DISTRICT COURT OF QUEENSLAND
CITATION:
Wylie v Orchard (No 2) [2020] QDC 315
PARTIES:
LYNETTE MARGARET WYLIE
(Plaintiff)V
ELIZABETH MARGARET ORCHARD
(Defendant)FILE NO/S:
2848/17
DIVISION:
Civil
PROCEEDING:
Trial
ORIGINATING COURT:
District Court at Brisbane
DELIVERED ON:
11 December 2020
DELIVERED AT:
Brisbane
HEARING DATE:
14 – 16 September 2020
JUDGE:
Porter QC DCJ
ORDER:
1. Judgment be entered for the Plaintiff for $150,500.
2. I will hear the parties as to interest and costs.
CATCHWORDS:
CONTRACT — BREACH OF CONTRACT — PERFORMANCE OF CONTRACT – claim in debt under a loan agreement – where the plaintiff entered into a loan agreement with the defendant – where the loan agreement provided that the plaintiff was to advance $100,000 to the defendant to purchase a “franchise from REFUND home loans” – where the loan agreement purported to give the defendant “full discretion as to how Loan funds are dispersed in order to achieve mutually beneficial objectives and provide ongoing employment opportunities for both parties” – where the loan was fixed for three years at which point the capital and interest was due and payable to the plaintiff – where the loan agreement required the defendant to pay the plaintiff 15% interest per annum – where it is uncontentious that the plaintiff advanced $100,000 to the defendant by way of bank cheque – where the defendant subsequently disbursed those funds to third parties – whether this on proper construction of the loan agreement comprised repayment of the debt – whether the plaintiff repudiated the contract by demanding repayment of the principal before its due date – whether the defendant is in breach of the terms of the loan agreement – whether the claim is statute barred
CONTRACT – FRAUDULENT MISREPRESENTATION – claim in deceit – where the plaintiff alleges the defendant induced the plaintiff to enter into the loan agreement and to lend the principal to the defendant by fraudulent misrepresentation as to how the defendant she intended to use the advance – where the plaintiff alleges that at the time of obtaining and bank cheque and entering into the loan agreement, the defendant never had the intention of applying the money for the purpose according to the loan agreement – – whether the plaintiff relied on the alleged misrepresentation – where the plaintiff does not give direct evidence of reliance – where the defendant contends that the loss was caused not by fraudulent misrepresentation but either the plaintiff’s repudiation of the contract or failure to pursue relevant person/s – whether the deceit claim is in any event statute barred
EQUITY — EQUITABLE REMEDIES — MISREPRESEN TATIONS — INDUCEMENT – claim for breach of trust – where the plaintiff claims a constructive trust arose over money advanced under a loan agreement induced by fraudulent misrepresentation – where the plaintiff contends the constructive trust was breached by payment out of the money other than for the plaintiff’s benefit – where the loan agreement was not rescinded for fraudulent misrepresentation – whether the principle articulated in Black v S Freedman is applicable to taking money paid under a loan agreement induced by fraudulent misrepresentation as to the intended use of the advance – where the contract itself is an instrument of fraud – whether a constructive trust therefore arose upon receipt of the advance – whether the trust was breached by paying the money away once obtained
LIMITATION OF ACTIONS — STATUTES — DEFENCE – where the defendant relies on limitation defences to the contract and deceit claims – where, under the contract, distinct causes of action accrue at several dates on the proper construction of the loan agreement – where those causes of action accrue at dates which separate interest and principal payments are due – where each of those dates are less than six years before the proceeding was commenced – where, under the deceit claim, the plaintiff first suffered loss by the defendant’s deceit on delivery of the bank cheque – where the plaintiff commenced action after the six year period from suffering loss – whether the plaintiff can rely on statutory extensions – whether s. 38 Limitations of Actions Act (LAA) is applicable – whether the plaintiff did not discover the fraud until within the relevant six year period – what was the plaintiff’s state of mind at certain dates – what constitutes “the fraud” under s. 38 – where states of mind must be inferred – where, under the trust claim, s 27(1) LAA provides that there is no limitation period for fraudulent breach of trust – where s 43 LAA in effect provides that nothing in the LAA affects equitable defences – whether and to what extent is there an interaction between the LAA and equitable defences in relation to claims for fraudulent breach of trust
LEGISLATION
Limitations of Action Act 1974 (Qld) ss. 10(1)(a); 27(1)(a); 38; 43
Evidence Act 1977 (Qld) s. 79(3)
CASES
Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567
Black v S Freedman & Co (1910) 12 CLR 105
Brigginshaw v Brigginshaw (1938) 60 CLR 336
Creak v James Moore & Sons Pty Ltd (1912) 15 CLR 246
Global Currency Exchange Network Limited v Osage 1 Limited [2019] EWHC 1375
Gould v Vaggelas (1985) 157 CLR 215
Halley v Law Society [2003] EWCA Civ 97
Hobson v Taylor [2019] QCA 265
In the matter of Courtenay House Capital Trading Group Pty Limited (in liquidation) and Courtenay House Pty Limited (in liquidation) (2018) 125 ACSR 149
MBF Australia v Malouf [2008] NSWCA 214
March v Stramare (1991) 171 CLR 506
Orix Australia Corporation Ltd v Moody Kendall & Partners Pty Ltd [2005] NSWSC 1209
R v Orchard [2018] QCA 58
Re Lewis (2020) 145 ACSR 459
Re Octaviar Ltd [2020] QSC 353
Wylie v Orchard [2020] QDC 86
SECONDARY SOURCES
Heydon, Heydon on Contract (2019, Thomson Reuters Australia Ltd)
Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines & Remedies (2014, 5th ed, LexisNexis Butterworths)
Tarrant, Theft Principal in Private Law (2006) 80 ALJ 531
Dal Pont, Law of Limitation (2016, LexisNexis Butterworths)
Seddon and Ellinghaus Cheshire & Fifoot’s Law of Contract (2008, 9th ed, LexisNexis Butterworths)
Handford, Limitation of Actions (2017, 4th ed, Thomson Reuters Australia Ltd)
COUNSEL:
M O Jones for the Plaintiff
A J H Morris QC for the Defendant
SOLICITORS:
Direct-access brief for the Plaintiff
Australian Law Partners for the Defendant
Contents
Summary
The witnesses
Ms Wylie
Mrs Orchard
The factual background
Ms Wylie as at September 2010
Mrs Orchard as at September 2010
Bank on Property
Mrs Orchard’s role
BOP makes contact with Ms Wylie
The first meeting: 8 September 2010
Further contact before 29 September 2010
Events on 29 September 2010
Ms Wylie’s version
Mrs Orchard’s version
Conclusion on execution of the contract
Visiting Mr St Pierre
The contract
Did Mrs Orchard know the deposit terms?
Further steps in the property transaction up to finance notification
The loan agreement and the bank cheque
Mr La Torre’s evidence
Ms Wylie’s evidence about events up to payment of the $100,000
The loan agreement
The funds are disbursed
Mrs Orchard state of mind relating to the $100,000
The parties’ dealings from 19 October until termination of the contract
Refund franchise idea abandoned
Safety in the MarketStaunch
Time for completion passes
Mrs Wylie demands her money back: November 2010 to January 2011
Emails on 5 and 6 December 2010
Events through to termination of the contract
The criminal litigation
The civil litigation
The issues
The contract claim
The deceit claim
The trust claim
Mrs Orchard’s dealing with the $100,000
Did Mrs Orchard make representations about use of the money?
Mrs Orchard’s state of mind
The evidentiary effect of the conviction
The contract claim
The loan has not been repaid
Contract claim not statute barred
Contract claim succeeds
The deceit claim
Deceit claim as an alternative
Fraudulent misrepresentation and reliance
Loss was caused by the fraud
Decision to terminate
Decision not to pursue Mr Silver
The deceit claim is statute barred
The trust claim
Relevant principles
Mrs Orchard received the bank cheque on constructive trust
No defence of laches arises
SUMMARY
In early September 2010, the plaintiff, (Ms Wylie) was contacted by a telemarketer representing a real estate marketing business called Bank on Property (BOP). Ms Wylie expressed some interest in investing. The result was a visit to Ms Wylie’s house by the defendant (Mrs Orchard) representing BOP. Mrs Orchard later provided a contract to buy a house and land located at 25 Collins Street, Brighton, about 20km from Hobart (the Property). The house had not been built.
On about 29 September 2010, Ms Wylie entered into a contract to buy the Property from a Mr Bradley Silver for $295,000 (the contract). The contract did not provide for any deposit to be paid. The contract was subject to finance. Mrs Orchard was present when Ms Wylie signed the contract. She took Ms Wylie to see an accountant to be given advice on tax advantages of the investment. She assisted in completion of her finance application to Westpac’s Pacific Fair branch. She took her to see the manager of that branch: a Mr St Pierre. Westpac approved finance for an amount exceeding the purchase price and finance was notified by Ms Wylie’s solicitor in Tasmania to the seller’s solicitor. Each of Mrs Orchard, Mr Silver and Mr St Pierre were involved with the broader Tasmanian property business of which BOP was unquestionably the marketing arm. These steps were completed by about 11 October 2010.
At around that time, Mrs Orchard also began discussing further investments with Ms Wylie. As a result, on about 18 October 2010, Ms Wylie gave to Mrs Orchard a bank cheque in favour of Mrs Orchard for $100,000. At the same time, Ms Wylie and Mrs Orchard signed a loan agreement (the loan agreement) by which Mrs Orchard made various promises to Ms Wylie in relation to the $100,000, including a promise to repay the advance after three years and to pay interest annually of $15,000. It is uncontentious that Mrs Orchard paid most of the $100,000 at the direction of and for the benefit of Mr Silver (the vendor). Mrs Orchard has never repaid the money obtained from Ms Wylie.
Ms Wylie advances three claims against Mrs Orchard: a claim in debt under the loan agreement, a claim in deceit and a claim for breach of trust. The latter two claims, in broad terms, arise from the contention that Mrs Orchard’s intention at the time she obtained the $100,000 was to pay it to the benefit of Mr Silver and that she dishonestly concealed this from Ms Wylie and represented quite a different intention. Thus, her alleged statements that she would invest the money for Ms Wylie’s benefit were knowingly untrue (deceit) and further she obtained the money dishonestly in a manner attracting equitable remedies.
The gravamen of Mrs Orchard’s defence to these claims is that while Mrs Orchard admits she paid most of the $100,000 to, or for the benefit of, Mr Silver, these payments were, and were intended by her to be, for Ms Wylie’s benefit because they comprised payment of a deposit under the contract to buy the Property. Accordingly:
(a)As to the claim on the loan agreement, on the proper construction of the loan agreement payment to Mr Silver comprised a discharge of Mrs Orchard’s debt; and
(b)As to the deceit and trust claims, there was no deceit or dishonesty because Mrs Orchard did apply the $100,000 to Ms Wylie’s benefit.
Mrs Orchard also argues that the common law claims are statute barred and that a defence of laches arises in respect of the equitable claim. Ms Wylie contends in response that the debt claim did not accrue until within 6 years of the commencement of the proceedings and that the other claims were not statute barred or barred by laches.
For the reasons which follow, I find that each of the claims advanced by Ms Wylie are established on the evidence. At the heart of all these conclusions is my finding that Mrs Orchard acted dishonestly when obtaining the bank cheque from Ms Wylie. Further, I find that no limitations defence is available against the contract claim nor is a laches defence available against the trust claim. However, I accept the defendant’s submission that a limitations defence to the deceit claim was established.
However, as the contract claim is the principle claim advanced, I order judgement for the sum claimed in that regard: $150,500.
THE WITNESSES
Only three witnesses were called in the trial: Ms Wylie, Mrs Orchard and Mrs Orchard’s son, Mr La Torre. I had no reason to doubt Mr La Torres’ evidence and no submission was made to me that I should. Indeed, his evidence provides useful insight into the genesis of the plan to obtain the payment of $100,000 from Ms Wylie. Ms Wylie and Mrs Orchard were each unreliable witnesses, though in different ways.
Ms Wylie
Mr Morris QC, who appeared for Mrs Orchard, submitted that though Ms Wylie was not deliberately dishonest[1], her evidence did demonstrate she had a grievance arising from the loss of her money which warped her recollection of events. He pointed to her inability to make concessions of obviously correct matters arising from documents apparently signed by her, and her assertion of incredible explanations of how her signature came to appear on the documents. He also pointed to her willingness, unfairly, to blame the solicitor acting for her on the Tasmanian property purchase for her loss. Mr Morris submitted that though none of these matters went to the heart of the claims Ms Wylie advanced, they did demonstrate that her evidence on all matters was very unreliable.[2]
[1] To be fair, Mr Morris actually submitted that it could be conceded Ms Wylie most probably was not a perjurer, though he made no submission that I should find any of her evidence was deliberately concocted.
[2] See paragraphs 42 to 50 of Mr Morris’ trial submissions
In my view, Mr Morris’ points as to the unreliability of much of Ms Wylie’s evidence were well made. Mr Jones, who appeared for Ms Wylie, did not really cavil with them. He accepted that while giving evidence about documents, Ms Wylie presented as bewildered and her evidence was bewildering. Frankly, I do not think that goes far enough. Her strange evidence about her signature being placed on various documents in some way that did not involve her, reflected on her broader reliability, as did some other matters raised by Mr Morris. However, Mr Jones made three points.
(a)First, he submitted that the oddities in her evidence and her clear sense of grievance did not mean that all the evidence she gave should be disregarded, particularly where it is consistent with other uncontentious evidence, particularly documentary evidence and/or inherently likely in the light of other uncontentious facts. I agree.
(b)Second, he submitted that notwithstanding the attacks on the credit of both witnesses, much of their evidence was not that far apart. This point is also correct, as will be seen in my analysis of the facts below. Indeed, there was numerous factual matters which were either admitted or demonstrated by documents which I accept as authentic and accurate.
(c)Third, he submitted that much of the case against Mrs Orchard can be made out on her own evidence. Again, as will be seen, I accept that proposition.
Mrs Orchard
Mrs Orchard appeared to have a better recollection of uncontentious points of detail than Ms Wylie. However, when it came to key contentious issues, I found her evidence to be entirely unreliable. On key issues, she had, at best, reconstructed her evidence in a manner which, presumably to her, was exculpatory. So much emerges when her evidence is measured against other evidence which I accept and obvious inferences which flow. Specific examples of this are referred to in my analysis of the evidence and findings below. One key example, however, was her position adopted at trial that the payment of the $100,000 to Mr Silver was payment of a deposit on the contract. I reject her evidence that she believed that to be true at any material time (though she might later have convinced herself it was so).[3]
[3] TS3-34.44
Further, Mrs Orchard’s evidence on collateral matters disclosed a capacity for exaggeration and a willingness to mislead. For example, when asked by Mr Jones how she came to be involved with BOP, she said:
… I had a company, my own business, since 1989, and it was a nanotechnology business, environmental – environmental research and environmental science products.
What kind of products were they? Basically for health and vehicle pollution.
And what, sorry? Vehicle pollution reduction. Omission reduction.
Right. Did you have qualifications in nanotechnology and environmental science? I had worked at Monash University in the physics department, and I had had a keen interest in – in technology and I had been a – a fan of Nikola Tesla for a long time. Did a lot of research.
Have you got any university qualifications in science? No.
What were you doing at Monash? I was a – a technical assistant to the lecture hall steward, and I – in the physics department, and I – I worked there for almost two years.
Okay. Thanks? [indistinct]
MR JONES: And what did that work involve? What was your day to day work at Monash? Well, as – as assistant lecture hall steward, my job was to provide the lecturers, the physics professors with the – the correct equipment that they needed to demonstrate various experiments and so on to the students and to help maintain the equipment and do what my boss directed me, and he was the head lecture hall student – sorry, the – the head lecture hall steward, and he was absent a lot of the time, so it was a responsible job.
Okay. So would it be fair to say that that was a clerical or administrative role as opposed to a scientific or academic role? No, because my job was really to make sure that all the apparatus was there. I was familiar with the apparatus and I sat in on a number of the lectures, although I had – I didn’t have the mathematics background at school. At high school, I did commercial instead of – instead of science.
But you didn’t have any academic post or position at Monash, did you? No. It wasn’t an academic post.
And you’ve never obtained a formal qualification from any university in science, have you? No. I didn’t. But I – I did have to pass the first year English literature exam at Monash in order to be able to assist in marking papers for the university, because all staff members were asked to participate in that sort of thing at that time, in the seventies.
[underlining added]
The underlined passage demonstrates that Mrs Orchard avoided the question as to whether she had any qualifications and instead chose to give a quite misleading answer suggestive of some scientific skill (falsified by her further evidence).
Another example was the YouTube video which Mrs Orchard accepted she had posted on the internet. In that video Mrs Orchard refers to a product called the Plasmatech pendant she said had been developed by her following a lifetime’s work, including collaborating with various scientists. It is said that the product may assist in curing cancer. Many other outlandish assertions are made. Mrs Orchard’s cross examination on this document reflected poorly on her credibility and reliability. She asserted that the product did work and that it had been medically proven and registered by the TGA. Both propositions are patently false, though again Mrs Orchard might have persuaded herself that they were true.
Mrs Orchard also sought to distance herself from some of the assertions in the video by saying they were written by the “computer programmer”. However, every page is marked with her name and photograph and marked as copyright to Mrs Orchard, using another name (Elizabeth Seewald, seemingly her maiden name). At one stage, after being shown to have wrongly denied that the product was said in the video to cure cancer, this exchange occurred:
So is it right that you – would you agree that you were asserting by this slide that the produce [sic product] that you developed may assist in the cure for cancer? Yes. Without any specific reference to how.
Yes. But you’re contending that the device may assist in a cure for cancer? Yes. That’s what it says there.
…
When you said a minutes ago that you’ve never asserted this device can help to cure cancer, that was a lie, wasn’t it? No, it wasn’t.
Could the video please be moved to about two minutes 44, or close enough? The words “assisting cure for cancer”, my products promote oxygen – oxygen balance on medical devices. And I think that’s what a programmer meant by putting that in.
Mrs Orchard was keen to assert that the video had not been available for public viewing. Given the misleading nature of her other evidence about this document, I doubt her evidence on that point. However, the video is important not only for the ridiculous nature of the claims made, but also for Mrs Orchard’s misleading and evasive evidence about it in cross examination.
Not only does this evidence give insight into her lack of reliability as a witness, it also gives an insight into Mrs Orchard’s capacity for self-delusion and grandiose self-confidence. In my opinion, this explains conduct by her in relation to this matter which might otherwise seem peculiar to a more grounded person (such as signing the loan agreement and making herself liable in debt for money she knew was to be paid away to Mr Silver).
Mr Morris submitted that I should conclude Mrs Orchard was a naïve and innocent victim of the fraud of people around her involved in BOP. I can accept that she was not the guiding mind and will of that company and the property scheme of which it was a part, nor was she the mastermind of its activities. I otherwise reject that argument. As I explain in detail below, the evidence established that she was actively involved in carrying on her part in the property business of which BOP was a component, and that she was the principal actor in the fraud practiced on Ms Wylie to dishonestly obtain $100,000. There might be others also culpable in that regard, but that does not alter the fact of Mrs Orchard’s culpability.
THE FACTUAL BACKGROUND
Ms Wylie as at September 2010
As at September 2010, Ms Wylie was an older person living in her own home at Logan. She had had a modest work history, if her position as at September 2010 was any guide.
Her employment was eclectic. She worked seemingly on a casual basis, cold calling potential clients for a real estate agency trying to build a rent roll. Her role was merely to call clients and if they were interested, to refer them to another person. She also sold Arbonne beauty products. She might also have been involved with a health product called Ganoderma. She worked as a lollipop lady. She sometimes rented out a room in her home. There is no suggestion that any of these ventures were lucrative.[4] (Her loan application shows her annual income at about that time was $36,000. She does not accept the accuracy of the loan application and I regard it with some suspicion as well, given the involvement of Mrs Orchard and Mr St Pierre in its preparation. However, it is unlikely her income was more that amount).
[4] The BAS statements for the printing business suggest it was a very modest undertaking: see Exhibit 4
Her asset position reflected very modest employment success. Her main asset was her house valued at perhaps[5] $340,000; she owed about $60,000 on the home but had $140,000 in an offset home loan account (which, as I understand such accounts, means that a total of $200,000 was due but $140,000 of that was held in an account offset against the debt and which could be drawn at will). She also said she was due an unspecified inheritance, but no more was heard about that in the trial.
[5] This figure is taken from the loan application. As I explain in paragraphs [81] – [82] and [92] below, I am not certain I accept the details in that document, though the broad picture of her position is likely to be generally consistent with it.
She was 63 in 2010. Her financial position was not strong for someone seeking to retire.
Both her personal history and her presentation in the witness box indicated to me a person of little sophistication and of limited understanding of business or financial affairs. That impression was reinforced by her sometimes incredible evidence about documents in this case already mentioned. In my opinion, part of the explanation for that evidence was her poor understanding of the documents themselves. Her numerous modest attempts at small business projects and different employment alternatives reflected, I say with respect, a person who was trying to improve her financial security but who had limited capacities for succeeding and who was perhaps becoming a little desperate as to her future. She did also not appear to have any partner or other person supporting her.
She denied telling Mrs Orchard that she wished to retire and receive rental income, but it is very likely she was concerned about her financial future and was susceptible to suggestions as to how a more secure retirement could be secured. This susceptibility was aggravated by a limited ability to judge the wisdom of what was proposed.
Mrs Orchard as at September 2010
As at September 2010, Mrs Orchard was employed as customer service manager for BOP. I infer she was perhaps at that time in her mid to late 50s.[6] She has little by way of tertiary or professional training. Her career up to that time is only partially in evidence. She appears to have worked as a laboratory assistant at some stage, to have worked in real estate in Melbourne at some stage and to have been involved with a business arising out of her “nanotechnology” beliefs. In about 2005 she appears to have been involved in telemarketing for a company called SMS. It is unclear what that business involved but it seems likely it was property marketing. She clearly understood how property contracts generally worked. My impression is that she had had some considerable involvement in property sales over her work life. Her financial position was never fully disclosed, though she claimed to have lost funds when Capital Growth International Club (CGIC), a company involved in the property scheme of which BOP was a part, became insolvent.[7]
[6] TS3-31.35
[7] TS3-8.7
Bank on Property
BOP was the trading name of All About Property Developments Pty Ltd (AAPD). AAPD was incorporated in December 2009, less than a year before Mrs Orchard first met Ms Wylie. The ASIC search shows Mr Sean Rossely as its sole director and shareholder.
Each of Mr Rossely and Mr Silver were 22 years old. It appears that their fathers also had significant involvement in the business.[8] It was uncontentious that the fathers had each been disqualified from being company directors. Mrs Orchard said she did not know that at the time. She said she was way down the food chain.[9] (This comment reflects a common tendency in Mrs Orchard to downplay her role in the affairs of BOP). When asked whether she thought it odd that the 22-year-old sons were directors not the fathers, Mrs Orchard said she did not give it a thought (even though she recognised that at least Mr Silver senior directed Mr Silver junior).[10]
[8] TS3-30 to 31
[9] TS3-30.6
[10] TS3-30
BOP’s brochure[11] (provided to Ms Wylie at the first meeting), provides relevantly as follows:
[11] Exhibit 15
(a)Under the heading “About Us”:
Bank On Property is founded on service to clients seeking quality property investments. Our professional organisation markets high quality developments with a wide range of homes, units, and new house/land packages available.
Packages are tailored towards your income whether you be a high or low income earner, retiree, professional investor or off plan buyer. If we don’t have what you want, we will do our best to locate a property that best suits your needs and budget.
Our experienced professional staff can assist with all aspects of property acquisition, obtaining finance, legals, finding the right tenants for your property and more.
(b)Under the heading “Finance Assistance to Genuine Investors”:
Our properties are financed by major lenders to approved purchasers.
We specialise in helping First home buyers and retirees meet Lender’s criteria by offering unsurpassed value for money.
(c)The last page identified Mrs Orchard, Mr Rossely and Mr La Torre by name.
The gravamen of the BOP brochure in my view was that it provided a broad property investment service drawing on many sources of property and finance. That was false. In fact, BOP sold property from one source (house and land packages developed in Brighton and New Norfolk, suburbs of Hobart, by others involved in the scheme), provided advice from one source (Mr Tomlinson, an accountant) and financed by one source (a Mr St Pierre, a manager of Westpac’s Pacific Fair branch). BOP was properly characterised as the marketing arm of a property finance and development scheme in which the Silvers, the Rosselys and Mr St Pierre[12] all participated, along with Mrs Orchard (the scheme).
[12] Described revealingly by Mrs Orchard as a silent partner [TS2-77.18], remembering he was also a manager for Westpac bank financing borrowers into the scheme.
Another corporate entity involved in the scheme was CGIC. Its role in the scheme was never made clear. It appears to have been an investment channel for funds for carrying out the construction of the properties sold by BOP or through BOP. It was wound up in February 2011. Mrs Orchard, her son and Mr Silver were shareholders of the company until they transferred their shares to Mr Rossely. Mr Silver was the director from incorporation in 2008 until May 2010, when Mr Rossely took over. Mr St Pierre also had some involvement in its affairs, according to Mrs Orchard: she said he advised her to invest in it. BOP’s role appears to have been to channel potential investors in property located by its cold calling activities to contracts with Mr Silver (and perhaps others) for house and land packages in Tasmania and then to Mr St Pierre for finance.
The integrated nature of this scheme was effectively described by Mrs Orchard and understood by her at the time.[13] For example, when asked as to who was in control of BOP on a day to day basis she nominated Mr Rossely and the Silvers as the “management team”.
[13] TS2-75 to 77; TS3-25 to 27
It is further revealed by the fact that Mr La Torre, though one of the three people identified by name in the BOP brochure, in fact worked as a project manager in Tasmania for the development arm of BOP, which seemingly oversaw the construction of the houses.[14] Indeed Mr La Torre in explaining how he perceived things, said that BOP and CGIC “were all the same company.” A probative insight from someone who worked in both companies from 2008.[15]
[14] TS3-96.15 to .42
[15] TS3-96.15 to .42
It was also demonstrated by the fate of Ms Wylie once she was engaged with Mrs Orchard and BOP: she was introduced to a house in one of the Tasmanian developments, a contract for that house was produced and signed, she was taken to Mr Tomlinson and she was taken to Mr St Pierre for finance. Mrs Orchard accompanied Ms Wylie for each of those steps.
Mr St Pierre and Mr Silver were ultimately each convicted of fraud offences for their part in this scheme, although the precise nature of their frauds was not explained in the trial.
Mrs Orchard’s role
Mrs Orchard was at pains to identify the limits of her role in the activities of BOP specifically and the property scheme generally. She said that she was neither an owner nor director of BOP. She said she was employed as Customer Service Manager of BOP and paid a salary with no commission
She clearly had a broader involvement in the scheme. She was an investor in the scheme through CGIC. She gave evidence that she invested an insurance payout of about $115,000 with CGIC in 2008. She said she lost part of those funds when CGIC went into liquidation. She also said that she had known Brad Silver since she gave him a job in 2005 (when he was 17). She also said she invested those funds on Mr St Pierre’s advice. I find that she understood the whole of the scheme and the place of BOP in it as the conduit of potential buyers to Mr Silver junior (and other sellers in the scheme) and had an interest in its success through her capital invested in CGIC.
She explained her role as Customer Service Manager as follows
(a)Her job was “gathering information and giving [Ms Wylie] the correct information.”[16]
(b)“I had nothing to do with legals and I had nothing to do with finance. My job was to approach clients and assess their ability…to enter a property contract of any kind and assess … if they were at all interested in property.”[17]
[16] TS3-24
[17] TS3-26
The company had telemarketers who effectively cold called potential clients and sent marketing material (such as the brochure) to persons who showed interest. It was never made clear what these telemarketers said. However, if a person showed any interest, a Ms Rogers would make an appointment for Mrs Orchard to visit the client in person. Mrs Orchard would then go to visit that person.
Mrs Orchard was keen to make clear that she did not act as a sales agent. She said BOP had sales agents: Mr Rossely junior and senior and three other persons.[18] She said that she was not a registered sales agent.
[18] TS2-76.27; TS3-26
It can be accepted that, officially, Mr Rossely junior or one of the other licensed agents was the selling agent. However, at least where Ms Wylie was concerned, I reject Mr Orchard’s evidence that she did not act as an agent and investment advisor to Ms Wylie in relation to the property Ms Wylie purchased because there was simply no-one else who could have done so. Even on Mrs Orchard’s evidence, Ms Wylie had nothing to do with Mr Rossely except on the day of the signing of the contract (on Mrs Orchard’s version: as to which see from paragraph [65] below). No-one else from BOP had any dealings with her by which BOP could have carried out its advertised services set out the brochure given to Ms Wylie.
Whatever role she played with other buyers, I find that Mrs Orchard’s role was to visit Ms Wylie, find out if she would be able to get finance to buy a property, and if she was able to get finance, to persuade her to buy a property and then try to ensure that she did so. As will be seen, that is exactly what she did.
BOP makes contact with Ms Wylie
The first contact with Ms Wylie on behalf of BOP which Ms Wylie recalled was a cold call from a telemarketer in early September 2010 who mentioned the possibility of property investment in Tasmania. Ms Wylie gave evidence that she said she was not interested but mentioned her Arbonne products.[19]
[19] TS1-13
There is no doubt that something of this kind happened in early September 2010. However, there might have been some prior contact with BOP by Ms Wylie because on 28 July 2010 am email was sent to Ms Wylie’s email address from BOP. It is unlikely this email resulted from a telephone communication because it is addressed to “Mr Wylie”.[20] The email goes on to state:
[20] Exhibit 2 page 9
Re: Tasmanian property opportunity
Your request for further information on the above opportunities is very much appreciated. Our new House / Land packages in Brighton or New Norfolk offer open plan living, well appointed kitchens inclusive of quality appliances, split system air conditioning, quality carpets, tiling and blinds, and are’ turnkey’ complete with landscaping and fencing. Prices start at $265,000 and comprise of 3 or 4 bedroom homes. The demand for rental properties has these homes achieving rents no less than $295 per week.
The suburbs of Brighton and New Norfolk are both a short drive along the Midland Highway, located within easy reach of Hobart City. Tasmania’s largest residential development has recently been approved for Brighton comprising of 400 homes. Also, construction on the Brighton Transport Hub and Bypass, peaking at $243 million, jointly funded by the State and Federal Government, is due for completion in September 2012. This significant injection of infrastructure and housing will see the greater area of Hobart experience major growth in the years ahead, currently creating a fantastic opportunity for investors.
Our company policy is to provide the best of service, support and accurate information at all times. We are very interested in your opinion and response to our House / Land packages and we look forward to speaking with you again during the coming week.
Please feel free to contact one of our senior consultants on (07) 5528 0422 with any questions you may wish to discuss.
Kind regards,
Bank on Property
The email suggests Ms Wylie had expressed interest in the Tasmanian property opportunity, but that does not mean that that hearsay assertion is true. It was not suggested to Ms Wylie as true and the first line might simply have been a way of trying to persuade the recipient to read the email. On the other hand, there is a reference in Ms Wylie’s diary to this event and that might suggest that she did express interest in BOP.[21] (Though as discussed in paragraph [60] below, it is hard to put much weight on the diary entries and they were not relied upon by the plaintiff). There is no suggestion that there was a follow up at this time, which tends to confirm that there might not have been any contact, as does the reference to “Mr Wylie”. The email does accurately describe what BOP was selling and the kind of property Ms Wylie ultimately purchased. The fact Ms Wylie received this email, however, might explain why she was later called in September 2010. The selling techniques of BOP were never fully explored at trial.
[21] TS2-4
Returning to early September 2010, one might think it unlikely BOP would have followed Ms Wylie up with a visit unless she expressed some interest, though it is possible that the caller thought that the reference to Arbonne products might provide an opening for BOP to at least get a hearing. What is clear is that Mrs Orchard was given Ms Wylie’s contact details and made use of that information in setting up the first meeting.
The evidence of the two ladies differs in detail as to the first call. Ms Wylie says Mrs Orchard called her and said she was very interested in the Arbonne products and arranged to do a facial on the 8th of September.[22] Mrs Orchard says she called Ms Wylie and Ms Wylie said “If I listen to your story about Tasmania, you know, you could listen to mine about Arbonne. I’m selling a product called Arbonne.” She says she never booked a facial.[23] Not much turns on the difference.
[22] TS1-13
[23] TS2-78
The first meeting: 8 September 2010
Both ladies agree that this was the date of their first meeting. As with most of the key events, their recollections differ somewhat.
Ms Wylie said Mrs Orchard came to Ms Wylie’s house and was given a facial first, then got into conversation. She said Mrs Orchard “told me she’s a lawyer, financial planner, sells house and land packages in Tasmania, and the Tasmanian Government would give people that are willing to buy, rent a house, $8000. And then we started – she started questioning me on my financial.” Ms Wylie said she disclosed her financial situation as summarised in paragraph [21] – [23] above.[24]
[24] TS1-13 to 14
Mrs Orchard said there was no facial. She: “… handed her a card at the door… and I had a folder that had been prepared by the real estate division, which was given to any prospective client…We sat down and I proceeded to, basically, open the folder and just put it on the table and, yeah, asked her some questions about her interest in the property and so on and so forth.” And then Ms Wylie brought up Arbonne. Mrs Orchard said it was her daughter in law’s birthday and thought she may be interested so she purchased some Arbonne products Ms Wylie.[25]
[25] TS2-79
Apart from the comments about Mrs Orchard claiming to be a lawyer (which I doubt was said) and the contention about whether the facial occurred (about which I am uncertain), both these accounts can stand together. It is consistent with Mrs Orchard’s description of her role that she would have obtained information about Ms Wylie’s ability to purchase. And there seems no point to her visit if it was not to then try to persuade her to do so, especially given her subsequent involvement in bringing about that result.
I think it very likely she would have mentioned the Tasmanian Government incentive as a way of persuading Ms Wylie, especially as that was later confirmed by Mr Tomlinson. And it is a very short step from asking some questions about Ms Wylie’s interest in the property “and so on and so forth” to trying to persuade her to buy one. That is exactly what Mrs Orchard was there to do.
An important fact which Mrs Orchard confirmed at that first meeting was that Ms Wylie had $140,000 available in an offset account.[26] Another matter which I find arose at this time, or soon afterwards, was Ms Wylie’s concern about her financial security and wish to retire.
[26] TS3-48.45
Further contact before 29 September 2010
It is not in dispute that the contract was signed on 29 September 2010, though the circumstances are hotly disputed. However, prior to that time, it seems that Mrs Orchard and Ms Wylie met on at least three occasions.
The first time was when Mrs Orchard came to pick up the Arbonne kits which she ordered on 8 September. That appears to have occurred on about 10 September 2010.
More significantly, it appears that Mrs Orchard came to Ms Wylie’s home for dinner some time thereafter at which dinner there was some further discussions about investing in property in Tasmania in which Mrs Orchard at the least advised Ms Wylie that she had enough equity to buy a house in Tasmania.
There was then a further meeting at the BP service station at Yatala. That appears to have been the meeting point for Mrs Orchard and Ms Wylie on more than this occasion. There is very little evidence about this meeting. There is also the vexed question of when Ms Wylie met with Mr St Pierre. I deal with that from paragraphs [79] – [83] below.
Events on 29 September 2010
After these few meetings, the parties agree that on 29 September 2010, Ms Wylie signed the contract. The two versions of how the contract came to be signed, however, are impossible to reconcile.
Ms Wylie’s version
Ms Wylie said that Mrs Orchard said she wanted to meet her at the Helensvale Bowls club for coffee. Ms Wylie agreed. At that meeting she says she was shown the contract. She said it was the first time she had seen the contract. Ms Wylie said that Mrs Orchard “sort of insisted I sign the contract there and then so she could get things started.”[27] Ms Wylie said she had a quick glance through it and signed it. She said Mrs Orchard took the contract with her.[28]
[27] TS1-15.6
[28] TS1-14 to 15
Ms Wylie was cross examined at length on this evidence. The cross examination focused on the notes contained in her diary for 29 September 2010. Ms Wylie’s evidence about the notes in this diary was uniformly unreliable. The effect of her cross examination leads me to conclude that she inserted notes in the diary at various times after the event and that Ms Wylie rarely had any recollection of when the notes were added. However, many of them appear to have been added after she was in dispute with Mrs Orchard. Further, Ms Wylie sometimes suggested that the notes were made quite soon after the event in circumstances where that could not be so. There is no doubt that some of the entries are genuine and contemporaneous notes. There are others that seem not to be and some which might be a combination. It is difficult to tell, and Ms Wylie’s evidence was unreliable on that distinction.
The diary note for 29 September is a good example of all these aspects of the evidence. It reads (with line breaks as in the exhibit):
Met Elizabeth at Helensvale.
to sign contract rushed to sign did not give me time to read through … (indecipherable mark)
contract or explain anythingI do not accept that the whole note was made contemporaneously. The second and third lines were probably made after Ms Wylie was in dispute with Mrs Orchard. And to make matters worse, Ms Wylie gave evidence that the notes were made soon after that day. That was plainly wrong. It is this kind of transparently incorrect evidence about her documents which make her an unreliable historian and probably does reflect, as Mr Morris contends, a fixed version of these events built up of the years which fits her sense of grievance. The diary was not relied upon in evidence in chief nor tendered by Ms Wylie. However, she seems to have refreshed memory from it. And in any event, her evidence about it in cross examination did her no credit.
Oddly, in this case, the first line of the note might be contemporaneous. However, I am not sufficiently confident of that to rely the note to that extent. Apart from my general concerns about the reliability of these notes (though they were not propounded in examination it should be noted nor tendered by the plaintiff), that line is written in the past tense and Ms Wylie’s uncontentious entries in the diary seem to reflect that she used the diary to note appointments and events to happen, rather than to record what did happen.
Mrs Orchard’s version
Mrs Orchard agrees with Ms Wylie’s evidence in the first three sentences of paragraph [59] above. However, she says this occurred prior to 29 September 2010. She denies that the contract was signed at that time. Rather she gave evidence that the discussion was “here’s the house and land contract for you to look at. And, you know, we’ll follow up on that – go and have a look – check it out, read through it, et cetera, et cetera. And there will be a further appointment – a follow-up appointment with David [St Pierre]”.[29]
[29] TS2-81
She agreed that the contract was signed on 29 September 2019, but not at the bowls club. She said it was signed at Ms Wylie’s home and in quite a different manner from Ms Wylie’s version. She said that[30]:
(a)Mr Sean Rossely, Mr Brad Silver, Mr Dennis Dwan and Mrs Orchard all attended at Ms Wylie house to sign the contract;
(b)Mr Silver was there as vendor;
(c)Mr Dwan was there a company administrative manager and as a JP. His role was normally to witness signatures on real estate contracts;
(d)Mr Rossely was there as the real estate agent who had to take her through the process of explaining the contract and explaining the cooling off period.
[30] TS2-81
She said in evidence in chief that her part in this signing ceremony was to witness Ms Wylie’s signature. She said that the contract was taken away by Mr Dwan to be sent to Mr St Pierre. She said she never pressured, advised or spoke to Ms Wylie otherwise about the contract because she was not employed as a real estate agent, received no commission and had only met Ms Wylie a couple of times as Customer Service Manager.
Mrs Orchard was cross examined at length on this event:[31]
[31] TS2-81
(a)When describing the signing she first said that the signing took place with all four visitors in Ms Wylie lounge room;
(b)She said Mr Dwan went to the meeting because he was a JP and it was his job to witness signatures;
(c)She was asked why Mr Dwan did not witness Ms Wylie’s signature twice. She evaded the question the first time. She said she did not know the second time;
(d)She then said she was outside on the porch while Mr Rossely was going through “whatever [the] PAMD requirement was”;
(e)She said that the whole event took 20 minutes;
(f)She was asked if she thought that situation was intimidating: she avoided answering by saying only the three men were in the lounge room, she was on the porch;
(g)She then again gave evidence that Mr Rossely went through the “PAMD, whatever the – cooling off period you know [whatever] the regulations were”, though she conceded she was not in the lounge at the time but was on the porch “taking phone calls”, though she maintained that that was what Mr Rossely was doing;
(h)She said her understanding was that a real estate agent had to go through a PAMD–type procedure and obtain some sort of signature or acknowledgement that had to do with the cooling off period; and
(i)Mr Jones also suggested that Mrs Orchard had not called Mr Dwan to give evidence because she knew he would not assist her case. Mrs Orchard impliedly denied that was so.
Mrs Orchard was re-examined to try to address the Jones v Dunkel issue raised by Mr Jones. Her evidence seemed to be that she had instructed her solicitors to try to contact Mr Dwan as well as Mr Rossely, though the evidence was given in an ambiguous manner. And there was no evidence about whether either of those persons had been located or asked as to their recollection.[32]
[32] TS3-88 to 89
Mr Morris also led evidence of a prior statement given in August 2020 in answer to Mr Jones suggestion that the evidence about the signing was false. While the paragraph relied upon did say that all four people attended at Ms Wylie’s home for signing, it also said that Ms Wylie’s application had been analysed by Mr St Pierre and approval of finance given by Westpac by letter of offer dated 29 September 2010. On the evidence tendered at trial, that statement is wrong: the letter of offer only issued on 11 October 2010.[33] Further, as explained below, I reject Mrs Orchard’s evidence that Ms Wylie had even met Mr St Pierre at this time. Thus the statement did not on balance add to the credibility of Mrs Orchard’s version, being marked by other clear errors of fact.
[33] Pages 1 – 14 of MFI A.
Conclusion on execution of the contract
This is one of the conflicts on the evidence where it is impossible for the evidence of the two witnesses to be reconciled. Mr Jones’ submissions suggested that Mrs Orchard’s version might be accepted. However, despite that, on this point, I reject Mrs Orchard’s evidence and accept Ms Wylie’s version. I reach that view for the following reasons.
First, Ms Wylie gave evidence that she had never met Mr Rossely, Mr Dwan or Mr Silver. Despite my significant reservations about her as a witness who could give a reliable account of events, I do accept her evidence in this respect. It is exactly her sense of grievance which supports that conclusion. I think it extraordinarily unlikely that Ms Wylie would forget if she had met the person who was the vendor under the contract which caused her so much grief. Further, it is equally unlikely that she would forget three men, previously unknown to her, descending on her home one day apparently without notice, for the signing of the contract.
Second, Ms Wylie does not have any motive to erase this event from her mind. It does not undermine her narrative in any material way. Indeed, it could be thought to enhance her complaints about illegitimate pressure to sign the contract. Mrs Orchard, on the other hand, has every incentive to create this story. It supports her narrative that she was just the Customer Service Manager, a narrative which is inconsistent with the facts in any event.
Third, Mrs Orchard’s cross examination on the subject was evasive and her answers on difficult questions were unconvincing. Most fundamental is her insistence that Mr Dwan was there as a JP to witness signatures on land contracts. Her story about her involvement was that she was outside, on the phone, not hearing anything and not involved in any way. Why then did she witness Ms Wylie’s signature? She could give no credible answer. The obvious answer, which makes sense of the witnessing on the execution page of the contract, is that Ms Wylie signed the contract in Mrs Orchard’s presence alone, as Ms Wylie says it occurred.
Fourth, her evidence about what Mr Rossely was doing there was also not credible. She spoke about his need to give PAMD type, cooling off instructions. However, she cannot have heard that on her version, given she was on the phone most of the time. And in any event, there is no hint that any such instructions were required or given in respect of the contract. It was a contract for purchase of land in Tasmania. It contains no notices, of the kind which are used in Queensland and would be expected for any similar statutory scheme in Tasmania. I agree with Mr Jones submission that this evidence was made up by Mrs Orchard to enhance her version and distance herself from her role as chief persuader and marketer to Ms Wylie.
Fifth, the previous statement relied upon by Mr Morris was only made a couple of months before the trial, 10 years since the events described. It was also wrong in material particulars relating to Mr St Pierre’s involvement.
Sixth, it is not ordinary practice for a vendor of property to be taken to a purchaser’s home so that the contract can be signed in each other’s presence, much less that the vendor take his own Justice of the Peace with him for the purpose, much less that three people descend on the home of the potential purchaser, apparently without notice, for the purpose. Frankly, the only credible explanation for such an unusual practice in this context is, as Mr Jones said, to pressure the potential purchaser into signing the contract then and there.
Seventh, I consider the evidence as to why none of the gentlemen who were supposed to have been at this meeting had not been called was inadequate. Apart from the unpersuasive way that her evidence emerged about this, no evidence was led as to whether Mrs Orchard’s solicitors looked for or found Mr Dwan or Mr Rossely, much less any explanation as to if they were found, why they were not called. The fact that Mrs Orchard might specify them as potential witnesses of itself is not compelling, given her capacity for self-delusion and the fact that she seemingly had told her solicitors by August 2020 that those men were present.
In my view, Mrs Orchard has reconstructed the signing event at Ms Wylie’s home on 29 September 2010, whether deliberately or not is hard to determine. However, it reflects her on-going tendency to try to minimize her role in persuading Ms Wylie into the property transaction. As I have found, that was exactly what her role was, and she played it with success.
Visiting Mr St Pierre
Both witnesses gave questionable evidence on aspects of the dealings with Mr St Pierre.
As to timing, Mrs Orchard says she took Ms Wylie to see Mr St Pierre on about 10 September 2010, over 2 seeks before the contract was signed. Ms Wylie says that she was taken to see Mr St Pierre on 11 October 2010, the date on the offer of finance.
I reject Mrs Orchard’s evidence. It is highly improbable that she would have taken Ms Wylie to see Mr St Pierre just two days or so after their first meeting. In any event, exhibit 3 (the loan application) puts the point beyond argument. It shows that Mrs Orchard filled out most of Ms Wylie’s finance application and sent it by fax to Mr St Pierre on 27 September 2010. It also bears Ms Wylie’s signature and the date 24 September. Ms Wylie would not have gone to see Mr St Pierre before the form was sent to Mr St Pierre.
Mr St Pierre appears to have added some further financial details and then on sent the finance application on 30 September 2010. It is likely that this information was obtained by him from Ms Wylie and it would make sense that that interview happened immediately after the contract was signed and finance required to be confirmed promptly. Strangely, the loan application does not appear to identify the amount sought to be borrowed.
Ms Wylie and Mrs Orchard gave conflicting accounts of how the interview with Mr St Pierre was conducted. In short, Ms Wylie’s evidence is that she was banished to one side while Mrs Orchard did all the talking to Mr St Pierre. Mrs Orchard’s version is that she played no part in the meeting. Both versions serve the respective narratives of the key players: Ms Wylie as the innocent victim and Mrs Orchard as the arm’s length, Customer Service Manager. Both accounts are inherently unlikely. The most likely scenario is that Mrs Orchard participated in the meeting and guided the process from Ms Wylie’s side, though Ms Wylie would have been involved in the discussions. This is consistent with Mrs Orchard role in keeping Ms Wylie moving towards settling on the house purchase. However, Ms Wylie’s version of her entire exclusion is just not likely, and I do not accept it.
The contract
Finally, the narrative arrives at the contract to purchase Collins Street.[34] The relevant aspects of the contract are as follows.
[34] Exhibit 2 pages 10 to 24
(a)The contract is a standard form Real Estate Institute of Tasmania/Law Society of Tasmania contract;
(b)The vendor is Brad Silver and his solicitor is Mr Crotty;
(c)The purchaser is Ms Wylie and her solicitor is nominated as being Mr Howroyd;
(d)The purchase price is $295,000;
(e)The deposit item in the schedule is not completed, nor is a deposit holder nominated. Read with standard condition 2, this means there was no deposit payable under the contract;
(f)Completion was 29 October 2010;
(g)The contract provides vacant possession of the Property and for a Property Use defined as “residential dwelling”;
(h)There is a subject to finance clause in the schedule, which provides for a finance amount of $236,000 to be obtained within 14 days and states:
It is a condition precedent to the Purchaser’s obligation to complete this Contract that, within the Finance Period, the Financier makes available to the Purchaser a loan of the Finance Amount
The standard conditions are unremarkable. The only one to note is clause 17, which provides:
17 Default
17.1 Parties may make time essential
After the Completion Date, one party may, by 14 days notice to the other, make the time for completion essential so that failure to complete will constitute a fundamental breach of this Contract justifying termination.
17.2 Vendor’s rights on termination of Contract
If the Purchaser fails to complete the Contract in accordance with its terms then, unless the failure is due to the Vendor’s willful default, on termination of the Contract:
(a) the deposit is forfeited to the Vendor;
(b) in addition to any other remedies available, the Vendor may:
(i)resell the Property and the Chattels in any manner and on any terms the Vendor chooses; and
(ii)claim any loss on resale from the Purchaser as liquidated damages; and
(c) any profit on resale will belong to the Vendor.
The following should be noted about the contract:
(a)First, although it emerged that Ms Wylie was buying a lot with an incomplete house being built on it, there is nothing in the contract which expressly recognises this;
(b)Second, Ms Wylie had no input into these terms nor had she ever met or heard of Mr Howroyd;
(c)Third, there is nothing in the contract or otherwise before the Court to suggest any cooling off period applied or that any specific disclosures were required; and
(d)Fourth, there was no evidence of any discussion with Ms Wylie about, nor other explanation for, the finance amount being set at $236,000.
There is little doubt that Mrs Orchard, on behalf of the scheme, encouraged and procured Ms Wylie’s entry into this contract as part of the process of ensuring her commitment to purchasing one of the properties. She gave evidence that she did not look at the contract before giving it to Ms Wylie on 29 September 2010. If that is correct, it reflects her disregard of the suitability for Ms Wylie of the transaction into which she was leading her. If contrary to my finding about the signing of the contract, the signing happened as sworn to by Mrs Orchard, her evidence demonstrates the kind of pressure tactics used by BOP and its associates. The fact she gave that evidence tends to demonstrate that, even if it did not occur on this occasion, it was the kind of tactics used.
Did Mrs Orchard know the deposit terms?
Mrs Orchard gave inconsistent evidence on this central issue throughout the trial. Twice she agreed that she knew that no deposit was payable under the contract.[35] At other points she gave evidence that she did not know that. In one passage she referred to a note of a whiteboard in the office, which said Ms Wylie owed $100,000 seemingly as a deposit. That evidence is unlikely and incredible. She said she relied on this, despite also accepting she knew the price under the contract and the finance amount, and that the difference was much less than $100,000.[36] It is also convenient to note that Mrs Orchard confirmed in evidence that she was generally familiar with how land contracts worked and that deposits were usually paid to a stakeholder.[37]
[35] TS2-82.36 and TS3-67.23
[36] See 3-34.45 to 3-35.45
[37] TS3-33.15 and TS3-34.27 to .36.
It is then necessary to consider the nature of the laches arguments advanced by Mr Morris. Although there are various specific circumstances where a laches defence might arise, the central consideration is whether the defence can identify any circumstance which would make it unjust to grant the relief sought. Mere delay is not of itself enough.[141]
[141] Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines & Remedies (2014, 5th ed, LexisNexis Butterworths) at [38-040] and [38-050]
Mr Morris pointed to the failure of Ms Wylie to take action promptly against Mr Silver. He said Ms Wylie’s failure to do so meant that the opportunity to recover the money had long since passed.
I reject this argument for the reasons in paragraphs [281] to [284] above. As articulated there, I do not think that pursuing Mr Silver had any realistic prospect of leading to recovery of the advance. Certainly, the defendant did not prove that it would have and all the evidence at trial suggested the contrary. There is also another consideration. I do not think that equity would assist a person who had obtained money by a fraud and paid it away to defend on the basis that the victim did not pursue the money in the hands of the persons to whom the fraudster paid the money.
Accordingly, if the contract claim had failed, I would have upheld the claim for equitable compensation for the amount paid to Mrs Orchard, being $98,000 plus interest. I note the only pleaded claim for interest is under the statute.