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  • Unreported Judgment

Wylie v Orchard

 

[2020] QDC 86

DISTRICT COURT OF QUEENSLAND

CITATION:

Wylie v Orchard [2020] QDC 86

PARTIES:

LYNETTE MARGARET WYLIE

(Plaintiff/Applicant)

V

ELIZABETH MARGARET ORCHARD

(Defendant/Respondent)

FILE NO/S:

2848/17

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

19 May 2020

DELIVERED AT:

Brisbane

HEARING DATE:

25 March 2020

JUDGE:

Porter QC DCJ

ORDER:

  1. Plaintiff’s application for summary judgment dismissed.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – application for summary judgment for fraudulent breach of trust – where the Applicant advanced $100,000 to the Respondent under a Loan Agreement – whether advance was held on trust  – where the plaintiff alleges the monies were then dishonestly disbursed in fraudulent breach of trust – where the plaintiff must show the breach of trust was fraudulent to answer a limitations defence  –  where the plaintiff alleges the monies were dishonestly disbursed to third parties – where the Respondent was subsequently convicted of fraud under 408C of the Criminal Code – whether under s 79(2) of the Evidence Act that conviction is evidence of disposition of the monies by fraudulent breach of trust –whether application for summary judgment should be granted. 

Legislation

Criminal Code Act 1899 (Qld) ss. 7, 408C

Evidence Act 1977 (Qld) ss. 79(2), 79(3)

Evidence Act 1995 (NSW) ss. 91, 92

Uniform Civil Procedure Rules 1999 (Qld)  rr. 151, 292, 375, 376

Limitation of Actions Act 1974 (Qld) ss. 10(1)(a), 27(2), 38

Cases

Barclay’s Bank Ltd v Quistclose Investments Ltd [1970] AC 567

Batey v Potts (2004) 61 NSWLR 274

Black v S. Freedman & Co Ltd (1910) 12 CLR 105

Global Currency Exchange Network Limited v Osage 1 Limited [2019] EWHC 1375

Halley v Law Society [2003] EWCA Civ 97

Hogan v Gill  (1992) Aust Torts Reports 81-182

Jacobsen v Suncorp Insurance and Finance (No. 2) [1992] 1 Qd R 385

Kerr v Nominal Defendant (1987) 5 MVR 175

COUNSEL:

M Jones for the Plaintiff/Applicant

K Lee (sol) for the Defendant/Respondent

SOLICITORS:

Australian Law Partners for the Defendant/Respondent

Summary

  1. [1]
    This is an application by the plaintiff (Ms Wylie) for summary judgment pursuant to Rule 292 Uniform Civil Procedure Rules 1999 (UCPR).  Ms Wylie advances three claims against the defendant, Ms Orchard: a claim under a loan agreement, a claim in deceit and a claim for breach of trust. These three claims arise out of the same circumstances, being Ms Wylie’s advance of $100,000 to Ms Orchard on about 18 October 2010.  
  2. [2]
    Ms Wylie seeks summary judgment only on her claim based on breach of trust.   Central to that contention is Ms Wylie’s reliance on the evidentiary effect of Ms Orchard’s conviction after trial of an offence against s. 408C of the Criminal Code arising out of the transaction the subject of these proceedings.   Ms Wylie contends that the effect of that conviction, taken together with Ms Orchard’s own evidence filed on this application and other uncontentious facts, is sufficient to make good the proposition that Ms Orchard has no real prospect of defending the claim based on breach of trust, either on the merits or on the basis of a limitations defence. 
  3. [3]
    For the reasons which follow, I am not satisfied that Ms Orchard has no real prospect of the defending the claim in breach of trust, at least as the case is presently articulated.  I therefore dismiss the application.

The pleadings

The statement of claim

  1. [4]
    The plaintiff alleges the parties entered into a written loan agreement on 19 October 2010 (the Loan Agreement).  The terms were, relevantly that:
    1. (a)
      The plaintiff would make an immediate advance of $115,000;
    2. (b)
      Interest of $15,000 would be paid immediately plus $2500 within 7 days;
    3. (c)
      Interest of $17,500 would be paid and the first and second anniversary of the Advance;
    4. (d)
      The capital would be repaid on 19 October 2013.
  2. [5]
    The plaintiff alleges she paid $100,000 by bank cheque pursuant to the Loan Agreement (the Advance) on about 19 October 2013 and that she capitalised the initial interest payment.
  3. [6]
    She alleges the defendant paid only $2000 of the interest payments and the balance of capital and interest remains the Outstanding Amount.  She alleges that she demanded repayment on 27 July 2017 and that it was not repaid.
  4. [7]
    She next alleges that:
    1. (a)
      Pursuant to the Loan Agreement, the Advance was to be used by Ms Orchard to purchase a ‘Partner’ franchise from Refund home loans in the names of the parties: the so-called Advance Purpose.
    2. (b)
      Accordingly, Ms Orchard held the Advance on trust for the Advance Purpose;
    3. (c)
      Contrary to the terms of the Loan Agreement and in breach of the trust alleged, without Ms Wylie’s knowledge, Ms Orchard paid the Advance to her bank account and then paid it for the benefit of her son, a third party company and a Mr Silver (seemingly the parties who received the money as alleged by Ms Orchard);
    4. (d)
      Those payments were made fraudulently; and
    5. (e)
      The payments in that manner comprised a breach of trust that resulted in the loss of the Advance.
  5. [8]
    She next pleads the deceit case as follows:
    1. (a)
      On 18 and 19 October 2010, Ms Orchard represented orally and in writing that she would apply the Advance for the Advance Purpose, doing so both orally and by the terms of the Loan Agreement (the oral representations comprised telephone discussions consistent with the alleged purpose);
    2. (b)
      At the time of making the representation, Ms Orchard knew that representation to be false or was reckless as to its truth or falsity;
    3. (c)
      Mrs Orchard intended Ms Wylie to rely on the representation and she did so in making the Advance; and
    4. (d)
      Consequently, Ms Wylie lost the amount of the Advance.
  6. [9]
    The particulars of Ms Wylie’s pleaded states of mind in paragraph [8](b) and [8](c) above are as follows:

On 5 June 2017, the Defendant was found guilty of an offence against s. 408C(1)(b) of the Criminal Code (Qld) that she dishonestly obtained the Advance from the Plaintiff.

  1. [10]
    Ms Wylie further particularised as follows:
    1. (a)
      On 5 June 2017, the defendant was convicted in the District Court at Brisbane of one count of fraud in that on 19 October 2010 at Logan Central she dishonestly obtained the sum of $100,000 from the plaintiff; and
    2. (b)
      Pursuant to section 79 Evidence Act 1977 (Qld), for the purpose of these proceedings the defendant is taken to have committed the act and to have possessed the state of mind (if any) which at law constitutes the offence unless the contrary is proved by the defendant.
  2. [11]
    These particulars do not identify the particular acts or states of mind that at law constitute the offence that are relied upon.
  3. [12]
    In respect of the claim based on the Loan Agreement, the plaintiff claims the entire sum due: some $150,500.  In respect of the claims for breach of trust and in deceit, Ms Wylie limits her claims to the capital lost, being the amount of the Advance of $100,000.

The defence

  1. [13]
    The defence first raises limitations defences.  Paragraph 2 pleads those matters as a basis for “objecting” to the Claim and Statement of Claim.  That is an incorrect form of pleading.  Limitations points are defences that are pleaded like any other ground of defence.   In any event, it is clear that Ms Orchard relies by way of defence on limitations provisions relating to each of the causes of action advanced.  She pleads each of the contract, deceit and breach of trust claims are barred by ss. 10(1)(a) and 38 Limitation of Actions Act 1974 (Qld) (LAA) because 6 years has passed since each of those causes of action arose.  The pleading fails to refer to the correct provision imposing a limitation period on certain claims for breach of trust.  That section is s. 27(2) LAA.  However, the plaintiff proceeded on the basis that that provision had been raised and so will I.  Further, s. 38 LAA does not impose a limitation period.  Rather, that section extends the time from which a limitation period begins to run for actions based upon fraud (and mistake) until, relevantly, the time that Ms Wylie discovered the fraud or could with reasonable diligence could have discovered the fraud.  Ms Orchard’s focus on s. 38 is understandable. The defence seems to intend to allege that notwithstanding s. 38 LAA, the claims are still statute barred.  Strictly speaking, one would ordinarily wait for s. 38 to be raised by the plaintiff before pleading to it by way of rejoinder.  However, it is clear enough what is meant.
  2. [14]
    Ms Orchard pleads that the pleaded limitations periods (of 6 years) applied to each cause of action because each cause of action accrued when Ms Wylie terminated the Loan Agreement, being either 5 December 2010 or 22 January 2011.  It is difficult to see how this allegation is apt correctly to identify when the causes of action arose, and that was not addressed in submissions (as to breach of trust and deceit see from paragraph [75] below).  It might also be speculated that the cause of action under the Loan Agreement might not have accrued until the due date for payment or perhaps even later (see paragraph [31] below).  However as I understand it, Ms Wylie accepts for the purposes of this application that the cause of action in breach of trust would have accrued by 22 January 2011, subject to and s. 27(2) LAA. 
  3. [15]
    (The defence does not allege the date of commencement of proceedings.  However, it appears from the file that proceedings were commenced on 2 August 2017, more than 6 years after the later of the two dates alleged as the dates upon which the defendant alleges that the causes of action accrued.)
  4. [16]
    Ms Orchard effectively admits, for present purposes, the Loan Agreement as alleged by Ms Wylie. However, Ms Orchard alleges that its terms were varied at about the time of execution of the Loan Agreement so that Ms Orchard would disburse the funds advanced for “the benefit of the Plaintiff under the Plaintiff’s contract of sale for the purchase of the property” at an address in Tasmania (Collis Street).  She admits receiving the money but alleges it was for the property purchase, not to acquire the franchise identified in the Loan Agreement.
  5. [17]
    She denies the allegation that she did not pay the amounts due under the Loan Agreement because she alleges she paid the Advance for the purpose pleaded in the defence: i.e. purchase of Collis Street. She alleges payments totalling $97,786.25[1] as follows:

Particulars

  1. $20,060.50 paid to Brad Silver’s layer James Crotty on 22 October 2010;
  2. $23,136.75 paid to Bunnings on 29 October 2010;
  3. $25,375.50 paid to the company ‘No Diggity Pty Lt’ on 4 November 2010; 
  4. $8,598.30 paid to Brad Silver’s staff as part payment of wages between on or about 20 October 2010 and 10 January 2011; 
  5. $13,625.00 paid to Brad Silver;
  6. $5,790.00 paid to the ‘Safety in the Market’ program on 22 October 2010; and
  7. $3,000.00 paid to the ‘Staunch’ program on 1 December 2010.
  1. [18]
    Ms Orchard then alleges that she has not failed to repay the amount advanced because, relevantly:
    1. (a)
      She paid the Advance as alleged for the purpose of acquisition of the Tasmanian property in the amount of $97,786.25;
    2. (b)
      She paid $2000 to Ms Wylie (which Ms Wylie admits but says was paid on account of interest under the Loan Agreement);
    3. (c)
      Ms Wylie “retained” $15,000 following the Advance and that amount was therefore never due;
    4. (d)
      Ms Wylie then terminated the Loan Agreement and terminated the contract to acquire Collis Street (the contract).
  2. [19]
    This is all said to sustain a denial that any amount is due under the Loan Agreement.
  3. [20]
    As to the breach of trust allegations, Ms Orchard pleads:
    1. (a)
      The Advance purpose was to acquire Collis Street;
    2. (b)
      The payment of the Advance was not a breach of trust because it was consistent with that purpose;
    3. (c)
      Alternatively, the advance was not held on trust.
    4. (d)
      She denies that Ms Wylie did not know about the payment of the Advance as particularised in the defence (though pleads no facts from which that state of knowledge is inferred).
    5. (e)
      She says that Ms Wylie suffered no loss by reason of any breach of trust (which breach is denied for the above reasons) because the loss was caused by termination of the contract.
  4. [21]
    As to the deceit case, Ms Orchard pleads:
    1. (a)
      She did not make oral or written representations as alleged by Ms Wylie because the oral discussions were to vary the Loan Agreement so that the purpose was to acquire Collis Street;
    2. (b)
      That the Loan Agreement does not contain any representation;
    3. (c)
      A denial that she made any false representations nor intended to induce Mr Wylie’s reliance as alleged seemingly because her representations were about acquisition of Collis Street; and
    4. (d)
      That Ms Wylie’s loss resulted from her decision to terminate the contract.
  5. [22]
    Ms Wylie has filed no reply.

The factual background 

  1. [23]
    Much of the factual context of this matter is not in dispute.  Both parties accept that:
    1. (a)
      Ms Wyle and Ms Orchard executed the Loan Agreement on 19 October 2010;
    2. (b)
      The Loan Agreement referred to acquisition of a Refund home franchise;
    3. (c)
      Ms Wylie paid Ms Orchard $100,000 on 19 October 2010 by bank cheque and that Ms Orchard collected the bank cheque to her personal account.[2] 
    4. (d)
      Ms Orchard did not repay that money to Ms Wylie, in accordance with the Loan Agreement’s terms or at all.
  2. [24]
    For purposes of this application, Ms Wylie also accepts that Ms Orchard paid the money as set out in her particulars.[3]
  3. [25]
    Because of the case as advanced by Ms Wylie on this application relies on a trust arising over the funds paid under the Loan Agreement, it is necessary to set out the terms of the Loan Agreement.   It is an unusual document.  It provides:

The purpose of this Agreement is to confirm the arrangements agreed to by the parties named, and documenting their Deed of Acknowledgement of Debt as follows:

Ms Lyn WYLIE or LW, of 11 Bindi Street, Logan Central, QLD as the Lender.

AND

Ms Elizabeth ORCHARD or EO, of 14 Surrey Court, Helensvale, QLD as the borrower.

As at October 16, 2010 it was discussed and agreed between LW and EO that they would form a business alliance for commercial purposes, to capitalise on their skills and experience in the following manner:

  1. To purchase a ‘Partner’ franchise from REFUND home loans in both names at the earliest possible time in order to procure an ongoing income for both parties.
  1. To establish a REFUND Financial Planning franchise based on the prior knowledge and experience of EO in that field, at the best possible cost, subject to successful negotiations with REFUND management at Brisbane Head Office.
  1. LW to receive a dividend of 15$ per annum for an initial period of Three (3) years by investing an amount of capital from her own resources to EO.
  1. The agreed Loan amount of One Hundred and Fifteen thousand Dollars (115,000 Dollars) to be advanced as agreed, under the following terms and conditions:
  1. A bank cheque is to be obtained by LW for the amount of One Hundred thousand Dollars (100,000 Dollars) payable to EO is to be provided on October 19, 2010. Interest is payable in advance of 15% per annum.
  1. Fifteen thousand Dollars (15,000) will remain in the account of LW, being a major portion of the initial interest paid in advance. Annual interest payable is calculated as $17,500, with the balance being $2,500 to be paid within 7 days to LW with a receipt to be issued for $17,500 interest paid in full.
  1. The next anniversary of this Loan shall be October 19, 2011 at which time the second interest installment of $17,500 shall be due and payable to LW.
  1. The third anniversary of this Loan shall be October 19, 2012 at which time the third interest installment of $17,500 p.a. shall be due and payable to LW.
  1. The term of this Loan is to remain fixed for three (3) years from the date of this Agreement, and at the end of the three year term the capital amount of One hundred and Fifteen thousand dollars (115,000 Dollars) is due and payable in full, unless otherwise agreed by the parties to extend the term by a further one, two or three year term.

This agreement is entered into with the utmost good faith from both parties, and shall be for the purpose of achieving commercial success with best efforts being put forth by both parties at all times. EO shall have full discretion as to how Loan funds are dispersed in order to achieve mutually beneficial objectives and provide ongoing employment opportunities for both parties.

LW and EO shall make joint decisions wherever practical with regard to conducting their REFUND franchise or any other mutual business in accordance with their qualifications and experience, and with honesty and integrity at all times.

If at any time the REFUND franchises reach a potentially marketable and profitable level, either party shall have first option to buy the others share, or be compensated on a 50/50 basis upon sale of the business(s) to any third party acceptable to both LW and EO.

This Agreement is entered into on this Nineteenth day of October, 2010 by the undersigned, being named as follows:

Ms Lyn Wylie:………………………………….

AND

Ms Elizabeth ORCHARD……………………...

Attachments: copy of bank cheque no 652941 for 100,000 dollars

Deposit slip: copy to be provide to LW by EO on October 20, 2010.

  1. [26]
    The key areas of conflict in the evidence are consistent with the areas in dispute on the pleadings:
    1. (a)
      Ms Orchard contends that there was an agreement with Ms Wylie to redirect the funds advanced under the Loan Agreement to Ms Wylie’s purchase of Collis Street because no Refund franchise was available and that Ms Orchard would thereby be released from any liability under the Loan Agreement. This was explained and agreed, according to Ms Orchard, about 1 week after the bank cheque was provided (i.e. about 26 October 2010).[4]  Ms Wylie says that the Advance purpose never changed; and
    2. (b)
      Ms Orchard says that Ms Wylie was aware of the disbursing of funds as set out in her particulars, which knowledge is seemingly to be inferred from the following:
      1. Because she gave her copies of the bank cheques for those payments; and
      2. Because of various statements by Ms Wylie set out in Ms Orchard’s affidavit (to which I will return).[5]
  2. [27]
    The purchase of the Collis Street property is also in evidence.  Ms Wylie does not address it directly in her evidence, except to say that she did not ever become registered proprietor of any land in Tasmania.  Given the place of this contract in Ms Orchard’s case, it is worth setting out the evidence before the Court on that issue.
  3. [28]
    Ms Orchard swears:
    1. (a)
      She was employed by a company called All About Property Development Pty Ltd trading as Bank on Property. She took direction from Bradley Silver and David St Pierre;
    2. (b)
      In about September 2010, Ms Orchard called on Ms Wylie as part of her employment and facilitated Ms Wylie meeting Mr St Pierre to discuss investment in property in Tasmania; and
    3. (c)
      On 29 September 2010, Ms Orchard discovered through her employment that Ms Wylie had entered into a contract to buy the Collis Street property.
  4. [29]
    The contract is in writing and dated.  The vendor is Mr Silver.  Ms Orchard was present when the contract was signed.  It relevantly provides that:
    1. (a)
      No deposit was payable;
    2. (b)
      The contract was to complete on 29 October 2010;
    3. (c)
      The contract was subject to finance for $236,000 from an unidentified Financier in the amount of $236,000 within 14 days of contract; and
    4. (d)
      On Completion, the buyer had to pay the purchase price in exchange for “documents of title”.
  5. [30]
    It is unclear what happened in respect of this contract between its execution and 5 December 2010, except that it did not settle.  On that date however, Ms Wylie sent an email to Ms Orchard asking her for her money back and, it seems, to terminate the contract on Collis Street.  She wrote:

Hi Liz,

I have been doing a lot of thinking about this money I have leant to you and I want the $100,000 given back to me by Wednesday 8th December 2010, you are telling me want (sic) you want to do with that money, you have not asked me what I want to do with it. I have asked for it back twice previously now and have not receive (sic) it.

Since I have taken that money out of my account I have paid nearly $1,400.00 in interest which I will be charged approx. another $800 in interest in a couple of weeks, I have been given $2,000 from you I cannot see any benefits from this excerise (sic).

Another thing this house is a bad debt which I need to clear and at this rate I will never get any where (sic) I am going around in circles getting no where (sic) fast.

I would appreciate that money given back to me ASAP because I know you are going away on Tuesday and I would like to see that back into my account before you go NO if or buts I can give you my bank account details if that would help me get it back into my account quicker.

Kind regards Lyn

  1. [31]
    Ms Orchard responded with a confusing email in which she admits she still owes the $100,000 and affirms it is earning Ms Wylie $15,000 per year, tells her that at settlement the price of Collis Street will be reduced by $100,000 and that she will therefore be repaid the $100,000 Ms Orchard owes.[6]  On 22 January 2011, Ms Wylie repeats her request for repayment of the loan and asks to cancel the contract for Collis Street or to be told how to do so.  Ms Orchard also chose to exhibit a further demand to that effect on 20 June 2012.[7] (Given the language used in the 5 December and 22 January letters from Ms Wylie, it might be doubted that she terminated the Loan Agreement for breach in those letters, calling into question the date that the cause of action on the Loan Agreement accrued).
  2. [32]
    Ms Wylie did not have solicitors acting for her in the purchase at the time of execution of the contract. However, at some stage she did obtain solicitors because there is correspondence on her behalf from Bennett Howroyd, Barristers and Solicitors of Hobart.   It is evident from that correspondence that settlement was extended by the seller for some time and ultimately, Ms Wylie instructed her lawyers to refuse to extend settlement with the consequence that the contract was terminated.  It must be said that this is an incomplete documentary record, but that is how it looks.  The correspondence between Ms Wylie and her lawyers suggests that the contract was terminated on about 1 March 2011.[8]
  3. [33]
    Against this background, Ms Orchard also swears that “The plaintiff was aware that the Advance was being put towards the investment property for her benefit…”  She relies on a number of emails from Ms Wylie which suggest she understood that was what the money she had paid Ms Orchard was used for.[9]  
  4. [34]
    In my view, on the face of the correspondence relied upon by Ms Orchard, it appears that Ms Wylie was told that Ms Orchard was applying the money somehow to the Collis Street purchase, but she was not asked if she wished to deal with it in that way.  Ms Wylie consistently asserts that Ms Orchard owes her the money.  However, it must be kept firmly in mind that Ms Wylie’s current application is for summary judgment and rarely would a Court rely on the applicant’s version of contested facts in determining such an application.

The criminal proceedings

  1. [35]
    Ms Wylie made a complaint to the Police when the money was not repaid. This resulted in a prosecution of Ms Orchard on indictment for an offence against s. 408C of the Criminal Code.  The matter went to trial before Judge Devereaux SC of this Court. His Honour summed up to the jury 5 June 2017.  The Verdict and Judgment Record (VJR) is before the Court.[10] It records that Ms Orchard was convicted of a breach of sections 408C(1)(b) and 408C(2)(d) of the Code on 21 June 2017 and that his Honour imposed a sentence of 2 years with parole release on 21 February 2018.
  2. [36]
    Ms Wylie relies on s. 79(3) Evidence Act 1977 (Qld). The whole section is relevant.  Section 79 provides:

79  Convictions as evidence in civil proceedings

  1. (1)
    In this section—

civil proceeding does not include an action for defamation.

convicted means a finding of guilt for an offence, on a plea of guilty or otherwise, and whether or not a conviction was recorded.

  1. (2)
    In any civil proceeding the fact that a person has been convicted by a court of an offence is admissible in evidence for the purpose of proving, where to do so is relevant to any issue in that proceeding, that the person committed that offence.
  1. (3)
    In any civil proceeding in which by virtue of this section a person is proved to have been convicted by a court of an offence the person shall, unless the contrary is proved, be taken to have committed the acts and to have possessed the state of mind (if any) which at law constitute that offence.
  1. (4)
    This section applies—
  1. (a)
    whether or not a person was convicted upon a plea of guilty; and
  1. (a)
    whether or not the person convicted is a party to the civil proceeding.
  1. [37]
    It is necessary in applying subsection (3) to identify “the acts” committed and the “state of mind” possessed which “at law constitute that offence”.  Neither the indictment nor the written particulars were tendered.  Indeed, it appears from the summing up that there were no written particulars.  However, the terms of the indictment and the Crown case can be identified from the summing up and the sentencing remarks.
  2. [38]
    In the summing up, His Honour informed the jury, relevantly:

Members of the jury, Ms Orchard is charged with one offence – and you have a copy of it – that on the 19th day of October 2010 at Logan Central in the State of Queensland she dishonestly obtained a sum of money from Lynette Margaret Wylie, and the sum was of a value of $100,000.

Before you could convict, the prosecution must prove, first, that the defendant obtained property from any person. And “obtained” includes to get or to gain or to receive, to acquire in any way. Second, that the action of the defendant must have been done dishonestly. And in this case it is the obtaining. To prove that the defendant acted dishonestly, the prosecution must prove that what the defendant did was dishonest by the standards of ordinary honest people. So that is the standard by which you have to judge whether what the accused person did was dishonest.

And then there is the extra allegation here about the value of what was obtained. Of those, really, three ingredients, it does seem to me that as, in line with the way counsel have made their submissions, there is just one real issue for you to decide. But before you could convict, you have to be satisfied of all of the ingredients beyond reasonable doubt, that the defendant obtained – and it is pleaded to be money, and she obtained it, and that it more – it was $100,000, and that she obtained it dishonestly. The real contest seems to be whether she obtained it dishonestly, because there is no real dispute about the fact that the complainant drew a cheque for $100,000 in the defendant’s name and the defendant obtained the cheque.

And the prosecution case seems to be that there was an agreed plan, that there was evidence of discussions before the heads of the agreement was signed, and then the document itself, and that the fund was put to a different purpose to that set out in the documents and the discussions. And so the accused obtained the money dishonestly.

The defence case, as I follow it, is that the defendant believed the complainant knew the heads of the agreement was merely a mechanism. And the word used was a “ruse” for a purpose of this entity Bank On Property. And so there was no deception. And that there is no evidence that the accused did not plan to allocate the money according to what was understood. And so you would at least have a reasonable doubt that the defendant dishonestly obtained the money. But I will come back – hopefully more clarity will be given when I review counsels’ arguments.

Now, Ms Cupina submitted again that a question is whether the obtaining of the $100,000 cheque was dishonest, that you would look at the conduct before the singing of the agreement, the agreement itself, and the post-conduct, how the money was disbursed, in order to reach a conclusion of guilt. There was a dinner on about the 15th of October. There was discussion about 15 per cent interest on property – on the amount until the house was built, and then a new idea of purchase of a refund partnership. Then on the 19th of October, Ms Orchard was at Ms Wylie’s house with a USB stick. They printed the document and signed it. And Ms Cupina took you to the document and submitted that when you consider the discussion that preceded it and the terms of the document, followed by how the fund was used, you’d be satisfied that the obtaining of it was dishonest by ordinary standards. That is to say, it’s about what Ms Orchard represented to Ms Wylie.

  1. [39]
    Also relevant is his Honour’s sentencing remarks, which provide, relevantly:

On Monday 5 June this year, you were convicted after a trial of one count of fraud. The charge read that on the 19th of October 2010 at Logan Central, you dishonestly obtained a sum of money from Lynette Margaret Wylie, and the sum of money was of a value of $100,000. I am to sentence you for that offence now. You can sit down while I put some matters in the record, and I will ask you to stand up again later when I sentence you.

As to the facts of the charge, I refer briefly to the evidence of the complainant, Ms Wylie. I am not setting out all of the circumstances of the evidence and the relationship between you and her. It is enough to say that you and she first came into contact with respect to her investing in property in Tasmania. The complainant gave this evidence of relevance to the particular charge: that on about the 15th of October, you contacted her wanting to take her to dinner. She said that you were always asking about her financial affairs. She said that in October on about the 18th, you rang her, and you had come up with a new idea. I am referring to page 2-56 of the transcript. You said that you had been to a weekend seminar, and it would be a great idea for both of you to go into partnership together for a Refund Home Loan franchise. And it was to pursue that, that the document was executed on 19 October. The complainant’s evidence was that you wanted her to outlay $100,000 to purchase the franchise. She went to the bank and obtained a bank cheque for that amount, and on the 19th of October, you came to her house. You also said that you would be paying her 15 per cent interest on the money for three years.

Earlier in her evidence at 2-51, she had said that you wanted her to give you the $100,000, offering that 15 per cent interest until the house was built. That is a reference to a house apparently being built, or that she understood was being built, in Tasmania, that she had earlier executed a purchase contract on. Another way she put it was this: she – that is you – she just says, “I’ll give you 15 per cent interest on that loan until the house is built, and then I’ll give you all your money back.”

The document was put in evidence...

The Prosecution case, in essence, was that the document was a fraud. Indeed, it was put, as part of your case, that the document was a ruse or part of a ruse. What happened was the money was transferred from your account. The next day $60,000 was sent to your son. He was apparently employed – he gave evidence he was employed by a firm called Bank On Property, which was your employer. It was in your employment with that firm that you first came into contact with the complainant, and that led to her executing the purchase contract.

Twenty-four thousand dollars went to an entity called No Diggity, which – from memory of the evidence, was a builder apparently performing building works in Tasmania. There were two other amounts taken out of your account. One went to an entity called Safety in Market; another went to an entity called Staunch. One of those was apparently for shares, and another was for – apparently for the two of you to undertake some course. The complainant simply says that apart from $2000 that was returned to her by you in December 2010, she has received nothing. She has lost $98,000.

  1. [40]
    His Honour sentenced Ms Orchard to 2 years imprisonment.
  2. [41]
    Ms Orchard appealed her conviction.  The appeal was dismissed.[11]   The grounds of appeal are not relevant to this application.  After summarising Ms Wylie’s evidence, however, the Court of Appeal summarised the crown case in this way:

[18] The prosecution case was a circumstantial one in which the jury was invited to draw an inference of dishonesty on the appellant’s part in obtaining the $100,000 from the complainant.  The inference arose from the contrast between the use to which the $100,000 was to be put according to the terms of the Heads of Agreement and the uses to which it was in fact put.

  1. [42]
    In my respectful view, that is an accurate summary of the way that the prosecution case was advanced at trial as articulated by Devereux DCJ. The appeal was heard on 27 November 2017 and dismissed on 29 March 2018. 

Procedural history of these proceedings

  1. [43]
    These proceedings were commenced on 2 August 2017.   The only claim initially advanced was under the Loan Agreement.  Ms Orchard appears to have been served while in custody.  Ms Wylie obtained default judgment on 9 April 2018.  Ms Orchard applied to set aside the default judgment in June 2018.  It was set aside in July 2018.
  2. [44]
    A defence was filed on 10 July 2018. It alleged that the claim in contract was filed outside the statutory limitation period of 6 years and raised the defences to the Loan Agreement set out above.  Ms Orchard then sought summary judgment against Ms Wylie. This seemed to have prompted an amendment to the claim and statement of claim to advance a case in deceit. That purpose of that amendment appears to have been directed towards avoiding the limitations defence, in part by alleging that Ms Wylie did not become aware of the fraudulent disposition of her funds until after 18 June 2013.  The effect of s. 38 LAA would arguably make that claim within time.  The amendment appears to have been successful in defeating the summary judgment application.  It was dismissed by Ryrie DCJ on 12 September 2018.
  3. [45]
    The next step brings us to the current application.  On 7 June 2019, a Further Amended Statement of Claim was filed.  That pleading did two things:
    1. (a)
      It restructured the deceit pleading such that is was advanced as representation based and the conviction expressly relied upon to establish fraud; and
    2. (b)
      It introduced the claim for breach of trust.
  4. [46]
    The claim has never been amended to seek relief for deceit or for breach of trust. It is certainly arguable that the amendments added causes of action which were statute barred and for which leave was required under Rule 375 and 376 UCPR. The defendant complained about non-compliance with Rule 376 but did not apply to disallow those amendments.
  5. [47]
    Ms Wylie filed her application for summary judgment on 25 February 2020.  It came on for hearing initially before me on 16 March 2020.  I adjourned the application to 25 March and directed that any amended defence be filed by 20 March.  Though the direction was not specifically in these terms, it contemplated the amendments made in the Amended Defence to raise limitations defences to the deceit and breach of trust claims.  That pleading was filed on 20 March 2020.  No reply was filed prior to the hearing on 25 March 2020.

The plaintiff’s case for summary judgment

  1. [48]
    Ultimately, Mr Jones, who appeared for Ms Wylie, confined his case on the application to one based on the breach of trust claim.  His argument was as follows.
  2. [49]
    First, funds advanced by Ms Wylie were impressed with a specific purpose which impressed them with trust obligations.  He identified that trust as arising pursuant to the principle articulated in Barclay’s Bank Ltd v Quistclose Investments Ltd [1970] AC 567 at 581-582.  He did not contend, however, for the purpose identified in the statement of claim: being the purpose identified in the Loan Agreement.  Rather he submitted that the “application should proceed on the basis, favourable to the Defendant, that the Defendant in fact told the Plaintiff that the advance would be put towards a property investment in Tasmania for the Plaintiff’s benefit”.[12] 
  3. [50]
    Second, he submitted that one ought to infer a breach of that trust because on Ms Orchard’s own evidence, the payments were never made for Ms Wylie’s benefit, but rather were paid to her son and to other entities not related to the making of a property investment by Ms Wylie.
  4. [51]
    Third, as to the limitation period issue, he referred to s. 27 LAA which relevantly provides:
  1. (1)
    A period of limitation prescribed by this Act shall not apply to an action by a beneficiary under a trust, being an action—
  1. (a)
    in respect of a fraud or fraudulent breach of trust to which the trustee was a party or privy; or
  1. (b)
    to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to the trustee’s use.
  1. (2)
    Subject to subsection (1), an action by a beneficiary to recover trust property or in respect of a breach of trust, not being an action for which a period of limitation is prescribed by any other provision of this Act, shall not be brought after the expiration of 6 years from the date on which the right of action accrued.
  1. [52]
    Mr Jones submitted that the breach of trust comprised in paying the money away was fraudulent and accordingly the limitation period in 27(2) LAA did not apply.  He submitted that I could conclude Ms Orchard had no real prospect of establishing the contrary because of two matters:
    1. (a)
      The evidential consequence of her conviction for fraud under s. 79 of the Evidence Act; and
    2. (b)
      The failure of Ms Orchard to proffer any explanation as to how the payments she made with the $100,000 were for Ms Wylie’s benefit.
  2. [53]
    Finally, he answered the defendant’s complaint about non-compliance with Rule 376 by contending that, by its failure to take any step to disallow the amendment, the defendant had waived non-compliance with that Rule.

The defendant’s case on summary judgment

  1. [54]
    As to the first point, the defendant submitted that the plaintiff did not allege factual matters which might give rise to the conclusion that the advance under the Loan Agreement was held on trust, and that the terms of the Loan Agreement suggested the contrary.   Nor did Ms Wylie swear to facts which sustain that conclusion.   While these arguments were focused on the trust case as pleaded, rather than the case as argued by Mr Jones, the argument applies equally to the trust case contended for at the hearing.  
  2. [55]
    As to the second point, the defendant contended that Ms Orchard’s evidence was that Ms Wylie knew what the loan funds were being used for: investment in Collis Street.   Accordingly, even if the funds were subject to a trust, it was not a breach for Ms Orchard to use the funds to make payments towards Collis Street.  
  3. [56]
    As to the third point, it was contended that it was not a fraudulent nor a breach of trust to make the particular payments Ms Orchard admittedly made by way of payments on account of Collis Street.  It was put in writing in this way:

19.  The plaintiff makes a number of contentious submissions regarding this issue:

...

  1. (c)
    That the payment of moneys by the defendant did not benefit the plaintiff, and that as a result there was a breach of trust. This is the crux of the plaintiff’s Application, and it is entirely unfounded. The facts are that the Advance could not be used for a Refund Home Loans franchise, and so were paid by the defendant to the seller of the house which the plaintiff was purchasing with the knowledge of the plaintiff. It is expected that payment made to the seller in the course of a residential property conveyance is made at the direction of the seller. A lump sum is not ordinarily paid wholly to the seller, but is divided and paid at the seller’s discretion to various parties. That is what happened in this case. The defendant did not retain the Advance for her own purposes, and the plaintiff would have benefited from the payments except that she terminated the contract for the purchase of the property. It was, at that stage, entirely out of the defendant’s control to have the Advance returned to the plaintiff; ...
  1. [57]
    The defendant also disputed that the conviction established that the payments of the advance was done in fraudulent breach of trust.  She contended (correctly) that the conviction was only prima facie evidence of the acts and state of mind constituting the offence and that it was met by Ms Orchard’s evidence that Ms Wylie knew the money was being paid out as stated in the particulars.
  2. [58]
    Finally, the defendant contended that I ought not to exercise the discretion to order summary judgment in any event given that there are other issues which must go to trial and given the advanced state of preparation of the trial.  The defendant also emphasised that the plaintiff required leave to add these causes of action and had not sought it (though no application to disallow the amendments was made).

Was the Advance subject to the trust alleged?

  1. [59]
    I cannot see how a trust of the funds advanced arises on the pleaded case nor on the case as argued.
  2. [60]
    Ms Orchard says that Ms Wylie agreed to the advance being used in relation to the acquisition of Collis Street after the advance had been paid.  Ms Wylie accepts that proposition for the purposes of this application.  By that time, however, the bank cheque had already been handed over and, it seems, collected to Ms Orchard’s account and paid out in part.
  3. [61]
    It would take a compelling set of factual circumstances to support the conclusion that a trust arose over the proceeds of the bank cheque when they had already been received into Ms Orchard’s account without being subject to a pre-existing trust.  What are the facts which would bind Ms Orchard’s conscience such that she could not assert beneficial title to the funds derived from the cheque at that point, if her conscience was not so bound prior then?  The mere fact that Ms Orchard told Ms Wylie she would use the funds for a particular purpose is not itself enough if Ms Orchard already had beneficial title to those funds.  What really would be required to create a trust at that point would be some conduct analogous to a declaration of trust over the funds by Ms Orchard.
  4. [62]
    In my view, the only way that the funds in the account could be subject to a trust arising from the use raised after payment of the money is if the bank cheque and its proceeds were already subject to a trust at the time of the alleged change of purpose.   That is, if a trust over the Advance arose from the circumstances of the making of that advance.  However, neither the pleading, nor the evidence, sustains that conclusion.
  5. [63]
    The plaintiff relies primarily on the purpose identified in the Loan Agreement.  However, in my view, a fair reading of the Loan Agreement does not sustain the conclusion that the money was to be used to acquire the franchise. The Loan Agreement is a vague and uncertain document.  One struggles truly to understand what it contemplated.  Where Ms Wylie bears the onus of making out the existence of a trust of the Advance, that is a difficulty for her.  In any event, so far as I can construe it, the Loan Agreement does not provide that the money advanced is to be paid to Ms Orchard strictly for use in acquiring the franchise:
    1. (a)
      The document contemplates forming a business alliance to purchase a franchise and provides that Ms Wylie was to receive a dividend of 15% per annum for three years “by investing an amount of capital from her own resources to” Mrs Orchard.  Note, however, that the document does not provide that the investment of capital was to be in the franchise, but involved investing capital “to” Ms Orchard;
    2. (b)
      The Loan Agreement then clearly provides, separately from the investment clauses, for the loan to be advanced to Ms Orchard and is to be repaid (by Ms Orchard) after 3 years.  This is inconsistent with the money being used as capital to acquire an interest in the franchise for, or in part for, Ms Wylie.  If it was to be used to acquire a property interest for Ms Wylie, why would it be repayable by Ms Orchard?;
    3. (c)
      The Loan Agreement then gives Ms Orchard full discretion as to how to disperse [sic] the funds in order to achieve vague “mutually beneficial objectives” and employment opportunities for both ladies; and
    4. (d)
      There is a first right of refusal on any franchise acquired (whatever that was supposed to mean). 
  6. [64]
    The idea that the money was advanced on trust for acquiring for Ms Wylie a half share in the franchise is inconsistent with Ms Orchard being responsible for its repayment.  It might be argued that the money was advanced for the purpose of Ms Orchard buying a half share in the franchise, but then why would that attract a trust of the money absent some other considerations.  Banks frequently lend money to be used for a purpose, but that does not make the advance one by the Bank on trust.  The Loan Agreement contains no other indicia of trust obligations such as to keep the money separate, nor to account for it in any particular distinct manner. 
  7. [65]
    Ultimately, I am not satisfied that the plaintiff can prove that the Advance was ever held by Ms Orchard on a trust arising out of the Loan Agreement or the subsequent discussions about the use of the funds in some vague manner associated with the purchase of Collis Street.[13]
  8. [66]
    It might be argued, however, that the Advance came to be held on trust in a different way.   It might be said that if Ms Orchard obtained the bank cheque from Ms Wylie dishonestly, then Ms Orchard took the bank cheque on a constructive trust, which she breached by paying away the money once she had obtained it, and that equitable compensation is available for that breach of trust.   This argument would be based on the line of authority which holds that a thief holds stolen property on a constructive trust for the true owner.  The leading case is Black v S. Freedman & Co Ltd (1910) 12 CLR 105.  That case recognised for the first time in Australia that a trust arose over stolen property immediately on its theft by the thief.  The case has been applied a number of times in Australia in that context since then.[14]  True it is that in this case the money was obtained under a contract.  However, consistent with what appears to be the acts and state of mind demonstrated by the conviction, it would be arguable that a constructive trust arose even in that circumstance: see Halley v Law Society [2003] EWCA Civ 97 especially per Carnwath LJ at [47] to [48].[15]  A fortiori, perhaps, where it can be argued that the contract itself is drafted by the alleged thief, provided to the victim without legal advice, and on its face an obscure and ambiguous document. 
  9. [67]
    That argument was neither pleaded nor advanced at the hearing of the application.  I therefore do not have regard to it in disposing of this application.
  10. [68]
    My conclusion that the plaintiff has not established the existence of the alleged trust to the necessary standard to obtain summary judgment[16] means that the application must be dismissed.  However, I will deal with the other issues. 

Was there a breach of the trust alleged? 

  1. [69]
    Mr Jones’ argument turns on satisfying the Court that the payment out of the money by Ms Orchard was both a breach of the trust alleged and was a fraudulent breach.
  2. [70]
    If I had been satisfied that a trust of the kind articulated by Mr Jones arose, there would have been a very strong argument that Ms Orchard had no real prospect of establishing at trial that the payments she in fact made were other than in a breach of that trust. 
  3. [71]
    Mr Jones’ case was that Ms Orchard held the money for use in paying the purchase price on the contract on Collis Street.   Ms Orchard swore in her affidavit that she made payments at the instruction of David St Pierre.  He was not the seller.  Further, she swears that the payments were made for the benefit of Mr Silver “for his benefit as seller of the investment property”.   This evidence does not demonstrate that Ms Orchard was paying the Advance to secure the purchase of Collis Street.  As I have identified, the contract identified how and when the contract price would be paid.  The payments sworn to were made at the direction of someone who was not the seller and without regard to the terms of the contract of sale.  Some of the payments were also made while the contract was conditional and, on Ms Orchard’s affidavit, some were made before Ms Orchard says that the purpose of the payments changed.
  4. [72]
    On Ms Orchard’s evidence, she might argue that Ms Wylie consented to payments in that particular manner.  However, Ms Orchard’s evidence at paragraph 20 of her affidavit does not go so far as to positively assert that.   Further, nothing in Ms Orchard’s evidence shows that Ms Wylie knew anything about how the payments were specifically made or to whom, at least until well after the payments were made.  Ms Orchard’s evidence that she gave Ms Wylie copies of the bank cheques disbursing the Advance is linked to no time period nor to any exhibited documents. 
  5. [73]
    Taken as a whole, this evidence might have been so deficient as to persuade the Court to conclude that Ms Orchard had no real prospect of establishing that the payments were made for the purpose she alleged.  However, I do not have to determine that issue because of my conclusion on the trust issue.

Limitation issues

  1. [74]
    The matters in the previous section of this judgment would also impact on limitation issues under s. 38 LAA and 27(2) LAA if they arose for determination.  Section 38  provides (s. 27 appears in paragraph [51] above):

38  POSTPONEMENT IN CASES OF FRAUD OR MISTAKE

  1. Where in an action for which a period of limitation is prescribed by this Act—
  1. the action is based upon the fraud of the defendant or the defendant’s agent or of a person through whom he or she claims or his or her agent; or
  2. the right of action is concealed by the fraud of a person referred to in paragraph (a); or
  3. the action is for relief from the consequences of mistake;

the period of limitation shall not begin to run until the plaintiff has discovered the fraud or, as the case may be, mistake or could with reasonable diligence have discovered it.

  1. Nothing in this section enables an action to be brought to recover or enforce a charge against or set aside a transaction affecting property that—
  1. in the case of fraud—has been purchased for valuable consideration by a person who was not a party to the fraud and did not at the time of the purchase know or have reason to believe that a fraud had been committed; or
  2. in the case of mistake—has been purchased for valuable consideration subsequently to the transaction in which the mistake was made by a person who did not know or have reason to believe that the mistake had been made.
  1. [75]
    If the essence of the claim in deceit comprised obtaining the Advance and paying it out in the manner alleged in the statement of claim, then the fraud would not have come to Ms Wylie’s attention until she discovered exactly how Ms Orchard had paid out the money and to whom.   It is unclear when that occurred, but there is no evidence that she became aware of the specific use of the money until after June 2012.[17]
  2. [76]
    However, Mr Jones’ argument focused on s. 27(1) LAA.  To make good that case, he had to make out that Ms Orchard’s breach of trust in paying the money as she did was fraudulent.  To make good that proposition he relied on Mr Orchard’s conviction.  The question then is whether the acts and statement of mind that comprise the offence of which she was convicted is evidence that Ms Orchard was acting fraudulently in paying out the Advance in the way she did of such a compelling character as to sustain summary judgment. 
  3. [77]
    It is first necessary to identify the legal elements of the offence.  The relevant provision is s. 408C(1)(b), which provides, in effect, that a person who dishonestly obtains property from another person commits the crime of fraud.  Section 408C(2)(d) provides a circumstance of aggravation where the value of the property is at least $30,000 but less than $100,000.  
  4. [78]
    These are the legal elements of the offence.  They will be the same in every offence under those provisions.  But how does one determine the particular acts and state of mind that comprised that offence as committed by Ms Orchard?
  5. [79]
    A convenient starting point is s. 2 of the Code that provides that an offence is “the act or omission which renders the person doing the act or making the omission liable to punishment[18].  Further, s. 7(1)(a) provides that every person who does the act or makes the omission which constitutes an offence is guilty of the offence.[19] While it might be thought that these provisions provide a structure for identifying the acts and states of mind that at law constitute a particular offence, they do not assist in identifying how to do so in practice for applying s. 79(3). 
  6. [80]
    The indictment is a good starting point but is unlikely to provide a complete answer.  Indictments in Queensland tend to be drafted in a manner apt to focus on the articulation of the legal elements of the offence, along with very broad allegations of the time and place of the offence and the person against whom (and if appropriate with whom) a particular offence was committed.  
  7. [81]
    An indictment will often not inform the defendant adequately of the “the time, place and manner in which the offence was committed”.[20]  Put another way, it does not always inform the defendant of all of the particular acts or omissions or states of mind that comprise the manner of commission of the offence charged.   The Crown often provides those details by way of particulars, whether formally in writing or informally by the manner in which the case is put to the jury.  However, not every detail in particulars will necessarily identify acts that at law constitute the offence. 
  8. [82]
    The indictment was not before the Court.  However its terms are clear from the transcripts in evidence.  The indictment read: on the 19th day of October 2010 at Logan Central in the State of Queensland Ms Orchard dishonestly obtained a sum of money from Lynette Margaret Wylie, and the sum was of a value of $100,000.
  9. [83]
    Given Ms Orchard’s conviction on that indictment, it establishes the following acts and state of mind for the purposes of s. 79(3):
    1. (a)
      Ms Wylie obtained money from Ms Wylie on 19 October 2010;
    2. (b)
      The value of that money was $100,000;
    3. (c)
      When Ms Wylie obtained that money, it was done with a dishonest state of mind. 
  10. [84]
    As I have said, while the acts and state of mind which at law constitute the offence would include the matters disclosed by the indictment, I do not think they would necessarily be limited to those matters.  Exactly how much further s. 79(3) reaches is in my view not easily articulated.
  11. [85]
    In my respectful view, the authorities do not much assist in applying s. 79(3) in any particular case. The first case to consider is Kerr v Nominal Defendant (1987) 5 MVR 175, a decision of the Full Court of the Supreme Court of Queensland.  Connolly J gave the leading judgment.  The issue and application of section 79(3) are explained in his Honour’s reasons:

This is an appeal from a judgment of his Honour Given J on 31 July 1986 which dismissed an action brought by the appellant for damages for negligence.

The circumstances were that the appellant was a passenger in a vehicle driven by one Ballard at 5 am or thereabouts on the morning of 15 August 1984. The vehicle travelled, as it is alleged, onto the incorrect side of the highway, it rolled over, and the appellant was thrown out and suffered injuries.

Ballard was subsequently convicted of driving without due care and attention on this date and from the evidence he gave at the trial, there is obviously sufficient reason to connect the events, the subject of that charge, with the events the subject of the action. The conviction, therefore, pursuant to s 79(3) of the Evidence Act 1977 (Qld), provides sufficient evidence that Ballard was driving at the relevant time without due care and attention. The conviction does not, however, to my mind, provide sufficient evidence of the further step which must be established, and that is that the appellant's injuries were caused by this lack of due care and attention.

We are pressed with the decision of the Court of Appeal in Wauchope v Mordecai [1970] 1 WLR 317 ; 1 All ER 417 , in which the plaintiff brought an action for negligence against the defendant in respect of a collision between the plaintiff on his bicycle and the open door of the defendant's car parked in the street. Before the action, the defendant had been convicted in relation to the collision — and I emphasise the following words — “of opening the door of a motor vehicle so as to cause injury or danger”. The trial judge, oblivious to a similar provision of the Civil Evidence Act of the United Kingdom, dismissed the plaintiff's claim on the basis that the plaintiff had not discharged the burden of proof. It was held by the Court of Appeal that the conviction provided evidence not only of the negligent act, but that that act had caused the injury. The important thing is that the conviction in that case was for doing the negligent act charged so as to cause injury or danger.

Section 79(3) in this case does no more than establish that Ballard was in some respect driving without due care or attention. There is, therefore, no basis upon which the conviction can be regarded as establishing, even prima facie, the whole of the plaintiff's cause of action. But even if it were possible in the absence of other evidence to treat Ballard's negligence as having caused the plaintiff's injuries, the problem is that Ballard in his evidence described what occurred, and he said that the car was approaching or slightly over the centre line when the appellant leaned over and seized the wheel.

[underlining added]

  1. [86]
    The evidence of the conviction before the Court is not stated.   However, it is evident his Honour must have had regard to some matters outside the bare articulation of the elements of the offence to be able to link the offending to the conduct the subject of the proceedings. 
  2. [87]
    The next case is Jacobsen v Suncorp Insurance and Finance (No. 2) [1992] 1 Qd R 385.  In that case, the Full Court was dealing with an appeal from a decision of Dowsett J.  His Honour dismissed a claim for damages in which the plaintiff alleged that the defendant was the driver of the vehicle in which both were injured.  The defendant and the plaintiff both gave evidence that the defendant was the driver.  The case was defended by the insurer, however, who was given leave to cross-examine the defendant.  Dowsett J found the evidence of both to be unpersuasive and concluded, because of certain bloodstain evidence, that the defendant was not the driver.  Importantly for present purposes, there was evidence admitted under s. 79(3) of a conviction of the defendant for dangerous driving.  The place of that evidence in the proceeding is explained by McPherson SPJ as follows:

It will be necessary to refer in some detail to the evidence about the blood inside the vehicle, and the inferences that may be drawn from it. Before doing so, reference must be made to another item of evidence that formed the basis of the plaintiff’s submissions on appeal. It is a certificate of conviction (ex. 21) dated 5 April 1990 under the seal of District Court at Bundaberg. It records the defendant’s conviction in that Court on an indictment dated 1 December 1989 charging that on 10 March 1985 at Burnett Heads he drove a motor vehicle, namely a Falcon utility, on Sea Esplanade dangerously, and thereby caused grievous bodily harm to [the plaintiff] Leonard Noel Jacobsen. The certificate further records that the defendant pleaded guilty to that charge on 13 March 1990; and that he was fined $1,500 and disqualified from holding or obtaining a drivers licence for five years from 13 March 1990.

It was for long the law that evidence of a conviction for a criminal offence was not admissible in civil proceedings arising out of the events giving rise to that conviction: Hollington v. F. Hewthorn & Co. [1943] K.B. 587, a decision of the Court of Appeal in England that was followed in Queensland: Origliasso v. Vitale [1952] St.R.Qd. 211. In England the law was altered by s. 11 of the Civil Evidence Act 1968, and in Queensland by s. 79 of the Evidence Act 1977, which is as follows:

"79.  Convictions as evidence in civil proceedings.

[A.C.T. s. 77; cf. Eng. 1968 s. 11.]. (1) In this section, “civil proceeding” does not include an action for defamation.

  1. In any civil proceeding the fact that a person has been convicted by a court of an offence is admissible in evidence for the purpose of proving, where to do so is relevant to any issue in that proceeding, that he committed that offence.
  2. In any civil proceeding in which by virtue of this section a person is proved to have been convicted by a court of an offence he shall, unless the contrary is proved, be taken to have committed the acts and to have possessed the state of mind (if any) which at law constitute that offence.
  3. This section applies —
  1. whether or not a person was convicted upon a plea of guilty; and
  2. whether or not the person convicted is a party to the civil proceeding.”

Section 79 differs from its English counterpart (the text of which is set out in Wauchope v. Mordecai [1970] 1 W.L.R. 317, 318) in several respects. In the present context the most important is that by s. 79(3) proof of conviction raises a presumption that the person convicted “committed the acts … which at law constitute that offence”. Under s. 11(2)(a) of the 1968 Act in England, the presumption is only that the person convicted committed the offence, although under s. 11(2)(b) the contents of an indictment on which that person was convicted are admissible for the purpose of identifying the facts on which the conviction was based.

It may be that this or other differences in the language of the section are responsible for the division of judicial opinion as to the operation of the provision in England that is manifest in Stupple v. Royal Insurance Co. Ltd [1971] 1 Q.B. 50, to which Phipson on Evidence (13th ed.) refers in para. 28–95, at 661. However that may be, there can, I consider, be no doubt about the meaning and effect of s. 79(3) of the Queensland Act. In the context of the present case it has the consequence that the convicted person Newitt (who is the defendant in this action) is taken to have committed the act of driving a motor vehicle on a road dangerously, which is what constitutes the offence under s. 328A of the Criminal Code, of which he was convicted. There has never been any question in this case that the offence of which the defendant was convicted in the District Court on 13 March 1990 arose out of the same act of driving the Ford Falcon utility on 10 March 1985 that is the subject of the civil claim in this case. If there were any doubt, it would be permissible to look at the contents of the indictment, etc., referred to in s. 81 of the Evidence Act 1977, which is the analogue in Queensland of s. 11(2)(b) of the English Act.

  1. [88]
    The key factual issue in dispute there was whether the defendant was the driver on the fateful day.  With the benefit of the particularised offence in the certificate of conviction tendered in that case, it was not difficult for his Honour to apply s. 79(3) to find that the conviction was proof of that act:

The result, then, of admitting in this action evidence of the fact of conviction of the defendant of the offence in question was to establish, “unless the contrary is proved”, that the defendant was driving the insured vehicle on the occasion when, as is shown by the evidence at the trial, the collision took place and the plaintiff was injured. The learned trial judge was referred to s. 79 of the Evidence Act, which was submitted by counsel to mean that the conviction was “prima facie evidence that the defendant was driving at the time”. That may well be an accurate statement of its effect. All that appears on the subject in his Honour’s reasons is the observation that “I have taken account of the fact that he has pleaded ‘guilty’ to a charge of dangerous driving and has been sentenced in respect thereto”. This observation appears in the portion of his Honour’s judgment in which he assesses the defendant’s credibility as a witness and leads on to the conclusion, already mentioned, that he could place no reliance on the defendant’s evidence.

  1. [89]
    His Honour went on to conclude that the trial judge had treated the evidence of the conviction as going only to credit rather than as evidence under s. 79(3) of the act of driving on the relevant day.     
  2. [90]
    The next case to note is Hogan v Gill (1992) Aust Torts Reports 81-182.  That case concerned a claim by a young boy against another child and that child’s father arising out of an accidental discharge of the father’s rifle by the child which struck the plaintiff causing severe injuries.  Amongst other issues were whether the father had been negligent in his control of the rifle.  One of the particulars of negligence relied on the conviction of the father for breach of s. 71 Firearms and Offensive Weapons Act 1979 as evidenced by a Certificate of Conviction.  Justice Shepherdson observed, after referring to s. 79(3), Kerr and Jacobsen:

When I consider the extent of the admission made by the plea of guilty described in the Certificate of Conviction, Exhibit 2, namely, failure to take all reasonable precautions to ensure that the rifle was kept in a place of safety such that it was unlikely that an unauthorised person would gain possession of the rifle, it is at once clear that s79(3) may be used to prove that failure quite independently of any other evidence in this case. That failure is very relevant, to the negligence claim against the first defendant and it supports the finding of negligence which I have made against the first defendant.

I should add that I consider Jacobsen's case distinguishable from an earlier Full Court decision of Kerr v Nominal Defendant (Qld) (1987) 5 MVR 175 in that the effect of the application of s79(3) in the present case facilitates proof of facts in issue and of which there is already evidence, whereas in Kerr the application of s79(3) to the facts of that case did not provide sufficient evidence of an essential further step in the cause of action such that Kerr discharged the burden of proof lying on him.

  1. [91]
    The last case to mention is Batey v Potts (2004) 61 NSWLR 274, which is referred to in the annotations to the section in the leading text.[21]  In that case, Gzell J was dealing with the question of whether a beneficiary under a Will was precluded from taking under the Will because he had unlawfully killed the testator.  That case was primarily concerned with the consequence of the forfeiture on the gift in question.  It is interesting to note, however, that the Uniform Evidence Acts do not contain an equivalent provision to s. 79(3).  The relevant provision in the Evidence Act 1995 (NSW) is s. 91.  It expressly prohibits evidence of a decision or finding of fact in a Court proceeding being admitted to prove the existence of a fact that was in issue in that proceeding.  The only relevant exception is to prove the fact of conviction of an offence.   The certificate of conviction was tendered under s. 92 of the NSW act to prove conviction for manslaughter.  It appears to have been treated as evidence of the fact of the unlawful killing. It is unclear to me how that was consistent with s. 91 or justified by s. 92, though the matter did not seen to be in genuine dispute in the hearing in any event and the point might have turned on the terms of the Forfeiture Act which his Honour was applying (see p. 279 paragraph [32]).   Justice Gzell did find that the summing up and sentencing reasons were irrelevant, but that finding depended on the scope of the exception in s. 92.  The case therefore does not assist in interpreting s. 79(3). 
  2. [92]
    None of the cases explore in principle how one identifies with precision the facts and states of mind that at law constitute the offence as opposed to those matter which are particulars of the offending but do not go as far as comprising an act constituting the offence.
  3. [93]
    In this case, at a broad level of generality, the acts and state of mind are as articulated in paragraph [83] above.  However, are there further facts which at law constitute this offence?  This is where provision of proper particulars of the offence is likely to be of assistance.  There is, however, no evidence of written particulars before this Court. Doing the best I can, the case was advanced by the prosecution in addresses as follows:

And the prosecution case seems to be that there was an agreed plan, that there was evidence of discussions before the heads of the agreement was signed, and then the document itself, and that the fund was put to a different purpose to that set out in the documents and the discussions. And so the accused obtained the money dishonestly.

Now, Ms Cupina submitted again that a question is whether the obtaining of the $100,000 cheque was dishonest, that you would look at the conduct before the singing of the agreement, the agreement itself, and the post-conduct, how the money was disbursed, in order to reach a conclusion of guilt. There was a dinner on about the 15th of October. There was discussion about 15 per cent interest on property – on the amount until the house was built, and then a new idea of purchase of a refund partnership. Then on the 19th of October, Ms Orchard was at Ms Wylie’s house with a USB stick. They printed the document and signed it. And Ms Cupina took you to the document and submitted that when you consider the discussion that preceded it and the terms of the document, followed by how the fund was used, you’d be satisfied that the obtaining of it was dishonest by ordinary standards. That is to say, it’s about what Ms Orchard represented to Ms Wylie. 

  1. [94]
    In brief, the case was that Ms Orchard obtained the money dishonestly because of the whole of the circumstances before, during and after signing which demonstrated she never intended to use it for the purpose in the Loan Agreement but rather for her own purposes. 
  2. [95]
    Mr Jones relied on s. 79(3) to provide evidence that the paying out of the money by Ms Orchard was fraudulent.  His submission was that if the obtaining of the money under cover of the Loan Agreement was dishonest that so must the paying out of the money be dishonest. 
  3. [96]
    That might be so as a matter of logic.  However the first question is whether the conviction provides direct evidence under s. 79(3) that the paying out of the Advance was fraudulent.  That depends on concluding that the acts with a dishonest state of mind which at law comprised the offence included the acts of paying out of the money in the way Ms Orchard did.  I am not satisfied that is strictly so.  The manner of the payment out after the money was obtained was one of a number of matters identified by the Crown as circumstantial facts from which the state of mind at the time of obtaining the bank cheque on 19 October 2010 could be inferred.  A state of mind will always be a matter of inference except perhaps for where the person in question gives direct evidence of his or her state of mind.  This is recognised not only in the criminal law but also the civil law.  Rule 151(1)(f), (i), (k) and (u) read with Rule 151(2) Uniform Civil Procedure Rules require facts from which states of mind are to be inferred to be expressly pleaded.
  4. [97]
    The question is whether all the matters relied upon by the prosecution as supporting the inference of a dishonest mind are included in the acts and states of mind which at law constitute the offence.  I am not persuaded that they are.  Any number of considerations might inform the conclusion by a jury that an identified act of obtaining money was done with a dishonest state of mind.  However, where there is a range of acts relied upon, it is difficult to be confident whether and to what extent the jury has accepted that those acts occurred, or indeed which they have relied upon to draw the necessary inference.   
  5. [98]
    However, the point is a moot one.  Section 79(3) supports the conclusion that Ms Orchard obtained the money under the Loan Agreement dishonestly.  Those facts provide a foundation for an inference to be drawn that the payment out of the money was also dishonest, even if the conviction is not itself direct evidence of the state of mind at that time.  Thus the conviction provides admissible evidence of the fact of fraud in the acts said to comprise the breach of trust.  To be fair to Mr Jones, this is probably the way he put the issue in argument.
  6. [99]
    However, this is not conclusive evidence of that matter, compelling though the inference might appear to be.  Mr Lee for Ms Orchard pointed out that Ms Orchard swore that Ms Wylie knew the money was being used for the acquisition of Collis Street and how it was being paid.  He therefore submitted that there was a triable issue on this subject.  Ordinarily that would be correct.  However, if I had been persuaded that the alleged trust arose, I might well have concluded that this was one of those rare cases where, even though there is a contest on the evidence, the account given by the defendant was so implausible as to mean it had no prospect of being accepted.  However, given my conclusion on the trust alleged, I do not have to determine that question.

Conclusion

  1. [100]
    For the above reasons I am not satisfied that the defendant has no real prospect of defending the case based on the breach of trust as presently alleged.  Accordingly I dismiss the application for summary judgment.

Footnotes

[1] Amended Defence paragraph 6(b)

[2] Orchard paragraphs 11 to 13

[3] Orchard paragraph 19

[4] Orchard paragraph 14 to 18

[5] Orchard paragraph 20

[6] Orchard exhibits page 68

[7] Orchard exhibits pages 69 and 70

[8] Orchard exhibits pages 71 to 76

[9] Orchard exhibits pages 62 to 67

[10] Wylie CD 34

[11] R v Orchard [2018] QCA 58

[12] Plaintiff’s submissions at [35]

[13] As to the principles applicable in determining whether a commercial agreement gives rise to trust obligations see the analysis of Jackson J in Sino Iron Pty Ltd v Palmer (No. 3) [2015] 2 Qd R 574 at [56] to [109]

[14] See the cases discussed in Tarrant, Theft principle in private law (2006) 80 ALJ 531 at 535 to 536

[15] See also Global Currency Exchange Network Limited v Osage 1 Limited [2019] EWHC 1375 at [44] to [47] which highlights some of the difficulties which might attend application of the principle, but note in the context of this case, at [47]

[16] i.e. That the defendant has no real prospect of defending the claim for breach of trust: Rule 292 UCPR

[17] Orchard exhibits p. 70 and see paragraph [72] above

[18] Section 2

[19] Section 7(1)(a)

[20] See McConnell Dowell Constructors (Aust) Pty Ltd v Environmental Protection Authority (No. 2) (2002) 54 NSWLR 39 at [11] to [15]

[21] J R S Forbes, Evidence Law in Queensland (Lawbook, 12th ed, 2018) 454

Close

Editorial Notes

  • Published Case Name:

    Lynette Margaret Wylie v Elizabeth Margaret Orchard

  • Shortened Case Name:

    Wylie v Orchard

  • MNC:

    [2020] QDC 86

  • Court:

    QDC

  • Judge(s):

    Porter DCJ

  • Date:

    19 May 2020

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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