Davmond Holdings Pty Ltd v Zaynah Pty Ltd [No 2]
[2018] WASC 11
•19 JANUARY 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: DAVMOND HOLDINGS PTY LTD -v- ZAYNAH PTY LTD [No 2] [2018] WASC 11
CORAM: MARTINO J
HEARD: 26 & 27 SEPTEMBER, 9 & 11 OCTOBER 2017
DELIVERED : 19 JANUARY 2018
FILE NO/S: CIV 3033 of 2010
BETWEEN: DAVMOND HOLDINGS PTY LTD
Plaintiff
AND
ZAYNAH PTY LTD
First DefendantCASHERE PTY LTD
Second DefendantTIM REITER
Third DefendantSELISE PTY LTD
Fourth Defendant
Catchwords:
Misleading or deceptive conduct - Conduct in trade or commerce - Conversion - Trust - Damages
Legislation:
Fair Trading Act 1987 (WA)
Trade Practices Act 1974 (Cth)
Result:
Damages awarded against the first defendant and the third defendant in the sum of $445,000 plus interest of $216,212
Category: B
Representation:
Counsel:
Plaintiff: Mr L A Tsaknis
First Defendant : No appearance
Second Defendant : No appearance
Third Defendant : In person
Fourth Defendant : No appearance
Solicitors:
Plaintiff: George Papamihail Barristers & Solicitors
First Defendant : No appearance
Second Defendant : No appearance
Third Defendant : In person
Fourth Defendant : No appearance
Case(s) referred to in judgment(s):
Australasian Conference Association Ltd v Mainline Constructions Pty Ltd (in liq) (1978) 141 CLR 335
Australian Competition and Consumer Protection Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640
Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592
Compass Resources Ltd v Sherman [2010] WASC 41; (2010) 42 WAR 1
Davmond Holdings Pty Ltd v Zaynah Pty Ltd [2017] WASC 201
Elders Trustee & Executor Co Ltd v EG Reeves Pty Ltd (1987) 78 ALR 193
Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480
Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121
Henville v Walker [2001] HCA 52; (2001) 206 CLR 459
I & L Securities Pty Ltd v Walker HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109
March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506
Mister Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23
Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd [2011] WASCA 76; (2011) 248 FLR 193
Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204
Re Ku‑ring‑gai Co‑operative Building Society (No 12) Ltd (1978) 36 FLR 134
Wardley Australia Ltd v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514
Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661
MARTINO J: The plaintiff is a company of which Paul John Blakers is the sole director and secretary. In December 2009 Mr Blakers and his wife Natalie Anne Blakers saw a newspaper advertisement advertising the opportunity to own Automatic Teller Machines (ATMs) and to earn income from those machines. Mrs Blakers called the telephone number that appeared in the advertisement. She spoke to the third defendant (Mr Reiter). Following meetings and telephone conversations Mr and Mrs Blakers arranged the payment of a total of $440,000 for ATMs plus $5,000 for a display at an expo promoting ATMs. Mrs Blakers signed a form of contract between the plaintiff and the fourth defendant. The plaintiff has not taken possession of any ATMs or earned any income from them. The plaintiff's claims arise out of events associated with those matters.
The defendants
Mr Reiter was the person with whom Mr and Mrs Blakers dealt. The first defendant's name at the time of the events with which this case is concerned was Credit Able Pty Ltd.
Mr Reiter was the sole director and the company secretary of the first defendant and the sole director of the second defendant. The second defendant was the company by which Mr Reiter promoted his ideas for a business model for the sale of ATM machines, which he called the ATM concept and for which the second defendant claimed it had intellectual property rights. On 15 January 2010 the second defendant entered into a written agreement with the fourth defendant by which the second defendant granted to the fourth defendant a licence to exploit the ATM concept.
The conduct of the trial
The trial was as to the plaintiff's claims against the first defendant and Mr Reiter only. The plaintiff obtained default judgment against the second defendant and the fourth defendant on 7 October 2011. The second defendant and the fourth defendant had been deregistered by the time of the trial.
The action was listed for trial on 24 July 2017. On the application of Mr Reiter I adjourned the trial to 26 September 2017: Davmond Holdings Pty Ltd v Zaynah Pty Ltd [2017] WASC 201.
By letter dated 22 August 2017 Mr James Koutsoukos of BRI Ferrier informed the solicitors for the plaintiff that first defendant had been placed into liquidation at a meeting of members held on 6 August 2017.
On 26 September 2017 Mr Reiter made another application for adjournment of the trial. The adjournment application was based on an email that Mr Reiter had sent to my Associate on Monday 25 September 2017 to which was attached a short medical certificate to the effect that Mr Reiter was unfit to travel and resume his usual occupation due to acute low back pain. Monday 25 September 2017 was a public holiday in Western Australia.
I permitted Mr Reiter to appear by telephone on his adjournment application. In the course of his submissions Mr Reiter informed me that the medical certificate had been provided by a medical practitioner in Victoria who was not his usual doctor. I informed Mr Reiter that his medical certificate was inadequate to justify the adjournment of the trial as it did not provide any detail as to why the reported level of pain would prevent him flying on a plane and attending the trial. I also informed Mr Reiter that a medical practitioner who gave evidence that Mr Reiter was unfit to appear at the trial would need to answer questions in cross‑examination as to the opinion. I adjourned the application to adjourn the trial to 27 September 2017.
On 27 September 2017 Mr Reiter sent by email a certificate from a medical practitioner in Victoria certifying that Mr Reiter was unfit for his usual occupation from 26 September 2017 until 7 October 2017 and that he should avoid sitting in an aeroplane for at least a week from 26 September 2017. Mr Reiter again appeared by telephone. The author of this medical certificate, who Mr Reiter said was not his usual medical practitioner but was from the same practice as his usual medical practitioner, was not available to appear by telephone to be cross‑examined as to his certificate.
I refused the application for the adjournment of the trial on the grounds that the certificates that Mr Reiter presented did not provide a history given by Mr Reiter to the doctors, did not provide any detail as to Mr Reiter's description of his symptoms, did not provide a reasoning process as to the conclusions that had been reached and that the medical certificates certified that Mr Reiter was unfit for his usual occupation, but did not certify he was unfit to attend court. I permitted Mr Reiter to appear by telephone at the trial to cross‑examine the plaintiff's witnesses, which he did.
On 27 September 2017 I gave the plaintiff leave under s 500 of the Corporations Act 2001 (Cth) to proceed with the action against the first defendant. The first defendant was not represented and took no part in the trial.
The plaintiff called as witnesses Mr Blakers, Mrs Blakers and William John Sheehy. The plaintiff's witnesses' evidence‑in‑chief was in the form of witness statements that had been filed in accordance with directions made by a Registrar.
After the plaintiff had called its witnesses I adjourned the trial to 9 October 2017. Mr Reiter attended the trial in person on that day and gave evidence. On 9 October 2017 I gave the plaintiff leave to amend its statement of claim.
The evidence that Mr Reiter gave was not the evidence contained in a statement that he had lodged at the court in accordance with a Registrar's directions. Mr Reiter attended court on 9 October 2017 with a document which he had prepared recently. I permitted him to read from that statement as his evidence‑in‑chief. The statement was very general and at times was expressed in terms of conclusions and submissions. He was then cross‑examined at length by counsel for the plaintiff.
Mr Reiter did not call any other witnesses.
The statement of claim
The plaintiff pleads what are defined to be the First Representations, the Verbal Representations, the Second Representations, the Third Representations, the Fourth Representations and the Fifth Representations. All of those representations are defined in par 31 of the statement of claim to be the Representations.
The plaintiff pleads that it paid a total of $445,000 to the first defendant made up of $198,000 which was paid on 15 and 16 December 2009, $202,000 which was paid on 23 December 2009, $40,000 which was paid on 27 December 2009 and $5,000 which was paid on 7 May 2010.
The First Representations are pleaded in par 7 as being that on or about 14 December 2009 the second defendant by its director Mr Reiter said to the plaintiff and to its director Mr Blakers and to Mrs Blakers that he had sites for ten ATMs, that the second defendant would supply and install ten ATMs for the price of $198,000 and that the plaintiff, Mr Blakers and Mrs Blakers would not have to do anything more than to pay the purchase price for the ATMs.
The plaintiff pleads in par 8 that later on 14 December 2009 Mr Reiter said that the second defendant would supply 11 ATMs for the price of ten.
The Verbal Representations are defined in par 13 as being a verbal agreement and the terms of that verbal agreement. That verbal agreement and its terms are pleaded in pars 12 and 13. The plaintiff pleads that on 18 December 2009 the second defendant, through Mr Reiter, and the plaintiff, through Mr Blakers, entered into a verbal agreement by which the plaintiff agreed that the payment of $198,000 that had been made would be applied as a deposit for the purchase by the plaintiff of 80 ATMs and that the plaintiff would pay an additional $242,000 to be applied as a deposit for the purchase by the plaintiff of 80 ATMs and to be appointed the sole State Distributor for Western Australia.
The plaintiff pleads in par 13 that there were terms of the verbal agreement that:
(a)Mr and Mrs Blakers would find purchasers for the ATMs and would issue invoices in the name of Cashbox ATMs to the purchasers;
(b)the second defendant would be the contracting party supplying ATMs to the plaintiff;
(c)the plaintiff would be appointed sole State Distributor for ATMs for Western Australia;
(d)an order for an ATM would be placed by the plaintiff to Mr Reiter at the second defendant;
(e)the second defendant would be responsible for finding sites for the 80 ATMs, preparing ATMs, dispatching ATMs to those sites and arranging for the installation of the ATMs at those sites. The plaintiff would not have to find locations or pay for the installation of the ATMs;
(f)the second defendant would provide a warranty for the ATMs for a period of seven years;
(g)the transaction fee of $2 payable each time a customer made a withdrawal from an ATM would be paid into an account maintained by the plaintiff in respect of which the plaintiff would retain 40 cents with the balance being paid to the purchasers of the ATMs.
In par 15 the plaintiff pleads that on 23 December 2009 Mr Reiter presented to Mrs Blakers a draft contract between the plaintiff and the fourth defendant. That draft contract is defined to be the Contract.
The Second Representations are defined in par 16. The plaintiff pleads that, when presenting the Contract to Mrs Blakers, Mr Reiter:
(a)did not afford Mrs Blakers the opportunity to read the Contract;
(b)told Mrs Blakers that the Contract contained what had been agreed in the verbal agreement and that she needed to sign the Contract immediately, which she did;
(c)did not tell Mrs Blakers that the Contract contained additional terms prejudicial to the interests of the plaintiff that had not been agreed in the verbal agreement; and
(d)did not tell Mrs Blakers that the Contract was not between the second defendant and the plaintiff as had been agreed.
The statement of claim defines, in par 16(b), as the Second Representations the pleaded statements to Mrs Blakers by Mr Reiter that the Contract contained what had been agreed in the verbal agreement and that she needed to sign the Contract immediately.
The Third Representations are defined in par 20 as being that on or about 6 May 2010 Mr Reiter told Mr Blakers that he agreed to change the Contract to provide, as had previously been agreed, that the plaintiff would be appointed the sole State Distributor for the sale of ATMs in Western Australia, that Mr Reiter and the second defendant had already secured sites in Perth for the siting of ATMs, that Mr Reiter and the second defendant would be responsible for finding sites for the ATMs and arranging for the installation of ATMs at those sites and that the plaintiff and Mr and Mrs Blakers did not have to do anything other than to purchase the ATMs.
The Fourth Representations are defined in par 43 as being that by the First Representations, the Verbal Representations, the Second Representations and the Third Representations Mr Reiter represented to the plaintiff, Mr Blakers and Mrs Blakers that the second defendant had the ability and intention to supply 80 ATMs to the plaintiff, that the second defendant had the ability and intention to find sites for the 80 ATMs, that the second defendant had the ability and intention to install the 80 ATMs at those sites and that the plaintiff would be appointed sole distributor for Western Australia.
The Fifth Representations are defined in par 46A as being that by reason of the matters pleaded in pars 7 ‑ 14, 17 and 20 ‑ 22 of the statement of claim Mr Reiter impliedly represented to the plaintiff that the $440,000 paid by the plaintiff was being applied and/or would be applied by Mr Reiter and the second defendant to purchase ATMs for the plaintiff and, in the case of the payment of $5,000 paid for the stall at the Perth Business Expo, Mr Reiter represented that the payment was the cost of the stall and would be used to market ATMs for the plaintiff.
The plaintiff pleads in par 47 that in making the Representations Mr Reiter was acting within the scope of his actual or apparent authority on behalf of the first defendant and the second defendant and that, by operation of s 84(1) and s 84(2) of the Trade Practices Act 1974 (Cth) (TPA), s 82(1) and s 82(2) of the Fair Trading Act 1987 (WA) (FTA) and the common law, his state of mind and conduct were at all time also those of the first defendant and the second defendant.
The plaintiff pleads in par 30 that by reason of Mrs Blakers having no authority to bind the plaintiff the Contract is a nullity, void and of no effect.
The plaintiff pleads in par 32 that the First Representations were false, misleading and deceptive within the meaning of s 10 of the FTA and s 52 of the TPA in that the following matters were not true:
(a)that Mr Reiter and the second defendant had secured or would or could secure sites in Perth for the siting of ATMs;
(b)that Mr Reiter and the second defendant could or would supply ATMs;
(c)that Mr Reiter and the second defendant were responsible for and could or would arrange for the installation of ATMs at sites;
(d)that the plaintiff, Mr Blakers and Mrs Blakers did not have to do anything other than purchase the machines.
Further and alternatively, the plaintiff pleads in par 33, the First Representations constituted representations as to a future matter and Mr Reiter did not have reasonable grounds for making them.
The plaintiff pleads in par 34 that in reliance on the First Representations it made payments of $440,000 to the first defendant, thereby causing the plaintiff to suffer loss and damage.
The plaintiff pleads in par 35 that the Second Representations were false, misleading and deceptive within the meaning of s 10 of the FTA and s 52 of the TPA in that:
(a)it was not true that the Contract contained what had been agreed in the verbal agreement;
(b)it was not true that Mrs Blakers needed to sign the Contract immediately;
(c)Mr Reiter failed to tell Mrs Blakers that the Contract contained additional terms prejudicial to the interests of the plaintiff that had not been agreed in the verbal agreement;
(d)Mr Reiter failed to tell Mrs Blakers that the Contract was not between the second defendant and the plaintiff; and
(e)Mr Reiter represented that the plaintiff would be appointed the sole distributor for Western Australia.
Further and alternatively, the plaintiff pleads in par 36, the Second Representations constituted representations as to a future matter and Mr Reiter did not have reasonable grounds for making them.
The plaintiff pleads in par 37 that in reliance on the First Representations and the Second Representations, alternatively the Second Representations only:
(a)Mrs Blakers signed the Contract;
(b)The plaintiff paid the sum of $40,000 to the first defendant on about 27 December 2009.
The plaintiff pleads in par 38 that by reason of the First Representations and the Second Representations or either of them being misleading and deceptive within the meaning of s 10 of the FTA and s 52 of the TPA and by reason of the plaintiff's reliance on the First Representations, the Verbal Representations and the Second Representations the plaintiff suffered loss and damage in the sum of $440,000 and, pursuant to s 77 of the FTA and s 87 of the TPA, is entitled to rescission of the contract signed by Mrs Blakers.
The plaintiff pleads in par 39 that the Third Representations were false, misleading and deceptive within the meaning of s 10 of the FTA and s 52 of the TPA in that Mr Reiter had not agreed to change the Contract.
Further and alternatively, the plaintiff pleads in par 40, the Third Representations constituted representations as to a future matter and Mr Reiter did not have reasonable grounds for making them.
The plaintiff pleads in par 41 that in reliance on the Third Representations it suffered loss and damage by paying to Mr Reiter and/or the first defendant the sum of $5,000 for a stall at the Perth Business Expo.
The plaintiff pleads in par 44 that the Fourth Representations were false, misleading and deceptive within the meaning of s 10 and s 21 of the FTA and s 52 and s 58 of the TPA in that neither the second defendant nor the other defendants had the ability or intention to supply 80 ATMs or any ATMs to the plaintiff, of finding sites for 80 ATMs or any ATMs or installing 80 or any ATMs or that the plaintiff would be appointed the sole distributor for Western Australia.
Further and alternatively, the plaintiff pleads in par 45, the Fourth Representations constituted representations as to a future matter and Mr Reiter did not have reasonable grounds for making them.
The plaintiff pleads in par 46 that in reliance on the Fourth Representations the plaintiff paid to the first defendant and Mr Reiter $445,000 and, in reliance on the First Representations, the Verbal Representations and the Second Representations only, Mrs Blakers signed the Contract which she would not otherwise have done, thereby causing the plaintiff to suffer loss and damage.
The plaintiff pleads in par 46B that the Fifth Representations were false, misleading and deceptive within the meaning of s 10 of the FTA and s 52 of the TPA in that:
(a)neither Mr Reiter or the second defendant was applying the $440,000 to purchase ATMs for the plaintiff and neither had any intention of doing so; and
(b)Mr Reiter was not using the stall at the Perth Business Expo to market ATMs for the plaintiff and Mr Reiter had no intention of doing so.
Further and alternatively, the plaintiff pleads in par 46C, the Fifth Representations constituted representations as to future matters and Mr Reiter did not have reasonable grounds for making them.
The plaintiff pleads in par 46D that in reliance on the Fifth Representations the plaintiff paid to the first defendant and Mr Reiter $445,000 thereby suffering loss and damage.
The plaintiff pleads in par 48 a claim in conversion, that Mr Reiter and the first defendant intentionally dealt with the payments totalling $445,000 not for the purpose of purchasing ATMs but for their own purposes, which had the effect of re‑vesting the right of immediate possession of the $445,000 in the plaintiff.
The plaintiff pleads in par 49 that the payments of $445,000 made to Mr Reiter and the first defendant were mutually intended by Mr Reiter, the first defendant and the plaintiff not to be part of the assets of Mr Reiter and the first defendant, but that those monies should be used exclusively for the purpose of purchasing and siting 80 ATMs and the monies were held by Mr Reiter and his alter ego the first defendant as trustee for the plaintiff for that purpose.
The plaintiff pleads in par 53 that in or about April or May 2010 Mr Reiter caused the sole State Distributorship for ATMs in Western Australia to be sold by the first defendant and purchased by William Sheehy by executing a contract on behalf of the first defendant with Mr Sheehy in substantially the same terms as the Contract and that in respect of his contract Mr Sheehy paid $220,000 to Mr Reiter.
The plaintiff pleads in par 52 that the fourth defendant was deregistered on 27 January 2012 and in par 54 that by reason of the fourth defendant being deregistered the contract has been frustrated or abandoned and there has been a total failure of consideration.
The plaintiff pleads in par 55 that by reason of the matters pleaded in pars 49 ‑ 54 the exclusive purpose for which the plaintiff paid $445,000 to the first defendant has not been fulfilled and the first defendant and Mr Reiter held the sum of $445,000 as trustee for the plaintiff and are required to repay it to the plaintiff.
The plaintiff pleads in par 56 further and alternatively in breach of the trust pleaded in par 49 neither the first defendant nor Mr Reiter applied the payments of $445,000 for the purchase of 80 or any ATMs or otherwise for the purpose of the Contract and they are required to repay that sum to the plaintiff.
The plaintiff claims against the first defendant and Mr Reiter a declaration that the first defendant and Mr Reiter hold $445,000 on trust for the plaintiff, an order that the first defendant and the third defendant pay $445,000 to the plaintiff and interest on that sum. The plaintiff claims against Mr Reiter a declaration that the Contract is void and of no effect, restitution of any monies paid to Mr Reiter pursuant to the Contract, rescission of the Contract, damages at common law and pursuant to s 79 of the FTA and s 82 of the TPA, interest and an order that Mr Reiter indemnify the plaintiff for any loss or damage sustained by it by reason of it entering into the Contract.
The prayer for relief against the first defendant for an order that it pay $445,000 to the plaintiff does not specify the basis for that claim. The plaintiff pleads in par 47 that Mr Reiter's state of mind and conduct were also those of the first defendant. The plaintiff's opening and closing submissions appeared to be on the basis that the plaintiff claims damages for misleading or deceptive conduct against both the first defendant and Mr Reiter. I interpret the statement of claim as including a claim against the first defendant for damages of misleading or deceptive conduct pursuant to s 79 of the FTA and s 82 of the TPA.
The defences of the first defendant and Mr Reiter
The first defendant and Mr Reiter deny that the representations and agreements pleaded by the plaintiff were made and deny that the plaintiff is entitled to any relief.
The first defendant and Mr Reiter plead in par 7 of their defences that by a verbal agreement (which they define as the Supply Agreement) made on or about 14 December 2009 between Mr Reiter, in his capacity as sales manager for the fourth defendant and Mr and Mrs Blakers, either on their own behalf or on behalf of their nominee, it was agreed that the fourth defendant would supply, and Mr and Mrs Blakers would purchase, ten ATMs for the price of $198,000. The first defendant and Mr Reiter plead in par 8 that subsequent to that agreement Mr Reiter, on behalf of the fourth defendant, informed Mr and Mrs Blakers that the fourth defendant would supply the plaintiff with 11 ATMs for the price of ten.
The first defendant and Mr Reiter plead in pars 10 and 11 that $158,000 was paid by Mr and Mrs Blakers to the first defendant on behalf of the fourth defendant and that on or about 18 December 2012 (which is clearly intended to be 18 December 2009) Mrs Blakers paid the sum of $40,000 into the bank account of the first defendant, on behalf of the fourth defendant.
The first defendant and Mr Reiter plead in par 12 that by a verbal agreement (which they define as the Verbal Distribution Agreement) entered into on or about 18 December 2009 between Mr Reiter, on behalf of the fourth defendant, and Mr and Mrs Blakers either on their own behalf or on behalf of their nominee, it was agreed that:
(a)the Supply Agreement would not go ahead;
(b)Mr and Mrs Blakers, either on their own behalf or on behalf of their nominee would pay $400,000 plus GST (a payment they define as the Licence Fee) to secure the State distribution rights for the ATMs;
(c)the sum of $198,000 that had been agreed to be paid under the Supply Agreement would be applied towards the Licence Fee;
(d)payment of the Licence Fee would also be regarded as a non‑refundable deposit of $5,000 plus GST per ATM for 80 ATMs;
(e)Mr and Mrs Blakers, either on their own behalf or on behalf of their nominee would be appointed the sole State distributors for Western Australia for ATMs to be supplied by the fourth defendant;
(f)Mr and Mrs Blakers, either on their own behalf or on behalf of their nominee would find purchasers for ATMs and would issue invoices to the purchasers;
(g)orders for ATMs would be placed to the fourth defendant and the machines would be paid for in full before they were delivered;
(h)Mr and Mrs Blakers, either on their own behalf or on behalf of their nominee would be responsible for finding sites for ATMs;
(i)the fourth defendant would arrange installation of the ATMs;
(j)the fourth defendant would provide a seven year warranty for the ATMs; and
(k)a transaction fee of $2 would be payable each time a customer made a withdrawal from an ATM, that account would be maintained by the fourth defendant and the sum of $1.70 would then be paid to the plaintiff.
The first defendant and Mr Reiter plead in par 14 that on or about 20 December 2012 (which is clearly intended to be 20 December 2009) Mr and Mrs Blakers paid the sum of $202,000 into the bank account of the first defendant, on behalf of the fourth defendant, that the payment of $40,000 was made by the plaintiff to the first defendant on behalf of the fourth defendant and that the payment of $5,000 was made by the plaintiff to the first defendant on behalf of the fourth defendant.
In par 16 of their defences the first defendant and Mr Reiter plead that by a written agreement (which they define as the Distribution Agreement) between the plaintiff and the fourth defendant which Mrs Blakers signed on behalf of the plaintiff the fourth defendant granted the plaintiff the Western Australian distribution rights and service and supply rights in respect of ATMs and they plead express terms of the Distribution Agreement.
The initial communications between Mr and Mrs Blakers and Mr Reiter
The West Australian newspaper of Saturday 12 December 2009 contained an advertisement for investors to own ATMs and to earn income from those machines. Mr and Mrs Blakers read that advertisement. After reading that advertisement Mrs Blakers telephoned the number that appeared in the advertisement and spoke to Mr Reiter.
On 13 December 2009, after that telephone conversation, Mr Reiter sent an email to Mrs Blakers, with the subject 'Cashere Info Pack'. The signature block on the email described Mr Reiter as Sales Manager of the fourth defendant. In the email Mr Reiter said that as 'a special launch offer we are supplying State of the Art Automated Teller Machines as per the prices attached'. He asked Mrs Blakers to 'look at the attached Presentation, Cashere Spreadsheet and brochure so that you can see if you qualify for this incredible money making opportunity'.
The attachment described by Mr Reiter as the Presentation was a slideshow. The name Cashere featured prominently on it. On the top right corner of each page of the slideshow there was an area in which the following appeared:
cashere
be the bank‑earn transaction fees
The pages of the slideshow included the following:
YOUR CASHERE
ATM BUSINESS
3 Levels of Investment
1)Own your own CASHERE ATM
2)Own and manage multiple Machines
3)State Distributor Ask us for more details …
…
Cashere Services
•Deployment - we arrange communication services, installation and merchant training
•Switching - acquiring, settlement and rebates
•Reporting - daily, weekly and monthly
•Maintenance - 24 hour help desk
…
Investment
•Cashere ATM
Deployment
Installation + Training
Switching + Settlement
Reporting + Maintenance
•Only $24,990 (inc GST)
…
Show Special
•5 Machines for $99,000 (inclusive of GST)
•Cashere ATM
•Deployment
•Installation + Training
•Switching + Settlement
•Reporting + Maintenance
The attached brochure stated:
cashere is at the forefront of the ATM industry evolution in Australia. We began when the introduction of Private ATM Ownership occurred in 2009 with the introduction of the new Legislation and the latest, large screen hardware.
Mrs Blakers replied by email on the same day. In that email Mrs Blakers said:
Hi Tim
Also have you got a state distributor for WA. I would also be interested in this position.
Meeting and telephone conversations on 14 December 2009
On Monday 14 December 2009 Mr and Mrs Blakers met Mr Reiter in the lobby of the Sheraton Hotel in Perth. The evidence of Mr Blakers and of Mrs Blakers was that at the meeting Mr Reiter told them that the ATMs that they purchased would have pre‑determined locations, that the location of those sites was confidential, that he had a company finding the sites, that if Mr and Mrs Blakers purchased the machines they would pay his company Cashere directly and the machines would be delivered to the site and installed by Cashere at no extra cost, that Mr and Mrs Blakers would earn money on each ATM transaction, that the site owner, the switching company and the state distributor of the machine would receive a portion from each ATM transaction and that the switching company was responsible for providing a network connection between the ATMs and the retail banks.
Mr Blakers also gave evidence that Mr Reiter said that the electrical work for the ATMs would be done by his company, that his company would connect the machines to the banks, that the cost for this work was included in the purchase price for the ATMs, that there was a seven year warranty for the ATMs, so no maintenance costs were payable for the first seven years, that there was a possibility the ATMs might require refurbishment after that time, that the role of the machine owner was to supply paper rolls on which the receipts were printed, to empty the money out of the ATMs and to restock the cash as required, that it was likely that if Mr and Mrs Blakers purchased the paper rolls the site owner would change them, that the ATMs had the ability to operate as a deposit point for the site owner and that the machines were a perfect investment because they would not have to do anything further after making the initial purchase.
Mr Blakers expressed interest in initially purchasing ten ATMs and in the State Distributorship and he told Mr Reiter that the machines would be purchased by his company, the plaintiff.
In his evidence Mr Reiter denied that he told Mr and Mrs Blakers that the location of the sites was confidential, but he agreed that he told them that there was a company finding sites. He also agreed that he told Mr and Mrs Blakers that ATMs would be installed at the site at no cost to them. Mr Reiter denied that he told Mr and Mrs Blakers that the third defendant would supply and install the ATMs. His evidence was that he said that the fourth defendant would do so. He agreed that he used the name Cashere, but his evidence that was a business name, not the third defendant. Mr Reiter denied that he said that the owner of the ATMs was required to empty the ATMs.
Mr Blakers told Mr Reiter that he and Mrs Blakers wanted to think about the investment overnight.
Mr Reiter telephoned Mr Blakers in the afternoon of 14 December 2009. He asked Mr Blakers if he had made a decision on the ATMs. Mr Blakers told him that Mr and Mrs Blakers had decided that they would definitely purchase ten machines.
Mr Reiter telephoned Mr Blakers a second time on 14 December 2009. He told Mr Blakers that Mr and Mrs Blakers would get 11 ATMs for the price of ten.
Meeting on 15 December 2009
Mr Blakers and Mrs Blakers met Mr Reiter on Tuesday 15 December 2009 at Cocos Restaurant in South Perth. Mr Reiter told them that because they had agreed to purchase ten machines he had decided to award them the West Australian State Distributorship. Mr Blakers said that Mr and Mrs Blakers were very interested in the State Distributorship, but that they wanted to see further information about it before accepting.
Mr and Mrs Blakers' evidence was that at the meeting Mr Reiter handed Mr Blakers an invoice dated 15 December 2009 addressed to Natalie and Paul Blakers. The invoice was for $198,000 for the supply, installation and maintenance of 11 ATMs and contained a request for the payment to be made into the bank account of Credit Able. Mr Blakers asked what Credit Able was. Mr Reiter said that it was his company that arranged re‑financing and that Credit Able financially backed Cashere in these deals. Mr Reiter said that the invoice had to be paid that day.
Mr Reiter's evidence was that he knew that Mrs Blakers received the invoice of 15 December 2009, but he was not sure whether he gave it to Mrs Blakers at the meeting on 15 December 2009. In cross‑examination Mr Reiter agreed that he had not mentioned the name Credit Able to Mr and Mrs Blakers previously. He was asked if Mr and Mrs Blakers asked who Credit Able was. He denied saying that Credit Able was his company that arranged re‑financing and that it financially backed Cashere.
Meetings on 16 December 2009
Mr Blakers and Mrs Blakers met Mr Reiter on Wednesday 16 December 2009 in the lounge area at the Sheraton Hotel. At that meeting Mrs Blakers handed to Mr Reiter a cheque payable to Credit Able for $158,000. Mr Reiter said that he needed special clearance so that the funds would be available in Credit Able's account as soon as possible and that the details of the State Distributorship were still being finalised.
Mrs Blakers left the hotel and went to a Westpac Branch to bank the cheque with a request for a special clearance. On the same day she transferred the sum of $40,000 to the first defendant.
Mr Blakers and Mrs Blakers met Mr Reiter at the Sheraton Hotel later on the same day. In the pleadings this meeting is said to have occurred on 18 December 2009. In my view nothing turns on the date of the meeting. The parties agree in the pleadings that the meeting took place and that at that meeting the parties agreed to vary the arrangements so that the plaintiff was appointed as State Distributor. On the evidence the meeting at which these things occurred took place on 16 December 2009.
At that meeting Mr Reiter showed a slideshow on his laptop about Cashere and gave a presentation about the State Distributorship.
The name Cashere featured prominently on the slide show and each page of it included the words:
cashere
be the bank‑earn transaction fees
The pages of the slideshow also included the following:
Your selling Point is that Individuals can now own ATM's & receive fees just like the bank with CASHERE
…
Guaranteed Income
-Minimum 10% per transaction for Your ATM Machine owners
You make a massive 20 cents on every transaction in your WA ATM network
Passive Income
-Machines do the work for you
…
WA State Rights
Your Investment
1)$400,000.00 Investment secures the State
2)No Goodwill. Money is a $5000 deposit on only 80 ATMs. As ATMs are sold the $5000 is credited to your buy price
3)Make $5,000.00 per ATM sold when all ATMs are sold you have received back the $400,000 and made $400,000.00 and will thereafter profit from the transaction fees. WA potential is many more than 80 ATM's. If 80 ATM Machines are sited then example spreadsheets ongoing income is $175,200 per annum.
Mr Blakers' evidence was that Mr Reiter said that Cashere would be responsible for finding sites for the ATM machines, arranging transport of the machines to Perth and installing the machines on site and that according to Mr Reiter's proposal as State Distributors Mr and Mrs Blakers would receive some 20 cents per transaction for each ATM sold.
Mrs Blakers gave evidence that Mr Reiter said that he had employed a marketing company to site the machines and would arrange the transport of the machines to Perth, that all that Mr and Mrs Blakers had to do was find and organise purchasers for the machines and that as State Distributors they would receive almost 20 cents per transaction for each ATM they sold.
Mr Blakers and Mrs Blakers gave evidence that Mr Reiter said that he would use their $198,000 payment as a part‑deposit for all 80 ATMs and that they would have to pay an extra $202,000 to make up the $400,000 investment required to secure the State Distributorship.
In his evidence Mr Reiter agreed that he met with Mr and Mrs Blakers after they had paid $198,000 to Credit Able and they discussed the State Distributorship. He also agreed that he presented the slide show at that meeting. He denied that the references to Cashere were references to Cashere Pty Ltd. He agreed that he and Mr and Mrs Blakers agreed to vary the arrangement by which they had paid $198,000 for the purchase of ATMs would, instead, be used under the new arrangement. He denied that he told Mr and Mrs Blakers that Cashere would be responsible for finding sites.
The payment of $202,000 and the signing of the State Distributorship Agreement
In the following days Mr Blakers had telephone conversations with Mr Reiter. Mr Blakers' evidence was that Mr Reiter told him that payment for the State distributorship had to be made in order to keep other interested parties out.
On Sunday 20 December 2009 Mrs Blakers paid $202,000 into the first defendant's bank account. On the same day she sent an email to Mr Reiter telling him that she had done so, requesting a receipt for all monies that had been paid and enquiring as to the time they were to start on Monday.
Mr Reiter replied to Mrs Blakers' email the same day, informing her that he had confirmed appointments, that there were three so far for Tuesday and that he would make more appointments for Tuesday. He said that the administration department would issue the tax invoice on Monday.
On 22 December 2009 Mrs Blakers met Mr Reiter at the Sheraton Hotel. Mr Blakers did not attend this meeting. At this meeting Mrs Blakers met with potential purchasers of ATMs.
Mrs Blakers again met with Mr Reiter at the Sheraton Hotel on 23 December 2009. At this meeting Mrs Blakers met with more potential purchasers. At the conclusion of the meetings Mr Reiter handed a form of contract between the plaintiff and the fourth defendant, entitled 'State Distributor Service & Supply Agreement', to Mrs Blakers.
Mrs Blakers' evidence was that Mr Reiter told her that it was the agreement that Mr Blakers and she had discussed at their previous meetings with Mr Reiter. Her evidence was that while holding the agreement Mr Reiter flicked through the pages and pointed to and read out sub headings in the document, which Mrs Blakers cannot recall. Mrs Blakers' evidence was that she did not read the agreement. Her evidence was that she asked Mr Reiter if the agreement contained all the terms that Mr Blakers and Mr Reiter had agreed upon and that Mr Reiter said that everything that he and Mr Blakers had discussed was included in the agreement and that Mrs Blakers needed to sign the contract because he had to take the contract to Melbourne that night. Mrs Blakers signed the agreement. Mr Reiter then handed to her an unsigned copy of the agreement.
Mrs Blakers was not a director or secretary of the plaintiff. No signed copy was produced at the trial. The provision for execution of the document stated that it was signed for and on behalf of the plaintiff by its authorised officers and provided for it to be signed by a director and a director/secretary.
Mr Reiter denied that he had not told Mrs Blakers before the meeting that he would bring the agreement for her to sign and he denied that he told Mrs Blakers that she needed to sign the agreement immediately. His evidence was that he offered Mrs Blakers every opportunity to take the agreement to a professional of her choosing.
When she returned home that night Mrs Blakers handed the unsigned copy of the agreement to Mr Blakers. Mr Blakers put the agreement on his desk to read after the Christmas break.
It was sometime after 27 December 2009 that Mrs Blakers told Mr Blakers that she had signed the agreement that Mr Reiter had presented to her.
Mr Blakers read through the State Distributorship Agreement. He saw that the front page showed that it was between the plaintiff and the fourth defendant and that the agreement did not provide that Mr Reiter or the fourth defendant would be responsible for finding sites for, transport and installing ATMs and that the plaintiff was not appointed the sole distributor for Western Australia.
Payment of $40,000
In around late December 2009 Mr Reiter told Mr Blakers that he had forgotten to included GST on the $400,000 investment. After that conversation Mr Blakers received an invoice dated 23 December 2009 from Credit Able addressed to Mr and Mrs Blakers for $440,000 as a deposit for 80 ATMs. Mr Blakers told Mrs Blakers to make a payment of $40,000. Mrs Blakers made the payment on 27 December 2009.
Communications following Mrs Blakers' signing of the State Distributorship Agreement
Following the meeting of 23 December 2009 Mrs Blakers sent emails to Mr Reiter informing him of her progress in finding purchasers of ATMs and passing on to him questions that she had received from potential purchasers. On 30 December 2009 Mrs Blakers sent an email to Mr Reiter in the following terms:
I met with Jerry this morning, he is keen but wants to know the site before purchasing and that he wants in the Perth CBD and Northbridge areas, are we able to do this?
On 11 January 2010 Mr and Mrs Blakers attended the offices of Mendelawitz Morton to seek legal advice.
At some time after 11 January 2010 Mr Blakers telephoned Mr Reiter and told him that Mr and Mrs Blakers did not acknowledge the State Distributorship agreement that Mrs Blakers had signed because Mrs Blakers was not a director of the plaintiff, there had been no opportunity for legal advice and the agreement did not reflect what Mr Reiter had told Mr Blakers in their telephone conversations and meetings.
On 25 January 2010 Mrs Blakers sent an email to Mr Reiter, which she wrote as she and Mr Blakers were about to go to Bali for a week. She apologised for not having responded to Mr Reiter earlier and said that the reason was that she had been busy with the ATMs and Mr and Mrs Blakers' window business.
She informed Mr Reiter that she had received payment for five ATMs and that she would receive payment for another machine that week. She also said that when she returned from Bali she had an appointment with a person who was to become a regional distributor and was also going to buy five ATMs. Mrs Blakers asked Mr Reiter to email her an up to date info pack as she had people waiting to receive information about the ATM and she did not want to send them the old info pack. She asked Mr Reiter to liaise with the lawyers to sort out the contracts as Mr and Mrs Blakers did not want to break any trade practices acts and said that Mr Blakers had tried to call Mr Reiter a few times, but there had been no answer. Mr Blakers sent follow up emails requesting info packs on 29 January 2010 and 3 February 2010.
On 4 February 2010 Mr Reiter replied to Mrs Blakers' emails, enclosing an updated presentation and said that Mrs Blakers should change it to reflect her company and that he had left out the pricing page so that Mrs Blakers could create her own if she wanted to change the pricing.
Mrs Blakers replied on the same day. She said that she had spoken to some people and that they asked the questions that Mrs Blakers set out in the email:
I know I have asked this before, but what happens after the 7 years with the maintenance package and the carry on of the machine who will look after it if there is any problems with maintenance and the switching (banking programme)?
Once they pay their deposit to purchase a machine do they get a list or can they pick an area where they want the machine to go.
Also what is the procedure once someone has given me their money? Like what paper work is required regarding their details for their transaction fees to be deposited and email reports etc.
Is it still 10 days to install?
On 8 February 2010 Mrs Blakers sent a follow up email, saying that Mr Blakers had tried to call him twice that day, asking Mr Reiter to call her or Mr Blakers as soon as possible and asking 'what's going on??'.
On 10 February 2010 Mrs Blakers sent an email to Mr Reiter informing him that Mr and Mrs Blakers had spoken with their lawyer that day and he still had not received anything back from Mr Reiter. She informed Mr Reiter that this was becoming a problem for her, as she had been holding people off and she was holding $99,000 for someone to buy five ATMs. She informed Mr Reiter that their lawyer had advised them not to proceed with any sales until issues were sorted out. She said that Mr Reiter had told Mr and Mrs Blakers on the 8th that it was going to be sent to their lawyer. Mrs Blakers said that the issue had been outstanding for three weeks and that 'I need it sorted to move forward'.
Mr Reiter replied the same day, saying that her lawyer would have his response the next day.
On 11 February 2010 Mrs Blakers sent an email to Mr Reiter saying that she still had not heard from her lawyer and asking if the information had been sent.
On 19 February 2010 Warwick Isherwood & Associates, solicitors acting for the fourth defendant, sent a form of agreement to Mendelawitz Morton.
Mr Blakers' evidence was that in or around late February 2010 he contacted Mr Reiter and told him that he should put the $440,000 that Mr and Mrs Blakers had paid into a trust account until the amendments to the agreement were finalised. Mr Reiter told him that he would not do that and that if they wanted their money back Mr and Mrs Blakers would have to start selling the ATMs.
On 9 March 2010 Mendelawitz Morton wrote to Warwick Isherwood & Associates informing them that the draft amendment deed that had been provided to them did not allay all the concerns that had been raised previously and that it appeared to raise further issues that had not been previously discussed. The letter expressed concerns about the plaintiff being liable to its customers and proposed an alternative structure for the dealings between the two companies.
On 24 March 2010 Mr Isherwood of Warwick Isherwood & Associates sent an email to Mr Mendelawitz of Mendelawitz Morton informing him that he had not been able to get instructions from the fourth defendant and that he no longer acted.
On 22 April 2010 Mr and Mrs Blakers met with Mr Reiter in Brighton, Victoria. Also present at that meeting was Phil Bryce‑Johnston who was a director of the fourth defendant. Mr and Mrs Blakers said that they did not recognise the State Distributorship Agreement that Mrs Blakers had signed because Mr Blakers did not sign the agreement and because of the circumstances in which the contract was signed. Mr Bryce‑Johnston said that the plaintiff was bound by the agreement. Mr Blakers asked Mr Reiter and Mr Bryce‑Johnston if they could view the ATMs that were to be sold in WA and that Mr Reiter said that the machines were in Queensland. Mr Blakers said that he would travel to Queensland to see the machines. Mr Reiter said that they were not allowed to see the machines until they had purchase orders in place from for the ATMs. Mr Reiter and Mr Bryce‑Johnston said that Mr and Mrs Blakers could look at one of the machines in Victoria, at a café in the Mornington Peninsula. Mr Reiter said that this was the only site in Victoria.
Mr and Mrs Blakers travelled to the café in the Mornington Peninsula and saw a working ATM.
The evidence of Mr Blakers was that in or around early May 2010 Mr Reiter telephoned him and said that he had agreed to all the changes that Mr Blakers had requested and the agreement would be amended to give effect to Mr Reiter's promises. Mr Reiter asked Mr Blakers if he would participate in an expo to be held at the Perth Convention and Exhibition Centre on 15 ‑ 16 May 2010 to drum up sales for the ATMs. Mr Blakers' evidence was that on the strength of Mr Reiter telling him that the agreement would be amended to give effect to the promises he told Mr Reiter that he and Mrs Blakers would participate in the expo. Mr Reiter said that he would bring the amended agreement to the expo. Mr Blakers' evidence was also that on the strength of Mr Reiter telling him that the agreement would be amended to give effect to the promises on or about 7 May 2010 he instructed Mrs Blakers to pay $5,000 to the organiser of the expo. On or about 7 May 2010 Mrs Blakers paid $5,000 to cover the cost of a stall at the expo.
The evidence of Mr and Mrs Blakers was that on Friday 14 May 2010 they met Mr Reiter at the Convention and Exhibition Centre. Mr Blakers asked for the amended contract. Mr Reiter said that he would provide the contract after the weekend was over.
Mr and Mrs Blakers participated in the expo on 15 and 16 May 2010. Mr Reiter and Mr Bryce‑Johnston were also present at the expo. Mr Bryce‑Johnston had another booth, near Mr and Mrs Blakers' booth.
On Monday 17 May 2010 Mr Reiter sent an email to Mrs Blakers attaching an amended form of contract. Mr and Mrs Blakers did not consider that the revised contract contained the promises that Mr Reiter had made.
On 20 May 2010 Mr Reiter wrote to Mrs Blakers in the following terms:
Further to the assistance provided at the recent Perth Expo on Sat 15th May and Sun 16th May 2010, Good news, I am pleased to inform you that we now have people wishing to proceed with sales which means profit to you.
Please provide me with the agreement you wish me to sign these people up on.
On 21 May 2010 Mendelawitz Morton wrote to the second defendant, saying that they were instructed that negotiations between the second defendant and the plaintiff had broken down. In that letter Mendelawitz Morton stated that it was their view that there was no agreement between the plaintiff and the fourth defendant and that the second defendant held the $440,000 that it had been paid on a bare trust for the plaintiff. Mendelawitz Morton informed the second defendant that the plaintiff offered to resolve matters by the second defendant supplying the plaintiff with 26 ATMs in exchange for the $440,000, which the second defendant would arrange to be sited, serviced and supported, together with other conditions.
Mr Reiter responded to that letter verbally, saying that he was not holding any money on trust and that because the contract was between the fourth defendant and the plaintiff Mr and Mrs Blakers should contact the fourth defendant.
On 10 and 17 July 2010 advertisements appeared in the West Australian newspaper for ATMs. Those advertisements contained the same telephone number as the advertisement that had been in the newspaper on 12 December 2009. Mr Blakers arranged for a friend to telephone the number. The friend told him that he had done so and had spoken to Tim who said that he was looking for a State distributor. Mr Blakers then decided to commence legal action.
The dealings between the defendants and the use of moneys received by the first defendant
On 15 January 2010 the second defendant and the fourth defendant entered into a written agreement by which the second defendant gave to the fourth defendant an exclusive licence to exploit what is described in the agreement as 'the ATM concept'. That term is defined in the agreement as being a business model for the sale, operation and installation of ATMs.
By that agreement the fourth defendant was given a right to grant sub licences to ATM Concept Customers. The right to grant the sub‑licence was conditional upon the payment to the second defendant of what was described in clause 4 of the agreement as being the Initial Payment. Clause 4.2 provided that the Initial Payment must be paid direct to the second defendant by or on behalf of the ATM Concept Customers and that where moneys received 'by or on behalf of' the ATM Concept Customers was 'equal to or less than the Initial Payment then the full amount received must be paid and Cashere may retain any Money Owing to and for its own account'. Schedule 1 to the agreement provided that the Initial Payment for the State of Western Australia was $400,000.
The sum of $400,000 as the initial payment for Western Australia in that agreement is the same sum as the sum of $400,000 for the State distributorship in the second slideshow presented to Mr and Mrs Blakers.
The December 2009 bank statement of the first defendant shows that on 16 December 2009 deposits of $40,000 and $158,000 were made into the first defendant's account. These were the two payments made by Mrs Blakers. On 18 December 2009 a payment of $225,000 was made out of the first defendant's account to Ali Family.
On 21 December 2009 the transfer of $202,000 that Mrs Blakers had made on 20 December 2009 was credited to the first defendant's account. On the same day a payment of $180,000 was made out of the first defendant's account to Ali Family.
On 29 December 2009 the payment of $40,000 that Mrs Blakers had made on 27 December 2009 was credited to the first defendant's account. On 31 December 2009 a payment of $24,908.40 was made out of the first defendant's account for an ATM purchase.
Mr Reiter accepts that the first defendant received $405,000 from Mr and Mrs Blakers on or about the times that they gave evidence of. He also accepts that he rendered invoices in the name of the first defendant. He also accepts that he arranged for the monies paid into the bank account of the first defendant to be immediately paid out of the bank account. His evidence was that he handled these transactions in this way at the direction of the fourth defendant because its directors were overseas at the time.
I do not accept Mr Reiter's evidence on these matters.
In my view it is entirely implausible that the fourth defendant would not be able to render invoices or to have monies banked into its account because its directors were overseas.
The first defendant and the second defendant were both Mr Reiter's companies.
In my view the fact that the agreement of 15 January 2010 provided that the sum of $400,000 was to be paid directly to the second defendant by the ATM Concept Customer for the State of Western Australia confirms that Mr Reiter regarded the monies arranged to be paid by Mrs Blakers were monies that were available to him.
I find that Mr Reiter gave to Mr and Mrs Blakers accounts in the name of the first defendant because he intended that they pay money to the first defendant and that he intended to use those monies as monies of the first defendant. I find that when the first defendant received the moneys that Mrs Blakers arranged to bank into the first defendant's bank account Mr Reiter paid monies out of the first defendant's bank account as monies of the first defendant, that the first defendant was treating those monies as its own and that Mr Reiter was not acting at the direction of the fourth defendant.
Mr William Sheehy
In about March 2010 Mr William Sheehy saw an advertisement in the West Australian newspaper for a State Distributor of ATMs. He telephoned the mobile phone number in the advertisement and spoke to Mr Reiter. In March 2010 he met Mr Reiter and Mrs Blakers at the Sheraton hotel. Mr Reiter told Mr Sheehy that Mrs Blakers and her husband's company was the State distributor for ATMs.
Mr Sheehy told Mr Reiter that he was not interested in anything other than the State distributorship. Mr Reiter told him of the benefits of owning individual ATMs and handed Mr Sheehy a leaflet with the Cashere logo on it, but Mr Sheehy was not interested and the meeting came to an end.
In about April or May 2010 Mr Reiter contacted Mr Sheehy and told him that the State distributorship was available. He told Mr Sheehy that the other people had moved onto purchasing another business. Mr Sheehy understood that Mr Reiter was referring to Mr and Mrs Blakers.
In or around late May 2010 Mr Sheehy met Mr Reiter at the Hyatt Hotel. Mr Reiter told Mr Sheehy that the State distributorship was available, that it would cost $440,000 and that as part of acquiring the State distributorship Mr Sheehy would own a number of ATMs. Mr Reiter told Mr Sheehy the number that he would acquire, but Mr Sheehy cannot recall what that number was. Mr Reiter told Mr Sheehy that he could offer Mr Sheehy a sub‑agency as a retired banker wanted half the State distributorship and the distributorship could be split into two halves.
Mr Reiter told Mr Sheehy that he had 120 leads for selling ATMs and that he converted 1 in 5 leads to sales. Mr Reiter told Mr Sheehy the amount of money that could be made from an ATM and the number of transactions a day that could be expected. Mr Sheehy cannot recall the numbers that Mr Reiter stated, but he can recall that Mr Reiter's statements made him believe that Mr Reiter's proposal was a profitable exercise.
Mr Sheehy continued to meet with Mr Reiter. At one of their meetings Mr Reiter provided Mr Sheehy with a form of agreement between the first defendant and Mr Sheehy's nominee for the appointment by the first defendant of Mr Sheehy or his nominee as State distributor of ATMs. Mr Sheehy took the agreement home and considered it.
Mr Sheehy's evidence‑in‑chief, which was given by the tendering of his statement, was that he recalled Mr Reiter saying that the terms of the agreement were that Mr Sheehy would be responsible for selling the individual ATMs and siting, installation and transportation was Mr Reiter's responsibility. However in cross‑examination his evidence was that it was his understanding that he was responsible for finding sites for ATMs.
Mr Sheehy agreed to become Regional Distributor and he signed the form of agreement that Mr Reiter had presented to him. He did not receive a signed copy from Mr Reiter. Mr Reiter told Mr Sheehy that he was the distributor for the whole of Western Australia.
Mr Sheehy gave two cheques to Mr Reiter. One cheque was for $55,000, which was debited from his account on 17 June 2010 and the other cheque was for $165,000, which was debited from his account on 9 July 2010. Mr Reiter accompanied Mr Sheehy to his bank when the second cheque was cleared. Mr Sheehy cannot recall whether the cheques were payable to Credit Able Pty Ltd, Mr Reiter or to cash.
When Mr Sheehy gave the second cheque to Mr Reiter, Mr Reiter gave to Mr Sheehy a list of leads for the siting of ATMs. Mr Sheehy telephoned all those leads and all of the people told him that they were not interested in purchasing ATMs. Mr Sheehy told Mr Reiter of the results of his enquiries. Mr Reiter told Mr Sheehy that it was up to Mr Sheehy to find more leads.
Mr Sheehy reminded Mr Reiter that he had said that he could convert 1 in 5 leads to sales. Mr Reiter insisted that Mr Sheehy needed to find more leads. Mr Sheehy told Mr Reiter that he should place some more advertisements to generate more leads.
In July 2010 Mr Sheehy saw advertisements in the West Australian newspaper for state distributors of ATMs. These advertisements were similar to the advertisements that Mr Sheehy had seen earlier and had the same telephone number. Mr Sheehy contacted Mr Reiter and asked him why he was advertising for State distributors. Mr Reiter told him that he intended to divide Western Australia into separate regions managed by sub distributors and that the advertisements were for the appointment of sub‑distributors.
In September of October 2011 Mr Sheehy went to Mr Reiter's office in Melbourne and asked to see an ATM. Mr Reiter took Mr Sheehy to 'a broken shop', showed Mr Sheehy an ATM and said words to the effect of 'well, you've seen one ATM you've seen the lot'.
Sometime after that conversation Mr Sheehy had a telephone conversation with Mr Reiter in which he asked Mr Reiter if he could have his money back as their arrangement was not working. Mr Reiter said that Mr Sheehy had to get out and make it work.
Mr Sheehy has not sold an ATM or received any income from his investment.
Whether Mr Sheehy's evidence assists the plaintiff's case
At his first meeting with Mr Reiter, which was also attended by Mrs Blakers, Mr Sheehy told Mr Reiter that he was only interested in the State distributorship and as that was not available the discussions did not proceed at that time.
It was later that further discussions were held between Mr Sheehy and Mr Reiter and the agreement between Mr Sheehy and the first defendant was entered into.
By the time that Mr Sheehy paid monies to the first defendant the relationship between the plaintiff and the defendants had broken down.
The discussions between Mr Sheehy and Mr Reiter concerned ATMs. Mr Reiter told Mr Sheehy that one in five leads led to a sale of an ATM. None of the leads led to a sale.
Evidence of representations made to a person other than the plaintiff can be relevant if the evidence would make it more likely that the representations contended for by the plaintiff were made: Mister Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23.
In my view the facts that Mr Reiter told Mr Sheehy that he converted one in five leads to sales and that Mr Sheehy was not able to find any purchasers for ATMs does not make more likely that Mr Reiter made the representations about which the plaintiff complains.
The plaintiff does not complain that it was not able to find purchasers for ATMs. Mr Sheehy may not have been a good salesman.
In my view the evidence of Mr Sheehy does not assist the plaintiff's case.
The credibility of Mr Reiter
For reasons I have given I have rejected Mr Reiter's evidence on the important matters of why monies were paid to the first defendant and why the first defendant paid out those monies in the way that it did. I have found that Mr Reiter gave to Mr and Mrs Blakers accounts in the name of the first defendant because he intended that they pay money to the first defendant, that he intended to use those monies as monies of the first defendant and that he did so.
These are not matters on which Mr Reiter could have been mistaken. These are matters concerning monies that were significant sums for the parties and around which this case centres.
I conclude that Mr Reiter deliberately gave the evidence that I have rejected and that he did so to support his defence of the plaintiff's claims. Mr Reiter is not a credible witness and I am not prepared to accept his evidence unless it is supported by other witnesses or contemporaneous documents.
The credibility of Mr and Mrs Blakers
It is my assessment of Mr and Mrs Blakers that they were honest witnesses who were giving their evidence to the best of their ability. Where there are conflicts in the evidence of Mr Blakers or Mrs Blakers and Mr Reiter I prefer the evidence of Mr and Mrs Blakers.
Findings of fact as to meeting of 14 December 2009
I accept the evidence of Mr Blakers and of Mrs Blakers as to what occurred at the meeting on 14 December 2009 and Mr Blakers' telephone conversations with Mr Reiter later that day. I find, in accordance with that evidence, that Mr Reiter told them that ATMs they purchased would have pre‑determined sites, that the location of the sites was confidential and that he had a company finding sites, that the ATMs they purchased would be installed at those sites at no cost to them and that they would not have to do anything further after making the initial purchase.
I find that at the meeting on 14 December 2009 Mr Reiter told Mr and Mrs Blakers that Cashere would supply and install ATMs and connect those ATMs to a banking network. The name Cashere featured prominently in the materials that Mr Reiter sent to Mrs Blakers with his email of 13 December 2009. In my view it is entirely consistent with those materials that Mr Reiter would say that Cashere would supply, install and connect those ATMs.
Findings of fact as to meeting on 15 December 2009
I accept the evidence of Mr and Mrs Blakers that Mr Reiter gave them an invoice at the meeting on 15 December 2009 and that Mr Reiter told them that Credit Able was his company that arranged re‑financing and that it financially backed Cashere in these deals. The first defendant, which was then called Credit Able, was Mr Reiter's company. His evidence was that it was a finance company at the time.
It is likely that when Mr and Mrs Blakers received an invoice from a company which had not previously been part of their discussions or communications with Mr Reiter they would ask what that company was. As it was a finance company under the control of Mr Reiter, it is in my view entirely consistent with that fact and Mr Reiter's dealings with Mr and Mrs Blakers that he would say that it was his company that arranged re‑financing and that it financially backed Cashere.
Findings of fact as to meetings on 16 December 2009
I accept the evidence of Mr and Mrs Blakers of what occurred at the meetings on 16 December 2009. I accept that Mr Reiter told them that Cashere would supply ATMs to customers. The name Cashere featured prominently in the materials that Mr Reiter sent to Mrs Blakers with his email of 13 December 2009 and the slideshow that Mr Reiter showed to Mr and Mrs Blakers on 16 December 2009.
I also accept Mr and Mrs Blakers' evidence that Mr Reiter told them that Cashere would find sites for the ATMs. In my view the evidence of Mr Sheehy that he was responsible for finding sites for ATMs does not detract from that conclusion. The fact that Mr Reiter told Mr Sheehey that he was responsible for finding sites does not make it more likely that he told Mr and Mrs Blakers that they were responsible for finding sites once the plaintiff was the State Distributor of ATMs.
Mr Reiter had previously told Mr and Mrs Blakers, at the meeting on 14 December 2009, that ATMs would be installed at pre‑determined sites. The slideshow that Mr Reiter presented to Mr and Mrs Blakers on 16 December 2009 did not suggest that the State Distributor had to find sites for machines. Another reason for my acceptance of Mr and Mrs Blakers' evidence that Mr Reiter told them that Cashere would find sites for the ATMs is the conduct of the parties following 16 December 2009.
Following that meeting Mrs Blakers found customers who were willing to purchase ATMs and sent emails to Mr Reiter informing him of her progress and asking him questions that potential purchasers had raised. On 30 December 2009 Mrs Blakers sent an email to Mr Reiter informing him that a potential purchaser of an ATM wanted to know the site before purchasing an ATM and that he wanted the ATM sited in the Perth CBD and Northbridge areas. Mrs Blakers asked Mr Reiter 'are we able to do this?'. On 4 February 2010 Mrs Blakers sent an email to Mr Reiter enquiring whether, once a purchaser of an ATM paid a deposit, they got a list or they could pick an area where they wanted an ATM to go.
There was no evidence of any response from Mr Reiter to Mrs Blakers' emails to say that the responsibility for finding sites was the plaintiff's.
In my view that conduct confirms that the company Mr Reiter represented was responsible for finding sites for ATMs.
Findings of fact as to the signing of the State Distributorship Agreement
I accept the evidence of Mrs Blakers as to what occurred at the meeting on 23 December 2009. I reach this conclusion not only on my assessment of Mrs Blakers as an honest witness but also on the objective probabilities. Mr and Mrs Blakers had both been involved in the discussions with Mr Reiter about the ATM distributorship. If Mrs Blakers had not been pressed to sign the agreement immediately, it is likely that she would have given it to Mr Blakers to look at before she signed it. I find that when he handed the State Distributorship agreement to Mrs Blakers Mr Reiter told her that it was the agreement that Mr Blakers and she had discussed at their previous meetings with Mr Reiter, that it contained all the terms that Mr Blakers and Mr Reiter had discussed and agreed upon and that Mrs Blakers needed to sign the contract because he had to take the contract to Melbourne that night. I also find that Mrs Blakers signed the agreement as a result of being told those things by Mr Reiter.
Findings of fact as to telephone conversation between Mr Blakers and Mr Reiter in early May 2010
I accept the evidence of Mr Blakers that in or around early May 2010 Mr Reiter telephoned him and said that he had agreed to all the changes that Mr Blakers had requested to the State Distributorship Agreement and the agreement would be amended to give effect to Mr Reiter's promises.
Representations as to ATMs
Section 52(1) of the TPA provides that a corporation, and s 10(1) of the FTA provides that a person, shall not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive. The terms trade and commerce are not terms of art. They are expressions of fact and terms of common knowledge: Re Ku‑ring‑gai Co‑operative Building Society (No 12) Ltd (1978) 36 FLR 134. The conduct of the first defendant and Mr Reiter was clearly conduct in trade or commerce.
Characterisation of conduct as misleading or deceptive generally requires consideration of whether the impugned conduct, viewed as a whole, has a tendency to lead a person into error: Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd [2011] WASCA 76; (2011) 248 FLR 193 [220].
The plaintiff claims that the representations made by Mr Reiter as to ATMs were misleading or deceptive because he represented that he and the companies he represented had the ability to supply, install and maintain ATMs and of finding sites for those ATMs.
In my view the conduct of Mr Reiter did constitute such a representation. In my view it is clear from his conduct as a whole Mr Reiter was representing that the companies he represented could supply and install ATMs and that he could find sites at which those ATMs could be placed.
Whether the defendants had the ability to supply, install or find sites for ATMs
There was no evidence that any of the defendants had the capacity to supply or install ATMs or to find sites for ATMs. All of the evidence was to the contrary.
The agreement between the second defendant and the fourth defendant made on 15 January 2010 gave to the fourth defendant the right to licence 'the ATM concept', a business model for the sale, operation and installation of ATMs.
Mr Reiter's evidence was that 'the ATM concept' was:[1]
What comprised the ATM concept? Do you recall?---It was as I explained, how the other companies were doing it, I was able to bring it to - you have a retail level and a - a retail level and a multiple machine level. A retail level sold to shop owners etcetera. A retail level sold to investors and a distributor model where people could obviously run their own business and obviously whoever's - whoever's organising that network gets a share of revenue, a share of fees, a share of the transaction income.
And you've probably answered this. Just to make sure. Cashere controlled the ATM concept? It was its concept?---Yes.
And the ATM concept included arrangements with an ATM manufacturer concerning the sale of ATM machines?---That's what I didn't - that's what Cashere didn't have.
I'm asking you. So you're saying didn't have it?---It had the - that's what the model says, but that's why I needed - needed help, because I couldn't progress from the whiteboard to eventuate.
[1] ts 165.
The second defendant controlled the ATM concept, but could not progress from the whiteboard to eventuate. The ATM concept included arrangements with an ATM manufacturer which the second defendant did not have.
In cross‑examination Mr Reiter was asked whether any of the defendant companies had sites for ATMs. His evidence was that it was necessary to have a site to make income from an ATM, that in December 2009 and January 2010 the first defendant and the second defendant did not have sites for ATMs. His evidence was that the fourth defendant had plenty of sites and that the sites at which the 11 ATMs which Mr and Mrs Blakers had originally agreed to purchase were going to be installed outside of Western Australia.[2]
[2] ts 156 - 158.
The evidence of Mr Reiter was that the fourth defendant was not a manufacturer of ATMs and that it had no experience in dealing with ATMs.[3]
[3] ts 159.
I reject Mr Reiter's evidence that the fourth defendant had sites for installation of ATMs. In my view it is not plausible that the fourth defendant, which had no experience in dealing with ATMs, had sites at which ATMs could be installed.
It is my conclusion that none of the defendants had any sites for ATMs anywhere.
All that Mr Reiter and his companies had was a rudimentary idea. He did not have the capacity to progress it. The fourth defendant had no experience in ATMs. It did not at any time do anything to even suggest it had any capacity to supply or install ATMs.
I conclude from all of the evidence that none of the defendants ever had any capacity to supply or install ATMs or to find sites for them. I conclude that Mr Reiter's conduct in making those representations was misleading and deceptive.
Whether the conduct of Mr Reiter was that of a mere intermediary or constituted representations by him
A person who does no more than pass on misleading or deceptive information supplied by someone else and who makes clear that they are not adopting or endorsing the information will not have engaged in misleading or deceptive conduct. The conduct of the individual who provided the information must be looked at as a whole: Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661; Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592.
Mr Reiter was the person who had the idea of the ATM concept. He was the person who prepared the content of the slide show presentations that he presented to Mr and Mrs Blakers. He was the person with whom Mr and Mrs Blakers dealt. He was not purporting to simply pass on information supplied to him by others. His conduct was not that of a mere intermediary. His conduct constituted representations made by him.
Whether the conduct of Mr Reiter was conduct of the first defendant
A company acts by living persons. The acts of those living persons are the acts of the company: Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121.
The invoices which Mr Reiter produced were issued by the first defendant. The monies were paid into the first defendant's bank account. Mr Reiter told Mr and Mrs Blakers that the first defendant was the company that arranged re‑financing and that it backed the second defendant in the deals. Throughout his dealings with Mr and Mrs Blakers Mr Reiter was acting on behalf of his companies, the first and second defendants, as well as on his own behalf. The conduct of Mr Reiter was also conduct of the first defendant, a company of which he was the sole director and the company secretary.
Whether Mrs Blakers could bind the plaintiff to the written contract with the fourth defendant which she signed on 23 December 2009
It is clear that the plaintiff has lost its investment. None of the defendants have any capacity to supply ATMs. The fourth defendant has been deregistered. For that reason the issue of whether the State Distributorship Agreement signed by Mrs Blakers was binding on the plaintiff has no significance. In any event Mrs Blakers did not bind the plaintiff when she signed the State Distributorship Agreement.
A signed copy of the form of agreement between the plaintiff and the fourth defendant was not provided to the plaintiff and one was not produced in evidence. The unsigned form of contract that was in evidence provided for the plaintiff to execute the agreement by its authorised officers in accordance with the Corporations Act, and for it to be executed by a director and a director or secretary. Mrs Blakers was not either.
A person who is held out by company as having authority to bind contractually the company can bind the company: Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480.
Under s 129(5) of the Corporations Act a person may assume that a document has been duly executed by a company if the document appears to have been executed by two directors of the company, or by a director and a company secretary of the company or, in the case of a proprietary company which has a sole director who is the sole company secretary, by a person who states next to their signature that they are the sole director and secretary of the company. There is no evidence that when Mrs Blakers signed the form of agreement she stated next to her signature that she was the sole company director and secretary.
Section 126(1) of the Corporations Act provides that a company's power to make a contract may be exercised by an individual acting with the company's express or implied authority and without using the common seal. Mrs Blakers did not have express authority of the plaintiff to a contract. Nor did she have implied authority to do so. She was dealing with Mr Reiter in securing purchasers for ATMs. Neither she nor Mr Blakers, who was the sole company director and secretary, had any knowledge that she would be asked to sign a contract when she met with Mr Reiter on 23 December 2009.
The plaintiff did not represent that Mrs Blakers had authority to bind it to any contract, Mrs Blakers did not have that authority and the plaintiff is not bound to the contract by her signing of it.
Causation
To recover damages under s 82(1) of the TPA or s 79(1) of the FTA the plaintiff must prove that it suffered loss or damage 'by' conduct in contravention of each Act. The word 'by' takes up the practical or common sense concept of causation discussed by the High Court in March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506; Wardley Australia Ltd v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514, 525.
Causation of loss is a question of fact. The conduct in breach of the TPA or the FTA need not be the only cause of the plaintiff's loss or damage. Once a causal link is established between contravention of the Acts and loss or damage the plaintiff is entitled to recover the amount of that loss or damage: I & L Securities Pty Ltd v Walker HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109.
Conduct is misleading or deceptive if it has a tendency to lead into error. There must be a sufficient causal link between the conduct and error on the part of the person exposed to it. It is in this sense that it can be said that the legislation was not enacted to benefit those who fail to take care of their own interests: Australian Competition and Consumer Protection Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 [39]; Elders Trustee & Executor Co Ltd v EG Reeves Pty Ltd (1987) 78 ALR 193, 241.
However, it will commonly be the case that a person induced by misleading or deceptive conduct to undertake a course of action will have acted carelessly or will have been otherwise at fault. The purpose of the legislation is not restricted to the protection of the careful or astute. It is sufficient if the misleading or deceptive conduct was a cause of the loss: Henville v Walker [2001] HCA 52; (2001) 206 CLR 459.
The representations made by Mr Reiter were designed to ensure that moneys be paid to the first defendant. Mr and Mrs Blakers accepted that the representations were true and they arranged for the payment of the monies by the plaintiff. The plaintiff paid those monies as a result of the misleading or deceptive conduct of the first defendant and Mr Reiter. Causation is established.
The amount of damages
The plaintiff has paid $445,000 to the first defendant. It is clear that the plaintiff has lost those monies. It is entitled to recover those monies as damages that it suffered by the misleading and deceptive conduct of the first defendant and Mr Reiter.
The plaintiff's claim in conversion
The plaintiff's claim in conversion is pleaded on the basis that the monies were not dealt with for the purpose of the purchase of machines but for the first defendant's own purpose. Conversion involves the deliberate dealing with a chattel in a manner inconsistent with the rights of another: Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204. The plaintiff intended that the moneys paid by it to the first defendant be paid to the first defendant. It did so relying upon misleading or deceptive conduct. The receipt by the first defendant of monies which the plaintiff intended to pay to the first defendant does not constitute conversion. The plaintiff's claim in conversion does not succeed because the payment of the monies into the first defendant's bank account was done with the plaintiff's consent. That is what the plaintiff intended to happen.
The plaintiff's claim that moneys were held in trust
The plaintiff's claim that the moneys paid to the first defendant were held on trust is pleaded on the basis that the monies were mutually intended by Mr Reiter, the first defendant and the plaintiff not to be part of the assets of Mr Reiter and the first defendant but to be used exclusively for the purpose of purchasing and siting 80 ATMs and so the monies were as trustee for the plaintiff for that purpose. Where money is advanced by one person to another person with the mutual intention that it should not become part of the assets of the person to whom it is advanced, but should be used exclusively for a specific purpose, there will be implied (in the absence of an indication of a contrary intention) a stipulation that if the purpose fails the money will be repaid and the arrangement will give rise to a relationship of a fiduciary character or trust: Australasian Conference Association Ltd v Mainline Constructions Pty Ltd (in liq) (1978) 141 CLR 335, 353.
Relations of trust and debt can co‑exist. For the payee to hold the monies on trust it is not sufficient for the parties to intend that the monies be used for a particular purpose, it is also necessary for the parties to mutually intend that the monies not become part of the general assets of the payee: Compass Resources Ltd v Sherman [2010] WASC 41; (2010) 42 WAR 1 [57] ‑ [67].
The payments made by the plaintiff to the first defendant were not made with any common intention that the monies should not become part of the assets of the first defendant. The first payments, on 15 and 16 December 2009 totalling $198,000, were as the purchase price of 11 ATMs. On 18 December 2009 Mr and Mrs Blakers agreed that those monies would be applied towards the plaintiff being appointed as State Distributor and the acquisition of 80 ATMs. The second payment on 20 December 2009 of $202,000 was intended to be the balance of that payment. The third payment of $40,000 on 27 December 2009 was an additional for Goods and Services Tax that the plaintiff agreed to pay. The fourth payment of $5,000 on 7 May 2010 was for a stall at the display at the Perth Convention Centre.
None of these payments were made with the common intention that the monies would not become part of the assets of the first defendant. Mr Blakers' evidence was that in or around late February 2010 he contacted Mr Reiter and told him that he should put the $440,000 that Mr and Mrs Blakers had paid into a trust account until the amendments to the agreement were finalised. This was after the monies had been received by the first defendant. The proposal was rejected by Mr Reiter. As there was no common intention that the monies paid to the first defendant would not become part of the assets of the first defendant no trust was created. The claim that the monies paid to the first defendant were held as trustee fails.
Conclusion
The plaintiff's claims against the first defendant and Mr Reiter for damages for misleading or deceptive conduct succeed. The claims in conversion and for breach of trust do not succeed. The plaintiff is entitled to damages against the first defendant and Mr Reiter of $445,000. The plaintiff does not succeed on any other cause of action.
The plaintiff claims interest on the damages awarded. The plaintiff has a discretion to award interest. The plaintiff has gained no benefit for the payments of monies to the first defendant. The action was commenced promptly. It is appropriate to exercise my discretion to award interest on the sums paid from the date of each payment until judgment. The appropriate rate of interest is 6%.
Interest on the sum of $198,000 from 16 December 2009 is $96,212. Interest on the sum of $202,000 from 20 December 2009 is $98,023. Interest on the sum of $40,000 from 27 December 2009 is $19,364. Interest on the sum of $5,000 from 7 May 2010 is $2,613. The total award of interest is $216,212.
1
20
2