Mattila v Gardner (No 2)

Case [2013] NTSC 32


Mattila v Gardner (No 2) [2013] NTSC 32

PARTIES:MATTILA, Allan Michael Jorma

By his litigation guardian

TERESA LATZER

v

GARDNER, Kelvin

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY

JURISDICTION:  SUPREME COURT OF THE NORTHERN TERRITORY EXERCISING TERRITORY JURISDICTION

FILE NO:106 of 2010 (21032189)

DELIVERED:  2 July 2013

HEARING DATES:  4, 5 and 6 June 2013

JUDGMENT OF:  SOUTHWOOD J

CATCHWORDS:

ORDER FOR ACCOUNT – Power of attorney – defendant sole signatory on plaintiff’s bank account – monies disbursed from bank account – defendant to account for amounts misappropriated or wrongly disbursed – onus on defendant to explain what happened to money – money not given as change, but instead spent on alcohol and gambling – failure to account for cash cheques and payee cheques disbursements – judgment for plaintiff –falsifications due and payable to plaintiff plus interest.

Powers of Attorney Act (NT) s 11

Glazier Holdings v Australian Men’s Health (No 2) [2001] NSWSC 6; Mattila v Gardner & Anor [2012] NTSC 76

REPRESENTATION:

Counsel:

Plaintiff:A Young

Defendant:A Wrenn

Solicitors:

Plaintiff:Bradley Solicitors

Defendant:Direct brief to counsel

Judgment category classification:   B

Judgment ID Number:  Sou1303

Number of pages:  29

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

Mattila v Gardner (No 2) [2013] NTSC 32

No. 106 of 2010 (21032189)

BETWEEN:

ALLAN MICHAEL JORMA MATTILA by his litigation guardian

TERESA LATZER

Plaintiff

AND:

KELVIN GARDNER

Defendant

CORAM:    SOUTHWOOD J

REASONS FOR JUDGMENT

(Delivered 2 July 2013)

Introduction

  1. On 28 September 2012 I delivered my Reasons for Decision in Mattila v Gardner and Anor.[1]  The judgment involved a number of claims and counterclaims between Mr Mattila and Mr Gardner, including a claim by Mr Mattila that Mr Gardner had breached his trustee and fiduciary obligations to Mr Mattila by withdrawing some of Mr Mattila’s money from the AMJ Mattila – Building Account and using it for Mr Gardner’s own purposes.  In the suit for breach of trust and fiduciary obligations, Mr Mattila claimed the sum of $382,857.00 or, in the alternative, an account.

  2. I ordered Mr Gardner to account to Mr Mattila and pay Mr Mattila any amount which is found to have been misappropriated or wrongly disbursed.  At the time I delivered my Reasons for Judgment, I also stated that I would hear the parties further about any ancillary orders in support of the order for an account.

  3. On 4 October 2012 I made the following ancillary orders:

    1.Mr Gardner on or before 1 November 2012 is to file and serve on Mr Mattila his detailed account verified by his affidavit of all monies disbursed by Mr Gardner and any other person on his behalf from the AMJ Mattila – Building Account in respect of

    (a)The amounts specified in par [100] of the Reasons for Judgment delivered 28 September 2012 (the Reasons for Judgment).

    (b)The amount of $132,732.05 specified in par [91] and par [107] of the Reasons for Judgment.

    2.Direct that such account shall specify in respect of each disbursement the date and the amount thereof, to whom the payment was made and the purpose or account for or to which the amount was paid as the case may be.

    3.Direct that the items of such account and statement be numbered consecutively and refer to any relevant cheque number, receipt, voucher or invoice and the date of such.

    4.Direct that Mr Mattila be at liberty within 14 days after the service upon him of the said account and statement to apply to the Court to examine Mr Gardner in respect of the said account and statement.

    5.Direct that Mr Mattila within 14 days of service upon him of the said account and statement or within 14 days of the conclusion of the examination of Mr Gardner have liberty to file and serve upon Mr Gardner his falsifications and objections (if any) thereto.

    6.Direct that all vouching and any discovery of documents by Mr Gardner be done out of Court on or before 15 November 2012.

    7.Direct that the evidence to be used on the said inquiry be oral evidence and the inquiry be conducted on a wilful default basis.[2]

  4. The amounts specified in par [100] of the Reasons for Judgment were:

    Unexplained cash disbursements  $21,000.00

    Unexplained cash cheques disbursement        $122,667.00

    Unexplained payee cheques disbursement               $128,304.00

    Litchfield Tavern cheques disbursement          $110,886.00

  5. I also made the following additional findings in my Reasons for Judgment:

    1.Mr Mattila has a right to an account from Mr Gardner. Mr Gardner was in the position of a trustee and attorney in relation to Mr Mattila’s money that was in the AMJ Mattila – Building Account. He was under a duty to render proper accounts to Mr Mattila. Mr Mattila also has a right to an account under s 11 of the Powers of Attorney Act.

    2.Mr Gardner has failed in his duty as trustee and attorney by not rendering proper accounts.  The accounts produced by Mrs Donna Gardner following the order made by Riley CJ are inadequate and are not proper accounts.

    3.Mr Gardner has misappropriated some of Mr Mattila’s money.  However, without an account, it is not possible to say that Mr Gardner has misappropriated the entire amount of $382,857.00 which is unexplained at this stage.

    4.Mr Gardner has misappropriated a good proportion of the money that he obtained by cashing cheques drawn on the AMJ Mattila – Building Account at the Litchfield Tavern.  I would estimate that at least 80 percent of the cheques cashed at the Litchfield Tavern were misappropriated by Mr Gardner.

    5.Mr Gardner has misappropriated at least $11,000.00 of the $21,000.00 that was not banked into the Berry Springs Caravan Park and Takeaway Account.

    6.Mr Gardner has misappropriated some of the $132,732.05 that was transferred from the AMJ Mattila – Building Account to the Berry Springs Caravan Park and Takeaway Account.

    7.Mrs Donna Gardner told a lie to the Court when she said the “change” was given to Mr Mattila.

    8.Shop fittings and equipment do not fall within the meaning of the words “repairs, improvements and building” which are used in the Lease Agreement.  The ordinary meaning of those words is confined to the landscaping, infrastructure, buildings, other installations and fixtures on the land at 115 Oxford Road, Berry Springs.

  6. As matters transpired, Mr Gardner filed his first affidavit of account on 17 December 2012 and a further affidavit of account on 15 May 2013.  Mr Mattila filed his List of Falsifications at the start of Mr Gardner’s oral examination.  Mr Gardner was examined on 4 June 2013.

  7. Mr Mattila’s List of Falsifications was comprised of the various statements of account which were annexed to Mr Gardner’s affidavit of 17 December 2012 with a handwritten note of each falsification being made on the extreme right hand side of each page.  Each falsification noted was calculated as the difference between the amount of each cheque set out in Mr Gardner’s statement of account and the particularised disbursements made from the money withdrawn by each cheque.  For example, the statement of account headed “Accounting of Expenditure AMJ Mattila – Building Account KI Gardner T/A Berry Springs Caravan Park Takeaway”, which is annexed to Mr Gardner’s affidavit of 17 December 2012, shows that on 13 July 2006 cash cheque No 1003 for $4000 was drawn by Mr Gardner on the AMJ Mattila – Building Account.  The accounting for cheque No 1003 also shows that the total sum of $2991.44 was spent on various items that are particularised in the statement of account, leaving the expenditure of the sum of $1008.76 unexplained in relation to this particular cheque.  Consequently, on the right hand side of the relevant page of the List of Falsifications, Mr Mattila has noted a falsification of $1008.70(sic).  Ultimately, for the reasons set out below Mr Mattila only claimed that 80 percent of the amount of $1008.70 was used by Mr Gardner for his own benefit.

  8. Having considered the accounting for expenditure provided by Mr Gardner, and his evidence during his examination, Mr Mattila only pressed the following amounts as the total of the falsifications for each of the amounts of expenditure for which the Court ordered Mr Gardner to account.

    1.   $132,000.00[3]  Nil

    2.   $21,000.00[4]  $1,000.00

    3.   $122,667.00[5]  $60,256.74

    4.   $128,304.00[6]  $10,500.00

    5.   $110,886.00[7]  $88,708.80

    TOTAL FALSIFICATIONS CLAIMED:          $160,465.54   

  9. The falsification of $1000 pressed in relation to the disbursement of the $21,000.00 was pressed because of the contents of exhibit P3 which shows: (1) that instead of an amount of $2,000.00 being wholly taken as drawings by Mr Mattila on 30 March 2009, $500.00 of that amount was spent by Mr and Mrs Gardner on their personal shopping; and (2) that instead of an amount of $1,000.00 being wholly taken as drawings by Mr Mattila on 11 May 2009, another $500.00 was spent by Mr and Mrs Gardner on personal shopping.

  10. The falsification of $60,256.74 pressed by Mr Mattila as the total of the falsifications in relation to the disbursement of the amount of each cash cheque drawn on the AMJ Mattila - Building Account was pressed on the following basis.  In addition to the $110,886.00 already identified as having been spent at the Litchfield Tavern, the statements of account provided by Mr Gardner failed to explain additional disbursements totalling $75,320.93 which were part of the drawings of various cash cheques.  Counsel for Mr Mattila submitted that the most likely explanation of what happened to this money is that it was not given to Mr Mattila as change; instead it was spent by Mr Gardner on gambling and alcohol at the Litchfield Tavern or other hotels.  Consistent with the previous determination of the Court, 80 percent of the sum of $75,320.93 would have been spent by Mr Gardner on himself or on alcohol for other members of the “Caravan Park crew”; 20 per cent of this amount would have been spent on Mr Mattila’s alcohol and gambling. 

  11. Mr Gardner’s evidence was that he and Mr Mattila went to the Litchfield Tavern almost daily, and when they did, Mr Gardner spent significant amounts of money on alcohol and gambling.  The distribution of the money in this way was not authorised by Mr Mattila.  He had no way of knowing how much of his money was being held and spent by Mr Gardner who had a significant gambling habit.  The onus was on Mr Gardner to explain what happened to this money.

  12. The falsification of $10,500.00 pressed by Mr Mattila as the total of the falsifications in respect of the money disbursed by the payee cheques was confined to the cheque payments made to the Berry Springs Caltex Service Station.  Mr Gardner gave evidence that, prior to Mr Mattila receiving his inheritance, Mrs Gardner and he would spend between $200.00 and $1000.00 per month at the Caltex Service Station.  After Mr Mattila obtained his inheritance, they used Mr Mattila’s money to pay for all accounts at the Berry Springs Caltex Service Station.  A fair and reasonable inference was that this included an average amount of $500.00 per month which was spent on items used solely for the benefit of Mr and Mrs Gardner and that such expenditure occurred over a period of 21 months.

  13. Mr Mattila accepted a total falsification of no more than the 80 percent of the $110,886.00 which the Court previously determined was misappropriated by Mr Gardner and spent on drinking and gambling at the Litchfield Tavern. 

  14. In my opinion, Mr Gardner has failed to explain a total expenditure of $160,465.54 and Mr Gardner should pay that sum to Mr Mattila less the difference between the $124,000 previously awarded to Mr Gardner and the $90,000.00 previously awarded to Mr Mattila plus interest on the net amount.

    The falsification of $1000 maintained in respect of the $21,000 cash not banked into the Berry Springs Caravan Park Account

  15. As is stated in my Reasons for Judgement delivered 28 September 2012, when the AMJ Mattila – Building Account was closed, a series of large cash cheques were drawn on that account and the majority of the proceeds of those cheques was deposited in the Berry Springs        Caravan Park Account operated by Mr and Mrs Gardner.  A total amount of $21,000.00 being part of the proceeds of those cheques was not banked into the Berry Springs Caravan Park Account. 

  16. The accounting for the $21,000.00 is set out on page one of annexure KG50 to the affidavit of Mr Gardner sworn on 17 December 2012.  That statement of account shows that the $21,000.00 was disbursed as follows: a personal loan to Mr Gardner of $10,000.00; a payment to Trevor McMahon of $3,000.00 for electrical work; and the balance is shown as drawings made by Mr Mattila.  In particular, there is an entry in the statement of account for 30 March 2009 which shows that on that day there was a drawing by Mr Mattila of $2000.00; and an entry for 11 May 2009 that shows a drawing by Mr Mattila of $1,000.00.

  17. Mr Mattila maintains that, of the $2,000.00 attributed to Mr Mattila as drawings on 30 March 2009, $500.00 is a falsification.  Likewise, $500.00 of the amount of $1,000.00 attributed to him on 11 May 2009 is also a falsification.  These claims are based on exhibit P3 which shows workings on the back pages of cheque books made by Mrs Gardner.  Those workings show that, of the $2000.00 attributed to drawings by Mr Gardner, $500.00 was spent on shopping by Mr and Mrs Gardner; and of the $1,000.00 attributed to drawings by Mr Gardner, another amount of $500.00 was also spent on shopping.

  18. Mr Gardner’s evidence about these falsifications was as follows.

    Mr Young:Would you just have a look at these documents for me please?  They are photocopies of the last pages of a cheque book for the Berry Springs Caravan Park account.  Do you recognise them?

    Mr Gardner:        Yeah, well the writing, it is not my writing, it is my wife’s writing.

    ….

    Mr Young:Because it is substantially the same information as you set out in the page I have just taken you to.  Just have a look through.  Can you see the first one?  The date is a bit unclear to me, but I imagine it is 12 March 2009.  It says “$10,000.00 building account, $10,000.00 loan Kelvin”.  Do you see that?

    Mr Gardner:        Yes.

    Mr Young:And $1,000.00 Micko?

    Mr Gardner:        Yes.

    Mr Young:Do you see the next entry, 30 March 2009, $15,000.00 building account, $1,500.00 Micko and $500.00 shopping?

    Mr Gardner:        Yes.

    Mr Young:I just want to stop you there.  The page in your affidavit says $2000.00 Micko drawing.  It does not divide it up into $1,500.00 Micko and $500.00 shopping does it?

    Mr Gardner:        What entry is that? The 14th of …

    Mr Young:The entry for 30 March 2009?

    Mr Gardner:        30th of March, yeah, and it says $2,000.00.

    Mr Young:Whereas the notation in the chequebook that I have taken you to says $1,500.00 for Micko and $500.00 for shopping doesn’t it?

    Mr Gardner:        Well that is probably where it went.  It still adds up to $2.000.00.

    Mr Young:What I am suggesting is that the affidavit material is not accurate.  There were only $1,500.00 drawings for Micko. $500.00 was spent by you or Mrs Gardner on your own shopping?

    Mr Gardner:        You can jump to whatever you want.  It adds up to $2,000.00.  $2,000.00 was taken out of there, out of the account.

    ….

    Mr Young:Do you know what the shopping was spent on?

    Mr Gardner:        It will be on groceries, and Micko probably helped eat those groceries.

    ….

    Mr Young:Did he eat all of those groceries, Mr Gardner?

    Mr Gardner:        No.  He had … he would have eaten a share of it.  What are we getting at here, nick for nack, for the paddy?

    [There was then a similar exchange about the $1,000.00 for 11 May 2009.]

  19. During his re-examination on this topic, Mr Gardner was asked by Mr Wrenn if he could recall what was happening at the time the drawings attributed to Mr Mattila were made.  He answered that they were taking money out of the building account and putting it in the caravan park account.  He said that if they took $10,000.00 out of the account, $9,000.00 would go into the caravan park account and they would take the other $1,000.00 and use it to buy bits and pieces and do shopping and the change would go to Mr Mattila.

  20. I find that $500.00 of the $15,000.00 cash cheque number 1607 dated 30 March 2009 was a falsification, and $500.00 of the $10,000.00 cash cheque number 1613 dated 11 May 2009 was a falsification.  Both lots of $500.00 were spent by Mr and Mrs Gardner on their own personal shopping.

    The disbursement of $110,886 at the Lichfield Tavern

  21. In his final submissions to the Court, Mr Wrenn made the following concession, in the presence of Mr Gardner, about the $110,886.00 spent at the Litchfield Tavern.

    It is quite likely that the money was spent at the hotel.

    ….

    The submission is that those cheques were cashed at the tavern.  That your Honour’s finding was and the submission from counsel was that [Mr Gardner] had a responsibility as trustee; he should have given [Mr Mattila] the Money.  It should have been Mr Mattila’s to do with as he wished at the hotel.  [Mr Gardner] should not have interfered and sat there and drank with him.  As a responsibility, he should not have cashed those cheques … and sat there and drank and gambled with [Mr Mattila’s] money.

    I concede that the $110,886.00 was spent in that way and accept …

    My only submission is that it should be 50 percent of the $110,886.00.  That is my submission in relation to that amount.

  22. This is a significant concession, albeit one that was partially consistent with the finding that had already been made by the Court.  It acknowledges that Mr Gardner was in breach of trust when he drank and gambled with money that was obtained by cashing cheques drawn on AMJ Mattila – Building Account at the Litchfield Tavern.

  23. Mr Gardner also gave the following evidence about these monies.

    I have never denied any of the cheques that have been cashed at the Litchfield Tavern.  You can scratch all of them off the list if you like.  I won’t deny any of them, because that is what we did.

    Alright, well I am not denying it because that is what we did.  After work we went to the pub.  I regret it now, but at the time we went there every afternoon just about.

  24. The only dispute was whether 50 percent or 80 percent of the money received by Mr Gardner when the cheques were cashed was spent for his own benefit.  However, there was no further evidence led from Mr Gardner about how much of the money obtained by cashing cheques at the Litchfield Tavern was spent by him and not by Mr Mattila.  In any event, I am bound by the finding that I made in my Reasons for Judgment.  Consequently, I find that Mr Gardner has failed to account for the amount of $88,708.80 of the $110,886.00 obtained by cashing cheques at the Litchfield Tavern.  That is, the falsifications total of $88,708.80 in this regard.

    The unexplained amount of $122,667.00 obtained by cash cheques drawn on the AMJ Mattila – Building Account

  25. As stated above, Mr Mattila accepted that all but $75,320.93 of the amount of $122,667.00 had been explained by the further statements of account provided by Mr Gardner.  He maintained that 80 percent of the amount of $75,320.93, being $60,256.74, had been wrongfully disbursed by Mr Gardner by gambling and drinking it at the Litchfield Tavern and other hotels.

  26. On behalf of Mr Gardner, Mr Wrenn submitted that, while it was likely that most of the $75,320.93 had been spent on drinking and gambling at the Litchfield Tavern and other hotels, there had been no breach of trust with regard to these monies.  He said that the Court should accept Mr Gardner’s evidence that the $75,320.93 had been given to Mr Mattila as change and Mr Mattila had then invited Mr Gardner to go drinking and gambling with him.  Mr Mattila had consented to sharing this money, which he had in his possession, with Mr Gardner.  What was done with these monies was distinguishable from the occasions when Mr Gardner simply cashed the cheques at the Litchfield Tavern and spent the money on drinking and gambling.

  1. I do not accept Mr Gardner’s evidence that it was his practice to cash cheques drawn on the AMJ Mattila – Building Account from time to time, spend the money on the amounts for which receipts have been provided and then give the change to Mr Mattila.  Many of Mr Gardner’s answers about these monies during his cross examination were dissembling and deflective.  He feigned being unfamiliar with the statements of account that were annexed to his affidavits and he feigned having difficulty following Mr Young’s questions.  His evidence was also lacking in detail.  I find that, consistent with how he dealt with the proceeds of the cheques that he cashed at the Litchfield Tavern, Mr Gardner kept control of the cash he received when cheques were otherwise cashed and he spent much of the money on his own drinking and gambling without Mr Mattila being informed about how much money was spent in this way.  It is apparent from the statements of account that often when a cheque was cashed, the proceeds would be disbursed over a number of days.  It was not a situation where Mr Gardner would cash a cheque, spend it on goods that were required to be purchased and then give the change to Mr Gardner all on the one day.  It is also apparent from Mr Gardner’s evidence that drinking and gambling at a hotel or tavern was invariably a daily event in circumstances where Mr Gardner was on a meagre pension of $750.00 per fortnight.  The most likely scenario was that Mr Gardner would cash a cheque drawn on the AMJ Mattila – Building Account.  He would then keep the cash, spend it on goods that were required from time to time and on drinking and gambling until the monies were spent.  He would then cash another cheque and so it would go.  Mr Gardner acknowledged that he would keep the money “if Mr Mattila asked him to hold it”.  While Mr and Mrs Gardner were quite meticulous in the way they kept their receipts, they made no record of the change Mr Gardner claimed to have given to Mr Mattila; nor did Mr Gardner give evidence that he accounted to Mr Mattila for the amount of money that had been withdrawn or the money that had been expended prior to when he says he gave change to him.

  2. I accept Mr Young’s submissions and I find the falsifications total $60,256.74 in this regard.

    The unexplained amount of $128,304.00 payee cheques drawn on the AMJ Mattila – Building Account

  3. As stated above, the total amount of falsifications pressed by Mr Mattila for the disbursement of the payee cheques was $10,500.00, being a proportion of cheques drawn on the AMJ Mattila – Building Account and paid to the Berry Springs Caltex Service Station.  In my opinion, the basis on which these falsifications were pressed is correct and they are made out.  Mr Gardner’s evidence was that he and Mrs Gardner had opened a monthly account at the Berry Springs Caltex Service Station before Mr Mattila received his inheritance.  Prior to Mr Mattila receiving his inheritance, Mr and Mrs Gardner’s monthly accounts at the service station were anywhere from $200.00 to $1000.00.  After Mr Mattila received his inheritance and work started on the Berry Springs Caravan Park, Mr Mattila applied for a monthly account at the service station but he was unable to obtain such an account, so they all used Mr and Mrs Gardner’s account.  Thereafter, all the bills from the Berry Springs Caltex Service Station were paid by cheques drawn on the AMJ Mattila – Building Account.  I find that the bills included items that were for the personal use of Mr and Mrs Gardner and that these items would have cost an average of $500.00 per month.

  4. That Mr and Mrs Gardner continued to use the Berry Springs Caltex Service Station account to purchase items for their own personal use was, in substance, conceded by Mr Gardner during his cross-examination as the following questions and answers demonstrate.

    Mr Young:All of the bills from the Caltex Service Station were paid for from [Mr Mattila’s] account?

    Mr Gardner:        Yes.

    His Honour:        Yes, he said yes.

    Mr Gardner:        Yes, if we – that is what it was initially used for – it was Mr Mattila’s Caravan Park.

    Mr Young:You are suggesting your personal expenditure thereafter ceased?

    Mr Gardner:        What was my personal expenditure?  What was it?

    Mr Young:That your personal expenditure was?

    Mr Gardner:        How much was it?

    His Honour:        Mr Gardner now you have given evidence that prior to 2006 you spent between $200.00 and $1000.00 monthly, did that expenditure continue by you personally after 2006 [emphasis added]?

    Mr Gardner:        No it did not.

    His Honour:         Did it cease [emphasis added]?

    Mr Gardner:        Because we were operating …

    His Honour:        Mr Gardner?

    Mr Gardner:        It did not cease because we used the same account your Honour [emphasis added].

    His Honour:        For your personal expenditure?

    Mr Gardner:        Yes it would have because we … not completely, we still used it, but it became Michael’s account because we were working on the caravan park [emphasis added].

    Mr Young:You see your personal expenditure did not stop at all Mr Gardner?

    Mr Gardner:        We paid for stuff ourselves, and it will probably show there somewhere in our cheque books – cheque accounts. [This answer is inconsistent with the first answer above]

  5. Those questions and answers have to be considered in a context where Mr and Mrs Gardner had used the service station account to acquire items for their own personal use for sometime before Mr Mattila received his inheritance, they had acquired the account because the service station was conveniently located and they used it regularly, and all of the purchases made at the service station after Mr Mattila received his inheritance continued to be made by Mr and Mrs Gardner.  Mr Gardner signed the cheques drawn on the AMJ Mattila – Building Account and, prior to the commencement of this proceeding, he did not account to Mr Mattila about expenditure on the service station account.

    Conclusion

  6. I find that there are a total of $160,465.54 in falsifications and that there is an amount of $126,465.54 due and payable (after an allowance of $90,000.00 to Mr Mattila in respect of his claim for damages against Mr Gardner and after allowance of $124,000.00 to Mr Gardner in respect of his cross claim against Mr Mattila) by Mr Gardner to Mr Mattila.  Annexed to my Reasons for Decision is a Certificate of Account to this effect.

  7. There is also payable by Mr Gardner to Mr Mattila interest in the amount of $34,317.22.  Counsel for the parties both agreed on this calculation of interest in the event that $126,465.54 was found to be due and payable by Mr Gardner to Mr Mattila.  The applicable rate of interest is the Reserve Bank cash rate from 5 July 2006 to the present.  The average rate of interest over that period has been 4.85 percent.  The relevant period for the calculation of interest is 2.67 years.

  8. I order that there be judgment for Mr Mattila against Mr Gardner in the sum of $126,465.54 plus interest of $34,317.22.

  9. I will hear the parties further as to costs.

…………………………………………

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

No 106 of 2010
(210321189)

BETWEEN

ALLAN MICHAEL JORMA MATTILA by his litigation guardian TERESA LATZER

Plaintiff

AND

KELVIN GARDNER

Defendant

JUDGE’S CERTIFICATE

  1. Pursuant to the order made on 11 October 2012 I hereby certify that I have taken an account of the sums due to the Plaintiff from the Defendant as at 2 July 2013 and I find as follows –

    SUMS DUE TO THE PLAINTIFF

    Item A Monthly Account Berry Springs Caltex Service Station

Cheque Number

  Description (from First Defendant’s account document Ex D4)  Amount disallowed
1077 fuel and oil account  $          283.00
1096 fuel and oil  $          408.49
1110 fuel oil  $          464.17
1122 fuel and oil  $          247.35
1142 monthly account  $          527.03
1148 monthly account  $          752.35
1156 monthly account  $          554.51
1179 monthly account  $          708.16
1189 monthly account  $          971.39
1202 monthly account  $       1,193.16
1207 monthly account  $       1,213.39
1226 monthly account  $       1,955.72
1241 monthly account  $       1,573.40
1267 monthly account  $       1,657.00
1281 monthly account  $          792.47
1286 monthly account  $       1,172.40
1295 account  $          667.81
1314 fuel account Mattila caravan park  $       1,856.41
1328 account  $       1,661.84
1333 account  $       1,040.24
1344 account  $       1,568.65
1352 account  $       1,292.25
1360 account  $       1,189.47
1383 fuel account Mattila caravan park  $          421.10
1387 fuel account Mattila caravan park  $          506.65
1393 account  $       1,051.25
1461 account  $       1,186.04
1479 fuel account Mattila caravan park  $          993.70
account  $       1,536.08
1560 fuel account Mattila caravan park  $       1,249.18
1582 fuel and oil account  $          628.54
 TOTAL  $     31,323.20  $10,500

Item B Transfers from the Building Account to the Berry Springs Caravan Park account.

Cheque Number Description Amount disallowed
1607 $15,000 cash cheque dated 30/3/2009 $500
1613 $10,000 cash cheque dated 10/5/2009 $500
TOTAL $1,000

Item C Drawings on Building Account

Cheque number Description (from First Defendant’s account document Ex D1) Plaintiff’s claim for disallowance.  Amount disallowed (80% of plaintiff’s claim).
1003 fridge, toolbox bore repairs cash for Michael Mattila and fuel money, diesel for machinery, gun safe  $     1,008.70  $            806.96
1005 food smokes booze and cash  $     1,000.00  $            800.00
1009 labourers payment Mattila caravan park,  $        911.04  $            728.83
1010 cash Michael Mattila  $        500.00  $            400.00
1011 400 cash shopping smokes and booze  $        829.83  $            663.86
1018  smokes 450 cash and clothes  $        695.00  $            556.00
1021 Michael Mattila  $        510.00  $            408.00
1022 material and labour welding 4 labourers for three days to weld and reinforce steel bracing . Shift tank, reinforce platform on which the tank sits, work had to be done with ladders and a cherry picker  $     4,305.37  $         3,444.30
1023 Michael Mattila  $        500.00  $            400.00
1024 Michael Mattila  $     1,000.00  $            800.00
1028 park work clearing  $        928.40  $            742.72
1029 clearing with dozer and dumping rubbish  $        851.65  $            681.32
1033 labourer wages, 100 for graeme jonsson to pickup cherry picker for work on the tank stand at park  $        500.00  $            400.00
1034 Michael Mattila 500 and shopping  $        418.00  $            334.40
1039 woolworths, booze and smokes Michael Mattila,labourer wages and 500 Michael Mattila  $        109.01  $             87.21
1041 Michael Mattila 500 shopping  $        468.00  $            374.40
1042 chemist, smokes shopping Michael Mattila  $        857.89  $            686.31
1044 auto electrician 300  $        200.00  $            160.00
1045 Michael Mattila  $        500.00  $            400.00
1050 Michael Mattila  $        500.00  $            400.00
1059 Michael Mattila 500, smokes booze ,groceries  $        344.55  $            275.64
1060 Michael Mattila 800 shopping 200  $          79.75  $             63.80
1064 Michael Mattila  $        500.00  $            400.00
1066 Michael Mattila  $        100.00  $             80.00
1067 Michael Mattila  $        100.00  $             80.00
1068 Michael Mattila  $        600.00  $            480.00
1069 Michael Mattila  $        200.00  $            160.00
1071 Michael Mattila  $        150.00  $            120.00
1073 300 Michael Mattila  300 LABOURE (sic)  $        300.00  $            240.00
1084 Michael Mattila 800 Bunnings JR lighting  $        339.52  $            271.62
1087 electricial 600 shopping booze smokes for Michael Mattila  $        700.00  $            560.00
1089 Michael Mattila  $        200.00  $            160.00
1090 Michael Mattila  $        200.00  $            160.00
1092 Michael Mattila  $        500.00  $            400.00
1097 farmworld/totalweld/woolies/coventry fast  $     1,590.40  $         1,272.32
1104 Michael Mattila and shopping  $        831.00  $            664.80
1115 shopping Michael Mattila labourer wages  $     1,127.00  $            901.60
1120 Michael Mattila1200 labourer 300 shopping 600  $        505.62  $            404.50
1124 Michael Mattila 700 shopping 250 labourers 350  $        483.15  $            386.52
1126 Michael Mattila woolworths  $        979.45  $            783.56
1127  $     1,100.00  $            880.00
1128 Michael Mattila  $     1,100.00  $            880.00
1129 Michael Mattila 250 Kelvin 250  $        500.00  $            400.00
1130 Michael Mattila 250 Kelvin 250  $        500.00  $            400.00
1131 Michael Mattila  $        500.00  $            400.00
1132 Michael Mattila    $        500.00  $            400.00
1135 Michael Mattila  $        500.00  $            400.00
1136 Michael Mattila  $        500.00  $            400.00
1141 Michael Mattila 1000 shopping 500  $        423.35  $            338.68
1143 Michael Mattila   $        600.00  $            480.00
1144 Michael Mattila  $        600.00  $            480.00
1145 Michael Mattila  $        500.00  $            400.00
1146 Michael Mattila and Kelvin  $        1,000.00  $            800.00
1147 Michael Mattila bought a share in a patent from Justin Morriss for the Mudskipper Shoes  $     4,000.00  $         3,200.00
1149 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1151 Michael Mattila  $     1,100.00  $            880.00
1152 Michael Mattila 600 shopping  $        311.70  $            249.36
1158 Michael Mattila and Kelvin  $     1,400.00  $         1,120.00
1162 Michael Mattila  $        500.00  $            400.00
1164 Michael Mattila 500  $        386.90  $            309.52
1169 Michael Mattila and Kelvin  $        700.00  $            560.00
1174 Michael Mattila 1800 ute cover 250  $        463.50  $            370.80
1176 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1178 cbc,  $        953.05  $            762.44
1180 Kelvin and Michael Mattila  $     1,000.00  $            800.00
1181 Independent Motor Mart 175.95 Michael Mattila 1000  $        861.15  $            688.92
1183 Austar bills wages Michael Mattila  $     2,000.00  $         1,600.00
1191 Michael Mattila 300, nim100, justin 300 shopping  $        300.00  $            240.00
1192 Michael Mattila 400,nim300, justin 300  $        446.25  $            357.00
1194 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1195 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1198 darwin kia manifold gasket, Michael Mattila and shopping  $     2,024.05  $         1,619.24
1199 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1200 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1201 Mattila cash and shoppping for repairs & improvements  Mattila caravan park  $     1,955.15  $         1,564.12
1205 nim 100 justin 130, Michael Mattila 1600  $        293.26  $            234.61
1206 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1213 nim justin and Michael Mattila  $        971.00  $            776.80
1218 Michael Mattila  $        500.00  $            400.00
1219 Patent for Mudskipper Shoes   $     3,720.00  $         2,976.00
1221 wages Michael Mattila shopping cloths (sic) for Michael Mattila  $  -  
1225 austar phone Michael Mattila  $        838.19  $            670.55
1230 Michael Mattila  $        500.00  $            400.00
1231 Michael Mattila and Kelvin  $        600.00  $            480.00
1232 [Cash cheque, no description]  $        178.35  $            142.68
1236 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1238 [Cash cheque, no description]  $        768.89  $            615.11
1254 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1255 donna travelling expenses for her mums funeral loan)1600 Michael Mattila and Kelvin powerwater 400  $     3,414.91  $         2,731.93
1257 Michael Mattila  $        500.00  $            400.00
1258 Michael Mattila  $        600.00  $            480.00
1259 Michael Mattila  $        500.00  $            400.00
1263 Michael Mattila  $        500.00  $            400.00
1264 Michael Mattila  $        500.00  $            400.00
1266 Michael Mattila  $        500.00  $            400.00
1270 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1271 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1272 [Cash cheque, no description]  $     1,570.16  $         1,256.13
1275 Michael Mattila Kelvin  $     1,000.00  $            800.00
1276 [Cash cheque, no description]  $     1,843.23  $         1,474.58
1277 Michael Mattila and Kelvin  $     2,000.00  $         1,600.00
1278 Michael Mattila and Kelvin  $     2,000.00  $         1,600.00
1279 wages for park and shop labourers  $     1,000.00  $            800.00
1282 [Cash cheque, no description]  $     1,140.95  $            912.76
1283 labour building supplies shopping  $        457.20  $            365.76
1284 labour(1500)truck driver(1900)hire of tipper and driver to remove and dispose of rubbish from Mattila caravan park approx hours 3hours per day over a period of 14 days/repay T McMahon purchase of electrical supplies for Mattila caravan park 567.60

$        464.80

 $            371.84
1287 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1288 labour building supplies shopping  $      1,962.45  $         1,569.96
1292 [Cash cheque, no description]  $         605.15  $            484.12
1304 Michael Mattila  $     1,000.00  $            800.00
1309 wages 1500, shopping smokes ctn Michael Mattila  $        500.00  $            400.00
1320 Michael Mattila Kelvin cash for mechanic  $     4,300.00  $         3,440.00
1321 Michael Mattila and Kelvin  $     2,000.00  $         1,600.00
1323 [No description]  $        500.00  $            400.00
1325 wages  bricks shopping  Michael Mattila  $     1,507.65  $         1,206.12
1326 Michael Mattila and Kelvin  $     1,500.00  $         1,200.00
1345 Michael Mattila 1500 shopping wages  $        707.67  $            566.14
1346 Michael Mattila labourers wages brickie sand bricks shopping  $     2,700.00  $         2,160.00
1350 Michael Mattila and Kelvin  $     5,000.00  $         4,000.00
1351 Michael Mattila   $     1,000.00  $            800.00
1355 s/hand bench top deep fryer  $        430.00  $            344.00
1356 Michael Mattila  $     1,000.00  $            800.00
1357 Michael Mattila and Kelvin  $     2,000.00  $         1,600.00
1358 Michael Mattila labourers shopping  $     1,940.30  $         1,552.24
1363 Michael Mattila loan to darren 900, Michael Mattila cash 1200,shopping  $        500.00  $            400.00
1365 wages and miscellaneous purchases  $     1,306.25  $        1,045.00
1371 Michael Mattila and shopping  $     1,009.45  $            807.56
1372 Michael Mattila and Kelvin  $        500.00  $            400.00
1376 Michael Mattila middendorp  $        264.92  $            211.94
1378 Michael Mattila and Kelvin  $        500.00  $            400.00
1379 [No description]  $        400.00  $            320.00
1395 Michael Mattila and xmas shopping  $        972.00  $            777.60
1396 Michael Mattila and Kelvin  $     2,500.00  $         2,000.00
1398 Michael Mattila Kelvin and park crew xmas party  $     4,000.00  $         3,200.00
1402 shopping  $     1,090.50  $            872.40
1403 [No description]  $     1,000.00  $            800.00
1404 Michael Mattila 500  $        600.00  $            480.00
1405 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1409 Michael Mattila Kelvin park crew  $     2,000.00  $         1,600.00
1410 Michael Mattila pay park crew shopping  $     1,255.66  $         1,004.53
1411 Michael Mattila Kelvin park crew  $     2,000.00  $         1,600.00
1412 Michael Mattila Kelvin park crew  $     1,000.00  $            800.00
1413 Michael Mattila  shopping  $        905.15  $            724.12
1414 Michael Mattila  $     1,000.00  $            800.00
1418 Michael Mattila 500  $        352.80  $            282.24
1424 labour building supplies shopping  $     1,000.00  $            800.00
1460 Michael Mattila 1000 shopping 1000  $        890.45  $            712.36
1465 Michael Mattila  $        955.11  $            764.09
1466 loan donna glasses  $        300.00  $            240.00
1468 Michael Mattila, shopping for park,l&S springs parts for mower 65.00  $     1,032.11  $            825.69
1474 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1475 Michael Mattila and park crew wages  $                -  
1480 [Cash cheque, no description]  $     1,184.75  $            947.80
1482 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1483 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1487 Michael Mattila Bunnings shopping  $     2,118.45  $         1,694.76
1496 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1498 Michael Mattila 1000/ darren nimy justin joe tim  $     2,300.00  $         1,840.00
1505 Michael Mattila 500 shopping  $     1,000.00  $            800.00
1511 Michael Mattila and park crew wages and shopping, darwin business machinew cash register service 45.45  $     1,774.60  $         1,419.68
1512 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1513 Michael Mattila and Kelvin  $     1,000.00  $            800.00
1526 Cash, wages  $     1,200.00  $            960.00
1527 [Cash cheque, no description]  $     2,500.00  $         2,000.00
1530 Michael Mattila Kelvin and park crew  $     3,556.00  $         2,844.80
1536 Litchfield Tavern  $     2,000.00  $         1,600.00
1548 wages  Naaman Justin Darren Joe, shopping Bunnings  $     1,061.11  $            848.89
1550 wages shopping park crew Naaman Justin Darren Joe  $     1,200.00  $            960.00
1553 wages and shopping Naaman Justin Darren Joe  $        863.55  $            690.84
1554 [Cash cheque, no description]  $     1,000.00  $            800.00
1557 [Cash cheque, no description]  $        988.10  $            790.48
1559 [Cash cheque, no description]  $        989.00  $            791.20
1561 wages and shopping  $     1,000.00  $            800.00
1578 naaman 500  $        500.00  $            400.00
1579 naaman 200  $        800.00  $            640.00
1581 naaman 200  $        324.75  $            259.80
1583 Michael Mattila 500  $        500.00  $            400.00
1585 Michael Mattila 300 naaman 300  $        407.56  $            326.05
1590 [Cash cheque, no description]  $     1,500.00  $         1,200.00
1594 Michael Mattila cash/ money for repairs improvements  $        831.45  $            665.16
1596 coles 114  $     1,128.62  $            902.90
1601 Cash, labour, building supplies, shopping  $        982.00  $            785.60
TOTAL  $  186,206.93  $      148,965.54

Summary of sums due to Plaintiff from the First Defendant

Item A   $10,500.00
Item B     $1,000.00
Item C $148,965.54
TOTAL $160,465.54

After allowance of $90,000.00 to the Plaintiff in respect of his claim for damages against the Defendant and after allowance of $124,000.00 in respect of the Defendant’s cross-claim against the Plaintiff the sum due and owing to the Plaintiff by the Defendant is $160,465.54 less $34,000.00, that is, $126,465.54.


[2]    The significance of a wilful default basis is that the onus of proof is reversed and the accounting party must show the expenditure was authorised: Glazier Holdings v Australian Mens’ Health (No 2) [2001] NSWSC 6 at [43].

[3]    Total transfers from the AMJ Mattila – Building Account to Berry Springs Caravan Park Account, referred to in pars [91] and [107] Reasons for Judgment.

[4]    Unexplained cash not banked into the Berry Springs Caravan Park Account – par [100] Reasons for Judgment.

[5]    Unexplained cash cheques drawn on the AMJ Mattila – Building Account – par [100] Reasons for Judgment.

[6]    Unexplained payee cheques drawn on the AMJ Mattila – Building Account – par [100] Reasons for Judgment.

[7]    Litchfield tavern cheques disbursement – par [100] Reasons for Judgment.

Details
AGLC
Mattila v Gardner (No 2) [2013] NTSC 32
Case
[2013] NTSC 32
Decision Date

CaseChat Overview and Summary

The case of Mattila v Gardner (No 2) involved a dispute between the plaintiff, Mr Mattila, and the defendant, Mr Gardner. The central issue was whether the defendant, who had been appointed as the plaintiff's attorney under a power of attorney, had misused the plaintiff's funds. Specifically, the dispute centred on the defendant's role as the sole signatory on the plaintiff's bank account, the service station account, and the disbursement of funds from that account. The defendant was required to provide an account of the funds misappropriated or wrongly disbursed, but failed to do so. Instead, the money was spent on personal items, including alcohol and gambling. The defendant also failed to account for certain cash and cheque disbursements, leading to the plaintiff seeking a judgment for the falsifications, along with interest.

The legal issues before the court included determining the extent of the defendant's misappropriation of funds, the applicable interest rate, and the calculation of interest over the relevant period. The court had to consider the onus of proof and whether the defendant had met his burden to explain the whereabouts of the misused funds. Furthermore, the court needed to decide on the appropriate interest rate and period for calculating interest in the event that a sum was found to be due and payable by the defendant to the plaintiff.

The court found that the defendant had misappropriated a total of $160,465.54, with an amount of $126,465.54 due and payable by the defendant to the plaintiff after certain allowances were made. The court also determined that interest at a rate of 4.85 percent over a period of 2.67 years was applicable, amounting to $34,317.22. The court ordered judgment for the plaintiff against the defendant in the sum of $126,465.54 plus interest of $34,317.22. The parties were to be further heard regarding the costs of the proceedings. The court certified that it had taken an account of the sums due to the plaintiff from the defendant as at 2 July 2013, finding that the monthly account from the Berry Springs Caltex Service Station was part of the sums due.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Those questions and answers have to be considered in a context where Mr and Mrs Gardner had used the service station account to acquire items for their own personal use for sometime before Mr Mattila received his inheritance, they had acquired the account because the service station was conveniently located and they used it regularly, and all of the purchases made at the service station after Mr Mattila received his inheritance continued to be made by Mr and Mrs Gardner. Mr Gardner signed the cheques drawn on the AMJ Mattila – Building Account and, prior to the commencement of this proceeding, he did not account to Mr Mattila about expenditure on the service station account.Conclusion I find that there are a total of $160,465.54 in falsifications and that there is an amount of $126,465.54 due and payable (after an allowance of $90,000.00 to Mr Mattila in respect of his claim for damages against Mr Gardner and after allowance of $124,000.00 to Mr Gardner in respect of his cross claim against Mr Mattila) by Mr Gardner to Mr Mattila. Annexed to my Reasons for Decision is a Certificate of Account to this effect. There is also payable by Mr Gardner to Mr Mattila interest in the amount of $34,317.22. Counsel for the parties both agreed on this calculation of interest in the event that $126,465.54 was found to be due and payable by Mr Gardner to Mr Mattila. The applicable rate of interest is the Reserve Bank cash rate from 5 July 2006 to the present. The average rate of interest over that period has been 4.85 percent. The relevant period for the calculation of interest is 2.67 years. I order that there be judgment for Mr Mattila against Mr Gardner in the sum of $126,465.54 plus interest of $34,317.22. I will hear the parties further as to costs. Pursuant to the order made on 11 October 2012 I hereby certify that I have taken an account of the sums due to the Plaintiff from the Defendant as at 2 July 2013 and I find as follows – SUMS DUE TO THE PLAINTIFFItem A Monthly Account Berry Springs Caltex Service Station

Ratio Decidendi

Legal Principle Established

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