Camozzato v Stansfield & Ors No. DCCIV-97-803 Judgment No. D137

[1999] SADC 137

Sandra CAMOZZATO  v  Arthur STANSFIELD, Serena PACE,
David JOHNSON, Nicholas BIRDSEYE,
Elbio PEREZ and King of Croissant Pty Ltd
[1999] SADC 137

Civil
Judge Kitchen

1 At the time of the events which give rise to this action the plaintiff was nearly 21 years old.  She had left school during Year 10, completed a six months secretarial course in 1991 and then obtained work involving typing, telephonist and reception duties, including some book-keeping, in a position she held for about four years.  During the last six months of that period of employment, the plaintiff obtained part-time work in the evening at Caf_ Va Bene a restaurant of 160 seating capacity.  At the end of the six months she took up full-time work at that caf_ and that was her employment at the time of the events the subject of this action; by that time, the plaintiff described, she was in the role of supervisor of the twenty or so persons employed there and also, as I understand her evidence, controlled the "front of shop" activities of the business.
2 In the latter part of 1996 the plaintiff sought to purchase the Caf_ Va Bene from the proprietor, a company effectively controlled by Mr and Mrs Delorso, both of whom worked in the caf_ as cooks or chefs.  In connection with her efforts to purchase the caf_, the plaintiff was introduced to the first defendant Stansfield who, it is agreed for the purposes of these proceedings, conducted the business Solution Partners a commercial managerial consultant providing, as he described in evidence, "commercial advice in relation to restructuring, re-financing, equity partnerships etc".  For reasons which appear later, the plaintiff's plan to purchase Caf_ Va Bene did not proceed, but through Stansfield the plaintiff was then presented with the opportunity to purchase, what I will for the moment call, the business of the sixth defendant, King of Croissant Pty Ltd, (which was effectively controlled by the fifth defendant Perez) known as the Caf_ King of Croissant.  In connection with that purchase, the plaintiff engaged the services of Johnson Lawyers, as her solicitor, the proprietor of which was the third-named defendant, Johnson, by whom the second-named defendant Pace was employed as a solicitor and who provided legal services to the plaintiff.  The fourth-named defendant Birdseye is an accountant, who provided services to the plaintiff concerning the purchase of Caf_ King of Croissant.
3 The plaintiff claims:-
.    that Stansfield acted as her agent in the purchase of the Caf_ King of Croissant, that he was in beach of his contractual duties to the plaintiff as her agent, that he was negligent and he was also in breach of fiduciary duties he owed to the plaintiff;

.    that the defendants Pace and Johnson were in breach of their duties as the plaintiff's solicitor, and further that the defendant Pace was in breach of fiduciary duties she owed to the plaintiff;
.    that the defendant Birdseye received from the plaintiff $25,000, part of the price for Caf_ King of Croissant, which when the plaintiff purported to rescind the contract for the purchase of Caf_ King of Croissant, Birdseye repaid to the plaintiff by his cheque drawn in her favour but payment of which he stopped; the claim against Birdseye is upon the dishonoured cheque;
.    that the defendant Perez misrepresented the turn-over of, and that there were no books or records relating to the business of, the Caf_ King of Croissant.
4 The defendant Birdseye became a bankrupt on 9th November 1998. The claim against him being a proveable debt the proceedings against him are stayed pursuant to s58(3) of the Bankruptcy Act 1996, no leave having been obtained, or sought, to continue the proceedings.
5 The plaintiff claims, variously, against the defendants compensation under particular statutes, damages (including aggravated exemplary or punitive damages), orders avoiding, or declaring void, the contract evidencing the transaction concerning the Caf_ King of Croissant and orders for the return, or for an account, of purchase moneys paid by the plaintiff.  Each defendant denies the plaintiff is entitled to any of the relief she claims against the defendant.
6 For his part, Stansfield counterclaims $21,000 as a fee to which he alleges he is entitled from the plaintiff concerning the plaintiff's proposal to purchase the Caf_ Va Bene. 
7 The plaintiff said that by the latter half of 1996 she was confident of her experience in the business of Caf_ Va Bene.  At some earlier point in time, about one year after she first began working there, she had offered to purchase a share in the business but that was not accepted.  She then learned that the proprietors were contemplating selling the business.  The plaintiff said she asked them for, and they gave her, trading figures for the previous two years showing turn-over and expenses and they said they would give her time to raise the price they wanted for the business.  The plaintiff obtained from the proprietors a document entitled "Business Profile.  Caf_ Va Bene" comprising many pages of information concerning the business.  It is Exhibit P1.  The purchase price is stated to be $550,000 plus stock at valuation.  The plaintiff said the proprietors, after the plaintiff's father had spoken with them, intimated that they would sell for $450,000 plus stock at valuation and that they would provide "vendor finance" to the extent of $50,000.
8 The plaintiff was living in her parent's house paying neither rent nor board.  Her only assets were $10,000 in a bank and two motor cars which she valued together at $53,000.  She had a second job working for a few hours two days a week for a finance broker, one Michael Samara.  Mr Samara arranged for the plaintiff and her father, Gaetano Camozzato, to approach Bank SA.  Mr Camozzato, a retired builder, was prepared to guarantee a loan of $400,000 for the purchase of Caf_ Va Bene.  The Bank on 18th October 1996 offered a loan facility of $400,000 subject to security being provided by way of a mortgage over two properties owned by Mr and Mrs Camozzato, a chattel mortgage over the two motor cars owned by the plaintiff and a guarantee by, and a fixed and floating charge over, SC Investments Pty Ltd (Exhibit P2).  SC Investments Pty Ltd was a company the incorporation of which had been arranged by Mr Vince Rigoni, an accountant, as the vehicle for the purchase of Caf_ Va Bene.
9 The proposed purchase of Caf_ Va Bene did not proceed.  Mr Camozzato changed his mind, his reason being (as he told the Court) that Caf_ Va Bene "was too big and too much work for my daughter".  He said his change of mind made the plaintiff "very upset for a few days and she wouldn't even talk to me".  The plaintiff agreed she was upset - she said her father had changed his mind "at the last day when the documents were ready to be signed".
10 The plaintiff, still determined to buy Caf_ Va Bene, said she spoke with Mr Samara who indicated he would be able to obtain a loan for her of $200,000.  As to the balance, the possibility of a silent partner was raised but Mr Samara's enquiries for such a person came to naught and he referred the plaintiff to Stansfield whom, she said, she saw in October 1996 for about twenty minutes telling him about Caf_ Va Bene, that her father had "backed out", that she was looking for a silent partner to put up moneys in excess of the $200,000 Mr Samara had told her he was sure he could obtain for her and also told him that Caf_ Va Bene was making much more than was disclosed in its financial records.  She could not remember whether she handed Exhibit P1 to Stansfield at this meeting or at a subsequent meeting.  The plaintiff said Stansfield told her that his business was to "put deals like that together", that his fees were usually 30 percent of the purchase price but he would charge her only 5 percent.
11 The plaintiff related that at this meeting with Stansfield she told him of SC Investments Pty Ltd and that she and her parents were directors of it.  (I interpolate here that that was not correct and shows a tendency on the plaintiff's part, which became more and more evident during her examination and cross-examination, not to be interested in or to read to understand any documents concerning, or related to, the transactions she involved herself in.  In the course of her cross-examination by counsel for Pace, and concerning letters the plaintiff received from Stansfield relating to Caf_ King of Croissant the plaintiff said "I looked at everything he gave me but not really took a lot of notice of things he wrote to me").  The plaintiff said that Stansfield was critical of the advice she had received from Mr Rigoni about the corporate structure (her words were that Stansfield called Rigoni an idiot for not setting up a family and unit trust) and Stansfield called Birdseye into the meeting.  Birdseye, who had offices in the same building as Stansfield, was introduced to the plaintiff as one of Stansfield's partners and an accountant.  Her evidence is that Birdseye, who was present only a short time, tried to explain to her as I infer unit trust structures.  The plaintiff said she could not remember whether Stansfield told her at this meeting, or any meeting, of the expense of setting up a family and unit trust structure but she did subsequently pay to Stansfield mainly in cash "500 a time, 700 a time, even over 1,000 for setting up companies that he had said he had paid Nick (Birdseye) and I had to pay him so he could reimburse himself".
12 The plaintiff said there was a second meeting between her and Stansfield and then she received a letter from him.  It is Exhibit P4.  It refers to meetings with her on 31st October 1996 and 7th November 1996, to the involvement of Birdseye concerning the profit and loss statements of Caf_ Va Bene and a report from Birdseye concerning the advantages of various corporate structures; the letter also reports of two persons being interested in a proposed equity partnership concerning Caf_ Va Bene (based upon a purchase price of $450,000 including stock, $100,000 being provided by the plaintiff and vendor finance of $50,000), it goes on:-
"Finally, we wish to bring to your attention the fees that we require in respect to concluding the purchase.
We advise that we require all disbursements, (out of pocket expenses) required for and part of the due diligence to be paid on request.
As to the purchase of the caf_, we advise that on matters of this nature, we charge on a "Success" basis only, that is if the matter proceeds to the purchase of the caf_.
On that basis, we advise that our fee will be 5 percent payable at settlement and irrevocable."
The plaintiff said she was "pretty sure" she spoke to Stansfield about the contents of the letter after she received it.  As I understand her evidence, at some time, either before or after she received the letter, Stansfield mentioned to her one George Wegener as being a wealthy man interested in the proposal concerning Caf_ Va Bene.  She said she met Wegener, with Stansfield, about one month after her first meeting with Stansfield, and Wegener asked her a number of questions about Caf_ Va Bene.
13 The plaintiff's evidence is that she was present during a telephone conversation between Stansfield and Samara to the effect that Samara's approaches to a bank for a loan to assist the plaintiff was still being considered and that Samara "wanted $5,000 of the commission (Stansfield) would make", upon which Stansfield became upset said he did not wish to deal any further with Samara and told the plaintiff he would help her to find finance.  The plaintiff said Stansfield arranged for Birdseye to approach the Commonwealth Development Bank but that was unsuccessful so the plaintiff asked her father if he would be her guarantor now that she had someone else, namely Wegener, to invest in the purchase of Caf_ Va Bene; she said her father, after speaking with Wegener, said he would guarantee up to $150,000 only if Wegener would put up the balance.  An application was made to National Australia Bank for $140,000 which with the plaintiff's $10,000 made up the $150,000.
14 The plaintiff said that the National Australia Bank approved the loan sought by her.  The terms of that loan are not before the Court.  It is not clear from the plaintiff's evidence when the proprietors of Caf_ Va Bene withdrew the offer of $50,000 "vendor" finance but it was withdrawn, with the consequence that Wegener would need to contribute $300,000 to make up the purchase price of $450,000 for Caf_ Va Bene which she said Wegener told her, and her father, he would do.
15 The plaintiff related that Stansfield arranged to speak with the plaintiff and her father at the latter's house.  On an earlier occasion the plaintiff, she said, had told Stansfield she had seen a "black book" which recorded significantly higher receipts and profit at Caf_ Va Bene than appeared in the financial statements included in Exhibit P1.  At the meeting between the plaintiff, her father and Stansfield:
(Transcript page 88 line 1 to page 89 line 7)
"Q.  What did Mr Stansfield say to you and your fair (sic).
A.   He said that he was advising me not to go ahead with the deal.  He said I was - to start with I was paying too much.  He didn't want to be responsible if something went wrong with the business there.  He mentioned that George - George would kill him or get upset with him in a way.  Told that there were plenty of other cafes around.  I shouldn't be dealing with people like Cathy and Tony.
Q.   Did he say why.
A.   Apparently George had rung the cafe and asked the owners to see this black book and Cathy, the owner, said if you want to see that then I will make you pay $50,000 more.  He told me that he didn't want to see me make a big mistake and that he would give up his fee not to see me make this mistake.  Said if he didn't care he would make me go ahead, but rather lose his fee and not see me make a mistake.
Q.   I think you said that Mr Stansfield said that George Wegener had gone to speak to the owners.
A.   He had called them and asked for this black book which had the real figures in it.
Q.   But the owners had told Mr Wegener if he wanted to see the black book he would have to pay another $50,000.
A.   Yes.
Q.   That is what Mr Stansfield told you and your father.
A.   Yes.
HIS HONOUR:         This is what she said.
Mr DI FAZIO:        I am making sure of that.  I don't know that it I mentioned clearly enough.
XN
Q.   Did you say anything.
A.   I asked him why did he, like, wait so long, but he said nothing.
Q.   And.
A.   He just said that, you know, that I am making a big mistake.  I still wanted to go ahead.  I still said I still want it, but at this stage, the way he was talking, he convinced my Dad again and my Dad said 'That's it'.
Q.   What did your Dad say.
A.   He said 'That's it.  It is finished.  No more'
Q.   What did you understand that to mean.
A.   That that is it.  That is it.  There is no way now I am ever going to have this cafe."
16 The plaintiff said that Stansfield never again raised with her the matter of his fee concerning Caf_ Va Bene.  She said she had given Stansfield a cheque for $10,000 to be held in trust by him as a deposit in connection with the Caf_ Va Bene venture, that the cheque was never presented and that he returned the cheque to her a long time after the proposed purchase of Caf_ Va Bene came to a halt.
17 After the events culminating in the Caf_ Va Bene venture not proceeding the plaintiff and Stansfield met or spoke on the telephone about once each week and also had coffee or lunch together on occasions.  The plaintiff said Stansfield told her that Wegener was considering purchasing premises to fit out as a caf_ and making the plaintiff a half owner if she ran it for him.  She related an occasion when she, Stansfield and Wegener drove around the suburb of Stepney looking at premises suitable as a caf_ or restaurant. 
18 Then, the plaintiff said, in about March or April 1997 Stansfield called her to his office.  He told her of a business he had been trying to sell for a time which the owners were going to renovate as a restaurant or caf_ and sell.  He said it would be good for her - the purchase price was $60,000 but he could get it for $40,000.  She said Stansfield took her to premises on Payneham Road (the Caf_ King of Croissant).  They went inside.  She described the premises as small, there were only three tables, a coffee machine, a pie/pastry warmer and a refrigerator.  The plaintiff said that Perez and his wife were there and that Stansfield spoke to Perez in Spanish or another non-English language.  The plaintiff described that Stansfield showed her over the premises suggesting ways in which they could be renovated into a "flashy" restaurant.  Her reaction was the premises were too small and she wanted something as big as Caf_ Va Bene.  As they both left the premises and drove away Stansfield, she said, told her the price was $35,000, to which she responded she did not like the caf_ and he said:-
(Page 94 line 24 to Page 95 line 11)
"A.  He said 'Use your imagination'.  You know, you can knock down this wall or whatever.  He told me that it was a good little business, making 5-800 a day.  Trying to make me just imaging that it can be renovated and it can be changed into a little restaurant.
Q.   You said he said it was making.
A.   5-800 a day.
Q.   Did he explain any more.
A.   That it was open 7.30 until 3.30, five days a week.
Q.   Did he say anything on the topic of a guarantee.
A.   Yes, he said I would be able to be given a guarantee.
Q.   Did he say anything, explain.
A.   For 70 weeks, but I didn't know quite what he meant by that.
Q.   Tell the court what you remember of Mr Stansfield's words in relation to the guarantees.
A.   Get a guarantee for 70 weeks.
Q.   Did he mention a figure.
A.   Because that adds up to 35,000.
Q.   Did he mention a figure as to what this guarantee might be in dollar terms.
A.   500 a week in pastry products or something like that.
Q.   In pastry products, or something like that.
A.   Yes.
Q.   Did you have a good grasp of what he was talking about.
A.   No."
19 The plaintiff said that she and Stansfield kept in contact, and at his request she joined him at the Universal Caf_ where he introduced her to one Jason Brinckett who ran the Eros Caf_; Jason she said sketched on the paper table cloth different styles of bars and, as I understand, other things that might be done to the Caf_ King of Croissant premises.  She said Jason told her "it would be good to do it" and Stansfield said "if you do not do it, then I will do it".  She described the effect of this meeting:-
(Page 96 line 22 to page 98 line 9)
"A.  They really persuaded me to make me think - to make me think that, okay, it can look like a nice place and maybe I can make good money there.  They made it sound as if this thing could get turned into a really nice little restaurant.
Q.   Any discussion on that occasion with Jason about the cost of making these changes.
A.   Not with Jason, no.
Q.   Before that, had there been any discussion with you and Mr Stansfield on the question of costs.
A.   He had mentioned $20,000 rebuilding cost.
Q.   Who had mentioned.
A.   Arthur Stansfield.
Q.   Was anything said on that occasion about how you might finance the purchase of this Cafe Croissant.
A.   At what stage?
Q.   At any stage up to meeting Jason say.
A.   No.
Q.   At any time up to meeting Jason, had Mr Stansfield said anything on the topic of his involvement in the sale of this cafe.
A.   He told me that Arthur said that he would have - that he wanted 10% of profit once it became profitable and he said that Jason would be getting 5 of his 10%.
Q.   Did he say anything on the topic of moneys to be paid by the owners.
A.   He mentioned at the start that he was charging Mr Perez $4,000.
Q.   For what purpose.  Did he say.
A.   To sell the business.
Q.   To sell.
A.   Sell his business.
HIS HONOUR
Q.   Charging how much.
A.   4,000.

XN
Q.   How long was the meeting with Jason.
A.   Probably about under an hour.
Q.   When that meeting was concluded, did you discuss this matter with Mr Stansfield in the absence of Jason.  In other words, did Jason go first and leave you with Mr Stansfield.
A.   No, I think I actually left first, because I had to go to work.
Q.   On what basis did you leave Mr Stansfield on that occasion.
A.   I left.  Again, like every other day, we would speak on the phone.
Q.   Did you give Mr Stansfield any indication of your attitude to the possible purchase of this cafe at the time when you had been speaking with Jason or subsequently.
A.   Okay, he knew I wasn't interested but he just went ahead and prepared everything and just like persuaded me to go ahead with everything.
HIS HONOUR
Q.   I thought you told me, having discussed the matter with Jason and with Mr Stansfield, that you were persuaded it could be made into a nice place, a restaurant.
A.   Yes, but I hadn't said yes, I want to go ahead or, that I wanted it, but they had persuaded me, making me think that, yes, it could be a nice place.
Q.   Persuaded but did not tell them.
A.   I didn't say yes, I wanted it.  I never said that."
20 Next the plaintiff received letters from Stansfield dated 11th April 1997 (Exhibit P5), 14th April 1997 (Exhibit P6) and 15th April 1997 (Exhibit P7).
21 Exhibit P5 reads:-
"RE: KING OF CROISSANT CAF╔ - 284 PAYNEHAM ROAD
Dear Sandra.

Further to our meeting on 9 April 1997, we wish to confirm the following.
We have attended to discussions with Mr. E. Perez, Managing Director of King of Croissant Pty. Ltd, the owner of the caf_.
Mr. Perez has confirmed that the Franchise Licence is for sale.
We have negotiated a purchase price of $35,000.00, inclusive of all costs, including legals.
We have requested that Mr. Perez provide us with the details in brief in relation to the Caf_, they are as follow;
.    The franchise licence ("the Licence") is perennial and transferable.
.    The licence requires that you purchase any and all bakery products only, from The King of Croissant Pty. Ltd.
.    King of Croissant Pty Ltd. will guarantee a minimum weekly payment of $500.00 for 70 weeks, a total of $35,000.00.
.    The monthly rental is $1,083.00 per month and has a term of 5 years with a renewal to be negotiated.
.    The Franchise Licence Agreement has been drafted by Phillips Fox Solicitors, and will be registered.
Please note, we advise that we will seek to have various clauses amended in the Franchise Licence Agreement, to your benefit.
Based on the information provided to us we are of the opinion that the above is worth considering, our only qualification is the strength of the guarantee, ie. if the King of Croissant became insolvent, we would assume that the guarantee would be unenforceable.
Having taken into account the risk, we can obtain advise (sic) on your behalf with the view to mitigating any loss that may arise should the King of Croissant become insolvent.
Obviously, there is considerable more due diligence to be conducted, should you wish to proceed, please contact the writer at your earliest convenience and we will attend to the same.
Yours faithfully.
Solution Partners
A.W Stansfield"
The plaintiff said that neither before that letter nor subsequently did Stansfield mention the topic of a franchise or a franchise licence and although he had told her that the "guarantee" would stand only if she bought bakery products to the value of $500 per week from Caf_ King of Croissant nothing was said to her about the solvency or financial position of Caf_ King of Croissant.  She said "due diligence" were words Stansfield had explained to her in connection with Caf_ Va Bene to the effect that if Caf_ Va Bene were acquired and Wegener was not happy "we could pull out".  As to the final paragraph of the letter ("obviously there is considerable due diligence to be conducted, should you proceed, please contact the writer at your earliest convenience and we will attend to same") the plaintiff's evidence was:-
(Transcript page 100 line 10 to line 21)
"Q.  Did you contact Mr Stansfield.
A.   No, he would have contacted me and talked me into it.
Q.   Can you explain to the court how that happened.
A.   Well, we used to meet all the time so we would have gone for a coffee again and he would have told me it is a good business, do it.
Q.   Did you ever say to him, yes, I will do it.
A.   Not in the words like yes, I will go ahead and do it.
Q.   What kind of words or how did you indicate your attitude.
A.   Well, basically, just came to a time where they asked for a deposit and I give (sic) it to them."
22 The letter dated 14th April 1997 (Exhibit P6) referred to a meeting between the plaintiff and Stansfield on that date at 2.30 pm, to the letter Exhibit P5 and also enclosed the draft of an offer to be made to Perez (which the letter asked that she read and then telephone Stansfield with her instructions) and confirmed the plaintiff's instructions to negotiate the terms of the franchise licence agreement and the lease and "the provision for insolvency in relation to the guarantee".  The enclosed draft of the offer reads:-
"14 April 1997

Att. Mr. E. Perez
Managing Director
King of Croissant Pty. Ltd.
C/ 284 Payneham Road
Royston Park  S.A

RE:  CAF╔

Dear Elbio
Further to our discussion and correspondence, we confirm the following.
We have met with Ms. Sandra Camozzato and she has requested that we confirm her interest in the purchase of the Franchise Licence Agreement Caf_ at 284 Payneham Road, Royston Park.
We are requested to confirm her offer to purchase on the following conditions;
.    The purchase price is $35,000.00.
.    The franchise licence ("the Licence") is perennial and transferable.
.    The licence requires that you purchase any and all bakery products only, from The King of Croissant Pty. Ltd.
.    King of Croissant Pty Ltd. will guarantee a minimum weekly payment of $500.00 for 70 weeks, a total of $35,000.00.
.    The monthly rental is $1,083.00 per month and has a term of 5 years with a renewal to be negotiated.
.    The Franchise Licence Agreement has been drafted by Phillips Fox Solicitors, and will be registered.
.    The terms for a new lease be negotiated and vested with Ms. Camozzato.
.    Ms. Camozzato be provided with a minimum of 7 days due diligence or a maximum of 14 days due diligence.
.    A deposit of 20% will be paid on signing of contract and settlement to be on conclusion of due diligence.
We are requested to advise that Ms. Camozzato will require to satisfy herself of the following, prior to settlement;
.    The veracity of the Franchise Licence Agreement.
.    The veracity of the $500.00 per week payment for the period of 70 weeks.
We advise that we must address the above to Ms. Camozzato's complete satisfaction prior to settlement.
Please confirm your acceptance of the above via return correspondence.
Yours faithfully.
Solution Partners
A.W Stansfield"
The plaintiff, after initially denying that she received the draft offer and with, as I observed, considerable hesitation said "I think I might have received" it.
23 The letter dated 15th April 1997 (Exhibit P7) reads:-
"RE: KING OF CROISSANT CAF╔ - 284 PAYNEHAM ROAD
Dear Sandra.

Further to our meeting today at 3.00pm, we wish to confirm the following.
We refer to our discussion and letter of 11 April 1997.
We confirm your instructions to present King of Croissant Pty. Ltd. with your offer to purchase the Caf_, we have facsimiled the same at 2.45pm today.
We also confirm our retainer of 10% of profit once the Caf_ has been purchased and is profitable.
Should you have any queries, please the writer to discuss the same.
Yours faithfully.
Solution Partners
A.W Stansfield"
The plaintiff's attention was drawn to the third paragraph.  Her evidence was:-
(Transcript page 104 line 5 to line 16)
"Q.  Do you recall giving instructions to do that.
A.   No, I did not give instructions.
HIS HONOUR
Q.   Think a little more carefully, the letter of 14 April that you had from Mr Stansfield , when you got that, what did you do.
A.   I read the letter.
Q.   And.
A.   And didn't really respond to it in any way.
Q.   What do you mean you didn't really respond.
A.   I didn't respond, didn't say 'Yes, go ahead' or 'No, don't go ahead'.  I just accepted what he did."
and as to the meeting referred to in that letter she said she could not remember whether she had such a meeting and if she did she has no memory of exactly what was said.
24 The plaintiff said that the next event was she met Stansfield at Cibo Caf_ when he told her that Perez wanted a deposit of $10,000 and in answer to her question "Why $10,000 and should I pay (it)" he said "It wouldn't make any difference because you would be paying the balance in the next week or so" - the plaintiff's evidence is that she did not have in her mind, at the time, that part of the letter P6, the offer to Perez, which proposed a deposit of 20 percent to be paid "on signing of contract".  The plaintiff related that Pace then came to the Cibo Caf_ and Stansfield introduced her to the plaintiff as a lawyer who "would be looking after everything from now on".  The plaintiff said she asked Pace whether "It was safe to buy it because Arthur (Stansfield) had told me there were no record, financial records".  She said Pace asked Stansfield whether he was representing the plaintiff or Perez; Stansfield said he was representing the plaintiff and he had told Perez he was no longer representing him, whereupon Pace said to the plaintiff "Well you have guarantee so you can't go wrong" and then left the caf_.  She had been there, the plaintiff said, for five or ten minutes.  After Pace left, the plaintiff at Stansfield's request gave him her cheque for $10,000 payable to Solution Partners.  The cheque is Exhibit 1D20.  It is dated 18th April 1997.  It is endorsed on the reverse side "Please pay Serena Pace" above what appears to be the signature of Stansfield.  The plaintiff said that the meeting at Cibo Caf_ was on the day of the date of her cheque, and that she asked Stansfield not to bank the cheque without telling her because she had to transfer money into her account.
25 The plaintiff said that when she gave Stansfield the cheque he put a two-page document in front of her, said "It just meant that I was giving the $10,000" and asked her to sign it which she did without reading it.  The plaintiff identified her signature on Exhibit P10; it is undated, headed "Memorandum of Understanding" and states the parties to it to be King of Croissant Pty Ltd.  Atf The King of Croissant Unit Trust T/A King of Croissant called the "Licensor" and Caf_ Enterprises Pty Ltd.  Atf Caf_ Enterprises Unit Trust called the "Licensee".  By its terms it grants a licence to the licensee to use:-
.    the "business premises" described to be the business of retailing croissants, cakes and sweet and savoury pastries and other bakery items at the premises 283-285 Payneham Road, Royston Park;
.    the plant and equipment to conduct and operate the business;
.    all business systems, techniques and operations used by the licensor in connection with the business upon the terms and conditions to be recorded in a document to be executed by the parties (called the licence), the description of the licence being expanded to be "the terms and conditions set out in an agreement to be executed between the parties and headed "Franchise Licence" to be executed no later than 5pm on 21 April 1997";
and provides:-
.    the consideration for the licence is $35,000 plus stock at valuation but not exceeding $1,000 "to be paid by way of deposit in the amount of $10,000 payable upon execution of this Memorandum of Understanding and the balance of $25,000 plus stock at valuation but not exceeding $1,000 payable upon execution of the franchise licence".
26 The plaintiff related that about two days after the meeting at Cibo Stansfield telephoned and said her cheque had "bounced".  She said she reminded him of her request that the cheque not be banked before he told her, and offered him a replacement cheque but he replied he did not want another cheque, that Perez was "cracking up" and he wanted the $10,000 in cash.  The plaintiff said she asked Stansfield to come to her workplace, the Caf_ Va Bene, that night; he did so at about 10pm in company with Pace and the plaintiff gave Stansfield $9,500 in cash.  The plaintiff described that Stansfield and Pace "counted the money together.  After every thousand, Serena (Pace) would put it in the glove box of the car, and Arthur told her to write a receipt and she did that on the back of a parking ticket and Arthur signed it.  He said he was going to give it to Elbio straight away and that he would put the extra $500 in "and I would fix him up later".  The receipt is Exhibit P9.
27 The plaintiff said that on one or two occasions between 18th April 1997 and 12th May 1997 she went to see Pace at her offices.  On one occasion they discussed changing something in "the agreement", a payment of $100 a month, which the plaintiff did not agree with but which she said Stansfield had told her she had to pay to obtain Perez's guarantee; she said the question of a lease was also discussed with Pace and she told Pace more than once that she wanted "some financial books and records", a matter she said she had also asked Stansfield about, but she was informed by Pace that Pace had asked Stansfield and been told there were "no books, no records".
28 The plaintiff's evidence is that the weekend after she paid $9,500 in cash to Stansfield she "got the impression that something was wrong, something wasn't right" and she did not want to proceed with the transaction so she telephoned Stansfield, told him she did not want to go ahead with buying Caf_ King of Croissant and wanted her $10,000 returned.  She said Stansfield told her she could not "get out of it, that Elbio Perez would sue me, that I would have a hard time trying to get my money back off him and it would end up costing me more in the end" which she said she believed.  About half an hour later, the plaintiff related, Pace telephoned her, asked her what was wrong and why did she "want to get out"; the plaintiff said she told Pace she did not want to go ahead and wanted her money back to which Pace replied "You can't get out now, it's too late.  If you try, you are going to get sued", that Elbio had the plaintiff's money and that the plaintiff "would have a hard time getting it back off him".  The plaintiff said she believed Pace and that she would have to proceed.  The plaintiff explained that she thought her call to Stansfield had been to Pace's mobile phone.
29 The plaintiff's evidence of these telephone conversations placed them before her first visit to Pace's office which on the plaintiff's case was 29th April 1997.  Pace said the first visit was on 24th April 1997 and also said that the meeting at Cibo Caf_ was on 16th April 1997.
30 The plaintiff said that a few days after the telephone conversation, she and her father went to see Stansfield at his office in a meeting that lasted for up to 15 minutes.  She said her father told Stansfield "You got her in it, you get her out", that Stansfield and her father then argued, Stansfield saying "If you let her down, I won't ... she can't get out now.  If she tries, she's going to get sued".  She said Mr Camozzato left Stansfield's office and before the plaintiff left Stansfield asked her to telephone him when she arrived home; she did so and says she was told by Stansfield that she had to proceed with the purchase.  A few days later, about one week before 12th May 1997, the plaintiff said she and her father went to Pace's office where Mr Camozzato said to Pace "The same things he had said to (Stansfield) - I want to stop this" to which Pace replied "You are going to get sued, it's too late", then Stansfield entered the office by a "back way", he and Mr Camozzato immediately started arguing and Pace told them to leave; they did so and the plaintiff said that Pace "made me sign something again ... just something small" - she said Pace did not tell her what the document was about.  She then left the office still believing she had to proceed with the transaction.
31 The plaintiff related that at "the start of May" Stansfield and Pace visited her parent's house and spoke with her and her father.  She said Stansfield showed to, and discussed with, Mr Camozzato some plans for renovating the Caf_ King of Croissant premises, that Pace reported to her she would have to pay the $100 per month (relating to Perez's guarantee) and also told Mr Camozzato that he would have to engage an independent solicitor concerning his guarantee of the lease of those premises.  The plaintiff said that is all she could remember of what was said.
32 The plaintiff next described the events on 12th May 1997. She said Stansfield telephoned her to say settlement was to be on that day and arranged to meet her at the Cibo Caf_. There he asked her for a cheque for $1,270 payable to Solution Partners saying that he had paid Birdseye "to set up another company for me" and also asked for a cheque for $25,000 payable to Nicholas Birdseye Family Trust. She said Stansfield wrote out both cheques and she signed them. She related that then she went to see Pace in her office. She said Pace had files on her table and was sorting out papers. She said she told Pace she had given a cheque for $25,000 to Stansfield; in Pace's office "I signed something again and then Arthur Stansfield and David Hall walked in". David Hall was the solicitor acting for Perez. She said Stansfield told her that Perez did not want to give her the guarantee and someone said "This is the funniest settlement I have ever seen". Then, the plaintiff said, she went into another room with Pace, Stansfield and Hall where they were joined by Perez; she described that "all these documents were put in front of me", Pace pointed to pages and the plaintiff signed them. The plaintiff said she was told by Pace that the plaintiff's company had been "sold", a shelf company Kallis Pty Ltd had been obtained by Birdseye and the name of it would be changed. The documents the plaintiff signed are in Exhibit P12, the franchising licence, the parties to which are King of Croissant Pty Ltd and S. Camozzato Investments Pty Ltd, and to which there are attached two documents, the first a certificate signed by Pace to the effect that the plaintiff had been advised by her concerning waiving compliance with s7 and s8 of the Land and Business (Sale and Conveyancing) Act 1994 and the second, signed by the plaintiff, waiving the requirements under those two sections. The plaintiff said that no-one explained, or said anything to her about, the documents she signed. Her evidence generally about any documents she signed was that "I just signed what I was told to".
33 The plaintiff related that on 13th May 1997, believing that she had purchased the business, she and her mother went to Caf_ King of Croissant because she wanted "to see how things worked there".  Perez's wife, Elbia Perez, was there.  There was some discussion with her during which the plaintiff said she saw an invoice or order and then Mrs Perez called Perez who was asleep in some other part of the premises.  The plaintiff spoke with Perez during which she said she had been told by Stansfield that Perez had been turning over $500 - $800 a day to which Perez replied "That is not true".  She said she then asked Perez why he would not give back her $10,000 deposit and Perez replied he had not received it, he had received only $2,000 by a cheque drawn by Pace and Perez also told her he did have books and records but he had never been asked for them.  The plaintiff described that both she and Perez were upset and she then went to see Stansfield, demanded her money back and accused him of lying to her in saying Perez had her $10,000 - she said he responded "I couldn't give Perez that money because he owes me $18,000 and I never would have got it back from him".  She said Stansfield told her Perez had informed him what the turn-over of Caf_ King of Croissant was and that he (Perez) was lying if he said otherwise.  The plaintiff said she and Stansfield then (but later in her evidence she said it might have been the next day) went to a bank in O'Connell Street, North Adelaide where Stansfield obtained and gave her a bank cheque for $5,000 saying that it was all that he would give her "until we work something out, or even give me five for the work I have done" to which the plaintiff said she wanted the full $10,000 back.  The plaintiff said she then returned to Caf_ King of Croissant, that Stansfield arrived there and she asked him to repeat to Perez, but he did not, what she said Stansfield had told her on the Friday before the 12th May 1997, to the effect that Perez had told him the turn-over on that day was $700.  The plaintiff said she then left Caf_ King of Croissant but returned there about midnight after finishing work at Caf_ Va Bene and spoke again with Perez telling him that she wanted to get out of the contract to which he replied that they should get rid of Stansfield and then work things out between them.

34 It is agreed that the bank cheque for $5,000 given by Stansfield to the plaintiff was dated 14th May 1997 and debited to an account with the National Australia Bank in the name of Serena Pace Family Trust (Exhibit P13).
35 The plaintiff said that on the day she went to see Stansfield to demand the return of $10,000 Birdseye, at her angry demand, gave her a cheque for $25,000; it is Exhibit P14.  Payment of that cheque was stopped - the plaintiff says she was told by Stansfield that payment was stopped because Perez had threatened to sue Birdseye.
36 The plaintiff said that on a date after 14th May 1997 she had a meeting with Pace and Johnson about the Caf_ King of Croissant transaction and subsequently terminated their instructions.
37 In cross-examination, counsel for Stansfield traversed with the plaintiff her evidence of the events concerning the Caf_ Va Bene both before and after her introduction to Stansfield.  She agreed she told Stansfield that cash was being "skimmed" from Caf_ Va Bene by the proprietors and that in a meeting with Stansfield and Wegener, which she said was "probably" after her second meeting with Stansfield on 7th November 1997, she "probably" told Wegener that the vendors of Caf_ Va Bene had deliberately understated the turn-over and the Caf_ Va Bene business was much better than appeared in the "books produced" by which I infer she was identifying Exhibit P1.  The plaintiff said she "thinks" she instructed Stansfield to make an offer to the proprietors of Caf_ Va Bene but she could not remember if she saw the letter of offer; it is Exhibit 1D15 dated 22nd November 1996.  Amongst other things it puts an offer on behalf of the plaintiff and Wegener to purchase Caf_ Va Bene for the price of $450,000 and includes "We are requested to clarify that this offer is conditional upon the business producing the turn-over and profit commensurate with the purchase price and as described by Ms Camozzato".
38 The plaintiff said that Wegener may have told her, but she could not remember, that he required some proof of her assertion that the Caf_ Va Bene turn-over was greater than that shown in "the figures".  She said she "thinks" that after the date of 1D15 she spoke with the proprietors of Caf_ Va Bene about the need for some proof of the turn-over figures but "they would not let anyone see or basically know the truth" and she told Stansfield that.  However, the plaintiff said, that fact and that the proprietors would not produce the "black book" did not concern her because the requirement for "due diligence" meant that Wegener could change his mind if on entering the business he was not satisfied.  The plaintiff spoke of a contract being prepared for the purchase of the Caf_ Va Bene the terms of which were the subject of communications between Stansfield and advisers to the proprietors of Caf_ Va Bene; this, as I understand her evidence of what was put to her, occurred in January 1997.
39 It appears from Exhibit 1D17, a letter dated 7th January 1997 from Stansfield to one Barwa, that on that date the proprietors of Caf_ Va Bene withdrew, or reiterated the withdrawal of, "vendor finance", and further that the proprietors of the Caf_ Va Bene wanted to reduce from $20,000 to $5,000 the value of the stock at valuation included in the purchase price, an alteration which, the letter states, was not acceptable to the proposed buyers.  It would appear from the letter that those matters were potential obstacles to the proposed transaction.  The letter also notes that Stansfield was holding a "cheque payable to Norman Waterhouse Trust Account in the sum of $10,000 by way of deposit ... to be paid to Norman Waterhouse upon satisfactory resolution of the matters herein addressed".  I infer that was the cheque the plaintiff spoke about in her evidence concerning the Caf_ Va Bene, the cheque the plaintiff says was later returned to her by Stansfield.
40 The plaintiff was taxed concerning the meeting at her parent's house between her, her father and Stansfield, the meeting which brought the Caf_ Va Bene transaction to an end.  She denied that Stansfield attended at her father's request, that her father said in effect he was concerned about giving a guarantee of her borrowing's for a business the turn-over of which, as the plaintiff represented it, was unsubstantiated or that her father asked Stansfield whether he would be prepared to guarantee that, in the event something went wrong, he (Stansfield) would be personally liable.  She agreed she had seen the "black book", (she said she had flicked through it) but her father had not although he had asked to see it.  She rejected the suggestion that one reason the Caf_ Va Bene transaction did not proceed was that her father would not guarantee the loan to her unless he saw the black book.  She repeated that Stansfield "talked my father out of" the transaction but said she thought he had done that in her best interests.
41 Taken to the topic of the events concerning Caf_ King of Croissant and her and Stansfield's visit to those premises in April 1997, the plaintiff denied Stansfield told her on that occasion that Perez owed him some money and rejected the proposition that he told her the turn-over of Caf_ King of Croissant was $500 per day, not $500-$800 per day as she claimed; she also rejected the suggestion that Stansfield told her the guarantee by Perez was conditional upon her buying all her pastry products from Perez but said she did not "really understand" what Stansfield did tell her about the guarantee except that it was to be for 70 weeks which added up to the purchase price of $35,000.
42 The plaintiff was shown a letter from Stansfield addressed to her dated 11th April 1997 (Exhibit 1D18).  It includes "As discussed, we further confirm that as (Perez) is indebted to this firm, he is willing to compromise the purchase price to reflect a reasonable price".  She said she did not receive that letter and had not seen it before but agreed she received the letter of the same date, Exhibit P5.  She denied that on the date of the meeting with Stansfield, identified in the letters P5 and 1D18 to have been 9th April 1997, Stansfield told her Perez owed money to him and also showed to her Exhibit 1D19, a document entitled "Authority" dated 3rd April 1997 signed by Perez as Director of King of Croissant P/L, authorising and directing Birdseye to receive all moneys payable to the company on the sale of "the Bakery Caf_ situated at Royston Park for $25,000 and/or the Distribution Arm of the bakery at 20 Hill Street, Wingfield for $100,000" and to disburse the amounts received as directed in that letter, including $22,500 by way of fees to Solution Partners and $3,220 to Birdseye.  She said she first saw Exhibit 1D19 as an exhibit to Birdseye's affidavit during some interlocutory application in the course of these proceedings, and had she known Perez was indebted to Stansfield "I would have known everything Arthur was telling me was not to really encourage me to buy the caf_; it was just to get himself out of debt with someone else".
43 The plaintiff said that Exhibit P10, the Memorandum of Understanding, which bears her signature might have been the document she signed at Stansfield's request at Caf_ Cibo on the occasion she was introduced to Pace.  The plaintiff said that although the document was not handed to her whilst Pace was present she was not sure whether she saw it and signed it before Pace arrived or after she left.  The plaintiff's belief is that Stansfield appointed Pace as her solicitor and she (the plaintiff) agreed.  As to the cheque for $10,000 which she gave to Stansfield, the plaintiff said Stansfield told her it was to go to Perez.  She denied she raised with Stansfield whether the deposit was refundable.
44 The plaintiff was questioned about her plans for Caf_ King of Croissant.  She denied she intended to close the business immediately after purchase and renovate the premises; she said Jason's ideas (and those of his girlfriend, an interior designer) for renovation of the premises appealed to her but, as Stansfield had advised her, she did not intend to renovate the premises until the business was profitable, her plan being to work in Caf_ King of Croissant during the day and continue working at Caf_ Va Bene between 4pm and midnight.  The plaintiff identified among Exhibit 1D21 and Exhibit 1D22 some plans or sketches which, or a variation of which, she had (or might have) seen before 12th May 1997 but said that there was no reference to plans on an occasion she and her father and Stansfield looked at the Caf_ King of Croissant premises concerning the removal of a wall.  She agreed she met one Moffa, the owner of Caf_ King of Croissant premises and landlord to Perez, before settlement and there were discussions with Stansfield and with Pace about a rent free period during, or for part of, the time to be taken up in carrying out renovations; she denied that the landlord ever told her he agreed to a rent free period of six weeks commencing on 12th May 1997 although she knew that Stansfield and Pace, or both, were seeking a rent free period on her behalf but not the length or terms of it.  The plaintiff in her answers in cross-examination on these topics of renovation, a rent free period and a rent abatement period was unimpressive.  She said she borrowed $40,000 "to make up the balance (of the purchase price) and to have money ready to renovate" which she understood would cost less than $15,000.
45 The plaintiff's evidence is that she relied on the statement she said Stansfield made to her that the turn-over of Caf_ King of Croissant was $500-$800 per day, and when, on 13th May 1997, Perez told her the turn-over was $270 per week that was one of the reasons she consulted Pace and Johnson for advice on setting aside the contract concerning Caf_ King of Croissant.  She said she had asked Stansfield or Pace a few times before settlement for books and records of Caf_ King of Croissant concerning the turn-over and she was told by each of them that Perez did not have any.  When Perez told her he did have books and records she did not "remember" asking to see them.
46 In the plaintiff's original statement of claim the allegation is that Perez told her the turn-over was $250-$270 per week; that was amended to $250-$270 per day because, the plaintiff said, it was a typographical error.  The amendment was made on the first day of trial.  However, the plaintiff agreed she had a meeting with Pace and Johnson on 16th May 1997 but said she could not remember whether she told them Perez had said $270 per week or $270 per day.  There is before the Court a letter dated 16th May 1997 from Johnson Lawyers to the plaintiff which includes a passage to the effect that the plaintiff had instructed them Perez had said $250-$270 per week.  I reject the plaintiff's assertion that there was a typographical error in the statement of claim.  The plaintiff is not to be criticised for, perhaps, misunderstanding what Perez said to her but her claim to there being a typographical error is not to be believed and together with other matters concerning her evidence which I have or will mention in the course of these reasons brings me to have little confidence in her evidence where there is credible evidence in conflict with hers.  This matter of $270 per week or per day, though of small moment in itself, is an example of the plaintiff's apparent unwillingness to tell, or to try to remember, the truth if she perceived it to be contrary to her claims about the conduct of other parties in this case.
47 In cross-examination by counsel for Pace, the plaintiff adhered to her evidence that when on 12th May 1997 she signed the document "Instrument of Waiver by purchaser" and other documents, part of Exhibit P12, in the plaintiff's office, no-one spoke to her then and no-one had spoken to her previously about the contents of it other than it was a franchise licence.  She said she thought the 12th May 1997 was the first time she had seen the document but then she said she might have, she was not sure, seen earlier drafts and no-one explained any part of them to her.
48 The plaintiff was taken to the letter from the National Australia Bank (Exhibit P2) and to the conversation she had with Rigoni, about incorporating a company, concerning Caf_ Va Bene.  There were many questions to her probing her knowledge or memory concerning those and related matters.  Her response, more often than not, was "I do not remember".  The plaintiff is a young woman and, as I assess from her evidence, is immature but I find it difficult to accept that her memory of events other than the focus she had upon some of them is as poor as she maintained; this is perhaps encapsulated in her declaration "I remember the main points and all the bad things that they did".
49 The plaintiff said that when Pace was introduced to her by Stansfield at Caf_ Cibo he said she was his fiance and a lawyer.  She is not sure whether that introduction was on 18th May 1997, the date of the cheque Exhibit 1D20 but she said it was the day she handed the cheque to Stansfield.  The plaintiff denied that on that occasion:-
.    she said to Pace referring to Exhibit P10 (the Memorandum of Understanding) "you are a lawyer should I sign it";
.    Stansfield said to Pace words to the effect that Exhibit P10 was a memorandum regarding the purchase of a licence to be drawn up in the near future and the memorandum provided for a deposit of $10,000;
.    Pace said "Is the deposit refundable" to which Stansfield said "Yes";
.    she asked Pace whether she could get the deposit back if it were paid;
.    Pace said to her "If you are asking about whether you can get your deposit back, why are you going ahead in any event";
.    Pace said "It is up to you whether or not you sign the document but if I were you I wouldn't sign anything if I was thinking of possibly pulling out anyway".
The plaintiff adhered to her evidence that in Pace's presence Stansfield said that Pace would be her lawyer.
50 The plaintiff was taken to her statement of claim which she said she had seen before.  Paragraph 9A pleads, to the effect, that on a date the plaintiff could not recall but it was after 23rd April 1997 she signed in the office of Pace and in the presence of Pace and Stansfield a document described as a Memorandum of Understanding between King of Croissant and "an entity described as Caf_ Enterprises Pty Ltd atf Caf_ Enterprises Unit Trust".  That paragraph was inserted in November 1998; the plaintiff said she "probably" instructed her solicitors to include the paragraph because "that's probably what I thought happened at the time.  I did remember a lot more back then".  She asserted there was a day, after 23rd April 1997 and before 12th May 1997, on which she did sign a document of "a few pages" at Pace's office but she could not remember what it was or its purpose - "there was never any explanation on any document".  This evidence is another example of the plaintiff in my view being an unreliable witness.
51 The plaintiff said that on the first occasion she went to see Pace in her office (she said she thought it was about a week after giving cash to Stansfield at the Caf_ Va Bene carpark and not the following day) she was unsure whether she took with her a draft of the franchise licence Exhibit P12 given to her by Stansfield, or that if she did not take it Pace had it on that occasion, but she said she was sure she did not spend over an hour with Pace.  The sum of the plaintiff's evidence as to any document she gave to Pace on this or a later occasion can be inferred from her response at page 325 concerning Exhibits 2D30 and 2D31; "I can't remember which one I have given her if I gave her any".  The plaintiff said "I'm pretty sure it never happened" that Pace spent an hour or so going through with her a draft of the franchise licence.  This is contrary to the evidence of Pace, upon that and other topics concerning Pace's advices to and her dealings with the plaintiff, which I will come to.  Compared with the evidence of Pace upon these matters, the plaintiff was singularly unimpressive and in my view is not to be relied upon - indeed the plaintiff was petulant and aggressive in her answers to questions upon those matters.
52 The plaintiff denied that in the first meeting with Pace at her office Pace said Stansfield had told her that the cash paid by the plaintiff to Stansfield in the Caf_ Va Bene carpark had been paid into the account Serena Pace Family Trust and Pace said that was unusual, it should have been placed in Mr Hall's or Johnson Lawyers Trust Account; she denied she told Pace she had given the money to Stansfield because Perez owed him a lot of money and the plaintiff did not want Perez to get his hands on the money.  She also denied that Pace told her she would act for her only concerning the terms of the franchise agreement, the lease, necessary documents, like settlement statements, and not concerning whether the transaction was a viable proposition, or negotiations with Perez in that respect.
53 The plaintiff was taxed about the occasion Stansfield and Pace visited her parent's house, which from Pace's evidence I find was on 30th April 1997 and which the plaintiff said was before the date she told the Court she spoke to Stansfield, and then to Pace, on the telephone and was told she would be sued by Perez if she tried to get out of the Caf_ King of Croissant transaction.  The plaintiff denied that either at the meeting at her parent's house, or when she and her father spoke to Pace at her office (the day she said Stansfield came in through the back door) did her father express concern about being a guarantor and she denied she told Pace to in effect disregard her father's apparent concern on that matter.
54 The substance of the evidence which Pace gave was put very squarely to the plaintiff and in considerable detail concerning, inter alia, communications, or meetings, between Pace and the plaintiff in the period 7th May 1997 to 12th May 1997.  It included, before 12th May 1997, that Pace told her if the plaintiff "hated" the Caf_ King of Croissant she should not and did not have to settle; and on 12th May 1997 Pace advised her not to proceed with the transaction.  Those matters the plaintiff denied and as to other matters put to her of her conversations, or dealings with Pace or Johnson, the plaintiff said she did not remember, that answer being given, on many occasions, upon subjects the substance of which I find it very difficult to accept her answer except that it demonstrates at the very least the plaintiff has a very poor memory.  A particular example concerned questions to her about what was said at a meeting she, and her father, had with Pace and Johnson on 16th May 1997 a note of which, as I accept, was made by Ms Lucy Byers (a clerk to Johnson) who was present at the meeting.
55 The plaintiff called her father.  Mr Camozzato's evidence concerning Caf_ Va Bene to the point he agreed with National Australia Bank to guarantee a loan of $140,000 for the purchase of Caf_ Va Bene was to much the same effect as the plaintiff's evidence.  He said that before the meeting he and the plaintiff had with Stansfield at Mr Camozzato's house the plaintiff had mentioned "another book" relating to Caf_ Va Bene demonstrating it generated more money.  He related that at the meeting Stansfield said the Caf_ Va Bene was too expensive for the plaintiff, that if she were to sell it later she would not recover the cost, that Wegener had asked to see the "black book" but the proprietors wanted an extra $50,000 to show the book, and then Stansfield said "Sandra I advise you not to go ahead with this purchase and I stand to lose $21,000 believe me".
56 Mr Camozzato said that about fifteen days later the plaintiff spoke to him concerning Caf_ King of Croissant, and renovating it, and she asked him to be guarantor for $40,000.  He later learned that the plaintiff had paid a deposit of $10,000.  Somewhat illuminatingly, he said the plaintiff "always tell me things after the event, not before".  Mr Camozzato described that he went with the plaintiff and Stansfield to Caf_ King of Croissant and there met Perez and Mr Moffa.  He said there had been talk with Stansfield that in the future a wall would be knocked down to enlarge the premises.

57 Mr Camozzato spoke of the occasion Stansfield and Pace came to his house and Stansfield showed to him "documents and papers".  He said Stansfield took them away before he had time to ask Stansfield to explain "the nature of the documentation".  Subsequent to that meeting, Mr Camozzato said, he and the plaintiff went to Stansfield's office and he told Stansfield that the plaintiff did not want to proceed, to which Stansfield said that it was too late, that Mr Camozzato had let the plaintiff down but he (Stansfield) would not.  He and the plaintiff then spoke to Pace about "stopping the whole operation" during which Stansfield came into Pace's office and first Stansfield and then Stansfield and Pace "insisted" that the deal proceed to which Mr Camozzato said no and he was sent out of the room.
58 In cross-examination by counsel for Stansfield, and concerning the Caf_ Va Bene, Mr Camozzato said that the plaintiff told him the figures in the papers she showed to him were not accurate and more was being earned.  He said he spoke to the owners who told him the business was sound.  He trusted them.  On one occasion he did ask for paper "proof" but the conversation was turned to concentrate on the price.  He said he paid a deposit of $5,000 but then decided the transaction should not proceed because "one morning" he came to the view Caf_ Va Bene was too large for the plaintiff to manage herself and "even if she had the help of somebody else it would have been still a concern which was far too large for her"; he rejected the suggestion he changed his mind because he was not satisfied concerning the actual turn-over of the business.  When approached again by the plaintiff, after the first proposal to buy Caf_ Va Bene was abandoned, he judged his own exposure upon a guarantee for $150,000 was less risky and he was happy to proceed, until Stansfield persuaded him otherwise.  He denied that he asked Stansfield to guarantee that the turn-over was $25,000 to $28,000 per week, as the plaintiff told him, or that Stansfield said he would not guarantee because he had never seen the black book.
59 Taken to the occasion when he and the plaintiff and Stansfield went to Caf_ King of Croissant, and there met Perez and Moffa, Mr Camozzato rejected that the plaintiff had told him she intended to close the premises immediately on purchase and rejected that Moffa agreed to consent to refurbishment; he said there were discussions with Moffa on the latter topic but they were incomplete.
60 Mr Camozzato said it is not the case that the reason for the meeting he and the plaintiff had with Stansfield when he asked Stansfield to get the plaintiff out of the transaction concerning Caf_ King of Croissant, was because he had told the plaintiff he was withdrawing his guarantee.  He said the reason for his request to Stansfield was because Stansfield was pressuring them along too quickly, that he (Mr Camozzato) wanted all the documentation including "daily turn-over figures, the lease figures and management costs, running costs of the premises and the profit, the true profit", to form an opinion about Caf_ King of Croissant explaining that although he had not sought such things in relation to Caf_ Va Bene that was because his daughter worked there and he trusted her when she told him about the turn-over of that business.
61 In cross-examination by counsel for Pace, Mr Camozzato said that he had not read Exhibit P6 before.  Mr Camozzato gave his evidence in Italian and the document was translated to him.  Exhibit P6 includes the proposed offer to Perez.  He said that was not read out to him by the plaintiff but "we discussed it" and, he said, when Stansfield and Pace visited his house (on 30th April 1997 as I have said) he thinks the matter of a franchise licence was mentioned by Stansfield in the plaintiff's presence; and before that meeting the plaintiff had told him she had been to see Pace at her office and he saw that the plaintiff had documents which he said looked like some of those among Exhibits 2D28, 2D29 and 2D31.  He described that in the meeting at his house with Pace and Stansfield there were large numbers of documents, and there were plans, and during the meeting, which was conducted in Italian and English, the plaintiff was asked to and she did retrieve documents from her bedroom.  He also said it was possible a copy of 2D32 was given to the plaintiff at the meeting.  That exhibit is a letter from Johnson Lawyers to Mr Hall dated 29th April 1997 commenting upon the draft franchising licence.
62 Taken to the occasion (which I find was on 2nd May 1997) when Mr Camozzato and the plaintiff went to see Pace in her office and say they asked her to stop the transaction (he said the conversation was mostly in English) Mr Camozzato denied he told Pace he was worried about losing his property and was having second thoughts about being a guarantor; he rejected the suggestion that the plaintiff was pressing him to be her guarantor.  It was on 9th May 1997, Mr Camozzato said, that he saw a solicitor and was advised about the guarantee he signed concerning the lease of the Caf_ King of Croissant premises.
63 The plaintiff called her mother Emilia Camozzato.  She was at the house when the meeting with Stansfield and Pace took place on 30th April 1997 but she said she could not remember much of what occurred.  As to the meeting at her house, which resulted in the Caf_ Va Bene transaction not proceeding, she said Mr Camozzato did not ask Stansfield to guarantee the turn-over of Caf_ Va Bene.  She said she could not remember whether the conversation was in Italian or English, said she does not understand everything in English, and were the conversation to have been in English either Mr Camozzato or the plaintiff would have interpreted it to her.  As to each of those meetings in my view no reliance can be placed on Mr Camozzato's evidence of what was said or not said.
64 In his evidence Stansfield described that his business as Solution Partners is, and was, restricted to the giving of commercial advice; "in other words the due diligence or the bona fide's of any particular transaction and for that purpose I engage professionals".  He explained "due diligence":-
(Transcript page 568 lines 24 - 31 inclusive)
"A.  Your Honour, basically if a proposition - if a particular client has a proposition, more often than not they're very busy running their own businesses, so they come to people like myself and say 'Will you do the work?' and I do that for an agreed fee.  If that work entails locating professional accounting advice or auditing advice or acquisition, I find the relative experts to assist in that."
65 Stansfield said that he met the plaintiff on 31st October 1996 and again on 7th November of that year, the first meeting being of a "fact finding" nature and the second to agree on his fees, and he made notes.  He said the plaintiff at the first meeting told him Mr Camozzato, on the advice of Mr Vozzo, had withdrawn his support for the purchase of Caf_ Va Bene, that he lost half the deposit, that she wanted to pursue her desire to purchase the caf_, to the purchase of which for $450,000 she could contribute $100,000, and she was looking for an equity partner to invest $250,000.  The plaintiff did not produce to him any figures concerning the business but informed him the Caf_ Va Bene income was more than was being declared.
66 At the second meeting Stansfield said he handed to the plaintiff Exhibit P4 which she read and told him the matters which the letter asked her to confirm.  He said he told the plaintiff of his concern that absent any "documentation" of the profitability of Caf_ Va Bene greater than that shown in the declared income it would be difficult to find a silent partner to invest in the business.  He said that on 15th November 1996 he arranged a meeting at his office to introduce the plaintiff to Wegener during which Wegener raised the matter of the turn-over of Caf_ Va Bene, a topic as to which Stansfield said he had told Wegener there was undeclared income.  He said the plaintiff told Wegener the turn-over was between $250,000 and $300,000, more than was declared.  Wegener agreed in principle to the proposed transaction and the plaintiff told Stansfield "to get on with it".  Exhibit 1D15 is a letter dated 22nd November 1996 from Solution Partners to Mr and Mrs Delorso in which Stansfield states that he had been retained by the plaintiff and Wegener to assist them "with the commercial considerations surrounding the proposed purchase" of 'Caf_ Va Bene' and was requested by them "to table the following offer".  He then arranged a meeting between the plaintiff, Wegener and Mr and Mrs Delorso on 29th November 1996 when "due diligence" was discussed, which Stansfield said included the verification by the plaintiff and Wegener that "the representations made to them were real"; Stansfield said that Mr and Mrs Delorso were upset about that topic pointing out that because the plaintiff worked at Caf_ Va Bene "you don't need due diligence" and there was no agreement about that matter.
67 Stansfield related that between 29th November 1996 and 7th January 1997 there were negotiations upon the basis that the plaintiff and Wegener were pursuing the purchase of Caf_ Va Bene and he had many meetings with the plaintiff including one on 10th December 1996 where the establishment of a corporate entity to structure the relationship between the interests of the plaintiff and Wegener in the proposed acquisition of Caf_ Va Bene were discussed, concerning which Stansfield said he proposed that Birdseye be engaged to give advice and to do the necessary work, all as set out in Stansfield's letter to the plaintiff dated 13th December 1996 (Exhibit 1D16).
68 Stansfield said that in January 1997 he was informed that "vendor finance" from the proprietors of Caf_ Va Bene would not be available and between the 7th and 9th January 1997 he met Mr Camozzato in a discussion with Wegener when Wegener agreed he would contribute an additional $50,000.  Stansfield said he was not aware Mr Camozzato was involved in any way in the proposed purchase; he understood the plaintiff was obtaining $100,000 from a source other than, and not involving, Mr Camozzato.  In that meeting he said Mr Wegener asked Mr Camozzato what he knew of the turn-over of Caf_ Va Bene and Mr Camozzato replied the plaintiff knew, she was the manager, to which Wegener said "Well that's all well and good but we should see some proof and I understand we will have the opportunity to verify that at some stage".  Stansfield agreed in evidence that this matter of verification was important not only to Wegener but also to Mr Camozzato.
69 Stansfield said that after the day of that meeting he was told by the plaintiff that Mr Camozzato had withdrawn his financial support for the plaintiff.  As I understand his evidence Stansfield was surprised because he was unaware Mr Camozzato was financially involved in the matter.  Then, Stansfield said, he met the plaintiff and Mr Camozzato at the Camozzato's house.  It is not clear to me what transpired at that meeting which he said was between 9th January and 16th January 1997; from his evidence at page 589 I understand him to say that the plaintiff requested the meeting and Mr Camozzato decided to withdraw his support for the plaintiff.  Then there was an unsuccessful approach to the Commonwealth Development Bank by Birdseye on behalf of the plaintiff for finance.  Next Stansfield said toward the end of January 1997 or early February 1997 Stansfield again went to the Camozzato's house "to discuss the purchase of Caf_ Va Bene with the plaintiff and her parents ... because her father had changed his mind".
70 Stansfield said that at that meeting Mr Camozzato told him that "because of constant pressure from (the plaintiff)" he had decided to proceed, but he was not happy with the transaction about which he had changed his mind two or three times; that the plaintiff was too young, the business of Caf_ Va Bene too big for her and "are you prepared to guarantee it, is (Wegener) prepared to guarantee it".  Stansfield said he replied that neither he nor Wegener would "guarantee it" to which Mr Camozzato said "I'm happy you feel that way because I'm not going through with it.  That's it.  I'd rather she bought something smaller.  Help her to buy something smaller and I'll support her".  Stansfield denied that he tried to persuade the plaintiff or Mr Camozzato from continuing with the purchase of Caf_ Va Bene.  He said that he told the plaintiff and Mr Camozzato that by abandoning the purchase of Caf_ Va Bene his "success fee was in some peril of being achieved" and it was agreed he would look for another business, a smaller business, and restructure his fee.
71 Stansfield's evidence is that he raised again with the plaintiff the topic of fees on the way to the meeting with Jason Brinckett:-
(Transcript page 598 line 33 to page 599 line 24)
"A.  Sandra said that the prospect of her having to work in the cafe King of Croissant after refurbishment would require my ongoing assistance and retainer, and we discussed the fee for that 10 per cent after the cafe became profitable.
Q.   How does that agreement relate back to the initial success fee of $21,000, the subject of your counter claim.
A.   Because she was aware that I was getting a fee, I was getting my fees repaid by Mr Perez in relation to the restructure of his business.
Q.   Listen to the question:  How did that agreement relate back to your previous claim for a success fee of $21,000.
A.   That was it, the 10 per cent after profit.
Mr Di FAZIO:        Could I indicate that all my objections are still maintained.
Mr GRIFFIN:         It has clearly been put to the plaintiff.  It is not an admissibility point.
HIS HONOUR
Q.   Do I understand you to be saying that, in place of that which you continued to assert you were entitled to, the success fee for the Cafe Va Bene, that a new agreement was entered into.
A.   Yes
XN
Q.   That agreement was the 10 per cent of the profit of the King of Croissant cafe, once that business became profitable.
A.   That's correct."
72 The prospect that the plaintiff consider the purchase of the business of Caf_ King of Croissant, Stansfield said, was raised by him at a meeting he had with the plaintiff on 9th April 1997 when he told her he was aware of that business "because Perez had (is) an existing client and the possibility might arise whereby she could purchase that caf_ ... this business is for sale for $60,000.  You could probably buy it at a considerable discount.  Mr Perez is indebted to us so he is more inclined to do a reasonable price for it".  He said he mentioned $35,000 and said to the plaintiff that Perez "was a former client that we had conducted some work for, and had reneged on payment to myself and to the various people that I had involved in the restructure of his business and that he was indebted to us, and, as I recall, I showed her the irrevocable authority".  He identified Exhibit 1D19 as the irrevocable authority.
73 Stansfield related sending, and he identified, the letters Exhibit P5, P6 and P7.  He said that the letter Exhibit 1D18, dated 11th April 1997, (the letter which includes the passage that Perez "is indebted to this firm") was sent to the plaintiff before the letter of the same date (Exhibit P5) but he did not receive any response to it from the plaintiff.
74 Stansfield said that about mid-April 1997, around the time the price for Caf_ King of Croissant was being negotiated, he told the plaintiff Perez had informed him that the turn-over of the business was $500 per day and the trading hours were from 9 or 10am until 3pm five days a week.  His evidence is that Perez on 15th April 1997 told him of the turn-over.  Stansfield said that he asked the plaintiff which lawyer she wanted to use; she enquired if he knew someone.  Stansfield and Pace lived in a defacto relationship.  He said he arranged for Pace to meet him and the plaintiff at Cibo Caf_ and that happened on 18th April 1997.  Pace, he said, arrived about 15 or 20 minutes after Stansfield and the plaintiff and remained there for some 10 minutes.  Stansfield said that before Pace came he showed to the plaintiff some plans, and drafts that preceded Exhibit 1D21, concerning the refurbishment of Caf_ King of Croissant which had been prepared, at his request on the plaintiff's instructions, by the wife of Jason Brinckett after the meeting the plaintiff had with Brinckett at Universal Caf_.
75 Stansfield said that when Pace arrived at Cibo, he explained to her the "contemplated transaction", that the plaintiff was willing to pay a deposit, he produced Exhibit P10, the Memorandum of Understanding, and gave it to the plaintiff to read.  He said the plaintiff asked Pace whether she should sign it; she signed it after Pace had left.  At his request the plaintiff gave him a cheque for $10,000 payable to Solution Partners because "I was to hold the money".  His evidence is that the plaintiff did not say he should not bank the cheque without first notifying him - he said she told him to "hang on to the cheque for one or two days (as) she had to transfer funds".  He said he "hung onto" the cheque until 23rd April 1997 "at which time she told me to bank it", it was dishonoured, he telephoned the plaintiff to inform her of that and she said she would fix it; then on 24th April, he believed, the plaintiff telephoned him to "come and get" the money, he went to Caf_ Va Bene with Pace and the plaintiff gave him $9,500 in cash.  He denied he demanded cash.
76 Stansfield's evidence of when it was he banked the cheque was wholly wrong.  It was banked on 18th April 1997 (Exhibit P58).
77 Stansfield said that between 24th April 1997 and 1st May 1997 the plaintiff telephoned him asking for books and records to verify the turn-over of Caf_ King of Croissant.  He had previously been informed there were no books and records, so he arranged to meet with Mr Hall and Perez "to get something in writing".  He said he met them in his office on 1st May 1997.  All then adjourned the meeting to the Queens Head Hotel where, Stansfield said, he was told by Hall to leave and return later.  He did so and on his return he was told by Mr Hall that there were no books and records and that he, Mr Hall, would write to Pace.  Stansfield said that a day or two later he was provided by Pace with a copy of a letter she had received from Mr Hall.  Because Perez had told him he was upset about being questioned concerning books and records when the plaintiff was buying a franchise, that she was going to demolish the place and not trade and that he (Perez) wanted to withdraw from his guarantee concerning the Caf_ King of Croissant, he had another meeting with Mr Hall and Perez, lasting about an hour (Mr Hall attending for some 15 minutes only) and Perez told him "there are no books and records.  You know there are no books and records because you've been dealing with me since June".  Stansfield's evidence is that he knew there were no books and records because in his activities to restructure Perez's business the National Australia Bank had asked for books and records which Perez could not produce.
78 Stansfield said he reported to the plaintiff that Perez had no books and records and the plaintiff replied "Oh".
79 Stansfield said that in late April or early May the plaintiff, in an agitated and upset state, telephoned him and said her father had "Once again withdrawn his support for the guarantee and she could not proceed" and asked him whether she could get out of the contract.  He said he replied Perez was litigious and "If we seek to back away from this contract without a proper reason there will be repercussions ... if you are not sure don't proceed".  The plaintiff then asked him to "Get money for me from someone else".  Stansfield described that next there was an acrimonious meeting between him and Mr Camozzato which the plaintiff attended; Mr Camozzato said that neither he nor the plaintiff wanted to continue and told him "You've got her into this, you get her out".  Stansfield said he told Mr Camozzato that in his opinion "We were all in it".  Mr Camozzato left, the plaintiff remained and he said she asked him "To get the money from someone else".  Stansfield related that he approached National Australia Bank but the bank refused to make finance available without a guarantee.

191 As a general observation I accept Pace's evidence in preference to that of any other witness where there is a conflict between them. It follows that I reject the plaintiff's submission it should be found that Pace was untruthful in her evidence of what transpired on, or soon after, the occasion on 23rd April 1997 when the plaintiff handed $9,500 in cash to Stansfield in the carpark of the Caf_ Va Bene, and I accept her evidence that it was not until 24th April 1997 when the plaintiff came to her office that Pace learned that the cash sum paid was in connection with the Caf_ King of Croissant. Pace ascertained from Stansfield that he was going to bank the cash the plaintiff had paid to him; I accept her evidence that, remarking to the plaintiff it was unusual, the plaintiff told her to the effect it was Stansfield's money and she did not want Perez to get his hands on the money. It appears that Pace accepted what she was told, but I infer that, concerned about it, and being presented by the plaintiff, as I find, with a draft of the proposed franchise licensing agreement, she spoke with Johnson and then informed the plaintiff her retainer from the plaintiff was limited to advising her on the contents of the agreement, the lease and preparing any other essential documents. In my opinion it was not unreasonable for Pace to see the position to be that her engagement was to carry through a transaction which the plaintiff and Perez had already agreed upon and which she (Pace) had had nothing to do with; her position was not unlike that of the solicitor in Bristol and West Building Society v Mothew (1996) 4 All ER 698. Pace understood, and reasonably so, that her task was to reflect in the document the plaintiff's view of, and her instructions concerning, the transaction. However Pace was told by Stansfield later in the day of 24th April that he had paid into the National Australia Bank account (the account titled Serena Pace Family Trust) some of the moneys he had received from the plaintiff and he was holding the rest; further she knew that on that day, or the previous day, she had signed cheques in blank in relation to that account and left them with Stansfield.
192 It is submitted that Pace, albeit she knew the plaintiff had been informed of the personal relationship between Pace and Stansfield, also knew but failed to disclose to the plaintiff that Stansfield had paid portion of the deposit into Pace's account, that Stansfield was using the money in that account to his and perhaps Pace's benefit and thereby thwarting or potentially thwarting the purpose for which it had been paid, that is as part of the purchase price for the Caf_ King of Croissant; it is urged that Pace on this account, and in other respects, was in breach of her fiduciary relationship to the plaintiff because of the position of hopeless conflict between her duty to the plaintiff and the benefit she and/or Stansfield derived or stood to derive from the moneys in the bank account and her loyalty to Stansfield in their de facto arrangement.
193 Pace's reaction to being told that the cash she had seen handed by the plaintiff to Stansfield was related to the transaction concerning the Caf_ King of Croissant, was that it should have been held in the trust account of Johnson's lawyer or Mr Hall.  That was a correct reaction.  She spoke to Stansfield who told her he was going to bank the money.  She judged that to be, and told the plaintiff it was, highly unusual.  The plaintiff's response, that it was Stansfield's money, that Perez owed Stansfield a lot of money, brought Pace to decide after apparently consulting with Johnson, to seek to limit the terms of her retainer.  In my opinion good practice and prudence required more of Pace.  She should, at the very least, have explored further with the plaintiff her understanding of her obligation concerning the purchase price, sought from Stansfield by what authority Stansfield was to hold the deposit, or spoken with Mr Hall whom she knew to be acting for Perez.  Even if those steps could be said to not be required at that point, when she learned that Stansfield had paid part of the deposit into Pace's account and was holding the balance, then notwithstanding the manner in which she had sought to define her retainer, she should at the least have informed the plaintiff of this highly irregular dealing with the plaintiff's money, explored with the plaintiff the whole question of the deposit, advised her about more prudent, safer means to keep the deposit moneys secure and (knowing how the deposit had been dealt with by Stansfield) explored with the plaintiff the matter of the payment of the balance of the purchase price.  Instead she did none of these things and knowing that some unstated portion of the deposit moneys had been placed to the credit of her personal account, she did not even enquire any further into that.  She chose to do nothing.  She left the plaintiff in a vulnerable position reliant on whatever rights might be deduced from the plaintiff's remark that it was Stansfield's money and left her exposed to the risk of loss.  In my opinion Pace's personal relationship with Stansfield is the only possible reason why she did nothing.  If her choice, consciously or unconsciously, was not to do that which in my view any competent solicitor would have done, then she should have ceased to act for the plaintiff.  Her personal interests were, or at least they were potentially, in conflict with her duty to the plaintiff.
194 The conflict manifested itself again on the occasion the plaintiff made it known to Pace that she did not want to proceed with the transaction but because of, inter alia, Stansfield's claim that he was at risk of being sued by Perez, she felt she had to. What Pace said to the plaintiff on that occasion would have been barely sufficient, even if the background had not been as it was. Pace knew that Stansfield had directed part of the deposit into her account, and that she had made no enquiry to ascertain what had happened to it. In my opinion Pace should have advised the plaintiff that the "reason" why the plaintiff felt obliged to proceed should be investigated, it being apparent on Pace's own evidence that the plaintiff was being pressured, or felt she was being pressured, to continue against her wishes. The plaintiff was not, and could not have appeared to Pace to be, a mature commercially wise and informed person capable of protecting, or even properly weighing, her own interests. Concerning the conflict between what she wished to do - withdraw from the transaction - and the consequences she feared, the plaintiff was in need of legal advice from a person with no interests to serve, or have regard to, except those of the plaintiff. That was not the position in which Pace was placed, there being an obvious conflict between on the one hand Pace's close relationship with Stansfield and her knowledge of his dealings with the deposit, and on the other her duty to the plaintiff in the position in which the plaintiff found herself. Pace, if she was not prepared to advise the plaintiff of what could or might be done to resolve the plaintiff's dilemma, should have ceased to act for her. She did not make that decision and in my opinion thereafter, and however thorough or careful she thought her advice to the plaintiff to be about the waiver of her rights under the Land and Business (Sale and Conveyancing) Act 1994, she should have known that the plaintiff was labouring under the apprehension that she had to complete the transaction, and that was because Pace's conflict between her interests and her duty had deprived the plaintiff of the benefit of timely, competent advice.
195 Although I accept Pace's evidence of what she said she told the plaintiff on 24th and 30th May 1999 were the limits of her retainer, to the effect that she was not undertaking any obligation to advise the plaintiff on the commercial prudence of the transaction, or to negotiate concerning purely commercial matters, in the circumstances that does not shield Pace from the consequences of the breach of her fiduciary duty to the plaintiff.
196 In my opinion a solicitor, acting as Pace was for the plaintiff, but not having the personal interests and conflict Pace had, on learning that Stansfield had paid some of the deposit into his private bank account and retained the balance, would or should have informed the plaintiff of that, advised her concerning the risk to the deposit, advised her what should be done to discover Stansfield's authority for what had occurred, and canvassed with her the matter of when and to whom the balance of the purchase price was to be paid so that the plaintiff could be appropriately protected.  Not to do so was negligent.  But even if I am wrong in that, and assuming there was no conflict, as I have identified it, in Pace's position, the failure to explore with the plaintiff and advise her concerning her wish not to proceed, was negligent.  An investigation at that stage would have uncovered to Pace the offer made by the plaintiff and the Memorandum of Understanding; the latter referred, somewhat nebulously, to a 'licence' the terms of which were neither set out in the memorandum nor attached to it.  The plaintiff could very well have been advised that she was not contractually bound to proceed.  Although Pace did not have, and as I understand had not read, the Memorandum of Understanding or the plaintiff's letter of offer, she appears to have been of the view that the plaintiff was not contractually bound to proceed.
197 The advice of a solicitor, with no interest to protect other than that of the plaintiff, would in all probability have discounted to naught the plaintiff's stated reasons for feeling obliged to proceed and avoided the plaintiff entering into the transaction.  Pace's negligence was causative of the plaintiff's loss.
198 Concerning the advice Pace said she gave to the plaintiff on the topic of waiving her rights under the Land and Business (Sale and Conveyancing) Act 1994, that whole matter was clouded by the plaintiff being bereft of advice which she should have been earlier given to resolve her dilemma about proceeding with the transaction. I do not find it necessary to explore the plaintiff's submission that upon the principles to be extracted from McNamara and Ors v Commonwealth Trading Bank of Australia (1984) 37 SASR 232 and Micarone and Bechara v Perpetual Trustees & Ors (SASC Judgment No. 6438 dated 19 November 1997 unreported) Pace's advices to the plaintiff were deficient and negligent. It is enough that I find that Pace's failure to advise the plaintiff upon the plaintiff's dilemma, was compounded by what Pace should have realised was the futility of any advice she gave the plaintiff concerning waiving her rights in circumstances where she felt obliged to proceed.
199 I do not accept the submission by counsel for the plaintiff that Pace was negligent in not considering and inserting, or seeking to insert, into the franchise license agreement, a clause of providing to the plaintiff a right in the nature of the "cooling-off" provisions in s5 of the Land and Business (Sale and Conveyancing) Act 1994. The topic was canvassed with Pace in cross-examination but in my opinion it was not, and perhaps could not have been, sufficiently explored with her so that precisely what might have been constructed to provide something in the nature of a "cooling-off" was not identified. In any event, whether a contractual right of that kind would have been accepted by Perez, or his adviser, was not put to Perez, and the matter is all too speculative.
200 The plaintiff's submission is that, in the event of a finding Pace was in breach of her fiduciary duty to the plaintiff, the plaintiff is entitled to a pecuniary award against Pace, irrespective of whether the plaintiff, were she to have been properly advised, would have acted otherwise than she did.  Counsel for Pace submitted that any breach of a fiduciary relationship, or negligence, was not causative of a loss to the plaintiff.  The plaintiff claims $35,000 (less the $5,000 repaid to her by Stansfield) her loan establishment fees of $375, interest paid by her on borrowings, the costs ($1,500) she paid to Johnson Lawyers, and $1,270 she paid to Stansfield.
201 The plaintiff referred to re Dawson (1966) 2 NSWR 211 and Gemstone Corporation of Australia Ltd v Grasso & Ano (1994) 62 SASR 239 as authorities for the proposition that a person who is in breach of a fiduciary relationship to another is liable to restore that other to his or her position as if the breach had not occurred, and it is irrelevant to consider questions of causation.
202 In re Dawson a trustee in New Zealand had wrongfully paid part of the trust estate to another some 27 years earlier and it was lost.  The trustee accepted that he must restore the lost funds to the estate in Australia but argued that the quantum should be fixed at the New Zealand/Australian currency exchange rate at the time of the breach, not at the date the funds were restored to the estate.  It was held that compensation is to be assessed by reference to the value of the asset at the date of restoration, not at the date of deprivation.  Street J. wrote:-
"The obligation of a defaulting trustee is essentially one of effecting a restitution to the estate.  The obligation is of a personal character and its extent is not to be limited by common law principles covering remoteness of damage. (page 214) ... if a breach has been committed then the trustee is liable to place the trust estate in the same position as it would have been if no breach had been committed.  Considerations of causation, foreseeability and remoteness do not readily enter into the matter (page 215) ... The cases to which I have referred demonstrate that the obligation to make restitution, which courts of equity have from very early times imposed on defaulting trustees and other fiduciaries, is of a more absolute nature than the common law obligation to pay damages for tort or breach of contract. (page 216)"
203 In Gemstone a director of the plaintiff company caused the issue of partly paid shares in the plaintiff company, shares to which he was entitled, to be made to another company in which the director had a substantial interest, but which had no assets other than the partly paid shares after it acquired them, and was never likely to be in a position to meet any call on the shares.  The director did not disclose to the plaintiff's directors the impecunious state of the allotee company.  A call was made which the company did not meet.  The plaintiff sued the director for breach of fiduciary duty.  The trial judge found that the director's action was a desire to insulate himself from the possibility of a call upon the shares.  However he held that a breach of fiduciary obligation occurs only when the fiduciary makes a profit or causes a loss by reason of the breach.  The plaintiff had not asserted the defendant had made a profit but asserted the plaintiff had made a loss, and as to that His Honour found that even if full disclosure had been made by the director, the plaintiff would still have allotted the shares as it did, and therefore there was no loss.
204 On appeal the court held that a right of action arises at the moment a fiduciary enters into a relevant transaction in breach of his duty and there is no requirement that the fiduciary receive a profit or cause a loss as a prerequisite to proceedings.  Once the non-disclosed facts are found to be material it is irrelevant to enquire whether the constituent would have acted differently if full disclosure had been made.
205 The plaintiff also referred to Brickenden v London Loan and Savings Co. (1934) 3 DLR 465 in which the Privy Counsel in a passage (cited in Gemstone's case as a distillation of the fundamental principles) wrote (page 469):-
"When a party, holding a fiduciary relationship, commits a breach of his duty by non-disclosure of material facts, which his constituent is entitled to know in connection with the transaction, he cannot be heard to maintain that disclosure would not have altered the decision to proceed with the transaction, because the constituent's action would be solely determined by some other factor, such as the valuation by another party of the property proposed to be mortgaged.  Once the court has determined that the non-disclosed facts were material, speculation as to what course the constituent, on disclosure, would have taken is not relevant."
206 Here it is submitted that the plaintiff suffered a loss namely, inter alia, entering into the agreement then paying away the purchase price and it is irrelevant to investigate whether the plaintiff would, or would not have done, that were Pace to have done that which, because of the conflict between her interest and her duty, she did not do, that is thoroughly explore and advise the plaintiff concerning her wish not to proceed.
207 The second and third defendants submit that once settlement occurred, the moneys paid by the plaintiff pursuant to the agreement, lost their character as the purchase price, were in the hands of others under the authority given by Perez and any dissipation of the moneys contrary to that authority was not causally related to and was too remote from any proved fiduciary breach or negligence on the part of Pace.
208 In Commonwealth Bank of Australia & Ano v Smith & Ano (1991) 42 FCR 390 the Full Court of the Federal Court reduced the question, in the case of an alleged breach of a fiduciary relationship, to be (at page 392):-
"(i) identifying the relevant incidents of that relationship and duties arising from it, and (ii) determining whether there had been a breach of duty leading to loss for which there was an obligation .... to compensate .... [the person to whom the duty was owed]"
209 Street J. in re Dawson said that in such a case considerations of causation, foreseeability and remoteness do not readily enter into the matter.
210 In my opinion the plaintiff is entitled to an order against Pace compensating her for the fiduciary breach by restoring to her the moneys she paid pursuant to the agreement, and for her consequential losses, less anything she has already recovered.  Further, in my view, Pace was also negligent for the reasons I have set out earlier.
211 The plaintiff, as I find she was entitled to do, rescinded the contract concerning the Caf_ King of Croissant. There are no factors (for example the intervention of third party rights or lapse of time) which make impossible restitutio in integrum and therefore the exercise of her right to rescind requires "a giving back and taking back on both sides". Newbigging v Adam (1886) 34 Ch.D 582, 595. Accordingly the plaintiff is entitled as restitution to recover from Perez the money paid by her pursuant to the contract together with interest: Skinner v James Syphonic Visible Measures Ltd (1927) 28 SR NSW 20, but, for his false representation, I find he is also liable to further compensate the plaintiff for her consequential losses, that is the fees she paid to others and the interest paid on her borrowings from the National Australia Bank: Brown v Smitt (1924) 34 CLR 161. Although the plaintiff knew that Stansfield was to "keep" the deposit and except for $2,000 received by Perez (which I find was part of the deposit) the deposit was not paid to him, nevertheless it was taken by his agent (Stansfield) to be accounted for to Perez (as he expected) in due course. Similarly as to the $25,000 - that was received by Birdseye on Perez's authority and it was Perez who, after the plaintiff informed him she wanted her money back, in effect directed that payment not be made to the plaintiff; whatever may have become of that sum Perez must nevertheless restore it to the plaintiff. However, as between Perez and Stansfield, in my opinion Stansfield should contribute and indemnify Perez for his liability to the plaintiff, except for the sum of $2,000 and interest thereon; it was Stansfield's misrepresentation which was the substantial cause giving rise to the plaintiff's right to rescind the contract.

212 Stansfield for his breach of fiduciary duty and his false representation is liable, in my judgment, to compensate the plaintiff by restoring to the plaintiff that which he procured the plaintiff to pay pursuant to the terms of the contract.  I reject his evidence that he showed the plaintiff, or told her of the contents of, the authority 1D19; he contented himself by stating only that Perez owed him money.  At his behest the plaintiff paid $35,000 pursuant to the contract which, by reason of his misrepresentation to the plaintiff, she was entitled to rescind and he, as I find from Birdseye's evidence, was complicit in the decision which resulted in Birdseye's extraordinary dealings with the $25,000, notwithstanding Stansfield's clear knowledge of the plaintiff's act of rescission.  Pursuant to the contract the plaintiff paid $35,000, $5,000 of which has been repaid by Stansfield to the plaintiff.  Further, in my opinion, Stansfield is liable to the plaintiff in damages equal to the sum of the $1,270 she paid to him for fees, the fees of $1,500 paid to Johnson Lawyers and also the loan establishment cost and the interest paid by the plaintiff on her borrowings (but less some appropriate deduction which I will come to); Stansfield knew of those fees and that the plaintiff was to borrow money in relation to the transaction and in my view they are a direct consequence of his misrepresentation.
213 In my opinion this is not, as the plaintiff's submits, an appropriate case warranting aggravated damages - there is I find no evidence of any increased injury to the plaintiff's reputation or feelings by reason of Stansfield's conduct; and neither is Stansfield's conduct, in my view, to be characterised as a "conscious wrongdoing in contumelious disregard of another's rights" (Whitfeld v De Lauret & Co Ltd (1920) 29 CLR 71) so as to found an award of exemplary damages.
214 For her breach of the fiduciary relationship toward the plaintiff, Pace (and Johnson by reason of his vicarious liability for Pace's breach) must suffer an award in the plaintiff's favour for the loss she has sustained, that is the aggregate of $30,000 (taking account of the $5,000 the plaintiff has already received), the professional fees of $1,500 charged by Johnson Lawyers, the fees of $1,270 paid to Stansfield, the loan establishment fee and the interest paid by the plaintiff on her borrowing from the National Australia Bank.  However they (that is Pace and Johnson) as between themselves and Stansfield and Perez should contribute to the judgment only to the extent of $1,500 plus the appropriate proportion of interest thereon.
215 Even if the plaintiff had proceeded against Pace only for breach of contract, or breach of fiduciary duty, I have found that Pace was negligent, that is she is liable to the plaintiff in tort, and therefore Pace and Johnson are entitled to maintain their claim for contribution from Stansfield and Perez; Rap Industries Pty Ltd v Royal Insurance Australia Ltd (1988) 5 ANZ Insurance Cases 60-876.
216 The interest charged to the plaintiff for her borrowings from National Australia Bank is agreed at $4,240.57 to 29 January 1999, but that was with respect to an initial principal sum of $40,000; the sum of the deposit (less $5,000 repaid to her), the balance purchase price, the loan establishment cost and the fees paid by her to Stansfield and Johnson Lawyers is $33,145.  That, as a fraction, of the agreed interest produces $3,513 (approximately); using the same fraction I will allow $1,580 for the period from January 1999 to the date of judgment, making a total of $5,093 for interest.
217 There will be the following orders and judgment:-

1. Order that the contract dated 12th May 1997 made between the parties to it was lawfully rescinded by the plaintiff.

2. Judgment for the plaintiff against the defendants but not the fourth-named defendant in the sum of $38,238.

3. The amount of contribution as between the defendants in respect of their liability to the plaintiff under this judgment shall be:-
   .    as to the first-named defendant $34,201
   .    as to the second and third-named defendants $1,730
   .    as to the fifth and sixth-named defendant $2,307.

4. If the plaintiff recovers from any defendant a proportion of the damages in excess of the contribution for which such defendant has been found liable then the defendant from whom such excess shall have been recovered may enter judgment for such excess against the other defendant together with the costs of entering such judgment.

5. First defendant's counterclaim against the plaintiff dismissed.
   218 I will hear the parties on the question of costs.

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