[2025] NSWSC 1019
In the matter of AMCI Investments Pty Limited
Declarations that Mr Jamie Frankcombe’s employment with, and directorship of, AMCI Investments Pty Ltd was not validly terminated and that he remains managing director of that company.
Catchwords
CORPORATIONS — directors and officers — appointment, removal and retirement of directors — where employment of managing director of a company purportedly terminated by executive chairman of another company — where executive chairman of that other company alleged to have authority to terminate employment and require resignation as director — where any such authority was terminated when another director ceased to acquiesce in any such arrangement — where no authority to terminate employment or require resignation as a director
Cases cited
- - Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd [1992] 2 VR 279
- - Equiticorp Finance Limited (in liq) v Bank of New Zealand(1993) 32 NSWLR 50
- - Hawcroft v Jamieson[2017] NSWSC 1478
- - Hely-Hutchinson v Brayhead Ltd. [1968] 1 QB 549
- - Junker v Hepburn[2010] NSWSC 88
- - Kraus v JG Lloyd Pty Ltd[1965] VR 232
- - Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd (2005) 220 ALR 211;[2005] FCAFC 131
- - Woonda Nominees Pty Ltd v Chng (2000) 34 ACSR 558;[2000] WASC 173
Legislation cited
- - Corporations Act 2001 (Cth), § 140
Judgment
Nature of the application
- [1]
By Originating Process dated 18 August 2025, the Plaintiffs, Mr Kundrun and 2010 FRK CRT Investments Ltd (“2010 FRK CRT”) seek declarations concerning, broadly, the validity of the purported termination on 6 August 2025, by the Second Defendant, Mr Hans Mende, of the employment of the Third Defendant, Mr Jamie Frankcombe, with the First Defendant, AMCI Investments Pty Ltd (“AIPL”). By an Interlocutory Process filed on 21 August 2025, Mr Mende and the Fourth Defendant, Mr Delamanha, seek declaratory relief which is, broadly, to the converse sought by the Plaintiffs. I will address that matter below.
Background facts and affidavit evidence
- [2]
The background facts and the matters in issue emerge from Points of Claim (“POC”) filed 22 August 2025 and Points of Defence (“POD”) filed 25 August 2025 by the parties. It is common ground Mr Kundrun or his controlled companies are a shareholder in AIPL and he is a director of AIPL (POC [1]; POD [1]). The Second Plaintiff, 2010 FRK CRT Investments, is a company controlled by Mr Kundrun and is a shareholder in AIPL (POC [2]; POD [2]). Mr Mende, or his controlled companies, are also a shareholder in AIPL and he is also a director of AIPL(POC [3]; POD [3]). Mr Frankcombe is, or was, a director of AIPL and was appointed its managing director on 28 April 2025, although the purported termination of his employment and its consequences are in issue in the proceedings (POC [5]; POD [5]). Mr Frankcombe appeared, but did not take a substantive role at the hearing, where allegations as to the basis of the termination of his employment were not pursued. Mr Delamanha and the Fifth Defendant, Mr Terry, are also directors of AIPL (POC [6]–[7]; POD [6]–[7]), AIPL and Mr Terry did not take an active role in the proceedings.
- [3]
It is common ground that Mr Kundrun and Mr Mende and their respective companies hold equal interests in AMCI Group LLC (“AMCIG”) which is a company incorporated under the laws of Delaware and has global investments in natural resources, transportation, infrastructure, metals and energy. Mr Kundrun and Mr Mendes and their respective companies also hold equal interests in AIPL but, importantly, AMCIG does not itself have any interest in AIPL.
- [4]
The AMCI Group LLC Amended and Restated Limited Liability Company Agreement dated 31 January 2020 (“AMCIG Agreement”) (Ex P1, CB 129) sets out the history of AMCIG and records, in article 1, that, “[a]s a general rule, governance is a company-level responsibility, and in particular is the responsibility of the company’s board of directors.” That article records that the board of directors, acting as a body, will manage the company and, unless the member of any particular “Series” agree otherwise, each Series. Article 1 of the AMCIG Agreement also recorded that the board may delegate any or all of its authority to act with respect to any matter to officers of AMCIG; AMCIG will have an “Executive Chairman” and, subject to the board’s authority:
- [5]
The concept of “Series” is in turn defined in article 2 of the AMCIG Agreement, which records that the company was established as a limited liability company with “Series” under s18-215(b) of the Delaware Law. The parties did not seek to explore the content of that provision, nor was it necessary to do so, since, as I noted above, AIPL is not a Series company and the AMCIG Agreement had no application to it. A Series Creation and Member Joinder Agreement (Ex P1, CB 245) in turn records the creation of several Phase III Series and a list of the relevant Series is attached. Again, little turns upon that, beyond the fact that AIPL is not a Series company.
- [6]
AIPL’s constitution (Ex P1, CB 99) provides, in cl 14.3, for the appointment of a director to fill a casual vacancy. Mr Ward, with whom Ms Constable appears for Messrs Mende and Delamanha, relies on that clause that a casual vacancy created by Mr Frankcombe’s resignation as a director of AIPL could be filled by AIPL’s board. That proposition is likely correct but does not advance the question whether Mr Mende had authority to terminate the employment of Mr Frankcombe, without a decision being made by AIPL’s board to do so, or whether Mr Frankcombe was required to resign as a director of AIPL in the relevant circumstances. Clause 14.4 of AIPL’s constitution in turn provides that the company may, by ordinary resolution, remove any director and may, by ordinary resolution, appoint another person in their stead. Mr Frankcombe was not removed as a director of AIPL by that mechanism. Clause 14.7 of AIPL’s constitution provides that a director’s office is vacated, relevantly, upon his or her resigning office by notice in writing to the company or being lawfully removed from office. Clause 16.1 provides for the conduct of directors’ meetings in conventional terms. Clause 16.11 provides that the directors may appoint a managing director and there is no controversy as to the fact that Mr Frankcombe was here appointed as managing director of AIPL.
- [7]
It is common ground (POC [11]; POD [11]) that the effect of s 140 of the Corporations Act 2001 (Cth) (“Act”) is that AIPL’s constitution has effect as a contract between AIPL and each of its members, between AIPL and each director and company secretary, and between a member and each other member, under which each person agrees to observe and perform the constitution as applicable to that person.
- [8]
It is common ground that, on or around 20 August 2024, AIPL entered into an Employee Service Agreement with Mr Frankcombe (“Employment Agreement”) (POC [8]; POD [8]). That Employment Agreement provides that Mr Frankcombe is employed in the Position (as defined) until it is terminated in accordance with cl 9. The term “Position” is defined by reference to Schedule 1, as Head of Australian Coal Operations commencing 1 October 2024. Schedule 2 in turn specifies the scope of Mr Frankcombe’s duties in that role which I accept largely relate to operations of Series companies. Clause 3.1 sets out Mr Frankcombe’s duties, include performing tasks that are assigned to him by the AMCI Managing Director (defined as the Managing Director of AMCIG) or their delegate or by Mr Mende, and reporting to the AMCI Managing Director or their delegate and Mr Mende. Clause 3.2 requires Mr Frankcombe to accept employment as a director or officer of any Group Member nominated by the AMCI Managing Director, and the term “Group Member” is defined as any company in the “Group” which is in turn defined as AIPL and all Related Corporations including specified companies. Clause 3.2(c) requires Mr Frankcombe immediately to do all things necessary to resign his office as a director of a Group Member if his employment is terminated for any reason or the AMCI Managing Director requests his resignation from that office in writing. For the reasons noted below, Mr Frankcombe’s employment has here not been validly terminated and the AMCI Managing Director has not requested his resignation as a director of AIPL although Mr Mende has done so. Clause 9.1 provides for termination of Mr Frankcombe’s employment by the Employer (defined to mean AIPL) with notice or without notice in specified circumstances.
- [9]
By letter dated 13 March 2025 (Ex P1, CB 289), the solicitors acting for Mr Kudrun and 2010 FRK CRT had referred to a request or direction that a former employee and director of AIPL resign and had drawn the attention of AIPL’s directors, including Mr Mende, to the terms of AIPL’s constitution in that regard.
- [10]
By letter dated 28 March 2025 (Ex P1, CB 308), Mr Terry, an alternate director of AMCI for Mr Kudrun, pointed to a historical practice of making corporate decisions at AMCI by circular resolution and suggested that a more orthodox process for directors’ meetings should be undertaken in the future and referred, in particular, to the need for board review in respect of the resignation of a former managing director of AIPL, if relevant documents were executed by AIPL.
- [11]
By letter dated 2 April 2025 (Ex P1, CB 316), the solicitors acting for Mr Kundrun and 2010 FRK CRT protested steps taken by Mr Mende and Mr Delamanha at recent joint venture meetings on the basis that they did not have authority to bind AIPL and observed that:
- [12]
That letter also requested confirmation from Mr Mende and AIPL that the equal ownership between Mr Kundrun and Mr Mende would be recognised and that there would be consultation on business operations concerning AIPL between Mr Mende and Mr Kundrun, either directly or by Mr Mende coordinating with Mr Kundrun’s alternate director, Mr Terry. Putting aside the position in respect of any Series company, as to which Mr Mende may have powers under the AMCIG Agreement, that letter correctly identified the position under Australian law. There can be no doubt that, from that time, Mr Kundrun and 2010 FRK CRT had required compliance with AIPL’s Constitution in respect of its management, and there was no longer any acquiescence by them as to any previous practice of Mr Mende making decisions without reference to the board of AIPL.
- [13]
By a further letter dated 2 April 2025 (Ex P1, CB 318) expressed concern as to the circumstance that a previous director and employee of AIPL had ceased in his role.
- [14]
By notice of meeting dated 10 April 2025 (Ex P1, CB 321), Mr Mende called a meeting of AIPL’s directors to confirm the appointment of Mr Frankcombe as a director of AIPL and certain other companies.
- [15]
By a meeting of directors held on 15 April 2025 (Ex D1, CB 1059), the directors of AIPL agreed that Mr Frankcombe would be appointed as a director of AIPL by circular resolution. That appointment was notified to the Australian Securities and Investments Commission on or about that date (Ex P1, CB 393).
- [16]
By email dated 21 April 2025 (Ex P1, CB 322), Mr Kundrun advised the then directors of AIPL, including Mr Mende, that:
- [17]
He also there pressed for Mr Frankcombe’s employment to be considered by AIPL’s board, and observed that
- [18]
By a notice of meeting dated 22 April 2025 (Ex P1, CB 326), Mr Kundrun gave notice of a meeting of directors to consider, inter alia, the ratification of Mr Frankcombe’s appointment in place of a former director of AIPL. Mr Kundrun also gave notice of a resolution to the effect that Mr Mende:
- [19]
By a meeting of directors of AIPL held on 22 April 2025 (Ex D1, CB 1060), the directors of AIPL ratified the appointment of Mr Frankcombe as a director of AIPL and 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. The failure to pass the latter resolution did not confer any authority upon Mr Mende which did not otherwise exist. By a further meeting of directors held on 28 April 2025 (Ex D1, CB 1063), the directors of AIPL resolved that Mr Frankcombe be appointed as managing director of AIPL.
- [20]
On 15 May 2025, Mr Kundrun wrote to the then directors of AIPL including Mr Mende and stated, inter alia, that he was concerned that AIPL “and 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”; asked why, if earlier appointments to joint venture management committees had happened in March 2025, he was only learning about them in May 2025; stated that “I am deeply concerned, as a director, that neither I nor the Board was given an opportunity to even know about Mr Delamanha’s appointment, let alone discuss or agree to it”; and also stated that:
- [21]
By email dated 20 June 2025 (Ex P1, CB 349), Mr Kundrun again pointed to the distinction between AIPL and the wider AMCIG and pointed out, again, that:
- [22]
By letter dated 6 August 2025 (Ex P1, CB 380), on the letterhead of AMCIG and signed by Mr Mende as Executive Chairman of AMCIG, Mr Mende purported to terminate Mr Frankcombe’s employment by AIPL as Head of Australian Coal Operations. Mr Mende made clear the basis on which he sought that step as follows:
- [23]
Turning now to the evidence, the Plaintiffs did not read any affidavit evidence but tendered documentary evidence to which I have referred above
- [24]
Mr Mende and Mr Delamanha read several affidavits, significant parts of which were not admissible and were not admitted. Mr Mende and Mr Delamanha read the affidavit dated 27 August 2025 of Mr Delamanha, who is the Chief Executive Officer of AMCI Group and a director of AIPL. Mr Delamanha refers to Mr Mende’s role in the decision to appoint Mr Frankcombe as Head of Australian Coal Operations and to Mr Frankcombe’s execution of the Employment Agreement. I accept that Mr Mende played a significant role in the decision to appoint Mr Frankcombe to that role, and may well have been the ultimate decisionmaker; but it does not follow from that fact that he has the authority to terminate Mr Frankcombe’s employment, particularly after the Plaintiffs sought to require the conduct of AIPL’s governance in an orthodox way and in accordance with its Constitution. Mr Delamanha also points out that the coal mining assets and coal mining companies, for which Mr Frankcombe would have management responsibility, are “Series” companies managed by the AMCIG. That does not assist the Defendants, as Mr Frankcombe was an employee of AIPL and not an employee of those companies and AIPL was not a “Series” company.
- [25]
Mr Mende and Mr Delamanha also read the affidavit dated 27 August 2025 of Ms Fiona Murdoch, who was previously, from March 2011 until November 2021, the General Manager – Commercial for AIPL and is now a representative appointed by another company within the AMCIG to joint venture management committees and a consultant to that other company. She refers to her responsibilities in her former role with AIPL and to her regular communications with Mr Mende and her limited contact with Mr Kundrun concerning AIPL. She refers to several significant projects where Mr Mende made decisions, or his approval was the basis for significant decisions, including in respect of several coal projects. That evidence also did not assist Mr Mende and Mr Delamanha since, in each of those cases, the party to the relevant contract was a Series company and not AIPL. I accept that Mr Mende has authority to make decisions within Series companies, but that does not assist in establishing his authority to make such decisions within AIPL. Other aspects of Ms Murdoch’s evidence establish that, possibly unsurprisingly, executives within the AMCIG consulted with Mr Mende in respect of significant decisions, but that also does not advance Mr Mende’s and Mr Delamanha’s position where a practice of consultation with Mr Mende does not confer the authority on him to make decisions for AIPL other than as authorised by its Constitution or with the acquiescence of other directors.
- [26]
By her affidavit dated 26 August 2025, Ms Ornella Bolz, who is the Vice President of AMCIG, referred to the formation of the AMCIG and the history and formation of AIPL and referred to aspects of the AMCIG’s coal business in Australia. Ms Bolz’s evidence established, uncontroversially, that Mr Mende played a significant role within the AMCIG but did not advance the question of his authority within AIPL.
The termination of Mr Frankcombe’s employment
- [27]
First, the Plaintiffs seek a declaration that Mr Mende’s purported termination of Mr Frankcombe’s employment was not authorised under AIPL’s Constitution and is of no effect. They contend (POC [15]–[17]) that Mr Mende did not have authority to terminate Mr Frankcombe’s employment, on the basis that AIPL is separate from, and not owned by, AMCIG; there had been no delegation of power by AIPL to Mr Mende, at least in respect of the termination of employment contracts; Mr Mende is not an employee or executive of AIPL and did not have authority to bind AIPL unilaterally or any authority conferred by AIPL’s board to unilaterally bind AIPL. The Plaintiffs also contend (POC [18]) that Mr Mende had no power to require a director of AIPL to resign; AIPL has itself not terminated Mr Frankcombe’s employment or sought his removal from office; and any conferral of power on Mr Mende to remove Mr Frankcombe as a director of AIPL would be inconsistent with the power to remove a director created by cl 14.4 of AIPL’s constitution.
- [28]
The Plaintiffs have established this contention on the straightforward basis that Mr Frankcombe’s employment under the Employment Agreement can only be terminated by “the Employer”, namely AIPL. Clause 15.1 of AIPL’s Constitution confers on AIPL’s directors (and not a single director such as Mr Mende) the power to manage the business of AIPL and AIPL’s directors did not resolve to terminate the Employment Agreement. That position is consistent with the general law position. That is sufficient basis to find that Mr Mende’s purported termination of Mr Frankcombe’s employment was without authority and invalid, subject to the matters raised by Messrs Mende and Delamanha which I do not accept for the reasons noted below.
- [29]
Messrs Mende and Delamanha identified several overlapping bases for Mr Mende’s claim to have authority on terminate Mr Francombe’s employment without the need for any decision by AIPL by its board. Messrs Mende and Delamanha respond that Mr Mende had power to terminate Mr Frankcombe’s employment “acting for [AIPL] and/or as Executive Chairman of the AMCIG and/or as the Managing Director of the AMCI Group” (POD [9 (d)(ii)]). In an overlapping claim, Messrs Mende and Delamanha contend (POD [12(b)]) that:
- [30]
The first aspect of the contention in (POD [12(b)]) is that Mr Mende terminated the Employment Agreement on behalf of AIPL. This first contention overlaps with further contentions that, at least prior to March 2025, it was understood and accepted by the Plaintiffs that significant commercial decisions for AIPL were being made by or with approval of Mr Mende. Messrs Mende and Delamanha also contend (POD [16(f)]) that Mr Mende had regularly, over a long period, controlled the operations of AIPL and caused it (directly or indirectly) to enter into and to terminate contracts.
- [31]
Both Mr Ward and Mr Izzo (with whom Mr Boyle appears for the Plaintiffs) draw attention to the applicable case law. Mr Ward refers to the basis on which implied authority was established in Hely-Hutchinson v Brayhead Ltd. [1968] 1 QB 549 at 584, where Lord Denning MR observed that:
- [32]
I recognise that, as Mr Ward also points out, in Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd [1992] 2 VR 279 a director was found (at 361) to be “more than an ordinary director” and to have had actual authority to manage the business of that company, by reference to the steps which he had taken in doing so. Mr Ward also points out that, in Equiticorp Finance Limited (in liq) v Bank of New Zealand (1993) 32 NSWLR 50 at 132–134 (“Equiticorp”), Clarke and Cripps JJA observed that:
- [33]
In Woonda Nominees Pty Ltd v Chng (2000) 34 ACSR 558; [2000] WASC 173 at [41], Owen J similarly noted that, once a director’s entitlement to act as chairman was put squarely in issue, no question of acquiescence could arise. Mr Ward also draws attention to Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd (2005) 220 ALR 211; [2005] FCAFC 131 at [124], where the Full Federal Court followed the approach in Equiticorp and observed that:
- [34]
In Junker v Hepburn [2010] NSWSC 88 at [43], Hammerschlag J (as his Honour then was) in turn observed that:
- [35]
Mr Ward submits that:
- [36]
Mr Ward also submits that:
- [37]
Mr Ward further submits that:
- [38]
Mr Izzo responds that:
- [39]
Here, 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. Here, even if Mr Mende had previously regularly exercised control of AIPL (as distinct from the Series companies), that does not assist the Defendants where the Plaintiffs had, prior to the purported termination of Mr Frankcombe’s employment, required that decisions within AIPL be made in accordance with its Constitution. Any implied authority was withdrawn by the letters dated 2 April 2025, 21 April 2025, 15 May 2025 And 20 June 2025 to which I referred above. Mr Ward submits that Mr Kudrun and 2010 FRK CRT could not depart from any earlier practice by which Mr Mende made decisions for AIPL without board approval without a majority decision of AIPL’s board of directors. I reject that submission. It is a necessary consequence of a director’s and shareholder’s rights under s 140 of the Act that that director, or shareholder, can insist on compliance with the company’s constitution, even if a majority of a company’s board would be content to acquiesce in non-compliance.
- [40]
The second aspect of the contention in POD [12(b)]) is that Mr Mende terminated the Employment Agreement as Executive Chairman of AMCIG. Mr Ward here relies on the AMCIG Agreement and submits that that Agreement:
- [41]
Mr Izzo responds and I accept that:
- [42]
The third aspect of the contention in POD [12(b)]) is that Mr Mende terminated the Employment Agreement as the Managing Director of AMCIG. I do not accept this contention where Mr Mende was not the Managing Director of AMCIG although he appointed other persons to that position in his capacity as Executive Chairman of AMCIG. By an Action by Written Consent dated 25 January 2021 (Ex P2, CB 517.003), AMCIG resolved that it may have one or more managing directors, and the then appointed managing directors were Messrs Beem, Patel and Murphy. An officer’s certificate in respect of AMCI Holdings LLC dated 9 July 2025 (Ex P1, CB 1056) subsequently records that Mr Mende, as Executive Chairman of AMCIG, appointed four other persons as managing directors of AMCIG.
- [43]
It is therefore not necessary to address Mr Izzo’s further submission that:
- [44]
The fourth aspect of the contention in POD [12(b)] is that Mr Mende is the person who authorised AIPL to enter into the Employment Agreement. Mr Ward submits that Mr Mende:
- [45]
In an overlapping contention, Mr Mende and Mr Delamanha further contend (POD [16(a)–(b)] that Mr Mende approved the execution of the Employment Agreement by Mr Beem, a director of AIPL on its behalf and AIPL’s board acquiesced Mr Mende’s conduct in respect of the execution of the Employment Agreement. The evidence establishes that Mr Beem, who executed the Employment Agreement, likely sought Mr Mende’s approval for that course and that Employment Agreement was subsequently ratified by AIPL’s board as I noted above.
- [46]
It seems to me that these matters do not assist Messrs Mende and Delamanha. The fact that executives, or here Mr Beem, sought Mr Mende’s approval generally for the Employment Agreement does not confer any relevant legal authority upon Mr Mende, beyond the scope of his powers as a director of AIPL; AIPL’s board retrospectively ratified Mr Frankcombe’s appointment so as to confirm its efficacy; and AIPL’s board has not ratified the termination of that employment.
- [47]
Next, Messrs Mende and Delamanha contend that Mr Mende had the power to terminate Mr Frankcombe’s employment because Mr Frankcombe was to perform duties “otherwise assigned to [him] by the AMCI Managing Director (or their delegate), or by [Mr Mende]” (POD [9](d)(iii) and (e)(i)(C)) or because Mr Frankcombe was to report to “the AMCI Managing Director (or their delegate), and [Mr Mende]” with respect to his responsibilities and performance of his duties (POD [9](d)(iii) and (e)(iii)) or because Mr Frankcombe was to comply with reasonable and lawful directions given by “the AMCI Managing Director (or their delegate)” (POD [9](d)(iii) and (e)(iv)). In an overlapping claim, they also contend (POD [16(c)–[e]) that Mr Frankcombe was to report to, inter alia, Mr Mende in carrying out his duties and his position as Head of Australian Coal Operations related exclusively to duties and responsibilities with respect to Series companies managed by AMCIG.
- [48]
Mr Ward submits that:
- [49]
Mr Ward also submits that:
- [50]
I do not accept this contention. In my view, the fact that Mr Frankcombe was to report to, inter alia, Mr Mende, does not confer upon Mr Mende any authority to terminate his employment. Where Mr Frankcombe was employed by AIPL, which was not a Series company, then Mr Mende also obtained no further authority from the fact that his duties extended largely or wholly to matters relating to Series companies.
- [51]
Messrs Mende and Delamanha also contend (POD [15]) that Mr Kundrun and entities he controls and Mr Mende and entities he controls reach hold 50% of the shares in AIPL and that the “Series” companies managed by AMCIG are also owned 50% by Mr Kundrun or entities controlled by him and 50% by entities controlled by Mr Mende. The position is correct but does not assist them where AIPL is not a Series company and the powers conferred on Mr Mende in respect of Series companies do not extend to it. They also contend that AIPL is an affiliated or associated entity of AMCIG, by reason of Mr Mende exercising his powers as Executive Chairman of AMCIG in relation to the business of the AMCIG. That proposition may be true, but it begs the question whether Mr Mende has any authority in respect of the termination of employment of a senior executive of AIPL.
- [52]
The Plaintiffs also point (POC [18]) to the constitutional provisions for removal of a director of AIPL, to which I have referred above; Messrs Mende and Delamanha respond (POD [18]) that those constitutional provisions are not exhaustive. That proposition also does not assist them, where no basis on which Mr Mende could exercise such a power has been established.
- [53]
I am satisfied that the Plaintiffs have standing to seek the first declaration and the Court has power to make it. In Kraus v JG Lloyd Pty Ltd [1965] VR 232, Hudson J similarly held that an injunction could be granted, so as to protect a shareholder’s individual membership rights, where a person acting as a director was not validly in office. I do not understand the observations of Gleeson J in Hawcroft v Jamieson [2017] NSWSC 1478 at [152], which identified additional bases on which such relief may be sought, to be inconsistent with the Court’s power to grant declaratory relief on that basis. The dispute is such that it can properly be quelled by the grant of declaratory relief. For the reasons set out above, the termination of Mr Frankcombe’s employment by Mr Mende took place without authority and is invalid and the first declaration sought by the Plaintiffs should be made.
Whether Mr Francombe was obliged to resign as director of AIPL
- [54]
Second, the Plaintiffs seek a declaration that Mr Frankcombe remains managing director of AIPL under cl 16.11 of its constitution.
- [55]
Under cl 14.7(d) of AIPL’s Constitution, a director can vacate office by resigning by notice in writing to AIPL. Mr Francombe has not done so. Clause 3.2(c)(ii) of the Employment Agreement in turn provides that Mr Frankcombe “must immediately do all things necessary to resign … [his] office as a director of [AMCI Investments] … if … the AMCI Managing Director requests … [it] in writing”. I have held above that Mr Mende is not the (or a) Managing Director of AMCIG and he did not have power to require that Mr Frankcombe resign from his office as a director of AIPL.
- [56]
Mr Frankcombe continues to hold office as Managing Director of AIPL where he would only cease to hold that office if he in fact resigned as a director of AIPLP, which he was not obliged to do and has not done. The second declaration sought by the Plaintiffs should also be made on that basis.
The relief sought by the Defendants
- [57]
As I noted above, by their Interlocutory Process filed on 21 August 2025, Messrs Mende and Delamanha seek a declaration that Mr Frankcombe’s employment was validly terminated on 8 August 2025 that, on or by that date, he was required to resign as a director of AMCI and any other “group member” as defined in cl 1 of an Employment Agreement and a declaration that any role or position that he held as managing director of AIPL ceased on or about 8 August 2025. It is not necessary to determine whether Messrs Mende or Delamanha have standing to seek those declarations, where they would not be made consequential on the findings that I have reached above.
Orders
- [58]
For these reasons, I make the following declarations:
- [59]
I note that Mr Francombe has sought the opportunity to make further submissions as to costs. I direct the parties to bring in agreed short minutes of order as to costs within seven days or, if there is no agreement, their respective draft orders and short submissions as to costs, and any reply submissions as to costs within 14 days.