Resolute Corporate Services Pty Ltd (formerly Goudhurst Pty Ltd) v Wearing - [2020] WADC 132

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   RESOLUTE CORPORATE SERVICES PTY LTD (formerly GOUDHURST PTY LTD) -v- WEARING [2020] WADC 132
CORAM:   GILLAN DCJ
HEARD:   20-23 JULY 2020
DELIVERED          :   9 OCTOBER 2020
FILE NO/S:   CIV 4472 of 2017
BETWEEN:   RESOLUTE CORPORATE SERVICES PTY LTD (formerly GOUDHURST PTY LTD)
First Plaintiff
SOCIETE DES MINES DE SYAMA SA
Second Plaintiff
CARPENTARIA GOLD PTY LTD
Third Plaintiff
AND
IAIN RICHARD WEARING
Defendant
IAIN RICHARD WEARING
Plaintiff by counterclaim
RESOLUTE CORPORATE SERVICES PTY LTD (formerly GOUDHURST PTY LTD)
First Defendant by counterclaim
SOCIETE DES MINES DE SYAMA SA
Second Defendant by counterclaim
CARPENTARIA GOLD PTY LTD
Third Defendant by counterclaim

Catchwords:

Fraudulent invoices - Previous convictions - Money had and received - Tort of deceit - Breach of Fiduciary Duty - Wrongly retained employment benefits - Counterclaim or equitable set-off - Application of the Rules of the Supreme Court 1971 (WA) O 18R4(2) - Turns on own facts

Legislation:

Criminal Code
Electronic Transaction Act 2011 (WA)
Evidence Act 1906 (WA)
Fair Work Act 2009 (Cth)
Limitation Act 2005 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Judgment in favour of each plaintiff in the action

Judgment in favour of the defendant and first plaintiff in the counterclaim

Representation:

Counsel:

First Plaintiff	:	Ms R Young
Second Plaintiff	:	Ms R Young
Third Plaintiff	:	Ms R Young
Defendant	:	In person
Plaintiff by counterclaim	:	In person
First Defendant by counterclaim	:	Mr R Young
Second Defendant by counterclaim	:	Ms R Young
Third Defendant by counterclaim	:	Ms R Young

Solicitors:

First Plaintiff	:	DLA Piper Australia - Perth
Second Plaintiff	:	DLA Piper Australia - Perth
Third Plaintiff	:	DLA Piper Australia - Perth
Defendant	:	Not applicable
Plaintiff by counterclaim	:	Not applicable
First Defendant by counterclaim	:	DLA Piper Australia - Perth
Second Defendant by counterclaim	:	DLA Piper Australia - Perth
Third Defendant by counterclaim	:	DLA Piper Australia - Perth

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

Adrenaline Pty Ltd v Bathurst Regional Council [2015] NSWCA 123; [2001] HCA 68
Australia & New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662
Awap SGT 26 Investment Ltd v CN 2000 Holdings Ltd [2020] WASCA 74
Banque Commerciale SA v Akhil Holdings Ltd (1990) 169 CLR 279
Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127; (2017) 51 WAR 341
Bennett v The State of Western Australia [2012] WASCA 70
Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178
Concut Pty Ltd v Worrell [2000] HCA 64
Coshott v Lenin [2007] NSWCA 153
Damberg v Damberg (2001) 52 NSWLR 492
Dovuro Pty Ltd v Wilkins [2003] HCA 51
Elzamtar v Bangladesh Islamic Centre of NSW Inc [2020] NSWSC 1161
Green v Bestobell Industries Pty Ltd [1982] WAR 1
Hazcor Pty Ltd v Kirwanon Pty Ltd (1995) 12 WAR 62
Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41
Magill v Magill [2006] HCA 51; (2006) 226 CLR 551
Mickleberg v Director of the Perth Mint [1986] WAR 365
Moses v Macferlan (1760) 2 Burr 1005; (1760) 97 ER 676
Murphy v Zamonex (1993) 31 NSWLR 439
Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd [2006] VSCA 6
R v Kastratovic (1985) 42 SASR 59
Reading v Attorney‑General [1951] AC 507
Refuge Assurance Company Ltd v Kettlewell [1909] AC 243
Roberts v State of Western Australia [2005] WASCA 37; (2005) 29 WAR 445
Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516
Shaw Building Group Pty Ltd v Narayan (No 2) [2015] FCA 585
Shire of Toodyay v Merrick [2016] WASC 29
Smith v Leveraged Equities Ltd [2020] WASCA 122
St George Bank v Meredith; Ghabrial v Meredith [2011] NSWSC 961
Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87
Stinchcombe v Thomas [1957] VR 509
Vines v Djordjevitch (1955) 91 CLR 512
Warwick Entertainment Centre Pty Ltd (Receivers and Managers Appointed) atf The Warwick Entertainment Centre Unit 6 Trust v Silkchime Pty Ltd (Receivers and Managers Appointed) (No. 4) [2018] WASC 120
Woolworths Ltd v Olsen (2004) 184 FLR 121

GILLAN DCJ:

On 23 October 2015 the defendant was relevantly convicted in this court on his plea of guilty of 30 counts of fraud contrary to s 409(1)(c) of the Criminal Code of Western Australia. The counts of fraud pertained to his creation and submission of fraudulent invoices to his employer, the first plaintiff, two other companies in the group of companies, the second and third plaintiffs, and the payment of those invoices. At the time of the submission of the invoices each of the plaintiffs were wholly owned subsidiaries of Resolute Mining Ltd (RML) and, except where it is necessary to do so, I will refer to the plaintiffs collectively as 'the plaintiffs' without drawing any distinction between them.
The convictions are admitted on the pleading.[1]
[1] See amended statement of claim, par 151; and amended defence, par 151.
By this action the plaintiffs are seeking recovery from the defendant of the amounts paid by the plaintiffs to him pursuant to the invoices. Recovery is sought on three alternative bases:
1.a claim for restitution in money had and received arising in unjust enrichment;
2.a claim for damages arising in tortious deceit; and
3.a claim for equitable compensation or an account of profits arising in breach of fiduciary duty.
The plaintiffs' case, in summary, is that the defendant produced fraudulent invoices purportedly from a third party contractor, MRW Mine Consulting, in truth the defendant's alter ego, submitted the invoices for payment, authorised their payment and received each payment. The plaintiffs' case is, further, to the extent that there was identifiable work underlying the invoices (a matter not conceded by the plaintiffs), that work was done by the defendant solely and he was already obliged to perform that work for the plaintiffs pursuant to his contract of employment.
By his pleadings, the defendant admits he produced the fraudulent invoices, that he gave the invoices to the plaintiffs and that payment for the invoiced sums were paid into his bank account. He denies liability to repay the whole of the sums claimed on several bases that:
1.the plaintiffs have not suffered any loss and damage by reason of the payments because work was performed and invoiced to the plaintiffs, the work benefited the plaintiffs and the value of the work exceeded the amount paid for it;
2.part of the plaintiffs' claims amounting to $91,740 are statute barred;
3.by way of counterclaim, the first plaintiff unlawfully withheld employment entitlements from him which should be paid to him; and
4.by way of counterclaim, after the termination of his employment the first plaintiff did not return to him certain personal property. He seeks return of his property.
In respect to [5.2], [5.3] and [5.4] above, the plaintiffs by their reply:[2]
1.admit part of the claim amounting to $75,990 is statute barred and seek an extension of the limitation period pursuant to s 38 of the Limitation Act 2005 (WA). I will deal below with the plaintiffs' application to withdraw that admission;
2.admit that the first plaintiff was not entitled to retain the employment benefits but says that this should be set off against their claim; and
3.say no proper cause of action is pleaded with respect to the personal property.
[2] Amended reply and defence to counterclaim dated 17 June 2019.

The law pertaining to the plaintiffs' claims

It is convenient to outline the law pertaining to the plaintiffs' claims including the law relating to the use to which the evidence of convictions can be put. I will deal later in these reasons with the law pertaining to the Limitation Act 2005 (WA) (LA) including whether any part of the claims are statute barred, the application to extend the limitation period, the appropriation of funds paid by way of restitution and the availability of any set off for employment benefits wrongfully retained.
Money had and received is a restitutionary claim. The classic exposition of the remedy, as expressed in Moses v Macferlan,[3] is to the effect that an entitlement to recovery arises when a wrongdoer receives money which in justice and equity belongs to the claimant in circumstances which render the receipt of the wrongdoer to the use of the claimant. That exposition is in broad terms so it needs to be kept in mind, as was pointed out by Nettle JA in Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd[4] at [46], that:
[D]espite the breadth of equitable principle, it remains that the scope of restitutionary remedies is informed, and to a large extent limited, by the categories of the decided cases.
[3] Moses v Macferlan (1760) 2 Burr 1005; (1760) 97 ER 676.
[4] Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd [2006] VSCA 6.
The broad rule has been applied, relevantly, in the:
1.recovery from a thief of monies stolen from the thief's employer: Shaw Building Group Pty Ltd v Narayan (No 2);[5] and
2.recovery of money was paid under a fundamental mistake of fact or law: Australia & New Zealand Banking Group Ltd v Westpac Banking Corporation.[6]
[5] Shaw Building Group Pty Ltd v Narayan (No 2) [2015] FCA 585.
[6] Australia & New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662.
In this case the plaintiffs contend that recovery is warranted on either the basis of:
1.the defendant's dishonesty in the production of the invoices, dishonesty in the authorisation of payment of those invoices and receipt of the funds knowing that they were for the payment of dishonestly produced invoices; or
2.the plaintiffs' obviously mistaken beliefs they were obliged to pay invoices presented to them where payment of each invoice was authorised by the defendant.[7]
If made out, and subject to the availability of any defence, each of those contentions appear to me to be a proper basis for recovery in money had and received.
[7] Shaw Building Group Pty Ltd v Narayan (No 2) [37].
The elements of a claim in money had and received which the plaintiffs will have to establish are that:
1.the defendant deceived them or otherwise committed a wrong;
2.as a consequence of that deception or wrong a plaintiff paid money to the defendant; and
3.it would be unjust or unconscionable for the defendant to keep the money.
With respect to [11.1], the question of whether the defendant deceived the plaintiffs or committed a wrong: the plaintiffs rely on the defendant's pleaded admissions that he fraudulently produced the invoices along with his conviction for fraud with respect to each of the invoices paid. I will return to the question of the effect of the evidence of convictions.
With respect to [11.2], whether it was as a result of a deception or wrong that the plaintiffs paid the money to the defendant: the defendant admits that the plaintiffs paid money to him pursuant to the invoices but does not admit that the plaintiff paid the monies to him as a result of his deceit.[8]
[8] Amended defence, par 146.
With respect to [11.3], whether it would be unjust or unconscionable for the defendant to keep the money: the plaintiffs submitted that no part of the cause of action for restitution on the basis of unjust enrichment requires them to prove that they were impoverished to the extent of the defendant's enrichment.[9] I am not entirely certain that is the case. In Shaw Building Group Pty Ltd v Narayan (No 2) the court, when considering the claim for recovery from their thieving employee, considered it was necessary to bring to account repayments of part of the sum stolen made by the co-accused. The necessity to bring repayments to account demonstrates that a lack of impoverishment on the part of the plaintiffs can tell in the determination of whether it would be unjust or unconscionable for the defendant to keep the money.
[9] Plaintiff's outline of opening submissions 30 March 2020, par 65; relying on Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd [47] (Nettle JA).
Further, with respect to [11.3], the plaintiffs contend that once they have established a prima facie entitlement to restitution, it is for the defendant to prove that it would not be unjust or unconscionable for him to retain the money so that the plaintiffs should be denied restitution.[10] I do not have to decide whether the legal onus shifts to the defendant but it seems clear that, at the very least, an evidentiary onus shifts to the defendant to put up evidence of matters that would displace the prima facie position of a right to recovery.
[10] Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd [20] (Chernov JA), [47] (Nettle JA).
As I have set out above, the defendant relies on the defence, to each of the claims, that the plaintiffs received good consideration for the money that they paid. Such a defence is open on the authorities: Adrenaline Pty Ltd v Bathurst Regional Council;[11] Roxborough v Rothmans of Pall Mall Australia Ltd.[12]
[11] Adrenaline Pty Ltd v Bathurst Regional Council [2015] NSWCA 123 [78] - [86]; [2001] HCA 68.
[12] Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516 [27] and [30].
For a good consideration defence to apply, I would need to be satisfied that the plaintiff received and paid for work which they were not otherwise entitled to receive from the defendant: Reading v Attorney‑General[13] and Refuge Assurance Co Ltd v Kettlewell.[14]^,[15]
[13] Reading v Attorney‑General [1951] AC 507 (514) - (515), (517) - (518).
[14] Refuge Assurance Co Ltd v Kettlewell [1909] AC 243.
[15] I note that if the plaintiffs' money had been used to pay for expenses which they were otherwise obliged to pay then there would have been a defence to the criminal charges: Roberts v State of Western Australia [2005] WASCA 37; (2005) 29 WAR 445; R v Kastratovic (1985) 42 SASR 59, 62.
Turning now to tortious deceit. The elements of the tort of deceit were summarised by the High Court in Magill v Magill.[16] The five elements are that:
1.the defendant made a false representation;
2.the defendant made the representation with the knowledge that it was false or that the defendant was reckless or careless as to whether the representation was false or not;
3.the defendant made the representation with the intention it be relied upon by the plaintiff;
4.the plaintiff acted in reliance on the false representation; and
5.the plaintiff suffered damaged which was caused by reliance on the false representation.
[16] Magill v Magill [2006] HCA 51; (2006) 226 CLR 551.
Fraud is a serious allegation and the necessity to satisfy each element is always strictly enforced.[17]
[17] Magill v Magill [114] and [37].
The third basis of the plaintiffs' claims are that the defendant's conduct in misappropriating money was a breach of fiduciary obligations owed to the plaintiffs.
The employer-employee relationship is one of a class of relationships in which an employee may owe fiduciary obligations to their employer.[18] It is easier to establish the existence of a fiduciary relationship for employees in a senior position[19] but the existence of a fiduciary duty arising out of the fiduciary relationship is usually determined by the power and opportunity that an employee has to exercise the powers of their office or their discretion to the detriment of their employer.[20]
[18] Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 [96] ‑ [97].
[19] Green v Bestobell Industries Pty Ltd [1982] WAR 1 [16].
[20] Hospital Products Ltd v United States Surgical Corporation [96] - [97]; Shaw Building Group Pty Ltd v Narayan (No 2); Woolworths Ltd v Olsen (2004) 184 FLR 121 [212].
By way of example, fiduciary duties may arise where an employee has undertaken or agrees to act for or on behalf of the interests of his employer in the exercise of a power or a discretion which affects the employers' interests in a legal or practical sense.[21]
[21] Concut Pty Ltd v Worrell [2000] HCA 64 [17].
The consequence of a breach of a fiduciary duty is to account for any benefit or claim obtained by the defendant by reason of his fiduciary position or from an opportunity or knowledge resulting from that position. In Chan v Zacharia[22] Dean J said:
Stated comprehensively in terms of the liability to account, the principle of equity is that a person who is under a fiduciary obligation must account to the person to whom the obligation is owed for any benefit or gain (i) which has been obtained or received in circumstances where a conflict or significant possibility of conflict existed between his fiduciary duty and his personal interest in the pursuit or possible receipt of such a benefit or gain or (ii) which was obtained or received by use or by reason of his fiduciary position or of opportunity or knowledge resulting from it. Any such benefit or gain is held by the fiduciary as constructive trustee … That constructive trust arises from the fact that a personal benefit or gain has been so obtained or received and it is immaterial that there was no absence of good faith or damage to the person to whom the fiduciary obligation was owed.
[22] Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178 (199).
Accordingly, to recover on the basis of breach of fiduciary duty the elements of what the plaintiffs must prove are that:
1.the defendant owes the plaintiffs a fiduciary duty arising out of the nature of his relationship with the plaintiffs to account for a benefit or gain obtained or received by him; and
2.in conflict of that duty to account, the defendant obtained a benefit or gain; so that
3.the defendant holds the benefit or gain on constructive trust or is otherwise liable for equitable damages or compensation.
The amount for which recovery is sought against the defendant in restitution is a global sum calculated by reference to the full amount paid to the defendant pursuant to the invoices, $249,786 reduced by two amounts by way of set off. First, $35,000 being the amount repaid by him by way of restitution, and second, a set off of the amount of the employment benefits wrongly retained.
The claim for damages in tort or equitable damages for breach of fiduciary duty relies on the same facts. A claim for an account of profits was not pressed.
For each of those causes of action the plaintiffs rely on the fact of the defendant having been convicted of fraud with respect to each of the invoices paid and the facts underlying the elements of that fraud as constituting evidence in their case.
The principle authority setting out the evidentiary effect of proof of conviction is Mickelberg v Director of the Perth Mint.[23] In Mickelberg each of Burt CJ, Smith and Kennedy JJ determined that proof of a relevant conviction would be admissible evidence and, once proven, prima facie evidence that the person did commit the offence of which he was found guilty. Kennedy J observed that the weight to be given to the facts established by any conviction proven is a matter for the trial judge but in a normal case considerable weight would be given to such a verdict.
[23] Mickelberg v Director of the Perth Mint [1986] WAR 365.
Each of their Honours decided that in order for the prima facie evidence established by the conviction to be displaced it would be necessary for evidence to be led which was not only fresh, in the sense that it was not available at trial and could not have been, with the exercise of reasonable diligence, obtained for trial but must also be evidence which entirely changes the aspect of the case sought to be proven by the conviction.

In this case the things which are prima facie proven by each of the relevant convictions are that the defendant:
1.was the person who committed the offence;
2.had an intention to defraud;
3.engaged in deceitful or fraudulent means; and
4.obtained a benefit for himself.
The factual basis which underpins those elements of each offence is ascertained either from the facts admitted for the purpose of sentence or the facts as found by a sentencing judge: Bennett v The State of Western Australia.[24] In Bennett Chief Justice Martin observed[25] that there is also an admission against interest as to the elements of an offence arising from a plea of guilty to that offence.
[24] Bennett v The State of Western Australia [2012] WASCA 70 [67].
[25] Bennett v State of Western Australia [49].

Background facts and facts which are uncontentious

There are facts which are relatively uncontentious between the parties.
The plaintiffs as wholly owned subsidiaries of RML are each part of the Resolute group of companies, the first and third plaintiffs are incorporated in Australia and the second plaintiff in Mali.[26]
[26] Admitted on the pleadings.
RML is a gold mining and exploration company which at the relevant time had two operating mines and was working in mining of those mines, their further development and of exploration and development projects in Australia and Africa.[27]
[27] Admitted on the pleadings.
Specifically, in the relevant period:
1.The operations in Australia were at the Ravenswood Project which is west of Townsville in Queensland. The third plaintiff ran the operations at Ravenswood, being an underground mine and an open cut mine;
2.The underground mine was called Mt Wright,[28] the open pit mine was called Sarsfield[29] and there was a further underground mining project associated with Ravenswood called Welcome Breccia;[30]
3.In Africa, there was a project in Tanzania and one in Mali. The second plaintiff was the holding company for the operations in Mali and the mine there was called Syama;[31] and
4.In Tanzania the project was called Golden Pride.[32]
[28] ts 87 (Goode), ts184 (Wearing).
[29] ts 78 - ts 79 (Goode).
[30] ts 78 - ts 79 (Goode).
[31] ts 78 - ts 79 (Goode).
[32] ts 78 (Goode).
The defendant is a qualified mining engineer.[33]
[33] ts 219 (Wearing).
The defendant was employed from early October 2010 by the first plaintiff as the group mining engineer for the Resolute group of companies.[34] His employment was the subject of a written contract of employment dated 29 September 2010.[35]
[34] Admitted on the pleadings.
[35] Admitted on the pleadings; Exhibits 1.30 - 1.43.
The role of group mining engineer included planning or scheduling work for mining operations, designing open pits and underground mines, conducting cost evaluations of mines, liaising with contractors, contributing to the development of Life of Mine (LOM) models, using software packages associated with LOM modelling such as Surpac, using software packages for the optimisation of cost effectiveness of mining such as Whittle, the development of plans for the waste from mining, budgeting and cost control.[36]
[36] ts 85 - ts 86 (Goode); ts 219 (Wearing), ts 221 - ts 222.
On commencement the defendant was tasked to commence optimisation and evaluation work on the expansion of the Sarsfield open cut mine and a high level study on the Syama mine and various satellite pits associated with Syama in Mali.[37] In addition, the defendant was also looking at the expansion of the Golden Pride project in Tanzania.[38]
[37] Exhibit 1.45A; ts 179 (Wearing); ts 90 (Goode).
[38] ts 179 (Wearing).
The defendant's role generally did not extend to operational site matters which they were handled by onsite mining engineers. Nevertheless in the period of his employment the defendant travelled to various mining sites and was sometimes asked to assist or give guidance to the onsite mining engineer while there.[39]
[39] ts 179 (Wearing).
Site managers would also from time to time request assistance with operational aspects of mining projects. When that occurred the defendant would assist if he had the approval of his line managers Mr Goode and Mr Venn to do so.[40]
[40] ts 179 (Wearing).
Between February 2011 and December 2011 the first defendant prepared 12 invoices, being invoices RML1 2011 ‑ RML12 2011. Those invoices were paid by the plaintiffs and 11 of them are the subject of these proceedings.[41]
[41] RML6 2011 was issued to a company then associated with RML and was paid but recovery is not sought because that company has been sold.
Between January 2012 and December 2012 the first defendant prepared 20 invoices being RML1 2012 ‑ RML20 2012. RML1 2012 ‑ RML19 2012 were paid by the plaintiffs and are the subject of these proceedings.[42]
[42] RML20 of 2012 was never paid.
Each invoice:[43]
1.Was expressed to be from MRW Mine Consulting and had a letterhead in that name;
2.Gave details of an Australian Business Number ABN 51206350524. That ABN Number was registered in the defendant's name but that was not obvious on the face of the invoice;
3.Gave a post office box address. The post office box address was used by the defendant but that was not obvious on the face of the invoice;
4.Was addressed to the defendant in his capacity as group mining engineer for either the first plaintiff,[44] the second plaintiff or third plaintiff depending on which project it purported to relate to;
5.Purported to be under the hand of 'Mitch Woods'; and
6.Gave details of a bank account for payment. The bank account was the defendant’s account but that was not obvious on the face of the invoices.
[43] Admitted on the pleadings; Exhibit 1.242 - 1.342; Exhibit 7 (invoice RML20 2012).
[44] As agent of the second plaintiff.
The defendant either posted or hand delivered each of the MRW Mine Consulting invoices to the first plaintiff's office in Perth. When any invoice arrived at the office a receptionist would collate the invoice, the invoice would be delivered to the accounts department and the accounts department would then seek approval from an appropriate person who had the requisite approval level. If appropriate, the authorised person would approve the invoice and give it a code for the project to which it related, the invoice would be returned to the accounts department and paid.[45]
[45] ts 238 (Wearing).
Each of invoices RML1 2011 - RML5 2011, RML7 2011 ‑ RML12 2011, RML1 2012 - RML19 2012 was authorised for payment by the defendant and paid after authorisation.[46] Detail of which plaintiff received and paid the invoices is set out in the Annexure to these reasons. It was pleaded but not admitted by the defendant that the first plaintiff received invoices and paid RML17 2012 - RML 19 2012 as agent of the second plaintiff. I will return to this below.
[46] Admitted on the pleadings, Exhibits 1242 - 1.342; Exhibit 7.
Invoice RML20 2012, which purportedly related to work performed in November 2012 was not paid. No explanation for that lack of payment was forthcoming from the plaintiffs.
After RML20 2012 there were no further invoices received from MRW Mine Consulting.
On or about 9 May 2013 an invoice purportedly from Cube Consulting was received at the RML offices.[47] The Cube Consulting invoice was addressed to the third plaintiff and marked to the attention of the defendant. It was in the sum of $38,080.63. The invoice had on it the defendant's bank account details as the account to which payment could be made. The defendant approved the Cube Consulting invoice for payment.
[47] Exhibit 1.242 - 1.341, page 341.
On 5 July 2013 the defendant's employment with the first plaintiff was suspended[48] and on 30 July 2013 his employment was terminated.[49]
[48] Exhibit 1.1146.
[49] Exhibit 1.1147.
By 6 August 2013 the defendant had paid $35,000 in total by way of restitution.
On 23 October 2015 the defendant pleaded guilty in this court as set out above. By his plea of guilty, the defendant accepted that the elements of each charge were proven. This means that he admitted which that he acted with fraudulent intent, by fraudulent means and that he obtained a benefit thereby. In addition he pleaded guilty to attempted fraud with respect to RML 20 2012 and the Cube Consulting invoice. At the sentencing hearing the defendant, through his counsel and directly, put the position to the sentencing judge that he had done all of the work the subject of each of the MRW Mining Consultant invoices and that it was the receipt of the monies in payment of those invoices which constituted the relevant benefit to him.[50] He contended that the plaintiffs had not suffered any loss.
[50] Exhibit 2; Exhibit 4, pages 29, 34 - 35, 37 - 38, 42 - 44.

Evidence

At trial the plaintiffs relied on the admissions in the pleadings, the facts established by the convictions as being prima facie proof of the facts constituting the elements of the offences, other documents tendered in evidence and also called two witnesses. The documents tendered were largely business records of the plaintiffs and other organisations such as the police.
In particular the plaintiffs relied on the terms of the defendant's contract of employment.
The plaintiffs led the evidence of Mr Andrew Goode and Mr Jodie Hatch in support of their case. Mr Goode was the defendant's direct line manager, he gave evidence about the work that the defendant undertook.
I pause here to note that Mr Goode no longer works for the company. Mr Goode was a careful and straightforward witness whose evidence was not substantially in dispute other than as to whether he had any knowledge of the use by one Mitch Woods or Mitchell Tennant Woods or Mitchell Tennant‑Woods of the defendant's ABN number.[51]
[51] Each of those name variations are evident in the documents.
Mr Jodie Hatch is the plaintiffs' current IT specialist. Mr Hatch gave evidence about searches which had been undertaken at his direction and under his supervision of the plaintiffs' records of archived emails. Mr Hatch was also a witness who gave his evidence in a straightforward and, it appeared to me, honest way.
At the trial the defendant's case differed substantially to the position he had put to the learned sentencing judge in that:
1. his case was now that he had not performed all of the work the subject of the MRW Mining Consultant's invoice. That work was only partly performed by him and largely performed by other independent contractors whom he then paid for their work; and
2.he maintained a position that he had no knowledge at all of the Cube Consulting invoice.
The defendant gave evidence in his defence. The defendant was an evasive and self-interested witness whose evidence, for the following reasons, cannot be accepted by me unless it is consistent with either the evidence of another witness whose evidence I do accept, a document which I accept to be authentic or it is against the defendant's own interests.
I cannot accept the defendant's evidence because:
1.His evidence that the work was largely undertaken by four contractors, Mitchell Tennant Woods (or Tennant-Woods),[52] Brian Law, Rick Pitman and Brett Ustick[53] was completely different to:
[52] Different variations of name or spellings were evident in the exhibits and no definitive spelling can be ascertained. The name or spelling will vary throughout this decision if referring to a document with different spelling.
[53] ts 100, ts 123 (Wearing).
a.his position before the learned sentencing judge on 23 October 2015;
b.what he had told the police in the interview on 6 December 2013 that all of the work was done by a Mitchell Tennant Woods;[54] and
[54] Exhibit 21.
c.By the end of cross‑examination about the relative differences in those position the defendant said that he no longer knew which of the positions put to the sentencing judge or the position put at trial was correct.[55]
[55] ts 266, ts 268 and ts 270.
2.None of the alleged four contractors were called to give evidence. There was no documentary evidence or evidence independent of the defendant to substantiate the defendant's assertion that Mr Tennant Woods and Mr Law had died despite the defendant being on notice the documentary proof should be produced.[56] There was no documentary evidence or evidence independent of the defendant that Mr Pitman was working overseas or that working overseas made him unavailable. The assertion by the defendant that he had lost contact with Mr Ustick did not establish that he had taken any steps to find Mr Ustick.
[56] Exhibit 20; ts 300 - ts 331.
3.The defendant's evidence at trial as to how he had effected payment of the four contractors, from a UK HSBC bank account,[57] the production of a document purporting to be the relevant bank statement from that account and his reliance on a document he said were his GST Activity Statements[58] recording those payments was unbelievable because:
[57] Exhibit 18.
[58] Exhibit 15.
a.At his interview with the police in December 2013[59] the first defendant said that Mitchell Tennant Woods had done all the work and volunteered a completely different account of how he paid Mitchell Tennant Woods. In summary, the defendant said he paid for the whole of Mitchell Tennant Woods' work either by cash or by payments made to credit cards the use of which they shared or which were used by Mitchell Tennant Woods;
[59] Exhibit 21.
b.The purported HSBC bank statement had not been discovered and was produced overnight mid trial in response to a concern I expressed to the defendant that given his change in position I would have difficulty in believing his evidence that he had paid the contractors without documentary evidence demonstrating that to be the case;[60]
[60] ts 193 ‑ ts 195; ts 198.
c.The purported bank statement was internally inconsistent in that the period of the statement (towards the top of the statement in bold) was expressed to be a one year period '1 January to 31 December 2013', but the opening balance and transactions purportedly recorded were for a three year period between 1 January 2011 to 31 December 2013. When this was pointed out to the defendant his response was, 'I'd never noticed that, Your Honour';[61]
[61] ts 203.
d.The defendant's GST Activity Statements were tendered on the basis that they were accurate and showed the payments made to the contractors.[62] When the purported HSBC bank statement was produced the following day it purportedly recorded payments to a 'Mitchell T Woods' which were not recorded in the GST Activity Statements while payments to M Woods Consulting were. The defendant's evidence that he overlooked the payments to Mitchell T Wood when completing the GST Activity Statements is unbelievable as those alleged payments were clear on the face of the purported bank statement.[63]
[62] ts 194.
[63] ts 353.
e.Further, the defendant then changed his evidence to say that the GST Activity Statements he had previously said were accurate were not accurate because they had subsequently been audited by the ATO to include missed payments to Mr Tennant Woods.[64] When later produced, the audit documentation[65] made it clear that the results of the audit were not directed to the inclusion of missed payments to Mr Tennant Woods. The defendant's answers when asked about this by me and by counsel in cross‑examination are but one example of how the defendant's evidence was evasive, implausible and inconsistent.[66]
[64] ts 301.
[65] Exhibit 25.
[66] ts 301, ts 355 ‑ ts 358.
f.The defendant's evidence under cross‑examination was that MRW Mine Consulting 'was' Mitchell Tennant Woods[67] but his GST activity statements were prepared on the basis that the payments of the MRW Mine Consulting invoices were received by him as his own income although the GST activity statements did refer to MRW Consulting, another name again, as a sub‑contractor;
g.The HSBC statement and GST Activity Statements purport to record payments to Mr Law, Mr Pitman and Mr Ustick under the name of DAT Consulting and the defendant's explanation for this was unbelievable. The first defendant said that Mr Law was the principal of DAT Consulting[68] but he did not provide any cogent explanation as to why DAT Consulting did not simply invoice the plaintiffs for Mr Law's work. There was no cogent explanation for why Mr Pitman and Mr Ustick's work was remunerated through DAT Consulting. The defendant's explanation was that the contactors' work was all 'lumped together' (for invoicing purposes) under the invoices prepared by the defendant purportedly from MRW Mines Consulting, and, that the work of Mr Law, Mr Pittman and Mr Ustick was further 'lumped together' (for payment purposes) in his own records under DAT Consulting. The whole of the evidence was unconvincing and self‑serving;
h.Mitchell T Woods, M Woods Consulting and DAT Consulting (as referred to on the HSBC bank statement) were said by the first defendant to 'probably' have been paid by transfer to other UK bank accounts,[69] which evidence was offered to explain the somewhat unusual recording of those alleged transactions. It seems to me to be inherently unlikely that each of Mitchell T Woods, M Woods Consulting and DAT Consulting would have had and maintained UK bank accounts; and
i.The purported GST Activity Statements recorded payments to DAT Consulting as being non-GST sales, in other words, offshore sales but did not do so for payments to M Woods Consulting even though on the reasoning in [3 h.] those payments would also have been offshore.
I cannot accept that either the purported bank statement or the defendant's GST document were accurate or that they reflected any transactions entered into by the defendant.
4.The defendant admitted under cross-examination that he had created and discovered certain emails in support of his position for the purposes of the trial.[70] A Certificate pursuant to s 11 of the Evidence Act 1906 (WA) was issued by me in respect to his evidence about those matters and I will come back to that evidence later;
5.The defendant produced two versions of copies of diary entries for 3 and 4 December 2012. Only one version of the diary entries purported to record notes relating to Mitchell Tennant Woods, recorded as 'MTW', and invoices. The defendant's explanation that one version had not copied well and so he had recopied and rediscovered them is by reference to the appearance of both versions patently unbelievable;
6.The defendant produced the MRW Mine Consulting invoices and delivered them to the plaintiffs without disclosing to the plaintiffs that he had drawn them up. His evidence was that he also produced proposals for the work which was purportedly to be undertaken by MRW Mine Consulting and kept those in his office. The defendant did not disclose to the plaintiffs that he had prepared any proposals for MRW Mine Consulting to undertake work for them.[71] No proposals were discovered by either the plaintiffs or the defendant. If those documents did exist then they were prepared to cover his tracks; and
7.The defendant admitted that it was his bank account details on the Cube Consulting invoice. He pleaded guilty to an attempted fraud with respect to that invoice which involved a concession that he had produced that invoice by fraudulent means. I did not believe the defendant's evidence at trial that he did not know anything about and had never seen the Cube Consulting invoice which contained his Commonwealth Bank account details and his signature approving it for payment.[72]
[67] ts 299.
[68] ts 299.
[69] ts 200 - ts 201.
[70] Exhibit 26; ts 266; ts 268 and ts 270.
[71] ts 209.
[72] ts 333.

Contested findings of fact

I make the following findings of fact or mixed fact and law.
At various times during his employment as senior mining engineer, the defendant did work that related to:
1.the Welcome Breccia project which was a small underground deposit outside the zone of operations at the Mt Wright underground mine in Queensland and the Sarsfield open pit mine operated by Carpentaria Gold (the third plaintiff) at Ravenswood in Queensland;[73]
2.the development of pit designs for the Syama LOM Options study and expansion projects of the Syama mine in Mali;[74]
3.managing the first phase of the Syama expansion project;[75]
4.managing the Sarsfield open pit expansion project which included an area known as Nolans;[76]
5.evaluating the extension potential for the Golden Pride project in Tanzania;[77]
6.directing waste designs on some of those projects undertaken by a external consultants who were retained to look specifically at waste from mining;[78] and
7.preparing optimisation studies using Whittle software[79] and pit design utilising the Surpac software.[80]
[73] ts 184.
[74] ts 222, ts 231.
[75] ts 221.
[76] ts 221, ts 179, ts 222.
[77] ts 179.
[78] ts 219, ts 222.
[79] ts 221.
[80] ts 222.
Each of the MRW Mine Consulting invoices specified the work to which they purportedly related. The invoices were:
1.Welcome Breccia project - invoice RML1 2011;
2.Syama LOM project - invoices RML2, 3, 4, 5, 7, 8, 10, 11 and 12 2011;
3.Syama expansion study - invoices RML1, 2, 4, 7, 9, 11, 13, 15, 17, 18 and 19 2011; and
4.Sarsfield expansion open pit study - RML9 2011 and RML3, 5, 6, 8, 10, 12, 13 and 16 2012.
Annexure A to the Amended defence and counterclaim is a document particularising which of the defendant or the four contractors is alleged to have done the work the subject of the invoices.[81]
[81] Exhibit 22.
The defendant gave evidence about an articulated dump truck (ADT) analysis for the Syama mine[82] which he said was the subject of specific invoices being RML 2 2011 - RML 5 2011 and RML 7 2011. By reference to Annexure A he said that the work was partly done by other contractors and to the extent the work was done by him it was outside his usual duties. An analysis of work particularised in Annexure A and those invoices shows that the work billed on RML2 2011 was alleged to be undertaken by Mr Tennant Woods. RML3, 4, and 7 2011, the work was alleged to be undertaken by, in some cases, Mr Pitman, Mr Tennant Woods and the defendant and in other cases by Mr Ustick, Mr Tennant Woods and the defendant.
[82] ts 179 - ts 181; invoices RML 2, 7, 9, 10, 11 and 12 2011.
The defendant said that the plaintiffs could not do ADT analysis work in-house because that work utilised a software package known as Talpac Haulage Analysis program which program the plaintiffs did not own.
I do not accept the defendant's evidence about those invoices being for the ADT analysis because:
1.There is no mention in any of the invoices RML2, 3, 4, 5 and 7 2011 to an ADT analysis. The invoices refer to pit design work, including the use of the Surpac program but make no mention of the Talpac Haulage Analysis program;
2.While the defendant pleaded and particularised that the work the subject of those specific invoices was undertaken by contractors, Annexure A to his amended defence does not say the work related to the articulated dump trump (ADT) analysis at the Syama mine or utilisation of the Talpac Haulage Analysis program. The plaintiffs were not on notice of that contention prior to trial.
3.Exhibits 9 and 11 are memoranda prepared by the defendant when he was working for the first plaintiff and tendered by him as independent evidence that the three contractors were involved in an ADT analysis and their work was included in those invoices. Exhibits 9 and 11 do refer to an ADT truck analysis for the pit at Syama, but make no reference to contractors having done any or all of the work. This contrasts with other documents such as exhibits 10, 12 and 13 also tendered by the defendant which expressly named and acknowledged the work of independent contractors. In my view the lack of reference to the work of contractors in Exhibits 9 and 11 makes it less likely that the three named contractors were involved. Neither of Exhibits 9 or 10 provide any independent support for the contention that the alleged independent contractors did any of the work or that the defendant did any work outside of his usual duties or working hours; and
4.The defendant's assertion at trial that the plaintiff did not have the Talpac Haulage program and that it was utilised by any of the alleged contractors to produce work the subject of those invoices was not put to Mr Goode so that he may have confirmed or denied those matters during his evidence.
The defendant was invited to give further evidence of what other work was undertaken outside of his employment contract but he declined to do so.[83]
[83] ts 203 (Wearing).
Accordingly there is simply no evidence which I am prepared to accept which establishes either that any of Mitchell Tennant Woods, Mr Law, Mr Pitman or Mr Ustick were involved in work the subject of the invoices or that if there was work the subject of those invoices, that work was outside the defendant's contract of employment.
On the evidence I do accept I find that:
1.To the extent that the invoices do reflect work performed that work was all performed by the defendant. I base this finding on the defendant's admission against interest through his counsel at the sentencing hearing on 23 October 2015 and in written submissions filed by him prior to that hearing.[84]
2.That finding is not a finding that the invoices are an accurate reflection of the time spent by the first defendant working on any of those projects or that any work was done outside of his usual duties or working hours. The invoices generally refer to work done on normal working days (Monday - Friday) and often for eight hours per day and there is simply no evidence which I do accept that would establish for me that the invoices are an accurate reflection of work being done additional to the defendant's usual duties or working hours.
[84] Exhibits 2 and 4.
The defendant's contract of employment provides:[85]
[85] Exhibits 1.30 - 1.43.
1.Clause 1.1: He is employed in a position of group mining engineer on a full time basis;
2.Clause 2.3: That his salary includes all payment for, but limited to, overtime, shift loading, annual leave, annual leave loading, public holidays worked and rostered off, industry allowance, leisure days off, disability payments and location payments;
3.Clause 2.4: That the salary fully commensurate the employee in respect of all payments and pay entitlements pursuant to any applicable industrial instrument including awards in existence which may subsequently bind the company to the extent that the salary must be set off against any such entitlements under an industrial instrument including an award;
4.Clause 5.1: That the defendant acknowledges that:
a.that as a member of staff the employee position is task rather than time oriented and that the employee will be required to work such hours are as necessary for the satisfactory performance of (his) role; and
b.the (defendant's) salary allows for such hours of work and includes compensation for all hours that may be worked by (the defendant) during (the defendant's) course of employment; and
5.Clause 5.2: Subject to cl 5.1, the defendant's usual hours of work will be on the basis of 8.5 hours per day which includes a one hour lunch break and office hours are usually from 8.30 am to 5.00 pm from Monday to Friday.
I accept the evidence of Mr Goode as to the roles that the defendant was obliged to undertake in the course of his employment and find that the work described in the invoices was within the usual duties of the defendant. Mr Goode's evidence was consistent with:
1.An email sent by Mr Goode on 1 October 2010[86] to the Perth office which sets out the jobs with which the defendant was initially tasked; and
2.A position description for the group mining engineer[87] prepared shortly after the defendant had left the first plaintiff’s employment. It was prepared with Mr Goode's input and was based on an earlier position description.[88] I acknowledge that the particular document was never given to the defendant but it is consistent with the defendant's evidence.
[86] Exhibit 1.45A.
[87] Exhibits 1.44 - 1.45.
[88] ts 88 (Goode).
To the extent that that any of Mr Goode's evidence differed to that of the defendant I prefer the evidence of Mr Goode, but note that their evidence was consistent in the important respect that the defendant was tasked to work on each of the projects purportedly the subject of the MRW Mine Consulting invoices.
Further, I find that even if there was work undertaken by the defendant outside of the usual hours of 8.30 am ‑ 5.00 pm Monday to Friday, that work would nevertheless, on the face of it, have been encompassed by the scope of his employment as recorded in the written contract of employment and in the oral evidence of the tasks which he as group mining engineer was to undertake. There is no evidence, other than the defendant's oral evidence, to the contrary.
In addition to the ADT Truck analysis which I have dealt with above, the defendant also specifically pointed to data about ore reserves certified by him and reported in a series of the plaintiffs' annual reports as establishing his contention that work undertaken by him in his guise as an independent contractor provided good consideration for the payment.
The defendant further contended that the plaintiffs had been prepared to outsource work to an independent contractor, in this case MRW Mine Consultants, the plaintiffs had work done for them at a reasonable rate and given that was work the plaintiffs were prepared to pay someone else to do, ergo, they got value for money.
The hourly rate attributed by the defendant to the work in the invoices appears by reference to the hourly rates referred to in other exhibits[89] seems to me to have been within a reasonable range for work by a senior mining engineer but that does not answer the question.
[89] For example Exhibit 14.
Even if there had been work that might properly have been treated as outside of his employment contract, the defendant's deceptions have made it impossible to tease out when, where and in what respect there was any such work. By way of example, even if I accept that the work to ascertain and certify the ore data reserves was valuable and continues to be valuable to the company, I cannot conclude that any work done by the defendant associated with that task was outside the defendant's contract of employment.
The difficulty remains with each of the defendant's contentions is that underlying them is the premise that the defendant would have, if he had acted honestly, become entitled to charge the plaintiff in the guise of an independent contractor for any work at all. The defendant's dishonesty in his dealings with the plaintiffs indicates to me that at the time he considered that the plaintiffs were unlikely to agree to treat him as an independent contractor for certain limited purposes and the reaction of the first plaintiff in terminating his employment on the discovery of the fraud strongly suggest that would not have been the case.
There is simply no evidence on which I could reach a conclusion on a counter-factual that if the defendant had said to the plaintiff, 'well I'm very busy. If you want me to do this work I'm going to charge you extra for it as an independent contractor because you would otherwise have to pay an independent contractor', that the plaintiff would have agreed to that state of affairs.
I further note that counter factual contention was not put to Mr Goode. Mr Goode did agree that the plaintiffs were prepared to use independent contractors when the defendant said he had too much to do and needed external assistance but that is not the same thing as agreeing to treat the defendant as an independent contractor when the defendant had the capacity to do the work.
It was also contended by the defendant that there should be no recovery of the funds paid because the plaintiffs knew that Mitchell Tennant Woods was using the defendant's ABN number and also knew that payments on the invoices were going into his bank account. I will leave to one side the question of whether those matters could establish a defence at law and deal with whether those facts are made out.
The defendant's evidence‑in‑chief was that prior to the first invoice he had informal or 'corridor' discussions with Mr Goode and Mr Beilby, who was the general manager of operations,[90] to the effect that he needed assistance with the amount of work he had to do and so he 'asked for help'.[91] Mr Goode recalled that the defendant did at one stage say he needed help and also mentioned in one of their meetings that a Mitch Woods was helping him.[92] For the reasons I have already set out there is no evidence independent of the defendant which would establish that what he told Mr Goode about those things were true. The defendant's evidence was that he then then put the request down 'sort of in writing and sort of in the emails' to formalise the arrangement and get authority to pay.[93]
[90] Exhibits 1.82a - 83; ts 91 (Goode).
[91] ts 183.
[92] ts 98.
[93] ts 184.
Exhibit 26 is a bundle of emails which the defendant relies upon to establish that Mitchell Tennant Woods was doing work the subject of the invoices and also that the plaintiff had known that Mr Tennant Woods would be using the defendant's ABN number. The authenticity of the entire bundle of emails was disputed by the plaintiffs.
The defendant's evidence was that it was proposed that Mitchell Tennant Woods would use the defendant's ABN number because at that time Mr Tennant Woods had not 'set anything up'[94] and that Mr Goode and Mr Beilby knew that was the case.
[94] ts 192.
A purported email relied on by the defendant and dated 27 January 2011 14:30:29 +0800 from the defendant to Mr Woods and copied to Mr Beilby refers to the scope of works for the Welcome and Syama projects for Mr Woods' signature and to the proposed use of the defendant's ABN number by Mr Woods. A purported responsive email dated 9 February 2011 09:13:29 + 0800 from Mr Woods returning the files relating to the optimisation of the Welcome deposit and a brief report. The defendant said that Mr Tennant Woods was then retained to do some of that work pertaining to the Welcome Brechia mine.[95]
[95] ts 185.
The defendant admitted in cross‑examination he had created some but not all of the emails in Exhibit 26 for the purposes of these proceedings but maintained that some of the emails were genuine, were sent and received by him and that they confirm that the plaintiffs knew that Mr Tennant Woods was using his ABN number.
I cannot accept the defendant's evidence that he had the corridor discussions he described with Mr Beilby and Mr Goode and that those discussions were confirmed by any email in the bundle. I reject the authenticity of the whole of the bundle of emails and my reasons for doing so are:
1.Mr Hatch gave evidence that by his direction and under his supervision a staff member of the IT Department searched the archived email records of Resolute group for emails to and from the addresses purportedly used by Mr Woods to any of the email addresses of employees of the Resolute group and for emails between the Resolute group on the dates and at the times shown in Exhibit 26. The searches of the archived records do not record that any of the emails in Exhibit 26 purportedly sent from or received at Resolute Mining emails addresses were sent or received.[96]
2.Mr Hatch's evidence was that over the term of his employment Mr Beilby used a number of different email addresses of which a record was maintained by the plaintiffs.[97] Mr Peter Beilby spelt his last 'Beilby' not 'Bielby' or 'Beiby'.[98] Exhibit 1.3508 shows that none of the email addresses used by Mr Beilby incorporate the spelling of 'Bielby' or 'Beiby' in any part of the email address.
3.Mr Hatch's evidence was also that records of email signatures were kept by the Resolute group and he had undertaken searches and could find no record Mr Beilby using an email signature in the course of working for the Resolute group of companies.
4.I have reviewed Exhibit 26 and cannot accept that any of the emails in it are authentic because:
a.The defendant produced these emails in discovery. His evidence was that once his employment was terminated he lost access to emails on the Resolute server so he had obtained copies of historical emails threads for the relevant period from Mr Tennant Woods;[99]
b.Mr Tennant-Woods purportedly sent the email threads to the defendant under cover of emails dated 27 June 2014 at 3.03 pm and 19 August 2014 at 2:19 pm. I do not regard the cover emails to be authentic, firstly, because for reasons I set out below I cannot accept some of the emails in the threads to be authentic, and, secondly, because the 'from' line of each email purports to be from 'mitchell tennant-wood' whose email address is 'wood@[email protected]'. In each case the from line and the email address deletes the 's' at the end of Mr Tennant-Woods surname;
c.In the threads there are emails purportedly addressed to and from Mr Beilby misaddressed to '[email protected]'.[100] That was not an email address used by Mr Beilby and Mr Hatch confirmed an email would bounce back if sent to a misspelled address.[101] Further, an email cannot be sent from an address that was not an existing email address;
d.Emails purportedly sent by Mr Beilby used an electronic signature which including his name and his email contact details included his misspelt name; and
e.There are two versions of a particular email purportedly from the defendant to '[email protected]' and Peter Beilby.[102] The subject is 'Additional manpower - scope of work' and the date is 'Fri, 21 Jan 2011 15:05:13 + 0800'. The email is purportedly addressed to 'Andrew/Peter' in confirmation of a discussion concerning associates who may be available to undertake some work. In the one version[103] the second sentence says 'attached CV for Mitchell Tennant, Mitch is a mining engineer with vast experience'. In the other version[104] the second sentence says 'attached CV for Mitchell Tennant Woods, Mitch is a mining engineer with vast experience'. This is one of the emails that the defendant admitted creating.
[96] Exhibit 1.3492 - 3507.
[97] Exhibit 1.3508.
[98] Exhibit 1.3508.
[99] See page 1108 of Exhibit 26.
[100] The letter 'L' is missing from the name.
[101] Exhibit 1.3508.
[102] At the incorrect address.
[103] Page 1107 in top corner.
[104] Page 1110 in top corner.
Mr Goode's evidence about these matters was that he became aware that MRW Mine Consulting was using the defendant's ABN number when it was bought to his attention by Angela who worked in the finance team in about November 2012. At Angela's suggestion Mr Goode spoke to Mr Venn about this and, again at Angela's suggestion, it was decided that any future invoices needed to have someone other than the defendant authorise payment. This was confirmed in an email dated 19 November 2012 to Mr Venn.[105] It was not put to Mr Goode in cross-examination that the defendant had told him about the use of the defendant's ABN number before the first MRW Mine Consulting invoice.[106]
[105] ts 100 - ts 101 (Goode); Exhibit 1.1128.
[106] ts 101, ts 104 ‑ ts 105 (Goode).
From this evidence, it seems clear that none of Angela, Mr Goode or Mr Venn turned their mind to whether the use of the defendant's ABN number might be indicative of fraud on the part of the defendant. The email from Mr Goode to Mr Venn,[107] amply demonstrates that at that time Mr Goode believed there was work being undertaken by a Mitchell Woods which was the subject of the invoices. That belief was based solely on what Mr Goode had been told by the defendant and by him having reviewed some of the earlier MRW Mine Consulting invoices but not on Mr Goode having ever met with Mr Woods or communicated with Mr Woods.[108]
[107] Exhibit 1.1128.
[108] ts 98 - ts 99 (Goode).

I am not satisfied that either Mr Goode or Mr Beilby had any knowledge that the ABN number on the MRW Mine Consulting invoices was the defendant's ABN number until it was brought to Mr Goode's attention by the accounting department in November 2012.
As to the defendant's contention that the plaintiffs knew that the payments were made to the defendant's bank account, payments for the MRW Mine Consulting invoices were paid to the defendant's National Australia bank account but his salary was not.[109]
[109] Exhibit 16 Unredacted bank statements for NAB account.
There is no evidence independent of the defendant's belief to support the suggestion that any employee of the plaintiffs knew or ought to have known that the payments of these invoices were going into a bank account associated with the defendant.
Turning now other matters, as I said above there was an issue on the pleadings as to whether the first plaintiff received and paid invoices RML17 - RML 19 2012 in the capacity of agent of the second plaintiff.
The defendant also said that each of those invoices were paid after the plaintiffs had become aware that his ABN number was on the invoices in circumstances where a further authorising signature should have been sought and there was no evidence that had occurred. The defendant said that the inference I should draw from this was that payment was made willingly and with knowledge thereby negating any right to repayment.
Each invoice[110] allegedly related to work on the Syama Expansion Study and was prepared by the defendant and addressed:
Iain Wearing
Group Mining Engineer
Goudhurst Pty Ltd
As agents for Societe des Mines de Syama SA.
[110] Exhibit 1.242 - 342 at Tabs 64 - 66.
No oral or documentary evidence was given about the terms of any agency. I have compared invoices RML17 2012 ‑ RML19 2012 against earlier invoices referring to the Syama Expansion Study but which were addressed to the defendant as the Group Mining Engineer of the second defendant along with the remittance advices relating to those payments and a note relating to the change of address acknowledged by the defendant on the front of the invoices.[111] From those documents I infer that new agency arrangements had been entered into between the first and second plaintiffs in the period before invoices RML17 2012 ‑ RML19 2012 were issued and that the defendant was aware of the new agency arrangement.
[111] Eg Exhibit 1.242 - 342 at Tabs 52 - 53 and Tabs 64 - 66.
The EFT remittance advice shows that the invoices were paid by the first plaintiff on 14 December 2012.[112] Given that the agency between the first and second plaintiff was disclosed in order for the new form of address to be utilised, that would ordinarily mean that the principal on whose behalf the payments were made would be the party entitled to sue to recover the moneys paid.[113]
[112] Exhibit 1.242 - 342 at Tab 67.
[113] Dal Pont, Law of Agency, (2^nd ed, Butterworths 2008) [19.1].
Other than simply a denial on the pleadings that the first plaintiff was the agent of the second plaintiff for those three invoices, no argument was addressed to the right, if any, of the first plaintiff to sue for recovery of money it, prima facie, paid as agent. Given my findings about the existence of the agency and that the principal was also a party to the proceedings, I am satisfied that the first plaintiff is authorised and has standing to claim recovery of the amounts it paid as the second plaintiff’s agent to the defendant.
For reasons which I set out at [89] ‑ [91] above, I find that the first plaintiff's payment of invoices RML17 2012 ‑ RML19 2012 was made with knowledge that the defendant's ABN number was on each invoice but that is not the same as the plaintiffs having knowledge of fraud. Further, even though there is no evidence or explanation as to why the payments were made without further authorisation, an inference open to me[114] is that was because of a failure of the plaintiffs to follow their own internal processes (the recommendation by Mr Goode to Mr Venn that someone else authorise the invoices) rather than a deliberate decision to pay the invoice with knowledge of a fraud.
[114] Conceded by the defendant ts 166.
Following on from all of the findings set out above, I find that each of the invoices represented each of the following matters to the plaintiff to whom it was addressed:
1.That there had been work done which was the subject of each invoice and that work had been undertaken by a firm or business known as MRW Mine Consulting;[115]
2.MRW Mine Consulting was an independent contractor;
3.The person responsible for the work at MRW Mine Consulting was Mitch Woods whose name appeared on each invoice. I also accept the evidence of Mr Goode that he believed that to be the position because it was what he had been told that by the defendant.[116] Mr Goode never met a Mr Woods or a Mr Tennant Woods, did not correspond or speak with him but believed work was being completed by that person because he saw those invoices;[117] and
4.Mr Woods could be contacted at either post office box 1,556 Melville or by email at '[email protected]'. This was a misrepresentation because the post offices boxes and post office box was associated with the defendant and it is unlikely that the email addressed ever existed as emails to that address were noted to bounce back in October 2012.[118]
[115] No business name has ever been registered: Exhibit 1.1066.
[116] ts 97 - ts 98 (Goode).
[117] ts 97, ts 99 (Goode).
[118] See the notation on Exhibits 1.242 - 1.332 at page 334.
The clear inference to be drawn from the efforts which the defendant went to mislead the plaintiffs and that he approved each invoice for payment by the respective plaintiffs, is that the defendant acted dishonestly and intended to defraud whichever of the plaintiffs were to pay those accounts. The payment of those invoices was obtained by way of fraud.
I have reached that conclusion without relying on the evidence of conviction, but, it is clear to me that the facts underlying the conviction are additional prima facie evidence of the intention of the defendant in effecting the fraud and that he acted by fraudulent means in the production of these invoices. Either pathway would have supported my finding.

Resolution of the plaintiffs' claims

Money had and received in restitution

By reason of my findings and by reference to the law as I have set out in [7] ‑ [16] above, I am of the view that the plaintiffs have established that the defendant deceived them, payments were made by each of them as set out in the annexure to these reasons and those payments were made as a consequence of that deception.
The determination of the last consideration: whether it would be unjust or unconscionable for the defendant to keep the money required the defendant to, at the very least, point to evidence that the plaintiffs received good consideration for the payments or paid with knowledge of the fraud or that the plaintiffs are bound in some way by the State's approach to a compensation order in the sentencing proceedings.
I have already set out my findings that the work the subject of the invoices was work performed entirely by the defendant and that work was obliged to be performed by the defendant pursuant to the terms of his contract of employment so that even if the plaintiffs received the benefit of any work they were already entitled to it.
There is nothing in the principles as to the use to which a prior conviction can be put as set out in Mickelberg and Bennett which would support the defendant's contention.
The plaintiffs are not bound by concessions made by the State in the course of the sentencing hearing on 23 October 2015. My reasons for that conclusion are that the plaintiffs were not a party to the sentencing proceedings, the State was not representing the plaintiff and could not be considered to be the agent of the plaintiffs in any concessions that it made for sentencing purposes. Further, the documentary evidence shows that the State enquired of the plaintiffs prior to sentencing hearing about the 'value for money' argument raised by the defendant in this trial and the plaintiffs' responses did not involve any concessions of the type made by the State at the sentencing hearing.[119]
[119] Exhibit 8.
For those reasons I find that the plaintiff would, but for the question of whether the limitation period has expired, have been entitled to make recovery on the basis of restitution in money had and received for the respective amounts they paid to the defendant as set out in the Annexure hereto. I will address below whether any part of the claims are statute barred the application for the extension of the limitation period.

Tortious deceit

By reason of my findings, particularly at [100] and by reference to the law of tortious deceit as I have set out in [18] ‑ [19] above, I am of the view that the plaintiffs have established that in respect to each invoice, the defendant made false representations to each plaintiff, the defendant made the representations with the knowledge that they were false, the defendant made the representations with the intention they would be acted upon by the plaintiff and each plaintiff acted in reliance on the false representation in paying the invoices which they respectively paid as set out in the annexure hereto.
I also find that each plaintiff has suffered loss by reason of the payment of the invoices because they were paying for services which ought to have been supplied by the defendant as group mining engineer. In the case of the second and third plaintiffs they were paying for services which would otherwise have been supplied to them by the defendant through the first plaintiff. That loss is the amount paid by each respective plaintiff as set out in the Annexure subject to a reduction for any amount which is statute barred.

Breach of fiduciary duty

Finally, I am also satisfied that the plaintiffs have made out their case on the basis of breach of fiduciary duty. The defendant was employed by the first plaintiff in a position of seniority and that position had attended to it the right to approve expenditure with respect to each of the plaintiffs up to the limit of $75,000. In respect to both the placing of work with external contractors and in overseeing their payment for that work the defendant owed a fiduciary duty to the first plaintiff as his employer but also to each of the second and third plaintiffs to whom the first plaintiff in turn provided services.
The defendant acted in conflict to those duties when he deceived the plaintiffs by purportedly placing work with a third party contractor and then authorising payment to himself.
In my view there is nothing in the matters raised by way of defence by the defendant which would make it inequitable to require him to repay the amounts paid to him and he should compensate the plaintiffs for the breaches of his fiduciary duty by repaying those monies. The amount to be repaid is the amount paid by each respective plaintiff as set out in the Annexure hereto less any amount which is statute barred.

Counterclaim and set off

Turning now to the matters the subject of the defendant's two counterclaims and whether those amounts can be set off against any sums that the defendant owes to the plaintiffs as a consequence of these findings.
The first of the defendant's counterclaims relates to the amount of $25,281.54 (net) employment entitlements withheld by the first plaintiff on the termination of his employment.
The first plaintiff admits that the sum of $23,291.36 (net) was withheld when the first plaintiff was not lawfully entitled to do so but pleads by way of reply that it was in the context of the defendant having indicated that he wanted to make restitution for his fraud. I accept that the further sum of $1,990 was re-imbursement of expenses as the letter of termination dated 30 July 2013 and attached documents sets that out.[120]
[120] Exhibit 1.1147 - 1149.
Section 324 when read with s 323 of the Fair Work Act 2009 (Cth) provide that an employer may make permitted deductions from an amount payable to an employee for 'amounts payable to the employee in relation to the performance of work'. The retention by the first plaintiff of the defendant's wages and annual leave entitlements were not permitted deductions. They were not authorised by the defendant in writing.
There is no law prohibiting the retention of the expenses figure of $1,990.
Accordingly, I find that the first plaintiff owes the defendant the sum of $23,291.36.
The question then becomes: can that sum be treated as a set off against the plaintiffs' claim against the defendant as pleaded and contended by the plaintiff? Notwithstanding that the retention was in the context of the defendant's expressed willingness to make restitution, the plaintiffs, quite properly, did not seek to justify the retention of the wages and holiday pay as a matter of law and equity. The plaintiffs further conceded that there could be no set off at law by reason that a lack of mutuality between the two debts.[121] The plaintiff did submit that sum could be set off in equity against the claim of the first plaintiff.
[121] Plaintiffs' outline of supplementary closing submissions on set-off and related issues dated 30 July 2020, par 3.
In my view the claim to set off in equity fails for these reasons:
1.The plaintiffs submit that there is no requirement of mutuality in respect to equitable set offs and contend that the requirement is that the set off be bound up with, or impeach, the title of the other party:[122] Hazcor Pty Ltd v Kirwanon Pty Ltd.[123]
2.There has to be more than simply cross-demands: Hazcor at [68].
3.The demands have to arise out of the same transaction as the claim or out of a transaction that is closely related to the claim or flow out of or be inseparably connected with the claim: Hazcor at [67].
4.An alternative basis to equitable set-off is that it arises where the person against whom the claim is made establishes an equitable ground for being protected from the claimant's claim and where the claim and equitable ground are so directly connected as to make it unjust to allow recovery: Murphy v Zamonex Pty Ltd.[124]
5.In my view neither of those basis are met in this case. The defendant claims against the first plaintiff as his employer for his wages and holiday pay which were retained contrary to law. The first plaintiff's claim against the defendant is in an entirely different right, as agent for the second plaintiff, against whom the defendant has no claim for wages and holiday pay. In each of those circumstances, no equitable set-off arises. I will deal below with whether cross judgments should be entered or judgment simply for any balance.
[122] Plaintiffs' outline of supplementary closing submissions on set-off and related issues dated 30 July 2020, par 4.
[123] Hazcor Pty Ltd v Kirwanon Pty Ltd (1995) 12 WAR 62.
[124] Murphy v Zamonex Pty Ltd (1993) 31 NSWLR 439, 465.
The second counterclaim bought by the defendant relates to certain of his belongings which he said were not returned to him by the first plaintiff.[125] The first plaintiff complains that the defendant's pleading of that claim was embarrassing and does not disclose a cause of action.[126]
[125] Amended defence and counterclaim, par 138.
[126] Reply and defence to counterclaim, par 2.3.
It is likely that the cause of action relied upon by the defendant is either in conversion or in detinue. In either case the defendant would have to prove that there were belongings of his which were not returned to him. To maintain an action in conversion the defendant must prove that he had possession or the right to possession of those belongings at the time of the conversion. Conversion means doing an act inconsistent with that possession. To maintain an action in detinue the defendant would have to prove that he made demand for the return of his belongings and that demand has been wilfully refused.
The defendant's evidence was to the effect that when his employment was suspended he left certain of his belongings in his office. He accepted some of these belongings were returned to him but maintained that he did not receive back from the first plaintiff some portable hard drives, two or three die‑cast models of mining equipment, he thought a die‑cast electric shovel, a caterpillar dump truck and a front end loader, some text books and books containing specifications for mining equipment and some USB's containing supplier information.[127] The defendant gave a rough estimate of the value of the die cast models as being about $2,500 - $3,000 but no other evidence of value was led.
[127] ts 210 (Wearing).
The defendant's evidence about these matters was equivocal. He said that his memory of events was not very good because there was no inventory for him to check against and because he had given up on the return of those items some time ago. He also said that when they were returned he was in hospital with a psychiatric illness and his wife took delivery of the items.[128]
[128] ts 210 (Wearing).
In cross‑examination the defendant conceded that he had no documentary evidence about these items, was reliant on his memory about what was not returned, confirmed that he had receive back personal items including Lego he had purchased for his son and kept at work and a number of die cast models.[129] He also said that he placed no value on the text books.
[129] ts 323 - ts 325 (Wearing).
There is no evidence that any demand for specific items was made by the defendant after the belongings were returned to him and before he made his counterclaim.
No oral evidence was led by the plaintiff about the return of the defendant's belongings but there was evidence about these matters is in a chain of emails between the defendant and Mr Hestelow, then the Finance & Administration Manager of the group.[130]
[130] Exhibit 1.1150 - 1156.
The emails demonstrate that as at 11 September 2013[131] the first plaintiff was making arrangements to courier the defendant's belongings to him. The defendant indicated he was in hospital at that time but that delivery could be made to his wife. In earlier emails in the email chain there is reference to some of the property which the defendant wanted to be returned including the portable hard–drives. The plaintiffs were prepared to return the portable hard–drives once they were wiped to remove the plaintiffs' confidential information.
[131] Exhibit 1.1150 - 1156.
For the reasons set out above I cannot accept the defendant's evidence unless it were confirmed by other independent evidence. I accept that the defendant appears to have suffered an acute episode of mental illness following the discovery of his fraud and that may well have had an effect on his memory of events but he bears the onus of proof on the counterclaim. Given the equivocal nature of the defendant's evidence about what was missing, the fact that property was returned to him and that even after he had the opportunity to check the property which was returned he did not make a demand for specific items together with the small amount in issue, the defendant has failed to convince me that any property of any significant value was retained by the first plaintiff.

The Limitation Act defence - the application pursuant to the Limitation Act to extend the limitation period and set off of the sum of $35,000 paid in restitution

Are any parts of the plaintiffs' claims statute barred?

As I summarised above,[132] an issue on the pleadings was whether part of the plaintiffs' claims were statute barred. The plaintiffs admitted some parts of their claims were statute barred but:
1.the amount which might be statute barred was in issue.[133] The defendant did not seek to persuade me to the greater sum at the trial; and
2.the plaintiffs maintained their application for leave to commence the proceedings and to extend time pursuant to LA s 38, for any part that was statute barred.
[132] See [5] and [6].
[133] The defendant said $91,740 and the plaintiffs admitted $75,990.

This question must be answered in the affirmative. The plaintiffs' did not know at the time of the payment of any of the fraudulent invoices that the defendant was engaging in a fraud in the common law sense of that word. The defendant's behaviour, in issuing the invoices, receiving payment and in not disclosing to his employer that he was in truth the person behind those invoices, had a sufficient character of moral turpitude to amount to fraudulent conduct as described in LA s 38.
In July 2013 WA Police advised that Resolute could not then instigate recovery proceedings, the defendant would most likely be advised by lawyers to repay the amount defrauded and, if he were found guilty, that the court would likely order the defendant to repay the money defrauded.[148] This is part of the background against which the question of when the action ought reasonably been commenced.
[148] Affidavit of John Paul Welborn sworn 23 February 2018, par 10(g).
The improper behaviour of the defendant extended beyond the concealment of his fraud. In July 2013 the defendant indicated to the plaintiffs that he intended to make restitution for his fraud. He offered an immediate payment of $50,000 and made a start on that by paying $35,000 in instalments before 6 August 2013 in circumstances where he made it clear to the plaintiffs that he understood that restitution was in his best interests given the likely criminal charges.[149] After the payments stopped the plaintiff enquired of the defendant as to whether further repayments would be forthcoming and he responded only to say that he was in hospital with mental health issues and had been advised not to undertake any activities.[150]
[149] Exhibit 1.1150 - 1156.
[150] Affidavit of John Paul Welborn sworn 23 February 2018 at JPW-8.
In February 2014 the defendant was charged with the offences of fraud and reparation was sought against him: see the Statement of Material Facts prepared in support of the charges and dated 25 February 2014.[151] On 14 February 2014 the plaintiffs were advised by WA Police that the defendant had been charged and that he denied any wrongdoing. The prosecution would push for, among other things, the defendant to repay monies owing.[152]
[151] Exhibit 1.1233 - 1245, page 1245.
[152]Affidavit of John Paul Welborn sworn 23 February 2018 at JPW-7.
Sometime after that the defendant resolved to plead guilty and on 2 July 2015 in an email from the defendant's lawyer to the DPP the defendant set out his erroneous view that there had been value given by him for the work the subject of the invoices.[153] That email was forwarded to Resolute on 10 July 2015 and Resolute responded with reasons why the defendant's position was untenable. Resolute was still then under the impression that a compensation order would successfully be sought at the time of sentencing.[154]
[153] Exhibit 8, email dated 2 July 2015 from Mark Andrews to Shane Walsh State Prosecutor.
[154] Exhibit 8, email dated 2 July 2015 from Greg Fitzgerald to Shane Walsh.
The defendant's final position regarding reparation and the reasoning behind his position was set out in Supplementary Sentencing Submissions prepared by Senior Counsel on his behalf and dated 22 October 2015.[155] The position taken by the defendant was maintained the following day at the sentencing hearing where he successfully opposed a compensation order being made.
[155] Exhibit 2.
In my view, the improper actions of the defendant extend to him initially presenting himself to the plaintiffs from July 2013 as a man who intended to repay the moneys he had defrauded and not finally abandoning that position until close to sentencing in October 2015. That improper conduct combined with the initial concealment of his fraudulent actions meant that as at July 2015, at least four years and three months had passed since the payment of the earliest of the invoices.[156]

Was the failure to commence the action 'attributable' to the fraudulent or other improper conduct of the defendant?

[156] RML 1 2011.

Mr Welborn's evidence in support of the application to extend time is that the proceedings were not initially commenced because of the non‑discovery of the fraud until July 2013, thereafter because of what the plaintiffs had been told by WA Police and finally by the need to investigate why no compensation order had been made and for appropriate employees of the plaintiffs to take up the conduct of the proceedings.[157]
[157] Affidavit of John Paul Welborn sworn 23 February 2018, pars 22 - 24.
In my view, those facts clearly support a finding that there was a sufficient causal connection between the defendant's conduct and the plaintiffs' failure to commence the action to make the failure 'attributable' to the defendant. Even accepting that the defendant was not responsible for the advice in July 2013 from the WA Police that Resolute could not instigate any recovery measures at that time, the connection does not have to be the sole, dominant, direct or proximate connection for the failure to be attributable to the fraudulent and other improper conduct of the defendant.

If the failure was so attributable, then when ought the action reasonably been commenced?

In my view the action ought not reasonably been commenced until a reasonable time after 23 October 2015 when the compensation order was refused by the court at sentencing. A further reasonable time required was to enable the plaintiffs to take steps to:
1.Make enquiry of the DPP as to why no compensation order was made;
2.Obtain further documentation to assist it to obtain its own legal advice;
3.Take legal advice; and
4.Give appropriate consideration to whether proceedings were in the best interests of the Resolute group. I pause here to note that civil litigation is not for the faint hearted, it is costly and time consuming and ought not lightly be embarked upon.
The affidavits of John Paul Welborn sworn 23 February 2018 and 27 November 2019 and their annexures demonstrate that:
1.In November 2015 the plaintiffs sought the advice of a solicitor Kenneth Green at Green Legal regarding matters pertaining to the defendant and advice was received from Mr Green on 21 November 2015. Legal professional privilege was not waived in respect to that advice and while I cannot draw any inference about the content of that advice from the decision not to waive privilege,[158] but the plaintiffs do not suggest that there was any particular delay as a consequence of obtaining that advice. I can infer from the timing of the advice that a month or so was required to take initial legal advice;
2.No further steps were then taken until March 2017 when enquiries were made of the DPP as to the reasons why no compensation order was made. The DPP wrote in response to the plaintiffs in April 2017.[159] No explanation is offered for the delay between November 2015 and March 2017 other than that 'it took some time for Resolute to investigate and understand why a compensation order was not made'.[160] Action was taken only on the appointment of a new chief financial officer in February 2017 followed by appointment of new general counsel and company secretary in August 2017.[161]
3.I accept the submission that when enquiries were made of the DPP in March 2017 matters were urgent and the DPP responded quickly. Had enquiry been made more timeously then a period of about 2 – 3 months would likely to have been reasonable for enquiry of the DPP;
4.DLA Piper were engaged as solicitors to represent the plaintiffs in civil recovery proceedings in November 2017.[162] Further enquiry was made of the DPP to obtain relevant documents, such as the prosecution notice and the sentencing transcript, and which were promptly provided by 24 November 2017.[163] At least another month was required here; and
5.The recovery proceedings were commenced on 5 December 2017.
[158] Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87.
[159] Affidavit of John Paul Welborn sworn 23 February 2018, pars 16 ‑ 17 and JPW-9, JPW-10.
[160] Affidavit of John Paul Welborn sworn 23 February 2018, par 24.
[161] Affidavit of John Paul Welborn sworn 23 February 2018, par 25.
[162] Affidavit of John Paul Welborn sworn 23 February 2018, par 18.
[163] Affidavit of John Paul Welborn sworn 23 February 2018, pars 19 ‑ 20 and JPW-11 ‑ JPW-16.
Considering what time each of those tasks might reasonably have taken, I am of the view that the action ought reasonably to have been commenced by the end of June 2016 which would have given adequate time after the compensation order was not obtained for the plaintiffs to have made necessary enquiries and given necessary thought to the commencement of proceedings.

Should the discretion to extend the limitation period for up to three years from the time the action ought reasonably been commenced be exercised in favour of the plaintiffs?

The discretion to extend time must be exercised judicially and by reference to the considerations of LA s 44 and the more general considerations outlined above relevant to the need to commence and resolve disputes quickly and efficaciously.
This is not a case where (if it is statute barred at all) the whole of the cause of action asserted is statute barred. If I were not to extend the time in which the action can be commenced then for reasons I have set out above it would only affect the ability of the second and third plaintiffs to recover RML 1, 2, 3, 4, 5, 7, 8, 9 and 10 2011 invoices (the statute barred invoices). The rest of the invoices cannot be said to be statute barred.
I am required to give consideration to LA s 44. In my view the delay in commencing the proposed action would not unacceptably diminish the prospects of a fair trial with respect to the statute barred invoices or significantly prejudice the defendant because:
1.The action could and did proceed with respect to the significantly larger number of the invoices which are not statute barred;
2.The defence with respect to the statute barred invoices and the the balance of the invoices was the same;
3.There were assertions by the defendant that he was disadvantaged because there had been documents on computer drives in his office which were not returned to him. The evidence is also that he was told in July 2013 that those drives would be wiped and he took no objection to that course.[164] Accordingly, any material, if it were relevant, was not lost by the effluxion of time but by a course of action he was agreeable to; and
4.The assertion that there was work the subject of the invoices performed by others, the nature of that work and the extent of that work were always matters uniquely within the defendant's own knowledge, and despite his repeated assertions to the contrary, he could point to no documents held by the plaintiffs which might have thrown additional light on those matters.
[164] Exhibit 1.1150 - 1156.
I am troubled that the period between November 2015 and the further activity to progress the matter from March 2017, some 15 months, is not adequately explained but there is nothing which occurred in that period which would point to additional hardship being visited on the defendant by that delay.
The legislation provides for a period of extension up to three years after the time that proceedings ought to have been commenced. This is clearly to restore a plaintiff to a position closer to that they would have been in but for the fraud or other improper conduct.
For those reasons I would grant leave to the second and third plaintiffs to commence the proceedings in respect to invoices RML 1 ‑ 10 2011 and will extend the time for them to commence those proceedings until 5 December 2017.

Set off of restitution payments

Again, if I am wrong about whether any part of the debt is statute barred, the question arises: can the restitution payments which were made up to early August 2013 now be appropriated to any part of the sums which is statute barred? For reasons I will briefly outline, I have reached the conclusion that the sum of $35,000 paid by restitution can be appropriated to any sums which are statute barred in the manner proposed by the plaintiffs - in the order in time in which those sums were paid to the defendant.[165]
[165] Plaintiffs' outline of supplemental closing submissions on set-off and related issues dated 30 July 2020, par 14.
This would reduce by $33,350[166] the part of the sum claimed by the second plaintiff which might be statute barred and reduces by $1,650[167] the part of the sum claimed by the third plaintiff which might be statute barred.
[166] By payment of RML 2 and 3 2011 and part‑payment of RM 4 2011.
[167] By payment of RML 1 2011.
Where a claim is bought outside the relevant limitation period, the LA generally operates to bar the remedy and not extinguish the right: Belgravia Nominees Pty Ltd v Lowe Pty Ltd[168] at [46(e)]; Warwick Entertainment Centre Pty Ltd (Receivers and Managers Appointed) atf The Warwick Entertainment Centre Unit 6 Trust v Silkchime Pty Ltd (Receivers and Managers Appointed) (No. 4)[169] [7], [95] and [126] ‑ [127].[170]
[168] Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127; (2017) 51 WAR 341.
[169] Warwick Entertainment Centre Pty Ltd (Receivers and Managers Appointed) atf The Warwick Entertainment Centre Unit 6 Trust v Silkchime Pty Ltd (Receivers and Managers Appointed) (No. 4) [2018] WASC 120.
[170] Except where the claim relates to rights and titles in land: LA s 75.
As the claim has not been extinguished then there is no reason in principle to prevent the appropriation by the plaintiffs against the payment of an existing albeit statute barred and hence unenforceable claim.
The defendant made the restitution payments by instalments all of which had all been received by 6 August 2013.[171] The restitution payments were made to a nominated bank account in the name of Resolute (Treasury) Pty Ltd[172] which I infer from exhibits 1.1147-1149 and exhibits 1.1150‑1156[173] is another subsidiary of RML.
[171] Exhibit 1.1147 - 1149, page 1147 and Exhibit 1.1150 - 1156, page 1151.
[172] Exhibit 1.1150 - 1156 at page 1153.
[173] The relevant parts of which are duplicated in Exhibit 1.1134 - 1138.
There is no evidence that the defendant, prior to payment of any part of the restitution payments or at any time thereafter, made an appropriation of the restitution payments to any specific part or parts of the sums defrauded by him.
The defendant was told in his termination letter dated 30 July 2013[174] that the restitution monies would be held in separate account pending completion of the formal investigation process then being undertaken by the police.[175] There was no evidence that at any time thereafter there an appropriation was made within the Resolute group of the restitution payments or any part of those payments to any part of the sums for which recovery is now sought.
[174] Exhibit 1.1147 - 1149, page 1147.
[175] Exhibit 1.1147 - 1149, page 1147.
Recently the Court of Appeal in Smith v Leveraged Equities Ltd[176] [132] set out the general and well established legal principles in relation to the appropriation of debts by a debtor who owes multiple debts to a creditor where the right of appropriation has not been the subject of agreement between the parties in these terms:
First, a debtor who owes multiple debts to a creditor is entitled to appropriate a payment made by the debtor to the creditor to one debt rather than the other or others. Second, if the debtor makes a payment to the creditor but fails to appropriate the payment, the creditor may make the appropriation. Third, if the debtor makes a payment to the creditor and neither of them makes an appropriation, in the case of a current or running account the law appropriates the payment to the earlier or earliest debt. Fourth, if the debtor makes a payment to the creditor, it is a question of fact whether the debtor or the creditor (as the case may be) made an appropriation. Fifth, an appropriation of a payment need not be express, but can be inferred. However, an appropriation may only be inferred from the facts and circumstances of the case as known to both parties. Sixth, an appropriation requires more than a mere intention by the debtor or the creditor (as the case may be) to appropriate. An appropriation will not be effective unless the debtor or the creditor (as the case may be) has communicated his or her appropriation to the other.
(footnote omitted)
[176] Smith v Leveraged Equities Ltd [2020] WASCA 122.
The right in the debtor to make the appropriation exists only up to the point of payment but thereafter the right in the creditor to make an appropriation extends to 'the very last moment'. The very last moment may extend to the point of trial unless there is some circumstance, for example, a third party's rights to some part of the money have intervened, which might make it inequitable for the right of appropriation to then be exercised: Smith v Leveraged Equities Ltd at [138] - [143].
There is no evidence that any third party creditors would now be disadvantaged by the exercise at the close of the trial of the right of appropriation. There is no reason in principle which would prevent the exercise of the right of appropriation of the debts within the group of companies where, as here, each of whom were wholly owned subsidiaries of the same company at the time of these frauds and where each have chosen to press their claims in conjunction with each other and using the same representation.
In my view the exercise of the right of appropriation by the plaintiffs does not result in any relative injustice as against the defendant because even though the claim made by the plaintiffs never sought to distinguish between the entitlements of each individual plaintiff to recover only those sums they had paid to the defendant, their global claim always recognised the need to reduce it by the restitution payments.

Conclusion

For reasons I have expressed I would find in favour of the plaintiffs on the principal action as follows:
1.The defendant pay as restitution or in damages the first plaintiff in the sum of $28,160 being the total sum of the invoices paid to the defendant. The first plaintiff paid that sum to the defendant in its capacity as agent for the second plaintiff but it is a matter for the first and second plaintiffs as to how those funds now fall to be accounted as between them;
2.The defendant pay as restitution or in damages the second plaintiff the sum of $109,450 which is the total sum of the invoices paid to the defendant $142,800 less $33,350 by way of appropriation; and
3.The defendant pay as restitution or in damages the third plaintiff the sum of $77,176 which is the total sum of the invoices paid to the defendant by the third plaintiff of $78,826 less $1,650 by way of appropriation.
Those sums totalled together are $214,786 which exceeds the global sum claimed by the plaintiffs by way of restitution.[177] That global sum allowed for the reduction of the amount of employment benefits unlawfully retained which I have not allowed by way of set off. I sought the submissions of the parties as to whether the plaintiffs were limited to their global claim of $189,504.46.[178] I accept the plaintiffs' submissions that there can be no suggestion that the defendant is disadvantaged by allowing the claims individually in excess of the global sum because the whole amount paid was always disclosed on the pleadings and, the claims for damages were not limited to the global sum, it is appropriate to enter judgment without amendment to the prayer for relief.
[177] Amended statement of claim, pars 142, 150, prayer for relief.
[178] MFI B.
I also find in favour of the defendant against the first plaintiff on the counterclaim and order the first plaintiff to pay the defendant the sum of $23,291.36.

I decline to enter judgement on the balance between the first plaintiff and the defendant pursuant to the Rules of the Supreme Court 1971 (WA) O18R2(4) on the basis that even if that rule provides an independent statutory basis for a set off this is an inappropriate case for its exercise because of the different right in which the first plaintiff brings its claim.
I will hear the parties as to interest and costs.

ANNEXURE

First Plaintiff – As Agent for the Second Plaintiff

Invoice Number

Date of Invoice

Date of Payment

Amount Paid

RML 17 2012

September 2012

14 December 2012

$6,400.00

RML 18 2012

October 2012

14 December 2012

$6,400.00

RML 19 2012

November 2012

14 December 2012

$15,360.00

Total $28,160.00

Second Plaintiff

Invoice Number

Date of Invoice

Date of Payment

Amount Paid

RML 02 2011

February 2011

18 March 2011

$8,850.00

RML 03 2011

March 2011

16 April 2011

$23,550.00

RML 04 2011

April 2011

13 May 2011

$7,200.00

RML 05 2011

May 2011

15 June 2011

$8,400.00

RML 07 2011

June 2011

15 July 2011

$8,400.00

RML 08 2011

July 2011

15 August 2011

$3,600.00

RML 10 2011

October 2011

16 November 2011

$8,400.00

RML 11 2011

November 2011

15 December 2011

$6,000.00

RML 12 2011

December 2011

18 January 2012

$6,000.00

RML 01 2012

January 2012

8 February 2012

$7,200.00

RML 02 2012

February 2012

14 March 2012

$8,400.00

RML 04 2012

March 2012

18 April 2012

$8,400.00

RML 07 2012

April 2012

16 May 2012

$6,000.00

RML 09 2012

May 2012

15 June 2012

$6,000.00

RML 11 2012

May 2012

18 July 2012

$7,200.00

RML 13 2012

July 2012

31 August 2012

$9,600.00

RML 15 2012

August 2012

28 September 2012

$9,600.00

Total

$142,800.00

First Plaintiff – As Agent for the Third Plaintiff

Invoice Number

Date of Invoice

Date of Payment

Amount Paid

RML 01 2011

February 2011

18 March 2011

$1,650.00

RML 09 2011

August 2011

21 September 2011

$5,940.00

RML 03 2012

February 2012

14 March 2012

$7,260.00

RML 05 2012

March 2012

30 April 2012

$13,200.00

RML 06 2012

April 2012

31 May 2012

$11,880.00

RML 08 2012

May 2012

29 June 2012

$6,600.00

RML 10 2012

June 2012

31 July 2012

$6,600.00

RML 12 2012

July 2012

31 August 2012

$7,920.00

RML 14 2012

August 2012

28 September 2012

$7,920.00

RML 16 2012

September 2012

31 October 2012

$9,856.00

Total $78,826.00

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
ED
Associate to her Honour Judge Gillan
9 OCTOBER 2020

First Plaintiff – As Agent for the Second Plaintiff
Invoice Number	Date of Invoice	Date of Payment	Amount Paid
RML 17 2012	September 2012	14 December 2012	$6,400.00
RML 18 2012	October 2012	14 December 2012	$6,400.00
RML 19 2012	November 2012	14 December 2012	$15,360.00
Total			$28,160.00

Second Plaintiff
Invoice Number	Date of Invoice	Date of Payment	Amount Paid
RML 02 2011	February 2011	18 March 2011	$8,850.00
RML 03 2011	March 2011	16 April 2011	$23,550.00
RML 04 2011	April 2011	13 May 2011	$7,200.00
RML 05 2011	May 2011	15 June 2011	$8,400.00
RML 07 2011	June 2011	15 July 2011	$8,400.00
RML 08 2011	July 2011	15 August 2011	$3,600.00
RML 10 2011	October 2011	16 November 2011	$8,400.00
RML 11 2011	November 2011	15 December 2011	$6,000.00
RML 12 2011	December 2011	18 January 2012	$6,000.00
RML 01 2012	January 2012	8 February 2012	$7,200.00
RML 02 2012	February 2012	14 March 2012	$8,400.00
RML 04 2012	March 2012	18 April 2012	$8,400.00
RML 07 2012	April 2012	16 May 2012	$6,000.00
RML 09 2012	May 2012	15 June 2012	$6,000.00
RML 11 2012	May 2012	18 July 2012	$7,200.00
RML 13 2012	July 2012	31 August 2012	$9,600.00
RML 15 2012	August 2012	28 September 2012	$9,600.00
Total			$142,800.00

First Plaintiff – As Agent for the Third Plaintiff
Invoice Number	Date of Invoice	Date of Payment	Amount Paid
RML 01 2011	February 2011	18 March 2011	$1,650.00
RML 09 2011	August 2011	21 September 2011	$5,940.00
RML 03 2012	February 2012	14 March 2012	$7,260.00
RML 05 2012	March 2012	30 April 2012	$13,200.00
RML 06 2012	April 2012	31 May 2012	$11,880.00
RML 08 2012	May 2012	29 June 2012	$6,600.00
RML 10 2012	June 2012	31 July 2012	$6,600.00
RML 12 2012	July 2012	31 August 2012	$7,920.00
RML 14 2012	August 2012	28 September 2012	$7,920.00
RML 16 2012	September 2012	31 October 2012	$9,856.00
Total			$78,826.00