Adelaide Concrete Cutting & Drilling Pty Ltd v Marino (No 2)

[2024] NSWSC 499

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Adelaide Concrete Cutting & Drilling Pty Ltd v Marino (No 2) [2024] NSWSC 499

Hearing dates:

8-11 August, 23-25 October 2023

Date of orders:

03 May 2024

Decision date:

03 May 2024

Jurisdiction:

Equity

Before:

Meek J

Decision:

Findings in favour of plaintiffs against first defendant on contractual claim. Findings against the plaintiffs’ claims against second defendant. Parties to bring in short minutes of order.

Catchwords:

COMMERCIAL — Investment arrangements — D1, a licensed real estate agent, and D2, a solicitor trading as Oracle Law, secured office premises in Queensland and worked from separate parts of the premises — D1 assisted D2 to set up office, referred conveyancing matters to Oracle Law, was given title “business development manager” and used an Oracle Law email address — D1 met P1’s director and stated he was a lawyer — D1 assisted P1 with loan arrangements regarding two associates of P1 — D1 and D2 subsequently left office premises and parted ways — D1 sought from D2 and was permitted to retain use of Oracle Law email address — P1’s director introduced P2 to D1 — D1 presented investment proposals to plaintiffs — P1 paid $10,000 and P2 paid $200,000 to D1 to be invested by him via a trading platform under asset management agreements (“AMAs”) and funds were not repaid — Plaintiffs claim that D1 represented to them that he was a lawyer, that the investments were risk-free or virtually risk-free, would give 100% return after 90 days, and were government controlled (“representations”) — Plaintiffs seek to recover against D1 based on contract, guarantee, breach of fiduciary duties or misrepresentation, pursuant to s 1041I(1) of the Corporations Act2001 (Cth) (“Corporations Act”) and s 236 of the Australian Consumer Law (“ACL”) and for negligence — Plaintiffs allege that D1 was an employee or officeholder of Oracle Law and seek to recover against D2 under the compensatory limb of the Court’s inherent supervisory jurisdiction, and by negligence, with alternative claims based on vicarious liability and breaches of the ACL — D2 cross-claims against D1 for contribution or indemnity

EVIDENCE — Privilege against self-incrimination — There is a distinction between the prohibition against drawing an adverse inference from a claim of privilege and adverse inferences that may arise from the absence of evidence which a party or witness could be expected to give (Jones v Dunkel) — It is not permissible to draw an adverse inference from a witness’ exercise of his or her privilege against self-incrimination

CONTRACT — Construction — Issues regarding aspects of AMAs that bear upon repayment — Whether trade period had commenced — “official start date” an undefined term but no real dispute that the 90-day period had commenced — Whether “return” refers to the initial investment or also the profit on the initial investment — Properly construed, “return” only refers to the profit component, accordingly, there was an unqualified obligation under the AMAs to pay back the initial invested capital after 90 days — Judgment in favour of plaintiffs against D1 — Unnecessary to address guarantee claim

EQUITY — Fiduciary duties — Duties allegedly owed by D1 as asset manager said to arise from contractual terms, being duties to disclose matters, to communicate information to the plaintiffs and to commence proceedings to recover invested funds — Fiduciary duties are proscriptive in nature, not prescriptive — Plaintiff failed to elaborate claim regarding fiduciary duties or address alleged breach — Contractual claim succeeded so unnecessary to make findings, particularly in absence of submissions addressing whether proscriptive duties may take on a positive character in relation to alleged duties

EQUITY — Rescission — Claims that D1’s representations were made knowing them to be false or recklessly as to their truth upheld — Finding that D1’s misrepresentations contributed to plaintiffs entering into AMAs, but no indication that the plaintiffs had purported to rescind the AMAs prior to them filing their claims — Plaintiffs either affirmed, or at least made no election to rescind, the AMAs — Court declines to make any declaration as to rescission

FINANCIAL SERVICES — Chapter 7 provisions of the Corporations Act are plausibly of some application to the present case — However, no submissions were made regarding claims for breach of the financial services provisions of the Corporations Act against D1 — Given findings in relation to the plaintiffs’ contractual claim and misrepresentation claim, the Court declines to make any findings as to this alternative claim

CONSUMER LAW — Misleading or deceptive conduct — Plaintiffs failed to distinguish between the operation of the ACL as a law of the Commonwealth and as a State “application” law — The Court proceeds on the basis that the claim is under the ACL as a law of the Commonwealth — Finding that alternative claim against D1 under ACL succeeds but damages no different — Claims against D2 fail

NEGLIGENCE — D1 owed a duty of care arising out of the AMAs — Finding that alternative claim against D1 succeeds but damages no different to contractual damages

NEGLIGENCE — Alleged duty of care owed by solicitor, D2, to the plaintiffs, who were not established to be the solicitor’s clients, and who suffered economic loss — Cases outside recognised or well-established cases of duty of care require focus upon and articulation of the scope and content of the duty of care — Failure of plaintiff to identify the scope and content of the duty of care of a solicitor in absence of any retainer — Duty of care not established

LEGAL PRACTITIONERS — Meaning of “client” discussed — Principles regarding implied retainers and general retainers

LEGAL PRACTITIONERS — Claim made against D2 under the compensatory limb of the Court’s inherent supervisory jurisdiction — Distinction between cases involving intentional conduct by a solicitor (such as breach of an undertaking, or egregious conduct, such as gross overcharging) and cases involving non-intentional conduct that falls short of a particular standard of care — Compensation under supervisory jurisdiction for breach of professional duty by negligence requires something more than “mere” negligence, the negligence must be of a “culpable quality” amounting to a “serious dereliction of duty” — Failure of plaintiffs to address requirements of “culpable quality” or gross negligence — Claim not established

PARTNERSHIP — Indicia of partnership discussed

VICARIOUS LIABILITY — Proper approach to determining employment relationship — Whether D1 in an employment relationship with D2 requires focus on the characterisation of their respective rights — Finding that there was no contract between D1 and D2 — Relationship between D1 and D2 was not one of employment — Whether tortious acts and omissions of D1 were committed in the course or scope of employment — Whether employment relationship terminated — Held tortious acts occurred after employment relationship, assuming one existed, terminated — In any case, acts were not in the course and scope of the employment and had no connection with what D1 would have been employed to do

CIVIL PROCEDURE — Agreed list of issues — Discussion of obligation of parties in conferring with each other and framing lists of issues — Failure of plaintiffs to identify essential aspects of causes of action in the pleadings — Inadequate listing and framing of issues by parties and, in any event, submissions not made by express reference to issues — Pleading and issue listing inadequacies places the Court in an invidious position in addressing the claims

CIVIL PROCEDURE — Court Book — Court Book did not heed the pre-trial directions for the email chains to be disassembled and placed in chronological sequence and for the Court Book not to contain duplicates of the same document — Numerous copies of certain emails and other documents scattered through the Court Book and email chains often in reverse chronological order — Non-compliant Court Book inhibited the efficient and smooth running of the hearing and did not facilitate the Court’s consideration of the evidence and the issues, or the preparation of reasons for judgment

COSTS — Preliminary observations regarding costs of the proceedings when contractual claims propounded by P1 of $10,000 and P2 of $200,000 against D1 straightforward — Balance of claims against D1 and claims against D2 more complicated, and some failed to identify essential issues of claims — Court Book contained 2,745 pages of materials (many duplicated) and hearing extended to 7 days (3 days beyond original estimate) — Presentation of Court Book not conducive to just, quick and cheap disposition of real issues — Parties directed to address proportionality provisions of s 60 of the Civil Procedure Act 2005 (NSW) in addressing issues of costs

Legislation Cited:

Bankruptcy Act 1966 (Cth)

Civil Liability Act 2002 (NSW)

Civil Procedure Act 2005 (NSW)

Competition and Consumer Act 2010 (Cth)

Corporations Act2001 (Cth)

Evidence Act1977 (Qld)

Evidence Act1995 (NSW)

Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth)

Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW)

Legal Profession Act2007 (Qld)

Legal Profession Uniform Law2014 (NSW)

Partnership Act1891 (Qld)

Partnership Act1892 (NSW)

Australian Solicitors Conduct Rules

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

5 Boroughs NY Pty Ltd v State of Victoria; Roberts v State of Victoria [2021] VSC 785

ACE Insurance Ltd v Trifunovski (2011) 200 FCR 532; [2011] FCA 1204

Adamson v Queensland Law Society Incorporated [1990] 1 Qd R 498

Adelaide Concrete Cutting & Drilling Pty Ltd v Marino [2021] NSWSC 1034

Al Mousawy v Howitt-Stevens Constructions Pty Ltd [2010] NSWSC 122

Allianz Australia Insurance Ltd v Haddad [2015] NSWCA 186

Amaca Pty Ltd (under NSW External Administration) v A B & P Constructions Pty Ltd [2007] NSWCA 220

Articulate Restorations & Development Pty Ltd v Crawford (1994) 57 IR 371

Associated Securities Ltd v Aziz [1974] VR 699

Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424; [1954] HCA 20

Barclays Bank v Various Claimants [2020] AC 973

Beach Petroleum NL v Kennedy (1999) 48 NSWLR 1; [1999] NSWCA 408

Bell v Hartnett Lawyers (No 2) [2021] NSWSC 1270

Bell v Hartnett Lawyers (No 3) [2022] NSWSC 1204

Bird v DP (A Pseudonym) (2023) 69 VR 408; [2023] VSCA 66

Braham v Catalano [2013] VSC 437

Breen v Williams (1996) 186 CLR 71; [1996] HCA 57

Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254 CLR 185; [2014] HCA 36

Brus v Australian Capital Territory [2007] ACTSC 83

Bugge v Brown (1919) 26 CLR 110; [1919] HCA 5

Caltex Oil (Australia) Pty Ltd v The Dredge “Willemstad” (1976) 136 CLR 529; [1976] HCA 65

Caltex Refineries (Qld) Pty Ltd v Stavar (2009) 75 NSWLR 649; [2009] NSWCA 258

Campbell v Tran [2024] NSWSC 204

Care A2 Plus Pty Ltd v Pichardo [2024] NSWCA 35

Carmody v Priestley & Morris Perth Pty Ltd (2005) 30 WAR 318; [2005] WASC 120

CCIG Investments Pty Ltd v Schokman [2023] HCA 21; (2023) 410 ALR 479

Chong v CC Containers Pty Ltd (2015) 49 VR 402; [2015] VSCA 137

Collins v Insurance Australia Ltd (2022) 109 NSWLR 240; [2022] NSWCA 135

Connelly v Wells (1994) 55 IR 73

Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 275 CLR 165; [2022] HCA 1

Cornall v Nagle [1995] 2 VR 188

Council of the NSW Bar Association v Siggins [2021] NSWCA 40

Cox v Ministry of Justice [2016] AC 660

D Capital 2 Pty Ltd v Western [2022] NSWSC 1064; (2022) 20 BPR 42,919

Dale v Veda Advantage Information Services and Solutions Ltd (2009) 176 FCR 456; [2009] FCA 305

Day v Ocean Beach Hotel Shellharbour Pty Ltd (2013) 85 NSWLR 335; [2013] NSWCA 250

Dean v Allin & Watts (a firm) [2001] EWCA Civ 758

Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31

Drake & Jackson v Corporation of Victoria (1884) 1 BCR 165

EFEX Group Pty Ltd v Bennett [2024] FCAFC 35

Elite Realty Development Pty Ltd v Sadek [2022] NSWSC 1333

Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; [2002] HCA 8

Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (2015) 228 FCR 346; [2015] FCAFC 37

Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395; [1973] HCA 49

Geraghty v Permanent Trustee Co Ltd (1986) 4 NSWLR 412

Girotto v Phillips Fox (a firm) [2011] VSC 293

Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; [2002] HCA 54

Hardware Services Pty Ltd v Primac Association Ltd [1988] 1 Qd R 393

Hartnett t/as Hartnett Lawyers v Bell as Executor of the Estate of the late Mabel Dawn Deakin-Bell [2023] NSWCA 244

Henville v Walker (2001) 206 CLR 459; [2001] HCA 52

Hill v Dunn [2019] NSWSC 419

Hill v Van Erp (1997) 188 CLR 159; [1997] HCA 9

Hoffmann v Boland [2013] NSWCA 158

Hollis v Vabu Pty Ltd (2001) 207 CLR 21; [2001] HCA 44

Howard Smith & Patrick Travel Pty Ltd v Comcare [2014] NSWCA 215

Imbree v McNeilly; McNeilly v Imbree (2008) 236 CLR 510; [2008] HCA 40

Jeandin v Tzovaras [2011] NSWSC 1254

John LjubomirAtanaskovic and the persons named in Schedule A t/as Atanaskovic Hartnell v Birketu Pty Ltd – Supervisory Jurisdiction [2020] NSWSC 573

Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44; [2005] HCA 15

Krolczyk v Winner t/as J Winner Building Services [2022] NSWCA 196

Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11

Legal Services Commissioner v Raghoobar [2023] QSC 41

Magjarraj v Asteron Life Ltd [2009] NSWSC 1433

Mallonland Pty Ltd v Advanta Seeds Pty Ltd [2023] HCATrans 138

Mallonland Pty Ltd v Advanta Seeds Pty Ltd [2023] QCA 24

McDonald v Grech; Bank of Western Australia Ltd v McDonald [2012] NSWSC 717

McIlraith v Ilkin [2007] NSWSC 911

McIlraith v Ilkin [2008] NSWCA 11

Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp [1979] Ch 384

Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31

Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254; [2000] HCA 61

Mohareb v Kelso [2017] NSWCA 98

Mt Owen Pty Ltd v Parkes [2023] NSWCA 77

Myers v Elman [1940] AC 282

Narich Pty Ltd v Commissioner of Pay-roll Tax (1983) 2 NSWLR 597

New South Wales v Lepore (2003) 212 CLR 511; [2003] HCA 4

NSW Trustee & Guardian as Executor of the Will of Michael Robert Walsh (Deceased) v Gregory [2012] NSWSC 681; (2012) 18 BPR 35,153

O’Connor v Comensoli [2022] VSC 313

Oakley Thompson & Co v Kanik (1998) 145 FLR 438

On Call Interpreters & Translators Agency Pty Ltd v Commissioner of Taxation (No 3) (2011) 214 FCR 82; [2011] FCA 366

Pappas v New World Oil DevelopmentsPty Ltd (1993) 43 FCR 594

Parrella v Trustee of the Property of Marino (Bankrupt) [2022] FCA 1530

Perera v Genworth Financial Mortgage Insurance Pty Ltd (2017) 94 NSWLR 83; [2017] NSWCA 19

Perre v Apand Pty Ltd (1999) 198 CLR 180; [1999] HCA 36

Prince Alfred College v ADC (2016) 258 CLR 134; [2016] HCA 37

Purkiss v Hannigan (Court of Appeal (NSW), 13 February 1997, unrep)

Rafferty v Madgwicks (2012) 203 FCR 1; [2012] FCAFC 37

Raghoobar v Legal Services Commissioner [2023] QCA 191

Re Application for Admission as a Legal Practitioner (2004) 90 SASR 551; [2004] SASC 426

Resilient Investment Group Pty Ltd v Barnet and Hodgkinson as liquidators of Spitfire Corporation Limited (in liq) (2023) 111 NSWLR 446; [2023] NSWCA 118

Roads and Traffic Authority of NSW v Dederer (2007) 234 CLR 330; [2007] HCA 42

Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2010) 184 FCR 448; [2010] FCAFC 52

Scott v Davis (2000) 204 CLR 333; [2000] HCA 52

Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16; [1986] HCA 1

Sullivan v Moody (2001) 207 CLR 562; [2001] HCA 59

Sutherland Shire Council v Heyman (1985) 157 CLR 424; [1985] HCA 41

Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161; [2006] HCA 19

Swick Nominees Pty Ltd v Leroi International Inc(No 2) (2015) 48 WAR 376; [2015] WASCA 35

TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533; [2013] HCA 5

Vairy v Wyong Shire Council (2005) 223 CLR 422; [2005] HCA 62

Victorian Legal Services Board v Jensen [2018] VSC 740

Walters v Scarborough [2011] NSWSC 1380

Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55

White v Jones [1995] 2 AC 207

Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515; [2004] HCA 16

Zervas v Burkitt (No 2) [2019] NSWCA 236

ZG Operations Australia Pty Ltd v Jamsek (2022) 275 CLR 254; [2022] HCA 2

Texts Cited:

Abadee, A, et al, Professional Liability in Australia (4th ed, 2023, Lawbook Co)

Atkins, Roger J, New South Wales Solicitors Manual (3rd ed, 1975, The Law Society of New South Wales)

Butterworths Australian Legal Dictionary (1997, Butterworths)

Dal Pont, G E, Law of Agency (4th ed, 2020, LexisNexis)

Dal Pont, G E, Lawyers’ Professional Responsibility (7th ed, 2021, Lawbook Co)

Dal Pont, G E, Solicitors Manual (LexisNexis)

Encyclopaedic Australian Legal Dictionary (LexisNexis)

Giles, Roger, “Duty of Care, Scope and Breach” (2009) 9 The Judicial Review 165

Halsbury’s Laws of Australia

Irving, Mark, The Contract of Employment (2nd ed, 2019, LexisNexis Butterworths)

Law Council of Australia, “Australian Solicitors’ Conduct Rules” accessed 24 April 2024

Macquarie Dictionary, online ed

Ritchie’s Uniform Civil Procedure NSW

Sappideen, Carolyn et al, Fleming’s The Law of Torts (11th ed, 2024, Lawbook Co)

Category:

Principal judgment

Parties:

Adelaide Concrete Cutting & Drilling Pty Ltd (First Plaintiff)
Giovanni Antonio Parrella (Second Plaintiff)
Frank Marino (First Defendant / Second Cross-Defendant)
Renaldo Tommaso Polo (Second Defendant / Cross-Claimant)

Representation:

Counsel:
S Baron Levi (First Plaintiff / Second Plaintiff)
C Lucarelli (with leave for First Defendant / Second Cross-Defendant - 23-24 October 2023 only)
A Jamieson (Second Defendant / Cross-Claimant)

Solicitors:
William Roberts Lawyers (First Plaintiff / Second Plaintiff)
Oracle Law (Second Defendant / Cross-Claimant)

File Number(s):

2020/295470

JUDGMENT

Introduction

1. HIS HONOUR: In essence, the plaintiffs seek to recover a total sum of $210,000 from the defendants consequent upon the plaintiffs paying monies to the first defendant (Mr Marino) to be invested by him via a trading platform (investment proposal).

2. The investment proposal was formalised by the plaintiffs each entering into an asset management agreement with Mr Marino on or about 23 or 24 August 2018 (“AMA”). Other than the differing amounts invested and the different parties, both AMAs are (relevantly) in the same terms.

3. The legal relationship alleged as between the plaintiffs and Mr Marino is, inter alia, contractual under each AMA. Under the AMAs, the plaintiffs were nominated as “Capital Provider(s)” (capital providers) and Mr Marino was designated as an “Asset Manager” (asset manager).

4. As a consequence of an alleged breach of contract and guarantee by Mr Marino, the first plaintiff (Adelaide) and the second plaintiff (Mr Parrella) have not been paid the funds they had invested, being $10,000 and $200,000 respectively (together, the funds). The connection between the plaintiffs and the second defendant (Mr Polo), a solicitor, arises essentially from the assertion that Mr Marino was an employee or officeholder of the law practice “Oracle Law”, of which Mr Polo was the principal.

5. On the hearing, Dr Baron Levi of counsel appeared for the plaintiffs. Mr Marino did not appear per se to contest the hearing (though, as I note below, he was subpoenaed to give evidence by the plaintiffs). Mr Jamieson of counsel appeared for Mr Polo. In that context, the active parties in the proceedings were the plaintiffs and Mr Polo (active parties).

6. Dr Baron Levi and Mr Jamieson each provided a written outline of submissions prior to the hearing and made oral final submissions following the completion of evidence in the hearing. I will cite the evidence in the proceedings by reference to the Court Book (CB), transcript pages and exhibit numbers, and cite the submissions by reference to Dr Baron Levi’s opening written submissions dated 4 August 2023 (POS), Mr Jamieson’s opening written submissions dated 24 July 2023 (D2OS1) and 3 August 2023 (D2OS2), and transcript pages.

Parties

7. Adelaide was registered in South Australia on 25 July 1997: CB 2379. Sergio Pacifico (Mr Pacifico) was appointed as a director and secretary of Adelaide on 28 February 2001. He is the sole director and shareholder of Adelaide: CB 2380, 2382. Adelaide was, at least in the early to mid-2000s, engaged in concrete polishing: CB 138[11].

8. Mr Parrella is the owner and “managing director” of a business called Magill Motor Bodies (Magill): CB 182[3]; T 114.21-.26. Magill is an approved crash repairer providing crash repair, panel beating and spray-painting services: CB 182[4].

9. Mr Marino goes by a number of names, including “Francesco Marino” and “Frank Marino”, and is bankrupt: CB 2525. Mr Marino held a real estate agent’s licence seemingly from 14 October 2009. The licence, which is a “Class 2 Agent – Real Estate – Sales or Leasing” licence, was renewed on 23 March 2020 (until 13 October 2024): CB 2510. He has associations with various companies, including being the sole director, secretary and member of Crystal Blue Group Pty Ltd (CBG), Just Investment Properties Pty Ltd, Urban Wealth Capital Pty Ltd and Urban Wealth Group Pty Ltd: CB 178[225]-[228]. Other entities with which Mr Marino was associated are listed in his application for bankruptcy: CB 2525. There is an issue in the proceedings regarding the precise nature and extent of Mr Marino’s association with Mr Polo and Oracle Law.

10. In his work in real estate, Mr Marino operated through CBG. An extract from CBG’s website does not give any real clarity about precisely what CBG is, or what it does. The description on the website is framed in vague terms (CB 180[238], 2488-2491):

Crystal Blue Group, founded by CEO and Managing Director Frank Marino is a company that has a diverse range of interests and opportunities. Under our umbrella are a range of companies that together create Crystal Blue Group. The Crystal Blue Group is at the core of who we are and what we do. From our Executive Team to our Business Development Managers, and Property Team to our Distributors, the Crystal Blue Group is committed to delivering the highest quality product and providing unparalleled service to our customers. The Crystal Blue team is made up of skilled and qualified professionals, committed to quality, integrity and creating positive outcomes for all our clients. Our core values are integrity, teamwork, performance and learning.

11. Mr Marino had some association with Akhilesh Kamkolkar (Mr Kamkolkar), a person whose precise role in the events the subject of the proceedings is unclear. From the plaintiffs’ perspective, his existence was first alluded to by Mr Marino in discussions with Mr Pacifico in early 2018, in connection with trading platforms, as being “my Indian friend who has been in share markets and banking industry for years”: CB 155[110]. He was copied into an email by which Mr Marino provided Mr Pacifico with the AMA: CB 1595.

12. Mr Polo was admitted to practice as a solicitor in New South Wales on 12 July 2002: CB 2484. He commenced practice in New South Wales under the name Polo & Co Solicitors: CB 205[2], [8]. In about 2013, upon deciding to move his practice to Queensland, Mr Polo changed his practice name to “Oracle Law”: CB 205[3]; T 139.50-140.2.

13. Mr Polo is the principal of Oracle Law, which was at the relevant times registered with the Law Society of New South Wales as having its “main office” at Horsley Park, New South Wales and an associated “branch office” at Mermaid Beach, Queensland: CB 179[230] (and based on the Law Society search documents as at 24-26 January 2022: CB 2456, 2463, 2470, 2484). Oracle Law is described as, and according to Mr Polo has always been, a sole practitioner law firm: CB 2470; T 139.42-.44.

14. Oracle Law also operated as a legal practice in Queensland until 30 June 2019: see CB 4[6(d)] read with CB 54[4] (see also a Queensland Law Society search document as at 24 January 2022: CB 2448-2451).

15. It was accepted by Mr Jamieson that Mr Polo was admitted in New South Wales and has a current practising certificate from the Law Society of New South Wales: CB 2477. He was not admitted in Queensland: T 34.35-35.4; CB 2487.

Overview of claims

16. The plaintiffs claim that Mr Marino represented himself to be a solicitor and owner of Oracle Law and that, in any event, Mr Marino was an employee or officeholder of Oracle Law. Mr Marino was not at any material time entitled to engage in legal practice in any Australian jurisdiction (which was admitted in his defence).

17. The plaintiffs allege that they entered into the agreements in reliance upon representations made by Mr Marino regarding investment opportunities. Apart from the principal claims for breach of contract and the guarantees, there are alternative claims against Mr Marino for damages said to arise under four alternative heads, being: (a) for breach of fiduciary duties or misrepresentation; (b) pursuant to s 1041I(1) of the Corporations Act2001 (Cth) (Corporations Act); (c) pursuant to s 236 of the Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law (ACL); and (d) for negligence: CB 3.

18. As against Mr Polo, the principal ground for relief is for compensation in respect of the losses that the plaintiffs have suffered (i.e. the funds), based on the Court’s inherent jurisdiction “in relation to the control and discipline of solicitors”. There are also alternative claims, for substantially the same relief, on the basis of negligence and pursuant to s 236 of the ACL: CB 3.

19. In a number of respects, the legal bases for the plaintiffs’ claims for relief against Mr Polo are more complex than what I have just indicated from the relief claimed under their amended statement of claim. I will refer to this more below.

Pleadings and leave to proceed against Mr Marino

Pleadings

20. The proceedings were commenced by a statement of claim filed on 14 October 2020. On 27 November 2020, John Coorey (a solicitor at Sparke Helmore) filed a notice of appearance for both defendants. On 25 March 2021, Mr Polo filed a notice of change of solicitor appointing himself as his solicitor on record and, on 1 April 2021, Mr Coorey filed a notice of ceasing to act in respect of Mr Marino. The reasons for the filing of those notices were not the subject of evidence, but it is at least explicable on the basis of a potential conflict in Mr Coorey acting for both defendants. On 26 March 2021, a defence was filed on behalf of Mr Polo. On 21 April 2021, Mr Marino filed a defence on his own behalf. Both defences relevantly disputed the plaintiffs’ claims.

21. On 24 November 2021, the plaintiffs filed an amended statement of claim which made a number of amendments to the initial pleading. However, the substance of the claims remained the same. On 1 and 9 December 2021, Mr Marino and Mr Polo respectively filed amended defences.

22. Further on 9 December 2021, Mr Polo filed a cross-claim against LawCover and Mr Marino which sought contribution or indemnity for any verdict in the plaintiffs’ claims against Mr Polo. I was informed by Mr Jamieson on the hearing that the cross-claim against LawCover had been discontinued: T 21-22.

23. The cross-claim against Mr Marino was predicated on the basis that Mr Marino had used the email address of Oracle Law when corresponding with the plaintiffs about the AMAs and investment opportunities without informing Mr Polo and without his permission. On 22 December 2021, Mr Marino filed a defence to the cross-claim.

Leave to proceed

24. On 22 June 2022, Mr Marino became bankrupt, having filed a debtor’s petition which was accepted by the Australian Financial Security Authority: CB 2525-2526. On 7 December 2022, following an application by the plaintiffs in the Federal Court of Australia, Katzmann J granted leave to the plaintiffs pursuant to s 58(3)(b) of the Bankruptcy Act1966 (Cth) to continue these proceedings against Mr Marino: Parrella v Trustee of the Property of Marino (Bankrupt) [2022] FCA 1530.

Real issues

Agreed list of issues

25. Pursuant to pre-trial directions, the active parties prepared a list of agreed issues in dispute. While the list (CB 126-131) contained 37 numbered issues, many of those issues contained sub-issues such that there were in effect over 50 listed issues.

26. At the outset of the hearing, I made a subdued remark that there seemed to be quite a number of issues and that it would assist me if counsel could revisit the list of issues and seek to refine what they contended I specifically needed to address. Dr Baron Levi accepted what I had observed about the list being long, acknowledged that the list was perhaps not particularly well-ordered and indicated that counsel could attend to refining the list: T 22.19-.26.

27. Ultimately, there was no refinement of the list. In any event, final submissions were not made by any express reference to the list.

28. The drafting of the issues was not ideal. I note that some of the issues raised matters which were not litigated and irrelevant (e.g. issue 1(e) – whether Mr Marino had represented that he “had become very wealthy as a result of success in these types of trades”; issue 9 – “[t]he part played by persons associated with operations at Southport as distinct from [Mr Polo’s] office address”; and issue 31 – “[t]he financial advantage to [Mr Polo] from the investments if any”). Other issues were drafted as generalised statements without reference to how they connected to any essential element of the claims (e.g. issue 10 – “[t]he investigations carried out by the Plaintiffs as to all relevant parties”).

Obligation of parties to assist the Court

29. The purpose of the Court making directions which require parties to agree on real issues in dispute is to assist the Court to be able to readily focus upon critical factual or legal issues to facilitate the just, quick and cheap disposition of the litigation.

30. In some cases, it may be that the issues can be simply stated (for example, in the form of questions) having regard to the pleadings or the nature of the claims of which the relief is based. However, where a number of complex claims are pleaded, the Court expects the parties, and in particular the legal practitioners, to engage with one another by conferring or otherwise and to give genuine and considered thought to the framing of issues and some suggestion as to an appropriate order based on some meaningful structure, whether it be logical or otherwise. In any case, the essential elements of the action (whether common law, equity or statute based) and any defence should be examined by the parties preparing the list of issues to ensure that the issues, whether factual or legal, are framed having regard to those essential elements so that the case is litigated on a proper footing.

31. If one or more particular issues are likely to be determinative of the outcome of the proceedings in such a way as to make other issues unnecessary to determine, the Court expects the parties to identify those determinative issues. The direction for agreement is intended not merely to assist the Court, but also the parties themselves, to focus on what is forensically important in the litigation.

32. In this case, as will be evident below, the failure of the parties to identify essential elements of causes of action in the pleadings or list of issues, and the inclusion in the list of issues of irrelevant matters, has left the Court in an invidious position in addressing the claims without the sort of assistance in submissions that would ordinarily be expected for litigation in this Court.

Claims against Mr Marino

33. In the POS, Dr Baron Levi addressed the plaintiffs’ claims against Mr Marino with some more clarity, essentially under the following heads:

1. breach of contract:

1. obligation to repay invested capital after 90 days – cl. 2.1(g) of the AMAs: POS [16]-[30];

2. guarantee/collateral warranty: POS [31]-[45]; and

3. other contractual breaches: POS [46]-[48];

2. breaches of fiduciary duties: POS [49]-[50];

3. negligence in relation to the plaintiffs’ capital investment: POS [51]-[53]; and

4. other conduct giving rise to:

1. an entitlement to rescission of the AMAs (for both breaches of fiduciary duty and misrepresentation): POS [54]-[59], [60(a)];

2. breaches of financial services provisions under ss 763A(1)(a), 763B, 766A(1)(a), 766(1)(b), 766A, 766B, 766C, 1041E, 1041F, 1041H and 1041I(1) of the Corporations Act: POS [54]-[59], [60(b)]; and

3. misleading or deceptive conduct, including in relation to representations as to a future matter, under ss 4(1) and 18 of the ACL: POS [54]-[59], [60(c)].

34. I will address the claims as such.

Claims against Mr Polo

35. The pleadings and agreed list of issues in the proceedings left much to be desired in clarifying critical aspects of the alleged liability of Mr Polo.

36. The plaintiffs’ amended statement of claim did not contain headings of the actions sought to underpin the relief claimed against Mr Polo. However, by reference to the pleading against Mr Polo (CB 23[56]-26[63]) and the POS, four claims for relief were identified. Two of the four claims for relief appeared to be based upon, or in reference to, the fact that Mr Polo was a solicitor. Indeed, the principal claim for relief relied upon by the plaintiffs against Mr Polo was in relation to the Court’s supervisory jurisdiction over solicitors.

37. Notwithstanding that, the basal relationship between Mr Polo and the plaintiffs was not clearly pleaded.

38. Significantly, the plaintiffs did not plead that they had a retainer with Mr Polo or Oracle Law.

39. The plaintiffs pleaded that Mr Marino was at all material times an employee or officeholder of Oracle Law: CB 5[9]. However, the pleading contained no material facts or particulars said to give rise to an employment relationship. Rather, there was only the bald assertion of employment. Mr Marino denied that allegation, as did Mr Polo.

40. Further, whilst the plaintiffs pleaded that Mr Polo owed a duty of care to “clients and prospective clients of Oracle Law”, the pleading contained no material facts or particulars said to give rise to the duty of care: CB 26[63]. The allegation of a duty of care was denied by Mr Polo: CB 59[35]. (I note the amended defence appears to contain a typographical error in that there are two paragraphs which plead to paragraph 62 of the amended statement of claim, namely CB 58[34] and 59[35]. However, as a matter of construction, it appears obvious that the second paragraph of the amended defence, CB 59[35], is a pleading to CB 26[63].)

41. Cryptically (in the absence of any pleaded retainer), the list of issues contained an issue (numbered 23) in the following terms:

Did Sergio Pacifico engage Oracle law or the Second Defendant personally.

42. In identifying the second ground for relief against Mr Polo, the POS contains in the chapeau to POS [65] the following statement:

The second [ground for relief] is that [Mr Polo] breached his duty of care to the plaintiffs as clients or prospective clients in …

43. There were only two references to “retainer” made during the hearing. Both were contained in answers given by Mr Polo in relation to the termination of his retainer with Hugh Mackay (Mr Mackay), a friend and associate of Mr Pacifico, and/or with Mr Mackay’s company, Mackay Ellis Group Pty Ltd (MEG): T 398.26, 403.7. There was no mention of a retainer as between the plaintiffs and Mr Polo or Oracle Law in any evidence. Nor did the oral closing submissions of Dr Baron Levi assert any retainer as between the plaintiffs and Mr Polo or Oracle Law. If any retainer was assumed by Dr Baron Levi, he did not explain how it arose and relevantly at what point it subsisted.

44. Thus, in the above context, the advancement of the plaintiffs’ claims against Mr Polo begged the question of whether the plaintiffs actually contended that they were clients of Mr Polo and/or Oracle Law and, if so, the precise nature and duration of any retainer. However, any such initial foment was suppressed during the hearing, which left the question unattended and accordingly any answer to it unilluminated.

45. Whilst the plaintiffs pleaded that Mr Marino was an employee of Oracle Law, they did not plead that Mr Marino was Mr Polo’s agent.

46. In the POS, Dr Baron Levi described the claims for relief against Mr Polo as follows (POS [63]-[67]):

63. There are 4 grounds of relief claimed against the second defendant.

64. The first is for an order under the inherent jurisdiction and power of the Supreme Court in relation to the control and discipline of solicitors, that the second defendant compensate the plaintiffs for the loss and damage caused to them due to the second defendant’s breaches of his professional obligations.

65. The second is that the second defendant breached his duty of care to the plaintiffs as clients or prospective clients in:

a. Failing to comply with his disclosure obligations to clients under s 152 of the LPA (Qld) in relation to any multi-disciplinary partnership;

b. Failing to advice clients that the first defendant was not a solicitor and was not entitled to engage in legal practice;

c. Failing to supervise or exercise control over the first defendant; and

d. Expressly or tacitly permitting the first defendant to continue to act directly for clients.

66. The third is that the second defendant is vicariously liable for the negligence of the first defendant in relation to the investments proffered by the first defendant.

67. The fourth is that by reason of the matters stated directly above, the second defendant represented by his conduct that the first defendant was entitled to engage in legal practice, which was misleading or deceptive under s 18 of the Australian Consumer Law.

47. I will address the claims as such.

48. Despite the unsatisfactory way in which the issue regarding whether the plaintiffs were clients of Oracle Law or Mr Polo was presented, in case it be said that the issue was a live issue, I propose to address it below.

Hearing

Appearances

49. In addition to the appearances of Dr Baron Levi for the plaintiffs and Mr Jamieson for Mr Polo, during the hearing of this matter:

1. Mr Marino, subject to what I note below, did not appear in defence of the claims against him, but was subpoenaed as a witness, attending after being arrested;

2. Mr Wengel, the trustee in bankruptcy for Mr Marino’s estate (though not a party to the proceedings), attended briefly on the first day of the hearing, as a courtesy to the Court, and provided a brief update as to the status of the bankruptcy;

3. Mr Senior, a solicitor appeared (on 11 August 2023) by leave in the interests of Mr Marino, limited expressly to representing Mr Marino in respect of the subpoena and the warrant: T 304.4-.28; and

4. Mr Lucarelli of counsel appeared (on 23 and 24 October 2023) by leave in the interests of Mr Marino, only for the purposes of addressing issues to do with the privilege against self‑incrimination: T 313.14-.18.

50. Mr Wengel provided a report regarding Mr Marino’s estate which was marked as MFI-1.

Jurisdictional issue

51. In interlocutory stages of the proceedings, Mr Marino, by notice of motion filed on 19 May 2021, sought an order pursuant to s 5(2) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) that these proceedings be transferred to the Supreme Court of Queensland on the ground that it is in the interest of justice to do so. The notice of motion was dismissed by Henry J: see Adelaide Concrete Cutting & Drilling Pty Ltd v Marino [2021] NSWSC 1034.

52. In Mr Marino’s amended defence, he objected to the jurisdiction of this Court to determine the proceedings on the basis that cl 11.1 of the AMAs vests jurisdiction to determine all disputes arising pursuant to the AMAs in the courts of Queensland: CB 34[1], 35[2]. Although Mr Marino did not appear on the hearing to propound his defence, it is nonetheless appropriate to address the matter.

53. The relevant clause in the AMA is not cl 11.1 but in fact cl 12.1, which is in the following terms:

12.1. This Agreement must be governed by and constructed in accordance with the laws of Queensland, AUSTRALIA and the parties submit to the non-exclusive jurisdiction of the courts of Queensland, AUSTRALIA[.] This clause shall survive termination of this agreement.

54. The AMA only provides for a “non-exclusive” jurisdiction of the courts of Queensland. I am satisfied that the Court has jurisdiction to deal with the claims regarding the AMA.

55. Dr Baron Levi also submitted that it is well-settled that the jurisdiction of the courts cannot be ousted by an agreement of the parties, citing TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533; [2013] HCA 5 at [76] per Hayne, Crennan, Kiefel (as her Honour then was) and Bell JJ: POS [62]. However, there is no need for me to comment on that submission.

Subpoena to Mr Marino and warrant for his arrest

56. On the first morning of the hearing, Dr Baron Levi requested that I issue an arrest warrant for Mr Marino for failure to comply with a subpoena to attend and give evidence. Mr Marino was thought at the time to be resident in Queensland.

57. Having been satisfied of due service of the subpoena, I issued the arrest warrant. It took several days for the warrant to be executed. On the morning of the fourth day of the hearing, the Court was informed that Mr Marino had been arrested overnight. At midday on the fourth day, my Associate received contact from Mr Senior, who had been contacted by Mr Marino following his arrest and attended upon him at the Southport watchhouse. Mr Senior appeared for Mr Marino at Southport Courthouse on the morning of the fourth day of the hearing, where Mr Marino consented to an extradition order. He was released into the custody of police and was transported to Sydney: T 286-287. He attended that afternoon and was examined by Dr Baron Levi, who questioned Mr Marino and thereby adduced evidence from him in the plaintiffs’ case.

Proceeding against Mr Marino in his “absence”

58. Early on the morning of the first day of the hearing, I raised with counsel the fact that Mr Marino had filed a defence but was absent from court. I noted that the provisions of Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 29.7 applied in such a circumstance: T 5. Mr Jamieson noted that Mr Marino had written to the plaintiffs’ solicitors quite some time ago and indicated clearly that he did not wish to take any part in these proceedings: T 6.9-.10.

59. UCPR r 29.7 is relevantly in the following terms:

29.7 Procedure to be followed if party is absent

(1) This rule applies when a trial is called on.

(2) If any party is absent, the court—

(a) may proceed with the trial generally or so far as concerns any claim for relief in the proceedings, or

(b) may adjourn the trial.

60. UCPR r 29.7 addresses the procedure to be followed when a “trial” is called on and a party is absent. A “trial” means any hearing that is not an interlocutory hearing: s 3 Civil Procedure Act 2005 (NSW) (CPA).

61. A party fails to appear, for the purpose of the present rule, if they have adequate notice of the hearing, and fail either to attend (personally or by a representative) or to provide the Court with an apparently credible explanation for their non-attendance: Ritchie’s Uniform Civil Procedure NSW at [29.7.2], citing Magjarraj v Asteron Life Ltd [2009] NSWSC 1433 at [22], NSW Trustee & Guardian as Executor of the Will of Michael Robert Walsh (Deceased) v Gregory [2012] NSWSC 681; (2012) 18 BPR 35,153 (Gregory) and Hill v Dunn [2019] NSWSC 419 at [8]-[21].

62. In Gregory, Hallen AsJ (as his Honour then was) observed that a party will not be found to be “absent” within the meaning of r 29.7 unless that party has knowledge or notice of the date of the trial: Gregory at [18]-[22]. However, in Elite Realty Development Pty Ltd v Sadek [2022] NSWSC 1333, whilst accepting that natural justice must be observed, Peden J at [16] respectfully disagreed that UCPR r 29.7 requires a plaintiff to notify a defendant of the date of the trial in order for the defendant to be “absent” and the hearing to proceed.

63. In this case, it is not necessary to embark upon that debate. Mr Marino was aware that the matter had been listed for hearing. He had been served with a subpoena and ultimately (as I note below) attended before the Court as a witness, following the issue of a warrant for his arrest pursuant to failure to comply with the subpoena.

64. When Mr Marino attended court on the afternoon of the fourth day of the hearing, Mr Senior attended by AVL and confirmed that he was representing Mr Marino in respect of the subpoena and the arrest warrant. Mr Senior further confirmed that this was his only involvement in the proceedings and otherwise Mr Marino was unrepresented in the proceedings.

65. The relevant part of the transcript was as follows (T 304.4-.28):

SENIOR: I’m here representing Mr Marino in respect of the subpoena and the warrant. I just wanted to raise that that is my only involvement in this proceeding, and Mr Marino is unrepresented in the proceeding, and I don’t believe I have any rights to interfere in the examination of … Mr Marino. And accordingly, I just wanted to raise that issue with your Honour because there are certain questions which are in my mind, and I don’t know where it might go to in the future–

HIS HONOUR: Just pausing there. What you have just stated is my understanding of the position. This case commenced on Tuesday. Mr Marino is a party to the proceedings. He did not attend on Tuesday and on the face of it, the proceedings commenced and have proceeded on the basis that he, as a party, has elected not to attend on the hearing in the capacity of a party. He was subpoenaed to attend not as a party but as a witness and consequent upon the application by Mr Baron Levi for Mr Marino to be arrested for failure to comply with the subpoena, that is what has led to his arrest.

He is present here this afternoon in the capacity of a witness rather than a party unless at some point of time, he makes an application to the Court, or at least makes an intention known to the Court, to indicate that he wishes to participate in the proceedings other than as a witness. So in light of that, he is being examined at the moment as a witness who just happens to be a party. In light of that, I consider that what you have just said is correct.

SENIOR: Thank you. That was the only issue I wished to raise.

66. In light of the above exchange, it was clear that Mr Marino had elected not to attend the hearing in the capacity of a party. Nonetheless, he was clearly aware of the fact that the hearing was proceeding against him. Mr Marino’s attendance on the fourth day (and at the time of the resumed hearing) was as a witness only, and without any attempt to appear as a party.

Evidence and credit of witnesses

67. On the hearing, the plaintiffs relied upon affidavits of Mr Pacifico, Mr Parrella and Sabatino Parrella (Sabatino), Mr Parrella’s brother. There were exhibits to each of the affidavits of Mr Pacifico and Mr Parrella which were included in the Court Book materials.

68. Mr Polo read and relied upon an affidavit of himself.

69. Each of the deponents of the affidavits was cross-examined.

Mr Pacifico

70. Mr Jamieson suggested, prior to cross-examination, that there would be an issue of credit in relation to Mr Pacifico. It appeared that the gist of what Mr Jamieson wished to challenge in this regard was that the plaintiffs were induced into making the investment without making proper enquiries: T 72.1-.20.

71. Mr Pacifico gave his evidence in a straightforward way. He stated many times that he was not good with recalling dates: e.g. T 77.24, 79.15, 88.24-.25, 88.44-.49, 95.49-.50, 103.33. However, he did indicate that he remembered the “facts” (or rather, in context, the events): T 88.49-.50. On one occasion Mr Pacifico could not remember what had been said in his affidavit: T 87.9-.13.

72. Whilst Mr Pacifico was not particularly reliable in terms of dates on the whole, I find that he attempted tell the truth to the best of his recollection. I deal more particularly with his evidence below.

Mr Parrella

73. Mr Jamieson submitted that Mr Parrella’s evidence was at times confused: T 442. Specifically, Mr Jamieson submitted that (T 442.21-.26):

… At that stage, in August, Mr Parrella is speaking with a Mr Kamkolkar. He says he thought he was in the office of Oracle Law, but there wasn’t any office of Oracle Law at that time and hadn’t been for months. So one wonders whether he just got his thinking wrong in respect to that, and I’ll come to one other aspect of the evidence in relation to that shortly.

74. However, there is nothing in Mr Parrella’s evidence suggestive that he had actually spoken with Mr Kamkolkar nor that Mr Kamkolkar (or Mr Marino) were working in the office premises. Mr Parrella’s evidence in his affidavit in chief was merely (CB 188[45]):

On 22 August 2018 at around 3.51am, I was copied into an email, as was Akhilesh Kamkolkar (Akhilesh) someone who worked with Frank, from Frank’s Oracle Law Email Address to Sergio in which Frank stated, amongst other things, the words:

“I have an (AMA) Asset Management Agreement for you ready for signing….”

75. Properly construed, all that Mr Parrella’s evidence conveyed is that he believed or assumed Mr Kamkolkar was “someone who worked with” Mr Marino.

76. Mr Parrella gave his evidence in a straightforward way. I did not detect that there was any serious challenge to his credit, as distinct from his reliability. I find that he attempted tell the truth to the best of his recollection. I deal more particularly with his evidence below.

Sabatino

77. Sabatino was briefly cross-examined. Mr Jamieson confirmed that there was no issue with Sabatino’s credit following his cross-examination: T 70.8-.15. I accept his evidence.

Mr Marino

78. As I have explained earlier, when called initially on the fourth day, Mr Marino was called as a witness rather than in his capacity as a party participating in the proceedings. A number of matters arose in the process of Mr Marino giving evidence.

79. First, while Dr Baron Levi initially purported to question Mr Marino in chief, I detected that certain questions strayed into a type of cross-examination and rejected a particular question: T 301. In those circumstances, Dr Baron Levi made an application pursuant to s 38 of the Evidence Act1995 (NSW) (Evidence Act) to question Mr Marino as though he were cross-examining him, on the basis that he was an unfavourable witness. I granted leave for Dr Baron Levi to question Mr Marino in the manner contemplated by s 38 (T 302), whilst being mindful that as a matter of procedural fairness I would, if the occasion arose, retain a discretion as to how the questioning might proceed: T 314.

80. Secondly, in the afternoon of the fourth day, occasion arose for me to consider in accordance with s 132 of the Evidence Act whether Mr Marino may have had grounds for making an objection to questions under s 128 of the Evidence Act, and to inform Mr Marino of his right in that regard: T 306. I then drew Mr Marino’s attention to the provisions of s 128 of the Evidence Act.

81. A little later, following an objection by Mr Marino, an issue arose as to the extent of the privilege accorded by s 128. The issue arose in circumstances where the answer to a question may have had the tendency to incriminate Mr Marino in respect of a breach of a Queensland statutory provision or a statutory provision in respect of which proceedings may be brought against him in Queensland: T 308.17-309.9. It was not self-evident that the protection afforded under s 128(7), relating to “any proceeding in a NSW court or before any person or body authorised by law of this State”, would have extended to afford protection to Mr Marino in respect of the law of Queensland or proceedings in a Queensland court.

82. I indicated that I was not entirely satisfied that it would be in the interests of justice to require Mr Marino to answer the question. Having regard to the fact that the Court was about to adjourn and would need to allocate further hearing dates, the issue was not further debated at that point.

83. On 23 October 2023, the hearing resumed. Mr Marino attended and Mr Lucarelli of counsel sought leave to appear for Mr Marino solely for the purpose of addressing issues in respect of privilege against self-incrimination. I made a provisional ruling granting Mr Lucarelli leave to appear for such purpose, and there was some debate about the issues. For his part, Dr Baron Levi addressed some submissions as to the question of whether, in dealing with a claim for privilege, I should give a direction requiring Mr Marino to answer questions: T 316.

84. Mr Lucarelli and Dr Baron Levi accepted that the interstate certificate provisions of s 128(12) of the Evidence Act are not replicated in the Evidence Act1977 (Qld): T 320-321.

85. The matter progressed and Mr Lucarelli, on behalf of Mr Marino, raised a claim for privilege in relation to a question put to Mr Marino as to whether he had issued invoices to Oracle Law clients on Oracle Law letterhead. Following debate, I indicated that I was not persuaded it was in the interests of justice to require Mr Marino to answer the question.

86. Questioning of Mr Marino proceeded and, from time to time, Mr Lucarelli claimed privilege on behalf Mr Marino, upon which I made rulings consistent with earlier rulings. Mr Marino was well presented and gave his evidence in a clear manner. Occasionally he made concessions.

87. As part of his closing, Dr Baron Levi submitted that, in civil proceedings, where a question is asked which relates to central issues in the proceedings on which the witness may be expected to give evidence, that an exercise of privilege against self-incrimination will permit the Court to be satisfied that inferences adverse to that party may properly be drawn, notwithstanding that there was a ground for refusal to provide evidence on that basis: T 440.3-.20. He cited the decision of Lee J in Pappas v New World Oil DevelopmentsPty Ltd (1993) 43 FCR 594 (Pappas) at 595 for that proposition.

88. In Pappas, Lee J stated at 595:

Counsel for BKF submitted that the failure of Pappas to answer the questions then put to him in cross-examination and claim of privilege against self incrimination provided grounds from which an inference may be drawn adverse to the credit of Pappas.

In Dolan v Australian and Overseas Telecommunications Corporation (1993) 42 FCR 206 Spender J had occasion to consider a similar submission and to review the relevant law in Queensland. From his Honour’s reasons it was apparent that the law relating to privilege against self incrimination, like the law in New South Wales, remains undisturbed by legislative provisions such as those to be found in the Evidence Act 1906 (WA), s 11, Evidence Act 1910 (Tas), s 87, Evidence Act 1971 (ACT), s 57.

Spender J reviewed the uncertain state of the authorities and concluded that no adverse inference may be drawn from the refusal of a witness to answer a question on the ground that the answer may, or would, tend to incriminate the witness. With respect, I agree that his Honour’s reasons also correctly state the law that may be applied in New South Wales in so far as the questions relate to issues collateral to the issues for decision. Of course, the failure to adduce evidence on central issues on which the witness may be expected to give evidence will permit a court to be satisfied that inferences adverse to the case of that party may be properly drawn notwithstanding that the ground for refusal to provide the evidence may be rooted in the privilege against self incrimination. (See P W Young, “Taking the Fifth”(1991) 65 ALJ 412 at 415.)

89. Dr Baron Levi further submitted that (T 440.22-.27):

In this case, I don’t say that an adverse inference may be drawn directly in the case against Mr Polo because Mr Polo didn’t exercise any such privilege, but in so far as the case against Mr Polo is derivative upon a case against Mr Marino, for instance in the context of vicarious liability where one is talking about the liability of Mr Marino, then it is the case that an adverse inference could be drawn in that case.

90. In prefacing this submission, Dr Baron Levi made it clear that he was making a submission in a context in which Mr Marino had exercised his privilege against self-incrimination: T 440.3-.4.

91. I do not accept Dr Baron Levi’s submission for several reasons.

92. First, the authorities make a distinction between the prohibition against drawing an adverse inference from a claim of privilege and drawing adverse inferences that may arise from the absence of evidence which a party or witness could be expected to give. I do not regard the comments of Lee J in Pappas as addressing the circumstances in which Dr Baron Levi was making this submission, being that Mr Marino had exercised his privilege against self-incrimination. This is made clear by the judgment of the Victorian Court of Appeal in Chong v CC Containers Pty Ltd (2015) 49 VR 402; [2015] VSCA 137 at [217]-[219].

93. Secondly, the submission lacked content. Dr Baron Levi did not identify particular instances of matters from which I should draw an adverse inference.

94. Thirdly, even if the submission were correct (which I do not accept), I doubt that it could be extended in the way that Dr Baron Levi contended; namely, that I could somehow draw an adverse inference against Mr Polo on the plaintiffs’ case of vicarious liability against him by reason of another witness, adverse to Mr Polo’s case, claiming to exercise his privilege against self-incrimination.

95. To the extent that there was conflict between the evidence of Mr Marino on the one hand and Mr Parrella and Mr Pacifico on the other, I accept the evidence of Mr Parrella and Mr Pacifico.

Mr Polo

96. Mr Jamieson submitted that, on the important aspects of the evidence given by Mr Polo, I should accept his evidence: T 448.16-.27. My impression was that Mr Polo gave his evidence in a straightforward way, making some concessions. Nonetheless, there is some evidence of Mr Polo that I did not accept, with which I deal below.

Initial meeting and association between Mr Polo and Mr Marino

97. Mr Polo become aware of Mr Marino in about late 2005 when Mr Polo was practising in New South Wales under the name Polo & Co Solicitors. The introduction came from a real estate agent who was involved with sales of properties owned by Mr Marino, his companies and associates. Mr Polo commenced providing legal services to Mr Marino, mainly in relation to conveyancing matters, at some stage after the referral: CB 205[8], [9].

98. Mr Polo also had social contact with Mr Marino, for example attending Mr Marino’s 40th birthday in 2009: CB 206[10]. A few years later, Mr Polo relocated to the Gold Coast and developed a friendship with Mr Marino. Mr Polo assisted Mr Marino with his business problems and his family law issues: CB 206[11]-[16].

Setting up of the Oracle Law business

99. Mr Polo was very sparse in his affidavit evidence regarding the arrangements between himself and Mr Marino for the use of an office premises at Mermaid Beach, from which Oracle Law eventually operated, as well as what working arrangement Mr Marino had in relation to Oracle Law.

100. Mr Polo deposed that “[o]n or about late 2014 I needed an office and Frank and I agree[d] to share office space at Mermaid Beach”: CB 206[18].

101. He deposed further as to his arrangement with Mr Marino as follows (CB 207[29]-[31], omitting parts rejected):

29. At the time that we occupied the office space Frank had suggested that he use his contacts to develop clients for my practice. This was for legal services only and not in relation to any other business areas.

30. I was of the opinion that he had resources and contacts to assist me, whereas I did not.

31. There was … a verbal arrangement. … Frank or Crystal Blue Group did not invoice for any referrals provided, and I did not provide discounted legal services consequent to the referrals. Most of the legal services provided to the first defendant were expected to be gratuitous.

102. In his amended defence to the plaintiffs’ claim, Mr Marino stated that he was a close friend of Mr Polo and agreed to assist him to establish his legal practice in Queensland in or about 2013, on the basis that Mr Marino would be engaged as a “contracted Business Development Manager” for Mr Polo and would be remunerated for his services by “the provision of discounted legal services” to him by Mr Polo and by way of “payment for contract services invoiced”: CB 35-36[9].

103. Mr Marino further stated in his amended defence (CB 37[11(g)]):

In 2013, I helped the Second Defendant set up a business “Logo”, The Oracle Law “Web Site” ( “Business Cards”, Email Footers, “Office Signage” various, marketing material for the “Will Kit” including shopping Centre marketing stands to sell the Will Kit Booklets created by the Second Defendant. The Second Defendant offered me to have my own business card for the purposes of handing out to new perspective [sic] clientele to refer to the Second Defendant’s business. The Second Defendant gave me the title of, “BDM” (Business development Manager). The First Defendant asked the Second Defendant at the time is this legal to introduce and refer new clientele to the business and the Second Defendant stated, “It’s all Good”[.] As a longtime client and friend, the First Defendant took this response took this [sic] on face value and the First Defendant agreed to assist him in rebranding his business at attracting new clientele.

104. It is worth noting, in light of the findings I make later in these reasons, that those pleadings are not binding on Mr Polo.

105. For reasons set out below, the actual timing for the establishment of the Oracle Law practice appears to have been in the latter half of 2012, as opposed to in either 2013 or late 2014.

106. In the context of Dr Baron Levi questioning Mr Polo in respect of the shared office premises with Mr Marino (T 142), I asked about Mr Marino’s association with Oracle Law and, specifically, how their connection actually arose in relation to the shared use of the office premises.

107. Mr Polo asserted that Mr Marino was a property developer and Mr Polo had previously assisted him with subdivisions and the sale of property, in the sense of Mr Polo being involved in contractual preparation and the lodgement of documents with the various authorities for registration. Mr Polo disputed that Mr Marino ever worked for him other than in the sense of referring matters to him: T 143.15-.24

108. Mr Marino was cross-examined about the statement in his amended defence at CB 35-36[9] which I have referred to above. He indicated that his arrangement with Mr Polo was one by which Mr Marino would be remunerated for his services or “in lieu for services rendered for [his] real estate business”: T 327.6-328.2. He could not recall precisely what he was referring to when he stated “payment for contract services invoiced” in his amended defence: T 328.5-.7.

109. On 19 September 2012, Peter Burrows, a business advisor, emailed Mr Polo and Mr Marino addressing the subject of a trading entity for legal practice: CB 706. The email addresses a number of matters and appears to contemplate that Mr Polo would be the director of a company to operate the business, and each of Mr Polo and Mr Marino would own shares in proportions to be agreed. It was contemplated that flexibility would be achieved by the shares being held through family trusts. The email (Burrows email) contains the statement:

If there is a Law Society restriction on you Frank owning shares perhaps there needs to be a silent agreement or otherwise a management agreement etc to get your profits out…

110. On 24 September 2012, Rick Herro (Mr Herro), the principal of a web administrator known as “The Net Unleashed”, sent an email to Rebecca Ottaway (who appears to have been an employee of Mr Marino associated with CBG), copying in Mr Marino and Mr Polo. The email provided a detailed fee proposal for the setting up and ongoing administration (seemingly for a period of 12 months) for an Oracle Law website: CB 707. I refer to this in more detail below.

111. On or about 1 May 2013, a proposed form of business chart, described as an “Oracle Law Business Plan & Structure”, was created. The structure assumed that Oracle Law would be some form of corporation and envisaged that Mr Polo would be the director of Oracle Law, with each of Mr Polo and Mr Marino having a 50% shareholding. Oracle Law was shown as providing services under four heads, being “individual services”, “business services”, “family services” and “commercial services” (proposed business chart): CB 713. However, this proposed corporate structure for Oracle Law was never instigated or formalised.

112. The first occasion on which Mr Marino adopted the title “business development manager” in Oracle Law emails appears to be on or about 10 October 2013, when he corresponded with Dean Ind (copying in others) using his Oracle Law email in connection with negotiations with a number of accountancy firms, financial planners, finance brokers in relation to the offering of a “Will Kit” (Exhibit D6: T 368) as a wholesale product to Oracle Law’s clients: CB 718. As best I can gauge, the abbreviated version of “business development manager”, namely “BDM”, appears to be first used by Mr Marino in Oracle Law emails on or about 13 February 2017: CB 963.

113. I asked Mr Polo about how the “business development manager” arrangement between him and Mr Marino arose. He indicated that the arrangement arose “during the transition”. Exactly what “transition” Mr Polo was referring to was undefined other than by reference to the fact that Mr Polo had assisted Mr Marino with his litigation matters in respect of previous partnerships and his family law matter. Mr Polo elaborated, indicating that (T 146.45-.50):

A. … He, after assisting him with so many different aspects of his problems, he believed that he owed me, owed me a favour, or owed me some recompense for everything that I had done. Because I hadn’t charged him at the full rate that any other lawyer would have charged him. And consequently he said that he would refer work to me as a consequence to allow me to build my business from his property, property sales business.

114. Mr Polo stated that he understood there to be no difference between a person referring work to him and that person becoming what he described as a “business development manager”, indicating “[i]t was only a title”: T 147.1-.16.

115. By 4 July 2014, Mr Marino had a conference with a bank (seemingly Westpac) in relation to integrating payment gateways and merchant facilities in connection with the Oracle Law website: CB 717, 722 (merchant facilities enquiries).

116. In or about July 2014, Mr Polo made an application for a PayPal business account to be set up for Oracle Law: T 164. On the account form, the box designated “business type” has the word “partnership” inserted: CB 723 (PayPal email).

Sharing of the office premises

Securing the office premises

117. As I have noted above, in about late 2014 Mr Polo needed an office on the Gold Coast, and he and Mr Marino agreed to share an office space at Mermaid Beach (office premises): CB 206[18]. The office premises were located in the Mermaid Shopping Centre on the Gold Coast Highway.

118. On 22 September 2014, in the application for lease of the office premises, Mr Marino is described as the first applicant and Mr Polo as the second applicant: CB 733-738 (lease application). The business name is described as being “Polo & Co Solicitors”, with the trading name as “Oracle Law” and current business being “solicitor”: CB 735. No additional description or business name is provided. The lease schedule describes the permitted use of the premises as being “legal administration office”: CB 736. Despite the impression given by the lease application, it was Mr Polo’s contention that he and Mr Marino each worked on their own respective businesses (i.e. Oracle Law and CBG) in different parts of the office: T 142.8-.11, 288.35-.40.

Description of the office premises

119. The street façade of the office premises was depicted in a photo: CB 781. Whilst the date of the photo was not given, it was clearly taken while Oracle Law operated out of the premises. On the awning there was a prominent sign with the Oracle Law logo and the Oracle Law website address. There was no signage for CBG depicted in the photo.

120. To access the office premises, there were stairs at the front of the building which led up to a veranda on the first level, on which the office premises were located: T 289. When one reached the top of those stairs, there was a door to the office premises. However, there was no signage on the door. Towards the back of the building there was a car park with designated parking spots allocated to premises rented within the building and marked by signage: T 290. At least one of those spots had signage referable to Oracle Law with a “NO PARKING DAY AND NIGHT - Oracle Law STAFF ONLY” sign: CB 779. There was no equivalent signage for CBG: T 290. Mr Marino was responsible for sourcing such signage for Oracle Law (see below).

121. A photograph depicting the flight of stairs leading up to the front entrance of the office premises was tendered: Exhibit D3; T 359. The dating of the photograph was not established, and it does not reveal any particular signage to Oracle Law or otherwise. A photograph of the back entrance to the building was also tendered: Exhibit D4; T 359.

122. Another photograph was tendered which was taken near the top of the stairs at the front of the building, and which showed a signage board on a tiled wall: MFI-2 (T 359), which became Exhibit D7 (T 393). The signage board contained details of shops 1 to 13 on the ground floor and offices 1 to 7 on the first floor. Mr Jamieson indicated that the signage board depicted was the current directory at the Mermaid Shopping Centre: T 358.23-.26. In relation to the office premises (office 7), the photograph depicts Mr Polo holding a makeshift white label with black writing on it over the name of the current occupant of office 7. The label contained the words “Oracle Law – Crystal Blue Group”, which was said to depict how the signage presented prior to the termination of Mr Polo and Mr Marino’s lease. What appears to be precisely the same photograph was marked as MFI-3 (T 360) and tendered as Exhibit D8 (T 393), and was said to depict the type of directory that existed at the back of the building (though it was accepted that the photograph was not a photograph of the actual directory at the back of the building).

123. During the hearing, Mr Polo prepared a sketch plan of the office premises: Exhibit D1. As noted above, Mr Polo asserted that he shared the premises with CBG and/or Mr Marino on the same floor in the Mermaid Shopping Centre building: T 288.35-.40. The total area of the office premises was 69m²: CB 1389.

124. Looking at Exhibit D1, there was a passageway leading from the front door into the premises, with a boardroom on the left and what Mr Polo described as his “Oracle office” on the right. He stated that the Oracle Law office and the boardroom were entirely his for “occupation” (i.e. use). Once one passed the boardroom and the Oracle Law office, there was a rear area containing a kitchen, storage and photocopier on the left and what was described as the “Crystal Blue office” on the right, being a section where Mr Marino and his CBG staff would work. Mr Polo indicated that, in terms of area, CBG staff and Mr Marino occupied about half of the overall office space entirely to the exclusion of Mr Polo: T 288.35-289.19.

125. Mr Polo stated (in context in or about late 2017) that he held conferences at the front of the office premises and the front boardroom, and at no stage involved himself with Mr Marino’s operation in the back offices: CB 207[22].

126. On 26 September 2014, Mr Marino corresponded with RBC Business Solutions apparently sourcing the purchase of a photocopier for Oracle Law: CB 739-740.

127. On 9 October 2014, Business Insurance Planning, an authorised representative of an insurance broker, provided a quotation for business insurance for Mr Polo and Mr Marino, marked to the attention of Mr Polo. The insurance schedule describes the insured name as “Renaldo Polo & Frank Marino” and the trading name as being “Polo & Company Solicitors & Oracle Law”: CB 750 (insurance quotation).

128. On 21 October 2014, Mr Marino engaged in email correspondence using his Oracle Law email address in relation to Oracle Law T-shirts: CB 765-766.

129. On 22 October 2014, Mr Marino corresponded with Darryl Clarke regarding logo images for Oracle Law office signs, including for the front door, the awning and the car park: CB 771-775.

130. On 24 September 2015, Mr Marino and Mr Polo extended the lease of the office premises for a term of one year, commencing on 10 October 2015 and due to expire on 9 October 2016: CB 783, 784.

Website and email setup, control, authorisation and access

131. During the hearing, it became obvious that a particular aspect of the case against Mr Polo was centred around his steps which empowered Mr Marino’s use of the Oracle Law website and an Oracle Law email address.

132. Mr Polo indicated that Mr Marino had assisted him with setting up the Oracle Law website because Mr Marino had an understanding about websites that Mr Polo did not: T 157.28-.37. Mr Marino essentially confirmed that this was the case: T 369.31-.38.

133. Following the 24 September 2012 fee proposal from Mr Herro that I noted above, the next correspondence regarding Oracle Law email setup appears to have been on 15 April 2013, when Mr Herro sent an email to Ms Ottaway indicating that the following three email addresses had been created (CB 709):

Email accounts
Email Address	Username	Password
renaldo	[email protected]	[XXXXX X]
info	[email protected]	[XXXXX X]
accounts	[email protected]	[XXXXX X]

134. The same email provided details of “CMS ADMIN”, indicating that there were two users – “Frank” (Mr Marino) and “Rebecca” (Ms Ottaway): CB 710.

135. Ms Ottaway forwarded the email to Mr Polo: CB 709.

136. “CMS” appears to be an abbreviation of “Content Management System”, which Mr Herro described as “an easy to use site management tool allowing client management and editing of all site images and written content”: CB 707. Essentially, it allowed for backend access to the Oracle Law website.

137. On 3 May 2013, a number of emails were sent in respect of the Oracle Law email system and website:

1. at 7:38am, Mr Polo sent Mr Marino and Ms Ottaway an email regarding use of certain limited liability text which was to appear on all documents and email footers: CB 716;

2. at 10:38am, Ms Ottaway sent an email to Mr Herro indicating that “…Oracle Law is ready to go live when you are back on deck”: CB 715; and

3. at 5:38pm, Mr Marino sent an email to Ms Ottaway (not copied to Mr Polo) requesting her to set up “[email protected]” as an email address for him: CB 714.

138. On 6 May 2013, Ms Ottaway made that request of Mr Herro, who later that day responded with the details of the Oracle Law email address set up for Mr Marino: CB 714.

139. On 4 June 2013, Ms Ottaway sent an email to Mr Polo providing the same “CMS ADMIN” details received from Mr Herro on 15 April 2013, indicating that the information was the “login for the backend of the website” if Mr Polo needed it: CB 709. The email went on to indicate that she would arrange for Mr Herro to set up a login for Mr Polo as well. On the same day, Mr Herro arranged for Mr Polo to be set up with backend access to the Oracle Law website: CB 711.

140. A domain name is the string of text that a user types into a browser window to reach a particular website. Domain names are registered in domain registries. Applications can be made to registrars to reserve domain names and to register a domain name. Thus, for example, it appears that Mr Polo was the registrant of a domain name “protectnlocate.com.au”, which had been registered by the registrar “Web Address Registration”: CB 1087.

141. Details regarding nomination of the ownership of the Oracle Law domain name “oraclelaw.com.au” were not expressly explained by the parties or counsel, nor evidence from the initial 2012 correspondence with Mr Herro. Some gleaning of it does, however, appear in later correspondence in the Court Book.

142. Mr Marino had a CBG account with Mr Herro (e.g. CB 970), and Mr Marino received renewal invoices for his “crystalblueproperty.com” domain name from Mr Herro’s firm: e.g. CB 799-801. On 21 September 2016, Mr Herro’s firm sent to Mr Marino’s CBG email address an invoice for renewal of the Oracle Law domain name: CB 812-813. The parties assumed, and I infer, that Mr Marino or CBG had ownership of the Oracle Law domain name.

143. Mr Polo’s affidavit evidence states that, whilst at the office together, he was not aware that Mr Marino was without his permission using “my email” for Mr Marino’s own purposes: CB 207[25]. It is not clear precisely what Mr Polo meant by “my email”. I further address his evidence as to permission below.

144. Mr Polo was cross-examined on a number of occasions regarding the website and email arrangements for Oracle Law. I gained the impression that Mr Polo’s understanding of website and email control, authorisation and access was very poor. Indeed, even at the time of the hearing, he did not appear to have any clear working understanding of what an administrator of a website domain is enabled to do, or what access they have: T 158.15-.32; also T 157.28-.37, 159.13-.47.

145. Specifically, Mr Polo did not have any clear understanding of: (a) what an “admin” does; (b) what “admin access” means; or (c) what “control over” the Oracle Law website or domain name entailed: T 158.30-159.22

146. In light of that, it is difficult to know what to make of Mr Polo’s answers in respect of control and access to the Oracle Law website and email arrangement.

147. From Mr Polo’s responses, he seemed to believe that:

1. as at 2018 and 2019, the Oracle Law domain name was in Mr Marino’s name, but he assumed that it belonged to Oracle Law and not to a particular person: T 159.21-159.43; and

2. up until 2019, Mr Marino: (a) had control of the Oracle Law domain name; (b) may have had control over the Oracle Law website; and (c) did not have control over Oracle Law email addresses other than his own: T 159.45-160.11.

148. Mr Polo gave contradictory evidence regarding whether, and at what times, Mr Marino had control over his own Oracle Law email address: T 160.6-.24.

149. Significantly, Mr Polo gave evidence that, until some point in April 2018 which he cannot recall, he was able to see every email sent or received on Mr Marino’s Oracle Law email address through some form of auto-forwarding system that had been established by the web administrator: T 160.26-161.23, 181.9-.25 (it being unclear as to who Mr Polo regarded as being the “web administrator”). After that point, he says that he could no longer see those emails being sent or received on Mr Marino’s Oracle Law email.

150. However, Mr Polo’s evidence was that Mr Marino would use his Oracle Law email and CBG email interchangeably: T 186.45.

151. On 30 June 2016, Mr Marino corresponded with Mr Herro (copying in Mr Polo) requesting the setup of a new email address for Oracle Law, being “[email protected]”. According to Mr Polo, the Oracle Law “admin” email address had a particular function and related to the Will kit that he had developed: T 188.7-189.24. The email also requested of Mr Herro to set up a function such that when anybody emailed out from the new email address, or received an email, that the Oracle Law “info” email address and Mr Marino’s Oracle Law email address would be automatically blind copied in the email: CB 793. Mr Marino indicated that this would help them track all emails sent and received. Another email sent by Mr Marino on the same day requested of Mr Herro to make certain changes to the Oracle Law website (including to presentation in respect of font size and colour, and change of contact address information): CB 793.

750. What commentary there is does not suggest that the mere fact that person A provides person B with an email address itself clothes person B with carte blanche authority to act on behalf of person A.

751. In Law of Agency, Dal Pont addresses the issue at [20.46] as follows:

Reliance on facilities granted to an agent

20.46

The issue as to whether reliance on an alleged holding out is reasonable also enters into play where the principal has given the agent facilities through which the agent can represent the principal; whether physical facilities, electronic facilities or merely business cards and letterhead paper. In each case, the court must determine whether the provision of the facilities in question would generate in a person in the third party’s position a belief in the authenticity of the agent’s authority to contract as the agent is purporting to do.

The case law indicates that providing an email address using the principal’s domain name, a business card, ^[5] the principal’s stationery, ^[6]  an office or vehicle facilities, ^[7]  are usually insufficient by themselves to lead a reasonable third party to believe that the agent was authorised to effect a transaction that would ordinarily exceed the authority of an agent holding that position. In CSX Transportation Inc v Recovery Express Inc, ^[8]  for example, it was held to be unreasonable for a third party to believe an agent to have authority from its principal to purchase out-of-service railcars simply on the basis that the agent communicated using an email address assigned by the principal with its domain name. Were granting an email domain name, by itself, to clothe the recipient with carte blanche authority to act on behalf of the principal, the court remarked, ‘every subordinate employee with a company email address — down to the night watchman — could bind a company to the same contracts as the president’. ^[9]  The court viewed an email domain name as sufficiently analogous to a business card, company vehicle and letterhead for this purpose. ^[10]  It concluded that the third party should have been more suspicious of an unsolicited, poorly written email arriving late one afternoon. ‘Before delivering goods worth over $115,000 to a stranger’, the court added, ‘one reasonably should be expected to inquire as to the authority of that person to have made such a deal’, ^[11]  especially given the anonymity of the internet.

Although instances exist in the case law where business cards, email addresses and/or letterheads have been found to provide grounds for ostensible authority, these are generally where the agent holds a senior position in the hierarchy of a corporate principal ^[12]  or other factors lead a reasonable person to believe the agent to be authorised. ^[13]

5. See, for example, Asplund v Selected Investments Inc, 103 Cal Rptr 2d 34 at 48–9 (App 2001) (also involving the display of a plaque); Prospect Industries Pty Ltd v Anscor Pty Ltd [2003] QSC 296; BC200305228 at [74], [75] per Philippides J; Cowburn v Leventis, 619 SE 2d 437 at 448 (SC App 2005).

6. See, for example, Harvey v New South Wales [2006] NSWSC 1436; BC200610778 at [176], [200] per Johnson J.

7. See, for example, Raclaw v Fay, Conmy and Co, 668 NE 2d 114 (Ill App 1996) (permitting the occupation of offices, the use of telephones and a receptionist, and access to company stationery); McFarland v Entergy Mississippi Inc, 919 So 2d 894 (Miss 2005) (putting a purported agent in an electric company vehicle).

8. 415 F Supp 2d 6 (D Mass 2006).

9. CSX Transportation Inc v Recovery Express Inc, 415 F Supp 2d 6 at 11 (D Mass 2006).

10. CSX Transportation Inc v Recovery Express Inc, 415 F Supp 2d 6 at 12 (D Mass 2006).

11. CSX Transportation Inc v Recovery Express Inc, 415 F Supp 2d 6 at 12 (D Mass 2006).

12. See, for example, Thesenga Land Co v Cirrus Warehouse Inc, 2003 Minn App LEXIS 1433 (business card designating an agent as vice-president of the principal); Viet Hai Petroleum Corp v Ng Jun Quan [2016] 3 SLR 887; [2016] SGHC 81 (business card with title ‘Chief Operating Officer’).

13. See, for example, Piper Group (1978) Ltd v Shearson Equities Ltd (1986) 78 NSR (2d) 413 at 417 per Nathanson J (SC) (where the corporate principal, in addition to permitting the agent to use a company business card, introduced the agent to the third parties as holding an executive position in the principal, and arranged matters so that all dealings would be through the agent); Heperu Pty Ltd v Morgan Brooks Pty Ltd (No 2) [2007] NSWSC 1438; BC200710862 (revd but not on the specific point of ostensible authority: Perpetual Trustees Australia Ltd v Heperu Pty Ltd (2009) 76 NSWLR 195; [2009] NSWCA 84; BC200903119) (where the defendant mortgage provider (MB), by allowing C to act and represent himself as manager of its business — wherein (i) MB authorised C to trade using prominently the MB name, logos, livery and email contact address; (ii) MB required C to use letterhead and business cards showing the MB name prominently, without containing any express limitation on C’s authority; and (iii) the placing of the MB signage and livery on C’s offices was done with MB’s express authority — led Palmer J to conclude that C had ostensible (but not actual) authority to advise clients how to invest borrowed funds: at [69]–[85]).

761. As will be readily observed from the above, much of the authority upon which Dal Pont relies is American authority. Nonetheless, in the absence of reference to any other caselaw which bears upon the matter, the above suggests that I should be cautious in making assumptions as to the extent of any authority conveyed by the provision of an email address with the putative principal’s domain name. In making that observation, I note what I have said above that no case of agency was pleaded.

Finding

762. In the above circumstances, I am not prepared to make a finding that Mr Polo is liable to the plaintiffs on the basis of vicarious liability.

Mr Polo – alternative claim – breaches of ACL

763. The claim against Mr Polo in relation to the alleged breach of the ACL is set out in CB 25[62].

764. The claim is essentially that:

1. Mr Polo was aware at all relevant times that Mr Marino was conducting matters on behalf of clients for Oracle Law (such awareness particularised as being disclosed from the fact that Mr Polo was copied into certain emails);

2. Mr Polo failed to comply with any disclosure obligations to clients under s 152 of the LPA in relation to any multi-disciplinary partnership;

3. Mr Polo failed to otherwise advise clients that Mr Marino was not a solicitor and was not entitled to engage in legal practice;

4. Mr Polo failed to supervise or exercise control over Mr Marino;

5. Mr Polo expressly or tacitly permitted Mr Marino to continue to act directly for clients;

6. by reason of the above matters (1) to (5), Mr Polo represented by his conduct that Mr Marino was entitled to engage in legal practice, which conduct was misleading or deceptive contrary to s 18 of the ACL; and

7. by reason of Mr Marino’s representations that he was a solicitor or alternatively the owner of Oracle Law, which Mr Marino knew to be false, and his representations that the investment opportunities Mr Marino managed were offered by or associated with Oracle Law, which Mr Marino also knew to be false, the plaintiffs seek damages against Mr Polo under s 236 of the ACL.

765. Regrettably, Dr Baron Levi did not specifically elaborate on the misleading or deceptive conduct case against Mr Polo. I proceed in dealing with this claim without the benefit of substantive submissions from the parties.

766. I have already referred to the necessity to distinguish between the operation of the ACL and how it operates as a law of the Commonwealth and as a State law. For present purposes, I will proceed on the basis that most of the relevant “conduct” of Mr Polo occurred by use of the internet, specifically email, as this was the predominant means by which any inference could have been made that Mr Marino was engaged in legal practice. In this way, the ACL would be applicable as a law of the Commonwealth.

767. The pleaded conduct of Mr Polo, as set out above, may be characterised essentially as a form of omission or failure to speak.

768. Section 2(2)(a) of the ACL relevantly provides that a reference in the ACL to “engaging in conduct” is a reference to “doing or refusing to do any act”, and s 2(2)(c)(i) relevantly provides that a reference to “refusing to do an act” includes a reference to “refraining (otherwise than inadvertently) from doing that act”.

769. Referring to the judgments in Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31, the Court of Appeal stated in Allianz Australia Insurance Ltd v Haddad [2015] NSWCA 186 at [42]:

… there are different approaches which can be taken to the characterisation of conduct as misleading or deceptive where, as here, it consists of or includes an omission to provide information. One approach is to consider whether in the circumstances the conduct, including any such omission, conveyed a representation which was misleading or deceptive. Another is to inquire whether those circumstances were such as to give rise to a reasonable expectation that if some relevant fact existed a particular thing would not be done, or not done, without disclosing that fact.

770. There is no general duty of disclosure; the question is simply whether, having regard to all the relevant circumstances, there has been conduct that is misleading or deceptive or that is likely to mislead or deceive: Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 32 per Black CJ, see also 41 per Gummow J (with whom Cooper J agreed). In Rafferty v Madgwicks (2012) 203 FCR 1; [2012] FCAFC 37, the Full Court observed at [278] (emphasis in original):

278. The authorities recognise that the circumstances in which silence may support a finding of misleading or deceptive conduct are not properly subject to any unifying principle. Nonetheless, the authorities also acknowledge that, if the circumstances of a particular case would give rise to a reasonable expectation that, if a fact existed, it would be disclosed, then the failure to disclose that fact may give rise to an inference that the fact does not exist. In this situation (i.e., where there is such a reasonable expectation), a failure to disclose the existence of that fact could constitute misleading and deceptive conduct. See, e.g., Kimberley NZI Finance Limited v Torero Pty Ltd (1989) ATPR (Digest) 46-054 at 53,195; Demagogue v Ramensky at 32, 41; Winterton Constructions Pty Ltd v Hambros Australia Ltd (1992) 39 FCR 97 at 114 (“Winterton Constructions”); Warner v Elders Rural Finance Ltd (1993) 41 FCR 399 at 405; and Software Integrators Pty Ltd v Roadrunner Couriers Pty Ltd (1997) 69 SASR 288 at 296-298.

771. As I have stated above in relation to Mr Marino’s use of his Oracle Law email address, neither Mr Pacifico nor Mr Parrella pointed to anything specific in email correspondence sent to them by Mr Marino which gave them the impression that Mr Marino was a lawyer carrying out a form of legal work.

772. There was no indication that Mr Polo had known that Mr Marino had represented himself to the plaintiffs to be a lawyer. Nor was there any indication that Mr Polo had known of Mr Marino making any similar representations in the past (as distinct from representing that he had an ownership interest in Oracle Law).

773. Contrary to the plaintiffs’ pleaded ACL claim against Mr Polo, I do not consider that his conduct, as pleaded, conveyed a representation that Mr Marino was entitled to engage in legal practice. In any case, while I have found that Mr Marino did, at times, engage in legal practice, his Oracle Law title of “Business Development Manager” (or its abbreviation “BDM”), business card and email address did not of themselves represent Mr Marino to be a lawyer. In the circumstances, I do not consider that there was a reasonable expectation on the part of Mr Polo to disclose that Mr Marino was not a lawyer or entitled to engage in legal practice. Mr Polo’s alleged failures, of themselves, did not give rise to an inference that Mr Marino was a lawyer or entitled to engage in legal practice. Mr Polo’s conduct was not misleading or deceptive or likely to mislead or deceive.

774. Even if I were incorrect in that conclusion, I find the plaintiffs’ pleading problematic in that the claim for damages under s 236 of the ACL is said to arise by reason of Mr Marino’s representations, not any representation of Mr Polo: CB 25[62(g)]. It cannot be said that the plaintiffs’ loss arising out of the investment proposal and the AMAs was suffered “because of” the pleaded conduct of Mr Polo: s 236(1)(a) ACL.

775. In the above circumstances, I am not prepared to make a finding that Mr Polo is liable to the plaintiffs on the basis of any breach of the ACL.

Cross-claim

776. The relief sought by Mr Polo against Mr Marino, namely for “contribution towards or indemnity for” any verdict recovered against him by the plaintiffs, is relevantly set out in the statement of cross-claim, and is said to be based upon the following “pleadings and particulars” (CB 65-66):

1. The Second Defendant shared office space situated at Office 7 Mermaid Shopping Centre 2563 Gold Coast Highway Mermaid Beach in the State of Queensland with the First Defendant.

2. The Lease was in the individual names of the First Defendant and the Second Defendant but was not leased to the Second Defendant’s practice known as Oracle Law.

3. The First Defendant operated his own business affairs separately from the Second Defendant.

4. From 19.7.2017 to 26.8.2017 the First Defendant travelled outside of Queensland and thereafter did not return to the office and the Second Defendant occupied the office alone.

5. The lease was due to expire on 31.3.2018 and on 9.2.2018 the Second Defendant entered into negotiations with a Company trading as Energy Options to share the office space in place of the First Defendant.

6. The negotiations failed and the Second Defendant vacated the office on 31.3.2018.

7. From about February, 2017 the First Defendant was operating his own affairs from his rented residential address at 28 Tosti Street Bundall Queensland and at the office of Mr. Craig Bax at Southport for his company matters.

8. At the time of the First Defendant issuing his Client Information Sheets dated 4.9.2018 there was no business or professional relationship between the First and the Second Defendant and the First Defendant used the Second Defendant’s email address without informing the Second Defendant that he continued to use that address and without permission.

9. At the time of the agreement between the Plaintiffs and the First Defendant dated 25 September 2018 the Second Defendant had parted company with the First Defendant and had no business or professional association with the First Defendant and had not done so for at least 6 months and that last contact was only for the purpose of discussions as to the termination of the least [sic] between the parties and the Landlord’s Agent.

777. Mr Jamieson did not address any submissions in relation to the entitlement of Mr Polo to succeed on the cross-claim against Mr Marino.

778. However, in light of the findings that I have made, there is no occasion to address the cross-claim as there was no verdict recovered against Mr Polo by the plaintiffs.

779. However, if I am incorrect in relation to that conclusion, I note that the pleaded claim for indemnity against Mr Marino by Mr Polo does not demonstrate any basis, whether contractual or otherwise, so as to enliven an entitlement or right of indemnity by Mr Polo against Mr Marino for the particular loss suffered by the plaintiffs.

Costs – preliminary observations

780. At the commencement of these reasons, I made some observations regarding the obligation of parties to conduct litigation with a view to resolving the real issues in such a way that the cost to the parties is proportionate to the importance and complexity of the subject matter in dispute. I also made an observation regarding this on the seventh and final day of the hearing: T 439.17-.21.

781. The plaintiffs and their legal representatives left no stone unturned in their efforts to secure relief against the defendants. The proceedings spanned seven days of hearing, and there were six volumes of the Court Book incorporating 2,745 pages of materials.

782. Early on the first day of the hearing as Dr Baron Levi was outlining the plaintiffs’ case, he essentially accepted my preliminary observation that the contractual case against Mr Marino was straightforward and might have taken about 20 minutes or so to articulate, and that the rest of the claim was directed to effectively proceeding against Mr Polo: T 28.25-.50, 29.34-30.26. According to Dr Baron Levi, the particular reason why the claim was brought in this Court was to invoke its inherent jurisdiction as to the control and discipline of solicitors in its compensatory arm: T 29.29-.32.

783. There is an obligation on the parties and their legal practitioners to facilitate the just, quick and cheap resolution of the real issues in the proceedings: s 56 of the CPA. Further, there is a statutory dictate that the procedures of the Court should be implemented with the object of resolving the real issues in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute: s 60 CPA.

784. Those preparing the Court Book did not heed the pre-trial directions for email chains to be disassembled and placed in chronological sequence, and for the Court Book not to contain duplicates of the same document. The result was that there were numerous copies of the certain emails and other documents scattered throughout the Court Book, and email chains often appeared in reverse chronological order.

785. The Court Book contained significant material to which neither of the active parties took me. Without being exhaustive, I note the following.

1. Under Tabs 7 and 8 of the Court Book, the parties included a request for particulars of Mr Marino’s initial defence and his response, which material comprised approximately 50 pages of the Court Book (CB 75-125). When I enquired as to what the parties wished me to do with those documents, Dr Baron Levi indicated that I should note them in the same manner as the pleadings as “they may inform the pleadings”: T 22.7-.19. I noted those documents. However, they were not referred to again, in any opening outline of submissions or otherwise, during the hearing.

2. Under Tabs 16 to 19 of the Court Book, the parties included notices to admit issued by the plaintiffs on Mr Marino and Mr Polo (both original and amended) and a notice of disputing facts by Mr Polo. Those documents comprised approximately 100 pages of the Court Book (CB 212-312), but were not referred to on the hearing.

3. Between Tabs 20 to 32 of the Court Book, there were various notices to produce and subpoenas, together with certain documents that were produced, comprising over 360 pages of Court Book (CB 313-677). Other than a subpoena for Mr Marino to attend to give evidence, none of those materials were referred to with one exception. On the fifth day of the hearing, Mr Jamieson (at T 369) requested that Mr Marino be shown an email at CB 521. However, that email also appears at CB 343, 377, 425, 473, 558, 595, 1864-1865 and 2217.

4. Most of volume 6 of the Court Book as supplemented (CB 2282-2745), being 463 pages and including an NAB transaction history comprising 84 pages, were not referred to on the hearing.

786. The result was that about 35% of the Court Book was not referred to during the hearing and the balance of the Court Book contained numerous duplications of documents.

787. In my estimation, the presentation of the Court Book in the manner that I have described inhibited the efficient and smooth running of the hearing. Further, it impeded my consideration of the evidence and the issues in preparing these reasons for judgment.

786. More generally, the parties’ approach to the case begs the question of how much time (especially court time) and effort ought to be committed to recovering $10,000 for one plaintiff and $200,000 for another plaintiff, and defending those claims. I have no express reason to doubt that the parties and their legal representatives were well-intentioned in their endeavours to prepare the case. However, the proportionality issue concerns me. In the above circumstances, I require the parties to specifically address the amount of costs incurred and provide some breakdown of the costs, so as to enable me to address the question of costs appropriately and in light of s 60 of the CPA.

Conclusion

789. There should be judgment in favour of the plaintiffs against Mr Marino on the contractual claim. The plaintiffs’ claims against Mr Polo should be dismissed.

790. I direct the parties to bring in short minutes of order to give effect to these reasons for judgment and to provide any evidence (including the amount of costs incurred and what those costs related to) and any submissions on costs.

**********

Endnotes

Amendments

13 May 2024 - [602] - remove "(as his Honour then was)"