As noted above, senior counsel for Mr Kundrun took the court to every document relied on by Mr Mende. None improved the position. Dr Ward had the opportunity in reply to respond that one or more had been misunderstood, or that there were other documents in the appeal books (the Blue book occupies some 1460 pages) to which reference had not been made, but he did not do so.

13. [50]

    In those circumstances, little would be served by summarising the documents which Mr Mende did not develop in written or oral submissions in support of his challenge to the factual conclusion of the primary judge. In large measure they did not refer to AIPL, or referred to decision-making in general, as opposed to binding AIPL by Mr Mende’s act.

14. [51]

    In addition, as Mr Giles emphasised, there were many documents which tended against Mr Mende’s case.

    1. (1)

       A board meeting dated 11 August 2006 formally resolved, “That the Company authorise the execution of the Contract by Hans J Mende on behalf of the Company …”. True it is that the express conferral of authority upon Mr Mende occurred almost two decades ago, yet nonetheless it sits uneasily with the claim that such authority was implied.

    2. (2)

       Many decisions were made by circulating resolutions of the directors; on Mr Mende’s case, that could have been done much more efficiently by his own unilateral act.

    3. (3)

       In 2007, AIPL appears to have executed (by the signing by a director and secretary) a formal power of attorney, conferring authority upon persons including Mr Mark Tzannes (who according to other documents was a director of AIPL) to execute a suite of documents. The existence of the formal authorisation by power of attorney of a director to bind AIPL tends to detract from the proposition that another director had the same or broader authority informally conferred.

15. [52]

    None of those documents is necessarily inconsistent with an implied conferral of authority upon Mr Mende. But they do not support that conclusion. It is to be borne in mind that the onus lay with Mr Mende to establish that, contrary to the ordinary formal modes by which AIPL seems regularly to have acted, it also in an undocumented way conferred authority, impliedly, upon Mr Mende to bind the company.

16. [53]

    So far it has not been necessary to address the scope of any authority Mr Mende might have, a separate point which was substantially passed over by his submissions. But it is one thing to have implied actual authority to make representations on behalf of the company, or bind the company in minor decisions (such as using company funds to pay for a small administrative expense) and another to have implied actual authority to terminate employment of the managing director. See Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146 at 151; [1964] HCA 61 where Barwick CJ said with the agreement of Kitto and Windeyer JJ that it was not shown that two directors had authority to make a contract binding on their company, and further at 152 that a solicitor who did have authority to settle the terms of a contract had no authority to execute it, with Menzies J writing on this latter point to the same effect at 154 with the agreement of Owen J; see also Pavlovic v Universal Music Australia Pty Ltd (2015) 90 NSWLR 605; [2015] NSWCA 313 at [139]-[141]. To be fair, much of the evidence relied upon was, appropriately, addressed to the entry into major transactions, no doubt with a view to the submission that no separate point about scope would arise if the Court were satisfied that actual authority existed. I mention scope because much like questions of fiduciary duty (Murdoch v Mudgee Dolomite & Lime Pty Ltd (in liq) [2022] NSWCA 12; 398 ALR 658 at [79]-[91]), it will ordinarily not suffice merely to establish the existence in principle of an agent’s authority without also establishing that the agent’s particular conduct which is in issue in the litigation falls within the scope of that authority.

17. [54]

    Finally, Mr Mende referred to the correspondence after April 2025 from Mr Kundrun as supportive of his case based on implied actual authority. It was said:

18. [55]

    I do not agree. Once again, the critical distinction is between informal decision making within AIPL and causing AIPL to be bound pursuant to authority conferred by AIPL upon Mr Mende. Mr Kundrun’s complaints are about the former. An example is the complaint made by Mr Kundrun that Mr Mende had caused Mr Murphy to resign without that fact being made known Mr Kundrun. If indeed Mr Mende had unilaterally purported to terminate Mr Murphy’s contract of employment with AIPL in the same way as he did on 6 August 2025 in relation to Mr Frankcombe, that would have been relatively powerful evidence supportive of his case on implied actual authority. But that was not what occurred. Instead, Mr Murphy resigned, bringing the contract of employment to an end by his own act. It may be that Mr Mende placed pressure upon Mr Murphy to take that course, and it may be that if Mr Murphy formed the view that a director and 50% owner wanted him gone, he had effectively no choice. Assuming favourably to Mr Mende that all of that is so, that does not without more establish any actual authority upon Mr Mende to bind the company.

19. [56]

    The result is that no error has been shown in the statement by the primary judge at [39] that “there was no admissible evidence of Mr Mende directly exercising authority, either generally or in respect of the termination of contracts or employment contracts, in respect of AIPL as distinct from other companies that were Series companies where he had such authority under the AMCIG Agreement, although management of AIPL likely sought Mr Mende’s approval for the steps which they took”. This ground is not made out.

Was any authority withdrawn?

1. [57]

   This issue does not arise, because no error has been established in the conclusions by the primary judge that Mr Mende lacked express or implied actual authority. Nonetheless, I shall address, albeit briefly, the parties’ submissions.

2. [58]

   Both sides advanced relatively extreme positions. On behalf of Mr Mende, it was said that any withdrawal of authority was a matter for AIPL’s board alone, as opposed to the wishes of a director and shareholder such as Mr Kundrun. The submission was that in the absence of a board resolution (no doubt a members resolution would also suffice) the express or implied authority conferred by AIPL upon Mr Mende could not be withdrawn.

3. [59]

   On behalf of Mr Kundrun, it was said that the primary judge was right to state that any director or member could enforce the corporate constitution, which took effect as a statutory contract between them and the company pursuant to s 140 of the Corporations Act. The submission was in fact more nuanced, including reference to the difficulties that incoming directors or members would face if they could not rely on the statutory contract.

4. [60]

   It is not necessary fully to summarise the parties’ submissions on this point which cannot affect the outcome of the appeal.

5. [61]

   I am sceptical of the correctness of both sides’ submissions. On the one hand, it seems decidedly odd that the implied authority conferred by a course of conduct in one year could never be withdrawn in any subsequent year by anything short of a formal corporate act. On the other hand, it also seems odd that, say, a statement by a member (including a member with a miniscule shareholding) insisting upon punctilious compliance with the constitution would then and there revoke actual authority which had previously been conferred, expressly or impliedly, on an officer. As noted in a very different context in Zhang v Commissioner of the Australian Federal Police (2021) 273 CLR 216; [2021] HCA 16 at [26]-[27], courts should be wary of parties adopting extreme positions to suit their forensic goals.

6. [62]

   I am disinclined to accept either side’s submissions. Instead, I favour the view that the approach taken on both sides, in strictly delineating questions of implied actual authority from whether such authority has been withdrawn, may be incorrect. There is only one issue in this litigation. That issue is whether Mr Mende had actual authority to bind AIPL when he wrote purportedly exercising a power of termination vested in AIPL on 6 August 2025. Insofar as Mr Mende’s authority turns on an implication, it requires a careful consideration of the whole of the evidence bearing upon his authority up to and including that time. That includes the claims that he was closely involved in all large decisions, and also the correspondence from Mr Kundrun. It is quite artificial, at least on the facts of this case, to approach the ultimate question by first determining whether, at some (unstated) earlier time, Mr Mende had implied actual authority, but that closer to 6 August 2025 such actual authority was withdrawn. Instead there is a single issue: did he have the requisite authority on 6 August 2025?

7. [63]

   If anything turned on the foregoing, I would have considered inviting further submissions from the parties. But there is no utility in causing further delay and expense in receiving submissions on a point which cannot affect the outcome.

Conclusion and orders

1. [64]

   For those reasons, there was no error in the conclusion of the primary judge that Mr Mende lacked actual authority, express or implied, to cause AIPL to terminate the employment of Mr Frankcombe by letter dated 6 August 2025. The appeal should be dismissed. So far as I can see there is no reason for costs not to follow the event. If either side wishes to seek some other or further order, then that may be done by motion filed and served within 14 days of today.

2. [65]

   I propose the following orders:

3. [66]

   MITCHELMORE JA: I agree with Leeming JA.

4. [67]

   STERN JA: I agree with Leeming JA.