While dismissing the bulk of CCL’s grounds of appeal, the Full Federal Court on Friday found Justice Steven Rares had wrongly calculated the damages owed the agent, Dr. Benoy Berry, and his firm Global Secure Company.

CCL had appealed two judgments by Justice Rares, in December 2017 and August 2018, which found the company had committed what the judge called a “shabby fraud” on Berry and awarded the businessman $50 million in unpaid commissions and a further $14.8 million in interest.

CCL, formerly known as Innovia Security and before that Securency, manufactured and designed polymer banknotes and was once half-owned by the Reserve Bank of Australia. In 2003, Berry travelled to Nigeria to introduce polymer banknotes to government officials. After meeting with key personnel, including the Governor of the Central Bank of Nigeria, Berry reported to Hugh Brown, then director of sales and marketing of CCL, that polymer banknotes could only be introduced to the country if they were printed there.

From 2003 to June 2006, Berry negotiated with the Nigerian government, believing that a banknote production facility, called an opacification plant, would be constructed locally. In June 2006, Berry met with Brown to negotiate a formal contract between them. Under the agreement, Berry acted as agent of CCL and was paid a 15% commission for sales within Nigeria and the Economic Community of West African States.

On limited evidence

Berry and GSC launched their case against CCL in December 2013, saying the company had deceived Berry in two ways: by convincing him to sign a termination letter under the false assumption a new agreement would be entered into, and by giving assurances that an opacification plant would be built in Nigeria when the company had no intention of following through with the project.

The Full Court found that despite the limited documentary evidence and inconsistent accounts, it was “clearly open” to Justice Rares to determine that CCL’s then director of business development for Africa and the Middle East, Peter Chapman, misled Berry at a meeting in February 2008 about the routine nature of the termination letter and his assurances Berry would continue to be able to receive his 15% commission through a new contract.

“Upon a close review of the evidence, there is little doubt that such a finding, expressed in these terms, was clearly open on the evidence and that this ‘business as usual’ conclusion was not undermined fatally by the limited documentary record following the February meeting,” the Full Court held.

Justice Rares did not err by finding that CCL had engaged in conduct that breached section 52 of the Trade Practices Act forbidding misleading or deceptive conduct, the appeals court said.

But it was not open to the judge on the evidence given that CCL had misled Berry about the likelihood of the Nigerian opacification plant being constructed.

“In our view, with respect to the primary judge and while recognising the careful and detailed way his Honour approached his findings, it was contrary to compelling inferences that such a specific representation at the time of handing over a partnership agreement was made,” the Full Court said.

A fair trial

The Full Court dismissed CCL’s argument that it was denied procedural fairness because Justice Rares had made a finding of fraud when fraud was not pleaded.

There was no prejudice to CCL, the judges wrote, because the parties had fought the primary case knowing fraud was part of the equation, with CCL’s senior counsel even saying during closing submissions that the matter was “in substance” a fraud case.

“While fraud was not a necessary integer of the misleading and deceptive conduct case pleaded, no prejudice was suffered by the primary judge recognising the way the case was run (as urged upon his Honour by senior counsel for Securency) and making findings accordingly,” the judges said.

In cutting the amount awarded to Berry and GCS, the Full Court found that Justice Rares had wrongly calculated damages up until March 13, 2018, the date CCL finally terminated its agreement with Berry. The company only terminated it then after the judge found in his ruling that its February 2008 termination letter was invalid.

The appeals court ruled that the proper end date of the agreement was June 30, 2008, 30 days prior to the expiration of Berry and GCS’s agency agreement. Without the termination letter signed in February 2008, CCL would have severed its ties with Berry anyway, the Full Court found.

“What is evident is that any post February meeting involvement of Dr Berry was limited and although the misleading conduct of [CCL] made that limited involvement possible, in the counterfactual, absent the misleading conduct, the factors that motivated the replacement of Dr Berry would have ensured that his agency would have been brought to an end,” it said.

The Full Court found that the correct amount owed to Berry and GCS was just over $1.2 million in unpaid commission and $580,000 in interest.

The ruling comes six months after the lifting of a suppression order in a corruption case in which CCL and another RBA subsidiary were fined $21 million. CCL and Note Printing Australia pleaded guilty in 2011 and 2012 to offering bribes to foreign officials in Indonesia, Malaysia, Vietnam and Nepal.

The offenses took place between 1999 and 2004, but details of the case and the penalty only came to light in November.

CCL declined to provide comment on Friday’s appeal judgment. Berry did not immediately respond to a request for comment.

Justices Neil McKerracher, Alan Robertson and Michael Lee were on the Full Court.

CCL Secure was represented by Garry Rich, SC, with Julia Roy, instructed by Arnold Bloch Leibler. Benoy Berry and Global Secure Currency were represented by Dr Christopher Ward, SC, with Philip Santucci, instructed by Marque Lawyers.

The primary case is Benoy Berry & Anor v Innovia Security Pty Ltd, formerly known as Securency Pty Ltd. The appeal is CCL Secure Pty Ltd v Benoy Berry & Anor.