Streatfeild v Eaton (Civil Dispute)
[2022] ACAT 89
•26 October 2022
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
STREATFEILD & ANOR v EATON (Civil Dispute) [2022] ACAT 89
XD 495/2022
Catchwords: CIVIL DISPUTE – debt recovery action – fraudulent invoice generated by third party – fraudulent invoice paid – debt undischarged – respondent liable
Cases cited:The Trustee for theDRB Group ACT Trust v Canberra Hydraulic Engineering Services Pty Ltd [2022] ACAT 30
Tribunal:Senior Member Prof T Foley
Date of Orders: 26 October 2022
Date of Reasons for Decision: 26 October 2022
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 495/2022
BETWEEN:
EDWARD STREATFEILD & JENNIFER STREATFEILD TRADING AS RESOLUTION PLANNING
Applicant
AND:
JONATHON EATON
Respondent
TRIBUNAL:Senior Member Prof T Foley
DATE:26 October 2022
ORDER
The Tribunal orders that:
The respondent pays to the applicant the sum of $3,830 by bank transfer by 23 November 2022, comprised of:
(a)$3,500 for the debt; and
(b)$330 for the ACAT filing fee.
………………………………..
Senior Member Prof T Foley
REASONS FOR DECISION
This matter was listed for an in person hearing before the Tribunal on 17 October 2022. The applicant appeared on its own behalf. The respondent did not appear. The decision was reserved, and the following is a statement of reasons for the Tribunal’s decision.
Outline of history
The applicant is a firm of town planning consultants. The applicant provided town planning consultancy services to the respondent on several occasions in 2017 in relation to the preparation of Development Applications for a dual occupancy application on land owned by the respondent at Flynn in the ACT. Services were provided and accounts paid for those services. In or about December 2017, additional services were provided, and on 19 February 2018 the applicant issued an invoice to the respondent in the sum of $3,500 for those services.
That invoice was forwarded to the respondent under cover of an email dated and timed 21 February 2018, 10:04am. That email never reached the respondent.
Rather, an email dated and timed 21 February 2018 1:38:51pm reached the respondent. That email had the same text as the earlier email, but it did not come from the applicant. The sender is described as “Ted Streatfeild [sic] [email protected]”. Beneath the identical “Subject” line is a direction “Reply-To: Ted Streatfeild <[email protected]”. This email was not from the applicant but a fraudulent third party. The reply address is not the applicant’s.
This email had attached to it the invoice of 19 February 2018 issued to the respondent in the sum of $3,500 but with altered payment options. The only payment option was now a bank transfer to a nominated account. The account was not the applicant’s.
The respondent says in his reply that he paid this invoice and deposited the funds in the fraudulent account.
In or about October 2018, the applicant inquired of the respondent as to its unpaid account. On 26 October 2018, the respondent forwarded to the applicant the email of 21 February 2018 he had actually received and said he had paid the account. It was then that the fraud came to light.
The applicant took a number of immediate steps. It lodged an incident report with the Australian Federal Police (AFP), Woden reporting the fraud. It advised its bank, the Commonwealth Bank, which indicated it could not instigate action as no deposit nor withdrawal from its accounts had been subject to fraud. The applicant also carried out a search of its records of all other invoices issued in that period which disclosed none had been subject to fraud.
The respondent says in his reply that he spoke to the police and his bank, the NAB, about the fraud. However, he failed to provide copies of any complaint to, or correspondence with his bank as directed in the tribunal’s orders of 23 August 2022.
On 29 September 2019, the applicant was advised by the AFP that it was awaiting response from the respondent’s bank “regarding the details of the payment remittance”. It was indicated that “further investigation into the matter is contingent on the bank’s cooperation with Mr Eaton”. On 2 August 2022, the applicant was advised by the AFP that it could release further information only to the respondent. The respondent has not advised the applicant or the Tribunal of any such outcome.
The debt remains outstanding, and the applicant has filed an application to recover the debt and interest owning on the debt.
Consideration
It is clear the invoice was intercepted and altered by a fraudulent third party. Given their past business dealings, the respondent has no reason to doubt the invoice and paid it. There is no direct evidence, but the steps taken by the applicant in October 2018 when advised of the likely fraud suggests it was not its email that was hacked.
As the tribunal makes clear in The Trustee for the DRB Group ACT Trust v Canberra Hydraulic Engineering Services Pty Ltd (DRB Group)[1] it is not for the tribunal to decide where the mistake lies. It is rather for the tribunal to decide if the respondent’s conduct has discharged the debt.
[1] 2022 ACAT 30 at [24]-[25]
As the tribunal says, this takes the matter back to first principles as to requirements in an application to recover a debt. The applicant must assert the debt, provide evidence for it being due and payable, and provide evidence that it has not been paid. The respondent from his side must allege and prove payment by way of discharge as a defence to the action.[2]
[2] 2022 ACAT 30 at [26]-[27]
I am satisfied that the applicant has discharged its legal responsibility as above. As in DRB Group, I accept the respondent had no reason to question the invoice given its arrival was anticipated and the previous business dealings between the parties. Nonetheless, responsibility for correct payment ultimately rests with the respondent and he has not discharged this responsibility.[3]
Conclusion
[3] 2022 ACAT 30 at [29]
Given that the respondent was the victim of a fraudulent third party I do the delay in payment is not due to his fault. Accordingly, I do not consider it appropriate that he is liable for interest owning on the debt.
For these reasons, I am satisfied that the respondent must pay to the applicant the sum of $3,830 by bank transfer by 23 November 2022, comprised of:
(a)$3,500 for the debt; and
(b)$330 for the ACAT filing fee.
………………………………..
Senior Member Prof T Foley
| Date of hearing | 17 October 2022 |
| Applicant: | In person |
| Respondent: | No appearance |
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