David Weedon v Paul Williams
[2014] NSWDC 128
•14 August 2014
District Court
New South Wales
Medium Neutral Citation: David Weedon v Paul Williams [2014] NSWDC 128 Hearing dates: 4-5 August 2014 Decision date: 14 August 2014 Jurisdiction: Civil Before: Mahony SC DCJ Decision: Verdict and judgment for the Cross-Claimant. For orders see [41]
Catchwords: Fraudulent representation in personal relationship; tort of deceit Legislation Cited: Evidence Act 1995 Cases Cited: Gould v Vaggelas (1985) 157 CLR 215
Magill v Magill (2006) 226 CLR 551Texts Cited: Law of Torts, R P Balkin and JLR David, 4th Ed Category: Principal judgment Parties: David Weedon (Cross-Claimant)
Paul Williams (Cross-Defendant)Representation: In person (Plaintiff)
P Braham SC with D Steirn (Cross Claimant)
Kennedy Partners
File Number(s): 12/49802 Publication restriction: Nil
Judgment ON CROSS-CLAIM
Introduction
At the commencement of the hearing of this matter on 4 August 2014 the plaintiff consented to a verdict against him on his claim and the following orders were made by consent:
(1) Verdict for the Defendant on the plaintiff's claim.
(2) Plaintiff to pay the Defendant's costs of the proceedings.
The defendant then proceeded on his cross-claim dated 9 July 2012. The gist of the cross-claim was that from 2004 the plaintiff had made false representations to the cross-claimant in respect of four separate fictitious persons to the effect, (but for various different reasons) that they were impecunious and had a need for money for various purposes. The representations in respect of three of the fictitious persons were made in 2010 and 2011.
The cross-claimant claims that relying on those false representations, he paid monies to the cross-defendant believing those monies were to be paid on to the four other persons.
The cross-claimant and the crossdefendant have known each other since 2003. They had never lived together and indeed lived in different States. However, the cross-claimant had bestowed significant generosity towards the cross-defendant, paying him a monthly allowance, purchasing an apartment for him to live in rent free and paying monies in respect of tuition fees for a tertiary degree the cross-defendant led him to believe he was undertaking.
The cross-claimant is a prominent member of the medical profession and there is a disparity in the ages of the parties. During those years, they had from time to time, a sexual relationship, which became infrequent, and they also travelled together, usually at the request of the cross-claimant.
It is the cross-claimant's claim that the plaintiff invented the names of the four young men so as to provoke sympathy in the cross-claimant. The cross-defendant was aware that the cross-claimant had provided financial support to other young people from time to time. The monies requested by the cross-defendant were for specific bequests and were supported by emails or text messages from phones purchased by the cross-defendant to give the appearance that these people existed.
In respect of each of the four fictitious persons, the cross-defendant has admitted that he falsely represented to the cross-claimant that he had met each of the persons concerned. He has not admitted, but has not denied, the further false representations pleaded in respect of each person which are set out below.
The cross-defendant filed a Defence to the Cross-Claim dated 20 July 2012. That document pleads, in respect of each of the four persons, that each person did not exist, and "that he told the cross-claimant about the existence of [that person] in order to stop the cross-claimant from pressuring the cross-defendant to find and encourage young men (over 18 years) to contact the cross-claimant for sex" (Defence to Cross-Claim paragraphs 1(d), 2(d) 3(d) and 5(d)).
A number of claims set out in the cross-claim were not pressed, namely paragraphs 4 and 9-18.
The Representations
The representations pleaded by the cross-claimant in respect of the four fictitious persons are set out in the cross-claim as follows:
"1 In the period from about early 2010 to early 2011 the Cross Defendant represented to the Cross Claimant that:
a he had met someone who was from Ireland called Paul ("Irish Paul);
b Irish Paul had no family in Australia and had insufficient funds to support himself;
c Irish Paul was not earning sufficient from his job as a waiter to support himself;
d Irish Paul was in need of funds generally and for purposes such as:
(a) his rent;
(b) returning to Ireland for his grandfather's funeral;
(c) having missed his return flight to Australia due to fog and needing to stay in London;
(d) needing to pay rent to a girl with whom he was staying in Sydney and who had demanded rent in advance.
e If the Cross Claimant advanced funds to the Cross Defendant for Irish Paul, which the Cross Defendant requested him to do, the Cross Defendant intended to and would pass them on to Irish Paul.
Particulars
The representations were express and insofar as they were not express implied, being made orally and by text message.
2 In the period from about mid 2010 to September 2011 the Cross Defendant represented to the Claimant that:
a he had met someone from America called Sam ("American Sam");
b American Sam was a waiter, but:
(a) his visa restricted his work arrangements so that he did not have much money;
(b) the coffee shop where he worked was struggling and he was always working;
c American Sam was struggling financially and needed help;
d American Sam was in need of funds generally and for purposes such as:
(a) two mobile telephones;
(b) an aeroplane fare to Cairns in order to relocate;
(c) other airfares;
(d) paying off a large debt or else hifs life would be in danger
(e) rent;
(f) living expenses;
(g) dinners with the Cross Defendant;
e If the Cross Claimant advanced funds to the Cross Defendant for American Sam, which the Cross Defendant requested him to do, the Cross Defendant intended to and would pass them on to American Sam.
Particulars
The representations were express and insofar as they were not express implied, being made orally and by text message.
3 In the period from about early 2011 to September 2011 the Cross Defendant represented to the Cross Claimant that:
a he had met someone called David who was doing the same finance course at university as the Cross Defendant ("Study Buddy David");
b Study Buddy David was poor, from Queensland, boarded with his sister in Melbourne and did not have enough money to support himself with warm clothes or food;
c Study Buddy David regularly studied at the Cross Claimant's Unit where the Cross Defendant was living;
d the Cross Defendant did most of Study Buddy David's assignments for him'
e Study Buddy David and the Cross Defendant regularly had casual sexual encounters with each other;
f Study Buddy David was in need of funds generally and for purposes such as:
(a) food;
(b) clothing;
(c) books;
(d) living expenses;
(e) dinners with the Cross Defendant;
(f) two mobile telephones;
(g) a brief case that he had left on a Melbourne tram;
(h) two trips to Brisbane to visit his family, one of which was for his mother's 50th birthday.
g if the Cross Claimant advanced funds to the Cross Defendant for Study Buddy David, which the Cross Defendant requested him to do, the Cross Defendant intended to and would pass them on to Study Buddy David.
Particulars
The representations were express and insofar as they were not express implied, being made orally and by text message.
5 In the period from about 2004 to 2009 the Cross Defendant represented to the Cross Claimant that:
a he had a friend called Dane Evans;
b Dane Evans was a recluse who lived with his alcoholic mother in or near Essendon;
c Dane Evans attended a university close to a university attended by the Cross Defendant in Melbourne for in excess of four years and Dane Evans was studying for a finance degree;
d Dane Evans was in need of funds generally and for purposes such as:
(a) University fees;
(b) living expenses;
(c) a car;
(d) credit card repayments;
(e) furniture;
(f) bond money for a rented flat;
e if the Cross Claimant advanced funds to the Cross Defendant for Dane Evans, which the Cross Defendant requested him to do, the Cross Defendant intended to and would pass them on to Dane Evans.
Particulars
The representations were express and insofar as they were not express implied, being made orally and by text message."
The cross-claimant pleads that in respect of those representations, they were false in that each of the named persons did not exist, and further, that each of the matters pleaded in respect of each fictitious person was false and untrue.
The cross-defendant admitted in his Defence making each of the representations in paragraphs 1(a), 2(a) and 2(b), 3(a) and 5(a). The cross-defendant further admitted that each of the named individuals did not exist (i.e. 7(a),(c), (e) and (i) of the cross-claim).
The Evidence
The cross-claimant relied on an affidavit sworn by him on 30 September 2013. The lengthy affidavit was prepared in defence to the plaintiff's claim and not all of it was relevant to the cross-claim. Senior Counsel for the cross-claimant read paragraphs 1 - 293 of the affidavit. Annexure DW8 to the affidavit was referred to, however, that annexure was not relied when I gave an indicative ruling that it would not be admissible pursuant to s 97 of the Evidence Act 1995. The relevant evidence concerning the claims for payments made in respect of the four fictitious young men, which was not challenged in cross-examination and which I accept, was as follows:
"Dane Evans
106 In or about late 2004, Paul commenced having conversations with me about a Dane Evans ("Dane Evans") which, at that time, were to the following effect:
Paul: I have a friend called Dane Evans, who lives in the northern suburbs of Melbourne.
Me: Ok, whereabouts?
Paul: Essendon. He does not get out much. He is a bit of a recluse, and lives with his alcoholic mother.
Me: That is too bad.
Paul: He has a friend his age. The friend's parents are good Catholics. They help Dane by feeding him. Dane paints their seaside cottage and the parents give Dane about $20 a day for this. They are a bit mean.
Me: That sounds like exploitation to me. I will give you some money to help Dane along. He sounds like a good hearted boy.
Paul: He will be very pleased.
...
122 During the course of 2005, I continued to exchange text messages with the person I believed at the time to be "Dane Evans". I no longer have a record of the telephone number or the messages sent, but generally recall that in or about 2004, a few between us were to the effect of me saying that "I would like to have sex with you.
...
123 In or about late 2005, Paul had a conversation with me about "Dane Evans", as follows:
Paul: Dane left his phone at the home of the friend with the Catholic parents.
Me: Okay?
Paul: The friend read your texts to Dane, and then his mother then contacted Dane's mother, and told Dane's mother that Dane is gay. His Mum has now called him a 'poofter'.
Me: Oh no! I feel very guilty about 'outing' him.
124 In or about the middle of December 2005, Paul and I again discussed Dane Evans in a conversation as follows:
Paul: Dane is still having a sad life. He has no one else in the world. He does not know who his father is.
Me: That is very sad. How is he going?
Paul: Still living with his alcoholic Mum. He wants to study finance next year, to get away from home.
Me: Does he need some financial support?
Paul: Yes, I think so.
Me: Let him know that I will pay for his course like I do for you. I still feel very guilty for 'outing' him to his mother. Next year, the living allowance can be $2,750 for each of you. It will be your last year next year, after all, won't it?
Paul: I have to pass yet.
Me: It will be a struggle for me supporting two of you. I will have to sell more of my inherited shares.
Paul: That would be really good of you, David.
Me: Give me his details so that I can contact him and arrange payment.
Paul: I think that would embarrass him. Pay it to my account, and I will make sure he gets the money. He often calls around on Saturday afternoon.
Me: Ok, if you think he would prefer that.
Paul: Yes, I do. Thank you again David. I do not know how he will get to university though as he has no car.
Me: I will transfer $10,000 so that he can buy one.
Paul: Thanks David, that is good of you.
...
133 In or about early 2006, Paul and I had a further telephone conversation as follows:
Me: How is Dane going?
Paul: Good, he is trying to find a place to live, and will have moving expenses and furniture.
Me: I will send a bit extra to help with that - say $1,500?
Paul: Thank you. I understand, too that his expenses for university will be about $480 a week.
Me: Ok. You are giving him the money?
Paul: Yes, we catch up sometimes for sex.
Me: Ok, fine, I will pay the money.
...
135 In or about the middle of 2006, Paul and I had a further telephone conversation as follows:
Me: How is Dane going?
Paul: Uni is going ok, but he is struggling with old credit card debts.
Me: What does he owe?
Paul: About $20,000.
Me: I will send money for that over the next couple of months.
Paul: Thank you.
Me: Ok how is everything else?
Paul: I might need a new car soon.
Me: I can spare $15,000 for that shortly.
Paul: Thank you."
"Irish Paul
203 In or about early 2010, Paul and I had a telephone conversation as follows:
Paul: I have met this cute waiter at a café I go to.
Me: Oh, ok. What is his name?
Paul: Paul, same as mine. He is from Ireland. He is very good looking.
...
205 About a few weeks after Paul first mentioned "Irish Paul" to me, he and I had another conversation about him as follows:
Paul: Irish Paul and I are having regular sex.
Me: Good. Is he still waiting?
Paul: Yes, but he does not have any family or financial support in Australia.
Me: Really?
Paul: Yes, and he does not have enough money to rupport himself. He needs money for rent and basic expenses.
Me: I will send some extra money to help.
Paul: Thanks David
...
206 In telephone conversations thereafter, Paul again from time to time referred to Irish Paul, and we sometimes had discussions as follows:
Paul: Irish Paul is still doing it a bit tough.
Me: I will deposit some extra funds into the Commonwealth Bank account.
Paul: Thank you.
...
207 In or about November 2010, Paul and I had a telephone conversation as follows:
Paul: Irish Paul's grandfather had died in Ireland, and he needs to go back for the funeral, but cannot afford it.
Me: I will deposit a few thousand extra so that he can fly home.
Paul: Thank you.
...
209 In or about early December 2010, Paul and I had a telephone conversation as follows:
Paul: Irish Paul went back for the funeral, but missed his return flight to Australia owing to fog. He needs some money to stay in London for a few days or so and then to catch another flight.
Me: Ok, I will deposit $6,000 into the Commonwealth Bank account.
Paul: Thank you.
...
211 Approximately a week or two later, Paul and I had another telephone conversation as follows:
Me: Did Irish Paul get home ok?
Paul: Yes, he did, but he has found work in Sydney.
Me: That is a good thing then?
Paul: Yes, it is, except that he is staying with a girl who wants him to pay rent in advance.
Me: How much will he need?
Paul: A couple of thousand.
Me: Ok, I will transfer some more to help him out.
Paul: Thanks David."
"American Sam
215 In about July or August of 2010, Paul and I had a telephone conversation as follows:
Paul: I have met another cute waiter in a coffee shop, called 'Sam', who is giving me the eye.
Me: Have you talked to him?
Paul: Yes, he is from the United States. His visa restrictions do not allow him to work very much.
Me: That is a shame.
Paul: Yes, and the coffee shop is struggling, so he does not get many shifts.
Me: Does he need some financial help?
Paul: Yes, some money for the first month's rent and bond, and some money to clear some credit card debts.
Me: I could help with that, and will send some money.
Paul: Thanks, David.
...
219 I exchanged some text messages with a mobile number Paul gave me for 'American Sam' late in 2010. I have not kept these, and from memory they were to the effect of:
American Sam: Thx for your help David.
Me: You're welcome
...
220 In or about early December 2010, Paul and I had a telephone conversation as follows:
Me: Could you ask American Sam whether he'd like to spend Christmas Eve and Christmas Day with me and my niece at the Versace Hotel on the Gold Coast?
Paul: Yes I will.
...
221 A couple of days later, Paul and I had a further telephone conversation as follows:
Paul: I've spoken to American Sam and he'd love to join you for Christmas but will just fly up for Christmas Day only.
Me: Great, I'll provide you with about $1,000 for American Sam's airfares.
...
222 I paid $1,000 into the Commonwealth Bank account early in December 2010 for the purposes of meeting 'American Sam's' airfares.
223 On Christmas Day 2010, Paul telephoned me and we had the following conversation:
Paul: American Sam is not coming after all, I am sorry. His boss wanted him to spend Christmas Day with him and his family.
Me: That is a real shame.
253 In around April of 2011, Paul and I had a telephone conversation as follows:
Paul: Do you remember American Sam?
Me: Yes, of course.
Paul: He is now in Queensland.
Me: Ok, where?
Paul: Working as a waiter at the Palm Cove, Resort, north of Cairns. He said he wanted to get away from the cold of Melbourne.
Me: Ok, he and I never caught up in the end. Please give me his mobile number so we can.
Paul: Sure, it is 0450 460 326. I am sure he would like to hear from you.
Me: Does he still need some financial support?
Paul: I would say so. Waiters do not get paid a lot.
Me: I will ask him for his account details.
Paul: You can just transfer to me, and I will send the money on to him via PayPal.
...
255 In or around early June 2011, I received a text message from Paul, which I did not keep, saying words to the effect of "David, American Sam is in real trouble, and owes a lot of money, at least $7,000. If he does not pay it soon, his life could be in danger.
257 Although I tried on several occasions to communicate directly with 'American Sam' via the telephone number previously mentioned, I had difficulty doing so. I had a telephone conversation with Paul about this in or about July 2011 as follows:
Me: I have been trying to get in touch with 'American Sam', but he hasn't responded. Is he ok?
Paul: Yes, he is ok. He has just got really bad phone reception at the resort as he is with Vodafone.
Me: I will send some more money so that he can sign up with Telstra."
"David referred to as "Study Buddy David"
238 In around March 2011, Paul and I had a telephone conversation as follows:
Paul: I met a guy at that finance course I am doing at Swinburne University. He is called 'David'. He kept looking at me in class, and we got talking.
Me: What is he like?
Paul: He is nice. We are having lunch together quite often, and we have become study buddies. He is from Brisbane, and came to live in Melbourne with his sister.
Me: How does he find that?
Paul: It's ok, but he does not have much money for food or warm clothes. He was shivering in the cold at coffee break.
Me: Does he need some financial support?
Paul: Yes, definitely.
Me: I will transfer some funds every few weeks or so for you to pass on.
Paul: Thank you.
...
240 Following this conversation, I began transferring funds to the Commonwealth Bank account so that Paul could onforward such funds to 'Study Buddy David'. With reference to the payment summary, I say that such transfers included $1,000 on 25 March 2011, $500 on 31 March 2011, $1,500 on 2 April 2011, $500 on 7 April 2011, and $600 on 8 April 2011.
...
241 At most times, after I had provided funds for 'Study Buddy David', I received text messages from a number that I did not know, being 61415395979. Those text messages have not been kept by me, but I recall that they said words to the effect of 'Thanks for your support David. Love, David.
...
243 In or about April 2011, also, Paul and I had the following telephone conversation:
Paul: David often comes to the Port Melbourne apartment to study. We have started having sex together.
Me: That is good. He seems a nice guy.
Paul: Yes, but he doesn't have enough money to go his mother's 50th birthday party in Brisbane.
Me: I will send some extra money to help him out - say another couple of thousand.
Paul: Thank you.
...
248 In about May 2011, I received separate telephone calls from Paul, and we had conversations as follows:
Paul: 'Study Buddy David' has lost his phone and cannot afford to buy a new one. Could you please send me some money so that I can give it to him to purchase a new one?
Me: Yes, I will transfer some as soon as possible; and
Paul: 'Study Budd David' has lost his wallet on the tram, and he is really stuck now. Can you please transfer some more money to help him out?
Me: Sure."
Evidence of Payment
Dr Weedon's affidavit sets out throughout the various payments he made following upon the conversations set out above. Annexed to the affidavit as DW7 is a schedule of all sums paid by him to the cross-defendant. It totals approximately $1.29 million. However, relevantly, in respect of the way the cross-claim was restricted, he set out evidence of the following payments, again which were not challenged, as follows:
"166.4 $3,000 each month intended to be for living expenses for 'Dane Evans', or $36,000 in total.
166.5 $480 a week for forth weeks of that year intended to be for Dane's living expenses, or $19,200.
Those payments related to the calendar year 2007. Evidence of payments made to the cross-defendant on behalf of 'Dane Evans' is also contained in paragraph [181.4 and 181.5] in respect of the calendar year 2008, and [193.4 and 193.5] in respect of the calendar year 2009. For the calendar year 2010, payments made by the cross-claimant to the crossdefendant in respect of 'Irish Paul' and 'American Sam' are set out in [227.4 and 227.5].
Evidence relating to the payments made to 'Study Buddy David' are set out in [240]. None of this evidence was challenged by the crossdefendant.
Other Evidence
Exhibit A comprised a text message log of messages made by the crossclaimant to two phone numbers. The names are redacted, however, the cross-defendant tendered an un-redacted version of the exhibit which became exhibit 1. The inevitable inference to be drawn is that the phone numbers were established by the cross-defendant to perpetrate the fraud on the cross-defendant by engaging in text messages with him from the fictional characters. Many of those messages concerned the sending of money by the cross-claimant to the fictitious character. Some of them were of a graphic sexual nature.
Exhibit B was a photo forwarded by the cross-defendant to the crossclaimant of a young man, purporting to be 'American Sam'. This was done again to perpetrate the fraud.
Exhibit C was an extract from the transcript of cross-examination of the cross-defendant on an interlocutory application on 11 April 2013, in which he admitted that he had dishonestly taken money from the cross-claimant on a false basis. There was however, no context in which that evidence could be said to be relevant to the cross-claim.
Cross-examination of Dr Weedon
The cross-defendant was self represented. It was put to the crossclaimant that he had paid $250,800 in respect of Dane Evans, a fictitional character who he had never met. That was the agreed amount of the cross-claimant's claim. The cross-claimant was asked whether it ever occurred to him that the people for which he was making payments did not exist. He gave evidence to the effect that it did not, because he believed the cross-defendant.
It was put to the cross-claimant that he paid the monies because it was benefiting his fantasy, which he denied.
The cross-claimant agreed that he had a history of giving money to many men between the ages of 19 and 24 over the years. It was put to him that those payments amounted to great generosity but were designed for the purpose of grooming those young men, which the cross-claimant denied. The implication in that question was that the cross-claimant was, by making the payments, grooming those young men for sexual favours.
In re-examination the cross-claimant gave evidence that in addition to the money he gave to the cross-defendant, there were other objects of his generosity. Whilst some of the recipients were young homosexual men, not all were, nor were all the recipients male. In addition, he had given generous donations to various institutions and established the David Weedon Pathology Museum. He had also carried our honorary work as a Professor of Pathology over a period of seven years. His largesse derived from an inheritance he received from his mother, together with income he earned as a pathologist and author.
The cross-claimant was asked what attempts he made to pay the recipients directly, to which he gave evidence that the cross-defendant said he would pass the payments on to those involved and he trusted him.
Submission made by Cross-Defendant
The cross-defendant submitted that the amounts claimed were estimates only and that there was no direct evidence of the monies paid. It was submitted that the cross-defendant did not set out to scam the crossclaimant, but that the cross-claimant engaged in a pattern of behaviour of pressuring him to procure other young men to provide sexual favours to him. The cross-defendant submitted that he came from a religious family and at the time he first met the cross-claimant, he was a very vulnerable and isolated individual. It was submitted that the crossclaimant "liked guys depending on him for their survival".
The purpose of making the representations he had made was to fuel the fantasy of the cross-claimant. He was not "pushing them onto him to get more money" and the text messages contained in exhibit 1 painted a different story to that of the cross-claimant.
Submissions on behalf of the Cross-Claimant
Mr Braham of Senior Counsel submitted that since 2004 the parties had been in a relationship which was primarily financial. There was no evidence that the cross-claimant wanted to be part of some sort of fantasy and no evidence to support the cross-defendant's submissions outlined above. Further, there was no evidence that the payments made by the cross-claimant were made to please the crossdefendant. What occurred in respect of Dane Evans was a deliberate lie maintained over a period of five to six years. The representations relied on in respect of the other three fictitious characters were also deliberate lies. The reason the cross-claimant paid the money was the he trusted the cross-defendant.
In reply to the submission made by the cross-defendant that there was no proper verification of the amounts paid, Senior Counsel submitted that there was ample evidence of the payments derived from the cross-claimant's bank records.
It was submitted that underlying the fraud was the fact that by 2010 the cross-defendant's time of being supported by the cross-claimant as a student was up. The evidence established that after 2009 there was no sexual relationship between the two men and in 2011 they met only once. There was an acceleration of activity from 2010 as to the introduction of the fictitional characters to the cross-claimant and the requests for payments for various purposes.
The cross-defendant had acknowledged the falsity of the representations made by him and the evidence established that the payments were made in reliance of those representations. The amount of the payments was not unchallenged and the payments had been verified by reference to the crossclaimant's bank records. It was submitted that there was no excuse or justification in any legal sense for the cross-defendant's actions. The crossclaimant was therefore entitled to judgment on the cross-claim, together with pre-judgment interest in the amount set out in the schedule.
Findings of Fact
There being no challenge by way of evidence or in cross-examination to the evidence of the cross-claimant, and no challenge to the veracity of the cross-claimant, I accept his evidence as outlined above in respect of each of the representations. Having regard to the admissions made by the cross-defendant in his defence to the cross-claim, and his admission in cross-examination on a previous occasion on 11 April 2013 that he had taken money from Dr Weedon on a false basis, I find that each of the representations outlined above have been established. I further find that each representation was made falsely and that the crossdefendant knew each of them to be false.
Whilst it is not incumbent upon a trial judge to accept evidence that is unchallenged, in this case, I accept the evidence of the cross-claimant as to his reliance on each of the representations made, to make the payments that he did make as outlined above.
Consideration
The cross-claimant has pleaded that each of the representations referred to above was made by the cross-defendant, knowing it to be false or alternatively, with reckless indifference as to whether it was true or false, and was made fraudulently with the intention of obtaining monies from the cross-claimant on the basis of those false statements.
In Magill v Magill (2006) 226 CLR 551 the plurality of the High Court said:
"114 The modern tort of deceit will be established where a plaintiff can show five elements; first, that the defendant made a false representation; secondly, that the defendant made the representation with the knowledge that it was false, or that the defendant was reckless or careless as to whether the representation was false or not; thirdly, that the defendant made the representation with the intention that it be relied upon by the plaintiff; fourthly, that the plaintiff acted in reliance on the false representation; and fifthly, that the plaintiff suffered damage which was caused by reliance on the false representation. Generally, the elements of the tort have been found to exist in cases which concern pecuniary loss flowing from a false inducement and the need to satisfy each element has always been strictly enforced, because fraud is such a serious allegation."
In the same case, Heydon J (at [207]) stated that:
"The tort of deceit gives a remedy where damage is caused by reason of a plaintiff having relied on fraudulent misrepresentation."
In Gould v Vaggelas (1985) 157 CLR 215 the High Court had held that in an action for damages for deceit, the general principle with respect to assessment of damages is that the plaintiff is to be put, so far as possible, in the position he would have been had he not acted on the fraudulent inducement.
The tort of deceit has been historically associated with commercial and economic matters, particularly with inducing contractual relations. However, the High Court in Magill has made it clear that it is not confined to those circumstances. I am satisfied here that the allegations of fraud, namely, the false representations, have been pleaded with sufficient specificity and particularity and that the cross-defendant was fully aware of the case he had to meet. I am further satisfied that each of the five elements of the tort as set out by the High Court in Magill have been established on the balance of probabilities. The representations were made by the cross-defendant, who knew them to be false with the intention of obtaining monies from the cross-claimant on the basis of them.
The matters relied on by the cross-defendant in his submissions do not constitute a legal justification or defence to the cross-claimant's claim. The facts outlined above may on an objective view demonstrate gullibility and an extreme lack of caution on the part of the cross-claimant, however, these attributes in the cross-claimant were no doubt well known to the cross-defendant at the time he perpetrated these four separate frauds, and I find that he did so at a time when he knew that his capacity to rely on the cross-claimant for further monies for himself (for the fictitious purpose of completing his studies) was coming to an end. It is no defence in an action for deceit that a plaintiff (in this case the cross-claimant) was foolish or failed to take any opportunity to verify the false statements - see "Law of Torts", R P Balkin and JLR David, 4th Ed at [23.32] and the authorities referred to therein.
I therefore find that the cross-claimant's claim has been made out and I propose to enter judgment for the amount claimed, together with interest, to the date of judgment, to be calculated by the parties.
Damages
I therefore find that the cross-claimant is entitled to damages as follows:
(1) In respect of the payments made to "Dane Evans" $250,800.00.
(2) In respect of the payments made to "Irish Paul" $12,500.00.
(3) In respect of the payments made to "American Sam" $29,170.00.
(4) In respect of the payments made to "Study Buddy David" $9,320.00.
(5) Total $301,790.00.
In addition, I order interest to be paid on each of the above amounts in accordance with the cross-claimant's schedule of damages up until the date of judgment. Such amount is to be calculated by the parties.
Orders
I make the following orders:
(1) Verdict and judgment for the Cross-Claimant on the Cross-Claim against the Cross-Defendant in the sum of $301,790.00 plus interest to be calculated.
(2) The Cross-Defendant is to pay the Cross-Claimant's costs of the Cross-Claim.
(3) The parties have liberty to apply on 7 days notice in respect of any special costs order.
(4) The exhibits are to be returned forthwith.
Decision last updated: 14 August 2014
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