Melena Pty Ltd v Swift

[2012] WASC 497

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   MELENA PTY LTD -v- SWIFT [2012] WASC 497

CORAM:   MASTER SANDERSON

HEARD:   3 DECEMBER 2012

DELIVERED          :   19 DECEMBER 2012

FILE NO/S:   CIV 2193 of 2009

BETWEEN:   MELENA PTY LTD

Plaintiff

AND

JODIE ANNE SWIFT
Defendant

Catchwords:

Claim for repayment of funds improperly used by defendant - Turns on own facts

Legislation:

Nil

Result:

Judgment for the plaintiff

Category:    B

Representation:

Counsel:

Plaintiff:     Mr J C Yeldon

Defendant:     No appearance

Solicitors:

Plaintiff:     George Papamihail Barristers and Solicitors

Defendant:     In person

Case(s) referred to in judgment(s):

Nil

1. MASTER SANDERSON:  In this action the plaintiff sought damages against the defendant, its former employee, in an amount of $183,165.62 plus interest and costs.  The amount of the claim is well within the jurisdiction of the District Court.  However, by way of relief the plaintiff also sought a proprietary interest in the defendant's property in Yangebup.  In the event, the plaintiff did not proceed with this part of the claim.  After a brief hearing I entered judgment for the plaintiff.  I indicate I would publish reasons for doing so.  These are those reasons.

2. The claim is based on a fraud carried out by the defendant on the plaintiff.  The plaintiff trades as Westate Hose Supplies, a supplier of hoses and hose fittings to industry and the rural and mining sectors.  The plaintiff has two directors, Malcolm Ross and Amanda Jayne Lockyer.  It is, in essence, a family business.  The defendant was at all material times an employee of the plaintiff.

3. During the period of her employment the defendant's duties included entering amounts into the MYOB accounting system, controlling the internet site of the plaintiff, paying the wages, the creditors and general reception and office duties.  As part of these duties the defendant completed cheques and cheque butts.  In about 2002 she was given signing authority on the cheque account.  In short, the defendant had complete access to the accounting systems of the plaintiff.  Given the level of responsibility the defendant was given it is clear she was trusted implicitly by both directors.  In fact when Mr Lockyer was travelling the defendant was provided with blank cheques so she could continue to run the business.

4. On 13 December 2005 the defendant became the registered proprietor of the Yangebup property.  The defendant asked Mr Lockyer for permission to order building supplies for her home.  She was intending to act as an owner/builder.  After discussions between Mr and Mrs Lockyer, Mr Lockyer, on behalf of the plaintiff, agreed.  The terms of the agreement were Mr Lockyer would see the invoices the defendant received for each purchase she made.  Those invoices would be paid by the plaintiff and the defendant would make immediate repayment.  The effect of this arrangement was the defendant would obtain a discount from the plaintiff's customers by using the company name and temporarily the company funds.  The use of the company funds was limited to expenditure with the company's suppliers.  There could be no suggestion the defendant was given permission to spend the company's money however she wished.

5. Entering into the agreement proved to be a mistake.  The defendant took fraudulent advantage of the plaintiff.

6. Mr Lockyer asked the defendant to keep all the invoices relating to the defendant's purchases in the company's name in a separate file.  This was not done.  There are now only limited independent records of payments made.  The plaintiff has had to engage upon a task that has involved great expense and time to produce records that the defendant should have kept.

7. In par 12 of the amended statement of claim there was set out lengthy particulars of 90 separate allegations of fraud and dishonesty of the defendant.  The plaintiff says these 90 allegations are probably the tip of the iceberg.  However, from these allegations the plaintiff can show the defendant took money from the plaintiff for which she never properly accounted.  For her part, the defendant has adopted a strategy of not ever properly pleading to the serious allegations.  For a time she was represented by a firm of solicitors, but they have ceased to act and the defendant has represented herself.  It is perhaps a measure of the defence available to her that she did not appear at the trial of this action and took no part in the proceedings.  The plaintiff asserted and I accept the bald denial to be found in the defence should be taken as an admission of the plaintiff's claim.  If there is an answer to this claim it should have been provided long since.

8. By par 6 of her defence the defendant claims that the purchases she made in the name of the plaintiff for building supplies, products and material were repaid for in cash by the defendant to Mr and Mrs Lockyer.  The defendant alleges the plaintiff was paid in full for the invoices purchases made pursuant to the oral agreement alleged in par 5 of the defence.

9. There are 20 separate allegations concerning building materials and services particularised in par 12 of the statement of claim.  These are all dealt with in Mrs Lockyer's witness statement and are supported by documents in the trial bundle.  The defendant has provided no answer to the plaintiff's claims.

10. The plaintiff admits certain sums have been 'repaid'.  This comes from the evidence of Mr Lockyer:  see pars 121, 128 ‑ 129, 132 of his statement.  It is clear these monies were not 'repayment' in the true sense of the word.  Rather money was taken wrongfully from the plaintiff by the defendant and not used.

11. Building materials and services the defendant purchased using the plaintiff's money are set out in the particulars to pars 9 and 15 of the statement of claim.  The evidence supporting this is found in the statement of Mrs Lockyer.  The value of these building products and services combined, less the admitted payment of $1,507.72, is $55,933.

12. By par 10A of the statement of claim it is alleged the defendant procured cash and cheques from the plaintiff to herself which were not building products or building services and which the defendant was not authorised to do under the agreement.  The procuring of the cash and cheques was fraud.  It is clear the cheque butts were written by the defendant in her hand writing to a fictitious name when the cheque was written either to the defendant or to cash.  All these matters are particularised in the statement of claim.  Further, Mrs Lockyer addresses all of these matters in her witness statement.  The witness statement is indexed to the relevant documents in the trial bundle.

13. By par 10B the plaintiff alleges the defendant made internet transfer of monies to her account and other accounts from the plaintiff's account.  She was not authorised to do so.  Once again these matters are particularised and are dealt with by Mrs Lockyer in her statement.  There is no doubt the plaintiff's claims are made out by reference to Mrs Lockyer's statement and by cross‑referencing the statement to the trial bundle.

14. By par 10C it is alleged the defendant procured cheques from the plaintiff to third parties which the defendant was not authorised to do.  Once again, particulars are provided and those particulars are supported by Mrs Lockyer's evidence and the documents support the plaintiff's position.

15. The judgment entered in this matter was not entered in default of appearance.  That is not the proper course.  The defendant did fail to appear at trial but it was still for the plaintiff to prove its case.  However in the absence of the defendant I did not insist upon witnesses being called and those witnesses confirming their witness statements.  Prior to the trial I had considered all of the evidentiary material and I was satisfied the plaintiff had made good its contentions.  On that basis I entered judgment for the plaintiff.