(1) Enter judgment for the plaintiff against the defendant for damages of $450,000. (2) Order the defendant to pay the plaintiff's costs of the proceedings, without varying any other costs order that has already been made in these proceedings.

Judgment

The plaintiff, Mr Timothy Martin Griffiths, by these proceedings sues the defendant, Mr Juan Jose Martinez, for damages for breach of contract concerning events that occurred principally in July and August 2015. The parties sue, and are sued, in their respective capacities as trustees for the Griffiths HWL Practice Trust and the Martinez HWL Practice Trust. That reflects the arrangements made by the relevant legal partnership, and is not material to these proceedings. I will simply refer to Mr Griffiths and Mr Martinez without reference to the trusts that they represent. Mr Martinez is also sued as the representative of the partners trading as HWL Ebsworth Lawyers (which I will call either HWLE or the Firm). It will be convenient to proceed as if Mr Martinez was the defendant. It will also be convenient to begin by setting out the relatively uncontroversial background facts, as that will assist in explaining the issues that arise in these proceedings.

Background

Mr Griffiths was admitted as a solicitor in this State in December 1980, and, after working in various legal positions, he became an equity partner of the firm Abbott Tout Lawyers on 1 July 1988. Mr Martinez was admitted as a solicitor in Victoria in 1982, and in 1989 he was made a partner of the legal partnership Home Wilkinson Lowry (HWL). Mr Martinez became managing Partner of that firm in October 1998. The partners of HWL entered into a partnership deed dated 9 October 2005 (Partnership Deed) to govern their affairs. The Partnership Deed distinguished between “Capital Partners”, who were effectively equity partners who contributed to the capital of the partnership and were entitled to vote on resolutions binding the partnership, and “Fixed Draw Partners”. Fixed Draw Partners are “partners appointed by the Capital Partners who do not contribute capital and are ineligible to vote upon partnership resolutions and have a fixed draw of profits as determined by the Capital Partners by Extraordinary Resolution” (cl 1.1 of the Partnership Deed). As appears from cl 8.5, Fixed Draw Partners are members of the partnership entitled to a fixed proportion of the net profit of the partnership. There is room for doubt about the true legal status of Fixed Draw Partners. Notwithstanding the definition of that term as set out above, cl 2.1 of the Partnership Deed refers to: “The partnership of the Capital Partners”; and cl 2.2(a) states: “The Capital Partners will carry on the Practice under the Firm Name”. Clause 2.5 implies that only the Capital Partners are members of the partnership. Clause 7.3(c) provides for the Capital Partners to indemnify Fixed Draw Partners in respect of any losses, for which the Fixed Draw Partners shall have no liability. The Partnership Deed contemplates the existence of an Executive, which is defined in cl 1.1 as being “the executive from time to time appointed pursuant to Clause 12.1”. That provision provides that the Executive “shall be appointed, be dismissed and have a membership in accordance with a Majority Resolution of the Capital Partners from time to time”. Clause 12.2 provides: “Subject to clause 12.1, the authority and responsibilities of the Executive are as set out in Schedule 3”. As mentioned above, cl 12.1 provides for the Capital Partners by Majority Resolution to determine the membership of the Executive. That provision only concerns membership, and does not authorise a change in the authority and responsibilities of the Executive as set out in Schedule 3. The Partnership Deed provides in cl 1.1 for the position of Managing Partner, being the person from time to time elected to that position pursuant to cl 11.1. Mr Martinez has at all material times been that person. Clause 10 of the Partnership Deed includes the following provisions:

10. Conduct of Partnership

10.1 How decisions are to be made

(a) All questions that arise concerning the conduct of the Practice and all decisions to be made and consents to be given by the Capital Partners under this Deed, if there is no provision in this Deed to the contrary, must be made or given by a Majority Resolution of the Capital Partners. The Capital Partners may by Majority Resolution from time to time delegate the powers and authorities referred to in this Deed as they see fit.

(b) As at the date of this Deed the Capital Partners have delegated the powers and authorities to the Executive and the Managing Partner described in Schedules 2 and 3.

…

Relevantly, Schedule 2 contains the authority and responsibilities of the Managing Partner, and states in par 1: “Employment and termination of all solicitors, support staff, finance staff and administration staff.” Schedule 2 lists in total 16 functions of the Managing Partner. Schedule 3 gives the Executive authority and responsibility for, among others: “1. Employment and termination of all Fixed Draw Capital Partners.” Note that the inclusion of the word “Capital” is an error. The schedule lists in all 12 functions of the Executive. There is a tension between cl 12.2 and cl 10.1(a), concerning the powers and authorities of the Executive. The former implies that they will remain as stated in Schedule 3. The second sentence of cl 10.1(a) provides that the Capital Partners may by Majority Resolution delegate the powers and authorities referred to in the Partnership Deed as they see fit. However, the general power created by the first sentence is subject to the requirement that “there is no provision in this Deed to the contrary”. The Partnership Deed does not contain a provision authorising the Capital Partners to vary the Partnership Deed by any resolution that does not have the unanimous support of the Capital Partners. As at 2006, Mr Griffiths was a member of the Abbott Tout Management Committee and Practice Group Leader in the Commercial Dispute Resolution Group. With effect from 5 March 2007, HWL merged with a substantial part of the firm Abbott Tout. The merger was governed by a Memorandum of Understanding (MOU) dated 6 December 2006 between the Capital Partners of HWL and the Equity Partners of Abbott Tout. The effect of clause 4.1 of the MOU was that nominated Equity Partners of Abbott Tout were admitted as Capital Partners of the merged practice pursuant to the Partnership Deed. Clause 8.1 of the MOU had the effect that the merged firm would substantially adopt the HWL executive management structure as set out in the Partnership Deed. At the time of the merger, the partners of Abbott Tout who joined the merged firm were provided with various policies that had previously been adopted by HWL, on the basis that those policies would be implemented by the merged firm. I will refer to the various policies upon which Mr Martinez has relied below in context where I deal with the issues to which they relate. On 26 October 2007, at a combined meeting of the Executive and Capital Partners of HWL, at which Mr Griffiths was present, a resolution was passed by those present that had the apparent effect of abolishing in a practical way the Executive, and thereafter members of the Executive were not appointed by the Capital Partners, and did not meet to perform the functions listed in Schedule 3 of the Partnership Deed. I will set out the resolution in full below when I deal with the significance of this issue. A merger took place between HWL and Ebsworth & Ebsworth Lawyers from 5 May 2008, at which time the Firm became known as HWL Ebsworth Lawyers. On 9 December 2009, a deed of agreement was entered into between Mr Martinez, for and on behalf of HWLE, and Mr Griffiths (the December Deed). The deed was signed by Mr Griffiths on that date but was dated 1 December 2009. The effect of this deed was that Mr Griffiths ceased to be a Capital Partner of the Firm and became a Fixed Draw Partner from 1 December 2009. The December Deed was entered into in the following circumstances. In his capacity as Managing Partner, Mr Martinez decided that Mr Griffiths no longer satisfied the criteria that were appropriate for him to continue as a Capital Partner, and Mr Martinez effectively put it to Mr Griffiths that, if he did not agree to transition to a Fixed Draw Partner on terms to be negotiated with Mr Martinez, Mr Martinez would recommend to the Capital Partners that they resolve to expel Mr Griffiths from the partnership. Mr Griffiths elected to conform to Mr Martinez’ demand and, accordingly, he executed the December Deed. Mr Martinez executed the December Deed on behalf of HWLE without any resolution of the Capital Partners or the Executive (the latter of which had ceased to operate in practical terms since the making of the resolution on 26 October 2007 that is set out above). By clause 3.2 of the December Deed, Mr Griffiths became entitled to a share of the profit of the Firm fixed at $250,000 per annum. Over time, this share of the profit was increased, so that by August 2015 Mr Griffiths’ share of profit was $435,000 per annum. Relevantly, the December Deed contained the following terms:

…

3.4 Either party may terminate this Deed by giving the appropriate period of notice specified below: [Relevantly, the period of notice in this case was 3 months].

3.5 HWL Ebsworth may at its absolute discretion terminate this Deed by making a distribution of profit in lieu of notice.

3.6 HWL Ebsworth may terminate this Deed and expel [Mr Griffiths] from the HWL Ebsworth Legal Practice summarily for any cause for which HWL Ebsworth is entitled to dismiss an employee summarily at common law, in which case [Mr Griffiths] will have distribution of profit in accordance with this Deed up to the date of termination only. For the purposes of this Deed and this clause, the conduct of the Trustee will be the relevant conduct.

…

In the period between about 2011 and mid-2014, Mr Griffiths wrote a novel about the exploits of the real-life Australian photographer and explorer Frank Hurley, which he named “Endurance”. This novel was researched and written in Mr Griffiths’ time during a period when he had succeeded in increasing the level of fees that he brought into the Firm to about $2.3 million by 30 June 2014. Consequently, the Firm had agreed to increase his entitlement to share in the profits. Unfortunately for Mr Griffiths, his billings were largely dependent on a particular type of work that he did for a single large insurer, and, in about February 2015, the insurer took that work in-house and ceased to give ongoing instructions to Mr Griffiths. Consequently, Mr Griffiths’ monthly billings effectively collapsed, and by mid-2015 the total fees for which he was responsible had reduced to about $1.5 million for that financial year. Mr Griffiths had not succeeded by that time in acquiring any significant new work, and his fees on an annual basis for the period after he lost the insurer’s work were likely to be substantially less than even the amount of $1.5 million. Mr Griffiths had attempted over the preceding period to persuade various partners within the Firm to include him in the legal teams for which they were responsible, but without any significant success. On 20 July 2015, Mr Martinez wrote an email to Mr Griffiths by which he purported to give Mr Griffiths three months’ notice of termination of his Fixed Draw Partnership. Such notice period was set out in cl 3.4 of the December Deed. Mr Martinez did not act with the authority of the Executive, as from 26 October 2007 the Executive had been practically defunct. The Partnership Deed provided in Schedule 3 par 1 that the Executive had authority and was responsible to the Capital Partners for the termination of employment of all Fixed Draw Partners. Mr Martinez only had authority under Schedule 2 par 1 for the termination of all solicitors and other staff of the Firm. Arrangements were made for the launch of Mr Griffiths’ novel, “Endurance”, by Prof Ron McCallum AO at the State Library of New South Wales on 29 July 2015. Mr Griffiths became heavily involved in organising the book launch and he engaged in part of this activity while at the Firm’s office, using the Firm’s email system, and to a limited extent with the assistance of staff employed by the Firm. On 12 August 2015, Mr Martinez sent an email to Mr Griffiths in which he said, among other things: “…I do not want you in the practice any longer. I wish to propose you leave tomorrow and on a without prejudice basis pay you a month’s notice in full settlement of any other notice period…” Mr Martinez gave reasons including Mr Griffiths’ low billings in July and August; that he had used staff and firm resources to work on his book activities, including the launch “and that 90% of your activity is for your book”; and also that Mr Griffiths was “requesting staff to print off precedents”. Email correspondence then ensued between Mr Griffiths and Mr Martinez about the reasons given by Mr Martinez for the termination of the December Deed and Mr Griffiths’ Fixed Draw Partnership, when Mr Griffiths would actually be required to leave, and the payments to which Mr Griffiths would be entitled. Mr Griffiths was required physically to leave the Firm’s premises on 17 August 2015, after Mr Martinez had sent him an email that said: “I have had other things on my mind BUT you should be packing.” There is a question about when the act of termination of the December Deed and Mr Griffiths’ Fixed Draw Partnership by Mr Martinez took place, but it is clear that Mr Martinez purported unilaterally to exercise the Firm’s right under cl 3.6 of the December Deed to terminate it on the basis that there were grounds that would permit the Firm summarily to dismiss an employee at common law. On 28 August 2015, Mr Griffiths, by email addressed to Mr Martinez, purported to accept the act of summary termination by Mr Martinez as being a repudiation of the December Deed that entitled Mr Griffiths to terminate the December Deed, which he did, reserving his rights to claim damages from the Firm. Mr Griffiths sought alternative employment as a solicitor, and from 23 May 2016 he was employed in the role of Special Counsel by a substantial Australian and international firm of solicitors in its Papua New Guinea office, for a salary of $300,000 per annum. These proceedings concern Mr Griffiths’ claim to be entitled to damages from Mr Martinez, and through him the Firm, for the wrongful repudiation of the December Deed, and the summary termination of his Fixed Draw Partnership that occurred in August 2015. Mr Martinez has denied that his summary termination of the December Deed was wrongful and ineffective, and contended that Mr Griffiths’ conduct justified Mr Martinez exercising the right of the Firm under cl 3.6 of the December Deed. Alternatively, Mr Martinez contends that, if his summary termination of the December Deed was wrongful, so that he is liable in damages to Mr Griffiths, his exercise of the Firm’s right to give Mr Griffiths three months’ notice of termination on 20 July 2015 was effective, so that Mr Griffiths will only be entitled as damages to the share of the profits of the Firm to which he would have been entitled between 20 July 2015 and 20 October 2015. Mr Griffiths has challenged this response by contending that the three months’ notice given to him on 20 July 2015 was not effective because, the Executive being defunct, the power to terminate the December Deed in exercise of the right contained in cl 3.4 resided exclusively in the Capital Partners, because it was not delegated to Mr Martinez as Managing Partner by Schedule 2 of the Partnership Deed. Consequently, according to Mr Griffiths, his claim for damages should be assessed on the basis that his Fixed Draw Partnership would have continued indefinitely. If Mr Griffiths succeeds in establishing his contentions, it will be necessary for the Court to assess an amount that is appropriate to be awarded to him as damages, having regard to all relevant possibilities and contingencies and applying a common sense approach.

Application to further amend defence

It will be necessary to interrupt the flow of these reasons to deal now with an application made by Mr Martinez to further amend his defence. On 30 November 2018, the last day of the hearing, immediately before the Court reserved its judgment, Mr Martinez foreshadowed an application to further amend his defence, in response to submissions made by Mr Griffiths to the effect that some of the matters relied upon by Mr Martinez in his final submissions were outside his pleaded defence. On 12 December 2018, Mr Martinez filed a notice of motion, by which he sought an order giving him leave to amend his existing amended defence in the manner set out in the draft further amended defence that was annexed to the notice of motion. The notice of motion was supported by an affidavit of Mr Martinez' solicitor, dated 11 December 2018. The Court heard the notice of motion on 14 December 2018, and at the completion of the submissions the Court reserved its judgment. For practical reasons, it was necessary for the Court to deal with Mr Martinez' application for leave to amend as part of its reasons for judgment in the principal proceedings. These are the reasons of the Court dealing with the notice of motion. Mr Griffiths consented to leave being granted by the Court to Mr Martinez making a number of the amendments that he wished to make. It is not necessary to refer further to the amendments for which consent has been given. Mr Griffiths opposed Mr Martinez' application in respect of three subject matters, being: (1) the addition of a ground justifying Mr Martinez' summary dismissal of Mr Griffiths from the partnership, being the improper provision of legal services to Mr Griffiths' brother, and a related ground to support Mr Martinez’ allegation that Mr Griffiths had breached his obligation of fidelity; (2) the introduction of a new estoppel claim by Mr Martinez; and (3) an amendment to add a defence based upon s 5 of the Partnership Act 1892 (NSW) (Partnership Act). It will be convenient to deal with these three matters in turn.

Claim concerning work done for Mr Griffiths' brother

It is appropriate to begin by setting out the relevant parts of Mr Martinez’ draft further amended defence. They are set out in par 8. In setting out the relevant parts of that paragraph below, I have omitted immaterial parts, not identified amendments to which consent has been given, and underlined the parts for which leave is opposed:

8. Based on the information the Defendant had on 17 August 2015 and on the further information the Defendant has acquired after that date, a proper basis existed as the Plaintiff had:

…

d. i mproperly provided legal services to his brother between 3 August and 11 August 2015 (including by not opening a client file in his name and by recording the work in an administrative file); and

e. had breached his obligation of fidelity to the Practice by engaging in the above conduct and by not being honest and candid with the Defendant in his explanations as to his improper conduct, in that when confronted about that conduct he did not disclose and/or was dishonest about:

…

iv. t he fact that he had been improperly providing legal services to his brother.

In order to put this application to amend in context, it is appropriate to start by setting out the terms of par 8 of the defence to amended statement of claim filed on 22 December 2017, which was the defence as filed at the time of the commencement of the hearing. Paragraph 8 of that pleading set out the grounds upon which Mr Martinez relied for effectively terminating Mr Griffiths' partnership in a summary manner. It provided:

8. A proper basis existed as the Plaintiff:

a. improperly used resources of the Practice for private purposes in spite of directions not to do so and in breach of policies of the Practice with which the Plaintiff was obliged to comply;

b. improperly continued to use resources of the Practice to promote the book he had written in spite of directions not to do so with which the Plaintiff was obliged to comply;

c. improperly used a significant number of working hours to promote his book, being hours that were only to be used to undertake work for the Practice, in spite of directions not to do so with which the Plaintiff was obliged to comply; and

d. had breached his obligation of fidelity to the Practice by engaging in such conduct.

Paragraph 8 provided little detail of the allegations. Sub-pars (b) and (c) related to the promotion of Mr Griffiths' book, but the nature of the improper use of resources for private purposes in sub-par (a) and the breach of the obligation of fidelity in sub-par (d) were not clearly explained. The justification Mr Martinez pleaded for summarily terminating Mr Griffiths’ Fixed Draw Partnership was limited to various types of conduct by Mr Griffiths, and did not include dishonesty or failing to supply candid answers to inquiries made by Mr Martinez.

Course of the hearing

Before the commencement of the hearing, Mr Martinez, in accordance with the usual order for hearing, served a written outline of submissions dated 26 October 2018. Paragraph 4(d) of the outline set out a fact that Mr Martinez had discovered in relation to Mr Griffiths' activities, that apparently Mr Martinez would rely upon to justify his summary termination of Mr Griffiths' partnership. The sub-paragraph provided:

(d) Mr Griffiths had, on the morning of 12 August 2015, sought and had printed out in Word format, four precedents being confidential and valuable work product of the defendant contrary to the defendant's well-established policy with respect to the use of precedents and enlivening legitimate concerns about his intended use of those precedents given that he was in his 'notice' period.

The outline of submissions also set out in par 5(b) the following additional fact upon which Mr Martinez relied for the purpose of summarily terminating Mr Griffiths' partnership:

(b) Mr Griffiths had been performing, at the same time, but without candid disclosure, further "foreign order" work to assist a family member.

In the context of the pleadings and the manner in which the hearing was conducted, the allegation in par 4(d) related to the instruction that Mr Griffiths gave to a subordinate to email to him a number of the Firm's precedents, which Mr Griffiths subsequently instructed his personal assistant to print out. The use of the expression "foreign order" in par 5(b) was evidently intended to refer to work done by Mr Griffiths for one of his brothers, in which Mr Griffiths prepared a draft deed to assist the brother in relation to the termination of a commercial venture in which the brother had been engaged. For completeness, it should be mentioned that Mr Martinez' statement of issues, also served in accordance with the usual order for hearing, was couched in very general terms that did not throw any light on the specific matters the subject of the application by Mr Martinez to further amend his defence. Following senior counsel for Mr Griffiths opening his case, senior counsel for Mr Martinez made a brief opening. The Court indicated that it wished to hear from Mr Martinez as to his claim that, by reason of Mr Griffiths' conduct, he was properly summarily dismissed (T16.41, T24.17). It will be seen to be of some moment that the Court, during the opening for Mr Martinez, indicated that the Court would decide the case on the basis of the pleadings (T23.34). Senior counsel outlined Mr Martinez' case concerning the justification for the summary termination of Mr Griffiths' partnership primarily by reference to the four dot points in Mr Martinez' 12 August 2015 email to Mr Griffiths, whereby he purported summarily to dismiss Mr Griffiths. Relevantly, the email stated the following grounds:

Performance for July $7K

Performance for August to date $7K

You have used staff and firm resources to work on your book activities including the launch and 90% of your activity is for your book

You are requesting staff to print off precedents

In this way, it is clear that Mr Martinez' case was opened to include reliance upon Mr Griffiths having requested the Firm's staff to print out precedents. However, nowhere in the opening do I see any reference to Mr Martinez relying upon Mr Griffiths having done unauthorised legal work for his brother. Perhaps motivated by the warning given by the Court during the opening that the parties would be held to their pleadings, on 2 November 2018, the third day of the hearing, Mr Martinez was given leave, by consent, to file an amended defence. Relevantly, the amended defence amended sub-par 8(d) to Mr Martinez's defence as follows, with the added words underlined:

8. A proper basis existed as the Plaintiff:

…

d. had breached his obligation of fidelity to the Practice by engaging in such conduct and by not being honest and candid with the Defendant in his explanations as to his improper conduct regarding:

i. h is use of the Practice's precedents;

ii. h is use of the Practice's resources to promote his book.

The addition of sub-par (d)(i) introduced an allegation that the summary termination of Mr Griffiths' partnership was justified by his misuse of the Firm's precedents (augmenting the fourth dot point in Mr Martinez' 12 August 2015 email to Mr Griffiths). The amendment did not introduce, or refer to, a justification for the summary dismissal based upon the work that Mr Griffiths did for his brother. That is so, notwithstanding that, at par 5(b) of his outline of submissions, Mr Martinez referred to Mr Griffiths as having performed "foreign order" work to assist a family member. This is all in the context that, in his 17 August 2015 response to Mr Martinez' 12 August 2015 email, Mr Griffiths gave the following explanation concerning his use of the precedents:

The Precedents

The precedents were printed to see if I could assist my brother. They did not leave my room. They are still here. I told my brother I was unable to assist.

Senior counsel for Mr Martinez cross-examined Mr Griffiths about the circumstances in which Mr Griffiths caused the Firm's precedents to be printed out, and also on the issue of the work done by Mr Griffiths for his brother: see in particular T133.18 to about T153. As I saw it, this cross-examination primarily took place in relation to the use to which Mr Griffiths intended to put the precedents that he had printed out. This issue was made relevant by par 8(e)(ii) of the further amended defence, which was an amendment to which Mr Griffiths did not object, by alleging that it was a breach of his obligation of fidelity by Mr Griffiths not being honest and candid with Mr Martinez, in that, when confronted about his conduct, he did not disclose and/or was dishonest about:

ii. the real reason for printing off Practice Precedents on 12 August 2015, namely to give them to his brother for his brother's use;

In response to senior counsel for Mr Martinez' pursuit in cross-examination of Mr Griffiths of the work done for Mr Griffiths' brother, in the context of the precedents being printed out, senior counsel for Mr Griffiths made a number of objections as follows. First, at T144.4:

DONALDSON: Yes, I object as to relevance, your Honour. Firstly in circumstances where my learned friend is foreshadowing some sort of application to amend to bring his application within the evidence. I'm anxious that he not expand his case further by way of cross examination but if it turns out to be relevant to the case that he's pleaded then so be it.

HIS HONOUR: No, I think I will allow this question.

I took the view that the line of questions was relevant to the claim pleaded by Mr Martinez in his amended defence, whereby he specifically raised the fact that Mr Griffiths had caused the Firm’s precedents to be printed out. It also appeared that the questions may have relevance to Mr Griffiths’ credit, given that he had been accused of breaches of his obligation of fidelity to the Firm. By his objection, senior counsel for Mr Griffiths made it clear that he objected to the line of questioning on the ground of relevance, if it was intended to support a claim outside Mr Martinez’ existing pleading, but the objection would not be pursued if the questions went to the existing pleaded case. Following this exchange, Mr Griffiths was shown a four-page draft deed that he had prepared for his brother, together with a printout of data from the Firm's timekeeping records (T144.23), and Mr Griffiths was asked questions concerning how he recorded the time that he spent preparing the draft deed as non-chargeable administrative time. It is in this context that the Court is required to decide whether Mr Martinez should be given leave to further amend his defence to add par 8(d) and par 8(e)(iv) after the end of the hearing and the close of submissions by the parties.

Pleading principles

In support of his application, Mr Martinez submitted that it is well-established that a party may amend its pleadings during (or even at the end of) the trial to reflect the evidence, in order to determine the real questions in controversy. He contrasted that situation with one where a party seeks to set up, by amendment, a new case at trial. Mr Martinez relied upon the decision of the High Court in Leotta v Public Transport Commission (NSW) (1976) 50 ALJR 666 at 668-669, (1976) 9 ALR 437 (Leotta) per Stephen, Mason and Jacobs JJ:

…

But the duty of the trial judge was clear. If in the cause of action upon which the plaintiff sued there had emerged at the conclusion of the evidence facts which, if accepted, established that cause of action, then it was the duty of the trial judge to leave the issue of negligence to the jury. The pleadings should have been amended in order to make the facts alleged and the particulars of negligence precisely conform to the evidence which had emerged. Part 20, r 1(2) of the New South Wales Supreme Court Rules provides that all necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings. Now, and for many years past, a plaintiff does not fail by being refused leave to amend or through failure formally to apply for amendment, where the evidence has disclosed a case in the cause of action fit to be determined by the tribunal of fact. Particularly is this so when the action finally determines the rights of the parties in the cause of action.

In a case where the question arose whether an amendment ought to have been requested and allowed in order to raise breach of a different duty of care the court in Mummery v Irvings Pty Ltd (1956) 96 CLR 99 at 112; [1956] ALR 795 at 802, said: “There is, of course, no doubt that the question of extending the issues at the trial was peculiarly within the discretion of the trial judge. But, on the assumption that there was some evidence upon which the jury could have reached a conclusion on this additional issue, there was every reason why it should have been submitted to the jury. If, as the members of the Full Court appear to have thought, the present judgment precludes the appellant from bringing any further action that was an additional reason why that course should have been adopted. We find it unnecessary to express any view upon that question but our doubts on this point do not lessen our belief that, if there was evidence upon this additional issue, a refusal to extend the issues was not, in the circumstances, justifiable.”

These observations apply a fortiori to a case where amendment would not raise a fresh issue based on a different duty of care but would only amend the expression of the course of events so that the facts pleaded would conform with the evidence given. An amendment to allege a different duty of care, namely, that of occupier to invitee, was rightly refused by the trial judge upon the ground that there was no evidence to support an issue of breach of that different duty.

It is further to be observed that there was no suggestion made at the trial on behalf of the Commissioner that the case proposed to be left to the jury required the giving of further or other evidence and no application was made for an adjournment. It was no ground of appeal to the New South Wales Court of Appeal that a case contrary to the pleadings or the particulars had gone to the jury. The grounds of appeal were that there was no evidence of negligence, that the verdict was against the evidence and the weight of evidence, that there was an error in the trial judge's direction to the jury, and that the damages were excessive.

…

Mr Martinez also relied upon the following aspects of the decision in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 (Aon), per French CJ at [14] and per Gummow, Hayne, Crennan, Kiefel and Bell JJ at [82] (footnotes omitted):

[14] There is a distinction between the discretion of a court to allow a party to amend its pleading on that party's motion and the requirement to make all such amendments as may be necessary to determine the real questions in controversy. That requirement engages with the authority conferred on the court to make amendments of its own motion. The point was made in 1887 by the Full Court of the Supreme Court of Victoria in Dwyer v O’Mullen in relation to O XXVIII, r 1 of the 1875 Rules. Higinbotham CJ said of the last clause of the rule that it:

“makes an amendment mandatory. The judge is under the obligation of making an amendment, but only for a certain purpose and in certain cases – for the purpose of determining the real question in controversy between the parties – that being expressed in many cases to be the question which the parties had agitated between themselves, and had come to trial upon.”

The position is different where a party seeks to set up, by amendment, a new case at trial.

And:

[82] The need for amendment will often arise because of some error or mistake having been made in the drafting of the existing pleading or in a judgment about what is to be pleaded in it. But it is not the existence of such a mistake that founds the grant of leave under rules such as r 501(a), although it may be relevant to show that the application is bona fide. What needs to be shown for leave to amend to be given, as the cases referred to above illustrate, is that the controversy or issue was in existence prior to the application for amendment being made. It is only then that it is necessary for the court to allow it properly to be raised to enable a determination upon it.

Further, Mr Martinez relied upon the terms of s 64(2) of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act), which is as follows:

Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings.

Mr Martinez submitted that, in accordance with these principles, he could show that that the "controversy or issue was in existence prior to the application for amendment being made"; and that "consideration of [the] cases does not suggest that an unduly narrow approach should be taken to what are the real issues in controversy, although they are not, or are not sufficiently, expressed in the pleading": see Aon at [82] and [83]. Mr Griffiths relied upon the following passage from the joint judgment of the High Court in Dare v Pulham (1982) 148 CLR 658 (Dare v Pulham) at 664 (footnotes omitted):

…

Pleadings and particulars have a number of functions: they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it (Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq)); they define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial (Miller v Cameron); and they give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court. Apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings (Gould and Birbeck and Bacon; Sri Mahant Govind Rao v Sita Ram Kesho). But where there is no departure during the trial from the pleaded cause of action, a disconformity between the evidence and particulars earlier furnished will not disentitle a party to a verdict based upon the evidence. Particulars may be amended after the evidence in a trial has closed (Mummery v Irvings Pty Ltd), though a failure to amend particulars to accord precisely with the facts which have emerged in the course of evidence does not necessarily preclude a plaintiff from seeking a verdict on the cause of action alleged in reliance upon the facts actually established by the evidence (Leotta v Public Transport Commission (NSW)).

…

Finally, Mr Griffiths relied upon the judgment of Gleeson JA in Gunasegaram v Blue Visions Management Pty Ltd [2018] NSWCA 179; (2018) 129 ACSR 265 (Gunasegaram), as follows:

…

[255] The function of pleadings is “to state with sufficient clarity the case that must be met”; this reflects “the basic requirement of procedural fairness that a party should have an opportunity of meeting their case against him or her”: Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279 at 286; [1990] HCA 11 (Banque Commerciale); Dare v Pulham (1982) 148 CLR 658 at 664; [1982] HCA 70.

[256] A party is entitled to have the opposing party confined to that party’s pleadings because parties are entitled to come to trial to meet only the issues raised on the pleadings. However, pleadings are but a means to an end and not an end in themselves: Banque Commerciale at 293 (Dawson J). Thus, a case may be decided on a basis different from that disclosed by the pleadings where the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities: Banque Commerciale at 287.

[257] Here, the defendants’ pleadings did not adequately put Blue Visions on notice that they were contending that Blue Visions had given informed consent to the alleged breaches of fiduciary duties. The particulars given under the estoppel defence are not fairly to be read as asserting a defence of informed consent. There is no error in the primary judge’s analysis of the defendants’ case as disclosed on the pleadings.

[258] In Betfair Pty Ltd v Racing New South Wales (2010) 189 FCR 356; [2010] FCAFC 133 at [52], the Full Court of the Federal Court referred to the remarks of Isaacs and Rich JJ in Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 at 517:

Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him, pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars. But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest. (Emphasis added)

[259] Viewed in these terms, the question is whether Blue Visions knew the nature of the case it had to meet. In my view, absent an oral opening by the defendants expressly drawing attention to their reliance upon the informed consent defence (which had not been pleaded), the fleeting reference in par 38 of the defendants’ written opening that mentioned informed consent was insufficient to put Blue Visions on notice that the defendants intended to depart from their pleadings and raise such a defence. Nor do I consider that it should be inferred from the way in which the trial was conducted that Blue Visions acquiesced in the defendants advancing their case at trial as including the informed consent defence.

…

Application of principles

Care must be taken in the present context in how the principles relied upon by Mr Martinez are to be applied. First, the application of s 64(2) of the Civil Procedure Act will be circumscribed by practical considerations when it is sought to be relied upon by a party at the end of the hearing. The manner in which the hearing has been conducted is likely to restrict the scope for the unimpeded application of the provision. In any event, it is expressed to be subject to s 58, which requires by sub-s (1)(a)(i) that, in deciding whether to make an order for the amendment of a document, the Court must seek to act in accordance with the dictates of justice. Secondly, care must be taken when seeking to transpose the actual result in Leotta to the circumstances of a present day commercial claim. As the majority stated at 668: "The only question which arises on this appeal is whether there was any evidence of negligence upon which the jury might find a verdict in favour of the appellant". Barwick CJ, who dissented, said at 667 that "the case involves no question of law which must be decided in order to dispose of the case other than the question whether the evidence adduced was such as to entitle a jury to find a verdict for the plaintiff". Barwick CJ at 667 described the claim as follows: "The cause of action was negligence on the part of the respondent in the care, control and management of the electric train". At the end of the hearing, there was no evidence before the Court to support the case set up in the pleadings and particulars, but there was evidence upon which the jury could find the respondent liable in negligence on a different basis. Thus, the majority said at 668 that "the case which the appellant at the trial sought to have submitted to the Jury was factually different from that alleged in the statement of claim and the particulars of negligence included therein.” The majority found at 668 that "a plaintiff does not fail by being refused leave to amend or through failure formally to apply for amendment, where the evidence has disclosed a case in the cause of action fit to be determined by the tribunal of fact." The discussion of the majority at 668-669 seems to allow for an amendment where the evidence supports a different duty of care, but in the case before the Court, the necessary amendment "would not raise a fresh issue based on a different duty of care but would only amend the expression of the course of events so that the facts pleaded would conform with the evidence given." Their Honours noted at 669 that: "An amendment to allege a different duty of care, namely, that of occupier to invitee, was rightly refused by the trial judge upon the ground that there was no evidence to support an issue of breach of that different duty." It was significant to the majority, as they noted at 669, that the respondent had not suggested at the trial "that the case proposed to be left to the jury required the giving of further or other evidence and no application was made for an adjournment." The Chief Justice also noted at 668: "It is, of course, proper to allow a plaintiff to amend pleadings during the course of the trial provided the interests of the defendant can be adequately safeguarded by adjournment and otherwise. That is one thing and a matter of common enough experience.” The Chief Justice also noted at 668 that an appropriate response to an amendment being allowed might be a consideration of "what witnesses already called should be recalled." The approach to the allowance of amendments adopted by the courts many decades ago in personal injury jury trials based on claims of negligence may not now easily translate into modern commercial claims, where the proceedings have been conducted applying up-to-date case management principles. In my perception, modern courts require the parties to take their obligations in readying the case for hearing most seriously and, indeed, one of the factors that s 58(2)(b)(ii) of the Civil Procedure Act permits the Court to have regard to in determining the dictates of justice in a particular case is "…the degree to which [the respective parties] have been timely in their interlocutory activities…" At least in the usual case, the Court will not readily grant an adjournment to enable the parties to deal with new evidence that a party seeks to introduce that is outside the claim that has been pleaded and for which particulars have been given. That observation is not put as a generalisation, as in each case the relevant rules must be observed. But, in the interests of the proper administration of justice, modern courts will often resist cases taking on a new life that is inconsistent with their proper determination in the period for which they have been set down for hearing. The observations of the High Court in Dare v Pulham that are extracted above that: “Apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings", have special force, given the modern approach of the courts to the management of cases. So too has the observation of Gleeson JA in Gunasegaram at [256]: "A party is entitled to have the opposing party confined to that party's pleadings because parties are entitled to come to trial to meet only the issues raised on the pleadings." An exception, recognised by Gleeson JA, that "a case may be decided on a basis different from that disclosed by the pleadings where the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities" demonstrates, by the use of the expression "deliberately chosen", how the circumstances in which the Court may be required to decide the case on a basis not covered by the pleadings are irregular and limited. In the particular case under consideration, Gleeson JA found at [259] that, in the absence of an oral opening by the party seeking to rely upon the defence that had not been pleaded "expressly drawing attention to their reliance upon" that defence, the plaintiff was not put "on notice that the defendants intended to depart from their pleadings and raise such a defence." In my view, it is true to say that in the modern era the courts will be astute to ensure that, if a party seeks leave to amend its pleadings at the end of the hearing to make a claim based upon evidence that has emerged during the hearing, that party has drawn the attention of the other party clearly and early enough to give that other party an effective opportunity to contest the issue. Before the amendment will be granted, the Court will need to be satisfied that the other party, having had a proper opportunity to contest the issue, has in reality, and perhaps "deliberately", accepted the challenge to contest the new issue. It will rarely, if ever, be sufficient to justify the amendment that evidence has emerged during the hearing that is capable of supporting the new claim. That is especially so where the new evidence is admissible in any event because it is relevant to an existing issue that arises on the pleadings. The difference between the modern position, which takes support from the legislation as well as from Dare v Pulham and Gunasegaram, and the approach to procedural issues adopted by the majority in Leotta, may be seen in a consideration of the nature of the new evidence in Leotta, which was described by the Chief Justice at 668 as being "a single and, one might almost say, a chance answer of a witness called to support the case as pleaded." The basis of the approach adopted by the Court is now one of procedural fairness, and is not dependent on the distinction between pleadings and particulars. However, in the present case it is of some moment that the claim pleaded by Mr Martinez, that Mr Griffiths breached his obligation of fidelity, by not being honest and candid regarding his use of the Firm's precedents, involves a different breach of duty to that relating to the improper provision of legal services to Mr Griffiths' brother. Had Mr Martinez been the moving party, the two claims would have raised different causes of action.

Conclusion

For the reasons that follow, it is not appropriate that the Court give Mr Martinez leave to make the amendment, after the completion of the hearing, concerning the provision of legal services by Mr Griffiths to his brother. Mr Martinez' defence, as it stood at the commencement of the hearing, was imprecise as to the basis of his claim that Mr Griffiths had breached his obligation of fidelity. Paragraph 5(b) of Mr Martinez' written outline foreshadowed a claim based upon a "foreign order", in Mr Griffiths having done work to assist a family member. However, Mr Martinez' case was not opened in a way that expressly drew attention to his reliance upon the case now sought to be made. In response to an indication from the Court that the parties should attend to their pleadings, Mr Martinez was given leave to amend his defence to specifically plead a claim based upon the way that Mr Griffiths used the Firm's precedents. Mr Martinez did not seek to introduce a claim based upon Mr Griffiths doing work for his brother. That was consistent with his opening, which restricted the claim to the misuse of the precedents. Mr Martinez applied for leave to amend his defence on the morning of the third day of the hearing. That was effectively at the end of the cross-examination of Mr Griffiths (senior counsel for Mr Martinez was permitted to complete his cross-examination briefly after the amended defence was filed in court). Mr Griffiths was not given any fair opportunity to lead evidence in his case on the issue now sought to be raised, and he did not do so. Before the cross-examination of Mr Griffiths concerning the facts relevant to the new claim, senior counsel for Mr Griffiths made a relevance objection. As appears from the extract from the transcript set out above, senior counsel for Mr Martinez was permitted to proceed, because the questions were relevant to the case as pleaded, and were capable of going to Mr Griffiths' credit. Mr Martinez did not clearly raise the claim that he now seeks leave to make against Mr Griffiths at a time or in a manner that would make it procedurally fair for the Court to give that leave. In all of the circumstances, I am of the clear view that it would not be procedurally fair to Mr Griffiths for the Court now to permit the amendment sought by Mr Martinez, and it will therefore not do so.

Additional grounds for estoppel defence

In his original defence, Mr Martinez raised a defence of estoppel in pars 18 to 20. The apparent reason for Mr Martinez having raised an estoppel defence is that Mr Griffiths foreshadowed that he would plead that Mr Martinez did not have authority to give Mr Griffiths three months’ notice to expel or otherwise terminate him as a Fixed Draw Partner from the partnership. In par 18, Mr Martinez alleged that the Firm and Mr Griffiths entered into the December Deed on the common understanding or assumption that Mr Martinez had authority to execute, terminate and take all steps in connection with the December Deed on behalf of the Firm. He alleged in par 19 that the Firm relied on that common understanding or assumption in entering into the December Deed, and in accepting Mr Martinez’ decisions to bestow benefits thereafter on Mr Griffiths pursuant to the December Deed. Then, in par 20, Mr Martinez alleged that, by reason of these matters, Mr Griffiths is estopped from denying that Mr Martinez had the authority to execute and terminate the December Deed. Whatever might be thought about the logical structure of this estoppel claim, it clearly related only to Mr Martinez' authority to terminate the December Deed in accordance with its terms. Mr Martinez now seeks leave to add the following additional estoppel claims to his pleaded defence:

21. From 20 July 2015, being the date on which the Plaintiff was given notice of termination, until immediately prior to the (aborted) hearing of these proceedings in the District Court on 26 September 2017, the Plaintiff did not raise any challenge to the authority of the Defendant to terminate the December Deed on notice or otherwise.

22. By reason of the Plaintiff's failure to raise the issue of authority as set out above:

a. the Defendant was not put on notice that, to terminate the Plaintiff lawfully on notice, he needed to:

i. have his decision to terminate the December Deed on notice ratified or authorised by a meeting of the Capital Partners; or

ii. in the alternative, have the Capital Partners pass a resolution to terminate the December Deed on 3 months' notice or payment in lieu thereof;

b. the Defendant thereby lost the opportunity to convene a meeting of the Capital Partners and to put a resolution to that meeting:

i. to have his decision to terminate the December Deed on notice ratified or authorised; or

ii. in the alternative, to terminate the December Deed on notice or by payment in lieu thereof; and

iii. to have the Capital Partners pass such a resolution.

23. By reason of the matters set out in paragraphs 21 and 22 above:

a. it is now unconscionable or unconscientious for the Plaintiff to assert or otherwise rely on any lack of authority to terminate the December Deed on notice in accordance with clause 3.4 of the December Deed; and

b. the Plaintiff is thereby estopped from asserting or otherwise relying on any lack of authority to terminate the December Deed on notice in accordance with clause 3.4 of the December Deed.

Mr Griffiths' solicitors responded to Mr Martinez' request for Mr Griffiths’ consent to leave being granted to file the proposed further amended defence, by saying in their letter of 7 December 2018:

…

However, provided the Defendant agrees:

1. to delete paragraphs 8(d), 8(e)(iv) and 24; and

2. to the making of the usual order that the costs associated with the amendment, which includes the cost of preparing additional submissions to address proposed paragraphs 21 to 23,

the plaintiff will agree to the filing of the further amended defence on that basis.

This letter signalled that Mr Griffiths would not oppose pars 21 to 23 being included in the further amended statement of claim, provided Mr Martinez agreed to pay consequential costs. However, Mr Martinez did not accept the offer made on behalf of Mr Griffiths, so it did not become binding on Mr Griffiths. Nonetheless, in par 1(b) of his written submissions in support of his application for leave to amend his defence, Mr Martinez stated his understanding that the estoppel amendments were not objected to, and explained that the additional paragraphs would only raise a legal argument based solely on the evidence led in the proceedings (Mr Martinez' emphasis). Consequently, Mr Martinez did not offer any arguments in support of this aspect of his application. In his oral submissions in support of Mr Martinez' application for leave on 14 December 2018, perhaps having some intelligence about a change of position by Mr Griffiths, senior counsel for Mr Martinez simply said about the changes to the estoppel pleading that all they "do is more fully identify the foundation for the argument" (at T2.38). Senior counsel for Mr Griffiths then made submissions as to why the Court should reject Mr Martinez' application for leave to include the new pars 21 to 23 in his further amended defence. Senior counsel said: "It is a new case factually and it should not be permitted" (at T15.35). Senior counsel did not explain in any detail how the new estoppel defence raised new facts. His submissions seem to have addressed an argument that the new estoppel suggested was not known to the law and was misconceived in principle. Senior counsel for Mr Martinez then responded, but he seems to have done so in a way that suggested that Mr Griffiths' conduct in raising the argument that Mr Martinez lacked authority to give Mr Griffiths a termination notice was unconscionable because Mr Griffiths had for a number of years accepted the benefits of the December Deed. Senior counsel did not appear to explain how the events pleaded in the new paragraphs could support a new and different estoppel to that which was alleged in the existing pars 18 to 20. It is a ground for a Court to reject an application by a party for leave to amend a pleading that the claim sought to be raised is not reasonably arguable, in the sense that, had it been included in the original pleading, it could have been summarily dismissed. That is a sensible procedural rule, where the amendment is sought to be made during the course of preparation of proceedings for hearing. The Court should not allow claims to be introduced that would be summarily dismissed if originally included. However, where the issue arises after the end of the hearing, when the Court's judgment is reserved, the practical considerations lose their force. The Court must effectively decide whether leave to amend should be given at the same instant as it decides whether the amended claim would be upheld. As I have noted, Mr Martinez seems to have linked the new estoppel defence to the old one, and less repetition will be involved if I consider whether leave to amend should be granted at the same time as I consider the present substantive estoppel defence. Therefore, the most convenient course will be for the Court to defer ruling on this aspect of Mr Martinez' application for leave to further amend his defence until later in these reasons.

Reliance on s 5 of the Partnership Act

Mr Martinez seeks the leave of the Court to add the following paragraph to his amended defence:

24. Further, or in the alternative, if the Defendant did not have actual authority to execute the December Deed (because the 26 October 2007 resolution did not validly delegate that power to the Managing Partner), the Plaintiff was aware of such lack of authority and therefore cannot enforce the December Deed against the Defendant.

Particulars

Section 5 of the Partnership Act 1892 (NSW)

Mr Martinez submitted in his written submissions that this amendment sets out the inevitable effect of s 5 of the Partnership Act, if the Court makes a finding that Mr Martinez lacked actual authority to terminate Mr Griffiths' partnership on notice, in light of Mr Griffiths' asserted knowledge of that lack of authority. Mr Martinez submitted that this is purely a legal point and is put forward solely on the basis of the evidence already led at the trial. He submitted that he should be given leave to make the amendment, as Mr Griffiths raised the issue of authority in his reply, Mr Griffiths has put on evidence on this point, and he was cross-examined extensively as to his understanding of Mr Martinez' authority. Mr Griffiths objects to Mr Martinez being given leave to make this further amendment to his amended defence. Section 5(1) of the Partnership Act provides:

5 Power of partner to bind firm

(1) Every partner in a partnership other than a firm that is a limited partnership or incorporated limited partnership is an agent of the firm and of the other partners for the purpose of the business of the partnership; and the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which the partner is a member, binds the firm and the other partners, unless the partner so acting has in fact no authority to act for the firm in the particular matter, and the person with whom the partner is dealing either knows that the partner has no authority, or does not know or believe the partner to be a partner.

…

There is an argument that s 5 would not be applicable in this context, because it makes every partner an agent of the firm and of the other partners "for the purpose of the business of the partnership”, and it states that the acts of every partner bind the firm and the other partners when the acts are "for carrying on in the usual way business of the kind carried on by the firm". It is doubtful that the act of one partner signing a deed under which an existing partner ceases to be a Capital Partner and becomes a Fixed Draw Partner is either part of the business of the partnership, or constitutes the carrying on in the usual way business of the kind carried on by the Firm. It is to be noted that the proposed par 24 is a conditional pleading, based upon the assumption that Mr Martinez did not have actual authority to execute the December Deed. Mr Griffiths has not alleged that Mr Martinez did not have authority to execute the December Deed on behalf of the Firm. Further, Mr Martinez has not himself alleged elsewhere in his proposed further amended defence that he did not have that authority. I consider that the proposed par 24 is misconceived. Section 5 of the Partnership Act is directed at the situation where a partner purports to act on behalf of the partnership for the purpose of its business, or in the carrying on in the usual way of business of the kind carried on by the firm, in some dealing with another person. That person is then entitled to enforce the transaction against the partnership, unless it is shown that the partner so acting in fact had no authority to act for the firm, and the person with whom the partner dealt either knew that the partner had no authority, or did not know or believe the partner to be a partner. Where the exception applies, the person cannot enforce the dealing against the firm. In an internal dispute between partners, particularly one that does not involve the usual way of business of the kind carried on by the firm, s 5 of the Partnership Act has no application. If a partner in the position of Mr Martinez lacked authority to bind the firm in dealing with another partner, the dealing will not be effective and that will be the end of the matter. In any event, Mr Griffiths only alleges in par 2 of his Reply, filed on 6 February 2018, that Mr Martinez lacked authority to give him three months' notice of termination under the December Deed. Mr Griffiths does not attack the validity of that deed. Mr Griffiths' attack on Mr Martinez' authority to give him the termination notice does not logically involve a commensurate attack on Mr Martinez' authority to enter into the December Deed with Mr Griffiths on behalf of the Firm. I accept Mr Griffiths' submission that, if it were properly raised on the pleadings, proof of the proposition that Mr Martinez did not have authority to enter into the December Deed on behalf of the Firm would involve a factual enquiry into the questions of whether Mr Martinez had the necessary authority, whether the Capital Partners had given him that authority, and whether, by reason of the actions of all concerned over the period since its execution, the December Deed had been ratified or become binding on some other basis. None of those factual questions have been examined in these proceedings, in part because notice of the issue was not given by Mr Martinez before the hearing commenced. Accordingly, I reject Mr Martinez' application for leave to further amend his defence by adding the proposed par 24.

Credibility of witnesses

This is a matter in which the credibility of the evidence given by the principal witnesses, Mr Griffiths and Mr Martinez, is important. In particular, there is a significant contest between them concerning the terms of a discussion that took place in about October 2014, when Mr Griffiths first informed Mr Martinez that he had written his book. The issue, in essence, is whether Mr Martinez only instructed Mr Griffiths that he should not let the publication of the book interfere with his work (as Mr Griffiths contends), or whether, in addition, Mr Martinez instructed Mr Griffiths that he should not use the resources of the Firm in relation to the promotion or advertisement of the book. I will deal with this conflict below. Mr Griffiths’ credibility is also significant in relation to his explanation of his responses to questions asked by Mr Martinez on a number of occasions, after Mr Martinez sent his 12 August 2015 email to Mr Griffiths. As I have explained above when considering Mr Martinez’ application for leave to further amend his defence, Mr Martinez’ case evolved over the duration of the hearing and the emphasis, at least in part, shifted to a reliance on what were claimed to be dishonest responses by Mr Griffiths to Mr Martinez’ questions to justify the summary termination.

Claims of dishonesty against Mr Griffiths

Mr Martinez’ submissions are relatively unrestrained in their condemnation of Mr Griffiths’ alleged dishonesty. In par 73(c) of his final written submissions, when comparing the credibility of Mr Griffiths to his own, Mr Martinez submitted:

By way of stark contrast, the plaintiff’s credibility has been seriously undermined by numerous clear examples when he was dishonest and/or otherwise lacking in candour when confronted with serious allegations (both in July and August 2015) by Mr Martinez and, more significantly, when he gave sworn evidence to this Court.

In Mr Martinez’ submissions concerning the use by Mr Griffiths of the precedents that he caused to be printed out on 12 August 2015, which submissions were set out over 15 pages in 13 paragraphs and numerous sub-paragraphs, Mr Martinez made unqualified allegations that Mr Griffiths was dishonest, disingenuous, evasive and lacked candour in most of these paragraphs or sub-paragraphs, sometimes multiple times. I fail entirely to understand the basis upon which Mr Martinez made these numerous allegations. Dishonesty is a matter to be established, not merely asserted. Perhaps Mr Martinez’ approach is consistent with the proposition that, if one pre-judges another person as being dishonest, then all reasonable explanations given by that other person will appear to be false.

General finding on Mr Griffiths’ credibility

I make these observations because, having observed Mr Griffiths being meticulously cross-examined over about one and a half days, where close attention by the Court was required because of the constant appearance that Mr Griffiths may have been being asked questions that related more to a case being made as the matter proceeded, rather than one that had been pleaded, I formed the confident opinion that Mr Griffiths was a witness whose credibility was in the first rank of witnesses that I have observed giving evidence in my time as a litigation lawyer. I found that, in giving his evidence, Mr Griffiths was attentive to the questions, responsive, immediate, careful, and appeared to me to be being entirely frank. That was equally true for subject matters that he would have expected and been prepared for, and subject matters that had not been raised by the pleadings. Mr Griffiths did not simply parrot his case, but gave carefully considered answers to each of the questions that were put to him. It appeared to me that, where circumstances required Mr Griffiths to adjust his evidence to concede that the manner in which he had expressed his recollection may have been flawed, he did so, even where against interest. There was one matter for which Mr Griffiths initially gave incorrect evidence. It concerned whether he had done work for his brother, and he initially said that he had not, on a number of occasions. That was a subject-matter not raised by the pleadings, but which has been sought by Mr Martinez to be the subject of an amendment to his defence, as considered above. I will deal with this matter in more detail below, but I am satisfied from observing Mr Griffiths that, when the subject was raised unexpectedly, he genuinely did not remember that he had done the work for his brother, but as he was given an opportunity to think about the matter further, he recalled that he had, and then conceded that point to the Court. I have analysed Mr Martinez’ final written submissions with a view to identifying the evidentiary basis of Mr Martinez’ claim that Mr Griffiths’ conduct was almost unremittingly dishonest. As those matters are not collected in the one place, but are distributed throughout the submissions, I will refer to what I understand to be the major matters in the order in which they appear in the submissions.

Dishonesty in response to three months’ notice of termination

Mr Martinez submitted in par 27 of his final written submissions that the factual basis for Mr Martinez giving Mr Griffiths the three months’ notice of termination on 20 July 2015, “and the plaintiff’s disingenuous response to it”, were as set out in Annexure A to the submissions. It seems to me that Mr Martinez raised one principal matter going to the issue of dishonesty in Annexure A, which is the “arranging meetings with clients without consultation” issue that is discussed in pars 9 to 11. This is the same issue raised by Mr Martinez in par 29 of his written submissions. In that paragraph he refers to Mr Griffiths’ “misconduct and dishonesty with respect to the July 2015 Dion Gooderham incident”. Mr Gooderham was apparently the second most senior in-house lawyer at the substantial insurer, IAG. Mr Griffiths sought the Firm’s consent to having a meeting with Mr Gooderham, in circumstances that I will consider as a separate matter below. Mr Martinez did not mention this issue in his further amended defence, and it is an impermissible basis for an assertion of dishonesty against Mr Griffiths. Not only was this issue not pleaded, but it would not have been relevant to the validity of the summary termination even if pleaded. As it was not a true issue in the proceedings, it was not properly litigated, and in particular Mr Martinez did not call the Capital Partners of the Firm who are suggested to be interested in the matter. The Court was asked to damn Mr Griffiths as a dishonest witness based upon a few insubstantial emails. In any event, when I deal with the matter, I will explain why I have found that Mr Griffiths’ conduct was not remotely dishonest in the manner claimed by Mr Martinez.

Use of email system contrary to directions

Next, in par 42(b) of his written submissions, Mr Martinez submitted that Mr Griffiths “then demonstrated a lack of honesty, disingenuousness and a lack of candour when confronted about these matters”. The matters were the use by Mr Griffiths of the Firm’s email system “in direct defiance of an oral direction given to the plaintiff by Mr Martinez in October 2014” and a written direction from the Firm’s Human Resources Manager on 13 July 2015. I will explain below why I prefer the evidence of Mr Griffiths to that given by Mr Martinez as to the terms of the October 2014 conversation, which has the consequence that I have found that Mr Martinez did not give Mr Griffiths an instruction in the terms that would have been necessary to prohibit the conduct by Mr Griffiths that Mr Martinez claims was the basis of his disingenuous response. Although Mr Griffiths clearly received the written direction from the Firm’s Human Resources Manager on 13 July 2015, I will also explain below why I have not accepted that the direction had the meaning contended for by Mr Martinez. These supposed directions do not form a proper basis for the allegation that is made by Mr Martinez that Mr Griffiths acted dishonestly in his explanation of his conduct with respect to his relevant use of the email system.

Time spent on promoting book

Mr Martinez submitted in par 42(c) that the “seriousness of the plaintiff’s misconduct was revealed” in that “it was likely that the plaintiff was spending around 90% of his time (in the period 21 July-12 August 2015) reading, sending and receiving emails in connection with the promotion and launch of his book and about a host of other non-work-related personal matters…” By a footnote, Mr Martinez reduced that estimate to 80%. When I deal with this allegation separately below as a matter of fact, I will explain why the percentage estimate made by Mr Martinez is flawed and essentially irrational.

Use of precedents

Then, Mr Martinez makes a long series of submissions in pars 46 to 55 (particularly in pars 46 to 48) as to why Mr Griffiths acted dishonestly in concealing that he had precedents printed out that he intended to give to his brother, without opening a file and earning revenue for the Firm. That is a complicated allegation which I will consider separately in detail below. Although there was a basis for suspecting that Mr Griffiths may have had the precedents printed out in order to make them available to his brother, this allegation must be considered from the perspective that it was not introduced into Mr Martinez’ defence until the cross-examination of Mr Griffiths was effectively complete. So far as the matter bears upon Mr Griffiths’ credibility, the gravamen of Mr Martinez’ claim concerns how Mr Griffiths responded to matters raised by Mr Martinez in emails starting with the 12 August 2015 email at 12:20 PM. The fourth dot point relied upon by Mr Martinez was: “You are requesting staff to print off precedents”. Part of Mr Griffiths’ response on this issue was: “It is not clear what is being referred to here but the implication is I have done something wrongful. There is no basis for any such suggestion.” The thrust of Mr Martinez’ claim is that, as the four precedents had been obtained for Mr Griffiths and printed out no more than one hour before Mr Martinez sent his email to Mr Griffiths, Mr Griffiths must have known which precedents were being referred to, so his response must have been disingenuous. Mr Griffiths’ response in cross-examination on this issue was – remembering that he was not given an opportunity to deal with it in chief – as follows (T 140.28-141.17):

A…I mean the situation is that Mr Martinez, when you look at this email, the view I formed was that he had not even gone to the trouble to look at the precedents. He hadn't himself actually looked at the substance of them, because if he'd looked at the substance of them he would have realised there was just nothing in it. There is absolutely nothing wrong with printing off precedents. It's a standard thing that everyone does in their work as a lawyer. Absolutely nothing wrong. And when you look at those precedents, you could see there was absolutely nothing in there of any value that I would have any interest in copying or stealing from the firm. It was just rubbish and to think that that was being put forward as a reason for my termination was just sickening.

Q. But you didn't decide to put in your response anything to that effect or to explain the circumstances in which you printed them off, you elected to say nothing?

A. Well no, I said something all right, but what I was concerned about was what on earth is he thinking about. I mean those precedent--

Q. But…

A. Excuse me, let me finish. Those precedents had been printed. With hindsight what we now know is, Martinez is looking in my emails and he sees this email and he terminates me within the hour. That's what happened and that's what we know now, and I had some awareness that he would be looking at my emails. But I mean there's just nothing in it. I was wondering what on earth is he thinking of? There must be something else that I've done somewhere in terms of precedents, and I'm just finishing my answer, that he is concerned about.

Q. And…

A. But those particular precedents, to me, if you look at them, they could be of no substance to back up this sort of termination.

Q. There are a number of things I need to take you through in relation to this, but insofar as on the 17th when first you mentioned your brother, why didn't you just tell him that when he's raised the question of precedents with you on the 12th?

A. Well because as I think what I just said in a longer fashion a moment ago, is I didn't know it wasn't clear to me, I didn't see how he could really be referring to that. I mean it was obvious because the word "precedents" clicked with my head I think, and I - but it just - I thought there must be something else.

When it comes to the issue of Mr Griffiths’ honesty, this exchange demonstrates how crucial perspective is, and why circumspection is required before allegations of dishonesty are made. I accept the evidence that Mr Griffiths gave. In the world in which Mr Griffiths lived, as a senior and experienced solicitor and partner of a number of law firms, it was not a serious breach of the duty of fidelity to his partners to print out a small number of the Firm’s precedents in an area of law with which he was not familiar. I will come to Mr Griffiths’ reasons for printing out the precedents when I deal with the facts concerning this issue. In Mr Griffiths’ world view, the partners in a firm are treated as having some independence and freedom with the partnership’s resources, albeit in a limited way. Whether or not he is right, Mr Griffiths did not appreciate that in the case of the Firm there was allegedly an iron rule that partners not print out the Firm’s precedents unless that was required to service an existing client in a manner that would permit the client number to be used in conjunction with the exercise. Mr Griffiths did not appreciate that it was an understanding of all members of the Firm that to print out the Firm’s precedents on one occasion was so serious a breach of the duty of fidelity that the partner responsible, if a Fixed Draw Partner, could expect to be summarily dismissed from the partnership. As it happens, the evidence did not in any event prove that the regime that Mr Martinez asserted governed the use of precedents within the Firm in fact existed. The only evidence given was that of Mr Martinez, and it was not sufficiently comprehensive to establish the regime for which he contends. The point is that, from Mr Griffiths’ perspective, he did not remotely see how Mr Martinez could have thought it proper to summarily terminate his partnership on the basis of the few precedents that were printed out. Consequently, he was bemused as much as he was devastated that he had been summarily terminated, and suspected that Mr Martinez must have been badly advised and mistaken as to what he had done regarding precedents. Quite apart from the fact that I accept Mr Griffiths’ explanation, even if he were wrong about the rigidness of the Firm’s expectations about the use of its precedents, it is untenable to conclude from his use of the words “It is not clear what is being referred to here” that he was being dishonest. In Mr Martinez’ second 12 August 2015 email, at 3:15 PM, he added the explanation: “There are emails where you are instructing a grad to print off precedents for you.” Mr Griffiths’ response the next day, 13 August 2015, at 11:48 AM, stated: “Your reference to precedents may be referring to a request I made of Jeffrey Chen who sent me a link to some precedents. There was nothing improper.” That evidence is consistent with the evidence given by Mr Griffiths in cross-examination, about being bemused as to what Mr Martinez was referring to in his first email. As soon as Mr Griffiths appreciated that Mr Martinez was indeed acting on the basis of the precedents printed out on 12 August 2015, he acknowledged what had happened. Mr Martinez says that even this response was dishonest, insofar as it asserted that nothing was improper. But that was simply a statement of Mr Griffiths’ belief and understanding, which I am satisfied he genuinely had.

Time spent on book activities

In pars 61 to 68 of his written submissions, Mr Martinez submitted that the plaintiff disingenuously responded to the statement made by Mr Martinez in his 12 August 2015 email that Mr Griffiths had used “staff and Firm resources to work on your book activities, including the launch and 90% of your activities for your book” by saying in Mr Griffiths’ reply: “I am unsure what is the basis for these statements”. Mr Martinez submitted at par 66 that, in making this response, Mr Griffiths “feigned not [sic] understanding of what was being referred to”. Mr Griffiths must have been astonished to see that he was being accused of spending 90% of his time on his book. I will explain below, when I deal separately with this subject, why I reject Mr Martinez’ estimate of the proportion of Mr Griffiths’ time spent on promoting his book. Given that conclusion, it is both plausible and understandable that Mr Griffiths’ confusion was genuinely held.

Use of staff

Another matter that it turns out Mr Martinez relied upon to attempt to establish Mr Griffiths’ alleged dishonesty was that Mr Griffiths had caused his personal assistant to prepare two separate lists of the persons who had accepted invitations to the book launch. Mr Martinez relied upon the fact that Mr Griffiths had asked a young solicitor, who was more technically proficient with IT matters than him, to assist him to upload a picture of the cover of the book to his LinkedIn account. Mr Griffiths had also cooperated with the Firm’s librarian, who wanted to interview him in order for her to prepare an article to submit for publication in the journal of an organisation of law librarians to which she belonged. Well might Mr Griffiths have been unsure of the basis for Mr Martinez’s claims, as, for what may be comparable reasons, I cannot see how these matters could possibly be such serious breaches of Mr Griffiths’ duty of fidelity to the Firm that their occurrence would justify summary termination. At the heart of Mr Martinez’ claims that Mr Griffiths was dishonest is an assumption of that which Mr Martinez is required to prove, which is not only not proved but not tenable.

Suggestion that the Firm may benefit from use of personal assistant

Mr Martinez submitted, at par 68 of his final written submissions, that Mr Griffiths’ defence of his use of his personal assistant to assist him with the guest list, by Mr Griffiths claiming that it was in the best interests of the Firm, because there were a number of judges, barristers, clients and staff attending the book launch, and that he believed the publication and the launch at the State Library was a good news story for the Firm, constituted the proffering of “disingenuous and untenable reasons”. Mr Martinez may be right in his understanding of the attitude of the Firm, and it may have been anathema to the Firm to have been associated with the production by one of the partners of a work of literature, but it seems bold indeed to make an allegation against Mr Griffiths that he was not simply incorrect but was actually being disingenuous in thinking that the Firm’s name may benefit from the peripheral connection with his book that he contemplated.

Failure to volunteer information

Mr Martinez made a submission in par 73(f) of his final written submissions that Mr Griffiths “has revealed a determination not to volunteer information and not to make admissions that could hurt his interests”. I reject that submission. In a separate part of these reasons below, I will deal with what I consider to be the significance of the devastation that Mr Griffiths must have experienced as a result of receiving Mr Martinez’ 12 August 2015 email, given its content and the consequences it was likely to have for his chances of obtaining a satisfactory alternative position as a solicitor. I will also deal with the practical difficulties that Mr Griffiths faced before he was removed from the Firm’s premises. These are practical matters which those who have accused Mr Griffiths of dishonesty should have been alive to.

Facebook use

I will finish by noting the submission made by Mr Martinez at par 74(b), that Mr Griffiths had made “further untenable defences for his use of the HWLE email system in connection with his book”, by saying that he was not a Facebook user. Mr Martinez supported this submission by referring to Court Book Vol 3 (in fact 2) at page 740, where, as alleged by Mr Martinez, “the plaintiff makes express reference to his Facebook account”. Thus, Mr Martinez submitted that Mr Griffiths’ assertion that he was not a Facebook user was shown to be false because Mr Griffiths had referred in the evidence to his Facebook account. What in fact happened was that Mr Griffiths sent a facetious email to himself in which Mr Griffiths said: “ Endurance Tim Griffiths has a Facebook page…” (emphasis added). There was no issue made about this during the hearing, and no questions were asked of Mr Griffiths in cross-examination about it. Mr Martinez has leapt at the reference to a Facebook page and made a criticism of Mr Griffiths, based upon an unsubstantiated assertion concerning the meaning of Mr Griffiths’ statement. The Court has no idea what the truth is. Any Facebook page that existed could possibly have been established by someone else, for instance Mr Griffiths’ publisher. The real point, however, is that it was not appropriate for this criticism of Mr Griffiths to be made on the basis relied upon.

Conclusion

I find Mr Griffiths to be an honest and reliable witness whose evidence the Court can confidently rely upon, subject only to making due allowance for the inevitable imperfections of human memory.

Mr Martinez’ credibility

I consider that Mr Martinez was generally a credible witness, who gave his evidence forthrightly and as accurately as his recollection permitted. In that respect, Mr Martinez was a satisfactory witness. However, in relation to a number of important issues where the recollection of Mr Martinez was in conflict with the evidence given by Mr Griffiths, I have preferred the evidence of the latter. I will explain those findings below when I deal with the relevant issues. It became apparent that, in a number of respects, Mr Martinez was giving evidence of matters that did not depend solely on his conduct or thinking, but was in substance an expression of the work of others within the Firm that was presented to Mr Martinez for the purpose of the preparation of his evidence. For example, the evidence given by Mr Martinez as to the billable hours worked by Mr Griffiths in the period 20 July to 11 August 2015 was based on information extracted by others from the Firm’s accounting system (T226.14), and Mr Martinez did not know how the tables included in his 14 November 2018 affidavit were produced because he did not produce them (T226.23). Mr Martinez said: “Well, I trust that they – they’re finance people that run the firm and I’m not the CFO” (T226.37). Mr Martinez did not himself choose the days for which Mr Griffiths worked a low number of billable hours that were listed in par 63 of his 3 May 2017 affidavit. The selection of days was presented to Mr Martinez by somebody else, and he did not know the criteria for selection that were applied (T238.20). I do not criticise Mr Martinez for deriving his evidence in this way, but it demonstrates that in some respects Mr Martinez was simply presenting the work of others. Of somewhat more significance is the manner in which Mr Martinez decided that he should summarily terminate the December Deed on grounds that included that Mr Griffiths was spending 90% of his work time working on the promotion of his book. Mr Martinez appears to have started with the evidence of the billable and administrative hours recorded in the Firm’s computer system as having been worked by Mr Griffiths, and extrapolated from that information that Mr Griffiths was spending the whole of the balance of his time promoting his book. I explain below why I reject that conclusion. Mr Martinez gave the following evidence in cross-examination about how he arrived at his 90% estimate (T 234.31-236.14):

Q. Do you tell his Honour on your oath that you recall examining Mr Griffiths' timesheets for the purpose of arriving at your 90% estimate?

A. Look, I don't recall specifically for that purpose but I would have in my mind that I would have looked over all that information, and that would have been a part of the process of arriving at that estimation.

…

Q. Do you tell his Honour that before you sent your 12 August email, you actually went to the firm's financial records and examined them yourself to see what proportion of Mr Griffiths' time was being spent on non-chargeable work?

A. I would have - I would have looked at some information produced to me. I can't say what. I wouldn't have gone into the system myself to do that but I would have discussed it and consulted with the national manager of HR and the national manager of finance.

…

Q. ...Please tell his Honour what you recall doing and if you don't recall, say so.

A. I - I consulted to obtain the information needed to prepare this information.

Q. To prepare the affidavit?

A. But I can't remember specifically what table I looked at, at what time, with whom. I would have got a general download of information from people who are employed to manage this process and to inform me about these things.

Q. If you'd looked at the information that's set out in paragraph 63 of your affidavit, you couldn't possibly have come to the view that Mr Griffiths was spending 90% of his time on matters related to his book, could you?

A. No, I don't think that's true. I think if you - if you assume that all you're doing here is talking about billable time and what I'm talking about is a partner - even an average partner, not a high-performing partner, just an average partner, would be doing about nine or over nine hours a day minimum.

…

Q. Mr Martinez, if you've had any regard to any the time that Mr Griffiths had posted as billable work, he couldn't conceivably have suggested that he was spending 90% of his time on matters to do with his book, could you?

A. That was my view - that was my estimate. That's the - the view I formed.

Q. It wasn't a genuine estimate either when you recorded it in your email or when you deposed to the truth of it in your affidavit, was it?

A. It was genuine for me.

It does not appear that Mr Martinez took great care with the manner in which a subject as important as a ground for summarily terminating Mr Griffiths’ Fixed Draw Partnership had been investigated and established. There were other aspects of Mr Martinez’ evidence where there is room for doubt that Mr Martinez attended to the detail of what was happening concerning events relevant to his summary termination of Mr Griffiths. One is whether he was aware from an attachment to an email sent to him by Mr Griffiths that Mr Griffiths had already sent out invitations to his book launch, before Mr Martinez instructed Ms Bianca Miselowski (National Human Resources Manager) to send her 13 July 2015 email to Mr Griffiths, in which she asked him not to use his HWLE email address on any advertising. This event will be considered in detail below. For present purposes, the relevant point is that Mr Martinez was cross-examined extensively on this subject between T248.3 to about T256.38. Mr Martinez’ evidence was that he did not look at the invitation to the book launch that was attached to the email sent to him by Mr Griffiths, so he did not know that Mr Griffiths had already used his Firm email address to send it, and that it was too late to reverse that situation, but he nonetheless left it to Ms Miselowski to decide what instruction to give to Mr Griffiths, and later – with that state of knowledge – he decided that Mr Griffiths had so seriously breached instructions given to him that summary termination of his position as a Fixed Draw Partner was warranted. Earlier in his cross-examination, in relation to that part of his evidence where he confirmed that he had relied upon information given to him by others concerning the amount of billable work done by Mr Griffiths on various days, the following exchange took place (T226.40-.49):

Q. Did you tell us a moment ago that you swore that the information provided in the table was true?

A. Yes, on that basis.

Q. So do you think that's an adequate basis for coming before his Honour and swearing this to the truth of the fact –

A. Yes, I do.

Q. – someone told you what it was?

A. It's the only way that I can function.

That may be a completely understandable response for someone who had the onerous administrative duties that Mr Martinez had as Managing Partner of the Firm, but it demonstrates that significant parts of Mr Martinez’ evidence concerned matters that were passing moments in the day for Mr Martinez. Mr Griffiths’ more precise recollection may be due to the fact that the same matters were of great importance to him.

Principles governing validity of summary termination

The issue is whether HWLE was entitled to terminate the December Deed and expel Mr Griffiths summarily because of the occurrence of a “cause for which HWL Ebsworth is entitled to dismiss an employee summarily at common law” (cl 3.6). Mr Griffiths submitted that cl 3.6 did not have the effect that Mr Griffiths was to be treated as if he were an employee. The effect of the clause was that, even though he would remain a Fixed Draw Partner, with whatever rights and status that position had under the Partnership Deed, he could summarily be expelled for a cause that would entitle the Firm to dismiss him if he had been an employee. I accept that submission, and do not understand that it is challenged by Mr Martinez. The parties accepted that the principle governing the circumstances in which an employer may summarily dismiss an employee were as simply stated by Payne JA (Gleeson and Leeming JJA agreeing) in Coope v LCM Litigation Fund Pty Ltd [2016] NSWCA 37; (2016) 333 ALR 524 at [139], where his Honour said: “…It is clear that conduct which is repugnant to the employer/employee relationship and which destroys the mutual trust and confidence between employee and employer will, generally, be a ground for summary dismissal”. His Honour cited as authorities Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 at 81; and Concut Pty Ltd v Worrell [2000] HCA 64 at [51]; (2000) 176 ALR 693 (Concut) at 707. As Mr Martinez seeks to justify the summary expulsion of Mr Griffiths partly on the basis of the claim that Mr Griffiths disobeyed lawful directions given to him on behalf of the Firm, it is also important to apply the following statement of principle by Isaacs ACJ in Adami v Maison de Luxe Ltd (1924) 35 CLR 143 at 151:

…It is no doubt a correct principle that, once the relation of employer and employee is established, obedience to lawful orders is, if not expressly, then impliedly, contemplated by the contract creating the relation, and mere disobedience of such orders is a breach of the bargain. But whether disobedience in a given case is of such a character as to justify a complete dissolution of the contract by one of the parties and, as here, a forfeiture by the other of valuable accruing rights, together with some degradation—altogether a severe penalty—is, in my opinion, quite a different matter. Such a justification requires the disobedience to be as phrased “wilful disobedience of a lawful order.” That is, it must be not merely a breach but a radical breach of the relation, and inconsistent with its continuance.

…

Gavan Duffy and Starke JJ put the matter as follows at 155-156 (footnotes omitted):

…

The question is whether the company was entitled to dismiss him for that breach. Was the plaintiff's conduct such as justified the company in determining, and treating as at an end, his contract of service with it? “If there is a distinct refusal by one party to be bound by the terms of a contract in the future, the other party may…treat the contract as at an end.…Short of such refusal,…the true principle to be deduced from all the cases is that you must ascertain whether the conduct of the party who has broken the contract is such that the other party is entitled to conclude that the party breaking the contract no longer intends to be bound by its provisions. This part of the rule was laid down by Lord Blackburn” in Mersey Steel and Iron Co. v. Naylor, Benzon & Co., “where he says the rule of law is that where there is a contract beween two parties, each side having to do something, ‘if you see that the failure to perform one part of it goes…to the foundation of the whole, it is a good defence to say, “I am not going to perform my part of it when that which is the root of the whole and the substantial consideration for my performance is defeated by your misconduct”’” (Rhymney Railway v. Brecon &c. Railway). Now it may well be—and the cases and the books suggest the conclusion—that where it is a condition of the contract that the servant shall obey all lawful orders of the master, then a wilful or deliberate and intentional disobedience of any of those orders is tantamount to a refusal to be bound by the terms of the contract, entitling the other party to treat it as at an end, and to dismiss the servant (Turner v. Mason; Pease and Latter's Law of Contract, 1st ed., p. 218)…

It is proper to note that these authorities emphasise the seriousness of the breach that must be established to justify summary dismissal. Before I begin to consider the application of these principles to the circumstances of the present case, it is appropriate to note that Mr Griffiths’ obligations were owed to the Firm as a whole, and not just Mr Martinez. While Mr Martinez was delegated the duties of Managing Partner, it did not follow that Mr Martinez’ views and attitudes subsumed those that may have been held by the Capital Partners at large. There is some basis in the evidence for concluding that Mr Martinez believed that the other partners in the Firm were obliged to comply with his instructions: see, for example, the following exchange from the cross-examination of Mr Martinez (T246.30–.37):

Q. And you're someone who regards obedience of your instructions as being very important, aren't you?

A. Obedience? I think compliance with what's expected is important.

Q. That's not my question. You regard compliance with your instructions as being important - compliance by other partners of the firm of your instructions as being important, don’t you?

A. Correct.

At par 8 of his written outline of opening submissions, Mr Martinez described Mr Griffiths’ conduct as having: “…undoubtedly robbed the defendant of the necessary trust and confidence in him (and of any desire to retain him)…” Mr Martinez then submitted in the same paragraph that: “…[Mr Griffiths] was earning virtually no money for the defendant and yet the defendant was paying him $36,000 each month…” (emphasis added). However, it was the Firm, not Mr Martinez, that permitted Mr Griffiths to share in its profits. Mr Martinez also expressed his own strong view about the entitlement of partners in the Firm to engage in literary enterprises in their own time: see (T 241.44 – 242.8)

Q. Do you really consider that your partners require your permission to - whether or not they should write a book? I'll withdraw that, it's very convoluted. Do you suggest to his Honour that your partners require your permission to write a book?

A. Considering a partnership is a