Adelaide Concrete Cutting & Drilling Pty Ltd v Marino - [2024] NSWSC 499 - NSWSC 2023 case summary — Zoe

NSWNSWSC

Adelaide Concrete Cutting & Drilling Pty Ltd v Marino

[2024] NSWSC 499

Supreme Court of NSW|2023-10-25|Before: Meek J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2023-10-25

Before

Meek J

Source

Original judgment source is linked above.

Judgment (117 paragraphs)

[1]

elation to alleged duties EQUITY - Rescission - Claims that D1's representations were made knowing them to be false or recklessly as to their truth upheld - Finding that D1's misrepresentations contributed to plaintiffs entering into AMAs, but no indication that the plaintiffs had purported to rescind the AMAs prior to them filing their claims - Plaintiffs either affirmed, or at least made no election to rescind, the AMAs - Court declines to make any declaration as to rescission FINANCIAL SERVICES - Chapter 7 provisions of the Corporations Act are plausibly of some application to the present case - However, no submissions were made regarding claims for breach of the financial services provisions of the Corporations Act against D1 - Given findings in relation to the plaintiffs' contractual claim and misrepresentation claim, the Court declines to make any findings as to this alternative claim CONSUMER LAW - Misleading or deceptive conduct - Plaintiffs failed to distinguish between the operation of the ACL as a law of the Commonwealth and as a State "application" law - The Court proceeds on the basis that the claim is under the ACL as a law of the Commonwealth - Finding that alternative claim against D1 under ACL succeeds but damages no different - Claims against D2 fail NEGLIGENCE - D1 owed a duty of care arising out of the AMAs - Finding that alternative claim against D1 succeeds but damages no different to contractual damages NEGLIGENCE - Alleged duty of care owed by solicitor, D2, to the plaintiffs, who were not established to be the solicitor's clients, and who suffered economic loss - Cases outside recognised or well-established cases of duty of care require focus upon and articulation of the scope and content of the duty of care - Failure of plaintiff to identify the scope and content of the duty of care of a solicitor in absence of any retainer - Duty of care not established LEGAL PRACTITIONERS - Meaning of "client" discussed - Principles regarding implied retainers and general retainers LEGAL PRACTITIONERS - Claim made against D2 under the compensatory limb of the Court's inherent supervisory jurisdiction - Distinction between cases involving intentional conduct by a solicitor (such as breach of an undertaking, or egregious conduct, such as gross overcharging) and cases involving non-intentional conduct that falls short of a particular standard of care - Compensation under supervisory jurisdiction for breach of professional duty by negligence requires something more than "mere" negligence, the negligence must be of a "culpable quality" amounting to a "serious dereliction of duty" - Failure of plaintiffs to address requirements of "culpable quality" or gross negligence - Claim not established PARTNERSHIP - Indicia of partnership discussed VICARIOUS LIABILITY - Proper approach to determining employment relationship - Whether D1 in an employment relationship with D2 requires focus on the characterisation of their respective rights - Finding that there was no contract between D1 and D2 - Relationship between D1 and D2 was not one of employment - Whether tortious acts and omissions of D1 were committed in the course or scope of employment - Whether employment relationship terminated - Held tortious acts occurred after employment relationship, assuming one existed, terminated - In any case, acts were not in the course and scope of the employment and had no connection with what D1 would have been employed to do CIVIL PROCEDURE - Agreed list of issues - Discussion of obligation of parties in conferring with each other and framing lists of issues - Failure of plaintiffs to identify essential aspects of causes of action in the pleadings - Inadequate listing and framing of issues by parties and, in any event, submissions not made by express reference to issues - Pleading and issue listing inadequacies places the Court in an invidious position in addressing the claims CIVIL PROCEDURE - Court Book - Court Book did not heed the pre-trial directions for the email chains to be disassembled and placed in chronological sequence and for the Court Book not to contain duplicates of the same document - Numerous copies of certain emails and other documents scattered through the Court Book and email chains often in reverse chronological order - Non-compliant Court Book inhibited the efficient and smooth running of the hearing and did not facilitate the Court's consideration of the evidence and the issues, or the preparation of reasons for judgment COSTS - Preliminary observations regarding costs of the proceedings when contractual claims propounded by P1 of $10,000 and P2 of $200,000 against D1 straightforward - Balance of claims against D1 and claims against D2 more complicated, and some failed to identify essential issues of claims - Court Book contained 2,745 pages of materials (many duplicated) and hearing extended to 7 days (3 days beyond original estimate) - Presentation of Court Book not conducive to just, quick and cheap disposition of real issues - Parties directed to address proportionality provisions of s 60 of the Civil Procedure Act 2005 (NSW) in addressing issues of costs Legislation Cited: Bankruptcy Act 1966 (Cth) Civil Liability Act 2002 (NSW) Civil Procedure Act 2005 (NSW) Competition and Consumer Act 2010 (Cth) Corporations Act 2001 (Cth) Evidence Act 1977 (Qld) Evidence Act 1995 (NSW) Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) Legal Profession Act 2007 (Qld) Legal Profession Uniform Law 2014 (NSW) Partnership Act 1891 (Qld) Partnership Act 1892 (NSW) Australian Solicitors Conduct Rules Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: 5 Boroughs NY Pty Ltd v State of Victoria; Roberts v State of Victoria [2021] VSC 785 ACE Insurance Ltd v Trifunovski (2011) 200 FCR 532; [2011] FCA 1204 Adamson v Queensland Law Society Incorporated [1990] 1 Qd R 498 Adelaide Concrete Cutting & Drilling Pty Ltd v Marino [2021] NSWSC 1034 Al Mousawy v Howitt-Stevens Constructions Pty Ltd [2010] NSWSC 122 Allianz Australia Insurance Ltd v Haddad [2015] NSWCA 186 Amaca Pty Ltd (under NSW External Administration) v A B & P Constructions Pty Ltd [2007] NSWCA 220 Articulate Restorations & Development Pty Ltd v Crawford (1994) 57 IR 371 Associated Securities Ltd v Aziz [1974] VR 699 Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424; [1954] HCA 20 Barclays Bank v Various Claimants [2020] AC 973 Beach Petroleum NL v Kennedy (1999) 48 NSWLR 1; [1999] NSWCA 408 Bell v Hartnett Lawyers (No 2) [2021] NSWSC 1270 Bell v Hartnett Lawyers (No 3) [2022] NSWSC 1204 Bird v DP (A Pseudonym) (2023) 69 VR 408; [2023] VSCA 66 Braham v Catalano [2013] VSC 437 Breen v Williams (1996) 186 CLR 71; [1996] HCA 57 Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254 CLR 185; [2014] HCA 36 Brus v Australian Capital Territory [2007] ACTSC 83 Bugge v Brown (1919) 26 CLR 110; [1919] HCA 5 Caltex Oil (Australia) Pty Ltd v The Dredge "Willemstad" (1976) 136 CLR 529; [1976] HCA 65 Caltex Refineries (Qld) Pty Ltd v Stavar (2009) 75 NSWLR 649; [2009] NSWCA 258 Campbell v Tran [2024] NSWSC 204 Care A2 Plus Pty Ltd v Pichardo [2024] NSWCA 35 Carmody v Priestley & Morris Perth Pty Ltd (2005) 30 WAR 318; [2005] WASC 120 CCIG Investments Pty Ltd v Schokman [2023] HCA 21; (2023) 410 ALR 479 Chong v CC Containers Pty Ltd (2015) 49 VR 402; [2015] VSCA 137 Collins v Insurance Australia Ltd (2022) 109 NSWLR 240; [2022] NSWCA 135 Connelly v Wells (1994) 55 IR 73 Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 275 CLR 165; [2022] HCA 1 Cornall v Nagle [1995] 2 VR 188 Council of the NSW Bar Association v Siggins [2021] NSWCA 40 Cox v Ministry of Justice [2016] AC 660 D Capital 2 Pty Ltd v Western [2022] NSWSC 1064; (2022) 20 BPR 42,919 Dale v Veda Advantage Information Services and Solutions Ltd (2009) 176 FCR 456; [2009] FCA 305 Day v Ocean Beach Hotel Shellharbour Pty Ltd (2013) 85 NSWLR 335; [2013] NSWCA 250 Dean v Allin & Watts (a firm) [2001] EWCA Civ 758 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 Drake & Jackson v Corporation of Victoria (1884) 1 BCR 165 EFEX Group Pty Ltd v Bennett [2024] FCAFC 35 Elite Realty Development Pty Ltd v Sadek [2022] NSWSC 1333 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; [2002] HCA 8 Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (2015) 228 FCR 346; [2015] FCAFC 37 Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395; [1973] HCA 49 Geraghty v Permanent Trustee Co Ltd (1986) 4 NSWLR 412 Girotto v Phillips Fox (a firm) [2011] VSC 293 Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; [2002] HCA 54 Hardware Services Pty Ltd v Primac Association Ltd [1988] 1 Qd R 393 Hartnett t/as Hartnett Lawyers v Bell as Executor of the Estate of the late Mabel Dawn Deakin-Bell [2023] NSWCA 244 Henville v Walker (2001) 206 CLR 459; [2001] HCA 52 Hill v Dunn [2019] NSWSC 419 Hill v Van Erp (1997) 188 CLR 159; [1997] HCA 9 Hoffmann v Boland [2013] NSWCA 158 Hollis v Vabu Pty Ltd (2001) 207 CLR 21; [2001] HCA 44 Howard Smith & Patrick Travel Pty Ltd v Comcare [2014] NSWCA 215 Imbree v McNeilly; McNeilly v Imbree (2008) 236 CLR 510; [2008] HCA 40 Jeandin v Tzovaras [2011] NSWSC 1254 John Ljubomir Atanaskovic and the persons named in Schedule A t/as Atanaskovic Hartnell v Birketu Pty Ltd - Supervisory Jurisdiction [2020] NSWSC 573 Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44; [2005] HCA 15 Krolczyk v Winner t/as J Winner Building Services [2022] NSWCA 196 Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 Legal Services Commissioner v Raghoobar [2023] QSC 41 Magjarraj v Asteron Life Ltd [2009] NSWSC 1433 Mallonland Pty Ltd v Advanta Seeds Pty Ltd [2023] HCATrans 138 Mallonland Pty Ltd v Advanta Seeds Pty Ltd [2023] QCA 24 McDonald v Grech; Bank of Western Australia Ltd v McDonald [2012] NSWSC 717 McIlraith v Ilkin [2007] NSWSC 911 McIlraith v Ilkin [2008] NSWCA 11 Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp [1979] Ch 384 Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31 Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254; [2000] HCA 61 Mohareb v Kelso [2017] NSWCA 98 Mt Owen Pty Ltd v Parkes [2023] NSWCA 77 Myers v Elman [1940] AC 282 Narich Pty Ltd v Commissioner of Pay-roll Tax (1983) 2 NSWLR 597 New South Wales v Lepore (2003) 212 CLR 511; [2003] HCA 4 NSW Trustee & Guardian as Executor of the Will of Michael Robert Walsh (Deceased) v Gregory [2012] NSWSC 681; (2012) 18 BPR 35,153 O'Connor v Comensoli [2022] VSC 313 Oakley Thompson & Co v Kanik (1998) 145 FLR 438 On Call Interpreters & Translators Agency Pty Ltd v Commissioner of Taxation (No 3) (2011) 214 FCR 82; [2011] FCA 366 Pappas v New World Oil Developments Pty Ltd (1993) 43 FCR 594 Parrella v Trustee of the Property of Marino (Bankrupt) [2022] FCA 1530 Perera v Genworth Financial Mortgage Insurance Pty Ltd (2017) 94 NSWLR 83; [2017] NSWCA 19 Perre v Apand Pty Ltd (1999) 198 CLR 180; [1999] HCA 36 Prince Alfred College v ADC (2016) 258 CLR 134; [2016] HCA 37 Purkiss v Hannigan (Court of Appeal (NSW), 13 February 1997, unrep) Rafferty v Madgwicks (2012) 203 FCR 1; [2012] FCAFC 37 Raghoobar v Legal Services Commissioner [2023] QCA 191 Re Application for Admission as a Legal Practitioner (2004) 90 SASR 551; [2004] SASC 426 Resilient Investment Group Pty Ltd v Barnet and Hodgkinson as liquidators of Spitfire Corporation Limited (in liq) (2023) 111 NSWLR 446; [2023] NSWCA 118 Roads and Traffic Authority of NSW v Dederer (2007) 234 CLR 330; [2007] HCA 42 Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2010) 184 FCR 448; [2010] FCAFC 52 Scott v Davis (2000) 204 CLR 333; [2000] HCA 52 Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16; [1986] HCA 1 Sullivan v Moody (2001) 207 CLR 562; [2001] HCA 59 Sutherland Shire Council v Heyman (1985) 157 CLR 424; [1985] HCA 41 Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161; [2006] HCA 19 Swick Nominees Pty Ltd v Leroi International Inc (No 2) (2015) 48 WAR 376; [2015] WASCA 35 TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533; [2013] HCA 5 Vairy v Wyong Shire Council (2005) 223 CLR 422; [2005] HCA 62 Victorian Legal Services Board v Jensen [2018] VSC 740 Walters v Scarborough [2011] NSWSC 1380 Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55 White v Jones [1995] 2 AC 207 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515; [2004] HCA 16 Zervas v Burkitt (No 2) [2019] NSWCA 236 ZG Operations Australia Pty Ltd v Jamsek (2022) 275 CLR 254; [2022] HCA 2 Texts Cited: Abadee, A, et al, Professional Liability in Australia (4th ed, 2023, Lawbook Co) Atkins, Roger J, New South Wales Solicitors Manual (3rd ed, 1975, The Law Society of New South Wales) Butterworths Australian Legal Dictionary (1997, Butterworths) Dal Pont, G E, Law of Agency (4th ed, 2020, LexisNexis) Dal Pont, G E, Lawyers' Professional Responsibility (7th ed, 2021, Lawbook Co) Dal Pont, G E, Solicitors Manual (LexisNexis) Encyclopaedic Australian Legal Dictionary (LexisNexis) Giles, Roger, "Duty of Care, Scope and Breach" (2009) 9 The Judicial Review 165 Halsbury's Laws of Australia Irving, Mark, The Contract of Employment (2nd ed, 2019, LexisNexis Butterworths) Law Council of Australia, "Australian Solicitors' Conduct Rules" accessed 24 April 2024 Macquarie Dictionary, online ed Ritchie's Uniform Civil Procedure NSW Sappideen, Carolyn et al, Fleming's The Law of Torts (11th ed, 2024, Lawbook Co) Category: Principal judgment Parties: Adelaide Concrete Cutting & Drilling Pty Ltd (First Plaintiff) Giovanni Antonio Parrella (Second Plaintiff) Frank Marino (First Defendant / Second Cross-Defendant) Renaldo Tommaso Polo (Second Defendant / Cross-Claimant) Representation: Counsel: S Baron Levi (First Plaintiff / Second Plaintiff) C Lucarelli (with leave for First Defendant / Second Cross-Defendant - 23-24 October 2023 only) A Jamieson (Second Defendant / Cross-Claimant)

[3]

Introduction

HIS HONOUR: In essence, the plaintiffs seek to recover a total sum of $210,000 from the defendants consequent upon the plaintiffs paying monies to the first defendant (Mr Marino) to be invested by him via a trading platform (investment proposal).
The investment proposal was formalised by the plaintiffs each entering into an asset management agreement with Mr Marino on or about 23 or 24 August 2018 ("AMA"). Other than the differing amounts invested and the different parties, both AMAs are (relevantly) in the same terms.
The legal relationship alleged as between the plaintiffs and Mr Marino is, inter alia, contractual under each AMA. Under the AMAs, the plaintiffs were nominated as "Capital Provider(s)" (capital providers) and Mr Marino was designated as an "Asset Manager" (asset manager).
As a consequence of an alleged breach of contract and guarantee by Mr Marino, the first plaintiff (Adelaide) and the second plaintiff (Mr Parrella) have not been paid the funds they had invested, being $10,000 and $200,000 respectively (together, the funds). The connection between the plaintiffs and the second defendant (Mr Polo), a solicitor, arises essentially from the assertion that Mr Marino was an employee or officeholder of the law practice "Oracle Law", of which Mr Polo was the principal.
On the hearing, Dr Baron Levi of counsel appeared for the plaintiffs. Mr Marino did not appear per se to contest the hearing (though, as I note below, he was subpoenaed to give evidence by the plaintiffs). Mr Jamieson of counsel appeared for Mr Polo. In that context, the active parties in the proceedings were the plaintiffs and Mr Polo (active parties).
Dr Baron Levi and Mr Jamieson each provided a written outline of submissions prior to the hearing and made oral final submissions following the completion of evidence in the hearing. I will cite the evidence in the proceedings by reference to the Court Book (CB), transcript pages and exhibit numbers, and cite the submissions by reference to Dr Baron Levi's opening written submissions dated 4 August 2023 (POS), Mr Jamieson's opening written submissions dated 24 July 2023 (D2OS1) and 3 August 2023 (D2OS2), and transcript pages.

[4]

Parties

Adelaide was registered in South Australia on 25 July 1997: CB 2379. Sergio Pacifico (Mr Pacifico) was appointed as a director and secretary of Adelaide on 28 February 2001. He is the sole director and shareholder of Adelaide: CB 2380, 2382. Adelaide was, at least in the early to mid-2000s, engaged in concrete polishing: CB 138[11].
Mr Parrella is the owner and "managing director" of a business called Magill Motor Bodies (Magill): CB 182[3]; T 114.21-.26. Magill is an approved crash repairer providing crash repair, panel beating and spray-painting services: CB 182[4].
Mr Marino goes by a number of names, including "Francesco Marino" and "Frank Marino", and is bankrupt: CB 2525. Mr Marino held a real estate agent's licence seemingly from 14 October 2009. The licence, which is a "Class 2 Agent - Real Estate - Sales or Leasing" licence, was renewed on 23 March 2020 (until 13 October 2024): CB 2510. He has associations with various companies, including being the sole director, secretary and member of Crystal Blue Group Pty Ltd (CBG), Just Investment Properties Pty Ltd, Urban Wealth Capital Pty Ltd and Urban Wealth Group Pty Ltd: CB 178[225]-[228]. Other entities with which Mr Marino was associated are listed in his application for bankruptcy: CB 2525. There is an issue in the proceedings regarding the precise nature and extent of Mr Marino's association with Mr Polo and Oracle Law.
In his work in real estate, Mr Marino operated through CBG. An extract from CBG's website does not give any real clarity about precisely what CBG is, or what it does. The description on the website is framed in vague terms (CB 180[238], 2488-2491): Crystal Blue Group, founded by CEO and Managing Director Frank Marino is a company that has a diverse range of interests and opportunities. Under our umbrella are a range of companies that together create Crystal Blue Group. The Crystal Blue Group is at the core of who we are and what we do. From our Executive Team to our Business Development Managers, and Property Team to our Distributors, the Crystal Blue Group is committed to delivering the highest quality product and providing unparalleled service to our customers. The Crystal Blue team is made up of skilled and qualified professionals, committed to quality, integrity and creating positive outcomes for all our clients. Our core values are integrity, teamwork, performance and learning.
Mr Marino had some association with Akhilesh Kamkolkar (Mr Kamkolkar), a person whose precise role in the events the subject of the proceedings is unclear. From the plaintiffs' perspective, his existence was first alluded to by Mr Marino in discussions with Mr Pacifico in early 2018, in connection with trading platforms, as being "my Indian friend who has been in share markets and banking industry for years": CB 155[110]. He was copied into an email by which Mr Marino provided Mr Pacifico with the AMA: CB 1595.
Mr Polo was admitted to practice as a solicitor in New South Wales on 12 July 2002: CB 2484. He commenced practice in New South Wales under the name Polo & Co Solicitors: CB 205[2], [8]. In about 2013, upon deciding to move his practice to Queensland, Mr Polo changed his practice name to "Oracle Law": CB 205[3]; T 139.50-140.2.
Mr Polo is the principal of Oracle Law, which was at the relevant times registered with the Law Society of New South Wales as having its "main office" at Horsley Park, New South Wales and an associated "branch office" at Mermaid Beach, Queensland: CB 179[230] (and based on the Law Society search documents as at 24-26 January 2022: CB 2456, 2463, 2470, 2484). Oracle Law is described as, and according to Mr Polo has always been, a sole practitioner law firm: CB 2470; T 139.42-.44.
Oracle Law also operated as a legal practice in Queensland until 30 June 2019: see CB 4[6(d)] read with CB 54[4] (see also a Queensland Law Society search document as at 24 January 2022: CB 2448-2451).
It was accepted by Mr Jamieson that Mr Polo was admitted in New South Wales and has a current practising certificate from the Law Society of New South Wales: CB 2477. He was not admitted in Queensland: T 34.35-35.4; CB 2487.

[11]

Claims against Mr Polo

The pleadings and agreed list of issues in the proceedings left much to be desired in clarifying critical aspects of the alleged liability of Mr Polo.
The plaintiffs' amended statement of claim did not contain headings of the actions sought to underpin the relief claimed against Mr Polo. However, by reference to the pleading against Mr Polo (CB 23[56]-26[63]) and the POS, four claims for relief were identified. Two of the four claims for relief appeared to be based upon, or in reference to, the fact that Mr Polo was a solicitor. Indeed, the principal claim for relief relied upon by the plaintiffs against Mr Polo was in relation to the Court's supervisory jurisdiction over solicitors.
Notwithstanding that, the basal relationship between Mr Polo and the plaintiffs was not clearly pleaded.
Significantly, the plaintiffs did not plead that they had a retainer with Mr Polo or Oracle Law.
The plaintiffs pleaded that Mr Marino was at all material times an employee or officeholder of Oracle Law: CB 5[9]. However, the pleading contained no material facts or particulars said to give rise to an employment relationship. Rather, there was only the bald assertion of employment. Mr Marino denied that allegation, as did Mr Polo.
Further, whilst the plaintiffs pleaded that Mr Polo owed a duty of care to "clients and prospective clients of Oracle Law", the pleading contained no material facts or particulars said to give rise to the duty of care: CB 26[63]. The allegation of a duty of care was denied by Mr Polo: CB 59[35]. (I note the amended defence appears to contain a typographical error in that there are two paragraphs which plead to paragraph 62 of the amended statement of claim, namely CB 58[34] and 59[35]. However, as a matter of construction, it appears obvious that the second paragraph of the amended defence, CB 59[35], is a pleading to CB 26[63].)
Cryptically (in the absence of any pleaded retainer), the list of issues contained an issue (numbered 23) in the following terms: Did Sergio Pacifico engage Oracle law or the Second Defendant personally.
In identifying the second ground for relief against Mr Polo, the POS contains in the chapeau to POS [65] the following statement: The second [ground for relief] is that [Mr Polo] breached his duty of care to the plaintiffs as clients or prospective clients in …
There were only two references to "retainer" made during the hearing. Both were contained in answers given by Mr Polo in relation to the termination of his retainer with Hugh Mackay (Mr Mackay), a friend and associate of Mr Pacifico, and/or with Mr Mackay's company, Mackay Ellis Group Pty Ltd (MEG): T 398.26, 403.7. There was no mention of a retainer as between the plaintiffs and Mr Polo or Oracle Law in any evidence. Nor did the oral closing submissions of Dr Baron Levi assert any retainer as between the plaintiffs and Mr Polo or Oracle Law. If any retainer was assumed by Dr Baron Levi, he did not explain how it arose and relevantly at what point it subsisted.
Thus, in the above context, the advancement of the plaintiffs' claims against Mr Polo begged the question of whether the plaintiffs actually contended that they were clients of Mr Polo and/or Oracle Law and, if so, the precise nature and duration of any retainer. However, any such initial foment was suppressed during the hearing, which left the question unattended and accordingly any answer to it unilluminated.
Whilst the plaintiffs pleaded that Mr Marino was an employee of Oracle Law, they did not plead that Mr Marino was Mr Polo's agent.
In the POS, Dr Baron Levi described the claims for relief against Mr Polo as follows (POS [63]-[67]): 63. There are 4 grounds of relief claimed against the second defendant. 64. The first is for an order under the inherent jurisdiction and power of the Supreme Court in relation to the control and discipline of solicitors, that the second defendant compensate the plaintiffs for the loss and damage caused to them due to the second defendant's breaches of his professional obligations. 65. The second is that the second defendant breached his duty of care to the plaintiffs as clients or prospective clients in: a. Failing to comply with his disclosure obligations to clients under s 152 of the LPA (Qld) in relation to any multi-disciplinary partnership; b. Failing to advice clients that the first defendant was not a solicitor and was not entitled to engage in legal practice; c. Failing to supervise or exercise control over the first defendant; and d. Expressly or tacitly permitting the first defendant to continue to act directly for clients. 66. The third is that the second defendant is vicariously liable for the negligence of the first defendant in relation to the investments proffered by the first defendant. 67. The fourth is that by reason of the matters stated directly above, the second defendant represented by his conduct that the first defendant was entitled to engage in legal practice, which was misleading or deceptive under s 18 of the Australian Consumer Law.
I will address the claims as such.
Despite the unsatisfactory way in which the issue regarding whether the plaintiffs were clients of Oracle Law or Mr Polo was presented, in case it be said that the issue was a live issue, I propose to address it below.

[15]

Proceeding against Mr Marino in his "absence"

Early on the morning of the first day of the hearing, I raised with counsel the fact that Mr Marino had filed a defence but was absent from court. I noted that the provisions of Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 29.7 applied in such a circumstance: T 5. Mr Jamieson noted that Mr Marino had written to the plaintiffs' solicitors quite some time ago and indicated clearly that he did not wish to take any part in these proceedings: T 6.9-.10.
UCPR r 29.7 is relevantly in the following terms: 29.7 Procedure to be followed if party is absent (1) This rule applies when a trial is called on. (2) If any party is absent, the court - (a) may proceed with the trial generally or so far as concerns any claim for relief in the proceedings, or (b) may adjourn the trial.
UCPR r 29.7 addresses the procedure to be followed when a "trial" is called on and a party is absent. A "trial" means any hearing that is not an interlocutory hearing: s 3 Civil Procedure Act 2005 (NSW) (CPA).
A party fails to appear, for the purpose of the present rule, if they have adequate notice of the hearing, and fail either to attend (personally or by a representative) or to provide the Court with an apparently credible explanation for their non-attendance: Ritchie's Uniform Civil Procedure NSW at [29.7.2], citing Magjarraj v Asteron Life Ltd [2009] NSWSC 1433 at [22], NSW Trustee & Guardian as Executor of the Will of Michael Robert Walsh (Deceased) v Gregory [2012] NSWSC 681; (2012) 18 BPR 35,153 (Gregory) and Hill v Dunn [2019] NSWSC 419 at [8]-[21].
In Gregory, Hallen AsJ (as his Honour then was) observed that a party will not be found to be "absent" within the meaning of r 29.7 unless that party has knowledge or notice of the date of the trial: Gregory at [18]-[22]. However, in Elite Realty Development Pty Ltd v Sadek [2022] NSWSC 1333, whilst accepting that natural justice must be observed, Peden J at [16] respectfully disagreed that UCPR r 29.7 requires a plaintiff to notify a defendant of the date of the trial in order for the defendant to be "absent" and the hearing to proceed.
In this case, it is not necessary to embark upon that debate. Mr Marino was aware that the matter had been listed for hearing. He had been served with a subpoena and ultimately (as I note below) attended before the Court as a witness, following the issue of a warrant for his arrest pursuant to failure to comply with the subpoena.
When Mr Marino attended court on the afternoon of the fourth day of the hearing, Mr Senior attended by AVL and confirmed that he was representing Mr Marino in respect of the subpoena and the arrest warrant. Mr Senior further confirmed that this was his only involvement in the proceedings and otherwise Mr Marino was unrepresented in the proceedings.
The relevant part of the transcript was as follows (T 304.4-.28): SENIOR: I'm here representing Mr Marino in respect of the subpoena and the warrant. I just wanted to raise that that is my only involvement in this proceeding, and Mr Marino is unrepresented in the proceeding, and I don't believe I have any rights to interfere in the examination of … Mr Marino. And accordingly, I just wanted to raise that issue with your Honour because there are certain questions which are in my mind, and I don't know where it might go to in the future- HIS HONOUR: Just pausing there. What you have just stated is my understanding of the position. This case commenced on Tuesday. Mr Marino is a party to the proceedings. He did not attend on Tuesday and on the face of it, the proceedings commenced and have proceeded on the basis that he, as a party, has elected not to attend on the hearing in the capacity of a party. He was subpoenaed to attend not as a party but as a witness and consequent upon the application by Mr Baron Levi for Mr Marino to be arrested for failure to comply with the subpoena, that is what has led to his arrest. He is present here this afternoon in the capacity of a witness rather than a party unless at some point of time, he makes an application to the Court, or at least makes an intention known to the Court, to indicate that he wishes to participate in the proceedings other than as a witness. So in light of that, he is being examined at the moment as a witness who just happens to be a party. In light of that, I consider that what you have just said is correct. SENIOR: Thank you. That was the only issue I wished to raise.
In light of the above exchange, it was clear that Mr Marino had elected not to attend the hearing in the capacity of a party. Nonetheless, he was clearly aware of the fact that the hearing was proceeding against him. Mr Marino's attendance on the fourth day (and at the time of the resumed hearing) was as a witness only, and without any attempt to appear as a party.

[20]

Mr Marino

As I have explained earlier, when called initially on the fourth day, Mr Marino was called as a witness rather than in his capacity as a party participating in the proceedings. A number of matters arose in the process of Mr Marino giving evidence.
First, while Dr Baron Levi initially purported to question Mr Marino in chief, I detected that certain questions strayed into a type of cross-examination and rejected a particular question: T 301. In those circumstances, Dr Baron Levi made an application pursuant to s 38 of the Evidence Act 1995 (NSW) (Evidence Act) to question Mr Marino as though he were cross-examining him, on the basis that he was an unfavourable witness. I granted leave for Dr Baron Levi to question Mr Marino in the manner contemplated by s 38 (T 302), whilst being mindful that as a matter of procedural fairness I would, if the occasion arose, retain a discretion as to how the questioning might proceed: T 314.
Secondly, in the afternoon of the fourth day, occasion arose for me to consider in accordance with s 132 of the Evidence Act whether Mr Marino may have had grounds for making an objection to questions under s 128 of the Evidence Act, and to inform Mr Marino of his right in that regard: T 306. I then drew Mr Marino's attention to the provisions of s 128 of the Evidence Act.
A little later, following an objection by Mr Marino, an issue arose as to the extent of the privilege accorded by s 128. The issue arose in circumstances where the answer to a question may have had the tendency to incriminate Mr Marino in respect of a breach of a Queensland statutory provision or a statutory provision in respect of which proceedings may be brought against him in Queensland: T 308.17-309.9. It was not self-evident that the protection afforded under s 128(7), relating to "any proceeding in a NSW court or before any person or body authorised by law of this State", would have extended to afford protection to Mr Marino in respect of the law of Queensland or proceedings in a Queensland court.
I indicated that I was not entirely satisfied that it would be in the interests of justice to require Mr Marino to answer the question. Having regard to the fact that the Court was about to adjourn and would need to allocate further hearing dates, the issue was not further debated at that point.
On 23 October 2023, the hearing resumed. Mr Marino attended and Mr Lucarelli of counsel sought leave to appear for Mr Marino solely for the purpose of addressing issues in respect of privilege against self-incrimination. I made a provisional ruling granting Mr Lucarelli leave to appear for such purpose, and there was some debate about the issues. For his part, Dr Baron Levi addressed some submissions as to the question of whether, in dealing with a claim for privilege, I should give a direction requiring Mr Marino to answer questions: T 316.
Mr Lucarelli and Dr Baron Levi accepted that the interstate certificate provisions of s 128(12) of the Evidence Act are not replicated in the Evidence Act 1977 (Qld): T 320-321.
The matter progressed and Mr Lucarelli, on behalf of Mr Marino, raised a claim for privilege in relation to a question put to Mr Marino as to whether he had issued invoices to Oracle Law clients on Oracle Law letterhead. Following debate, I indicated that I was not persuaded it was in the interests of justice to require Mr Marino to answer the question.
Questioning of Mr Marino proceeded and, from time to time, Mr Lucarelli claimed privilege on behalf Mr Marino, upon which I made rulings consistent with earlier rulings. Mr Marino was well presented and gave his evidence in a clear manner. Occasionally he made concessions.
As part of his closing, Dr Baron Levi submitted that, in civil proceedings, where a question is asked which relates to central issues in the proceedings on which the witness may be expected to give evidence, that an exercise of privilege against self-incrimination will permit the Court to be satisfied that inferences adverse to that party may properly be drawn, notwithstanding that there was a ground for refusal to provide evidence on that basis: T 440.3-.20. He cited the decision of Lee J in Pappas v New World Oil Developments Pty Ltd (1993) 43 FCR 594 (Pappas) at 595 for that proposition.
In Pappas, Lee J stated at 595: Counsel for BKF submitted that the failure of Pappas to answer the questions then put to him in cross-examination and claim of privilege against self incrimination provided grounds from which an inference may be drawn adverse to the credit of Pappas. In Dolan v Australian and Overseas Telecommunications Corporation (1993) 42 FCR 206 Spender J had occasion to consider a similar submission and to review the relevant law in Queensland. From his Honour's reasons it was apparent that the law relating to privilege against self incrimination, like the law in New South Wales, remains undisturbed by legislative provisions such as those to be found in the Evidence Act 1906 (WA), s 11, Evidence Act 1910 (Tas), s 87, Evidence Act 1971 (ACT), s 57. Spender J reviewed the uncertain state of the authorities and concluded that no adverse inference may be drawn from the refusal of a witness to answer a question on the ground that the answer may, or would, tend to incriminate the witness. With respect, I agree that his Honour's reasons also correctly state the law that may be applied in New South Wales in so far as the questions relate to issues collateral to the issues for decision. Of course, the failure to adduce evidence on central issues on which the witness may be expected to give evidence will permit a court to be satisfied that inferences adverse to the case of that party may be properly drawn notwithstanding that the ground for refusal to provide the evidence may be rooted in the privilege against self incrimination. (See P W Young, "Taking the Fifth"(1991) 65 ALJ 412 at 415.)
Dr Baron Levi further submitted that (T 440.22-.27): In this case, I don't say that an adverse inference may be drawn directly in the case against Mr Polo because Mr Polo didn't exercise any such privilege, but in so far as the case against Mr Polo is derivative upon a case against Mr Marino, for instance in the context of vicarious liability where one is talking about the liability of Mr Marino, then it is the case that an adverse inference could be drawn in that case.
In prefacing this submission, Dr Baron Levi made it clear that he was making a submission in a context in which Mr Marino had exercised his privilege against self-incrimination: T 440.3-.4.
I do not accept Dr Baron Levi's submission for several reasons.
First, the authorities make a distinction between the prohibition against drawing an adverse inference from a claim of privilege and drawing adverse inferences that may arise from the absence of evidence which a party or witness could be expected to give. I do not regard the comments of Lee J in Pappas as addressing the circumstances in which Dr Baron Levi was making this submission, being that Mr Marino had exercised his privilege against self-incrimination. This is made clear by the judgment of the Victorian Court of Appeal in Chong v CC Containers Pty Ltd (2015) 49 VR 402; [2015] VSCA 137 at [217]-[219].
Secondly, the submission lacked content. Dr Baron Levi did not identify particular instances of matters from which I should draw an adverse inference.
Thirdly, even if the submission were correct (which I do not accept), I doubt that it could be extended in the way that Dr Baron Levi contended; namely, that I could somehow draw an adverse inference against Mr Polo on the plaintiffs' case of vicarious liability against him by reason of another witness, adverse to Mr Polo's case, claiming to exercise his privilege against self-incrimination.
To the extent that there was conflict between the evidence of Mr Marino on the one hand and Mr Parrella and Mr Pacifico on the other, I accept the evidence of Mr Parrella and Mr Pacifico.

[23]

Setting up of the Oracle Law business

Mr Polo was very sparse in his affidavit evidence regarding the arrangements between himself and Mr Marino for the use of an office premises at Mermaid Beach, from which Oracle Law eventually operated, as well as what working arrangement Mr Marino had in relation to Oracle Law.
Mr Polo deposed that "[o]n or about late 2014 I needed an office and Frank and I agree[d] to share office space at Mermaid Beach": CB 206[18].
He deposed further as to his arrangement with Mr Marino as follows (CB 207[29]-[31], omitting parts rejected): 29. At the time that we occupied the office space Frank had suggested that he use his contacts to develop clients for my practice. This was for legal services only and not in relation to any other business areas. 30. I was of the opinion that he had resources and contacts to assist me, whereas I did not. 31. There was … a verbal arrangement. … Frank or Crystal Blue Group did not invoice for any referrals provided, and I did not provide discounted legal services consequent to the referrals. Most of the legal services provided to the first defendant were expected to be gratuitous.
In his amended defence to the plaintiffs' claim, Mr Marino stated that he was a close friend of Mr Polo and agreed to assist him to establish his legal practice in Queensland in or about 2013, on the basis that Mr Marino would be engaged as a "contracted Business Development Manager" for Mr Polo and would be remunerated for his services by "the provision of discounted legal services" to him by Mr Polo and by way of "payment for contract services invoiced": CB 35-36[9].
Mr Marino further stated in his amended defence (CB 37[11(g)]): In 2013, I helped the Second Defendant set up a business "Logo", The Oracle Law "Web Site" (www.oraclelaw.com.au), "Business Cards", Email Footers, "Office Signage" various, marketing material for the "Will Kit" including shopping Centre marketing stands to sell the Will Kit Booklets created by the Second Defendant. The Second Defendant offered me to have my own business card for the purposes of handing out to new perspective [sic] clientele to refer to the Second Defendant's business. The Second Defendant gave me the title of, "BDM" (Business development Manager). The First Defendant asked the Second Defendant at the time is this legal to introduce and refer new clientele to the business and the Second Defendant stated, "It's all Good"[.] As a longtime client and friend, the First Defendant took this response took this [sic] on face value and the First Defendant agreed to assist him in rebranding his business at attracting new clientele.
It is worth noting, in light of the findings I make later in these reasons, that those pleadings are not binding on Mr Polo.
For reasons set out below, the actual timing for the establishment of the Oracle Law practice appears to have been in the latter half of 2012, as opposed to in either 2013 or late 2014.
In the context of Dr Baron Levi questioning Mr Polo in respect of the shared office premises with Mr Marino (T 142), I asked about Mr Marino's association with Oracle Law and, specifically, how their connection actually arose in relation to the shared use of the office premises.
Mr Polo asserted that Mr Marino was a property developer and Mr Polo had previously assisted him with subdivisions and the sale of property, in the sense of Mr Polo being involved in contractual preparation and the lodgement of documents with the various authorities for registration. Mr Polo disputed that Mr Marino ever worked for him other than in the sense of referring matters to him: T 143.15-.24
Mr Marino was cross-examined about the statement in his amended defence at CB 35-36[9] which I have referred to above. He indicated that his arrangement with Mr Polo was one by which Mr Marino would be remunerated for his services or "in lieu for services rendered for [his] real estate business": T 327.6-328.2. He could not recall precisely what he was referring to when he stated "payment for contract services invoiced" in his amended defence: T 328.5-.7.
On 19 September 2012, Peter Burrows, a business advisor, emailed Mr Polo and Mr Marino addressing the subject of a trading entity for legal practice: CB 706. The email addresses a number of matters and appears to contemplate that Mr Polo would be the director of a company to operate the business, and each of Mr Polo and Mr Marino would own shares in proportions to be agreed. It was contemplated that flexibility would be achieved by the shares being held through family trusts. The email (Burrows email) contains the statement: If there is a Law Society restriction on you Frank owning shares perhaps there needs to be a silent agreement or otherwise a management agreement etc to get your profits out…
On 24 September 2012, Rick Herro (Mr Herro), the principal of a web administrator known as "The Net Unleashed", sent an email to Rebecca Ottaway (who appears to have been an employee of Mr Marino associated with CBG), copying in Mr Marino and Mr Polo. The email provided a detailed fee proposal for the setting up and ongoing administration (seemingly for a period of 12 months) for an Oracle Law website: CB 707. I refer to this in more detail below.
On or about 1 May 2013, a proposed form of business chart, described as an "Oracle Law Business Plan & Structure", was created. The structure assumed that Oracle Law would be some form of corporation and envisaged that Mr Polo would be the director of Oracle Law, with each of Mr Polo and Mr Marino having a 50% shareholding. Oracle Law was shown as providing services under four heads, being "individual services", "business services", "family services" and "commercial services" (proposed business chart): CB 713. However, this proposed corporate structure for Oracle Law was never instigated or formalised.
The first occasion on which Mr Marino adopted the title "business development manager" in Oracle Law emails appears to be on or about 10 October 2013, when he corresponded with Dean Ind (copying in others) using his Oracle Law email in connection with negotiations with a number of accountancy firms, financial planners, finance brokers in relation to the offering of a "Will Kit" (Exhibit D6: T 368) as a wholesale product to Oracle Law's clients: CB 718. As best I can gauge, the abbreviated version of "business development manager", namely "BDM", appears to be first used by Mr Marino in Oracle Law emails on or about 13 February 2017: CB 963.
I asked Mr Polo about how the "business development manager" arrangement between him and Mr Marino arose. He indicated that the arrangement arose "during the transition". Exactly what "transition" Mr Polo was referring to was undefined other than by reference to the fact that Mr Polo had assisted Mr Marino with his litigation matters in respect of previous partnerships and his family law matter. Mr Polo elaborated, indicating that (T 146.45-.50): A. … He, after assisting him with so many different aspects of his problems, he believed that he owed me, owed me a favour, or owed me some recompense for everything that I had done. Because I hadn't charged him at the full rate that any other lawyer would have charged him. And consequently he said that he would refer work to me as a consequence to allow me to build my business from his property, property sales business.
Mr Polo stated that he understood there to be no difference between a person referring work to him and that person becoming what he described as a "business development manager", indicating "[i]t was only a title": T 147.1-.16.
By 4 July 2014, Mr Marino had a conference with a bank (seemingly Westpac) in relation to integrating payment gateways and merchant facilities in connection with the Oracle Law website: CB 717, 722 (merchant facilities enquiries).
In or about July 2014, Mr Polo made an application for a PayPal business account to be set up for Oracle Law: T 164. On the account form, the box designated "business type" has the word "partnership" inserted: CB 723 (PayPal email).

[25]

Description of the office premises

The street façade of the office premises was depicted in a photo: CB 781. Whilst the date of the photo was not given, it was clearly taken while Oracle Law operated out of the premises. On the awning there was a prominent sign with the Oracle Law logo and the Oracle Law website address. There was no signage for CBG depicted in the photo.
To access the office premises, there were stairs at the front of the building which led up to a veranda on the first level, on which the office premises were located: T 289. When one reached the top of those stairs, there was a door to the office premises. However, there was no signage on the door. Towards the back of the building there was a car park with designated parking spots allocated to premises rented within the building and marked by signage: T 290. At least one of those spots had signage referable to Oracle Law with a "NO PARKING DAY AND NIGHT - Oracle Law STAFF ONLY" sign: CB 779. There was no equivalent signage for CBG: T 290. Mr Marino was responsible for sourcing such signage for Oracle Law (see below).
A photograph depicting the flight of stairs leading up to the front entrance of the office premises was tendered: Exhibit D3; T 359. The dating of the photograph was not established, and it does not reveal any particular signage to Oracle Law or otherwise. A photograph of the back entrance to the building was also tendered: Exhibit D4; T 359.
Another photograph was tendered which was taken near the top of the stairs at the front of the building, and which showed a signage board on a tiled wall: MFI-2 (T 359), which became Exhibit D7 (T 393). The signage board contained details of shops 1 to 13 on the ground floor and offices 1 to 7 on the first floor. Mr Jamieson indicated that the signage board depicted was the current directory at the Mermaid Shopping Centre: T 358.23-.26. In relation to the office premises (office 7), the photograph depicts Mr Polo holding a makeshift white label with black writing on it over the name of the current occupant of office 7. The label contained the words "Oracle Law - Crystal Blue Group", which was said to depict how the signage presented prior to the termination of Mr Polo and Mr Marino's lease. What appears to be precisely the same photograph was marked as MFI-3 (T 360) and tendered as Exhibit D8 (T 393), and was said to depict the type of directory that existed at the back of the building (though it was accepted that the photograph was not a photograph of the actual directory at the back of the building).
During the hearing, Mr Polo prepared a sketch plan of the office premises: Exhibit D1. As noted above, Mr Polo asserted that he shared the premises with CBG and/or Mr Marino on the same floor in the Mermaid Shopping Centre building: T 288.35-.40. The total area of the office premises was 69m²: CB 1389.
Looking at Exhibit D1, there was a passageway leading from the front door into the premises, with a boardroom on the left and what Mr Polo described as his "Oracle office" on the right. He stated that the Oracle Law office and the boardroom were entirely his for "occupation" (i.e. use). Once one passed the boardroom and the Oracle Law office, there was a rear area containing a kitchen, storage and photocopier on the left and what was described as the "Crystal Blue office" on the right, being a section where Mr Marino and his CBG staff would work. Mr Polo indicated that, in terms of area, CBG staff and Mr Marino occupied about half of the overall office space entirely to the exclusion of Mr Polo: T 288.35-289.19.
Mr Polo stated (in context in or about late 2017) that he held conferences at the front of the office premises and the front boardroom, and at no stage involved himself with Mr Marino's operation in the back offices: CB 207[22].
On 26 September 2014, Mr Marino corresponded with RBC Business Solutions apparently sourcing the purchase of a photocopier for Oracle Law: CB 739-740.
On 9 October 2014, Business Insurance Planning, an authorised representative of an insurance broker, provided a quotation for business insurance for Mr Polo and Mr Marino, marked to the attention of Mr Polo. The insurance schedule describes the insured name as "Renaldo Polo & Frank Marino" and the trading name as being "Polo & Company Solicitors & Oracle Law": CB 750 (insurance quotation).
On 21 October 2014, Mr Marino engaged in email correspondence using his Oracle Law email address in relation to Oracle Law T-shirts: CB 765-766.
On 22 October 2014, Mr Marino corresponded with Darryl Clarke regarding logo images for Oracle Law office signs, including for the front door, the awning and the car park: CB 771-775.
On 24 September 2015, Mr Marino and Mr Polo extended the lease of the office premises for a term of one year, commencing on 10 October 2015 and due to expire on 9 October 2016: CB 783, 784.

[27]

The same email provided details of "CMS ADMIN", indicating that there were two users - "Frank" (Mr Marino) and "Rebecca" (Ms Ottaway): CB 710.
Ms Ottaway forwarded the email to Mr Polo: CB 709.
"CMS" appears to be an abbreviation of "Content Management System", which Mr Herro described as "an easy to use site management tool allowing client management and editing of all site images and written content": CB 707. Essentially, it allowed for backend access to the Oracle Law website.
On 3 May 2013, a number of emails were sent in respect of the Oracle Law email system and website: 1. at 7:38am, Mr Polo sent Mr Marino and Ms Ottaway an email regarding use of certain limited liability text which was to appear on all documents and email footers: CB 716; 2. at 10:38am, Ms Ottaway sent an email to Mr Herro indicating that "…Oracle Law is ready to go live when you are back on deck": CB 715; and 3. at 5:38pm, Mr Marino sent an email to Ms Ottaway (not copied to Mr Polo) requesting her to set up "frankm@oraclelaw.com.au" as an email address for him: CB 714.
On 6 May 2013, Ms Ottaway made that request of Mr Herro, who later that day responded with the details of the Oracle Law email address set up for Mr Marino: CB 714.
On 4 June 2013, Ms Ottaway sent an email to Mr Polo providing the same "CMS ADMIN" details received from Mr Herro on 15 April 2013, indicating that the information was the "login for the backend of the website" if Mr Polo needed it: CB 709. The email went on to indicate that she would arrange for Mr Herro to set up a login for Mr Polo as well. On the same day, Mr Herro arranged for Mr Polo to be set up with backend access to the Oracle Law website: CB 711.
A domain name is the string of text that a user types into a browser window to reach a particular website. Domain names are registered in domain registries. Applications can be made to registrars to reserve domain names and to register a domain name. Thus, for example, it appears that Mr Polo was the registrant of a domain name "protectnlocate.com.au", which had been registered by the registrar "Web Address Registration": CB 1087.
Details regarding nomination of the ownership of the Oracle Law domain name "oraclelaw.com.au" were not expressly explained by the parties or counsel, nor evidence from the initial 2012 correspondence with Mr Herro. Some gleaning of it does, however, appear in later correspondence in the Court Book.
Mr Marino had a CBG account with Mr Herro (e.g. CB 970), and Mr Marino received renewal invoices for his "crystalblueproperty.com" domain name from Mr Herro's firm: e.g. CB 799-801. On 21 September 2016, Mr Herro's firm sent to Mr Marino's CBG email address an invoice for renewal of the Oracle Law domain name: CB 812-813. The parties assumed, and I infer, that Mr Marino or CBG had ownership of the Oracle Law domain name.
Mr Polo's affidavit evidence states that, whilst at the office together, he was not aware that Mr Marino was without his permission using "my email" for Mr Marino's own purposes: CB 207[25]. It is not clear precisely what Mr Polo meant by "my email". I further address his evidence as to permission below.
Mr Polo was cross-examined on a number of occasions regarding the website and email arrangements for Oracle Law. I gained the impression that Mr Polo's understanding of website and email control, authorisation and access was very poor. Indeed, even at the time of the hearing, he did not appear to have any clear working understanding of what an administrator of a website domain is enabled to do, or what access they have: T 158.15-.32; also T 157.28-.37, 159.13-.47.
Specifically, Mr Polo did not have any clear understanding of: (a) what an "admin" does; (b) what "admin access" means; or (c) what "control over" the Oracle Law website or domain name entailed: T 158.30-159.22
In light of that, it is difficult to know what to make of Mr Polo's answers in respect of control and access to the Oracle Law website and email arrangement.
From Mr Polo's responses, he seemed to believe that: 1. as at 2018 and 2019, the Oracle Law domain name was in Mr Marino's name, but he assumed that it belonged to Oracle Law and not to a particular person: T 159.21-159.43; and 2. up until 2019, Mr Marino: (a) had control of the Oracle Law domain name; (b) may have had control over the Oracle Law website; and (c) did not have control over Oracle Law email addresses other than his own: T 159.45-160.11.
Mr Polo gave contradictory evidence regarding whether, and at what times, Mr Marino had control over his own Oracle Law email address: T 160.6-.24.
Significantly, Mr Polo gave evidence that, until some point in April 2018 which he cannot recall, he was able to see every email sent or received on Mr Marino's Oracle Law email address through some form of auto-forwarding system that had been established by the web administrator: T 160.26-161.23, 181.9-.25 (it being unclear as to who Mr Polo regarded as being the "web administrator"). After that point, he says that he could no longer see those emails being sent or received on Mr Marino's Oracle Law email.
However, Mr Polo's evidence was that Mr Marino would use his Oracle Law email and CBG email interchangeably: T 186.45.
On 30 June 2016, Mr Marino corresponded with Mr Herro (copying in Mr Polo) requesting the setup of a new email address for Oracle Law, being "admin@oraclelaw.com.au". According to Mr Polo, the Oracle Law "admin" email address had a particular function and related to the Will kit that he had developed: T 188.7-189.24. The email also requested of Mr Herro to set up a function such that when anybody emailed out from the new email address, or received an email, that the Oracle Law "info" email address and Mr Marino's Oracle Law email address would be automatically blind copied in the email: CB 793. Mr Marino indicated that this would help them track all emails sent and received. Another email sent by Mr Marino on the same day requested of Mr Herro to make certain changes to the Oracle Law website (including to presentation in respect of font size and colour, and change of contact address information): CB 793.
On 6 May 2016, it appears that Mr Marino arranged to have his Crystal Blue Wealth email terminated: CB 795.
On 2 July 2018 (in the midst of Mr Marino's correspondence with the plaintiffs regarding the investment proposal), Mr Marino via his CBG email arranged through Mr Herro to have the Oracle Law domain name renewed for a further two years, to expire on 27 September 2020: CB 1504-1505.
I address below the termination of the Oracle Law website and email arrangements.

[28]

Mr Pacifico's introduction to Mr Marino

In about September 2016, Mr Pacifico travelled with a few friends from Adelaide to Broadbeach on the Gold Coast and stayed for around four days: CB 139[24]. On one of the nights, Mr Pacifico attended the opening of his friend's restaurant. He was having some drinks at the restaurant when Mr Marino sat down next to him and engaged him in conversation: CB 140[28]. Later in the evening, Mr Pacifico had a further conversation with Mr Marino in which he says Mr Marino informed him "I'm a lawyer": CB 140[29]. On hearing this, Mr Pacifico asked Mr Marino to "look at" a vitamins business, Pharma Active Pty Ltd (Pharma Active), which had approached Mr Pacifico for a loan.
In his amended defence, Mr Marino gave a different version of their introduction. Mr Marino pleaded that upon his introduction to both Mr Mackay and Mr Pacifico at the venue, he handed them his CBG business card and introduced himself as a "New South Wales real estate agent". Mr Marino also told Mr Pacifico and Mr Mackay that he had been involved with property development and marketing for over 21 years: CB 36[11(a)]. Mr Marino pleaded that at no material times did he state that he was a solicitor or employee of Oracle Law: CB 37[11(h)].
There is a conflict between Mr Pacifico's evidence and Mr Marino's amended defence. I accept Mr Pacifico's evidence that Mr Marino told him words to the effect "I am a lawyer".
The two exchanged phone numbers and Mr Pacifico saved Mr Marino's details as "Frank Law" in his mobile phone: CB 141[30].
Subsequently, Mr Pacifico met Mr Marino in Sydney, at which point Mr Marino indicated that he had done certain checks in relation to Steven Elovaris (Mr Elovaris), a man associated with Pharma Active, and considered that "everything's well". As a result of this, Mr Pacifico says, and I accept, that he considered he could trust Mr Marino and thought Mr Marino would look after him and "legally protect" his interests in relation to the proposed loan, and potentially other loans and investments: CB 141[36].
From about September or October 2016, Mr Pacifico met Mr Marino more frequently in Adelaide, Sydney and on the Gold Coast to discuss various business matters, including Pharma Active loan issues: CB 142[41], [43].

[36]

Conveyancing and loan work (October 2016 - March 2018)

As noted above, much of the evidence adduced by the plaintiffs in the proceedings was directed to showing Mr Marino's association with Oracle Law and his engagement in what the plaintiffs asserted was legal work.
The presentation of the evidence to this end was haphazard. It is not entirely clear whether this evidence was relied upon purely for the purpose of showing that Mr Marino was engaging in some form of legal work or whether it was additionally adduced to show the plaintiffs were aware of what Mr Marino was doing. In any event, in summary, the following appear to be the salient chronological events related to Mr Pacifico's matters.
In or around October 2016, Mr Pacifico's initial correspondence with Mr Marino involved Mr Marino discussing arrangements with him to: (1) help recoup the money that was owing from Mr Mackay (or rather MEG), which required Mr Marino getting involved in Mr Mackay's handling of the Chinderah properties; and (2) prepare a stronger loan agreement with Pharma Active to better protect Mr Pacifico's interests, as it appears Mr Marino considered the existing agreement was insufficient: CB 142[41]-143[47].
According to Mr Polo, in November 2016 Mr Marino introduced Mr Mackay to him (or Oracle Law) "for a conveyance": CB 208[34].
As referred to above, from about 22 November 2016 Mr Polo acted for Mr Mackay and/or MEG in relation to matters associated with XXX Chinderah Bay Drive, Chinderah: CB 143[48], 835-836.
Mr Polo indicates that his work for Mr Mackay as a client was for conveyancing in relation to his land at Chinderah, which required subdivision, registration and preparation of sale contracts. Mr Polo says that he prepared sale contracts and issued these to various buyers who proposed to purchase the land after the registration of the subdivision had occurred: CB 208[34].
Between 12 and 16 December 2016, Mr Marino corresponded with Mr Pacifico and Mr Elovaris in relation to the re-drafting of the First PA Deed: CB 143[50]-144[55], 845-849. Although dated 1 November 2016, the revised deed was executed by the borrowers on 22 December 2016 and by Mr Pacifico as trustee for the SP Glass Trust on 15 January 2017 (Second PA Deed): CB 831. The Second PA Deed was far more elaborate than the First PA Deed and nominated, in addition to Pharma Active, two other borrowers, being Daven Pty Ltd as trustee for the Nicholas Elovaris Family Trust and Mr Elovaris: CB 814-831.
The schedule to the Second PA Deed includes reference to Mr Marino's Oracle Law email address as a nominated address for service for Mr Pacifico as lender: CB 829. The Second PA Deed was also emailed to Mr Elovaris and Mr Pacifico on 16 December 2016 from Mr Marino's Oracle Law email address, with the signature line "Business Development Manager": CB 882.
Notably, in cl 6.9.2, the Second PA Deed includes provision for payment of Mr Pacifico's collection costs and costs of entry into the agreement, which are said to include but are not limited to "commissions and outlays payable to Frank Marino & Renaldo Polo for work in collecting the Loan Amount and associated monies": CB 823. In addition, it makes provision in cl 6.10 for the borrowers to pay to Mr Pacifico his costs of entering into the agreement "including but not limited to commissions and outlays payable to Frank Marino & Renaldo Polo for work in preparing this agreement": CB 824.
In his affidavit evidence, Mr Pacifico indicated that, between at least 2 February 2017 and 4 September 2017, he understood that Mr Marino was representing him in relation to drafting a (new) loan agreement to allow Adelaide to remove its caveat over certain of Mr Mackay's Chinderah properties in order to allow Mr Mackay to refinance and repay the funds owing to Adelaide, which totalled $300,000: CB 145[58]. Mr Pacifico understood from the arrangement that Mr Marino, through Oracle Law, would be acting for him to arrange repayment from Mr Mackay. Interestingly, Mr Pacifico's affidavit indicated that he understood Mr Polo originally worked for Mr Marino and would assist Mr Marino on those matters for which Mr Marino asked his assistance: CB 145[59]. In cross-examination, Mr Pacifico indicated that he could not precisely remember the reference to Mr Polo assisting Mr Marino on such matters, but he did remember Mr Marino saying that Mr Polo worked for him: T 87.
On 23 February 2017, Mr Marino sent to Mr Pacifico a draft amended deed for the loan agreement between Adelaide and MEG (Second MEG Deed): CB 994-1023. In the email, Mr Marino states that he had included a number of extra conditions to "cover" Mr Pacifico. The email also attached "an updated work time sheet", which Mr Marino indicated showed what time had been put into the deal for Mr Pacifico: CB 993 (the timesheet appears at CB 1024). The timesheet gives some indication of the activities Mr Marino was "charging" for, as set out below. Sergio Pacifico Time sheet as at 23-2-2017 Huey Deal 1. 27th October 2016 Initial meeting with Hue for discovery of all agreements background brief = 2 x Hrs. 2. Meeting with Hue in QLD head office to complete discovery of all agreements = 1.5 x Hrs. 3. Onsite meeting at Hue's property 4th December 2016 to discuss options to maximise a quicker return for funds to come to Sergio. 3 x Hrs. 4. Numerus discussions on the phone with Huey 2 x Hrs. 5. Preparation of Annexure to existing agreement 3 x Hrs. 6. Numerus discussions on the phone with Huey 2 x Hrs. 7. 2 x Meetings with Hue in QLD head office to discuss the strategy to selling the properties to help the bank release the properties and the Ex-wife and help him to calculate the remaining payout figures to pay you out = 2 x Hrs. Steve Deal 8. 14th November 2016 Initial meeting with Steve at his office in Silverwater NSW background brief = 4 x Hrs. 9. Preparation of NEW loan contract = 3 x Hrs
On 1 May 2017, a form of authority was prepared whereby Mr Mackay, in his capacity as sole director of MEG, in consideration of Adelaide releasing its caveat over XXX Chinderah Bay Drive, charged on behalf of MEG a substitute security described as "Lot [XXX], [XXX], [XXX] Chinderah Bay Rd, Chinderah (Lot [X] in DP [XXXXXX]), (Lot [X] in DP [XXXXXX]) and (Lot [X] in DP [XXXXXX])": CB 2061 (it will be observed that the lot reference for XXX "Chinderah Bay Rd" (which ought to read "Chinderah Bay Drive") was precisely the same as the lot reference for XXX Chinderah Bay Drive, and in that respect appears to have been a mistaken description of that lot number). The authority in evidence is signed by Mr Pacifico on behalf of Adelaide but there is no signature by or on behalf of MEG.
As referred to above, seemingly on or prior to 3 May 2017, Mr Mackay engaged Bill Redmond of Redmond + Redmond Lawyers to act for him: CB 1162. On 4 May 2017, Amy Clark, a paralegal of that firm, sent correspondence to Mr Mackay about MEG's refinancing of the Chinderah properties: e.g. CB 1145.
On 8 May 2017, Mr Marino sent an email to Mr Mackay noting that Mr Pacifico had agreed to have a caveat placed on the properties at XXX-XXX Chinderah Bay Drive, and indicated that certain conditions needed to be agreed upon prior to Mr Pacifico providing his consent to a release of the existing caveat. Notably, Mr Marino stated that he would need to approve the new caveat prepared by Mr Redmond prior to lodgement taking place. The email was sent from Mr Marino's Oracle Law email address with the signature "BDM": CB 1036.
Also on 8 May 2017, Mr Marino sent an email to Mr Pacifico from his Oracle Law email address with the subject heading "Legal services Tax Invoice". The content of the email was as follows (at CB 1209-1210): HI Sergio, Please find attached the Tax Invoice chargeable for the legal services to date on the current debt collection. I understand that you have requested for this Invoice to be paid by Hue so may you please instruct the invoice and arrange Hue to make payment a.s.a.p.. Please note, that I this part payment and doesn't include the loan variation document and time spent until [full] and final payment of the total debt is repaid. The email signature details include "Frank Marino - BDM".
Precisely what was attached to this email is not entirely clear. Nonetheless, there is a form of tax invoice dated 13 May 2017, identified as invoice 70, which is under the letterhead of Oracle Law: CB 1211. The invoice sets out a description of work (which items roughly accord with the "time sheet" Mr Marino sent to Mr Pacifico on 23 February 2017) with provision for payment to Mr Marino at the foot of the page, with fees totalling $7,678 (invoice 70).
In his amended defence, Mr Marino claimed that invoice 70 was issued to Mr Pacifico in his capacity as trustee of a trust unrelated to the proceedings: CB 38[11(k)]. Mr Marino further asserted that Mr Pacifico had disputed the invoice amount and only agreed to pay $4,750, and that Mr Polo had instructed Mr Marino to create and send the invoice for Mr Polo's services.
It would appear that invoice 70 was attached to a subsequent email from Mr Marino, again from his Oracle Law email address, to Mr Pacifico on 15 May 2017: CB 1208-1209. The content of that email was as follows: Hi Sergio, As instructed yesterday, please find attached the revised detailed tax Invoice showing an itemised list of services provided to you and Hue in order to achieve the outcome. As confirmed, I have charged "mates rates" on this invoice. As per the written undertaking provided by Bill Redmond I could have been paid from the loan settlement however, Hue confirmed with me that these fees will be paid from other funds, that way I didn't produce the Tax invoice at settlement. If there is any problem or either of you need to discuss the Invoice with me further please call me by Monday 5pm, if all is good then I will need payment completed by next Friday 5pm the 19th May. Please also, let me know if you still want me to prepare the loan variation documents protecting both of you with the balance of outstanding funds. Also if you require me to create the NEW loan agreement for $300,000 between the parties to justify the clear funds being paid to Sergio?
Mr Pacifico referred to the receipt of these emails in his affidavit evidence: CB 150[81]-[83]. Whilst Dr Baron Levi submitted that these were some of the communications which created a risk that the plaintiffs could have viewed Mr Marino as a solicitor, and indeed suggested that Mr Mackay was under the impression that Mr Marino as a solicitor (T 420.45-421.22), Mr Pacifico does not actually say that his receipt of these emails confirmed for him the belief that Mr Marino was a solicitor.
On 21 May 2017, a nine paragraph typed document with handwriting on it was apparently signed by Mr Mackay and witnessed by Mr Marino: Exhibit D5; T 365. The handwriting stated: I Request that you Terminate any and all contracts Oracle Law is or has represented Mackay Ellis Group/or Hugh Arthur Mackay effectively as of this date.
According to Mr Marino, Mr Mackay had terminated Mr Polo as the conveyancing solicitor for him and MEG as at that date and went to another solicitor: T 365.21-.31.
If it be the case that Mr Mackay had signed a form of termination of Mr Polo's instructions in May 2017, the evidence leaves somewhat unexplained why Mr Polo seems to have still been involved with Mr Mackay up until July 2017.
Mr Polo deposed that, in July 2017, "caveat release [advice] was provided to Mr Mackay in relation to the encumbrance on title", and "the advice was in relation to the steps outlined by the caveator for release of the caveat": CB 208[35].
Mr Polo stated that it was difficult to obtain instructions from Mr Mackay and he ended up handing back to Mr Mackay the sale contracts which he had prepared and recovering his out-of-pocket expenses for searches required for the contract preparation: CB 208[34].
On 18 July 2017, Mr Marino sent an email to Mr Mackay regarding release conditions for the caveat on XXX-XXX Chinderah Bay Drive: CB 1040, 1309, 1310, 1312, 1314. It was marked "without prejudice" and in the following terms: "Without Prejudice" Dear Huey, I have made [several] attempts to contact you since last Thursday to confirm a meeting time to finalise the lifting of the caveat currently registered in favour of Sergio Pacifico known as "Adelaide Concrete Cutting & Drilling Pty Ltd" (ACN 079 482 429). You have responded by confirming to meet 2 times in this period and on both occasions you haven't turned up?. As advised, I am leaving for an overseas trip tomorrow until 28th August 2017 and I will not be available and or contactable during this period. I have been instructed by Sergio Pacifico to confirm that he doesn't consent to the release of the caveat until all conditions below have been agreed to by him in writing and until my return from overseas. The following conditions need to be agreed to prior to consent being removed; 1. Sergio Pacifico will consent and agree to the release of the caveat based on receiving a written undertaking on the following conditions will be completed hereto in by Noel Barbie (Solicitor), 2. Sergio Pacifico gives consent to Noel Barbie (Solicitor) to withdraw the current caveat on the properties known at [XXX]-[XXX] on Lot [X],[X],[X] DP [XXXXXX] Chinderah Bay Drive on or before settlement taking place, 3. At settlement, a bank Chq's is drawn and in favour of 'Sergio Pacifico as Trustee SP Glass Trust' 4. All costs associated in relation to this matter including and not limited to, the release fees, any government are paid by your Hugh Mackay as agreed by the parties, Bank Chq: Outstanding balance is $150,000 amount for settlement is; $150,000.00 by depositing the bank chq into; Account Name: 'Sergio Pacifico as Trustee SP Glass Trust' (Bank Chq name) BSB: [XXX]-[XXX] Account No: [XXXXXXXX] Kind Regards, FRANK MARINO - BDM
On or about 1 or 2 July 2017, Mr Pacifico became aware that Pharma Active was going into receivership: CB 152[89]. He telephoned Mr Marino, however Mr Marino stated that he was overseas at that point and asked him to call Mr Polo: CB 152[90]. Mr Pacifico subsequently spoke with Mr Polo, at which point Mr Pacifico indicated to Mr Polo that he was a friend of Mr Marino's and that he would get Mr Elovaris to call Mr Polo to explain the matter: CB 152[92]; T 77. Over the next few days, Mr Pacifico had further discussions with Mr Polo in which Mr Polo indicated that he was talking to Pharma Active's receivers and staying in touch with Mr Marino: CB 152[93].
Sometime after 19 July 2017 (or at least prior to 15 August 2017), there was further communication between Mr Pacifico and Mr Marino. After speaking with Mr Mackay, Mr Pacifico became aware that there were some problems between him and Mr Polo. Mr Pacifico then spoke with Mr Marino about this, who responded "[d]on't worry about it. I've sacked Renaldo": CB 154[102]-[103].
On 5 September 2017, Mr Marino sent Mr Polo an email from his Oracle Law email address with the subject line "Pharmaactive Tax Invoice" in the following terms (CB 1342): HI Bello, Do you want me to prepare a Tax invoice tonight ahead of my meeting with Steve for the next two days?? If so, which account and please supply any details you require on the invoice? If not, no worries.. Just wanting to get paid and push for me while I'm there.
On 13 September 2017, Mr Polo sent an email (CB 1346, see also CB 1345, 1348, 1352, 1356, 1358) to Mr Pyrlis, Mr Elovaris, Mr Pacifico and Mr Marino under the subject heading "AMENDED TAX INVOICE" (September 2017 PA amended tax invoice email) stating: Dear Sirs, Further to my previous email to you and Franks attendance in Sydney last week, find enclosed our amended invoice. Should you have any questions regarding same do not hesitate to contact the writer. Regards, Renaldo Polo
Connected to the version of the September 2017 PA amended tax invoice email appearing at CB 1346 is an invoice (at CB 1347, see also CB 1357) dated 13 September 2017 with Oracle Law's logo and a reference "Renaldo Polo" (September 2017 PA Polo amended tax invoice). The content of the invoice was as follows: RE: ScottPac vs Pharma Active To our professional fees in taking instructions, and acting for you in the above matter 1. Providing Advice on the Matter 2. Negotiating with Receiver terms of Settlement Total (Inclusive of GST) $7,000.00 Pay to Oracle Law BSB [XXX]-[XXX] Account [XXXXXX]
A reference to an "amended" tax invoice ordinarily conveys that an original invoice has been provided. However, Mr Polo could not identify what the purpose of the actual amendment was, and Dr Baron Levi indicated that the original invoice was not in evidence and had not been produced following the issue of a notice to produce (within a general request for documents): T 230.35-231.14.
Confusingly, connected to an email from Mr Marino dated 6 March 2018 (CB 1351), which appears to be following up payment of the September 2017 PA Polo amended tax invoice, is a separate invoice (CB 1353) with the Oracle Law logo, but which bears the hallmarks of Mr Marino's involvement in the matter referred to as "Scott Pacific Vs Pharmactive In Receivership", is for a larger amount and provides payment details for a different account (September 2017 PA Marino tax invoice). The invoice in its terms appears to be "billed" not to Mr Pacifico but in fact Pharma Active. The content of that invoice was as follows: Professional consulting Fees in relation to the above matter $10,000 Debt Options Pty Ltd Trust Account REF: 60103. BSB: [XXX]-[XXX] Account Number: [XX]-[XXX]-[XXXX] Make all checks payable to Frank Marino. If you have any questions concerning this invoice please contact me on [XXXXXXX] ACCOUNTS PAYABLE WITHIN 7 DAYS.
The email attaching that invoice was sent to Mr Elovaris and Mr Tortorella, among others, from Mr Marino's Oracle Law email address, and appeared to be following up a previous email from Mr Marino on 9 October 2017 to Mr Elovaris under the subject heading "ORACLE LAW - TAX INVOICE" (CB 1351, see also CB 1356). That previous email stated: HI Steve, As per our discussions last week, here is the outstanding Tax Invoice ready for payment once you receive your new finance loan come this week. I have explained to Renaldo your situation and he understands your position, however payment needs to be completed by the end of the week. Thanks, FRANK MARINO
Meanwhile, on 20 October 2017, Mr Polo sent an email to Mr Pyrlis, copied to Mr Marino, under the subject heading "Fwd: AMENDED TAX INVOICE": CB 1358. In the email, Mr Polo stated: "See attached outstanding Invoice for payment. Advise when payment is expected".
On 18 January 2018, Mr Marino sent an email to Mr Tortorella, copied to Mr Pacifico and Mr Elovaris, making a disclosure of four loans with which he had been associated, including two relating to Mr Pacifico: CB 1369-1371. That email also made reference to the September 2017 PA Marino tax invoice and relevantly concluded with the following three sentences: Outstanding Tax Invoice payable by Pharma Active Pty Ltd to Oracle Law for $10,000 for services to negotiate with the administrator (BDO). This has been outstanding since September 2017 In summary, the total outstanding loan/debts representing the above is; $1,213,687.00 In order to conclude and complete all outstanding loans/debts all the above parties have instructed Oracle Law to act on their behalf to start recovery action by next Thursday 25th January 2018
In relation to the concluding statement of purported instructions to Oracle Law, the email is an example of what appears to be Mr Marino representing to recipients of the email matters that would have ordinarily been the subject of instructions for legal proceedings. That is notwithstanding the email containing the signature "Frank Marino - BDM".
On 18 July 2018, Mr Pacifico was copied into an email from Mr Marino using his Oracle Law email address. The email was directed to Mr Tortorella: CB 2286. The email attached another tax invoice, being invoice 71 (CB 2288), with an Oracle Law logo and said to be in respect of work done for the matter "Scott Pacific Vs Pharma Active In Receivership". In fact, the invoice is identical in all material aspects to the September 2017 PA Marino tax invoice except for the date, claiming fees of $10,000 for "Professional Fees in relation to the above matter". The payment options provided for payment to an account apparently with the NAB, with a reference for Mr Marino. Dr Baron Levi asked Mr Pacifico about this document in re-examination and, whilst he indicated that it was one of the invoices that Mr Marino had provided to him, he could not remember how it was sent to him: T 110.20-.38.
In his amended defence, Mr Marino claimed that: this invoice was issued to an unrelated company to the proceedings; Mr Polo had instructed Mr Marino to create and send the invoice for Mr Polo's services; and the invoice was never paid: CB 38[11(l)].

[39]

June-August 2018 (the investment proposal)

The plaintiffs pleaded that, in or about June 2018, Mr Marino represented to Mr Pacifico that: Mr Marino managed investments; selected people were investing $100 million in an investment platform with which Mr Marino was associated; and if Mr Pacifico found investors who would invest $1 million in the investment platform, Mr Pacifico would make 40% of the profit: CB 6[14]. In his amended defence, Mr Marino admitted that he had advised Mr Pacifico and Mr Parrella that he offered assets management services for a variety of investments situated outside of Australia: CB 38[12].
In or about early July 2018, Mr Parrella had a discussion with Mr Pacifico during which Mr Pacifico informed him about an investment opportunity that Mr Marino had told him about. Mr Pacifico asked Mr Parrella whether he wished to participate and invest some money: CB 182-183[12].
Mr Parrella referred to an initial meeting with Mr Marino and Mr Pacifico, in or about late July 2018, at Mr Parrella's business premises in Magill, Adelaide: CB 183[15]. Later that night, there was a further meeting at Mr Parrella's home during which, according to Mr Parrella, Mr Marino told him and Mr Pacifico (CB 183[19]): "I have purchased land next to the Gold Coast Airport to build a city. I have acres and acres of land. This project is backed by the government with government funds. There are other investors for the platforms but I'm helping Sergio. Sergio said he lost a lot of money. I'm doing Sergio a favour. It's an investment of one million dollars. You can get back your capital plus profits within 3 months. You should invest. It's a good deal. Here, look at these documents."
Mr Parrella said that Mr Marino had a folder of documents that he showed them, which included what appeared to be letters, emails and contracts all on the letterhead of Oracle Law. Mr Marino also showed them his business card, which had an Oracle Law logo on it. Mr Parrella further said that Mr Marino told them that he "was involved in the preparation and amendment of those documents", and also later said that "I own Oracle Law": CB 184[20]-[22]. Mr Parrella said that, as a result of those statements and the fact that Mr Marino was providing them with legal documents which he had amended, he thought that Mr Marino was a lawyer and believed that he was the owner of Oracle Law: CB 184[23].
On 19 July 2018, Mr Pacifico received an email from Mr Marino, again from his Oracle Law email address, with the subject line "INSTITUTIONAL BANKING Programs" and attaching a number of PowerPoint presentations: CB 159[127], 1516; T 25.
The body of the email per se has no content. Another version of the email appears at CB 2105-2106 with the actual attachments proceeding it.
It is not relevantly disputed that Mr Marino's 19 July 2018 email attached a number of PowerPoint documents appearing at CB 2107-2145, which included the following: 1. "LEVERAGED CASH TRADE PROGRAM (Small Cap)": CB 2107-2119 (13 pages); 2. "MANAGED BY/SELL PROGRAMS": CB 2120-2132 (13 pages); and 3. "MANAGED Tear Sheet Program": CB 2133-2145 (13 pages).
The three sets of PowerPoint documents follow a similar form of presentation to one another.
To give a flavour of the presentations, I note that the "LEVERAGED CASH TRADE PROGRAM (Small Cap)" presentation includes the following details.
The first page of the presentation (CB 2107) contains a stock image of high-rise office buildings looking up to a blue sky, with the words "LEVERAGED CASH TRADE PROGRAM (Small Cap)" in the centre of the page. In the top right-hand corner of the page is the Oracle Law logo and at the bottom right-hand side are the words "Presented to you by Frank Marino".
The third page (CB 2109) is titled "Background Information" and contains five points as follows: - Mostly Western European, Asian, Canada, USA use this to generate Cash. - This is an INSTITUTIONAL BANKING Transaction You will not be told about this by any banker and can only participate via invitation and ONLY by a Trade Platform. - Banks in general can leverage cash in the bank up to 10 to 14 times. They do this in order to promote product such as, loans, mortgages etc. - These VERY specialised, discreetly operated trade programs were created to raise cash for project financing. - The system starts with the Trader and a client (The Money) partnering under contract.
Thereafter, further detail about the purported "Trade Platform" is included on subsequent pages titled: 1. "Background on the process - Parties involved": CB 2110; and 2. "System Explained - HOW IT WORKS": CB 2111.
The following page (CB 2112) addresses "Risk Understanding" and the question "what is the risk of losing my money". On that page is a diagram with a number of arrows forming a type of square with the words "IDENTIFY RISK", "ASSESS RISK", "CONTROL RISK" and "REVIEW CONTROLS". On the left-hand side there are two points as follows: - Generally speaking, RISK is limited to almost ZERO. - Cash provided is generally not even used. A line of credit will be taken against the cash and it is that cash that generates the trades and returns.
On the right-hand side there are an additional two points as follows: - We use a tier 1 bank trader which gives us much comfort in the funds not being used the wrong way. - Our DD process is intense and has been going on for decades successfully. This has been fully verified in more ways than one.
At the foot of the page there is the following note: CONFIDENTIAL INFORMATION: Not for publication or distribution. This information is not to be construed as an offer to sell or solicit: It is for educational in nature and intended for a closed audience
The "MANAGED Tear Sheet Program" presentation contains the following information on its page dealing with "Background on the process - Parties involved" (CB 2136): There are 3 parties that make up a Tear Sheet Program The Platform (Trader - the party who will garner profits) The Capital Provider (YOU - the party that puts up the cash to enable the trade to start) The Project Management Co. (Francesco Marino & Akhilesh Kamkolkar - the parties who will handle and control all projects.) NOTE: The purpose of this trade is to raise capital for projects. In this case, Francesco & Akhilesh are allowing an external capital provider to come in to earn cash profits whilst at the same time, raise capital for their projects.
The logo of Oracle Law appears on a number of pages in each of the three sets of PowerPoint documents (CB 2107, 2116, 2117, 2118, 2119, 2120, 2130, 2131, 2132, 2133, 2143, 2144, 2145).
Specifically, included on the final page of each of the three sets of PowerPoint documents (CB 2119, 2132, 2145) are the following words: Oracle Law only associates its business with licensed operators. The Business is based on the Gold Coast AUSTRALIA and has deals with international law.
Mr Pacifico's evidence in relation to this material included the following (CB 159[128]-160[131]): 128. I perused the PowerPoint Presentations provided by Frank and thought that the presentations contained what Frank had already told me. I had already been advised by Frank during my many discussions with him when Frank and I were together in Adelaide in or about early 2018 that the investments were government regulated, and that the investments were risk free or virtually risk free as the government backed the investments, and because the banks themselves went to the platforms to obtain funds. 129. I did, however, notice that the PowerPoint Presentations contained the Oracle Law logo and the words "Oracle Law only associates its business with licensed operators". 130. I had a discussion with Frank with words to the following effect: I said: "I've noticed Oracle Law is stamped on there [the PowerPoint Presentations]. How come?" Frank said: "Oracle Law backs and are involved with the platform. We support the product." 131. I thought that the PowerPoint Presentations supported what Frank had said in that they were approved by his law firm, Oracle Law. This gave me greater confidence in the investment. I believed that because lawyers were involved, they would know whether the investments were legitimate.
The particular proposal to which the above-mentioned presentations related required an investment of $1 million, which Mr Pacifico and Mr Parrella did not have: CB 160-162.
It is not suggested that these particular presentations, which were apparently offering three different investments, referred to the actual investment into which the plaintiffs ultimately entered. Rather, they were put by Dr Baron Levi as indicating the sort of representations made by Mr Marino in relation to his investments generally, including the association with Oracle Law: T 35.
On 3 August 2018, Mr Marino sent to Mr Parrella (and copied to Mr Pacifico) details of an "exclusive offer" (CB 1517-1518) and attached certain draft documentation: CB 1519-1546; T 38. This offer also required an investment of $1 million.
On or about 9 or 10 August 2018, Mr Pacifico had a further conversation with Mr Marino in which Mr Marino notified him of another opportunity: CB 162[144]. According to Mr Pacifico, the conversation was to the following effect: Frank said: "There's a new opportunity that I found for you. It's for $250,000.00, but you have to be quick as it's a rare opportunity that never comes up. It's a 90 day platform, government backed, with a 100 per cent return on investment." I said: "That sounds good but if you think it's that good, would you guarantee it because you know how much money I've just lost." Frank said: "Because you have lost a lot of money and I know you, I'm going to help you bello and I will guarantee you the capital personally."
Mr Pacifico said that he subsequently had a discussion with Mr Parrella about the new opportunity: CB 162[145]. Mr Parrella indicated that he could come up with a sum of $200,000. Mr Pacifico could come up with $10,000.
According to Mr Parrella, he received a telephone call from Mr Pacifico alerting him to the proposed alternative investment opportunity and had a subsequent telephone conference with Mr Pacifico and Mr Marino in which the following was said (CB 187[38]-[39]): Frank said: "I have found a platform deal that was about to be submitted. Not everyone can get into the platform investment, it takes years and years. If you give me $200,000.00, you'll get $400,000.00 back. I am only doing this for you and particularly as a favour to Sergio because he lost a bit of money on a prior investment. I will guarantee the principal. Are you interested?" Sergio said: "We'll get back to you."
On the same day or shortly thereafter, Mr Pacifico had a discussion with Mr Parrella and Mr Marino in the driveway to Mr Parrella's mother's house as follows (CB 162[146]): Frank said: "It's a new deal with $250,000.00. It's for 90 days and you will get back 100 per cent of the investment as a return." I said: "Frank, you're going to guarantee the capital, won't you?" Frank said: "Yeah, I'll guarantee it because I know what Serge is going through. I don't do it for anyone, just you, bello." I said: "Will you put it in writing?" Frank said: "Yeah, I'll put it in the agreement." I said: "We can probably come up with $210,000.00." Frank said: "Okay, given that, I don't do it often but I'll put in the difference to help yous (sic)." Tony said: "We can't really lose, it's only 3 months and Frank is going to guarantee it. Sounds good, let's do it." I said: "Alright."
Later, Mr Parrella met with his brother Sabatino and discussed an arrangement whereby Sabatino would provide him with a sum of $200,000. Presciently, according to Mr Parrella, Sabatino stated at the conclusion of the discussion "please, just don't make me lose $200,000.00": CB 187[42].
In his cross-examination, Sabatino indicated that he had a brief discussion with Mr Parrella, who had asked him to lend Mr Parrella $200,000 and then receive back $235,000 after three months. Sabatino accessed the funds via a form of overdraft facility, and Mr Parrella gave Sabatino account details to put the funds into: T 65.19-.50. Mr Parrella repaid his brother the $200,000, but not more than that: T 66. Sabatino could not particularly recall stating words to the effect "don't make me lose it Tony", but was nonetheless concerned about losing the money: T 67.40-68.26. However, it was evident that Sabatino was content to pay the money over to his brother without making any enquiries regarding the investment: T 69.30-.35.
On 22 August 2018, Mr Marino sent Mr Pacifico an email (copied to Mr Parrella) attaching a form of the AMA. On reading it, Mr Pacifico noticed that the proposed profit was 15%, whereas Mr Marino had promised that it would be 100%. Mr Pacifico also noticed that there was no guarantee in the draft agreement: CB 163[149]-164[151]; T 76.
Mr Pacifico then called Mr Marino and had a conversation as follows (CB 164[152]): I said: "Frank, the profits of trade on the agreement is 15 per cent when you said it would be 100 per cent." Frank said: "I'll change it." I said: "It's also missing the guarantee." Frank said: "Don't worry, I'll put it in."
There was further correspondence on 22 August 2018 between Mr Pacifico, Mr Parrella and Mr Marino as follows.
At 3:51am, Mr Marino sent Mr Pacifico an email (from his Oracle Law email with the email signature "Frank Marino - BDM") in which he noted that he had supplied an AMA for Mr Pacifico to sign (CB 1552-1559) and requested that Mr Pacifico sign and send back the AMA and transfer the amount of $10,000 to an account in Mr Marino's name: CB 1560-1561, 1579-1580; T 39.
At 7:42pm, Mr Marino sent Mr Parrella an email (from his Oracle Law email with the email signature "Frank Marino - BDM") in which he noted that he had created and supplied two AMAs for Mr Parrella to sign (CB 1563-1578, 1596-1623; see also T 40-41) and requested that Mr Parrella sign and send back the AMAs and transfer the amount of $200,000 to an account in Mr Marino's name: CB 1595.
The plaintiffs appear to have assumed that Mr Kamkolkar worked with Mr Marino: see for example CB 165[153], 188[45]. In certain materials he is described as the chief executive officer of Orb Global Investments Pty (OGI): CB 1278. Mr Marino corresponded with Mr Kamkolkar at an "@orbgi.com" email address in relation to some form of investment trading as early as 29 May 2017: CB 1255. Of some interest is the fact that there is a form of investment agreement dated 26 June 2017 between OGI and Mr Marino, in which OGI is described as an "Asset Manager" and Mr Marino is described as the "Investor": CB 1262. Mr Kamkolkar also had an email address, "akamkolkar@cbwealth.com.au", associated with Crystal Blue Wealth (another entity with which Mr Marino was associated): e.g. CB 1740.
On 23 August 2018, Mr Pacifico transferred $10,000 to the account provided to him by Mr Marino, which was a Heritage Bank account in Mr Marino's name: CB 85, 166[159].
On 24 August 2018, Mr Marino sent an email to Mr Parrella, to which Mr Pacifico was copied, attaching two amended AMAs: CB 166[160], 1716. The forms of the AMAs appear at CB 1719-1734.
The covering email makes reference to certain changes that I will refer to. There is a form of the AMA in relation to the $200,000 amount at CB 1706-1713 which is signed by Mr Parrella: T 48.
Dr Baron Levi noted that the second attachment to the email appearing at CB 1716 (being the $10,000 AMA with Adelaide) cannot be found or identified as the relevant attachment: T 43.48. Nonetheless, it is not in dispute that such an agreement was attached and entered into.
Dr Baron Levi referred to an email from Mr Marino to Mr Pacifico and Mr Parrella dated 21 May 2019 (CB 2224-2227), in which Mr Marino relevantly set out the terms of a number of amended clauses in the signed AMA, being cll 2.1(c), (i), 3.1(a), (b), (c) and 3.5.1(e)(iii). The last-mentioned clause was set out by Mr Marino in the following terms (omitting Mr Marino's comments): 3.5.1(e)(iii) The Asset Manager will: (e) be responsible to the Capital Provider for: (iii) the asset Manager takes reasonability [sic] and warrants that the capital providers initial capital will be repaid. The asset Manager does not warrant the projected returns to the capital provider.
On 27 August 2018, Mr Parrella arranged to transfer the sum of $200,000 to the Heritage Bank account in Mr Marino's name: CB 85, 191[57].

[40]

September 2018 (the Diamonda investment agreement)

On 25 September 2018, a document described as the "Investment Development Cooperation Agreement" between Diamonda Holdings NA LLC (Diamonda) (with an address at South Kensington, London) and Mr Marino (referred to as "FMO") was executed (Diamonda investment agreement): CB 1760-1775, 1780-1795. It is signed by Mr Marino, who was noted as being located in Australia (CB 1794), and Mr Uriel Roth. The latter signed purportedly in his capacity as managing partner of Diamonda, and was noted as being located in Israel: CB 1795.
On 27 September 2018, Mr Marino sent an email to Mr Kamkolkar with a subject heading "257K Trade summary of conference call". The email attached a summary of contact information in the signed Diamonda investment agreement: CB 1776.
That summary was titled "Contact People for this Trade" and listed five persons with various contact information, including email, telephone and other details. The five people were: Dr Nathan B Bregman, associated with "Sympatico"; Asif Amann, associated with "ppp-direct.com"; Jörg M Pohlig (spelt as Joerg in other evidence), associated with "Wwfnservice"; Mitesh Patel, associated with "Lycia Ltd"; and Stuart Priest, associated with "Century Capitol": CB 1778.
It appears that there was also correspondence on 27 September 2018 between Mr Marino and at least two individuals purportedly connected to the Diamonda investment agreement: T 55-56. That correspondence was as follows.
There was an email from Dr Bregman (with an email address "@simpatico.ca") to Mr Marino, copied to Mr Pohlig (with an email address "wwfnservice@yahoo.com"), with the subject line "INVESTMENT CONTRACT ISSUED FOR LEASED BG: 250M USA FROM FRANCESCO MARINO ... VIA NATHAN". The content of the email was relevantly as follows (CB 1758): Dear Mr. Francesco Marino, It was a pleasure to meet with you today on a conference call arranged by Joerg Pohlig your Direct Lead intermediary ... Enclosed please find the Investment Contract for your initials and signature that is extending you a one stop shop entry via a Leased BG for 250M USD into a Private Placement Investment Trade Program... Please once initialed and signed kindly revert this Investment Contract back to me for my Records as it is already Counter initialed and signed in advance ... You need to then forward a Wire Transfer for 257K to the Coordinates of the Bank indicated in the Investment Contract with a copy sent to me for reference purposes... Once received an Insurance Liability Policy will be issued for you for 1M ... You then will be next informed as to the time table include in the Investment Contract when your entry will be starting into Trade ...
The form and presentation of the email, as well as other aspects of the Diamonda investment agreement more broadly, have classical hallmarks of an investment scam which would ordinarily raise red flags. I consider these "red flags" further below in relation to the negligence claim against Mr Marino.
Mr Marino also sent the following email to Dr Bregman asking a number of questions about the Diamonda investment agreement (CB 1756-1757): HI Nathen, I have completed my DD on the contract. As offered by you, I requesting that you please provide me with answers to the following questions below. Upon receipt of a favourable response I will sign and wire the funds across tomorrow EST Australia. 1) Diamonda Holdings UK address is different to that on companies house. Who's address is this one contract? 2) The phone number is a Montreal number. Who's number is that? And why is it on the contract as a point of contact? 3) Who is "Uriel Roth" and what's his role in all this trade? 4) Diamonda Holdings is trading as UK Capital Reserve. Is this correct? 5) The states that Uriel's is location is Israel, is this correct? If correct, how is he a managing partner of Diamonda UK? 6) Previous information provided noted that a Draft Insurance Policy and Draft BG will be provide at the contract stage? May you please send these also through a.s.a.p. I Also, note that assistance would be given to the successful applicants to open a bank account in different jurisdictions outside of the US. As recommended by you, I am happy to open a NEW bank account in Singapore with DBS and or Citi Bank to receive trade profits. Please confirm this is the case and at what point we will start this process?. I Also confirm, that I will be instructing a NEW paymaster based in the UK. Once confirmed, I will forward through the details and confirmation. I look forward to your prompt response so we can all move forward with this transaction quickly.
Later that day, Dr Bregman emailed to Mr Marino, copying Mr Pohlig, a "sanitized copy of the Insurance Liability Policy": CB 1796.
On 28 September 2018, Mr Marino completed a form of telegraphic transfer document, naming Diamonda as the beneficiary of funds in the sum of $257,000 USD. The beneficiary details refer to Diamonda's address in the United Kingdom, however the beneficiary bank is stated as Wells Fargo Bank in California: T 56; CB 1824. On the same date, there is an entry on Mr Marino's Heritage Bank statement whereby it appears that funds (arguably including $210,000 AUD) were the subject of "Transfer to Foreign Currency" in the sum of "364,672.45": CB 85.
On 29 September 2018, in response to Mr Marino's previous email with his queries, Mr Pohlig simply stated (CB 1755): Please kindly view the attached PPA and return to us executed as soon as possible.
On 30 September 2018, Mr Marino responded to Mr Pohlig and Dr Bregman as follows (CB 1755): As instructed, please find attached the signed PPA document for our records.

[41]

Termination of Oracle Law website and email arrangements

On 7 March 2019, Mr Polo sent an email to Mr Herro requesting him to direct any further information regarding hosting for the Oracle Law website to Mr Polo: CB 2016. This appears to have been the first time that Mr Polo made such a request. Mr Herro responded indicating that there was "no problem" in doing so. In his response, Mr Herro copied in Mr Marino at his Oracle Law email address: CB 2015-2016.
Later that day, Mr Marino responded to Mr Polo indicating that he was more than happy for Mr Polo to take over the hosting of the website, noting that he (Mr Marino) had paid for the initial setup costs and hosting since its establishment. However, Mr Marino requested that he be able to maintain his Oracle Law email address, due to the many important passwords and access codes that he had established with that email. While, in his reply email (CB 2013), Mr Polo indicated that they should put aside some time to discuss the matter, he accepted in cross-examination that he allowed Mr Marino to keep his Oracle Law email address based on the reasons Mr Marino had provided: T 262.25-.41.
At 6:54am on 26 March 2019, Mr Polo sent an email to Mr Marino (at his CBG email address) asking what he had been sending from his Oracle Law email without Mr Polo's knowledge: CB 207[26], 209[44], 2022-2023, 2035.
At 9:18am, Mr Marino responded and gave some "explanation and answers" that were embedded in Mr Polo's email in red: CB 2022-2023. Mr Polo's initial email, together with Mr Marino's responses (reflected in italics), consisted of the following: Frank, Ill contact Rick and pay! Following my past emails. I need to know what you have been sending from Oracle Law email and what you have been using the Oracle Law email for. I dont have access to your email and should have given I am the principal. Ive stated previous my files are under audit. Question has been raised about your email address. Particular attention has been raised from someone making an inquiry with the Legal Services Commissioner. If they request the access I cant deny. - My Explanation of general use of the email address is: The email address has generally been used in the capacity of BDM on behalf of Oracle Law.. The use of the email address was also generally use for 1. loan documentation transactions, 2. negotiating loan/debt settlements 3. property transactions and communication with Darry and other clients on your behalf. 4. Also, further to that, I use the email address as access "user names" for trading Bitcoin & cryptocurrency online.. 5. general commination of the all of the above requirements In general terms, I have mainly used the email address for business related communications only.. I need to know now if:- 1. you have been giving legal advice under the Oracle Law email. - Definitely NOT!!... I have never given legal advice. 2. you been consulting clients under the Oracle law? - Definitely NOT!!... 3. you have used the oracle law email for your family law matter? - NO!!... I have been using CBG emails as this is records by legal representation. 4. you have sent emails under my signature? - Definitely NOT!!... Even emails to Dan will be questioned. - Ok, well I have been using this communication email for Dan and other loans transactions in the past.
Mr Polo sent a reply email to Mr Marino at 9:51am in the following terms (CB 2022): Frank The allegations are you have given legal advice. The question to QLS asked were you legally qualified at the time to give that advice!
The precise allegations to which Mr Polo was referring were not made clear on the hearing. In fact, Mr Polo said in cross-examination that he did not "suspect anything" and had "no concern" at the time: T 276.37-.29. He made up the fact that an inquiry had been made in order to find out that Mr Marino was not using the Oracle Law email for any other purpose, and was not alive at all to any risk that Mr Marino would use that email for any improper purpose: T 277.41-278.20. Mr Polo was apparently satisfied by the answers provided.
On 8 November 2019, the following correspondence took place between Mr Marino and Mr Herro regarding Mr Marino's access to his Oracle Law email address: 1. Mr Marino emailed Mr Herro, copying in Mr Polo, stating (CB 2099, 2100, 2101, 2525): As discussed, I am happy to transfer the domain name to Renaldo for (Oracle Law). I will require my email to remain active for a further 12 months, mainly for access to sensitive web sites and software reasons typically. I further request that all incoming emails for frankm@oraclelaw.com.au be diverted to; frankm@cbwealth.com.au moving forward. 1. Mr Herro relevantly responded (CB 2098, 2101): As requested, I've set the new diversion of frankm@oraclelaw.com.au to go to frankm@cbwealth.com.au - With this new diversion in place, did you want me to deleted the current stand alone email address frankm@oraclelaw.com.au? You will still receive these messages to frankm@cbwealth.com.au, but you won't be able to send from frankm@oraclelaw.com.au 1. Mr Marino then replied (CB 2098): I still require to be able to send emails for a 12 month period so, please don't delete the email address. Please leave all other emails in place. Thank you.
Mr Jamieson asked Mr Marino about this correspondence. Mr Marino indicated that he understood that, at that time, Mr Polo wanted the Oracle Law domain name, and Mr Marino wished to maintain access to his Oracle Law email (T 369.45-370.43) because: A. ... it was sensitive to passwords that I'd had in relation to a number of, amount of software issues, I tried to change them and they wouldn't change them other than deleting everything.
Mr Marino denied that he maintained virtually total control over the Oracle Law domain, emails and website. He indicated that he had access to, but not control of, his own Oracle Law email: T 370.45-371.15.
As at 23 June 2020, Mr Marino was still receiving emails from "admin@oraclelaw.com.au" and he requested that Mr Herro delete the diversion of these emails to his CBG email address: CB 2194.
As at 25 September 2020, the renewal invoice for the Oracle Law website domain was still being sent by Mr Herro to Mr Marino at his CBG email address: CB 2237-2238. On that day, Mr Herro sent an email to Mr Polo regarding the renewal, wanting to make sure that Mr Polo had been receiving the reminders; if it had not been renewed by the then due date (27 September 2020), the website and email would stop working.
Mr Herro further noted that the reminder emails had been going to Mr Marino, as the Oracle Law domain name was still in his account at that time: CB 2235-2236. In his reply of the same day, Mr Polo asked Mr Herro whether Mr Marino still had access to emails, including his Oracle Law email: CB 2235. In cross-examination, Mr Polo accepted that this was the first time that he had asked Mr Herro that question: T 281.23-.25. Mr Herro responded that Mr Marino did not have access to his Oracle Law email anymore, as Mr Marino had asked him to delete it on 13 June 2020: CB 2235.
Mr Polo accepted that he had not taken any steps after he largely ceased contact with Mr Marino in April 2018 to end Mr Marino's access to his Oracle Law email address: T 281.38-.41. Mr Polo further accepted that he had not taken any steps to ensure that the account which held the Oracle Law domain name was transferred to him: T 280.44-.46.
Even as late as 13 to 27 September 2022, Mr Herro's firm was still sending renewals for the Oracle Law domain name to Mr Marino and Mr Polo: CB 2534-2543.
In cross-examination, Mr Polo accepted that he should have taken control of Mr Marino's Oracle Law email after they largely ceased contact in April 2018, and that a reasonable principal of a solicitor's firm would have done so (T 242.38-243.25): Q. You've given evidence that you ceased contact with Frank in April 2018? A. I did. Q. When you ceased contact with Frank in 2018, wasn't that the point in time, if not earlier, that you should have cut off his access to the Oracle Law email address? A. Yes. Q. Do you accept that you should have taken control of that email address at that point in time? A. Yes. Q. Do you accept that it was remiss of you not to have done so? A. Remiss - yes. Q. Do you accept that a reasonable principle of a solicitor's firm would've done precisely that, don't you? A. I agree, yes. Q. You agree that there's no possible reason why he continued to have access to an Oracle Law email address beyond that time, don't you? A. He gave me reasons why, that he would not use the email address for any improper purpose or for any purpose. Q. If he said that he wouldn't use it for any purpose, why on earth would he be permitted to continue to use it? A. He wasn't permitted to continue to use it. He was permitted to have it available to him to use information that he had stored within the email, emails. Q. He could've stored that information elsewhere, couldn't he? A. He could have, yes. Q. You could've insisted that he install that information elsewhere, couldn't you? A. I could have, yes. Q. You could've then cut off his access to that email? A. Yes.
However, Mr Polo did not consider that his attitude towards Mr Marino's possession and control of his Oracle Law email address was one of recklessness: T 283.33-.35.

[42]

The AMAs

Dr Baron Levi presented the case for the plaintiffs on the basis that the AMAs are in relevantly identical terms: T 29.12. Other than the names of the respective plaintiffs, the amounts provided, the "payout amount" and the "total to be paid", that appears to be the case in relation to the draft documents.
I note that in the version of the AMA signed by Mr Parrella, there is a cl 7 titled "negative pledge" which does not appear in a version of the AMA signed by Mr Pacifico, however that clause has no relevance for present purposes. Some of the clause numbering is different in each of the AMAs, at least by reason of this. However, for the purposes of outlining the terms of the AMAs, it is convenient to use the agreement entered into and signed by Mr Parrella: CB 1706-1713.
The AMA is described as being between Mr Marino ("Francesco Marino") as "Asset Manager" and Mr Parrella as "Capital Provider". There are two recitals.
The first recital states inter alia that the asset manager is a provider of "asset management services", and has "particular expertise" in investments in private equity and various other forms of financing and trading. At the end of the recital there is a note to the following effect: … ALL transactions are NON-AFSL related and do not require a licence to participate.
Dr Baron Levi submitted that this statement was simply false. The investments were solicited in Australia and the funds were paid over in Australia: T 55.20-.28.
The second recital refers to the capital provider wishing to enter into an arrangement whereby: … the Asset Manager will manage the Capital Provider's funds from an account based in a suitable jurisdiction, on the terms and conditions as set out in this agreement.
The general structure of the AMA is set out in the following main clauses: 1. Interpretation. 2. Asset agreement through Francesco Marino. 3. Capital provider warranties and acknowledgements. 4. Authorisation. 5. Discretion and responsibilities. 6. Conflicts. 7. Negative pledge. 8. Termination. 9. Involvement of third parties. 10. No waiver. 11. No legal or tax advice. 12. Governing law. 13. Banking details.
Following those clauses, there is a Schedule A titled "Schedule of Payments" and the execution clause.
Apart from the two parties to the AMA, being the asset manager and the capital provider, the agreement refers to a number of other persons, including a "paymaster" (referred to in cl 13 and the schedule of payments) and a "platform/trader" (referred to in cl 2.1(i)).
Dr Baron Levi identified particular aspects of the AMA as follows (POS [10]): 1. the asset manager would manage the plaintiffs' funds from an account based in a suitable jurisdiction on the terms and conditions set out in the AMA (while Dr Baron Levi cited cl 4.1, it appears he intended to refer to the second recital); 2. the plaintiffs would deposit the initial invested capital (invested capital) (cl 2.1(a)); 3. the plaintiffs would appoint the asset manager as their agent (cl 2.1(b)); 4. after a trading period of 90 days, the plaintiffs would be paid a net return amounting to 100% of the invested capital (the return) together with the invested capital (cl 2.1(g), Dr Baron Levi's emphasis); 5. the payment of the return was subject to payment being made available by the "platform/trader" to the asset manager (cl 2.1(i), Dr Baron Levi's emphasis); 6. the asset manager shall manage all communications between the "platform" and the "trader" (cl 4.2); 7. the asset manager would act in the plaintiffs' best interests (cl 5.1(c)); 8. the asset manager would be responsible for the functions that the plaintiffs had contracted the asset manager to perform, irrespective of whether the asset manager contracted a third-party to provide these services on the asset manager's behalf (cl 5.1(e)(i)); 9. the asset manager would remain in full control of the trade process throughout the 90 day trade period (cl 7.1 in Adelaide's AMA and cl 8.1 in Mr Parrella's AMA); and 10. the agreement is governed by the laws of Queensland (cl 11.1 in Adelaide's AMA and cl 12.1 in Mr Parrella's AMA).
It is worth setting out cl 2.1(g) in full: 2.1. The Capital Provider agrees to: … (g) A NET Return of (100%) ONE HUNDRED PERCENT of invested capital is paid back to the Capital Provider plus the original capital in 90 days from the official start date of the trading period. Refer to, (Schedule A) …
I refer to the terms of Schedule A below. The "platform" and "trader" are undefined terms and the entities or persons fulfilling those roles are not identified in the AMA.
On 27 September 2018, in an email from Mr Marino to Mr Kamkolkar shortly after the Diamonda investment agreement, Mr Marino stated that he needed to set up and pay for "Bentley Legal" as his "registered paymaster" and that he also needed to set up a new bank account with "DBS or Citi Bank = Singapore" for the collection of all profits: CB 1776.

[43]

Legal profession regulatory provisions and rules

The claims against Mr Polo were based upon certain provisions of the Legal Profession Uniform Law 2014 (NSW) (Uniform Law), the Legal Profession Act 2007 (Qld) (LPA) and the Australian Solicitors Conduct Rules (Conduct Rules). I set out the relevant provisions below.
Sections 10 and 11 of the Uniform Law provide: 10 Prohibition on engaging in legal practice by unqualified entities (1) An entity must not engage in legal practice in this jurisdiction, unless it is a qualified entity. Penalty: 250 penalty units or imprisonment for 2 years, or both. (2) An entity is not entitled to recover any amount, and must repay any amount received, in respect of anything the entity did in contravention of subsection (1). Any amount so received may be recovered as a debt by the person who paid it. (3) Subsection (1) does not apply to an entity or class of entities declared by the Uniform Rules to be exempt from the operation of subsection (1), but only to the extent (if any) specified in the declaration. 11 Prohibition on advertisements or representations by or about unqualified entities (1) An entity must not advertise or represent, or do anything that states or implies, that it is entitled to engage in legal practice, unless it is a qualified entity. Penalty: 250 penalty units. (2) A director, partner, officer, employee or agent of an entity must not advertise or represent, or do anything that states or implies, that the entity is entitled to engage in legal practice, unless the entity is a qualified entity. Penalty: 50 penalty units.
A "qualified entity" is defined in s 6 of the Uniform Law as follows: qualified entity means - (a) an Australian legal practitioner; or (b) a law practice; or (c) either - (i) an Australian-registered foreign lawyer; or (ii) a foreign lawyer who is not an Australian-registered foreign lawyer but only to the extent that the foreign lawyer's legal practice is limited to the practice of foreign law and is carried out in accordance with the applicable requirements of Part 3.4; or (d) an individual engaged in legal practice under the authority of a law of the Commonwealth or of a jurisdiction, other than this Law or the Uniform Rules; or (e) an entity engaged in legal practice of a kind specified in the Uniform Rules for the purposes of this definition, but only while the entity engages in the legal practice in accordance with any applicable requirements of the Uniform Rules.
Sections 34 and 35 of the Uniform Law provide: 34 Responsibilities of principals (1) Each principal of a law practice is responsible for ensuring that reasonable steps are taken to ensure that - (a) all legal practitioner associates of the law practice comply with their obligations under this Law and the Uniform Rules and their other professional obligations; and (b) the legal services provided by the law practice are provided in accordance with this Law, the Uniform Rules and other professional obligations. (2) A failure to uphold that responsibility is capable of constituting unsatisfactory professional conduct or professional misconduct. 35 Liability of principals (1) If a law practice contravenes, whether by act or omission, any provision of this Law or the Uniform Rules imposing an obligation on the law practice, a principal of the law practice is taken to have contravened the same provision, if - (a) the principal knowingly authorised or permitted the contravention; or (b) the principal was in, or ought reasonably to have been in, a position to influence the conduct of the law practice in relation to its contravention of the provision and failed to take reasonable steps to prevent the contravention by the law practice. (2) A contravention by a principal arising under subsection (1) is capable of constituting unsatisfactory professional conduct or professional misconduct by the principal. (3) Neither subsection (1) nor (2) affects any liability of the law practice or any other person for the contravention. Note: Section 470 deals with contraventions by partnerships and other unincorporated bodies.
Section 24 of the LPA relevantly provides (omitting subss (3A) to (3E), the statutory example provisions dealing with POA licensees and subs (7)): 24 Prohibition on engaging in legal practice when not entitled (1) A person must not engage in legal practice in this jurisdiction unless the person is an Australian legal practitioner. Maximum penalty - 300 penalty units or 2 years imprisonment. (2) Subsection (1) does not apply to engaging in legal practice of the following kinds - (a) legal practice engaged in under the authority of a law of this jurisdiction or the Commonwealth; (b) legal practice engaged in by an incorporated legal practice under part 2.7; (c) the practice of foreign law by an Australian-registered foreign lawyer under part 2.8; (d) work performed by a trustee company, or a person employed by a trustee company, in the course of - (i) preparing a will; or (ii) carrying out any other activities involving the administration of trusts, the estate of a living or deceased person or the affairs of a living person; (e) legal practice prescribed under a regulation. (3) Also, subsection (1) does not apply to an Australian lawyer if the lawyer - (a) has applied under section 49 to the law society for a local practising certificate and has not been given a notice that the law society has refused to grant the application, or refused to consider the application, as mentioned in section 51; and (b) is employed in or by a law practice and the lawyer has informed the law practice that he or she has applied for, but not yet been granted, a local practising certificate by the law society. …. (4) A person is not entitled to recover any amount in relation to anything the person did in contravention of subsection (1). (5) A person may recover from someone else (the other person), as a debt due to the person, any amount the person paid to the other person for anything the other person did in contravention of subsection (1). (6) A regulation may make provision about the application, with or without stated changes, of provisions of this Act to persons engaged in legal practice of a kind mentioned in subsection (2) other than paragraphs (a) and (b). …
Section 144 of the LPA provides: 144 Nature of multi-disciplinary partnership (1) A partnership is a multi-disciplinary partnership if it is a partnership between 1 or more Australian legal practitioners and 1 or more other persons who are not Australian legal practitioners, and the partnership business includes the provision of legal services in this jurisdiction as well as other services. (2) However, a partnership consisting only of 1 or more Australian legal practitioners and 1 or more Australian-registered foreign lawyers is not a multi-disciplinary partnership. (3) Nothing in this part affects or applies to the provision by a multi-disciplinary partnership of legal services in 1 or more other jurisdictions.
Section 152 of the LPA provides: 152 Disclosure obligations (1) This section applies if a person engages a multi-disciplinary partnership to provide services that the person might reasonably assume to be legal services. (2) Each legal practitioner partner of the multi-disciplinary partnership, and any employee of the partnership who is an Australian legal practitioner and who provides the services on behalf of the partnership, must ensure that a disclosure that complies with the requirements of this section and a regulation made for this section is made to the person about the services. Maximum penalty - 100 penalty units. (3) The disclosure must be made by giving the person a written notice - (a) setting out the services to be provided; and (b) stating whether or not all the legal services will be provided by an Australian legal practitioner; and (c) if some or all of the legal services to be provided will not be provided by an Australian legal practitioner - identifying those services and indicating the status or qualifications of the person or persons who will provide the legal services; and (d) stating that this Act applies to the provision of legal services but not to the provision of the non-legal services. (4) A regulation may provide for the following matters - (a) the way in which a disclosure is to be made; (b) additional matters required to be disclosed in connection with the provision of legal services or non-legal services by a multi-disciplinary partnership. (5) Without limiting subsection (4), the additional matters may include the kind of services provided by the multi-disciplinary partnership and whether those services are or are not covered by the provisions of this Act, including, for example, provisions about insurance. (6) A disclosure under this section to a person about the provision of legal services may relate to the provision of legal services on 1 occasion, on more than 1 occasion or on an on-going basis.
Section 701 of the LPA provides: 701 Liability of principals (1) If a law practice contravenes, whether by act or omission, any provision of this Act or a regulation imposing an obligation on the practice, each principal of the practice is taken to have contravened the same provision, unless the principal establishes that - (a) the practice contravened the provision without the knowledge actual, imputed or constructive of the principal; or (b) the principal was not in a position to influence the conduct of the law practice in relation to its contravention of the provision; or (c) the principal, if in that position, used all due diligence to prevent the contravention by the practice. (2) Subsection (1) does not affect the liability of the law practice for the contravention. (3) A contravention of a requirement imposed on a law practice by this Act is capable of constituting unsatisfactory professional conduct or professional misconduct by a principal of the practice.
"Australian legal practitioner" is defined in s 6(1) of the LPA as follows: (1) An Australian legal practitioner is an Australian lawyer who holds a current local practising certificate or a current interstate practising certificate.
"Legal practice" per se is not defined in the LPA, other than for the purposes of Part 2.5. For the purposes of that Part, "legal practice" includes "the practice of foreign law in this jurisdiction by a foreign lawyer": s 85 LPA.
Other terms, such as "engage in legal practice", "law firm", "law practice", "legal services" and "unlawful operator" are defined in the Dictionary in Schedule 2 of the LPA: engage in legal practice includes practise law. … law firm means a partnership consisting only of - (a) Australian legal practitioners; or (b) 1 or more Australian legal practitioners and 1 or more Australian-registered foreign lawyers. law practice means - (a) an Australian legal practitioner who is a sole practitioner; or (b) a law firm; or (c) an incorporated legal practice; or (d) a multi-disciplinary partnership. … legal services means work done, or business transacted, in the ordinary course of legal practice. … unlawful operator means - (a) a person who engages in legal practice in this jurisdiction even though the person must not do so under section 24; or (b) a person who represents or advertises that the person is entitled to engage in legal practice even though the person must not do so under section 25.
The term "associate" (of a law practice) is defined in the Dictionary by reference to s 7(1) of the LPA, which states: (1) An associate, of a law practice, is - (a) an Australian legal practitioner who is - (i) a sole practitioner if the law practice is constituted by the practitioner; or (ii) a partner in the law practice if the law practice is a law firm; or (iii) a legal practitioner director in the law practice if the law practice is an incorporated legal practice; or (iv) a legal practitioner partner in the law practice if the law practice is a multi-disciplinary partnership; or (v) an employee of, or consultant to, the law practice; or (b) an agent of the law practice who is not an Australian legal practitioner; or (c) an employee of the law practice who is not an Australian legal practitioner; or (d) an Australian-registered foreign lawyer who is a partner in the law practice; or (e) a person who is a partner in the multi-disciplinary partnership but who is not an Australian legal practitioner; or (f) an Australian-registered foreign lawyer who has a relationship with the law practice, that is a class of relationship prescribed under a regulation.
The Conduct Rules were first endorsed by Law Council of Australia Directors in June 2011. They were adopted as the professional conduct rules for solicitors in Queensland in June 2012 (see Exhibit P4) as the Australian Solicitors Conduct Rules, and in New South Wales from 1 July 2015 as the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015: Law Council of Australia, "Australian Solicitors' Conduct Rules" https://lawcouncil.au/policy-agenda/regulation-of-the-profession-and-ethics/australian-solicitors-conduct-rules accessed 24 April 2024.
Rule 36 of the Conduct Rules provides: 36. Advertising 36.1. A solicitor or principal of a law practice must ensure that any advertising, marketing, or promotion in connection with the solicitor or law practice is not: 36.1.1. false; 36.1.2. misleading or deceptive or likely to mislead or deceive; 36.1.3. offensive; or 36.1.4. prohibited by law. 36.2. A solicitor must not convey a false, misleading or deceptive impression of specialist expertise and must not advertise or authorise advertising in a manner that uses the words "accredited specialist" or a derivative of those words (including post-nominals), unless the solicitor is a specialist accredited by the relevant professional body.
Rule 41 of the Conduct Rules provides: 41. Mortgage financing and managed investments 41.1. A solicitor must not conduct a managed investment scheme or engage in mortgage financing as part of their law practice, except under a scheme administered by the relevant professional body and where no claim may be made against a fidelity fund.
The Conduct Rules, as at 27 May 2015 through to 31 March 2022 (Exhibit P6), were relevantly in the same terms as those in force in 2012.

[46]

Statements by Mr Marino

The high point of the evidence is that, in or about September 2016 when Mr Pacifico met Mr Marino at a restaurant on the Gold Coast, Mr Pacifico says that Mr Marino directly told him that he was a lawyer. According to Mr Pacifico, that conversation was relevantly as follows (CB 140[29]): Frank said: "I'm a lawyer." I said: "Oh, that's good. You're a lawyer, are you? Maybe you can help me. I've been approached about this vitamins business. Can you look at it for me?" Frank said: "Yes, I'll check it out for you. I'll do some background checks on the business. Leave it with me." I said: "The guy is in Sydney." …
On the hearing, Mr Pacifico confirmed that this is what Mr Marino had told him on the night when he met Mr Marino: T 79.1-.22.
Specifically, Mr Pacifico stated in cross-examination that Mr Marino "said he was a lawyer": T 79.22. Mr Pacifico also confirmed that Mr Marino had said "I'm a lawyer" rather than "I'm a lawyer with Oracle Law": T 79.46-.48.
In his affidavit evidence, Mr Pacifico indicated that Mr Marino had said to him that he owned Oracle Law: CB 145[59]. Precisely when that statement was made is not clear from Mr Pacifico's affidavit. In context, it appears to have been sometime between September 2016 and 16 December 2016: CB 145[59].
Mr Pacifico was cross-examined about his involvement with Mr Mackay and it was suggested to him by Mr Jamieson that Mr Polo was the solicitor acting on the sale of the Chinderah properties: T 77.50-78.1, 78.26. Mr Pacifico was seemingly unaware that Mr Polo had been acting for Mr Mackay and MEG in relation to his properties at Chinderah: T 78.2, 78.27. Rather, Mr Pacifico stated that "we engaged Frank to speak to Hughie because we thought he was a lawyer": T 82.25-.26. Mr Pacifico believed or assumed that Mr Marino was acting for him and that Mr Barbi was acting for Mr Mackay (and MEG): T 77.30-78.41. Mr Pacifico stated that Mr Marino had even said to Mr Barbi that he was Mr Pacifico's solicitor: T 78.38-.39. However, later in his cross-examination, Mr Pacifico appeared to be unsure of the involvement of Mr Barbi, despite the fact that he had mentioned Mr Barbi in his affidavit (CB 154[104]): T 98.14-.29.
Mr Jamieson put to Mr Pacifico that all that Mr Marino was trying to do for him, in making his arrangements in respect of the monies Mr Pacifico had lent to Mr Mackay, was to organise to free up funds relating to the sale of the Chinderah properties. However, this was denied by Mr Pacifico, indicating that he understood that Mr Marino was acting for him and "it was him [Mr Marino] who said that to the lawyers": T 81.37-82.2, 82.48-83.22.
In respect of Mr Parrella, his affidavit evidence does not refer to any direct statement by Mr Marino that he was a lawyer. Rather, Mr Parrella deposed that, during their second meeting in around late July 2018 about the investment proposal, Mr Marino had said "I own Oracle Law": CB 184[22]. As a result of such statements and the fact that Mr Marino was providing him and Mr Pacifico with legal documents which Mr Marino had amended (which apparently all contained the letterhead of Oracle Law), Mr Parrella stated that he believed that Mr Marino was a lawyer: CB 184[23].
It appears that Mr Parrella was not directly told by Mr Marino that he was a lawyer, rather Mr Parrella assumed that Mr Marino was a lawyer as "he came across as the owner of Oracle Law": T 117.50-118.1. Mr Parrella indicated that Mr Marino had shown him his Oracle Law business card, and that Mr Marino "did say vaguely that he was a solicitor, that he did prepare all the paperwork for the contract that we … signed": T 118 .30-.32; see also T 411.
In relation to Mr Parrella's state of mind at the time of the investment proposal, his cross-examination relevantly continued as follows (T 122.28-.36, 124.6-.20, 127.34-128.15): Q. Isn't it even more important that if your brother needs [the money] that you should have carried out more enquiries before jumping in? A. I just believed in Frank, the way he came across being a lawyer. Q. That's only because of something Sergio told you? A. No, 'cause he showed me a business card and everything that was coming through as emails had Oracle Law, and obviously, I believe that you couldn't have one of my business cards and, and make yourself as a business owner of Magill Motor Bodies, could you? … Q. Frank Marino is emailing you and emailing Serg and emailing [Mr Kamkolkar]-- A. Mm-hmm. Q. --and he's not emailing him as a lawyer, Mr Kamkolkar as a lawyer? A. Yes, it-- Q. As far as you were concerned? A. Frank, Frank was emailing all of us as a lawyer, Oracle Law. Q. But he didn't copy Mr Polo in on that email? A. No, not that I know of. Q. Did you ask why? A. I, I didn't know Mr Polo owned the law firm. I thought Frank did at that stage. … Q. Well, did it occur to you that what you should do is get your own legal advice on the [AMA]? A. Yeah, I should've. Q. But you didn't? A. I didn't. I believed in [Mr Marino]. Q. Believed in him as an asset manager? A. As a lawyer. Q. That's how he described it? A. As a lawyer because he wrote the documents as well, he said. Q. But he is a party to the documents. He's not an independent person. He's a party to these documents. That's him and you? A. Yeah. Q. Are you saying just because he's a lawyer, you can rely on him to give you anything he wants, and you just sign it? A. I rely on my lawyers. I sign documents that-- Q. But he's telling you-- A. For the last three years, I've been signing documents with my lawyers. Q. But he's spelling it out in this document that he's not giving you any legal advice or tax advice. Isn't that correct? A. Yes. Q. Is it the case that you and your brother just thought you were going to make so much money, you didn't care about looking at these documents? A. No, I honestly believed in Frank Marino that he was a lawyer, and we were going to make money out of this.

[49]

Findings

First, concerning statements, I have referred above to the evidence of Mr Pacifico and Mr Parrella regarding Mr Marino's statements that he was a lawyer. I accept Mr Pacifico's evidence that Mr Marino stated "I'm a lawyer". I accept Mr Parrella's evidence that Mr Marino "vaguely" stated that he was a solicitor.
In relation to Mr Pacifico's evidence that he understood that Mr Polo originally worked for Mr Marino and would assist Mr Marino in matters, and that Mr Polo was subsequently sacked by Mr Marino, Mr Jamieson submitted that Mr Pacifico was just confused as to matters: T 444. Mr Jamieson's submission that the "sacking" statement from Mr Marino was two months before Mr Pacifico speaking with Mr Polo about Pharma Active is incorrect: see CB 152[93], [103].
Mr Pacifico's affidavit suggests that Mr Marino had informed him that he had sacked Mr Polo on or about 19 July 2017, or in any event at least prior to 15 August 2017: CB 154[101]-[103].
Mr Pacifico gave evidence that Mr Marino had told him Mr Polo was "sacked" from Oracle Law because he was "hopeless": T 87.15-.19. In substance, Mr Pacifico appears to have understood that Mr Polo was sacked from working for Mr Marino and indeed had "in fact been turfed out of Oracle Law": T 87.21-.46. Mr Pacifico had no more dealings with Mr Polo after he understood that Mr Polo had been "terminated": T 87.48-88.9.
Mr Pacifico appears to have had some confusion about the timing of when Mr Polo was sacked in relation to when he had entered into the AMA: T 88.5-.25. Part of the confusion was that Mr Pacifico had seen Mr Polo's name on the Second PA Deed and was seemingly unsure about the timing of that: T 88.24-89.48, 91.20-94.24. However, he appears to believe that Mr Marino only told him about the sacking once: T 100.30-.32. Ultimately, Mr Pacifico appears to have accepted that he was told in 2017: T 107.22-.24.
The purported sacking, in context, appears to have been connected with Mr Mackay changing solicitors.
On balance, I am satisfied that Mr Pacifico was informed of the sacking on or about 19 July 2017, or in any event at least prior to 15 August 2017, and acted on the basis that Mr Polo was not connected with Oracle Law: T 87.21-.46.
Secondly, regarding business cards, whilst Mr Marino's Oracle Law business card associated him with Oracle Law, it did not of itself contain any representation that Mr Marino was a lawyer or a solicitor.
Thirdly, the inferences sought to be drawn from Mr Marino's emails to Mr Pacifico and Mr Parrella were problematic. Dr Baron Levi appeared to indicate that the fact that Mr Marino sent emails from his Oracle Law email address to Mr Pacifico and Mr Parrella formed part of the conduct by which there was a holding out that Mr Marino was not an employee but, in some instances, a lawyer of Oracle Law: T 72.33-74.29, especially 73.47-.49.
Mr Parrella did not say that he believed that Mr Marino was a lawyer because of emails sent to him by Mr Marino. Nor did Mr Parrella identify particular content of any such email sent by Mr Marino as being a material part of his belief that Mr Marino was a lawyer.
The closest that Mr Parrella came to addressing emails as being part of his belief was seemingly in the following exchange with Mr Jamieson about investigating the investment proposal (T 121.15-.34): Q. What was said to you in paragraph 39 of your affidavit, "I've found a platform deal that was about to be submitted. Not everyone can get into the platform investment. It takes years and years. If you give me 200,000 you'll get 400,000 back", is that the conversation you had? A. That's right. Q. Didn't that seem too good to be true? A. It did. Q. Did you investigate it? A. Later on we did, yes. Q. No, but before you got involved with it, did you investigate it? A. Like I said, the way he came across, he was a lawyer to me. He came across as a lawyer, and I believed in the guy. And with Oracle Law all plastered all over the place and all the emails that we received, was all Oracle Law, and- Q. But you'd only met- A. -and, and I just assumed he was a legit man. I really did.
Dr Baron Levi's submissions regarding what could be drawn from email correspondence require some careful consideration.
There are no instances where Mr Marino is identified within correspondence with the word "solicitor" or "lawyer" expressly associated with his name, at least in the email signatures: T 26.14-.18, 411.43-.49, 414.35-415.1.
Dr Baron Levi submitted that there were emails emanating from Mr Marino which gave the appearance "to any reasonable observer" that he was acting as a solicitor: T 411.45-.47.
For the purposes of the claims against the defendants, it seems to me that it is unhelpful to look generally at the massive email correspondence that emanated from Mr Marino using his Oracle Law email address over many years, much of which had no connection to the plaintiffs. Rather, one ought to focus more particularly upon the email correspondence that took place between Mr Marino, Mr Pacifico and Mr Parrella prior to their entry into the AMAs.
However, Dr Baron Levi did not attempt to isolate the emails in this way, and the rather disorderly form of the Court Book did not readily permit me to identify precisely what emails were sent between Mr Marino, Mr Pacifico and Mr Parrella prior to their entry into the AMAs.
Between September 2016 and late August 2018, it appears that Mr Marino had sent only four emails from his Oracle Law email address to which both Mr Pacifico and Mr Parrella were either the direct recipient or copied in. Those four emails are set out in the table below. No. Date Subject Court Book reference 1 Friday, 3 August 2018 at 6:38pm Tear Sheet Programs Offer CB 1517-1518 2 Wednesday, 22 August 2018 at 3:51am Trade Program Asset Management agreements CB 1560-1561, 1579-1580, 2703-2704 3 Wednesday, 22 August 2018 at 7:42pm Trade Program Asset Management agreements CB 1595, 2714 4 Friday, 24 August 2018 at 3:59pm Amended AMA agreements CB 1716, 2734

[50]

With one exception which I note below, none of the emails specifically intimate that Mr Marino is acting in the capacity of a lawyer. Indeed, Mr Marino's signature in each of these emails is "FRANK MARINO - BDM". As far as I can gauge, these four emails appear to be the extent of emails received by Mr Parrella from Mr Marino during this period. While Mr Marino had sent various other emails to Mr Pacifico from his Oracle Law email address during this period, Mr Pacifico never identified any email in particular which he said caused him to believe that Mr Marino was a lawyer, or which reinforced that belief.
Of significance is the fact that one of the documents attached to Mr Marino's email on 3 August 2018, being "PAGE 6 of 18" (CB 1535), is in the following terms: FRANCESCO MARINO [XX] Tosti St, Bundall QLD, AUSTRALIA 4217 Tel. [XXXXXXX] frankm@oraclelaw.com.au Corporate Information ... Legal Advisor Full Name: ORACLE LAW Company: TRADING NAME Address: [X]/[XXXX] GOLD COAST HIGHWAY City: MERMAID BEACH State: QLD Country: AUSTRALIA Postal Code: 4218 Telephone Number: [XXXXXXX] Fax Number: N/A Email Address: frankm@oraclelaw.com.au Bank Information * Please attach copy of account statement from bank Bank Name (where funds are currently on deposit): Street Address: BOQ City: BRISBANE State: QLD Country: AUSTRALIA Postal Code: 4006 Account Name: CORNERSTONE LAW OFFICES PTY LTD in Trust for FRANK MARINO & MARIA ALICE MARINO Account Number: [XXXXXXXX] IBAN Number: [XXXXXX] - [XXXXXXXX]
In context, I consider that that page (CB 1535) amounted to a representation that Mr Marino purported to be a legal advisor with Oracle Law.
However, importantly, neither Mr Pacifico nor Mr Parrella asserted in their affidavit evidence, or during their cross-examination, that there was any particular email which they had received from Mr Marino which gave them the impression that Mr Marino was a lawyer carrying out a form of legal work.
In a sense, there is little utility in commenting upon email correspondence in a context where neither Mr Pacifico nor Mr Parrella have pointed to anything specific in email correspondence sent to them by Mr Marino which gave them the impression that Mr Marino was a lawyer carrying out a form of legal work.

[52]

Who is a "client"?

The choices of meaning which the Macquarie Dictionary, online ed ascribes to the noun "client", leaving aside ancient etymology and more remote meanings, include: 1. someone who applies to a solicitor for advice or commits their cause or legal interests to a solicitor's management. 2. someone who employs or seeks advice from a professional adviser. 3. a customer.
The first meaning identifies "client" in the sense of a person who engages a solicitor for a specific purpose (such as advice or a cause).
The Encyclopaedic Australian Legal Dictionary (LexisNexis) defines "client" as: Any person who, either as principal or on behalf of another person, consults or retains a legal practitioner.
It adds, arguably by way of comment rather than by definition, that "[t]he relationship between a legal practitioner and client is a fiduciary one and communications between them may attract legal professional privilege".
In defining "client", the initial Butterworths Australian Legal Dictionary included the sentence I have extracted above, but added the words "and any other person who is liable to pay a solicitor's costs": Butterworths Australian Legal Dictionary (1997, Butterworths) at 202.
Halsbury's Laws of Australia does not expressly define "client". However, within the chapter dealing with "Legal Practitioners", and in particular the part dealing with the "Lawyer-Client Relationship" authored by G E Dal Pont, Dal Pont identifies a client by reference to the existence of a relationship of "retainer". Specifically, Dal Pont points to a "client" as being someone (a) to whom the lawyer owes legal duties, (b) from whom the lawyer looks for authority to act and (c) from whom the lawyer looks for the payment of costs and disbursements (unless the retainer provides otherwise): Halsbury's Laws of Australia (Halsbury's), 250 - Legal Practitioners at [250-1025].
Thus, the answer to the question of whether one is a client of a solicitor involves the task of determining the existence and terms of a retainer: Halsbury's at [250-1025]. The retainer identifies the client and prescribes the services expected: G E Dal Pont, Lawyers' Professional Responsibility (7th ed, 2021, Lawbook Co) (Lawyers' Professional Responsibility) at [3.20]. Where there is no express written or oral retainer, one may be implied from the circumstances, including by conduct: Lawyers' Professional Responsibility at [3.50]; Beach Petroleum NL v Kennedy (1999) 48 NSWLR 1; [1999] NSWCA 408 (Beach Petroleum) at [210].

[53]

Implied retainers

An implied retainer will only arise where, on an objective consideration of all the circumstances, the parties' intention to enter into a contractual relationship may be imputed: A Abadee et al, Professional Liability in Australia (4th ed, 2023, Lawbook Co) (Professional Liability in Australia) at 468 [3.120]; Dean v Allin & Watts (a firm) [2001] EWCA Civ 758 at [22] per Lightman J; Jeandin v Tzovaras [2011] NSWSC 1254 at [64] per McDougall J; Girotto v Phillips Fox (a firm) [2011] VSC 293 at [288] per Hollingworth J.
A solicitor-client relationship may be inferred if it is proved that the relationship existed "de facto" between the solicitor and another person: Professional Liability in Australia at 468 [3.120]. In McDonald v Grech; Bank of Western Australia Ltd v McDonald [2012] NSWSC 717 at [80], Ward J (as her Honour then was) noted as follows: … It is noted that factors which have been recognised as indicative of the existence of a retainer include the following: • acceptance by the solicitor of responsibility to prepare documents or do professional work without any indication that he cannot fully discharge his professional duties to the client (Pegrum v Fatharly (1996) 14 WAR 92 at 102, where it was said that in such a case there is a strong bias towards finding that the solicitor tacitly agrees to act and to undertake the usual professional responsibilities); • consultation by the alleged client with the solicitor or evidence of reliance by the alleged client on the solicitor (Pegrum at 102); • the fact that the solicitor has acted for the alleged clients on previous occasions (Hendriks at [12]); • the giving by the solicitor of the impression of acting in the alleged clients' interests (Hendriks at [12]); • payment of legal fees by the alleged clients (Pegrum at 6); • the undertaking by the solicitor of work which appears to be in the alleged clients' interests (IGA Distribution Pty Ltd v King & Taylor Pty Ltd and Anor [2002] VSC 440 at [234]), and/or which appears to be legal in nature and goes "beyond the provision of casual assistance" (Fleeton v Fitzgerald unreported, NSW Court of Appeal, 18 December 1998 per Beazley JA at 11); • the fact that the solicitor does not make clear that he or she is not acting for the alleged clients (Hendriks at [12]); • knowledge of the solicitor that the alleged clients are not represented by another solicitor (IGA at [234]); • knowledge of the solicitor that the alleged clients would be at risk of loss if their interests were not looked after (IGA at [234]); • the unlikelihood, given the alleged clients' inexperience or inability, that they "would undertake and complete the proposed transaction without the benefit of legal assistance" (Jeandin v Tzovaras [2011] NSWSC 1254 at [62]-[65]).

[54]

General retainers

In Geraghty v Permanent Trustee Co Ltd (1986) 4 NSWLR 412, Kearney J adopted the description of Begbie CJ in Drake & Jackson v Corporation of Victoria (1884) 1 BCR 165 at 169 as to the effect of a general retainer (at 415-416): "… if he be retained generally, the client contracts that in all matters coming within the scope of a solicitor's business he will, pending the retainer, employ this solicitor and not another (see Pulling on Attorneys, chaps iii, ix; Brett LJ, in LR 12 Ch D, p 360), and will pay the solicitor his proper reward for his services; and the solicitor correspondingly contracts that, pending the retainer, he will undertake the conduct of all his client's legal business, will give him advice, and exhibit average skill and diligence."
However, the notion of a "general retainer", in terms of the duties that it may impose upon a solicitor, has been questioned. In Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp [1979] Ch 384 (Midland Bank Trust), Oliver J stated at 402: Mr. Harman sought to rely upon the fact that Mr. Stubbs was Geoffrey's solicitor under some sort of general retainer imposing a duty to consider all aspects of his interest generally whenever he was consulted, but that cannot be. There is no such thing as a general retainer in that sense. The expression "my solicitor" is as meaningless as the expression "my tailor" or "my bookmaker" in establishing any general duty apart from that arising out of a particular matter in which his services are retained. The extent of his duties depends upon the terms and limits of that retainer and any duty of care to be implied must be related to what he is instructed to do.
In Carmody v Priestley & Morris Perth Pty Ltd (2005) 30 WAR 318; [2005] WASC 120 (Carmody), Hasluck J referred to Midland Bank Trust approvingly and stated further (at [119], in the context of accountants): … I give weight to the notion that unless special arrangements are made there is no such thing as a general retainer and the nature of the services to be provided and the scope of the related duty of care will depend upon the circumstances in which the advice is sought.

[56]

Mr Mackay & MEG matter

Mr Polo deposes that, in November 2016, Mr Marino introduced him to Mr Mackay (whose name he spells "Mckay") for a conveyance: CB 208[34]. Specifically, Mr Polo says: Mr Mckay had land in Chinderah which required subdivision, registration and the preparation of sale contracts. I prepared sale contracts and issued to various buyers proposing to purchase the land after registration occurred. I recall it was difficult to obtain instructions from Mr Mckay and ended [up] handing back the contracts to the seller recovering my out of pocket expenses for searches required for contract preparation.
There are a number of examples in evidence of Mr Marino emailing Mr Mackay to obtain instructions and update him on the matter's progress, which Mr Polo said was done on his direction and because Mr Marino knew Mr Mackay: e.g. CB 957; T 213.10-.37.
Mr Pacifico believed that Mr Marino was acting for him and it was another solicitor (who seems to be Mr Barbi) who was acting for Mr Mackay: T 78.30-.41. He asserted in evidence that he "engaged" Mr Marino (T 82.25) to speak to Mr Mackay and Mr Pacifico believed Mr Marino "was acting for" him (T 81.42). When asked whether there was any actual retainer document from Mr Marino, Mr Pacifico pointed to invoices sent by Mr Marino to him in relation to that work (eg CB 1211), as opposed to any retainer document, as evidence that Mr Marino was acting as his lawyer for those matters: T 83.40-84.2.
Mr Pacifico knew that Mr Polo (or Oracle Law) was acting for Mr Mackay at some point: T 87.17-.18.
In July 2017, Mr Polo says that he provided advice on caveat release to Mr Mackay in relation to the encumbrance on title (in context, seemingly in relation to the Chinderah properties), and that the advice was in respect of the steps outlined by the caveator for release of the caveat: CB 208[35].
Mr Polo stated that Mr Mackay terminated his services because he disagreed with what Mr Polo had advised him to do, although the precise time of the termination is unclear: CB 292.43-293.3.
Significantly, Mr Polo states that he has no knowledge of any other advice provided to Mr Mackay and at no time did he provide instructions to Mr Pacifico (or Adelaide) with respect to the caveat on title: CB 208[35]. In re-examination, Mr Polo denied that Oracle Law ever acted for Mr Pacifico in terms of recovery of a debt, nor did anyone else act for Mr Pacifico as far as he was aware: T 291.47-292.2. Mr Polo deposes that he does not have any file relating to "the loan arrangements and deeds": CB 208[36]. Mr Polo was seemingly referring to those between Mr Pacifico, Mr Mackay and their related entities.
At some point, although it is not precisely clear when, Mr Pacifico says that he attended the Oracle Law office premises at Mermaid Beach with Mr Mackay: T 95.45-96.13. Mr Pacifico did not see Mr Polo in the office on that occasion.
In May 2017, Mr Marino sent Mr Pacifico and Mr Mackay an invoice (which I have referred to above as invoice 70) for "legal services" he had provided up to that point, to be paid by Mr Mackay: CB 1209-1211. The invoice items include work referable to the preparation of loan agreements and other documents.
Mr Polo deposes that at no time did he instruct Mr Marino to duplicate the firm invoices to invoice for legal services with alternate banking particulars, and if an invoice was to be issued it would have been generated by the firm with the firm's banking details: CB 208[37]. The invoice's payee details are to an account with Heritage Bank, which Mr Polo understands was Mr Marino's and not associated with Oracle Law: T 293.35-.45. Mr Polo contends that none of the monies payable on this invoice came to him or Oracle Law: T 294.12-.14.
Thus, in relation to the matter with Mr Mackay and MEG, there appears to be a distinction to be made between work which Mr Polo did solely for Mr Mackay and his entities, which pertained to conveyancing issues with the sale of his properties, and work which Mr Marino purportedly performed in negotiating the terms of the loan arrangements between Mr Pacifico, Mr Mackay and their related entities.

[57]

Mr Elovaris & Pharma Active matter

In relation to the matter with Pharma Active, Mr Polo's evidence is that he negotiated terms of settlement with its receiver: T 230. In particular, there is an invoice in evidence dated 13 September 2017 in the amount of $7,000, which I have referred to above as the September 2017 PA Polo amended tax invoice: CB 1347. The invoice was addressed to Pharma Active and, in October 2017, Mr Polo followed up Mr Pyrlis from Pharma Active seeking payment of the invoice: CB 1346. In cross-examination, Mr Polo accepted that this was his invoice: T 229.40.
The invoice is referred to as an "amended invoice" and is said to be further to Mr Marino's attendance in Sydney: CB 1346. However, Mr Polo denied that the amended invoice included Mr Marino's time spent in relation to the matter, and he did not believe that Mr Marino was involved in negotiating the terms of settlement: T T230.6-.18. The original invoice is not in evidence.
Mr Polo stated that he "spent a lot of time on this matter", with almost days spent on the telephone dealing with the owner of Pharma Active and the receiver: T 230.39-.41.
Mr Marino also created an invoice in relation to the Pharma Active matter dated 13 September 2017, in the amount of $10,000, which I have referred to above as the September 2017 PA Marino tax invoice: CB 1353. The payee details are to a "Debt Options Pty Ltd Trust Account", and the reference is to Mr Marino's Oracle Law email. The description is for "professional consulting fees" in relation to the matter. It is not clear whether the amount contained in this invoice is inclusive of the $7,000 invoiced by Mr Polo.
Mr Jamieson submitted that the September 2017 PA Polo amended invoice, properly construed, does not demonstrate that any work is being charged for the services of Mr Marino: T 447.27-.50.
Dr Baron Levi cross-examined Mr Polo regarding the September 2017 PA amended tax invoice email (CB 1346) and the September 2017 PA Polo amended tax invoice (CB 1347). He put it to Mr Polo that the invoice was amended to include Mr Marino's time in relation to the matter, and specifically time that Mr Marino had spent during an attendance in Sydney. Mr Polo denied that the invoice included any fee for Mr Marino: T 229.16-230.23. Mr Polo asserted that the invoice for $7,000 "related to my matter, the time that I spent on the matter": T 229.38-230.8.
The following day, Dr Baron Levi cross-examined Mr Marino regarding the same September 2017 PA Polo amended tax invoice (albeit on a different Court Book page, namely CB 1357). When asked whether the invoice incorporated fees for his time, Mr Marino stated "I didn't prepare the invoice. I'm unaware if it did": T 304.50. When pressed as to whether it incorporated an amount relating to his time, Mr Marino indicated "[n]ot to my knowledge, no": T 305.1-.11.
Despite Dr Baron Levi's submission otherwise (T 419.32-420.48), I accept Mr Jamieson's submission that the September 2017 PA Polo amended invoice, properly construed, does not demonstrate that any work is being charged for the services of Mr Marino.
In what appears to be around July 2017, Mr Pacifico says that he had telephone conversations with Mr Polo about the matter while Mr Marino was overseas: CB 152[90]-[93]; T 77.22-.28. This appears to be the extent of Mr Pacifico's direct contact with Mr Polo, and Mr Pacifico accepted that he had no other discussions with Mr Polo other than about the Pharma Active matter: T 112.20-.23.
However, none of those matters allow any proper finding of a retainer with Mr Polo, nor any finding as to the scope of any such retainer or the identification of any duties which would cover the subject matter of the investment proposal or the AMAs, outside any agency relationship with Mr Marino. I note the following. 1. In entering into the AMAs, neither of the plaintiffs had any contact with Mr Polo and, indeed, Mr Pacifico believed that Mr Polo had been "sacked" from Oracle Law seemingly at least by the end of 2017: CB 145[59]; T 88. Mr Pacifico had only had discussions with Mr Polo in relation to the Pharma Active matter: T 112.20-.23. Even then, the invoice raised by Mr Polo in respect of that matter was addressed to, and chased up from, Pharma Active: CB 1346-1347. 2. There is no suggestion that Mr Parrella met Mr Polo. Further, Mr Parrella does not recall ever speaking directly to Mr Polo: T 115.47-.49, 123.40-.43, 128.41-.43.

[58]

Finding

The prerequisite of a retainer to determine whether one can properly be said to be a client of a solicitor immediately creates several problems for imposing liability on Mr Polo for the loss suffered by the plaintiffs in entering into the AMAs.
First, there was no express written or oral retainer pleaded on behalf of the plaintiffs.
Secondly, no implied retainer was pleaded. What was pleaded was that Mr Marino represented to Mr Pacifico and Mr Parrella that he was a solicitor and that Mr Marino "provided legal services and advices" for Mr Pacifico in relation to certain caveat and loan agreement matters: CB 5[10(e)]. Those matters had no connection with the AMAs.
Thirdly, the plaintiffs did not plead that Mr Marino was an agent of Mr Polo (and thereby Oracle Law), only that Mr Marino "is and was at all material times an employee or office holder of Oracle Law": CB 5[9]. There is "no identity in Australian law between agency and employment": G E Dal Pont, Law of Agency (4th ed, 2020, LexisNexis) (Law of Agency) at [2.19]. That is, agency and employment are distinct concepts. An employee is not necessarily an agent nor vice versa.
Dr Baron Levi made several submissions which broadly alluded to the fact that Mr Polo had "cloaked" Mr Marino with "ostensible authority" which seemingly extended to an apparent authority to establish and operate an investment scheme with the endorsement of Oracle Law: POS [105]-[109], [116], [118]; T 439.38-.41, 449.30-.37. However, that submission was predominantly in respect of Mr Polo's alleged vicarious liability, rather than any legal relationship of agency between Mr Marino and Mr Polo. As agency was not pleaded, nor listed as an issue, there is no proper basis on which to make a finding that Mr Marino was an agent of Mr Polo and/or Oracle Law such that any retainer entered into by Mr Marino was on behalf of Oracle Law.
In all of the above circumstances, it is very difficult for me to make any positive finding that, at any given point of time, the plaintiffs were clients of Oracle Law or Mr Polo in any relevant sense, and even more so in the period after April 2018.
In circumstances where Dr Baron Levi did not make specific submissions regarding any express retainer nor seek to identify any point of time at which it was said that any implied retainer was created or subsisted, I do not consider that I can fairly make a finding that the plaintiffs were clients of Oracle Law or Mr Polo after April 2018. To attempt to guess at how the case could be put, and to make any finding on that basis, I consider would be procedurally unfair to Mr Polo.
I propose to proceed on the basis that the plaintiffs were not clients of Oracle Law or Mr Polo after April 2018, and certainly not at the time of the alleged representations by Mr Marino and entry by the plaintiffs into the AMAs.

[61]

Perceptions of Mr Marino's involvement in Oracle Law

Mr Polo attempted to convey that Mr Marino's involvement in Oracle Law, if any, was limited to sharing an office space (starting from late 2014) in circumstances where Mr Polo and Mr Marino each worked on their own respective businesses (being Oracle Law and CBG) in different parts of the office: T 142.8-.33. In this way, Mr Polo said that Mr Marino did not have involvement in the "day-to-day operation of Oracle Law": T 142.37.
However, on the other hand, Mr Polo also gave evidence that the arrangement between him and Mr Marino was as follows (CB 207-208[29]-[31]): 1. they had a "verbal arrangement" whereby Mr Marino had suggested that he use his contacts to develop clients for Mr Polo's practice, as Mr Polo did not have resources and contacts of his own (although in cross-examination Mr Polo indicated that he "had plenty of clients" of his own and did not need Mr Marino's contacts at the time: CB 200.15-.27); 2. such clients would be for legal services only and not in relation to any other business areas; 3. Mr Marino, or his business CBG, did not invoice for any referrals provided, and Mr Polo did not provide discounted legal services consequent to the referrals; and 4. most of the legal services provided to Mr Marino were expected to be gratuitous.
Mr Polo asserted that he worked in the front of the office premises and Mr Marino worked in the back of the office premises, they had separate businesses and neither of them was involved in the other's business. In particular, Mr Polo indicated that Mr Marino had no involvement in the day-to-day operations of Oracle Law other than referring conveyancing matters to Oracle Law: T 144.9-.34. He indicated that Mr Marino had an expectation of receiving some free legal services to himself personally and to his business. He denied that there was any remuneration of any kind: T 145.16-.43.
Mr Marino described his role as basically to "bring in business" (I infer to Mr Polo) and indicated that there was a type of "contra" [1] whereby Mr Polo did conveyancing work for Mr Marino's real estate business (I infer CBG): T 302.44-303.9.
Mr Polo stated that Mr Marino did work "under the banner of Oracle Law" which was "around referring matters" to Mr Polo: T 145.45-146.28.
Part of Mr Marino's work in Oracle Law involved communicating with the clients he had referred "to obtain information" which Mr Polo had requested, or otherwise update the clients, which he did with his Oracle Law email address and which Mr Polo accepted was as a "representative" of Oracle Law: T 147.44-148.24; e.g. CB 904, 957; T 208.9-.39, 213.10-.37. Such clients also emailed Mr Marino directly with questions: e.g. CB 961; T 216.3-.8. At times, Mr Polo indicated that Mr Marino would also be acting as the client's real estate agent when using his Oracle Law email: e.g. T 220.6-.21, 225.6-.10.

[63]

Finding

Clearly there was at certain times a form of close professional relationship as between Mr Polo and Mr Marino.
Mr Polo denied that Mr Marino was involved in any way in the management or administration of Oracle Law: T 149.34-.38.
For the period up to 2014, that appears to be the case. In this early period, Mr Marino's involvement included instances of him sourcing a photocopier for the office (T 150.6-.8), being named as one of the insured, along with Mr Polo, on insurance policies for the office premises (CB 756), organising the purchase of promotional Oracle Law shirts (CB 766-767; T 179.33-180.27), and arranging Oracle Law signage for the premises (e.g. CB 771-775) and merchant facilities in connection with the Oracle Law website: CB 717, 722.
However, my impression is that that particular kind of involvement was limited to a period no later than up to the end of 2014.
I am comfortably satisfied that at least up until the termination of the lease in March 2018, despite Mr Polo's suggestions that Mr Marino was conducting his business and that he (as a sole practitioner) was conducting his own business, that Mr Polo allowed Mr Marino to represent himself as being associated with Oracle Law.
There are aspects of that representation that one might think would amount to a form of agency. Mr Polo appeared to accept that that was the case for "certain purposes" as I have noted above (T 233.22-.35). Those purposes appear to have been in relation to client matters which Mr Marino had referred: T 203. The evidence as to whether Mr Marino was an agent of Oracle Law did not venture beyond the above.
Mr Marino also gave evidence that he considered he had a "general authority" from Mr Polo to pursue business opportunities under the Oracle Law name, but that did not include investments in trading platforms: T 337.32-.40.
However, no case of agency was pleaded. As such, I need not make any finding as to whether Mr Marino was an agent of Oracle Law.
What I have set out above is the extent of the evidence as to the actual relationship that existed between Mr Polo and Mr Marino. Significantly, other than pleading that Mr Marino was an "employee" or "officeholder" of Oracle Law, the plaintiffs did not expressly plead that a contract existed between Mr Marino and Mr Polo. To the extent that such a pleading could be inferred from the pleading that Mr Marino was an "employee" or "officeholder", there were no pleadings as to the terms of any contract. No direct attempts were made on the hearing to establish the necessary elements of the formation and content of any contract between Mr Polo and Mr Marino in respect of the work at Oracle Law.
I have referred above to the verbal arrangement or understanding that arose between Mr Marino and Mr Polo whereby, inter alia, Mr Marino would refer clients to Oracle Law and Mr Polo would provide some form of gratuitous legal services to Mr Marino and his business. I consider that, in that arrangement, there was a form of intended mutual benefit in a practical sense.
However, it is not at all apparent to me that Mr Marino and Mr Polo intended to be legally bound by virtue of that arrangement. There is no suggestion that there was a voluntary assumption of a legally enforceable duty, being the essence of contract: Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424 at 457 per Dixon CJ, Williams, Webb, Fullagar and Kitto JJ; [1954] HCA 20, cited in Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; [2002] HCA 8 (Ermogenous) at [24] per Gaudron, McHugh, Hayne and Callinan JJ. Intention to create legal relations, objectively determined, is a necessary element: Ermogenous at [24]-[25]; Krolczyk v Winner t/as J Winner Building Services [2022] NSWCA 196 at [147] per Griffiths AJA (White and Kirk JJA agreeing).
There is no evidence that Mr Marino promised to refer a certain number of clients to Mr Polo in any given period, nor that Mr Polo promised to deliver any specific or regular legal services to Mr Marino. From what can be gauged by the case studies of the matters with Mr Mackay/MEG and Pharma Active, the arrangement between Mr Marino and Mr Polo appeared to only be ad hoc such that, if Mr Marino came across a client who was potentially in need of some legal work, he may refer them to Mr Polo. There was no specific evidence as to what legal services Mr Polo provided to Mr Marino, and I infer that such services were provided only on an ad hoc basis when the occasion arose. From this, I conclude that neither party intended to have assumed a legally enforceable duty. If either party decided to stop "performing" their arrangement, the other would not be entitled to sue for breach. So much is apparent from the way in which Mr Marino and Mr Polo parted ways in early 2018.
As such, I conclude that the relationship between Mr Marino and Mr Polo in respect of the work of Oracle Law was not one of a contractual nature.

[64]

Legal principles

In Legal Services Commissioner v Raghoobar [2023] QSC 41 (Raghoobar), Martin SJA addressed the issue of what is meant by "engaging in legal practice" at [5]-[13] (footnotes omitted): 5. Section 24 of the LPA provides that: "(1) A person must not engage in legal practice in this jurisdiction unless the person is an Australian legal practitioner." 6. An Australian legal practitioner is an Australian lawyer who holds a current local practicing certificate or a current interstate practicing certificate - s 6(1) LPA. 7. The term "engage in legal practice" is given an inclusive definition in Schedule 2 of the LPA, namely, it "includes practice law". What does it mean to "engage in legal practice" 8. Legislation similar to that contained in the LPA has been the subject of consideration in Victoria and Western Australia as well as in this State. It will assist the consideration of the circumstances in this case if I briefly set out the decisions which have considered this section or cognate sections. 9. In Cornall v Nagle, J D Phillips J couched the meaning of 'acting or practising as a solicitor' in the following way: "… I conclude that a person who is neither admitted to practise nor enrolled as a barrister and solicitor may "act or practise as a solicitor" in any of the following ways: (1) by doing something which, though not required to be done exclusively by a solicitor, is usually done by a solicitor and by doing it in such a way as to justify the reasonable inference that the person doing it is a solicitor. This is the test in Sanderson. (2) by doing something that is positively proscribed by the Act or by Rules of Court unless done by a duly qualified legal practitioner. Examples of such prohibitions in a statute are ss. 93 and 111 of the L.P.P.A. (3) by doing something which, in order that the public may be adequately protected, is required to be done only by those who have the necessary training and expertise in the law. For present purposes, it is unnecessary to go beyond the example of the giving of legal advice as part of a course of conduct and for reward." 10. The meaning of "engage in legal practice" was considered by the Victorian Court of Appeal in Felman v Law Institute of Victoria where Kenny JA said at 352: "In my opinion, the expression to "engage in legal practice" in s. 314 and elsewhere signifies "to carry on or exercise the profession of law". Reference to the definitions of "engage" and "practice" in the Oxford English Dictionary supports the view that this is the ordinary and natural meaning of the expression. The carrying on of the profession of law is done by none other than a "legal practitioner". Accordingly, in my view, the expression "engage in legal practice" means "engage in legal practice as a legal practitioner", the italicised words being implicit in the notion of legal practice." 11. In Legal Services Commissioner v Bradshaw, Fryberg J expressed the view that "engage in legal practice" and "practise law" are the professional equivalent of "carry on business". His Honour said: "One would look for evidence of continuity, of repeated acts; one would look for evidence of payment for those acts; one would look for evidence of seeking business from members of the public, or at least from other lawyers; one would look for evidence of a business system; one would look for evidence of maintaining books and records consistent with the existence of a practice; one would look for evidence of a multiplicity of clients. None of those things is in evidence before me." 12. The meaning of "engage in legal practice" was considered by Daubney J in Legal Services Commissioner v Walter. Daubney J disagreed with Fryberg J's equation of practising law with the carrying on of a business. His Honour said: "18. For my part, I would respectfully disagree with the equation of practising law with the carrying on of a business. I prefer the formulation of Kenny JA, and would hold that the terms "engage in legal practice" and "practise law" in the LPA invoke the notion of carrying on or exercising the profession of law, not the "business" of law." 13. In Walter, Daubney J found that it was clear that the respondent had engaged in practice of: (a) advising parties to litigation in respect of matters of law and procedure; (b) assisting parties to litigation in the preparation of cases for litigation; (c) drafting court documents on behalf of parties to litigation; (d) drafting legal correspondence on behalf of parties to litigation; and (e) purporting to act as a party's agent in at least one piece of litigation.
An appeal to the Queensland Court of Appeal was dismissed in Raghoobar v Legal Services Commissioner [2023] QCA 191. Relevantly, Bowskill CJ (with whom Dalton JA and Buss AJA agreed) stated at [17]: 17. Before turning to address the grounds, it is important to note that the appellant does not challenge the finding below as to what it means, as a matter of law, to "engage in legal practice". Relevantly, Martin SJA found, by reference to authority, that to "engage in legal practice" means to carry on or exercise the profession of law, which includes doing things usually done by a legal practitioner, such as advising parties to litigation in respect of matters of law and procedure, assisting parties to litigation in the preparation of cases for litigation, drafting court documents or legal correspondence on behalf of parties to litigation and purporting to act as a party's agent in relation to litigation. His Honour also found that, whilst carrying on or exercising the profession of law is to be distinguished from the "business" of law, indicia of carrying on a business are relevant to the assessment of the activities of a person in this context. Importantly in the present case, Martin SJA also endorsed the view that the relevant inquiry is not informed by subjective considerations (that is, whether the person intended to breach the unauthorised practice proscription, or, one might add, whether the person told their clients they were not a legal practitioner) - the inquiry is an objective one. I agree with the principles as articulated by Martin SJA in the decision below.
However, I note that provisions of the kind relied upon by the plaintiffs under the LPA and Uniform Law have not been readily construed as preventing a solicitor from delegating "purely ministerial" tasks to unqualified persons: e.g. Cornall v Nagle [1995] 2 VR 188 (Cornall) at 199 per J D Phillips J, citing Associated Securities Ltd v Aziz [1974] VR 699 at 709 per Pape J.

[65]

Plaintiffs' submissions

Dr Baron Levi submitted that a person in the position of Mr Marino (who was not admitted to practise) may engage in legal practice, at least factually, in a number of ways, including by doing something (POS [73]-[74]): 1. which, though not required to be done exclusively by solicitor, is usually done by solicitor and by doing it in such a way as to give rise to a reasonable inference that the person doing it is a solicitor; 2. that is positively proscribed by law unless it is done by a duly qualified legal practitioner; or 3. which, in order that the public may be adequately protected, is required to be done only by those who have the necessary legal training and expertise in law.
Dr Baron Levi submitted that Mr Marino performed or engaged in legal practice, contrary to s 10(1) of the Uniform Law and s 24(1) of the LPA (POS [72]; T 440-441), citing Cornall at 210 and Raghoobar: POS [74].
During the hearing, Dr Baron Levi directed my attention to an array of email correspondence said to evidence instances of Mr Marino providing legal services and cross-examined both Mr Marino and Mr Polo in relation to a number of those instances, as well as others.
The main instances which were relied upon by the plaintiffs of Mr Marino purportedly providing legal services were said to be in the preparation of loan agreements and advices in relation to caveats.
The particulars of the plaintiffs' pleading (CB 5[10(e)]) addressed the ways in which it was said that Mr Marino "provided legal services and advices" for Mr Pacifico, namely: (1) Preparation of loan agreement on or about 1 November 2016; (2) Preparation of draft amended deed on or about 23 February 2017; (3) Preparation of loan agreement on or about 1 March 2017; (4) Advices in relation to caveat in or around April and May 2017; (5) Further advices in relation to caveat from about 18 July 2018 to 13 March 2019.
Dr Baron Levi submitted that, with Mr Polo's knowledge, Mr Marino was involved in multiple client matters in a manner in which it appeared that he was a professional engaged in those matters, but in circumstances where the explanation could not be that Mr Marino was a real estate agent or a conveyancer because he was engaged by the law firm. Indeed, he submitted that it was significant that, in relation to a number of the communications, it was unclear to Mr Polo himself in what capacity Mr Marino was acting: T 415.27-.44, 417.23-.27.
He cited, as an example, an email sent from Mr Mackay to Mr Marino on 4 January 2017 regarding an offer on one of the Chinderah properties: CB 904-905. The email states: Hi frank just went across to talk to neibour and I asked if he had ten minutes for a chat and he said lets just leave it up to the lawyers to sort out So I basically told him were to go what's the story with his depots I don't want him near the place I will try and catch you tomorrow I might be going to garden bar for a drink With konen tonight need to blow of some steam hughy
Dr Baron Levi submitted that this demonstrated that Mr Marino was being emailed in the capacity of a lawyer: T 416. I am not convinced that that is the only available inference arising from this email.
Another example given by Dr Baron Levi related to an email dated 3 February 2017 sent by Adam Smith of Planit Consulting to both Mr Polo and Mr Marino, copied to Mr Mackay and Darren Jones (a real estate agent with Ray White). The email related to what was then a proposed purchase of one of the Chinderah properties (see CB 903, 959). The email had a subject "changes to contracts" and stated (CB 955-956): Hello Renaldo and Frank With reference to the attached changes suggested by Flood Lawyers for the lot that they are looking at purchasing, can I please request urgent amendments to each of the three contracts so as to reflect the suggested amendments. This is of course only if you can see that there would be legal impediments or disadvantage to Hugh in doing so. Can we get these amended contracts through asap this afternoon if possible ?
Dr Baron Levi submitted that the email shows that Mr Marino was engaged generally in the sort of communications in which one might expect a lawyer to be engaged, and that the communications were being sent to him as well as to Mr Polo: T 416.25-.44. Even if I accept that as a possibility, I am not convinced that that is the only available inference arising from this email.
A further example relied upon was an email dated 8 February 2017 from Mr Marino to Sandra Pepi of Benchmark Wealth, Mr Pyne of Ramsden Law and Mr Polo (and copied to various other persons), relating to the purchase/sale of a property at Cessnock. In response to Ms Pepi's earlier email asking if settlement will take place that day, Mr Marino's email states (CB 959): Still waiting on Ramson Lawyers to produce settlement figures to us? So not sure yet?. Can you chase them.
Dr Baron Levi submitted that this was one of numerous emails in which, simply to an objective observer, the role of Mr Marino is highly ambiguous: T 417.23-.25.

[66]

Mr Polo's submissions

Mr Jamieson submitted that the arrangements established between Mr Polo and Mr Marino in or about late 2014 were in a context in which Mr Marino was a real estate agent who had contacts and was able to refer conveyancing matters to Mr Polo, and Mr Polo used Mr Marino's assistance as a business development manager to bring in work to him for his new practice: T 446.42-.50. At the time of those discussions, Mr Marino was working under the CBG label and had a different business card and business address (Exhibit D2), and there was no suggestion that they would do anything other than share the office premises: T 447.8-.19.
Mr Jamieson submitted that the appropriate context for assessing the plaintiffs' claims against Mr Polo is that the plaintiffs' involvement with Mr Marino and Oracle Law was between August 2016 and early 2018, and was one in which principally conveyancing matters (as distinct from litigation) were being engaged in between businessmen who were friends and who knew one another. Mr Jamieson went on to submit that: 1. Mr Polo's involvement was limited, incidental and confined (my words, capturing the essence of the submission) to the "legal work" necessary for the preparation of and exchange of contracts for the conveyancing work (e.g. CB 912-913, 959); and 2. Mr Marino's involvement was not doing conveyancing work per se but providing incidental assistance to Mr Polo on conveyancing matters he had referred as a real estate agent (e.g. CB 909), such as responding to requests from Mr Polo to get some information, pass on information, prepare some figures or look at premises in his capacity as a real estate agent and see that matters are ready to be completed (T 448.40-449.4), and as such acting as a "middle man on what Mr Polo's doing" (T446.5-.9): T 441.37-.50, 443.35-444.1, 444.42-446.9, 448.29-.30.
Mr Jamieson's submissions were brief and (in part) chronological, rather than by reference to the list of issues or a particular structure. However, I understood him to submit (my summary) as follows. Specifically, in relation to the period up to early 2017: 1. in August 2016, Mr Pacifico met Mr Marino, and Mr Marino introduced Mr Mackay to Mr Polo: T 441.37-.38, 446.34-.36; 2. the debt arrangements with Pharma Active had nothing to do with Oracle Law: T 443; 3. the context for Mr Polo acting for Mr Mackay was on "the basis of some substantial knowledge of the parties as to other parties" and each of the parties were introduced to one another "to do some work or solve some problems": T 441.41-.49; and 4. by May 2017, Mr Pacifico knew that Redmond + Redmond Lawyers were acting for Mr Mackay: T 444.
In the period immediately prior to the AMAs, Mr Jamieson submitted that: 1. for (the last) part of 2017 Mr Marino was away, in March 2018 the lease of the office premises expired, by 14 April 2018 the office was closed (with Mr Polo being unable to obtain another subtenant) and Mr Polo and Mr Marino went their separate ways: T 442; 2. the critical discussions between Mr Marino, Mr Pacifico and Mr Parrella which led to the investment proposal occurred four months after Mr Polo closed the office and had parted from Mr Marino: T 442; and 3. after the cessation of operations between Mr Polo and Mr Marino, their only involvement with one another was essentially Mr Marino resolving a joint loan that Mr Marino and Mr Polo had engaged in to assist a builder, Dan Smith, and a few conveyancing matters that needed to be wrapped up (circa October 2018 to February 2019: CB 1861, 1862, 1899-1900): T 446.18-.32.
In relation to the AMAs, Mr Jamieson submitted that (T 442-443): 1. Mr Polo was not present at any of the discussions leading up to the AMAs, nor was he mentioned in negotiations leading up to Mr Marino going to Adelaide; 2. the AMAs incorrectly nominate Mr Marino's address as being the office premises (incorrectly in the sense that the premises had been closed for approximately five months by that time); 3. the AMAs for the plaintiffs say that the capital providers are to seek independent legal and financial advice prior to entering into the agreements; and 4. Mr Marino is described as an asset manager in the AMAs, not as a lawyer or solicitor.

[67]

Loan documents

In relation to the preparation of agreements addressing loans, the reference in the plaintiffs' particulars to the loan agreement dated 1 November 2016 appears to be what I have described above as the Second PA Deed. While I will infer that the amended deed said to be prepared on or about 23 February 2017 is the draft deed which Mr Marino circulated to Mr Pacifico on that date, it is not clear to me what the reference is to the loan agreement said to be prepared on or about 1 March 2017.
The Second PA Deed, both in its draft form (CB 883-900) and in its signed form (CB 814-831), contains the following provisions (CB 823-824, 892-893): 6.9.2. Secondly in payment of the Lenders collection costs and costs of entering into this Agreement including but not limited to commissions and outlays payable to Frank Marino & Renaldo Polo for work in collecting the Loan Amount and associated monies; … 6.10. In addition to the forgoing and notwithstanding anything contained in this Agreement or elsewhere the Borrower will pay to the Lender, the Lenders costs of entering into this Agreement including but not limited to commissions and outlays payable to Frank Marino & Renaldo Polo for work in preparing this Agreement.
Clause 6.10 is suggestive that both Mr Marino and Mr Polo had worked in preparing the agreement.
Mr Pacifico referred to this agreement, and the fact that Mr Polo's name was on the agreement, and was cross-examined about it: T 89.29-94.24. The evidence in relation to this was left in an unsatisfactory state.
As set out above, the plaintiffs did not plead that there was any retainer with Mr Polo or Oracle Law. On a number of occasions, Mr Pacifico stated that Mr Marino "wrote up" the agreement: T 77.27-.28, 89.44-.48, 94.5-.11. Quite how he knew that was not made clear. Mr Pacifico did not, at least expressly, assert that Mr Polo had prepared the agreement. Indeed, Mr Pacifico did not embrace any personal involvement on the part of Mr Polo in drafting documents for him. He gave the following evidence (T 90.42-.48): Q. What I want to ask you here is in relation to what you've just said, I put it to you that there is no document that refers to Renaldo Polo personally being involved in drafting documents for you? A. I never said that. Q. I'm sorry, I thought that's what you did say. What did you say? A. I said his name's on the agreement.
There does not appear to be any invoice from Mr Polo for work done in relation to the Second PA Deed. The September 2017 PA Polo amended tax invoice which Mr Polo caused to be issued (CB 1346), whilst copied to Mr Pacifico, appears to be principally directed to the persons associated with Pharma Active and relate to negotiating terms of settlement with its receiver: CB 1345. Mr Pacifico was re-examined by Dr Baron Levi regarding discussions he had with Mr Polo (specifically, in July 2017): T 110.20-112.9; CB 152[90]-[93].
The re-examination resulted in some chronologically confusing evidence. The invoice to which Dr Baron Levi directed Mr Pacifico's attention was dated 18 July 2018: CB 2288. The conversations to which he directed Mr Pacifico's attention occurred in July 2017: CB 152[90]-[93]. Mr Pacifico's responses, however, appeared to suggest that these were discussions that he had with Mr Polo regarding Mr Polo chasing payment for invoices for work that he had done for Mr Elovaris: T 111.8-.14. That is a little confusing, because the only tax invoice in evidence from Mr Polo to Mr Elovaris is the amended invoice dated 13 September 2017 (CB 1347), after the alleged discussions. The original tax invoice was not in evidence and it is perhaps possible that it was dated earlier, which might make the conversations explicable.
In any event, Mr Pacifico's evidence is of some moment, as it confirms that he understood that Mr Polo was working for Pharma Active or Mr Elovaris, and not for him (i.e. Mr Pacifico): T 111.8-.14.
Whilst there is some latent uncertainty about the respective involvement of Mr Marino and Mr Polo, I am satisfied the Second PA Deed was prepared either completely or at least in part by Mr Marino. I am unable to make any more particular findings in relation to Mr Polo's involvement, if any, in the preparation of the Second PA Deed.
No attempt was made to identify precisely who prepared the Second MEG Deed either. It did not appear to be suggested that Mr Polo had prepared that deed.
Other than in the general manner referred to above, Mr Jamieson did not specifically address the preparation of the loan agreement documents. However, even if it be said, consistent with Mr Jamieson's other submissions, that work in preparing a loan agreement is ancillary work in connection with conveyancing matters and not necessarily legal work, I would reject that submission.
The First PA Deed, which was not prepared by Mr Marino, was apparently prepared by an accounting firm. The context in which Mr Marino was preparing an amended loan deed for Mr Pacifico was that Mr Marino had suggested that a "stronger" loan agreement needed to be drafted to protect Mr Pacifico's interests. Mr Marino took a similar attitude in seeking to protect Mr Pacifico and Adelaide's interests in relation to the drafting of the amended loan agreements with Mr Mackay and MEG.
It seems to me that, on the facts of this particular case, the preparation by Mr Marino of the loan agreements was the doing of something which, if not required to be done exclusively by a solicitor, is usually done by a solicitor, and the way in which he interacted with Mr Pacifico in respect of the preparation of those agreements was in such a way as to justify the reasonable inference that he was doing it as a solicitor: see e.g. Cornall at 196-198, 207-208, 210.

[68]

Other materials

Mr Polo gave evidence that he had never included Mr Marino's services in any disclosure statement that he had provided to a client: T 268.22-.31.
On Mr Polo's evidence, Oracle Law invoices were always generated by himself and never incorporated any amount that was intended to cover Mr Marino's time: T 150.20-.29. That is inconsistent with the following evidence from Mr Marino (T 303.23-.43): Q. Is it the case that you invoiced clients for work that you did for Oracle Law? Is that correct? A. Yes. Q. Those invoices, were they invoices that you prepared, or were they invoices that Mr Polo prepared, or both? A. Both. Q. So Mr Polo prepared a number of invoices that were sent to clients and incorporated amounts for your time, is that right? A. Not necessarily that specific. I don't recall. Q. What do you mean by "not necessarily that specific"? A. Well, there weren't many, there weren't many invoices raised by me at all. Q. Do you mean that there were invoices raised by Mr Polo? A. Yes. Q. Those invoices included amounts that reflected your time as well as Mr Polo's, is that right? A. In some cases.
However, Mr Marino did not identify any "case" of an invoice of Mr Polo which reflected Mr Marino's time as well as Mr Polo's. Mr Polo invoiced for the work completed in the matter with Pharma Active: CB 1347 (the September 2017 PA Polo amended tax invoice). The Oracle Law logo appears in the top left corner. The payee details appear to be an Oracle Law bank account and the Oracle Law reference contains Mr Polo's name. Nowhere on the invoice does Mr Marino's name appear.
However, there are also several invoices which on their face appear to be from Oracle Law, but have in fact been sent by Mr Marino: e.g. CB 1211, 1353, 2288 (including the September 2017 PA Marino amended tax invoice). Those invoices relate to work purportedly done by Mr Marino in relation to Mr Mackay's matter and the Pharma Active matter. Like Mr Polo's invoice, the Oracle Law logo is in the top left corner. However, the format of the invoice is visibly different and the reference contains Mr Marino's name. On some invoices the payee details are to a "Debt Options Pty Ltd Trust Account", while on others they are to Mr Marino's Heritage Bank account. Mr Marino stated that the former was a trust account for an entity that performed debt collecting: T 305.34. In cross-examination, Mr Polo pointed out these differences and called it "a complete fabrication of an invoice": T 265.9-.14.
Mr Marino accepted that he sent invoices directly to clients such as those referred to above: T 305. From this, the reasonable inference seems to be that Mr Marino was, at least in relation to the matters involving Mr Mackay and Pharma Active, invoicing for his own time in a fabricated Oracle Law invoice form and for which he would receive payment separate to Oracle Law.
There is also evidence which indicates that Mr Marino corresponded on behalf of clients to solicitors of other parties to transactions in relation to matters he had referred: e.g. CB 1201.
Many of Mr Marino's communications in evidence demonstrate that he was performing some form of legal work. Examples of legal work being done by Mr Marino included: 1. attempting to settle negotiations in relation to the lifting of a caveat and loan agreement (although Mr Polo did not accept that this sort of communication was necessarily what a solicitor at a law firm may send and believed that Mr Marino was not providing legal services, rather he "was trying to come to a happy medium" between two people he knew: T 228.3-.33, 259.10-.35): CB 1310; 2. receiving an undertaking from a solicitor: CB 1201; and 3. preparation of loan agreements and related documentation: CB 1064-1065.

[70]

What induced the plaintiffs to enter into the AMAs?

In the case against Mr Marino, the plaintiffs plead as part of their ACL and misrepresentation claims that they entered into the AMAs in reliance upon, or induced by, representations by Mr Marino that: 1. he managed exclusive investment opportunities which were offered by or associated with Oracle Law, subject to intensive due diligence, risk-free or virtually risk-free and paid substantial returns, and that the $200,000 investment opportunity would pay a return on the investment of 100% after 90 days, was government-controlled, risk-free and would be personally guaranteed by Mr Marino in relation to the initial capital investment: CB 8-9[19(a)-(c)], 9[20], 19[46(b)-(f)], 21-22[50]-[52], 22[54(b)-(c)]; and 2. Mr Marino was a solicitor or alternatively the owner of Oracle Law: CB 19[46(a)], 21[50], 22[52], 22 [54(b)-(c)].
In the case against Mr Polo, the plaintiffs plead that Mr Polo represented by his conduct that Mr Marino was entitled to engage in legal practice by reason of Mr Polo being aware that Mr Marino was conducting matters on behalf of clients for Oracle Law and tacitly permitting Mr Marino to continue to act directly for clients, as well as Mr Polo's failure to: (a) comply with disclosure obligations s 152 of the LPA; (b) advise clients that Mr Marino was not a solicitor and was not entitled to engage in legal practice; and (c) supervise or exercise control over Mr Marino: CB 25[62(a)-(f)].
In the case against Mr Polo, the plaintiffs repeat the earlier pleading that Mr Marino represented that he was a solicitor or alternatively the owner of Oracle Law, and that the investment opportunities offered by Mr Marino were offered or associated with Oracle Law: CB 25[62(g)(1)]. However, this aspect of the pleading does not (at least expressly) assert that Mr Polo represented that Mr Marino was a solicitor or alternatively the owner of Oracle Law.
The above begs the question as to why the plaintiffs entered the AMAs and what, if any, conduct on the part of Mr Marino and Mr Polo was operative in inducing the entry of the plaintiffs into the AMAs.
Precisely what induced the plaintiffs entering into the AMAs was not the subject of direct evidence by Mr Pacifico or Mr Parrella. However, there is some evidence that arguably bears upon the matter.
According to Mr Pacifico, Mr Marino came to Adelaide in or about early 2018: CB 155[109]. During this visit, Mr Marino raised with Mr Pacifico the fact that he was involved with "trading platforms": CB 155[110]. This appears to have been the first time in which Mr Marino raised with Mr Pacifico the concept of trading platforms.
Mr Pacifico's evidence was as follows (CB 155[110]-[111]): Frank said: "Don't worry, I will help you. I am involved with trading platforms. I've been making money with my Indian friend who has been in the share markets and banking industry for years. He's also been on SBS on TV doing the shares there." I said: "Why don't you help me then?" Frank said: "Not yet, I'm just waiting to see how I go in this first investment and if it goes well I will get a $100 million return." 111. After hearing this, I did not want to sound too eager, but I thought that, after what Frank and I had been through, and after losing my life savings, Frank would be able to help me.
This evidence is quite curious. The narrative of Mr Pacifico's affidavit to that point does not refer to any immediate reason why Mr Pacifico would need help financially. The reference to an "Indian friend" is unclear, although it is likely a reference to Mr Kamkolkar.
Some insight is given in a number of other parts of Mr Pacifico's affidavit. A little earlier, Mr Pacifico indicates that, on or about 1 or 2 July 2017, he discovered that Pharma Active was not doing well financially and he received notice that it was going into receivership: CB 152[89]. This appears to have been the catalyst for Mr Pacifico initially contacting Mr Marino, who was overseas, and then speaking with Mr Polo: CB 152[90]-[93].
Following the conversation with Mr Marino in early 2018, Mr Pacifico recounts a number of discussions with Mr Marino leading up to May 2018: CB 156[112]-157[116].
Mr Pacifico said that, by early 2018 (and seemingly before May 2018), he trusted Mr Marino "completely": e.g. CB 157[116]; T 103.43, 122.30.
Mr Pacifico then refers to the fact that, in or about May 2018, he told Mr Marino that he had put all of his savings into the Pharma Active investment. In response, Mr Marino proposed putting Pharma Active through administration and bankrupting Mr Elovaris: CB 157[118]. At that stage, Mr Pacifico had not been repaid by Mr Elovaris (or Pharma Active): CB 158[121].
I have referred above to the fact that, on 19 July 2018, Mr Marino sent an email to Mr Pacifico regarding "INSTITUTIONAL BANKING Programs", which attached the three PowerPoint presentations.
As I set out earlier, part of Mr Pacifico's evidence in relation to the PowerPoint presentations included the following (CB 159[130]-160[131]): 130. I had a discussion with Frank with words to the following effect: I said: "I've noticed Oracle Law is stamped on there [the PowerPoint Presentations]. How come?" Frank said: "Oracle Law backs and are involved with the platform. We support the product." 131. I thought that the PowerPoint Presentations supported what Frank had said in that they were approved by his law firm, Oracle Law. This gave me greater confidence in the investment. I believed that because lawyers were involved, they would know whether the investments were legitimate.
In relation to the AMA, on or about 22 August 2018, Mr Pacifico deposed that (CB 164[150]): I read the draft asset management agreement and I was comforted that the draft asset management agreement had been prepared by an Australian law firm, Oracle Law, and its lawyers, and because Oracle Law had reviewed and approved the platform investment. As with reading the PowerPoint presentations and from listening to Frank, I thought that lawyers would know whether the investment was legitimate. (emphasis added)
Later, on or about 23 August 2018 when Mr Pacifico had been provided with the AMA (on 22 August), he noted that as the matter was urgent (an impression he appears to have gotten from Mr Marino) and he trusted Mr Marino, he then signed the AMA's signature page: CB 166[157]. Mr Pacifico indicated in cross-examination that he did not read the agreement properly because he trusted Mr Marino: T 103.42-104.9.
Mr Parrella gave somewhat similar evidence in his affidavit as follows (CB 189[48]): As I had received the draft asset management agreements from Frank's Oracle Law email address with the Oracle Law email signature, I believed Frank's investment scheme was legitimate and I believed that Frank was a credible person.
In cross-examination, Mr Parrella referred to his belief in Mr Marino as follows (T 121.28-.31, 122.30): A. Like I said, the way he came across, he was a lawyer to me. He came across as a lawyer, and I believed in the guy. And with Oracle Law all plastered all over the place and all the emails that we received, was all Oracle Law, and - … A. I just believed in Frank, the way he came across being a lawyer.
Nowhere in either of the plaintiffs' affidavits, or their cross-examination, did they state that they would not have entered into AMAs if they had known that Mr Marino was not a lawyer and/or was no longer associated with Oracle Law. The highest it is put is that it gave them greater comfort or assurance in making the investment.
Contrary to Mr Pacifico's evidence at CB 164[150], there is no express indication that the draft AMA "had been prepared by an Australian law firm, Oracle Law, and its lawyers," or that "Oracle Law had reviewed and approved the platform investment".
Significantly, Mr Pacifico gave evidence (as above) that he noticed that Oracle Law's name was stamped on the PowerPoint presentations: CB 159[129]-[130]. However, his discussion with Mr Marino appears premised on the basis that he did not, by reason of that stamping alone, assume that Oracle Law had reviewed and approved the investment platform. Hence, his question to Mr Marino: "How come [Oracle Law is stamped on the PowerPoint Presentations]?". I accept that it is Mr Marino's response to Mr Pacifico, namely that "Oracle Law backs and are involved with the platform. We support the product", which gave rise to the thought in Mr Pacifico that the investments (in the PowerPoint presentations) were approved by "[Mr Marino's] law firm, Oracle Law" and this gave him "greater confidence in the investment", and that he "believed that because lawyers were involved, they would know whether the investments were legitimate": CB 159-160[130]-[131].
Neither Mr Pacifico nor Mr Parrella identified any representation to them by Mr Polo in respect of the investment proposal or AMAs. Nor did they indicate what, if anything, about the emails they received associated Mr Polo with any reason as to why they entered into the AMAs.
Mr Pacifico did not speak to Mr Polo about the AMA either before or after entering into the agreement: T 95.15-.37. Further, he could not recall the last time that he had spoken with Mr Polo prior to signing the agreement: T 106.46-107.11.
As indicated above, I am satisfied that Mr Pacifico was informed by Mr Marino that he had "sacked" Mr Polo on or about 19 July 2017, or in any event at least prior to 15 August 2017, and thereafter Mr Pacifico acted on the basis that Mr Polo was not connected with Oracle Law: T 87.21-.46.
It is far from clear how Mr Pacifico could have put any reliance upon Mr Polo in a context in which he thought that Mr Polo had been sacked from Oracle Law because he was "hopeless", and in fact had no more dealings with Mr Polo after the purported "termination": T 87.21-88.9.
Prior to the investment proposal, Mr Parrella had not met or spoken to Mr Polo by telephone or in any other way: T 115.26-.49. The suggestion of the investment came "entirely" to Mr Parrella from Mr Pacifico introducing him to Mr Marino: T 116.1-.11. The first email that Mr Parrella received on the investment proposal was from Mr Marino on 3 August 2018. He had no contact with Mr Polo after he had entered into the AMA: T 128.41-.43. In those circumstances, it is very difficult to see how Mr Parrella could have put any reliance upon Mr Polo in entering into the AMA.

[74]

The "official start date" referred to in cl 2.1(g) is an undefined term.
Nonetheless, according to cl 2.1(c), it is indicated that the trade "will generally start up to 10 banking days". Dr Baron Levi submitted, and it was not apparently contested, that this presumably would be from the date of the deposit by the plaintiffs: POS [18]; see also T 50.
There is no real dispute that the 90-day period had commenced, for the purposes of cl 2.1(g), on or about 21 or 22 November 2018.
On 16 November 2018, Mr Marino sent Mr Pacifico and Mr Parrella an email indicating that the trade would start on 21 November 2018: CB 1878, 1879. On 23 November 2018, Mr Marino sent a text message to Mr Pacifico and Mr Parrella stating that he had been verbally advised that the trade had started on 22 November 2018: (admitted on the pleadings by Mr Marino: CB 12[29(a)] read with 35[6]); CB 863. Further, on 7 December 2018, Mr Marino sent a text message to Mr Pacifico and Mr Parrella stating that the trade was underway: (admitted on the pleadings by Mr Marino: CB 12[30(a)] read with 35[6]); CB 864.
Schedule A of the AMA states that the payments are subject to cl 2.1(i), which relevantly states: Payment of the return for the capital provider is subject to the payment being made available by the Platform/Trader to the Asset Manager…
Dr Baron Levi submitted that the proviso in cl 2.1(i) applies only to the "return", being the profit on the initial investment and not the original investment itself. He says that for two reasons. First, the ordinary meaning of the term "return", in the context of an investment, is the profit and not the original investment. Secondly, and more compellingly, he submits that the provisions of the AMA (in particular the terms of cl 2.1(g) and Schedule A), properly construed, indicate that the "return" only refers to the profit component: POS [24]. I accept the submission. Accordingly, there is an unqualified obligation under cl 2.1(g) of the AMA to pay back the initial invested capital after 90 days.
Prima facie, that gives rise to a breach by Mr Marino. Neither of the plaintiffs have been paid back their initial invested capital.
In his amended defence, Mr Marino (at CB 40-42[24], [27], [28], [30], [31], [34]) relied on the provisions of cll 5.2 and 5.3 of the AMA, which provide as follows: 5.2. The Asset Manager must not be liable in any manner for: (a) the failure of any investment policy; (b) the tax consequences of any action or inaction for the amount received by the Capital Provider taxable income; or (c) any loss or damages suffered by Capital Provider in respect of the investments made under the Investment Account, by reason of the exercise of discretion given to the Asset Manager under this agreement, except as directly caused by the gross negligence, fraud or wilful default of the Investment Manager. 5.3. The Capital Provider agrees to indemnify the Asset Manager and its employees, officers, delegates, agents and contractors (on a full indemnity basis) against all actions, costs, liabilities and expenses arising out of or in connection with the proper performance of the Asset Manager's obligations under this agreement. The Capital Provider may however redeem or act against the trade group as it will be a direct client to the platform.
Dr Baron Levi submitted that cl 5.2 does not apply as Mr Marino did not establish that any loss suffered was by reason of the exercise of a discretion given to him under the AMA: POS [29(a)]. However, whilst referring to cl 5.2 in his defence, Mr Marino did not identify what exercise of discretion he engaged in to support reliance upon cl 5.2. Further, Dr Baron Levi submitted that any loss suffered was as the result of "gross negligence, fraud or wilful default" (referencing the concluding words in cl 5.2) on Mr Marino's part, as pleaded in the plaintiffs' reply: CB 47[3]; POS [29(b)].
There are very curious aspects of the arrangements for the investment of the monies which were referred to by Dr Baron Levi during the hearing.
Dr Baron Levi submitted that cl 5.3 is no answer to the plaintiffs' claim, as it is only enlivened by establishing that there was "proper performance" of the asset manager's obligations under the agreement: (Reply) CB 48[4]; POS [30]. He submits, and I accept, that there was no proper performance because of the loss of the funds and control over the funds by Mr Marino: T 52. In any case, leaving aside the word "proper", it would appear that the clause would, in effect, almost completely nullify the other provisions of the AMA if it were given a construction which extended to the present facts.
In the circumstances, I find that Mr Marino is liable for breach of the AMAs and the unqualified obligation under cl 2.1(g) to pay back the initial invested capital after 90 days. The damages awarded to the plaintiffs ought to be the amount of their respective initial invested capital, namely, $10,000 in respect of Adelaide and $200,000 in respect of Mr Parrella.

[76]

Mr Marino - alternative claim - "damages" for breach of fiduciary duty or cl 5.1(c) of the AMA

The plaintiffs pleaded a claim to the effect that, by reason of the provisions of cll 2.1(b), (g), (i), 4.2, 5.1(c) and (e)(i) of the AMA (alleged fiduciary clauses), Mr Marino owed fiduciary duties to the plaintiffs in relation to the monies they had transferred: CB 10-11[24(c)-(i)], 12[28]. They pleaded that Mr Marino breached his fiduciary duties (CB 18[45]), giving rise to loss. The conduct giving rise to the breach was particularised as including Mr Marino's failure to disclose to the plaintiffs various aspects of the trade and trading platform, his failure to communicate with the plaintiffs for extended periods of time, his failure to commence legal action against any party in relation to the trade and his failure to claim under a policy of insurance in relation to the trade: CB 17[42(d)], 18[45].
Dr Baron Levi made brief reference to the claim for breach of fiduciary duty in the POS: POS [49]-[50], [60(a)]. In closing submissions, Dr Baron Levi fleetingly referred to the basis of the fiduciary duty as particularly being enlivened by cl 5.1(c) of the AMA: T 407.17-.21. He did not submit that the claim for breach of fiduciary duty would result in any different financial outcome for the plaintiffs: T 407.26-408.11.
I consider that as a contractual obligation there was a breach by Mr Marino in acting in the plaintiffs' best interests. If, for some reason, I be incorrect in finding that there was a breach of cl 2.1(g) of the AMA, in Mr Marino's failure to pay back the initial invested capital after 90 days, I find that there was a breach of the provisions of cl 5.1(c) of the AMA. Neither counsel suggested that there would be any different assessment of damages for breach than a finding that the loss was the amount of the invested capital.
In any event, there are issues with the claim of breach of fiduciary duties arising from the alleged fiduciary clauses. That is because the breaches asserted by the plaintiffs consist of Mr Marino's failure to do positive acts, including: a failure to disclose aspects of the trade; a failure to communicate (with the plaintiffs); and a failure to commence proceedings. Ordinarily, fiduciary duties are proscriptive in nature, not prescriptive: Breen v Williams (1996) 186 CLR 71 at 113 per Gaudron and McHugh JJ; [1996] HCA 57. Proscriptive duties may in some circumstances take on a positive character in relation to a duty to disclose: e.g. Law of Agency at 205; see my comments in D Capital 2 Pty Ltd v Western [2022] NSWSC 1064; (2022) 20 BPR 42,919 at [401]-[404]. However, there were no submissions on this aspect of the issue. I decline to make any express findings on the issue of whether Mr Marino owed the plaintiffs any fiduciary duties in addition to his contractual duties and, if so, whether any such duties were breached.

[77]

Mr Marino - alternative claim - rescission or damages for misrepresentation

The plaintiffs alternatively sought relief in terms of a declaration that the AMAs are rescinded, based on certain misrepresentations by Mr Marino: CB 3[2(a)], 19[46], 20[47]; POS [60(a)]. The claim for rescission was said to be alternatively based upon Mr Marino's breach of fiduciary duty: CB 20[47]; POS [60(a)]. However, based on what I have explained above, I decline to consider rescission on the basis of any breach of fiduciary duty. In the alternative to rescission, the plaintiffs also sought damages based on the purported misrepresentations: CB 3[3(a)], 20[48].
The claim was propounded on the basis that the plaintiffs were induced to enter the AMAs on the basis of various representations by Mr Marino, including representations that: (a) Mr Marino was a solicitor or alternatively the owner of Oracle Law; (b) the investment opportunities Mr Marino managed were offered by or associated with Oracle Law; (c) the investment opportunities Mr Marino managed were subject to intensive due diligence and (represented to be) risk-free or virtually risk-free; and (d) the $200,000 investment opportunity would pay a return on the investment of 100% after 90 days, was government controlled and risk-free: CB 19[46].
It was pleaded that the representations (a) and (b) were made by Mr Marino knowing them to be false, and that the representations (c) and (d) were made by Mr Marino recklessly as to their truth: CB 19[46]. That aspect of the pleading is essentially a pleading of fraud.
The consequence of those misrepresentations was said to entitle the plaintiffs to rescission of the AMAs and, alternatively, damages.
Dr Baron Levi made brief reference to the claim for rescission based on misrepresentation in the POS: POS [60(a)]. In opening the case, Dr Baron Levi submitted that the fraudulent misrepresentation case against Mr Marino differed from the negligence case, in that "the relevant fraud was in alleging that the investments were backed by Oracle Law": T 33.7-.9.
Dr Baron Levi made reference (at T 7.7-.22) to the provisions of s 153(2)(b) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act), which are to the effect that the discharge of a bankrupt from a bankruptcy does not release the bankrupt from a debt incurred by means of fraud or a fraudulent breach of trust to which he or she was a party or a debt of which he or she has obtained forbearance by fraud.
Dr Baron Levi subsequently foreshadowed an application to amend the amended statement of claim to seek a declaration that the representations pleaded at CB 19[46(a)-(b)] (being representations (a) and (b) above, said to be made by Mr Marino knowing them to be false) amounted to some form of fraudulent conduct, so as to seek to bring the proceedings within the purview of s 153(2)(b) of the Bankruptcy Act, in the event that I made findings that the representations were knowingly false: T 17.29-18-.28.
There was the following exchange (T 18.30-19.7): BARON LEVI: I'm content not to press an application for a declaration. I understand that sometimes it's the case that it's unnecessary to make particular findings in relation to a particular pleaded, but perhaps, if I put it simply, in terms of a request that the pleadings in para 46(a) and (b) that there be findings in relation to or at least that what's pleaded at para 46 is specifically considered by the Court. HIS HONOUR: I think all you can do in that regard is simply make a submission. I don't think you can require me to make a finding of that nature in advance. I think that's effectively all you can do, unless you're able to demonstrate by reference to some - are the allegations here based on a statutory provision or some other provision? BARON LEVI: There are allegations that are also based on statutory provisions. They are statutory provisions under the ASIC Act in relation to the provision of financial services. HIS HONOUR: The particular ones you focused upon are at paras 46(a) and (b), but if you can show me that those are provisions under some legislation and that it is by force of the legislation or by some other means it is usual or common, in making findings or making orders, for the Court to expressly make a finding or make an order that refers to falsity or, to use the wording of the Bankruptcy Act, fraud. Then I'll obviously listen to what you have to say, but you will need to demonstrate to me that that's the position. BARON LEVI: Perhaps if I can review that then, I may then make submissions on that in terms of final submissions, but if I don't, perhaps it can be taken that I've abandoned any such request in that respect.
The PowerPoint presentations were sent after Mr Polo and Mr Marino had parted ways. However, there is branding of Oracle Law on the PowerPoint presentations, and each of the three presentations are said to be "Presented to you by Frank Marino": CB 2107, 2120 and 2133. There is no reference to Mr Polo.
The notion of the investments being risk-free or virtually risk-free arose initially from statements made by Mr Marino to Mr Pacifico in Adelaide in early 2018: CB 159[128].
Towards the beginning of the "LEVERAGED CASH TRADE PROGRAM (Small Cap)" presentation, there is some flavour of the investments (or at least aspects of them) being risk-free when explaining how the system works.
Thus, the presentation contained the following (CB 2111): - Medium Term Notes (MTN's) - used for interbank purposes. Most common as it is a zero risk buy and sell. … - Physical Commodities (transacting on large scales of gold, oil etc). All at banks r[i]sk, NOT the client!
Significantly, the presentation went on to state the following in respect of "Risk Understanding" (CB 2112): What is the RISK of losing my MONEY … Generally speaking, RISK is limited to almost ZERO. … Our DD process is intense and has been going on for decades successfully. This has been fully verified in more ways than one.
The presentation had a disclaimer which included (CB 2118): … This E-mail letter and the attached related documents are never to be considered a solicitation for any purpose in any form or content. Upon receipt of these documents you, as the Recipients, hereby acknowledges this warning and disclaimer…
Finally, the presentation concludes as follows (CB 2119): Oracle Law only associates its business with licensed operators. The Business is based on the Gold Coast AUSTRALIA and has deals with international law.
I am prepared to accept that the presentations sent by Mr Marino to Mr Pacifico indicated that the investment opportunities Mr Marino managed were associated with Oracle Law and that the investment opportunities were subject to intensive due diligence and represented to be risk-free.
I accept those representations were made by Mr Marino knowing them to be false, or being reckless as to their truth.
As I have noted above, nowhere in either of the plaintiffs' affidavits, or their cross-examination, did they state that they would not have entered into the AMAs if they had known that Mr Marino was not a lawyer and/or was no longer associated with Oracle Law. The highest it is put is that it gave them greater comfort or assurance in entering into the AMAs. In relation to the representations as to the investment opportunities having been subject to intensive due diligence and being risk-free, the effect which those representations had on the plaintiffs, as distinct to those regarding Mr Marino being a lawyer or associated with Oracle Law, was not made clear on the evidence.
On the issue of the causation requirements for an action in deceit, the Court of Appeal (Bell CJ, Stern JA and Basten AJA) has recently stated in Care A2 Plus Pty Ltd v Pichardo [2024] NSWCA 35 at [126]: 126. The causation requirements for an action in deceit are satisfied where the misrepresentation "contributed", even if only a "minor part", to the plaintiff's conduct which precipitated their loss: Gould at 236, 238-239. Therefore, a misrepresentation can relevantly cause loss despite the victim being actuated by misapprehensions from other sources, or their own predetermined intention to embark on the particular course of action: Demetrios v Gikas Dry Cleaning Industries Pty Ltd (1991) 22 NSWLR 561 at 570; David Rolph et al, Balkin & Davis: Law of Torts (6th ed, 2021, LexisNexis) at [23.38]. An action for deceit will only fail on causation grounds if the court determines that the plaintiff was motivated entirely upon their own judgement when they entered the transaction, or if they were aware of the representation's falsity, and instead knew the true state of affairs: Holmes v Jones (1907) 4 CLR 1692 at 1702; [1907] HCA 35; Gipps v Gipps [1978] 1 NSWLR 454 at 460.
Cognisant of the requirements outlined by the Court of Appeal, I am prepared to accept that Mr Marino's misrepresentations "contributed" to the plaintiffs entering into the AMAs. It cannot be said that the plaintiffs were motivated entirely upon their own judgment when they entered into the AMAs, nor that they were aware of the representations' falsity.
On the question of remedy, I note that the plaintiffs' primary claim is one for damages arising from certain breaches of the AMAs by Mr Marino, which I have found in the plaintiffs' favour. There is no indication that the plaintiffs had purported to rescind the AMAs prior to them filing their statement of claim on 14 October 2020. In those circumstances, it appears that the plaintiffs have affirmed, or at least made no election to rescind, the AMAs and I decline to make any declaration as to rescission.
However, based on my findings above, I find that, in the alternative to the plaintiffs' primary claim for breach of contract, Mr Marino is liable to pay damages to the plaintiffs for fraudulent misrepresentation in the amount of their respective initial invested capital, namely, $10,000 in respect of Adelaide and $200,000 in respect of Mr Parrella.

[78]

Mr Marino - alternative claim - breaches of financial services provisions of the Corporations Act

It was pleaded that: (a) the $200,000 investment opportunity was an opportunity to invest in a financial product within the meaning of ss 763A(1)(a) and 763B of the Corporations Act; (b) Mr Marino provided financial product advice within the meaning of ss 766A(1)(a) and 766B of the Corporations Act in relation to a financial product; and (c) Mr Marino dealt within the meaning of ss 766A(1)(b) and 766C in a financial product: CB 20-21[49(a)-(c)].
It was said that by reason of (b) and (c) above, Mr Marino provided a financial service within the meaning of s 766A of the Corporations Act: CB 19[49(d)]. By reason of the earlier misrepresentations (CB 19[46], being those set out above in relation to the misrepresentation claim), it was pleaded that Mr Marino: 1. made statements or disseminated information that was false in a material particular or materially misleading, likely to induce persons to apply for financial products or acquire financial products and made knowing that the statements or information was untrue such that, in the premises, the statements were false or misleading statements contrary to s 1041E of the Corporations Act: CB 21[50]; 2. published statements, promises and forecasts as to which he was reckless as to whether they were misleading, false or deceptive and, in the premises, induced the plaintiffs to deal in a financial product contrary to s 1041F of the Corporations Act: CB 21[51]; and 3. engaged in conduct in relation to a financial product or financial service that was misleading or deceptive or likely to mislead or deceive contrary to s 1041H of the Corporations Act: CB 22[52].
As a consequence of the alleged breaches set out above, the plaintiffs sought damages against Mr Marino pursuant to s 1041I(1) of the Corporations Act: CB 22[53].
Dr Baron Levi made no submissions regarding the claim for breach of the above financial services provisions of the Corporations Act in the POS (other than to note that such a claim was asserted by the plaintiffs): POS [60(b)]. No further particular submissions were made by Dr Baron Levi in respect of it. The only submissions made in relation to the Corporations Act related to questions arising from my interaction with Mr Lucarelli regarding the provisions of s 128 of the Evidence Act: T 316, 338-351
On their face, it could well be that the Chapter 7 provisions of the Corporations Act referred to in the plaintiffs' pleadings are of some application to the present case. However, without the benefit of more detailed submissions as to precisely how those provisions ought to be construed and applied to the present facts, and given my findings above in relation to the plaintiffs' contractual claim and misrepresentation claim, I do not propose to make any findings as to this alternative claim. In any event, there was no suggestion that the Corporations Act damages claim would be more extensive than the damages arising from the contractual claim.

[79]

Mr Marino - alternative claim - breaches of ACL

It was pleaded that Mr Marino was relevantly, at all material times, engaged in trade or commerce and, by reason of the representations set out at CB 19[46] (being those set out above in relation to the misrepresentation claim), Mr Marino engaged in misleading or deceptive conduct contrary to s 18 of the ACL: CB 22[54(a)-(b)].
Further and in the alternative, it was pleaded that the representations that (a) there was no risk or virtually no risk in relation to the offers in the PowerPoint presentations, (b) the plaintiffs would receive a substantial fixed return in relation to the offers in the PowerPoint presentations, and (c) in relation to the $200,000 investment opportunity, the plaintiffs would earn a 100% return on the initial investment after 90 days, and the opportunity was risk-free, were representations as to a future matter within the meaning of s 4(1) of the ACL. It was said that under s 4(2) of the ACL, Mr Marino is taken to have had no reasonable grounds for making the representations, and the representations were therefore misleading or deceptive: CB 22[54(c)].
In consequence of the above, it was claimed that the plaintiffs were entitled to damages against Mr Marino under s 236 of the ACL: CB 22[54(d)].
Dr Baron Levi made brief reference to the claim for breach of the ACL in the POS: POS [60(c)]. In closing submissions, Dr Baron Levi submitted (at T 413-414) that the rules for causation for misleading or deceptive conduct, for the purposes of damages under s 236 of the ACL, are the same as those for the tort of negligence, citing Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 525; [1992] HCA 55 and Henville v Walker (2001) 206 CLR 459; [2001] HCA 52 (Henville) at [14], [105]-[107].
Dr Baron Levi observed that some of the conduct underlying the claims against Mr Marino occurred across jurisdictions, including the proffering of investments which involved Mr Marino physically meeting the plaintiffs in South Australia, other matters occurring by email and much of the physical work of Oracle Law occurring in Queensland: T 35.
The pleading of the plaintiffs' ACL claim, and the submissions of Dr Baron Levi, did not distinguish between the ACL as a law of the Commonwealth and as a State law. Precisely how the ACL operates as a law of the Commonwealth and as a State law is a distinction which is not always properly appreciated in practice, but it is important: Zervas v Burkitt (No 2) [2019] NSWCA 236 (Zervas) at [53] per Bell P (as his Honour then was) (Macfarlan and McCallum JJA agreeing). No submission was made as to the appropriate State law(s) that would be operative in the present case. On that basis, I will proceed in dealing with the ACL claim on the understanding that the plaintiffs claim under the ACL as a law of the Commonwealth.
The ACL as a law of the Commonwealth does not relevantly apply to a claim against a person for involvement in a breach of s 18 of the ACL (Cth): Zervas at [57] per Bell P (Macfarlan and McCallum JJA agreeing).
In Campbell v Tran [2024] NSWSC 204 (Campbell v Tran), I explained that there may be an extension of the operation of s 18 of the ACL (Cth) (in addition to certain other parts of the ACL) to persons who are not corporations, where the impugned conduct involves the use of the internet: 256. Section 6(3)(a) of the CCA extends the operation of s 18 of the ACL (Cth) (in addition to certain other parts of the ACL) to persons who are not corporations where the impugned conduct involves the use of postal, telegraphic or telephonic services or takes place in a radio or television broadcast: Kazal v Thunder Studios Inc (California) [2023] FCAFC 174 at [7] per Wheelahan J (Wigney and Abraham JJ agreeing); Australian Competition and Consumer Commission v Kaye [2004] FCA 1363 at [36] per Kenny J; Pollock v Hicks [2015] NSWCA 122 at [41] per Gleeson JA; see also Russell V Miller, Miller's Australian Competition and Consumer Law Annotated (45th ed, 2023, Lawbook Co.) (Miller) at 148 [CCA.6.60]. 257. The expression "postal, telegraphic or telephonic services" extends to conduct involving the use of the internet: Australian Competition and Consumer Commission v Jutsen (No 3) (2011) 206 FCR 264; [2011] FCA 1352 at [100] per Nicholas J; Miller at 148 [CCA.6.60].
This Court has jurisdiction to entertain a case based on s 18 of the ACL (Cth) by virtue of s 4(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) and s 9 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW).
The representations that Mr Marino was a solicitor and the owner of Oracle Law (CB 19[46(a)]), at least to the extent that they were oral representations coupled with the handing over of a business card, were not made by use of the internet.
However, I consider that the representations pleaded in CB 19-20[46(b)-(f)] (representations (b), (c) and (d) as set out above in dealing with the misrepresentation claim) were misleading and were made by use of the internet.
Damages to be assessed under s 236(1) of the ACL (Cth) are compensatory. In Campbell v Tran, I stated: 262. Damages to be assessed under s 236(1) of the ACL (Cth) are compensatory. In the context of this case, that requires a comparison between the position in which the plaintiffs were in having relied on the representation with their position if there had there been no contravention of s 18 of the ACL (Cth). In Mills v Walsh [2022] NSWCA 255, Brereton JA (as the Commissioner then was) (Bell P (as his Honour then was) agreeing) stated at [110] (omitting footnotes): The purpose of an award of damages under ACL s 236 for a contravention of the prohibition on misleading and deceptive conduct in s 18, as at common law for misrepresentation, is to compensate the plaintiff for the prejudice or disadvantage it has suffered in consequence of having altered its position under the inducement of the misrepresentation made by the defendant. The aim is to put the plaintiff in the position in which it would have been had the misrepresentation not been made, so far as monetary compensation can do so. Typically, this involves making good the loss or expenditure incurred by the plaintiff in consequence of the inducement upon which it relied, offset by any corresponding advantage in money or money's worth obtained by the plaintiff from the transaction. 263. The loss, assessed by reference to the so-called "rule in Potts v Miller" (see Potts v Miller (1940) 64 CLR 282; [1940] HCA 43), focuses, not on the difference between price and "market value", but on the difference between price and "real value": Barrett v Maradaca Pty Ltd [2020] NSWSC 440 at [221] per Lindsay J, citing HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640; [2004] HCA 54 at [36].
Dr Baron Levi did not address particular submissions as to damages other than by reference to the initial capital investment.
I find that, in the alternative to the plaintiffs' primary claim for breach of contract, Mr Marino is liable to pay damages to the plaintiffs pursuant to s 236 of the ACL (Cth) in the amount of their respective initial invested capital, namely, $10,000 in respect of Adelaide and $200,000 in respect of Mr Parrella.

[80]

Mr Marino - alternative claim - negligence

The claims against Mr Marino also included a pleading of negligence: CB 22-23[55].
The pleading was said by Dr Baron Levi to be important for the reason that it formed the basis for the vicarious liability claim against Mr Polo: T 6.29-.37, 30.25-.26, 32, 408.15-.20.
Dr Baron Levi also commented that there is a question as to whether debts arising as a result of negligence are provable or non-provable in bankruptcy: T 7.28-.33.
Dr Baron Levi submitted (POS [51]-[53]; T 32.29-33.1, 406.24-.30), and I accept, that Mr Marino owed a duty of care to the plaintiffs in relation to their capital investment arising from a number of the provisions of the AMA, including that: 1. he was the plaintiffs' agent: cl 2.1(b); 2. he was the plaintiffs' asset manager: cl 4.1; 3. he would act honestly and diligently in providing services: cl 5.1(a); 4. he would exercise the degree of care and diligence that a reasonable person would exercise if they were in the asset manager's position: cl 5.1(b); and 5. he would act in the best interests of the plaintiffs: cl 5.1(c).
It was claimed that Mr Marino breached his duty of care by failing to act in the manner of a reasonable and responsible asset manager, including relevantly that a reasonable asset manager (i) would have foreseen that no investment promising a 100% return in 90 days was risk-free, and (ii) would have known that any such investment carried extreme risk and was likely to be a sham, and would have advised against entering such a transaction: CB 23[55(b)]; POS [53].
I accept that Mr Marino breached his duty of care in the manner alleged. The investment proposed by the AMA, when linked with the Diamonda investment agreement, had unconventional aspects, was inherently risky and, on any view of it, Mr Marino did not act diligently or with a degree of care and diligence that a reasonable person would exercise in an asset manager's position.
The Diamonda investment agreement has a number of unusual aspects to it which ought to have alerted a reasonable asset manager to question the legitimacy of the investment. Dr Baron Levi referred to these as "red flags": T 406.34-.48. These included that: 1. Diamonda was said to be based in London, but it is an "LLC" (a limited liability company), which is a form of private limited company specific to the United States, rather than a company incorporated in the United Kingdom: CB 1760; 2. the email address for Diamonda was "ambassadorfinancellc@gmail.com", being a different company name to Diamonda: CB 1760; 3. the telephone and fax numbers for Diamonda given on the Diamonda investment agreement were Montréal numbers and not United Kingdom numbers: T 406.43-.44; 4. subject to the identification of the "receiver's bank", the Diamonda investment agreement does not identify a single specific institution connected to the supposed investment; and 5. terminology in the glossary is in generic terms, for example: the "investment bank" is simply described as "a financial intermediary that performs a variety of services"; "issuing bank" is simply described as "a financial institution or legal entity that develops, registers and sells securities for the purpose of financing its operations"; "receiving bank" is defined as "a receiving financial institution, other than the recipient's financial institution, accepts a transmittal order by executing the transmittal order"; and "lending institution" is defined as "Organization/ Institution such as a bank, credit union or finance company that giving or contributing financial loans".
There are further extraordinary aspects of the Diamonda investment agreement, including the fact that somehow Mr Marino has agreed "to co-operate and arrange" an initial investment capital of $250 million USD in the form of a bank guarantee or standby letter of credit to the benefit of Diamonda: CB 1765.
The "receiver" is not defined, but in context appears to be Diamonda: T 59.15. The "receiver's bank" is specified as Wells Fargo Bank: CB 1775.
Mr Marino asserted in his email to Dr Bregman on 27 September 2018 that "I have completed my DD on the contract…": CB 1756-1757. Yet it is not evident what, if any, due diligence Mr Marino had undertaken.
In that email, Mr Marino raises a number of queries regarding the Diamonda investment agreement, yet seemingly arranges to sign the contract and send the funds with exceeding haste without apparently having received any responses to his queries. Mr Marino's queries raised in the 27 September 2018 email were not apparently answered, other than with the provision of an insurance policy.
The "sanitised" insurance policy is in evidence. Quite what was meant by Dr Bregman in describing the policy as "sanitised" is unclear. Dr Baron Levi was unable to explain precisely what it meant: T 61. However, at least on one view, the word "sanitised" is an apt description, because the certificate of liability insurance (CB 1798), the policy wording (CB 1799-1813) and the endorsements (CB 1814-1820) are devoid of any meaningful detail which would enable the reader to understand anything about who or what was being insured and the extent of such insurance. There is no reference to who is insured or the insurer's details: T 61-62, see also 406.50-407.14.
There is evidence that the plaintiffs paid their respective funds to the account nominated by Mr Marino in the AMAs: CB 85. Despite the existence of the telegraphic transfer document purporting to show Diamonda as a beneficiary of funds in the sum of $257,000 USD, with the funds to be paid to Wells Fargo Bank in California (CB 1824), Dr Baron Levi submitted there is no actual evidence as to the ultimate destination of the funds that were paid by the plaintiffs: T 50.50-51.13, 56.16-.17. He noted suggestions from Mr Marino that the funds had ended up in London, but also referred to a meeting which Mr Marino had purportedly attended in Monaco where the funds are supposed to have ended up. Dr Baron Levi submitted that there is a lack of clarity about almost everything after Mr Marino sent the funds on: T 49.41-50.2.
Dr Baron Levi submitted that there was a breach of duty of care in the sense that Mr Marino failed to remain in control of the trade and the funds (T 51-52, 406.30-.32), giving rise to loss (in that the plaintiffs' investment was lost and not returned to them). I accept that there was a breach by Mr Marino of his duty of care to the plaintiffs, and that such breach led to the plaintiffs' loss.
There was no suggestion that the damages sought under the negligence claim would be any different or more extensive than the damages arising from the contractual claim. Mr Marino is alternatively liable to pay damages to the plaintiffs for negligence in the amount of their respective initial invested capital, namely, $10,000 in respect of Adelaide and $200,000 in respect of Mr Parrella.

[82]

Plaintiffs' case

The pleaded claim of the plaintiffs suggested that the primary claim against Mr Polo was one pursuant to the inherent compensatory jurisdiction of the Supreme Court in relation to the control and discipline of solicitors. However, in closing submissions, Dr Baron Levi indicated that the principal claim against Mr Polo was in negligence: T 408.24-.31. I will consider that claim, as well as the other claims brought against Mr Polo, further below.
The inherent supervisory jurisdiction claim was essentially pleaded as follows: 1. Mr Marino: 1. was an employee or officeholder of Oracle Law; 2. represented to Mr Pacifico and Mr Parrella that he was a solicitor; and 3. was not at any material time entitled to engage in legal practice. 1. The representations by Mr Marino that he was a solicitor consisted of: 1. him stating that he was the owner of Oracle Law; 2. him stating that Mr Polo was his employee; 3. him sending emails to Mr Pacifico and Mr Parrella using his Oracle Law email address; 4. his Oracle Law emails containing a signature section stating that the information contained in the email message and any attachments was confidential and privileged; 5. him providing legal services and advices for Mr Pacifico in relation to the preparation of loan agreements and caveats; and 6. him issuing or causing to be issued tax invoices on Oracle Law letterhead to Mr Pacifico for legal services and advices he provided. 1. By reason of those matters, Mr Marino engaged in legal practice and represented that he was entitled to engage in legal practice contrary to ss 10(1), 11(1) and (2) of the Uniform Law and s 24(1) of the LPA. 2. By reason of those matters, Mr Marino also disseminated advertising, marketing and promotional material of Oracle Law to the plaintiffs which was false or misleading or deceptive and contrary to r 36.1 of the Conduct Rules. 3. Mr Polo, as the principal of Oracle Law: 1. is responsible for the failure to take steps to ensure that the legal services provided by Oracle Law were provided in accordance with the Uniform Law, LPA and Conduct Rules: s 34(1)(b) Uniform Law; 2. is taken to have directly contravened any provision of the Uniform Law, LPA or Conduct Rules contravened by Oracle Law: s 35(1)(b) Uniform Law; s 701 LPA; and 3. in the premises, is directly liable for Mr Marino's contraventions. 1. Mr Polo contravened: 1. rule 41.1 of the Conduct Rules, which prohibits a solicitor from conducting managed investments as part of their law practice, except in relation to a scheme administered by a relevant professional association; and 2. the disclosure provisions under s 152 of the LPA, in relation to any multi-disciplinary partnership. 1. The Court has an inherent jurisdiction and power in relation to the control and discipline of solicitors and to order compensation for loss suffered as a result of the breaches of professional obligation set out above.

[83]

Plaintiffs' submissions

Based on his submissions (outlined above) that Mr Marino engaged in legal work, Dr Baron Levi submitted that Mr Polo, as principal of Oracle Law (POS [75]): 1. is responsible as a matter of law for the failure to take steps to ensure that the legal services provided by Oracle Law were provided in accordance with the Uniform Law, LPA and Conduct Rules; 2. is taken to have directly contravened any provision of the Uniform Law, LPA and Conduct Rules contravened by the law practice: s 35(1)(b) Uniform Law; s 701 LPA; and 3. is directly liable for the contraventions engaged in by Mr Marino under ss 10(1), 11(1)-(2) of the Uniform Law, s 24(1) of the LPA and r 36.1 of the Conduct Rules.
Dr Baron Levi submitted that the claims in this regard were not dependent upon a finding that Mr Marino was employed by Oracle Law and that the term "associate of a law firm", for the purposes of the Uniform Law, is defined in such a way as to extend to any agent or representative of the firm: T 34.12-.14.
That submission requires refining. There is a definition of "associate of a law practice" in s 6 of the Uniform Law as follows: "associate" of a law practice means a person who is one or more of the following - (a) a principal of the law practice; (b) a partner, director, officer, employee or agent of the law practice; (c) an Australian legal practitioner who is a consultant to the law practice;
The definition extends to any "agent" of the law firm, but not to any "representative".
Dr Baron Levi submitted that Mr Polo attended himself with a carelessness towards compliance with legal obligations and regulations, citing the fact that: his invoices referenced legislation that had been repealed 12 years earlier; he engaged Mr Bax to act as a clerk, in circumstances where he knew that Mr Bax had been struck off as a solicitor; and he was prepared to take a percentage of recovered funds from a client rather than bill on any permissible basis: T 437.22-.35. He further submitted that I should reject Mr Polo's evidence regarding Oracle Law not engaging in a multi-disciplinary partnership, and therefore him not being required to make clear Mr Marino's role as a non-lawyer: T 437.37-438.1.
Dr Baron Levi submitted, though without elaborating, that there is a well-established compensatory limb (as distinct from a disciplinary limb) under the Court's supervisory jurisdiction over its officers, citing McIlraith v Ilkin [2007] NSWSC 911 (McIlraith v Ilkin) at [10]-[21] per Brereton J (as the Commissioner then was): POS [68].
In closing submissions, Dr Baron Levi referred (T 440) to the decision of Peden J in Bell v Hartnett Lawyers (No 3) [2022] NSWSC 1204 (Bell v Hartnett Lawyers (No 3)) at [93], where her Honour referred to the decision of Slattery J in Bell v Hartnett Lawyers (No 2) [2021] NSWSC 1270 as follows: 93. Slattery J continued at [41]-[43]: [41] The Supervisory Jurisdiction. Hammerschlag J concisely described the essential features of the Court's inherent supervisory jurisdiction in a recent case, John Ljubomir Atanaskovic and the persons named in Schedule A trading as Atanaskovic Hartnell v Birketu Pty Ltd - Supervisory Jurisdiction [2020] NSWSC 573 at [29] - [31]. In a passage approved on appeal by the Court of Appeal in Atanaskovic Hartnell v Birketu Pty Ltd (2021) 392 ALR 154; [2021] NSWCA 201 at [130] (per Gleeson JA), Hammerschlag J said: "[29] The Court has a well-established inherent supervisory jurisdiction, to which solicitors are amenable, which is designed to impose on them higher standards than the law applies generally: United Mining & Finance Corporation Limited v Becher [1910] 2 KB 296 at 304; Wade v Licardy (1993) 33 NSWLR 1 at 6-9. A solicitor is expected to act honourably and ethically. A solicitor is expected to keep her or his word. [30] This jurisdiction is disciplinary and compensatory. It is not exercised for the purposes of enforcing legal rights, but for the purpose of ensuring honourable conduct on the part of the Court's own officers. It is distinct from any legal rights or remedies of the parties, it is unaffected by anything which affects the strict legal rights of the parties, and it is not limited to technical principles: Re Gray [1892] 2 QB 440 at 443 per Lord Esher MR; R & T Thew Limited v Reeves (No 2) [1982] 1 QB 1283 at 1285; Countrywide Banking Corporation Limited v Kingston [1990] 1 NZLR 629 at 637; Australian Guarantee Corporation (NZ) Ltd v East Brewster Urquhart & Partners [1990] 2 NZLR 167 at 173; McIlriath v Ilkin [2007] NSWSC 911 at [10]. [31] The jurisdiction extends to ensuring that a solicitor honours an undertaking given by her or him in that capacity. The fact that the solicitor may have a defence to an action at law on the undertaking does not preclude the Court from exercising the jurisdiction, but it is a factor which the Court may take into account in deciding whether or not to exercise its discretion and, if so, how: Udall v Capri Lighting Limited [1987] 3 All ER 262 at 269; Countrywide Banking Corporation Limited v Kingston [1990] 1 NZLR 629 at 637. It is no answer to a complaint that a solicitor acted in breach of an undertaking given by her or him that there was no consideration for it: United Mining & Finance Corporation Limited v Becher [1910] 2 KB 296 at 303-4; John Fox v Bannister, King & Rigbeys [1988] QB 925 at 928, 931; Wade v Licardy (1993) 33 NSWLR 1 at 9." [42] An important relevant feature of the jurisdiction identified in this passage is that the jurisdiction may be engaged whether or not a solicitor has a defence to an action at law. Here, Hartnett Lawyers indicate that LPA 2004, s 350(8)(d) is an answer to any costs differential brought about by a successful non-associated third party payer costs assessment initiated by Anthony. Authorities are clear that the supervisory jurisdiction is available notwithstanding provisions such as LPA 2004, s 350(8)(d). [43] The Court's supervisory jurisdiction includes the Court's capacity to scrutinise the conduct of solicitors to ensure that they do not charge exorbitant fees or otherwise take improper advantage of their clients: NSW Crime Commissioner v Fleming (1991) 24 NSWLR 116; (1991) 54 A Crim R 401; [1992] ANZ ConvR 344 at [123] (per Gleeson CJ) recently affirmed by the Court of Appeal in Atanaskovic Hartnell v Birketu Pty Ltd at [145]. And such general jurisdiction is exercisable against an Australian lawyer from interstate providing legal services in NSW: Council of the NSW Bar Association v Siggens [2021] NSWCA 40. Slattery J also indicated that the Court may decide to fix the costs pursuant to s 98 of the Civil Procedure Act (2005) NSW.
He noted that Peden J extracts part of the decision of Slattery J, which in turn cites Hammerschlag J (as his Honour then was) in John Ljubomir Atanaskovic and the persons named in Schedule A t/as Atanaskovic Hartnell v Birketu Pty Ltd - Supervisory Jurisdiction [2020] NSWSC 573, as support for the propositions that the compensatory limb of the inherent supervisory jurisdiction is (T 440.29-.38): 1. not exercised for the purposes of enforcing legal rights, but for the purpose of ensuring honourable conduct on the part of the Court's own officers; 2. distinct from any legal rights or remedies of the parties; 3. unaffected by anything which affects the strict legal rights of the parties; 4. not limited to technical principles; and 5. a general jurisdiction that is exercisable against an Australian lawyer from interstate providing legal services in New South Wales.
Finally, in relation to the question of the provision of legal services, Dr Baron Levi made reference to two decisions which were said to inform the definition of what legal services are.
The first was Victorian Legal Services Board v Jensen [2018] VSC 740, for which Dr Baron Levi submitted that "the finding in that case was that activity including advising that the removal of a caveat was under consideration, offering to contract on behalf of a client, sending notices and tax invoices in relation to property disputes, and providing purported legal documents to a municipal council amounted to engaging in unqualified legal practice": T 440.43-.48.
The second was Adamson v Queensland Law Society Incorporated [1990] 1 Qd R 498 (Adamson), for which Dr Baron Levi submitted "in that decision, a solicitor and clerk had entered into an oral arrangement by which the clerk would bring in conveyancing work and then be paid 75% of all professional costs rendered for work introduced by her after accounting for minor outlays. The clerk rented her own office adjacent to the solicitors' office".
Based on Adamson, Dr Baron Levi submitted as follows (T 441.7-.13): In my submission that case has a number of similarities to the present case, the significant difference being that the compensation for the first defendant, Mr Marino in this case, was at least in the form of legal work being performed by the second defendant without charge, but there's evidence that there was some further remuneration beyond that. Mr Polo for instance in his evidence stated that it also included amounts for contracted services but he couldn't say what that referred to.

[85]

Legal principles

As I have noted above, Dr Baron Levi drew my attention to a number of authorities in relation to aspects of the inherent supervisory jurisdiction.
On examination, the various cases referred to present a more nuanced approach to the exercise of the Court's inherent supervisory jurisdiction than broad assertions that: the jurisdiction can be exercised in any circumstances where the requirements of justice might demand it; it is not restricted to closed and defined categories of cases; it is not exercised for the purposes of enforcing legal rights but for the purpose of ensuring honourable conduct on the part of the Court's own officers; it is distinct from any legal remedies or rights of the parties; it is unaffected by anything which affects the strict legal rights of the parties; and it is not limited to technical principles. While these may be statements of principle, they are not capable of direct application and require careful consideration in any given circumstances.
The decision of Peden J in Bell v Hartnett Lawyers (No 3) was the subject of an appeal in Hartnett t/as Hartnett Lawyers v Bell as Executor of the Estate of the late Mabel Dawn Deakin-Bell [2023] NSWCA 244 (Hartnett Appeal). On the appeal, Bell CJ set out the principles applicable to the supervisory jurisdiction. His Honour stated: 123. Several statements of authority may be noted at the outset of the consideration in relation to the Court's inherent and supervisory jurisdiction: 1. The Court's inherent jurisdiction "can be exercised in any circumstances where the requirements of justice demand it and thus cannot be restricted to closed and defined categories of cases": McGuirk v University of New South Wales [2010] NSWCA 104 at [178] (McGuirk); Reid v Howard (1995) 184 CLR 1 at 16; [1995] HCA 40 (Reid); Tringali v Stewardson Stubbs & Collett Ltd (1966) 66 SR (NSW) 335 at 344; [1966] 1 NSWR 354 at 360-361; 2. "The juridical basis of [the inherent jurisdiction] is therefore the authority of the judiciary to uphold, to protect and to fulfil the judicial function of administering justice according to law in a regular, orderly and effective manner": IH Jacob, "The Inherent Jurisdiction of the Court" (1970) 23 Current Legal Problems 23 at 27-28, as cited in McGuirk at [185]; 3. "The inherent power of a court to control and supervise proceedings includes the power to take appropriate action to prevent injustice": Hamilton v Oades (1989) 166 CLR 486 at 502; [1989] HCA 21; 4. The inherent jurisdiction "is not confined to a situation in which there is no statute or rule of court that could possibly apply to what is to be done in that regard. The true rule is that a court may exercise its inherent or implied powers in a particular case, even in respect of matters that are regulated by a provision of a statute or rules of court, so long as it can do so without contravening any such provision": Landsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421 at 427; [1993] FCA 171 (Landsal) (with added emphasis), citing Taylor v Attorney-General [1975] 2 NZLR 675 at 680, 687-688 and 692-693; 5. The Court can do whatever "may be necessary to prevent any injustice occurring with respect to matters which come within its cognizance": Ex parte Farren; Re Austin (1960) 77 WN (NSW) 743 at 744, cited in Dwyer v National Companies & Securities Commission (1988) 15 NSWLR 285 at 287; 6. The inherent jurisdiction of the Court overlaps with, but is not displaced by, s 23 of the Supreme Court Act 1970 (NSW): McGuirk at [177]; 7. On the other hand, "the inherent power and the jurisdiction conferred by s 23 of the Supreme Court Act are to be exercised only as necessary for the administration of justice", and "the power is not at large": Reid at 16-17; 8. The inherent jurisdiction cannot authorise the making of orders excusing compliance with statutory obligations or preventing the exercise of authority deriving from statute: Reid at 16; Commonwealth Trading Bank of Australia v Inglis (1974) 131 CLR 311 at 318-319; [1974] HCA 17; Doyle v The Commonwealth (1985) 156 CLR 510 at 518; [1985] HCA 46; 9. The inherent jurisdiction does not extend to making orders simply because the Court believes it would be fair to do so: see, for instance, Moore & Anor v Assignment Courier Ltd [1977] 2 All ER 842 at 846; see also The Siskina [1979] AC 210 at 262; 10. The Court has an inherent or general jurisdiction to regulate the costs, charges and disbursements claimed by officers of the Court, and to prevent exorbitant demands: Woolf at 678; 11. The Court may exercise its inherent jurisdiction in relation to a solicitor's costs "in the way it might think fit": Storer & Co v Johnson (1890) 15 App Cas 203 at 206. 12. This well-established supervisory jurisdiction is designed to impose on solicitors higher standards than the law applies generally. The jurisdiction is disciplinary and compensatory. It is not exercised for the purposes of enforcing legal rights, but for the purpose of ensuring honourable conduct on the part of the Court's own officers. It is distinct from any legal rights or remedies of the parties, it is unaffected by anything which affects the strict legal rights of the parties, and it is not limited to technical principles: Atanaskovic First Instance at [29]-[30], approved in Atanaskovic at [127]; 13. Statutory provisions dealing with the issue of lawyers' costs are complementary to this inherent jurisdiction, and do not oust it: Woolf at 678; Pryles & Defteros (a firm) v Green [1999] 20 WAR 541; [1999] WASC 34 at [24] (Pryles); see also Re Jabe; Kennedy v Schwarcz [2021] VSC 106 at [46] (Re Jabe) and s 264 of the Legal Profession Uniform Law 2014 (NSW). The two jurisdictions are enlivened by different acts and must be analysed separately: Whyked Pty Limited v Yahoo!7 Pty Limited [2008] NSWSC 477 at [18]; … 17. The exercise of supervisory jurisdiction over officers of the Court is not governed by "strict legal rights and duties or matters of technicality." Rather, "in exercising supervisory jurisdiction, the Court does not engage in a final determination of legal rights but determines whether one of its officers should be held to ethical and honourable behaviour": Atanaskovic First Instance at [80]-[81]; … 124. In his well-known article "The Inherent Jurisdiction of the Court" (1983) 57(8) Australian Law Journal 449 at 451, Mr Keith Mason, as the subsequent President of the Court of Appeal then was, pointed out that (omitting footnotes): "The control over the conduct of proceedings extends, at least in the Supreme Court, to dealing with practitioners for professional misconduct, negligence or default in the conduct of cases in the Court. This jurisdiction is both punitive and compensatory in that the Court may strike off or suspend the legal practitioner, or order him to pay the costs of either his own client or the opposite party. Similarly, a court's inherent jurisdiction over its own officers extends to ordering them to deliver a bill of costs and tax it." 125. One of the cases cited in support of the penultimate sentence in this extract was Myers v Elman [1940] AC 282 (Myers). In Myers, a solicitor, who had acted for the defendants in the underlying proceeding, was ordered to pay costs of the plaintiff as the solicitor, acting through his clerk, had allowed defences which he knew to be false to be presented to the Court. 126. The Appellant placed particular reliance on this Court's decision in McGuirk and, in particular, the observation by Sackville AJA at [187], with whom Young JA agreed, to the effect that: "…where the rules of court contain provisions ... which confer broad powers on the court to give directions or make orders for the conduct of proceedings, there is no good reason in policy or practice to extend the inherent jurisdiction of the court beyond its established scope. To put the matter another way, it is not necessary to extend the inherent jurisdiction of the court beyond its established parameters where the existing powers of the court are adequate to ensure that the interests of justice are served." On the facts of McGuirk, the alternative powers the Court had in mind were the powers to punish for contempt of Court. 127. It is important to bear in mind that Sackville AJA commenced [187] of his judgment in McGuirk with the observation that "[t]here is authority for the proposition that the court's inherent jurisdiction is not displaced by rules of court, provided the exercise of the inherent jurisdiction does not contravene the requirements of the rules of court: Landsal at 427, and recognised the tension between that authority and what his Honour went on to say. What was said in Landsal has been noted at [123(4)] above. Landsal is also consistent with Woolf where Dixon J identified three sources of power justifying a particular course. One of those sources was the Court's general supervisory jurisdiction over solicitors which is a recognised aspect of a superior court's inherent jurisdiction. 128. Woolf is inconsistent with any contention that the Court's supervisory jurisdiction may not be exercised where alternative statutory avenues may provide a remedy. So much also follows from statements by the High Court to the effect that the Court may stay proceedings as an abuse of process in the Court's inherent jurisdiction (see, for example, CSR Limited v Cigna Insurance Australia Ltd (1997) 189 CLR 345 at 391-392; [1997] HCA 33) given that the Court also enjoys statutory powers that may support such a remedy. 129. Notwithstanding the Appellant's strong reliance on McGuirk, Ms Whittaker observed in oral address: "It's put against us, I apprehend, that we are saying that, if there's another available statutory right or remedy that the Court can't use the inherent jurisdiction. We don't say that. I don't aim that high." 130. The fact that an application may have been possible under the Queensland LP Act did not mean that this Court's inherent supervisory jurisdiction over solicitors could not be invoked, and McGuirk did not compel that result, as was conceded by Ms Whittaker. This Court is bound by Woolf which, like Landsal, accepted that the inherent jurisdiction is not displaced by rules of Court. Indeed, were such an argument based on McGuirk at [187] to be accepted, s 23 of the Supreme Court Act which provides that "[t]he Court shall have all jurisdiction which may be necessary for the administration of justice in New South Wales" would supplant the Court's inherent, supervisory jurisdiction. The Appellant, in his written submissions, endorsed the proposition that a court may exercise its inherent powers in a particular case, even in respect of matters that are regulated by statute or rules of Court, so long as it can do so without contravening any such provision. … 133. The highest standards of integrity are expected of members of the legal profession. That should not need to be spelt out although it has been, in justifiably strong terms, from time to time: see, for example, Dupal v The Law Society of New South Wales [1990] NSWCA 56; New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284 at [19]-[20].
Adamson JA relevantly agreed with the Chief Justice at [165]. At the conclusion of the hearing of the appeal, Ms Whittaker SC offered certain undertakings to the Court with a view to the matter being resolved by a third party payer costs assessment, and argued that the consequence of the availability of these alternative avenues was that the inherent jurisdiction was not available because it was not "necessary" that it be exercised: Hartnett Appeal at [179]-[180]. Addressing this point, Adamson JA stated at [181]: As the Chief Justice has explained in his Honour's reasons, the Court's inherent jurisdiction includes a supervisory jurisdiction over legal practitioners. The charging of fees is a fundamental aspect of the relationship between a solicitor and a client. I am not persuaded that the Court's jurisdiction ought be constrained by the principles which apply when its inherent jurisdiction is invoked in circumstances which do not involve the conduct of officers of the Court. The Court's supervisory jurisdiction is not displaced by the sufficiency of the mechanisms postulated by Ms Whittaker to protect Mr Bell's interests.
Griffiths AJA agreed with the Chief Justice at [182].
When one examines the various cases dealing with the Court's inherent supervisory jurisdiction, one can see that it covers potentially a very broad range of conduct. The cases dealing with the inherent supervisory jurisdiction show that the approach taken by the Court in dealing with such claims depends on the nature of the conduct alleged. It is far from clear that cases involving intentional conduct by a solicitor, such as breach of an undertaking, or egregious conduct, such as gross overcharging, are dealt with in the same way as non-intentional conduct that falls short of a particular standard of care.
Specifically, in New South Wales there is authority suggestive that the compensatory limb of the Court's inherent supervisory jurisdiction, whilst able to be invoked in cases of breach of professional duty by negligence, is said to require something more than "mere" negligence: McIlraith v Ilkin at [11]-[21] per Brereton J. Specifically, it has been stated that the negligence must be of a "culpable quality" amounting to a "serious dereliction of duty": McIlraith v Ilkin at [43] (unaffected by the judgment of Basten and Bell JJA in McIlraith v Ilkin [2008] NSWCA 11 (McIlraith Appeal) at [6], dismissing an application for leave to appeal); see also G E Dal Pont, Solicitors Manual (LexisNexis) at [20,050].
It is appropriate to set out the relevant parts of the respective judgments of Brereton J and the Court of Appeal in McIlraith v Ilkin and McIlraith Appeal.
In McIlraith v Ilkin, Brereton J provided a detailed survey of the authorities at [10]-[21] as follows: 10. The summary supervisory jurisdiction of the court over its officers is well-established, and it has a compensatory as well as a disciplinary limb. It has several aspects: the summary enforcement of professional undertakings [John Fox v Bannister, King & Rigbys [1988] 1 QB 925; Udall v Capri Lighting Ltd [1988] 1 QB 907; Wade v Licardy (1993) 33 NSWLR 1]; the control of solicitors acting in litigation [cf Kallinicos v Hunt (2005) 64 NSWLR 561]; and the making of costs orders against practitioners [cf Myers v Elman [1940] AC 282]. Although at one stage I entertained the view that the summary jurisdiction was available only in connection with a proceeding already otherwise in the court, I accept that this is not so [Geoffrey Silver & Drake v Baines [1971] 1 QB 396, 475; Fox v Bannister; Udall v Capri Lighting; Wade v Licardy]. 11. Although I accept that the compensatory supervisory jurisdiction is not limited to a case of professional misconduct such as would warrant striking off or suspension from practice, and may be attracted in a case of breach of professional duty by negligence, something more than "mere" negligence, such that the conduct would attract professional reproof, is required. That negligence of a culpable quality is at least a necessary but sufficient basis for the jurisdiction appears from Marsh v Joseph [1897] 1 Ch 213, in which Lord Russell of Killowen CJ, delivering the judgment of a Court of Appeal constituted by himself, Lindley and A L Smith LJJ, said (at 244): No question of jurisdiction was raised before us, but I think it important to state the principle upon which the Court acts. It is that where negligence or other breach of duty is committed by a solicitor, an officer of the Court, in a matter in which the Court has seizin, the Court may, and, if it can do full justice, will summarily order its officer to make good the loss occasioned by his neglect or breach of duty. 12. His Lordship proceeded to refer (at 245), in the course of exonerating the solicitor, to his not having done "any blame-worthy thing". 13. The requirement for "gross" negligence also appears in the leading case of Myers v Elman. Viscount Maugham said that though the jurisdiction may be exercised where the solicitor is "merely negligent", it ought be exercised only where there had been a serious dereliction of duty; his Lordship used the term "merely negligent" in contrast with "disgraceful or dishonourable conduct", and accompanied by the epithet "of a serious character" (at 290-292): These cases [White v Washington (1738) Cooke's Practice Cases 152; Fowke v Horabin (1739) Barnes' Notes 11] did not depend on disgraceful or dishonourable conduct by the solicitor, but depended on mere negligence of a serious character, the result of which was to occasion useless costs to the other parties. If, then, as I think, the authorities show that the jurisdiction may be exercised where the solicitor is merely negligent, it would seem to follow that he cannot shelter himself behind a clerk, for whose actions within the scope of his authority he is liable. … But, although, in the view I take, it is not necessary to show that Mr Elman has been guilty of conduct which would justify the punishment of striking him off the rolls or of suspending him from practice, I entirely agree with the contention that the jurisdiction in question ought to be exercised only when there has been established a serious dereliction of duty as a solicitor, either by himself or by his clerks. 14. Lord Atkin referred to "gross negligence" as the test (at 303-304): It is to be noticed that the judge laid down for himself a standard which was perhaps too favourable to the solicitor: 'By misconduct is meant something which would reasonably be regarded as disgraceful or dishonourable by solicitors of good repute; for example, wilfully misleading the court in the conduct of a case.' I think that this is too favourable, for it would appear from the cases that a breach of duty owed to the court committed by gross negligence may lead to the exercise of punitive jurisdiction. 15. Lord Wright referred to "gross neglect" (at 318-9): The cases of the exercise of this jurisdiction to be found in the reports are numerous, and show how the courts were guided by their opinion as to the character of the conduct complained of. The underlying principle is that the court has a right and a duty to supervise the conduct of its solicitors, and visit with penalties any conduct of a solicitor which is of such a nature as to tend to defeat justice in the very cause in which he is engaged professionally, as was said by Abinger CB, in Stephens v Hill [1842] 10 M&W 28. The matter complained of need not be criminal. It need not involve peculation or dishonesty. A mere mistake or error of judgment is not generally sufficient, but a gross neglect or inaccuracy in a matter which it is a solicitor's duty to ascertain with accuracy may suffice. Thus, a solicitor may be held bound in certain events to satisfy himself that he has a retainer to act, or as to the accuracy of an affidavit which his client swears. It is impossible to enumerate the various contingencies which may call into operation the exercise of this jurisdiction. It need not involve personal obliquity. The term "professional misconduct" has often been used to describe the ground on which the court acts. It would perhaps be more accurate to describe it as conduct which involves a failure on the part of a solicitor to fulfil his duty to the court and to realise his duty to aid in promoting, in his own sphere, the cause of justice. 16. Lord Porter referred (at 338) to the solicitor having been "grossly negligent". 17. That a serious dereliction of duty was required to found the jurisdiction was emphasised in Edwards v Edwards [1958] P 235, in which by Sachs J said that neither an error of judgment, nor an error amounting to mere negligence, would suffice (at 248): Nor is even an error merely because it is of an order which constitutes or is equivalent to negligence. There must be something that amounts, in the words of Lord Maugham to "a serious dereliction of duty", something which justifies according to the other speeches in that case, the use of the word gross. It is not, however, normally necessary to establish mala fides or other obliquity on the part of the solicitors, though it may be that if mala fides is established that might turn the scale in a particular case. 18. The distinction was decisive in Mauroux v Sociedade Comercial Abel Pereira da Fonseca SARL [1972] 2 All ER 1085, in which Megarry J, with reference to the judgment of Sachs J in Edwards v Edwards, said (at 1093) that to invoke the jurisdiction it was insufficient merely to establish negligence, holding that while there had been a breach of a statutory obligation to serve a notice of a grant of legal aid on the opposing party, it amounted to an oversight but not to deliberate or gross misconduct, and was insufficiently grave to fall within the jurisdiction. His Lordship said (at 1093-4): It is plain that there has been a breach of the statutory duty; it is plain that there has been an oversight; but, very properly, it has not been suggested that there has been any deliberate or gross misconduct by the solicitors concerned. In any case, it seems to me that the complaints of lost opportunities made by the defendant company are too speculative to support the jurisdiction under either head. I think that the misconduct is insufficiently grave, and that it falls into the category of being a mere oversight which ought not to be visited with the exercise of the jurisdiction under … Myers v Elman . 19. The "complaints of lost opportunities" were to the effect that, had the relevant notice been given, the defendant might have settled the claim or let judgment be entered by default, since it had no assets within the jurisdiction. 20. In R & T Thew Ltd v Reeves (No 2) [1982] QB 1283, Lord Denning MR, with reference to the above authorities, said of the supervisory compensatory jurisdiction (at 1286): The cases show that it is not available in cases of mistake, error of judgment or mere negligence. It is only available where the conduct of the solicitor is inexcusable and such as to merit reproof. 21. O'Connor LJ, with whom Dunn LJ agreed, said (at 1288): The cases show that such an order ought not to be made unless it is shown that the Thews have suffered loss as a result of serious misconduct by the solicitors in the case.
In McIlraith Appeal, the appellant sought leave to appeal against the orders made by Brereton J summarily dismissing the proceedings. As noted above, leave to appeal was refused by Basten and Bell JJA. On Brereton J's review of authorities set out above, their Honours observed: 6. Brereton J reviewed the authorities that deal with the compensatory supervisory jurisdiction, concluding that the jurisdiction is not limited to a case of misconduct such as would warrant striking off or suspension from practice and may be attracted in a case of negligent breach of professional duty, provided the negligence is of a culpable quality amounting to a "serious dereliction of duty" (Judgment [43]). His Honour held that a solicitor is not guilty of a serious dereliction of duty by the expression of an opinion which is erroneous because an assumption on which it was made is false, at least where the assumption is not unreasonably made and the fact that it is no more than an assumption is apparent. (Judgment [44]) Nothing was advanced in support of the application to suggest that his Honour was arguably wrong in his statement of the relevant principles. … 9. Whether the Court can or should exercise its supervisory jurisdiction over its officers at the behest of a private individual, in order to award compensation to the individual, in circumstances where no private cause of action is available or invoked, may be doubted but need not be pursued. The primary judge held that the applicant's claim had no reasonable prospect of success: see [2007] NSWSC 911 at [25] and [40]. These conclusions have not been shown to be attended by sufficient doubt to warrant a grant of leave.
In making the observation that nothing was advanced to suggest that Brereton J was arguably wrong in his statement of the relevant principles, Basten and Bell JJA themselves did not suggest that Brereton J's statement of principles was incorrect.

[86]

Discussion - provision of legal advice and engaging in legal practice

This aspect of the plaintiffs' claim under the compensatory limb of the Court's inherent supervisory jurisdiction was detailed, which is why I have addressed the issue of whether Mr Marino engaged in legal practice above.
As noted above, I accept that Mr Marino engaged in legal practice.
Dr Baron Levi cited Re Application for Admission as a Legal Practitioner (2004) 90 SASR 551; [2004] SASC 426 at [45] per Debelle J (in dissent) for the proposition that members of the public repose great trust in legal practitioners, in particular in relation to money matters: T 412. At [45], Debelle J stated the following: 45. A legal practitioner must at all times act with complete integrity. Financial integrity has been described as a matter of "great importance": ex parte Lenehan at 422. Members of the public repose great trust in legal practitioners. They entrust them with their money and their personal confidences. The Courts and the members of the legal profession expect to be able to rely on the integrity of a legal practitioner. Legal practitioners are officers of the Court. The Court, other legal practitioners and the public are entitled to expect upright and honourable conduct on the part of officers of the Court: ex parte Lenehan per Rich J at 426. The fact that a person is a solicitor gives him the stamp of trustworthiness and marks him as a person in whom confidence may be reposed: ibid. Thus, the integrity must exist in both financial as well as in personal dealings.
Whilst that may be true as a general proposition in the context of a legal practitioner's admission and disciplinary proceedings, there is no evidence that the plaintiffs trusted Mr Polo or turned their minds to any conduct of Mr Polo as a basis for entering the AMAs.
Dr Baron Levi made the further submission that there was a "stamp of trustworthiness" in relation to Mr Marino created by the fact that the plaintiffs understood him to be a lawyer, which gave them confidence to enter into the AMAs: T 412. However, given my observations above in relation to the problems with the purported inferences the plaintiffs sought to draw from Mr Marino's emails, I fail to see how that submission relates in any material way to any potential liability of Mr Polo under the Court's inherent supervisory jurisdiction. Any "stamp of trustworthiness" of Mr Marino created in the minds of the plaintiffs was conjured by Mr Marino, not Mr Polo.

[88]

Discussion - engaging in multi-disciplinary partnership

The final particular contravention of the LPA alleged by the plaintiffs is that Mr Marino and Mr Polo engaged in a form of multi-disciplinary partnership, contrary to the provisions of s 144 of the LPA, such that it is said that Mr Polo breached disclosure provisions in relation to various persons, but relevantly the plaintiffs, under s 152 of the LPA. Mr Polo denied that he was in any form of multi-disciplinary partnership with Mr Marino. There is no doubt that material was adduced which gives a flavour of Mr Polo and Mr Marino being engaged in a form of partnership. However, whilst the word "partnership" is able to be found in some of the evidentiary materials, Dr Baron Levi did not make specific submissions about what constitutes a partnership.
"Partnership" per se is not defined in the LPA.
As a common English word, the noun "partnership" is simply described as "the state or condition of being a partner; participation; association; joint interest": Macquarie Dictionary, online ed. The Macquarie Dictionary, online ed further contains a definition the context of law, and describes partnership in the following terms: 2. Law a. the legal relationship of persons carrying on some business together with a view to profit (provided that they are not members of an incorporated body). b. the contract creating this relation. c. a firm. d. limited partnership.
The initial definition 2(a) corresponds closely with the definition of partnership which is relevantly adopted in s 1(1) of the Partnership Act 1892 (NSW) and s 5(1) of the Partnership Act 1891 (Qld).
Each of Mr Polo (T 151-156) and Mr Marino (T 297-299) were cross-examined about the Burrows email and the proposed business chart. Further, Mr Polo was cross-examined about the merchant facilities enquiries and the PayPal email (T 163-166), Mr Marino sourcing a photocopier and t-shirts, the lease application and the insurance quotation (T 150, 170-181). I assume the cross-examination related to the pleading that Mr Polo engaged in a multi-disciplinary partnership with Mr Marino.
However, whilst Dr Baron Levi cross-examined Mr Polo and Mr Marino regarding these matters and the nature of their business relationship with one another, there was no serious attempt, as I understood it, to establish that Mr Marino and Mr Polo were carrying on a business in common with a view to profit.
Oracle Law never shared any form of income in relation to any matter with Mr Marino (T 150.31-.33), and Mr Marino was never paid a referral fee or earned any remuneration from Mr Polo in relation to referred matters or otherwise: T 203.37-.48.
Other indicia which are common key features of a partnership, such as mutual agency, participation in profits, sharing of losses and common capital, were not evident as between Mr Marino and Mr Polo: see e.g. Halsbury's, 305 - Partnerships and Joint Ventures at [305-1]; Walters v Scarborough [2011] NSWSC 1380 at [261]-[266], especially at [263], per Ward J (as her Honour then was). There was no attempt to cross-examine either Mr Polo or Mr Marino in relation to any funds received into their bank accounts, with a view to showing that such funds were the subject of income derived by profit sharing.

[89]

Findings

No submissions were directed to the issue of whether the compensatory limb of the inherent supervisory jurisdiction is exercisable against a practitioner admitted in New South Wales but practising in Queensland. However, I am prepared to proceed on the basis that the Court has such jurisdiction: cf Bell v Hartnett Lawyers (No 3); Hartnett Appeal; Council of the NSW Bar Association v Siggins [2021] NSWCA 40.
A difficulty with the plaintiffs' pleading of the claim under the compensatory limb of the inherent supervisory jurisdiction is that assertions were made regarding Mr Marino's conduct and the purported responsibility or liability of Mr Polo, as principal of Oracle Law, for that conduct, without detailed steps outlined as to how Mr Polo's role was connected to the investment undertaken by the plaintiffs and their loss.
There may be cases where the failure of a principal of a law practice to take certain steps in relation to a matter may, without any further particular assertions, self-evidently demonstrate that a person who has suffered loss ought to be regarded as directly connected to the conduct of the principal such that, in administering the jurisdiction, the Court would intervene and direct that compensation be provided. A classic case for example would be where a solicitor has grossly overcharged a client. However, such cases seem to be set apart from the facts of this case. Dr Baron Levi did not make any particular submissions regarding the culpable nature of Mr Polo's conduct in the terms that are described in McIlraith v Ilkin, nor did he address what may be required by way of positive conduct or omission on the part of Mr Polo to enliven a type of responsibility or culpability in Mr Polo for the loss of the plaintiffs, such that the Court would award the plaintiffs compensation.
In those circumstances, I consider that it is difficult to form the conclusion that the Court should necessarily exercise its jurisdiction to award compensation.
There was a lack of clarity in the plaintiffs' pleadings and submissions as to how, precisely, the purported breaches of the Uniform Law, the LPA or the Conduct Rules by Mr Polo in fact caused the plaintiffs' loss. It cannot be sufficient to enliven a favourable exercise of the compensatory limb of the inherent supervisory jurisdiction to merely assert various breaches of the Uniform Law, the LPA or the Conduct Rules (even if some such breaches are established) without reference as to how the breaches were causally connected with the loss suffered by the plaintiffs.
In any event, McIlraith v Ilkin shows that, whilst the compensatory supervisory jurisdiction is not limited cases of professional misconduct, and may be attracted in a case of breach of professional duty by negligence, Brereton J made clear that something more than "mere" negligence is required. His Honour, by reference to the decision in Myers v Elman [1940] AC 282, referred to the requirement for "gross" negligence.
Whilst outlining alleged breaches by Mr Polo, Dr Baron Levi did not make any particular submissions as to how Mr Polo's conduct was said to amount to "gross" negligence, or what the distinction or dividing line was between negligence per se and "gross" negligence. There was no analysis in this regard of Mr Polo's alleged failings. In his closing submissions, Dr Baron Levi submitted that the Court's inherent jurisdiction may be exercised "regardless whether another cause of action is established": T 426.9-.10. He said further (T 426.12-.19): In other words, it is open to this Court simply on the basis of some conduct of a solicitor that falls short of their obligations to provide compensation in relation to that, even if a traditional cause of action is not made out, or even if a defence, a valid defence exists to a traditional cause of action. And that's a special inherent supervisory jurisdiction that this Court exercises over solicitors so that those who suffer loss as a result of some failure of a solicitor may have redress before this Court by invoking that Court's inherent supervisory jurisdiction…
In light of Brereton J's detailed observations in McIlraith v Ilkin, it is clear that the compensatory limb of the Court's inherent jurisdiction does not extend to any "conduct of a solicitor that falls short of their obligations", if what is meant by the submission is that a mere departure from the standard of care is enough to justify compensatory relief. I do not accept Dr Baron Levi's submission in this respect.
For his part, Mr Jamieson did not clearly address the operation of the compensatory supervisory jurisdiction by reference to the requirement of "gross" negligence either.
Albeit not solely in the context of the claim under the Court's supervisory jurisdiction, significant emphasis was placed by the plaintiffs on the fact that Mr Marino had continued access to his Oracle Law email address after he had parted ways with Mr Polo. Given this, I note that I accept, at least from his own admission, Mr Polo ought to have taken steps to take control of and terminate Mr Marino's use of and access to his Oracle Law email, and that a "reasonable principal of a solicitor's firm" would have done so. However, I am not satisfied that Mr Polo's failure is of a culpable quality amounting to a "serious dereliction of duty" or amounts to "gross negligence" such as to lead to the outcome that Mr Polo should, under the compensatory limb of the Court's inherent supervisory jurisdiction, be responsible to the plaintiffs for their loss.
In all the above circumstances, I am not satisfied that this case warrants intervention of the Court pursuant to its compensatory supervisory jurisdiction.

[92]

Duty of care

The POS continued to resort to the relevant duty as being a duty to "clients and potential clients". Thus, in relation to negligence, Dr Baron Levi submitted as follows (POS [76]-[77]): 76. The second defendant conferred upon the first defendant the management title, business card and email address of Oracle Law, the authority to communicate and deal with clients and potential clients as a representative of Oracle Law; and yet took no real steps to ensure that clients understood that the first defendant was not a solicitor or to supervise or control the first defendant or his use of his Oracle Law email address. 77. The first defendant had unmonitored and uncontrolled access to and control over his Oracle Law email address, which he then used to engage in false and misleading representations and to proffer the investments proffered to the plaintiffs, purportedly on behalf of Oracle Law.
In opening, Dr Baron Levi characterised the claim as the second defendant's "failure to supervise and control the activities of the first defendant", including the use of his Oracle Law email: T 33.17-.19. He stated that the claim was not dependent upon a finding that the first defendant was an employee of Oracle Law, because "the second defendant had placed the first defendant in a position where the first defendant had control of the Oracle Law domain and website and email addresses": T 33.23-.26.
Dr Baron Levi confirmed, prior to the calling of Mr Pacifico (in the midst of discussion with both counsel regarding issues), that the gist of the plaintiffs' case against Mr Polo is that he created the circumstances in which Mr Marino was able to hold himself out not only as an employee but in some instances as a lawyer of Oracle Law: T 73.47-.49.
In closing submissions, Dr Baron Levi articulated the negligence claim as follows: Mr Polo conferred upon Mr Marino the title of an employee of Oracle Law, business cards of Oracle Law and an Oracle Law email address; and Mr Marino engaged with clients, prospective clients and third parties using his Oracle Law title and email address with the knowledge of Mr Polo: T 408.26-.33.

[93]

Breach of duty

Dr Baron Levi indicated that the duty of care was breached in a number of ways, as follows (T 408.35-.50, 409.6-.39): 1. first, Mr Polo did not make it clear to clients and other recipients of Mr Marino's emails the role that Mr Marino played within Oracle Law, and in particular the fact that Mr Marino was not a solicitor and was not entitled to engage in legal practice; 2. secondly, there was "a confusion" as to Mr Marino's role and capacity within Oracle Law which was created by both: 1. the fact that Mr Marino's email signature failed to properly clarify his role (citing as examples occasions where the email signature simply said "Frank Marino - BDM", and on other occasions where the email signature simply said "Frank Marino", without identifying any title or role, but in each case there being the signature of Oracle Law); and 2. the fact that Mr Marino, with Mr Polo's knowledge, engaged in email communications with clients and with other parties in a manner that could have had the appearance of the communications of a solicitor; and 1. thirdly, Mr Polo failed to terminate Mr Marino's access to his Oracle Law email address, thereby creating a risk (of which Mr Polo was aware having regard to Mr Marino's previous misrepresentation to the NAB) that he could pass himself off as a lawyer and represent that the investments were connected to Oracle Law or backed by Oracle Law.
Dr Baron Levi submitted that the failure to make Mr Marino's role clear to clients, prospective clients and third parties resulted in the plaintiffs believing that Mr Marino was a solicitor: T 409.1-.5.
Dr Baron Levi accepted that the AMAs themselves do not make any reference to Oracle Law per se and do not in their terms (as distinct from being sent from an Oracle Law email address) indicate that Oracle Law or Mr Polo guaranteed the investments in any way or that they were expressly backed by Oracle Law or Mr Polo: T 409.48-410.48.
Dr Baron Levi submitted that the emails to Mr Pacifico and Mr Parrella in relation to the investments were sent at a point when Mr Marino was no longer involved with Oracle Law and at a point therefore where his access to his Oracle Law email address should have been "cut off". He noted that there are admissions by Mr Polo that he should have cut off Mr Marino's access to his email address at the time that Mr Marino ceased to have contact or involvement with Oracle Law, which was by 14 April 2018 at the latest: T 411.1-.8, 434.5-437.20.

[96]

Duty of care

Jurisprudentially, a duty of care is a notional pattern of conduct: Vairy v Wyong Shire Council (2005) 223 CLR 422; [2005] HCA 62 (Vairy) at [22] per McHugh J, citing R W M Dias, "The Duty Problem in Negligence" (1955) 13 Cambridge Law Journal 198 at 202.
A duty of care arises in the context of a relationship between individuals and "imposes upon one a legal obligation for the benefit of the other … to deal with particular conduct in terms of a legal standard of what is required to meet the obligation": Vairy at [22] per McHugh J, citing Prosser and Keeton on the Law of Torts (5th ed, 1984) at 356.
In claims in negligence, broadly stated, the proper identification of a duty of care is a question of law, whereas questions of breach and causation are questions of fact: e.g. Amaca Pty Ltd (under NSW External Administration) v A B & P Constructions Pty Ltd [2007] NSWCA 220 at [45]-[47] per Giles JA.
Speaking generically, I will refer to the party who owes the duty as the obligor and the party to whom the duty is owed as the obligee.
There is a distinction between the question of whether a duty of care exists and the content of the duty: e.g. Imbree v McNeilly; McNeilly v Imbree (2008) 236 CLR 510; [2008] HCA 40 at [46] per Gummow, Hayne and Kiefel (as her Honour then was) JJ.
Common law duties of care: 1. require that reasonable care be taken to avoid the relevant risk of harm: Collins v Insurance Australia Ltd (2022) 109 NSWLR 240; [2022] NSWCA 135 (Collins) at [9] per Kirk JA, citing Vairy at [25] per McHugh J; Roads and Traffic Authority of NSW v Dederer (2007) 234 CLR 330; [2007] HCA 42 at [43] per Gummow J; 2. are owed by one person to another particular person or to a particular class of persons, and are not owed generically to the world: Collins at [12]; and 3. do not necessarily require the obligor to take reasonable care to avoid all risks of harm to another person or class of persons: Collins at [10], citing inter alia Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254; [2000] HCA 61.
Where the relationship between the obligor and obligee and the kind of damage in question are well-established as a category of case where a duty of care has been found, there is usually no need to dwell on consideration of whether the duty is owed, or the content of the duty.
In Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 (Kuhl), French CJ and Gummow J (in dissent) outlined a number of principles at [22] which are uncontroversial but important. In summary (quoting substantially from their Honours' reasons and omitting citations): 1. different classes of care may give rise to different problems in determining the nature or scope of a duty of care; 2. in many cases a duty formulated as being one to take "reasonable care" may suffice for the finding of duty in that particular case; 3. well-established cases (e.g. the duty of a solicitor to his or her client to exercise professional skill in accordance with the retainer) ordinarily involve no real controversy over the scope and content of the duty of care; 4. where the relationship falls outside of a recognised relationship giving rise to a duty of care, or the circumstances of the case are such that the alleged negligent act or omission has little to do with that aspect of a recognised relationship which gives rise to a duty of care, a duty formulated at too high a level of abstraction may leave unanswered the critical questions respecting the content of the term "reasonable" and hence the content of the duty of care; and 5. the appropriate level of specificity when formulating the scope and content of the duty will necessarily depend on the circumstances of the case.
French CJ and Gummow J warned of the inherent danger in an action in negligence to look first to the cause of damage and what could have been done to prevent that damage, and from there determine the relevant duty, its scope and content. Further, "to begin the inquiry by focusing only upon questions of breach of duty invites error… because the assumption that is made about the content of the duty of care may fail to take fundamental aspects of the relationship between the parties into account": Kuhl at [19], citing Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44; [2005] HCA 15 at [19] per McHugh, Gummow, Hayne and Heydon JJ.
Their Honours' dissent did not appear to be in respect of these observations of principle, and they have been subsequently cited in several appellate court decisions: e.g. Collins at [8] and Swick Nominees Pty Ltd v Leroi International Inc (No 2) (2015) 48 WAR 376; [2015] WASCA 35 at [362].
A duty of care that is formulated retrospectively as an obligation purely to avoid the particular act or omission said to have caused loss, or to avert the particular harm that in fact eventuated, is of its nature likely to obscure the proper inquiry as to breach: Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; [2002] HCA 54 at [192] per Gummow and Hayne JJ; see also Hoffmann v Boland [2013] NSWCA 158 at [113] per Sackville AJA. It is impermissible to determine the existence of a duty, its scope and content, by reasoning backwards from the loss that occurred, to a counterfactual of what could have been done differently to avoid the loss; while causation may be reasoned backwards, foreseeability and duty must be forward-looking: 5 Boroughs NY Pty Ltd v State of Victoria; Roberts v State of Victoria [2021] VSC 785 at [25] per Dixon J.

[97]

Solicitor's duties

Generally, a solicitor's duty is owed solely to a client, subject to his or her primary duty to the Court and the rules and standards of the legal profession: Hill v Van Erp (1997) 188 CLR 159 at 167 per Brennan CJ; [1997] HCA 9 (Hill v Van Erp); Professional Liability in Australia at [3.480].
There may be some circumstances in which solicitors become potentially liable to former clients, such as investors in a solicitor's mortgage practice who suffer loss: Professional Liability in Australia at [3.520], citing Purkiss v Hannigan (Court of Appeal (NSW), 13 February 1997, unrep) (Purkiss).
In Purkiss, the leading judgment was given by Giles AJA, with whom Gleeson CJ and Handley JA agreed.
Giles AJA found at 7 that, in the circumstances of the case, Mr Hannigan (a solicitor) was under a duty to inform the investors of a mortgage practice of certain matters, including the fact that the person who administered the mortgage practice, Mr Burke, was not a solicitor. However, the context of the finding of a duty to inform was predicated on the practice having had an existing mortgage practice which provided an established structure for the making of investments, which is not the case here.
The limited nature of duties owed by solicitors to third parties in tort is reinforced in commentary by G E Dal Pont in Solicitors Manual (LexisNexis) at [26,005]. At [26,010.5], whilst acknowledging that the High Court has not spoken with one voice on what attracts duties of care in tort, Dal Pont states that it appears to be clear that successful claims by third parties against lawyers for economic loss require proof of more than reasonable foreseeability, citing Oakley Thompson & Co v Kanik (1998) 145 FLR 438 at 450 per Baker and Morgan JJ, and Beach Petroleum at [357]-[359].
Dal Pont states at [26,010.5] that the additional factors have been judicially described by reference to: 1. the assumption of responsibility by the lawyer to a third party: e.g. White v Jones [1995] 2 AC 207 at 268 per Lord Goff of Chieveley; 2. the reliance by a third party on the lawyer: e.g. Hardware Services Pty Ltd v Primac Association Ltd [1988] 1 Qd R 393 at 397 per Thomas J; and 3. the control the lawyer has over the interests of a third party: e.g. Hill v Van Erp at 198-199 per Gaudron J.

[98]

Novel duties

If the circumstances fall outside an accepted category of duty such that the posited duty is a novel one, the proper approach to be applied in determining whether a defendant owes a plaintiff a duty of care is a degree elusive.
The present position seemingly involves approaching the duty question by undertaking a close analysis of the facts bearing on the relationship between the plaintiff and the putative tortfeasor by reference to "salient features" of the relationship between them: e.g. Kuhl at [20], citing Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; [2002] HCA 54 at [149], Perre v Apand Pty Ltd (1999) 198 CLR 180; [1999] HCA 36 at [198] and Sullivan v Moody (2001) 207 CLR 562; [2001] HCA 59 (Sullivan v Moody) at [50]-[52]; Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515; [2004] HCA 16 (Woolcock) at [22] per Gleeson CJ, Gummow, Hayne and Heydon JJ, drawing on remarks by Stephen J in Caltex Oil (Australia) Pty Ltd v The Dredge "Willemstad" (1976) 136 CLR 529 at 576-578; [1976] HCA 65. In Woolcock, Kirby J appeared to endorse an approach of identifying "salient features" that help the decision-maker to decide whether a duty of care exists: Woolcock at [123].
In Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254 CLR 185; [2014] HCA 36 (Brookfield), French CJ referred to the determination of duty by reference to the "salient features" of the relationship between the parties: Brookfield at [4], [30]. Crennan, Bell and Keane JJ referred to arguments based on "salient features" without apparent disapproval: Brookfield at [115]. Their Honours further made observations regarding the recovery of economic loss in the common law: Brookfield at [121]-[126].
Crennan, Bell and Keane JJ observed that the High Court has accepted that the general rule of the common law is that damages for economic loss which is not consequential upon damage to person or property are not recoverable in negligence even if the loss is foreseeable: Brookfield at [127], citing Woolcock at [22] per Gleeson CJ, Gummow, Hayne and Heydon JJ.
The notion of "salient features", or factors affecting the appropriateness of imputing a legal duty to take reasonable care to avoid harm or injury, was discussed by Allsop P (as his Honour then was) in Caltex Refineries (Qld) Pty Ltd v Stavar (2009) 75 NSWLR 649; [2009] NSWCA 258 (Stavar) at [102] (Simpson J (as her Honour then was) agreeing).
In Stavar, Allsop P provided at [103] a list or catalogue of 17 salient features, described as "a non-exhaustive universe of considerations of the kind relevant to the evaluative task of imputation of the duty and the identification of its scope and content": Stavar at [104]. Allsop P did not suggest that it was necessary to make findings about all such features in any given case and, whilst describing "foreseeability" as a salient feature, suggested that it is perhaps better expressed that the use of the salient features operates as a control measure on foreseeability: Stavar at [104], [106].
However, in Howard Smith & Patrick Travel Pty Ltd v Comcare [2014] NSWCA 215, Basten JA (with whom Beazley P (as her Excellency then was) and Sackville AJA agreed) stated at [36] that the value of such a catalogue or list is limited.
In Mallonland Pty Ltd v Advanta Seeds Pty Ltd [2023] QCA 24 (Mallonland), whist referring to the primary judge's recognition that recent binding statements of principle by the High Court relevant to the existence of a duty of care require identification of the "salient features", Bond JA observed that "[w]hat is less clear is the methodology which should be employed in the consideration of those 'salient features'": Mallonland at [288]-[289] (Morrison JA and Williams J agreeing).
At [290], Bond JA referenced the following comments of Gageler J (as his Honour then was) in Brookfield at [169], in turn citing Sullivan v Moody at [49]: Whether or not a particular duty of care should be recognised in a novel category of case is determined on the understanding that "[t]here are policies at work in the law which can be identified and applied to novel problems, but the law of tort develops by reference to principles, which must be capable of general application".
Given that special leave to appeal has been given in Mallonland Pty Ltd v Advanta Seeds Pty Ltd [2023] HCATrans 138, it seems likely that the High Court is not finished with reviewing this issue.
The "salient features" identified by Allsop P in Stavar at [103] consist of the following: (a) the foreseeability of harm; (b) the nature of the harm alleged; (c) the degree and nature of control able to be exercised by the defendant to avoid harm; (d) the degree of vulnerability of the plaintiff to harm from the defendant's conduct, including the capacity and reasonable expectation of a plaintiff to take steps to protect itself; (e) the degree of reliance by the plaintiff upon the defendant; (f) any assumption of responsibility by the defendant; (g) the proximity or nearness in a physical, temporal or relational sense of the plaintiff to the defendant; (h) the existence or otherwise of a category of relationship between the defendant and the plaintiff or a person closely connected with the plaintiff; (i) the nature of the activity undertaken by the defendant; (j) the nature or the degree of the hazard or danger liable to be caused by the defendant's conduct or the activity or substance controlled by the defendant; (k) knowledge (either actual or constructive) by the defendant that the conduct will cause harm to the plaintiff; (l) any potential indeterminacy of liability; (m) the nature and consequences of any action that can be taken to avoid the harm to the plaintiff; (n) the extent of imposition on the autonomy or freedom of individuals, including the right to pursue one's own interests; (o) the existence of conflicting duties arising from other principles of law or statute; (p) consistency with the terms, scope and purpose of any statute relevant to the existence of a duty; and (q) the desirability of, and in some circumstances, need for conformance and coherence in the structure and fabric of the common law.
It may be noted that "vulnerability" (the fourth factor in the above list) is to be understood as a reference to a plaintiff's inability to protect itself from the consequences of a defendant's want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant: Woolcock at [23] per Gleeson CJ, Gummow, Hayne and Heydon JJ.
Whether the posited duty is coherent with the existing body of law is also an important consideration: see Perera v Genworth Financial Mortgage Insurance Pty Ltd (2017) 94 NSWLR 83; [2017] NSWCA 19 at [39]-[57] per Leeming JA (Macfarlan and Simpson JJA agreeing).
A postulated duty of care must be stated in reference to the kind of damage that a plaintiff has suffered and in reference to the plaintiff or a class of which the plaintiff is a member: Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 487 per Brennan J (as his Honour then was); [1985] HCA 41, referred to in Collins at [13] per Kirk JA; Roger Giles, "Duty of Care, Scope and Breach" (2009) 9 The Judicial Review 165 at 167.
In pleading a novel duty of care, it has been emphasised that the nature of the purported duty must be identified with precision: Mohareb v Kelso [2017] NSWCA 98 at [42] per Simpson JA.
That being said, there have been cases in which the alleged novel duty was never clearly defined by the claimant and the task of defining the duty (if any) was undertaken by the trial judge: e.g. Al Mousawy v Howitt-Stevens Constructions Pty Ltd [2010] NSWSC 122 (Al Mousawy).
In Al Mousawy, Hoeben J (as his Honour then was), in addressing a case against an engineering company, noted that the alleged duty of care and its contents "was never clearly defined" and that, to the extent that a definition was attempted, it sought to define the company's duty in terms of breach: Al Mousawy at [64]. His Honour considered at [65] that "[t]o state the duty and its content in such a way is unhelpful and closer analysis is required to determine firstly whether a duty did exist and if so, its content". Relevantly, Hoeben J proceeded to apply the salient factors approach set out by Allsop P in Stavar and concluded that the duty of care owed by the company to the plaintiff related only to the structural integrity of the building's floors (which it had been contracted to examine) and that it did not owe any duty to him in relation to the ceilings: see Al Mousawy at [66]-[88].
A similar approach was taken by Lindgren J in Dale v Veda Advantage Information Services and Solutions Ltd (2009) 176 FCR 456; [2009] FCA 305 at [376], [379]-[417].
There is at least one case (albeit not in the context of a firm of solicitors) where an employer was found to have owed a duty of care in holding out an employee as being adequately and appropriately qualified. In Brus v Australian Capital Territory [2007] ACTSC 83 (Brus), the plaintiff claimed damages against a public hospital arising from complications suffered by her following a vaginal hysterectomy undertaken at the hospital by a registrar under the supervision of a specialist gynaecologist. Relevantly, the registrar had been rated as unsatisfactory for surgical skills as a level two registrar, yet the hospital had held her out as a level three registrar to the specialist (the level at which a registrar would be permitted to perform a supervised vaginal hysterectomy). Connolly J found on the issue of the first defendant's negligence as follows (at [61]-[62]): 61. I should make it clear that I find negligence against the first defendant solely on the basis that, being in possession of adverse assessment reports which showed that Dr Cree had been rated as unsatisfactory for surgical skills as a level 2 Registrar, the hospital, through Dr Peak, made a decision to rate her as satisfactory, and held her out to Dr Heaton as a level 3 Registrar in good standing. I am confidently able to make these findings of fact on the documentary evidence and the unchallenged evidence of Dr Heaton. There was no evidence from Dr Cree or Dr Peak, and I am entitled to draw an adverse inference from this. 62. I do not accept that there is a general duty of care on a public hospital to in effect provide public patients with a choice of doctor, or to appraise a patient as to the academic standing of a registrar. However, there is a duty on a hospital to ensure that it provides patients with suitably qualified staff. The rigorous College training program, it seems to me, ensures that, at each stage of their training, a registrar in good standing is suitably qualified to perform the range of procedures commensurate with their level of training. In this case, a registrar known to the hospital to have major deficiencies in surgical techniques for a level 2 Registrar was held out to Dr Heaton as a level 3 Registrar, and he allowed her to perform a procedure that he would not have permitted a level 2 Registrar to perform.

[100]

Duty of care

Critically, the pleading simply asserted that Mr Polo owed a duty of care to "clients and prospective clients of Oracle Law": CB 26[63(a)].
Dr Baron Levi did not at any point elaborate on what was described in the pleading as a "prospective client".
There was nothing in the evidence which suggested in any way that Mr Pacifico or the plaintiffs were, on or after April 2018, proposing to be clients of Mr Polo and/or Oracle Law.
The difficulty with the pleading is that, at the time that the plaintiffs were presented with the investment opportunity by Mr Marino and at the time that they entered into the AMAs, as I have found, it is not evident that they could be properly said to be clients of Oracle Law.
In that context, when one has regard to the above-mentioned authorities, the facts regarding the investment proposal and entry into the AMAs, insofar as they relate to Mr Polo, do not give rise to an established category of duty of care, as the plaintiffs were not clients of Oracle Law (at least in relation to the relevant investment).
Essentially, while the plaintiffs pleaded that Mr Polo owed a duty of care to "clients and prospective clients of Oracle Law", the question of whether and how the duty of care arose, or what the scope of such a duty would be, was not expressly dealt with in the plaintiffs' written or oral submissions. There was no subsequent pleading that the plaintiffs were "clients" or "prospective clients" of Oracle Law and those terms were never defined or put in context. It was an assumption that was pleaded at a high level of abstraction.
Rather than develop the duty of care referred to in the pleading, the plaintiffs in this case (as in Al Mousawy) attempted on the hearing to define Mr Polo's duty of care to them, and its content, in terms of breach. Specifically, that Mr Polo failed to inter alia: supervise and control the activities of Mr Marino; make clear to clients and recipients of Mr Marino's correspondence the role he played within Oracle Law, in particular that he was not a solicitor; and cut off Mr Marino's Oracle Law email access after they parted ways in April 2018. It is worth repeating Hoeben J's comments that to state the duty and its content in such a way is unhelpful and closer analysis is required to determine first whether a duty did exist and if so, its content.
In the circumstances of this case, the relevant duty of care must be a duty relating to, or at least including, the risk of economic loss from the investment proposal and entry into the AMAs.
Some salient features of the case up to late August 2018 are that: 1. from at least 4 June 2013, the Oracle Law website and email system had been set up with Mr Marino having an email address and login details for the "backend of the website": CB 709; 2. from about 6 October 2014 (CB 730) up to March 2018, when the lease of the office premises expired (CB 210), Mr Polo and Mr Marino leased and physically shared business premises at Mermaid Beach (albeit that, according to Mr Polo, there was a de facto separation of use of rooms or space within those premises); 3. between late 2016 and at least late August 2018 (and indeed thereafter), Mr Marino carried out work which the plaintiffs contended to be either legal work or at least some form of commercial loan and conveyancing work with certain other businessmen, under the imprimatur or banner of Oracle Law, on behalf of Adelaide and Mr Pacifico and which related to their loans to corporate entities associated with those businessmen; 4. those arrangements include dealings with Mr Mackay/MEG, for whom Mr Polo did act from about November 2016 to May-July 2017; 5. on 14 April 2018, Mr Polo left the office premises: CB 66, 207[27], 210; 6. until about April 2018, Mr Polo had access to emails being sent to and from Mr Marino's Oracle Law email address, as the emails were forwarded to him: T 160-161; and 7. for some months after April 2018, it was not apparent to Mr Polo that he could no longer see the emails that were being sent to or from Mr Marino's Oracle Law email address: T 161-162.
Mr Polo could have taken steps to prevent Mr Marino using his Oracle Law email address after April 2018. However, the nature of the harm alleged, being economic loss resulting from the investment proposal and entry into the AMAs, had no connection whatsoever to Mr Polo. While Mr Marino did use his Oracle Law email address to communicate with the plaintiffs regarding the investment, as well as plant the Oracle Law logo on his PowerPoint presentations about the investment, there was in no real sense any connection between the harm suffered by the plaintiffs and Mr Polo's practice.
Further, as at August 2018: 1. Mr Marino's involvement in Oracle Law was limited to a few sporadic conveyancing matters which were yet to be completed, none of which involved the plaintiffs: T 395; 2. the plaintiffs were not clients or even "prospective clients" of Mr Polo or Oracle Law; 3. Mr Polo never expressly held out Mr Marino as a solicitor; 4. for the reasons that I have outlined earlier, it is by no means clear that the plaintiffs placed any reliance upon Mr Polo in entering into the AMAs; 5. the plaintiffs were not "vulnerable" in the sense of being unable to protect themselves from the consequences of Mr Polo's want of reasonable care; a simple search would have revealed that Mr Marino was not a lawyer; 6. there is no evidence that Mr Polo assumed any responsibility for the plaintiffs in respect of the investment proposal or AMAs; 7. there is no evidence that Mr Marino had, during his time with Mr Polo, promoted investment schemes relating to platform trading, nor is there evidence that Mr Polo knew or suspected that Mr Marino was likely to promote such schemes; and 8. there is no indication that Mr Polo had any actual or constructive knowledge of the investment proposal or the AMAs, or of Mr Marino's attempts to invite people into the investment.
Whilst in or about 2015 or 2016, though possibly earlier than that, Mr Polo became aware that Mr Marino had falsely informed his NAB branch (unbeknownst to Mr Polo) that Mr Marino had a 50% interest in Oracle Law, there were no subsequent instances of Mr Polo being aware that Mr Marino engaged in dishonest conduct.
While Mr Polo conceivably had some degree of control over Mr Marino in respect of carrying out matters relating to the business of Oracle Law, he obviously had no ability to control Mr Marino's actions otherwise, particularly after April 2018. The "control" which Mr Polo could have exercised over Mr Marino's access to his Oracle Law email address after April 2018 ought not, in any material sense, be considered as any degree of control which Mr Polo could have exercised to avoid the economic loss which the plaintiffs suffered for the purposes of establishing a duty of care. Indeed, many of Mr Marino's interactions with Mr Pacifico and Mr Parrella regarding the investment proposal were in person.
For the above reasons, it would be inappropriate to impose a novel duty of care on Mr Polo to the plaintiffs to avoid economic loss as a result of the investment proposal and AMAs. Further, given the lack of clarity in the plaintiffs' pleadings and submissions on the duty of care question, for me to do so at this point would be, in my view, procedurally unfair to Mr Polo.

[101]

Causation

In any event, even if a duty were owed to the plaintiffs which Mr Polo had breached, there are other issues that arise which would likely create difficulties in respect of causation. These include the following difficulties. 1. Contrary to Mr Pacifico's evidence at CB 164[150], there is no indication that the draft AMA "had been prepared by an Australian law firm, Oracle Law, and its lawyers," and that "Oracle Law had reviewed and approved the platform investment". The AMAs do not bear any indication that they were drafted by Mr Polo or Oracle Law. At best, I accept that Mr Pacifico assumed that the agreement had been prepared by Mr Marino, who sent the agreement to him, based on Mr Marino's previous statement to Mr Pacifico that "Oracle Law backs and are involved with the platform. We support the product": CB 159[130]. 2. Neither Mr Pacifico nor Mr Parrella identified any express representation made to them by Mr Polo. Nor did they indicate what, if anything, about the emails they received (which I have identified above in the table) associated Mr Polo with any reason as to why they entered into the AMAs. Nowhere in either of the plaintiffs' affidavits, or their cross-examination, did they state that they would not have entered into the AMAs if they had known that Mr Marino was not a lawyer and/or was no longer associated with Oracle Law. The highest it is put is that it gave them greater comfort or assurance in making the investment. In cases of negligent omission or a failure to act, questions of causation are resolved by determining what would or would not have happened had the failure not occurred: Carolyn Sappideen et al, Fleming's The Law of Torts (11th ed, 2024, Lawbook Co) (Fleming's) at 293 [9.110]. 3. On one view, the plaintiffs' evidence is that they trusted Mr Marino "completely" or "just believed in" him: e.g. CB 157[116]; T 103.43, 122.30. At least in relation to Mr Parrella, he says that this was because Mr Marino "came across" as a lawyer and he "just assumed that [Mr Marino] was a legit man": T 121.28.-.34, 122.30. Mr Pacifico's evidence was not so qualified. Given the above, it is difficult to say one way or another whether the plaintiffs would have entered into the AMAs had Mr Polo's supposed failures not occurred. 4. Further, the AMAs signed by the plaintiffs describe Mr Marino as an "asset manager": e.g. CB 1707. The details for payments of funds were also to Mr Marino's personal bank account (e.g. CB 165[153], 188[45]), and the guarantee sought by the plaintiffs was from Mr Marino personally (i.e. not Oracle Law): CB 162[146], 1709. The documents themselves give no indication that, in entering into the AMAs, Mr Marino was acting as a lawyer or was acting on behalf of Oracle Law.

[105]

Vicarious liability - general principles

In summary, the principles in relation to vicarious liability are as follows.
It is a well-established general law principle that an employer is vicariously liable for the negligent act of an employee undertaken within the scope of his or her employment: Mt Owen Pty Ltd v Parkes [2023] NSWCA 77 at [33] per Basten AJA (Brereton (as the Commissioner then was) and Kirk JJA agreeing); New South Wales v Lepore (2003) 212 CLR 511; [2003] HCA 4 at [40] per Gleeson CJ; Day v Ocean Beach Hotel Shellharbour Pty Ltd (2013) 85 NSWLR 335; [2013] NSWCA 250 at [14], [16] per Leeming JA (Meagher and Emmett (as his Honour then was) JJA agreeing). There may be cases where a relationship may give rise to vicarious liability on the part of a principal notwithstanding that the tortfeasor was not an employee of the principal: e.g. Bird v DP (A Pseudonym) (2023) 69 VR 408; [2023] VSCA 66 (Bird) at [114]. However, in a commercial context, the relevant distinction ordinarily is between, on the one hand, an employment relationship, and on the other hand, the relationship of the principal with an independent contractor: Bird at [113]; Scott v Davis (2000) 204 CLR 333; [2000] HCA 52 at [301] per Hayne J. So much did not appear to be challenged in this case.
Recently in CCIG Investments Pty Ltd v Schokman [2023] HCA 21; (2023) 410 ALR 479 (Schokman) at [49]-[53], Edelman and Steward JJ provided a cogent analysis of the way in which the term "vicarious liability" has been used (footnotes omitted): 49. Any coherent map of vicarious liability must recognise that the cases which have been described as concerning "vicarious liability" now span across three different areas of law, each involving different legal principles. In Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd, Kiefel CJ, Keane and Edelman JJ identified two of these different areas, saying that the term "vicarious liability" is commonly used to describe two different types of liability and two areas of law. In order to avoid confusion, it is only the second area in relation to which the expression should be used. 50. The first area of law generally involves cases where one person is, in broad terms, an agent for another. It is a primary liability: the acts of another are attributed to the defendant on the basis that they were part of a joint enterprise, or procured, authorised or ratified by the defendant. Each of these notions conveys the sense of something that is done for another with the "seal of [their] approval", amounting to an acceptance of the act as the other's own; "everyone can see that [an employer] ought to answer for [an employee's] acts", when those acts are performed with the employer's authority in this broad sense. This type of liability is really based on "vicarious act[s]" or "vicarious conduct", rather than "vicarious liability". It applies to all principals, whether an employer or not, for whom the acts are done with their authority. 51. The second area of law, also described as "vicarious liability", involves cases where "vicarious liability" is used in its true, or proper, sense of liability based on the attribution of the liability of another. This second area of law developed from the first area of law using similar language but involving a very different concept. Rather than attributing to one person the authorised acts of another, it attributed to an employer the liability of an employee, based on the wrongful acts of the employee, whether or not those acts were authorised in the broad sense described above. But the employee's wrongful acts had to be sufficiently or closely connected to the employee's duties or powers of employment so that they could be said to have been performed in the "course of their employment". This Court has not extended vicarious liability in this sense beyond employees. 52. It has sometimes been argued that these two conceptions of "vicarious liability" are in competition and that only one should be accepted. One view is that the only proper conception is attribution of acts. The other view is that the only proper conception is attribution of liability. But, as Glanville Williams observed, "the law may recognise both vicarious responsibility in the proper sense of the term and also a doctrine of vicarious conduct". The confusion arises because these two areas of law, concerning two different types of liability, are conflated by the use of the same label. 53. Matters are further complicated because "vicarious liability" is sometimes used to describe a third area of law. As early as Sir Frederick Pollock's famous writing on what he described as "the rule of vicarious liability", instances were included under the label of "vicarious liability" where an employer owed a duty to ensure that reasonable care was taken in the performance of the duties of an employee or even an independent contractor. If an employer had delegated "general authority to a manager or superintendent", the employer could not "cast off this duty by handing over the performance of it" to another. Cases in which this non-delegable duty arises do not involve "vicarious liability" in the first or second areas of law. Unlike the second area they are not confined to employers. Nevertheless, the liability, unfortunately, has also been described as "vicarious".
This case is only concerned with vicarious liability as described in the second area of law outlined by their Honours.

[106]

Principles

Where there is a claim in proceedings relating to employment, it is necessary to identify what is in issue. The legal approach to different issues is nuanced. For example, ascertaining the "character" or "characterisation" of the relationship between a putative employee and his putative employer is a separate question from ascertaining the identity of an employer: Resilient Investment Group Pty Ltd v Barnet and Hodgkinson as liquidators of Spitfire Corporation Limited (in liq) (2023) 111 NSWLR 446; [2023] NSWCA 118 (Resilient) per Gleeson JA at [161]-[162] (White JA at [198] and Brereton JA at [201] agreeing).
In order to resolve the characterisation of a relationship as being either one of employment or one of principal and independent contractor, it has been said that the "totality of the relationship" between the parties must be considered: see Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 29 per Mason J (as his Honour then was); [1986] HCA 1 (Stevens); Hollis v Vabu Pty Ltd (2001) 207 CLR 21; [2001] HCA 44 (Hollis) at [24] per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ; Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 275 CLR 165; [2022] HCA 1 (Personnel Contracting) at [34] per Kiefel CJ, Keane and Edelman JJ.
In ACE Insurance Ltd v Trifunovski (2011) 200 FCR 532; [2011] FCA 1204, Perram J summarised at [29] the relevant principles as follows: … first, the distinction between an employee and an independent contractor is "rooted fundamentally in the difference between a person who serves his employer in his, the employer's, business, and a person who carries on a trade or business of his own" (Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at [40] per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ citing Marshall v Whittaker's Building Supply Company (1963) 109 CLR 210 at 217 per Windeyer J); secondly, the answers to that question are to be determined by reference to the "totality" of the relationship (Hollis at [24]); thirdly, a number of indicia have accreted over time in the authorities which are thought to throw light to varying degrees on the outcome without being determinative: the terms of the contract; the intention of the parties; whether tax is deducted; whether sub-contracting is permitted; whether uniforms are worn; whether tools are supplied; whether holidays permitted; the extent of control of, or the right to control, the putative employee whether actual or de jure; whether wages are paid or instead whether there exists a commission structure; what is disclosed in the tax returns; whether one party "represents" the other; for the benefit of whom does the goodwill in the business inure; how "business-like" is the alleged business of the putative employee - are there systems, manuals and invoices; and so on - the list is neither exhaustive nor short: see Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16 at 24 per Mason J and 36-37 per Wilson and Dawson JJ; for application see Hollis at [48]-[57] per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ; Sweeney at [30]-[33] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ. …
However, some understanding as to the relative significance of the various factors is desirable, both to minimise the extent to which application of the test may produce an impressionistic and subjective outcome on the one hand, and to avoid the injustice of a mechanistic checklist approach on the other: Personnel Contracting at [34].
In Hollis, the High Court affirmed what has been described as the "multifactorial approach" in finding that the bicycle couriers of the respondent courier company were its employees. In that case, the relevant factors demonstrating an employment relationship included that: the couriers were not providing skilled labour or labour which required special qualifications; the couriers had little control over the manner of performing their work; the couriers were presented to the public and to those using the courier service as "emanations" of the courier company, in the sense that they wore the company's livery; in terms of deterrence, the company knew the danger to pedestrians presented by its bicycle couriers and the failure to adopt effective means for personal identification of those couriers by the public; the company superintended the couriers' finances; and there was considerable scope for the actual exercise of control over the couriers.
Meanwhile, in Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161; [2006] HCA 19 (Sweeney), a majority of the High Court found that a refrigerator mechanic contracted by the respondent company, which was required to service and maintain the refrigerator at a convenience store, was not an employee of the respondent. Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ distinguished the circumstances from Hollis, finding that the mechanic essentially conducted his own business: Sweeney at [33]. The circumstances on which the majority placed particular weight included that: the mechanic invoiced the respondent for each job that he did; the respondent was concerned to verify that the mechanic had proper workers' compensation and public liability insurance; the respondent did not control the way in which the mechanic worked; the mechanic supplied his own tools and equipment, and brought his skills to bear upon the work to be done; and the mechanic was not presented to the public as an emanation of the respondent: Sweeney at [31]-[32].
When considering the employment relationship, in Personnel Contracting Kiefel CJ, Keane and Edelman JJ relevantly observed: 41. An employment relationship will not always be defined exclusively by a contract between the parties. Historically, the employment relationship was recognised and regulated by the law before the law of contract came to govern the relationship. An employment relationship, though principally based in contract, may be affected by statutory provisions and by awards made under statutes. It may also be that aspects of the way in which a relationship plays out "on the ground" are relevant for specific statutory purposes. So, for example, a statute may operate upon an expectation generated in one party by the conduct of another, even though that expectation does not give rise to a binding agreement. 42. A contract of employment may be partly oral and partly in writing, or there may be cases where subsequent agreement or conduct effects a variation to the terms of the original contract or gives rise to an estoppel or waiver. In such cases, it may be that the imposition by a putative employer of its work practices upon the putative employee manifests the employer's contractual right of control over the work situation; or a putative employee's acceptance of the exercise of power may show that the putative employer has been ceded the right to impose such practices.
In Resilient, Gleeson JA stated at [159]: In Personnel Contracting and ZG Operations it was held that where there is a written agreement, the legal rights and obligations established by the written agreement should be decisive of the character of the relationship. In Rossato it was said (at [57]) that "[a] court can determine the character of a legal relationship between the parties only by reference to the legal rights and obligations which constitute that relationship".
In the recent decision of EFEX Group Pty Ltd v Bennett [2024] FCAFC 35 (EFEX Group), Katzmann and Bromwich JJ observed that the High Court decisions in Personnel Contracting and ZG Operations Australia Pty Ltd v Jamsek (2022) 275 CLR 254; [2022] HCA 2 (Jamsek) have marked a shift of focus away from "the totality of the relationship between the parties" under the multifactorial analysis, giving primacy to the contractual arrangement between the putative employer and employee. Thus, their Honours relevantly observed at [10]-[14]: 10. Thus, whether the contact [sic] is written or not, or is oral in whole or in part, the characterisation of the relationship between the parties depends on their contractual rights and not on circumstances, facts or events that do not affect those rights. It follows that a "wide-ranging review of the entire history of the parties' dealings" is neither necessary nor appropriate for the purpose of characterising the relationship: Personnel Contracting at [59] per Kiefel CJ, Keane and Edelman JJ; see also [185]-[189] per Gordon J (Steward J agreeing). 11. The principles of contract interpretation also apply to the terms of an unwritten contract that are able to be ascertained, inferred or implied. They allow regard to be had to circumstances surrounding the making of the contract and events and matters, known to the parties at the time of contracting, which assist in identifying the object or purpose of the contract. The nature of the work contracted for and the arrangements of the supply or provision of any tools or equipment to the putative employee may also be relevant. Generally, things said or done after a contract was made are not legitimate aids to its construction. In a case such as this, for a matter with no necessary connection to the contractual obligations of the parties to have any bearing on the characterisation of their relationship, "it must be concerned with the rights and duties established by the parties' contract, and not simply an aspect of how the parties' relationship has come to play out in practice": Personnel Contracting at [61] (Kiefel CJ, Keane and Edelman JJ). 12. The central question that remains, under an unwritten contract as in a written contract, is whether or not a person is an employee. As was observed in Personnel Contracting at [39] per Kiefel CJ, Keane and Edelman JJ (see also [113] per Gageler and Gleeson JJ), while the dichotomy between a person's own business and the putative employer's business may not be perfect so as to be of universal application, because not all independent contractors are entrepreneurs, that approach is still useful. That is because it focuses attention on whether the putative employee's work as contracted to be performed was so subordinate to the putative employer's business as not to be part of an independent enterprise. It also avoids the danger of an impressionistic and subjective judgement, or ticking off a checklist, running counter to objective contractual analysis. 13. Once the contours of the legal relationship are identified, its characterisation as one of employment or not often hinges on two considerations identified in Personnel Contracting, in particular by Kiefel CJ, Keane and Edelman JJ at [36]-[39], each of which may involve questions of degree, namely: (a) the extent to which the putative employer has the right to control how, when and where the putative employee performs the work; and (b) the extent to which the putative employee can be seen to be working in their own business as distinct from the putative employer's business. 14. However, as a cautionary note, in some circumstances the proper analysis may be more nuanced than that. As Gordon J pointed out in Personnel Contracting at [181]-[183] (Steward J agreeing), asking whether a person is working for their own business may not always be a "suitable inquiry for modern working relationships", given that it may not take much for even a low skilled person to be carrying on their own business. Analysis based on this dichotomy may distract from the relevant underlying analysis of the totality of the relationship created by the contract. It may also direct attention to non-contractual considerations, which are not relevant unless forming part of the contract itself. The better question may be to ask whether, by the terms of the contract, the person is contracted to work in the business or enterprise of the purported employer, so as to maintain the correct focus. That is, if the contract does not lead to the conclusion that the person was working in the business of the asserted employer, then the person will not be an employee. This approach has some traction in this case.
In the United Kingdom, it appears to be accepted that relationships "akin" to that of an employer/employee can satisfy the relationship test for vicarious liability, where the individual carries on activities as an integral part of the business activities carried on by the defendant and for its benefit: Cox v Ministry of Justice [2016] AC 660 at [24] per Lord Reed JSC (with whom Lord Neuberger of Abbotsbury PSC, Baroness Hale of Richmond DPSC, Lord Dyson MR and Lord Toulson JSC agreed); see also Fleming's at 503 [17.80]. Whether a relationship "akin" to employment ought to be determined for the purposes of vicarious liability requires looking at the details of the relationship: Barclays Bank v Various Claimants [2020] AC 973 at [27] per Baroness Hale of Richmond (with whom Lord Reed JSC, Lord Hodge DPSC, Lord Kerr of Tonaghmore and Lord Lloyd-Jones JJSC agreed).
However, that extension of vicarious liability beyond the employment relationship has not generally taken favour in Australia thus far: see e.g. Schokman at [51]; Sweeney at [33]; cf s 6G Civil Liability Act 2002 (NSW) (in the context of child abuse).
In determining whether an individual is conducting his or her own business, several indicia have been considered, two of which are particularly relevant here. 1. Mode of remuneration: An individual may be an employee despite being remunerated by commission, or by a share of the employer's profits or income: see Mark Irving, The Contract of Employment (2nd ed, 2019, LexisNexis Butterworths) (Irving) at 77 [2.22]; Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395 at 406 per Stephen J; [1973] HCA 49; Connelly v Wells (1994) 55 IR 73 at 87 per Kirby P (as his Honour then was). Regular payment of remuneration suggests the relationship is one of employment and irregular payments suggest it is not: Irving at 77 [2.22], citing Articulate Restorations & Development Pty Ltd v Crawford (1994) 57 IR 371 at 379 per Kirby P (Meagher JA agreeing). Payment by a third party is not inconsistent with employment, and it is the substance of the payment, rather than the manner, that is important: Irving at 77 [2.22], citing inter alia Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (2015) 228 FCR 346; [2015] FCAFC 37 at [224]-[226] per North and Bromberg JJ and Narich Pty Ltd v Commissioner of Pay-roll Tax (1983) 2 NSWLR 597 at 607 per Lord Brandon of Oakbrook for the Board. 2. Representation: It is a significant indicator of employment that the individual hands out cards with the employer's name, wears the insignia and uniform of the employer, or informs others that he or she is performing work on behalf of the employer: Irving at 80-81 [2.25], citing inter alia Hollis at [50]-[52], Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2010) 184 FCR 448; [2010] FCAFC 52 at [44]-[46] and On Call Interpreters & Translators Agency Pty Ltd v Commissioner of Taxation (No 3) (2011) 214 FCR 82; [2011] FCA 366 at [270]-[274] per Bromberg J.
The existence of control, whilst significant, is not the sole criterion by which to gauge whether a relationship is one of employment: Stevens at 24 per Mason J. As Mason J observed in Stevens, the importance of control lies not so much in its actual exercise, although clearly that is relevant, as in the right of the employer to exercise it. In Personnel Contracting Kiefel CJ, Keane and Edelman JJ stated at [73]: Like the "own business/employer's business" dichotomy, the existence of a right of control by a putative employer over the activities of the putative employee serves to sensitise one to the subservient and dependent nature of the work of the employee, so as to assist in an assessment of whether a relationship is properly to be regarded as a contract of service rather than a contract for services.

[107]

Submissions

Dr Baron Levi's submissions did not refer to Personnel Contracting or Jamsek. In relation to employment, Dr Baron Levi submitted that the following matters were significant as identifying Mr Marino with the business of Oracle Law, to the knowledge of Mr Polo, so as to make Mr Marino an employee (POS [86]): 86.… i. the first defendant was titled as 'Business Development Manager' of Oracle Law, going so far as to obtain business cards with his name and that title printed upon them; ii. the first defendant arranged for the Oracle Law domain, website and email addresses to be established, and he obtained an oracle law email address which he used; iii. the first defendant arranged for Oracle Law signage, advertising, and clothing with the Oracle Law logo for staff; iv. the first defendant was involved in developing online will kits for sale through Oracle Law, in working on multiple conveyancing and transaction matters and, critically, in dealing with clients and opposing parties in relation to those matters; v. In dealing with such clients and opposing parties, the first defendant used the Oracle Law email address and email signature, which again labelled him as 'Business Development Manager' or 'BDM' at 'Oracle Law'; vi. the first defendant set up merchant services for Oracle Law so that it could accept payment from clients; vii. On a number of occasions the first defendant referred to Oracle Law as "our business"; viii. the second defendant advised a client, on at least one occasion, that an invoice has been amended to incorporate the time relating to the first defendant's "attendances" at Sydney; ix. the first defendant played a role in assisting or facilitating transactions and other client matters on behalf of Oracle Law; and x. the first defendant and the second defendant shared office space, being the premises of 'Oracle Law'.
In addition, Dr Baron Levi submitted that (POS [87]): 87. By clothing the first defendant with the title, business cards, email and inclusion in invoices, the second defendant evidently made the first defendant identifiable with the business of Oracle Law. [2] Further, he did so in a way which ordinarily would be strongly suggestive that a person is a permanent employee of a business, in particular through the title of 'Business Development Manager'. There was no indication to external persons that the first defendant was anything otherwise than an ordinary employee of Oracle Law. The conclusion that the first defendant was an "emanation" of Oracle Law was inevitable for the reasonable external observer.
In relation to deterrence, Dr Baron Levi submitted that holding Mr Polo liable for the wrongs of Mr Marino would encourage employers to take steps to reduce the risk of future harm: POS [89].
In relation to the right of control, Dr Baron Levi referred to Mr Polo enjoying a right of control over Mr Marino in Mr Marino's performance of his mandate of carrying out business and marketing work: POS [90]. He submitted that Mr Marino was afforded considerable latitude in the performance of his role of being a business development manager, and that this was entirely consistent with Mr Marino being an employee: POS [92].
In respect of Mr Marino's conduct in the business, Dr Baron Levi submitted that Mr Marino was an integral part of Oracle Law, as opposed to operating his own business providing services to Oracle Law. In this regard, Dr Baron Levi submitted as follows: 93. … i. the first defendant set up the Oracle Law domain, and was an administrator of that domain; ii. the first defendant controlled the Info@ Oracle Law email address; iii. the first defendant arranged at various points for business cards for other staff of Oracle Law, he sourced and ordered the professional photocopier and printer for Oracle Law; iv. the first defendant performed other management or administrative tasks within Oracle Law; and v. the first defendant carried on business and marketing work as the Oracle Law Business Development Manager.
In relation to remuneration, Dr Baron Levi submitted (POS [95]): 95. Although it is not a conventional arrangement of remuneration, it is relevant that the second defendant did remunerate the first defendant by way of free provision of legal services, the free use of premises, and other incidents of the employment. With respect to remuneration, it is notable that even a supposed volunteer, not remunerated by wages, may be an employee; as Schmidt AJ noted in Plaintiff A v Bird [2020] NSWSC 1379 at [446]-[447].
Ultimately, in relation to employment, Dr Baron Levi submitted as follows (POS [99]-[100]): 99. … the plaintiff submits that the evidence will show that the second defendant and the first defendant understood that the first defendant was being employed within the business of Oracle Law, that sub-contracting would not be permitted given the individual nature of the services provided by the first defendant, that the first defendant 'represented' Oracle Law and that the benefit of the goodwill in the business inured in Oracle Law and through it the second defendant. 100. Therefore, applying the multifactorial test set out in Hollis, in totality it appears that the first defendant was an employee of Oracle Law. This is particularly so when the analysis is performed in light of the underlying concerns of the doctrine of vicarious liability, including that it ought to extend to identified representatives of an enterprise, and the importance of deterrence.

[108]

Principles

For an employer to be held liable for the tort of an employee the common law requires that the tortious act of the employee be committed in the course or scope of the employment: Schokman at [12] per Kiefel CJ, Gageler (as his Honour then was), Gordon and Jagot JJ; Prince Alfred College v ADC (2016) 258 CLR 134; [2016] HCA 37 at [40] per French CJ, Kiefel (as her Honour then was), Bell, Keane and Nettle JJ. Regarding this enquiry, in Schokman their Honours observed at [20]-[21] (footnotes omitted): 20. In the context of vicarious liability, and the rule that the employee's tortious act must have been committed in the course or scope of the employment, decided cases also provide assistance by way of a test which has been developed. A body of cases, including Bugge v Brown, point to a logical enquiry which may be made as to whether the tortious act in question has a sufficiently strong connection with the employment, and what is entailed in it, so as to be said to have been done in the course of that employment. Two points should be made. First, a test of vicarious liability requiring no more than sufficiency of connection must be constrained by the outer limits of the course or scope of employment. Second, the statement in Prince Alfred College that a "test of connection does not seem to add much to an understanding of the basis for an employer's liability" reinforces the need to undertake analyses in determining the course or scope of employment described above whilst recognising the use of past cases as a guide. 21. An enquiry as to the connection between the wrongful act and the employment was proposed by Sir John Salmond as one of the tests to be utilised to determine whether an act was in the course or scope of the employment. Relevantly, for present purposes, he proposed that an employer may be liable not only for authorised acts but also for unauthorised acts, provided that they are "so connected" with authorised acts that they may be regarded as modes, albeit improper modes, of doing them.
In Schokman, the employee's drunken act of negligence in urinating on the claimant while in shared accommodation was found to have had no real connection to his employment, despite the shared accommodation arrangement being required under his employment contract: Schokman at [46] per Kiefel CJ, Gageler, Gordon and Jagot JJ, [85], [88] per Edelman and Steward JJ.
In Bugge v Brown (1919) 26 CLR 110; [1919] HCA 5, Isaacs J considered that the liability of the employer "must cease where the relation [of employment] itself ceases to exist" (at 118, quoting Quarman v Burnett (1840) 6 M & W 499 at 509 [151 ER 509 at 514] per Parke B), and "if the [tortious] act done was utterly unconnected with anything [the employee] was employed to do anywhere, it was outside the sphere of his employment" (at 119).
The distinction between whether there is an employer/employee relationship and whether what was done was in the course of that employment was expressed by Gordon J in Personnel Contracting at [191] as follows (footnotes omitted): 191. Whatever might be the principles upon which vicarious liability operates, there is an important distinction between whether there is an employer/employee relationship and whether what was done was done in "the course of [that] employment". The relevant inquiry is not only about whether an alleged tortfeasor was an employee. There is a separate question about whether the relevant act or omission of the alleged employee took place in the course of that employment. That second question necessarily directs attention to the state of affairs at the time the cause of action accrues. The second question is asked for a different purpose and at a different point in time. The state of affairs relevant to that inquiry necessarily includes facts and matters, including subsequent conduct, that are not relevant to answering the first question. To the extent that a fact or matter may be considered relevant to both questions, not only is that fact or matter considered for a different purpose in answering each question but the weight to be attached to that consideration is likely to be different.

[109]

Submissions

In relation to the facts regarding course of employment, Dr Baron Levi submitted as follows (POS [111]-[118]): 111. First, as discussed above, that employment, and all of the implied and inferred representations made by the second defendant, or made by the first defendant with the knowledge of the second defendant set out at [10] above and discussed at [31], the external observer would be led to find it not only plausible, but likely, that the first defendant was an employee of great importance and authority within Oracle Law, with a broad capacity to exercise the authority of Oracle Law. In light of that, and in particular the peculiar relationship of trust and fiduciary duties which ordinarily exists between solicitor and client, there existed a special relationship of vulnerability to fraud, deceit and negligence on the part of the first defendant as employee of Oracle Law. 112. Second, this aligns with what was actually conveyed by the first defendant to the plaintiff, including through representations that the first defendant was a solicitor and the owner of Oracle Law, the sending of emails to the plaintiffs using the Oracle Law email address, the provision of legal services to the director of the first plaintiff including preparation of loan agreements, preparation of an amended deed, and advices in relation to caveats on separate occasions in 2016, 2017 and 2018, and the invoicing for these services using an "Oracle Law" invoice. 113. Therefore, the plaintiffs were in a position of particular trust and therefore vulnerability to the first defendant, in the first defendant's exercise of the ostensible performance of the duties of a very senior employee of Oracle Law, or the apparent authority of such a person. So long as the first defendant's tortious actions were given occasion by the exercise of the apparent authority of such a person, or ostensibly in the performance of the duties of such a person, "In such a circumstance the requisite connection would be present" [3] so as to render those tortious actions in the course or scope of employment. 114. Turning to the particular tortious acts, In June and July 2018 the first defendant represented to the plaintiffs that he managed investments, and he sent to the plaintiffs PowerPoint presentations in PDF format of 3 different investment options. He sent these presentations using his Oracle Law email address. The presentations contained the Oracle Law name and logo on the coverpage and throughout the presentations and stated that they were presented by the first defendant. They also contained various representations concerning their connection to Oracle Law. The effect of the whole of the communication was to convey that Oracle Law endorsed and was associated with the provision of these investment options. 115. In turn, the first defendant represented orally and in person that he had another investment opportunity. He represented that it was government controlled, risk free, and would return 100% upon the initial investment in 90 days. The first defendant used his Oracle Law email address in providing various instructions to the plaintiff concerning the investment immediately prior to the plaintiffs signing written contracts relating to the investments. The effect was again to convey that Oracle Law endorsed and continued to be associated with provision of that investment. 116. It must be appreciated that there is a history of solicitors offering investment schemes, in particular by firms offering conveyancing and transactional work. This included so-called 'solicitor lending' schemes, where 'A legal practice pools investor funds for lending, again holding those funds on trust, and the solicitor's nominee company is the mortgagee and credit provider'. [4] The firms would ordinarily act as a facilitator of the relevant investment scheme by recommending the scheme to clients, and then doing the relevant conveyancing and associated legal work with the scheme. The first defendant's offering of such a scheme and facilitation of entrance into that scheme, purportedly in exercise of his authority and position at Oracle Law, must be placed in that context. Given that it was a frequent practice of such firms, and the title and authority ostensibly granted to the first defendant, the first defendant's operation and facilitation of the scheme, albeit fraudulent and negligent, falls within the scope and course of his employment. This is perfectly analogous with Lloyd v Grace, where the ordinary part of the business of a law firm in that case was the conveyancing work. 117. As has been noted, even a criminal act may be committed in the course or scope of employment, and therefore render the employer liable. That the offering of investment schemes by firms of solicitors may be prohibited is therefore not to the point; rather, the question is whether there was sufficient connection between the very broad authority of the first defendant in his employment with Oracle Law, and the tortious acts, so as to be said to have been done in the course of that employment. 118. Here, the first defendant's cloaking within the authority of Oracle Law, and the special trust that existed between the plaintiffs and the first defendant in that capacity, gave occasion to the tortious act of the first defendant. The first defendant was placed, by the actions of his employer, the second defendant, in a special position, and given such a broad ostensible authority that it extended to an apparent authority to establish and operate investment schemes with the endorsement and through Oracle Law. Acting in pursuance of that authority, and additionally in ostensible performance of the duties of his employment, the first defendant committed the relevant tortious acts. Therefore, Oracle Law, and therefore the second defendant as its principal, ought to be held vicariously liable.

[110]

Discussion

To enliven vicarious liability, Dr Baron Levi submitted that, broadly speaking, what was required to be established was that Mr Marino was an employee of Oracle Law (as opposed to an independent contractor) and that the tortious acts and omissions of Mr Marino were committed in the course or scope of employment: POS [79], [101].
In light of Personnel Contracting and Jamsek, it is clearly important to address the question of whether a contract existed as between Mr Marino and Mr Polo and, if so, the terms of the contract. Cases of vicarious liability arising from non-contractual relationships have tended to be somewhat limited, such as in the context of church organisations: see e.g. Bird; O'Connor v Comensoli [2022] VSC 313. Part of the reason for extending vicarious liability to those cases may be due to the sui generis nature of the relevant relationship: Bird at [120]. This is not such a case.
As I have found above, the evidence in this case did not establish that there was a contract between Mr Polo and Mr Marino in respect of his work at Oracle Law. Given that the characterisation of the relationship between the parties depends on their contractual rights and not on circumstances, facts or events that do not affect those rights (EFEX Group at [10]), that creates some difficulty to any finding that Mr Marino was an employee of Mr Polo or Oracle Law, and hence that Mr Polo could be held vicariously liable for Mr Marino's negligence. On one view, that could be determinative of the vicarious liability enquiry.
Notwithstanding the above, I note the following matters as relevant to the issue of whether there was a relationship of employment between Mr Marino and Mr Polo.
There was no "target" or any requirement for Mr Marino to refer a certain number of clients in a given time period: cf EFEX Group.
While it might be said that there was a limited degree of exercise of control by Mr Polo in respect of him giving directions to Mr Marino, for example, to make certain enquiries with a client, one cannot point to the existence of a right of control. There was no requirement for Mr Marino to devote all of his time during working hours, or indeed any particular amount of time at all, to his work in Oracle Law. Indeed, he operated his own businesses, including CBG, at the office premises.
As Mr Marino noted, he had paid for the initial set up costs and hosting of the Oracle Law website domain since its establishment up to at least March 2019: CB 2013. There was no right to reimbursement from, or contribution by, Mr Polo.
As referred to above, in respect of the other side of the arrangement, there was no specific evidence as to what legal services Mr Polo provided to Mr Marino. There was no evidence that Mr Polo paid Mr Marino any form of salary or regular remuneration, and such a proposition was expressly denied by Mr Polo: T 203.37-.48. While there were at least two invoices which were created by Mr Marino with the Oracle Law letterhead and sent to clients of Oracle Law (being Mr Mackay/MEG and Pharma Active), there was no indication that Mr Marino had a right to invoice clients directly and, indeed, Mr Polo stated that invoices were always generated by him and never included Mr Marino's time spent on a matter: T 150. That is despite Mr Marino accepting that he invoiced clients for work that he did for Oracle Law: T 303.23-25.
When comparing the facts of this case to those in EFEX Group, it is apparent that the present facts lean even more against a finding of an employment relationship.
Dr Baron Levi placed great emphasis on the way in which Mr Marino was "clothed" by Mr Polo with the title "Business Development Manager", and with business cards and an Oracle Law email which reflected the same, which evidently made Mr Marino identifiable with the business of Oracle Law: e.g. POS [87]. In respect of this submission, the observations of Katzmann and Bromwich JJ at [42] of EFEX Group are particularly relevant: 42. Secondly, the EFEX business/own business evidence dichotomy can now be seen to be more slender when confined to contractual analysis, at best cutting both ways on that more confined analysis. Presenting as a member of an organisation to clients or customers in a case such as this carried some understandable weight, viewed through the prism of the now proscribed multifactorial analysis, but says little, let alone anything decisive, about the nature of the legal relationship in place. An independent contractor with even the clearest of written contracts to that effect may still present as a representative of the organisation by way of business cards, uniform, email address and job title, especially in any kind of services role. That much is now apparent in a range of service occupations of the kind identified by Gordon J in Personnel Contracting at [181].
Rather tellingly, the person found to be an independent contractor in EFEX Group was also given the title "Business Development Manager".
While I would give some weight to Dr Baron Levi's submission, in light of what their Honours stated in EFEX Group, I do not consider that the way in which Mr Marino was presented as a representative of Oracle Law disclosed anything decisive about the nature of the legal relationship between Mr Marino and Mr Polo. I do not consider that Mr Marino and Mr Polo's relationship could be characterised as one of employment. That conclusion seems even more apparent after April 2018 when the shared office premises were vacated and their contact largely ceased.
This brings me to a further difficulty with the vicarious liability case which arises in respect of the second limb, namely that the tortious acts and omissions of Mr Marino were not committed in the course or scope of his employment.
Mr Polo stated that he no longer communicated with Mr Marino from April 2018: T 136, 160. In re-examination, he clarified that he and Mr Marino "had a few sporadic matters that needed to be completed", which included some conveyancing matters and recovery of a debt owed by Mr Dan Smith: T 395. However, the latter was a loan made to Mr Smith personally by Mr Polo and Mr Marino, and had nothing to do with Oracle Law.
If there was any continuing "employment" relationship as between Mr Polo and Mr Marino after April 2018, it was significantly limited to the few ongoing conveyancing matters that he had referred to Oracle Law. The proffering of the investment proposal and the AMAs to the plaintiffs seems to extend well beyond that scope and have no connection with what Mr Marino would have been employed to do.
The specific "tortious acts and omissions" of Mr Marino are pleaded as being in respect of his failures as asset manager under the AMAs.
However, neither Oracle Law nor Mr Polo had investment schemes as any part of its practice. There is no evidence that, in promulgating the AMAs, Mr Marino was doing so in the course or scope of the duties that he had carried out or undertaken for Oracle Law.
In the last 10 lines of transcript before judgment was reserved, Dr Baron Levi made the submission that, although the "relationship ceased" between Mr Polo and Mr Marino (T 449.9), "Mr Marino was still… held out to be an employee of or connected to Oracle Law by virtue of the fact that he still had his Oracle Law email address and that that had not yet been revoked": T 449.30-.37. He submitted that, "because the test of vicarious liability centres on the principle of ostensible authority", that means that "he still was operating under an ostensible authority that had been held out". In light of the principles I have set out above, the test for vicarious liability does not "centre" on "the principle of ostensible authority". In any case, for the reasons I have stated above, Mr Marino's continued access and use of his Oracle Law email does not demonstrate anything decisive about Mr Marino's putative employee status, let alone the scope or course of his employment.
In light of Dr Baron Levi's reference to the notion of ostensible authority within the realm of employment and vicarious liability (as distinct from ostensible authority within the realm of the law of agency), the proposition that there was some form of holding out by Mr Polo of Mr Marino begs the question: what is conveyed or held out where one party enables another or provides another with an email address and a domain name? Dr Baron Levi did not direct my attention to any specific caselaw on the issue. So far as my researches have been able to glean, there is not a great deal of commentary bearing upon the issue.
What commentary there is does not suggest that the mere fact that person A provides person B with an email address itself clothes person B with carte blanche authority to act on behalf of person A.
In Law of Agency, Dal Pont addresses the issue at [20.46] as follows: Reliance on facilities granted to an agent 20.46 The issue as to whether reliance on an alleged holding out is reasonable also enters into play where the principal has given the agent facilities through which the agent can represent the principal; whether physical facilities, electronic facilities or merely business cards and letterhead paper. In each case, the court must determine whether the provision of the facilities in question would generate in a person in the third party's position a belief in the authenticity of the agent's authority to contract as the agent is purporting to do. The case law indicates that providing an email address using the principal's domain name, a business card, [5] the principal's stationery, [6] an office or vehicle facilities, [7] are usually insufficient by themselves to lead a reasonable third party to believe that the agent was authorised to effect a transaction that would ordinarily exceed the authority of an agent holding that position. In CSX Transportation Inc v Recovery Express Inc, [8] for example, it was held to be unreasonable for a third party to believe an agent to have authority from its principal to purchase out-of-service railcars simply on the basis that the agent communicated using an email address assigned by the principal with its domain name. Were granting an email domain name, by itself, to clothe the recipient with carte blanche authority to act on behalf of the principal, the court remarked, 'every subordinate employee with a company email address - down to the night watchman - could bind a company to the same contracts as the president'. [9] The court viewed an email domain name as sufficiently analogous to a business card, company vehicle and letterhead for this purpose. [10] It concluded that the third party should have been more suspicious of an unsolicited, poorly written email arriving late one afternoon. 'Before delivering goods worth over $115,000 to a stranger', the court added, 'one reasonably should be expected to inquire as to the authority of that person to have made such a deal', [11] especially given the anonymity of the internet. Although instances exist in the case law where business cards, email addresses and/or letterheads have been found to provide grounds for ostensible authority, these are generally where the agent holds a senior position in the hierarchy of a corporate principal [12] or other factors lead a reasonable person to believe the agent to be authorised. [13]
As will be readily observed from the above, much of the authority upon which Dal Pont relies is American authority. Nonetheless, in the absence of reference to any other caselaw which bears upon the matter, the above suggests that I should be cautious in making assumptions as to the extent of any authority conveyed by the provision of an email address with the putative principal's domain name. In making that observation, I note what I have said above that no case of agency was pleaded.

[112]

Mr Polo - alternative claim - breaches of ACL

The claim against Mr Polo in relation to the alleged breach of the ACL is set out in CB 25[62].
The claim is essentially that: 1. Mr Polo was aware at all relevant times that Mr Marino was conducting matters on behalf of clients for Oracle Law (such awareness particularised as being disclosed from the fact that Mr Polo was copied into certain emails); 2. Mr Polo failed to comply with any disclosure obligations to clients under s 152 of the LPA in relation to any multi-disciplinary partnership; 3. Mr Polo failed to otherwise advise clients that Mr Marino was not a solicitor and was not entitled to engage in legal practice; 4. Mr Polo failed to supervise or exercise control over Mr Marino; 5. Mr Polo expressly or tacitly permitted Mr Marino to continue to act directly for clients; 6. by reason of the above matters (1) to (5), Mr Polo represented by his conduct that Mr Marino was entitled to engage in legal practice, which conduct was misleading or deceptive contrary to s 18 of the ACL; and 7. by reason of Mr Marino's representations that he was a solicitor or alternatively the owner of Oracle Law, which Mr Marino knew to be false, and his representations that the investment opportunities Mr Marino managed were offered by or associated with Oracle Law, which Mr Marino also knew to be false, the plaintiffs seek damages against Mr Polo under s 236 of the ACL.
Regrettably, Dr Baron Levi did not specifically elaborate on the misleading or deceptive conduct case against Mr Polo. I proceed in dealing with this claim without the benefit of substantive submissions from the parties.
I have already referred to the necessity to distinguish between the operation of the ACL and how it operates as a law of the Commonwealth and as a State law. For present purposes, I will proceed on the basis that most of the relevant "conduct" of Mr Polo occurred by use of the internet, specifically email, as this was the predominant means by which any inference could have been made that Mr Marino was engaged in legal practice. In this way, the ACL would be applicable as a law of the Commonwealth.
The pleaded conduct of Mr Polo, as set out above, may be characterised essentially as a form of omission or failure to speak.
Section 2(2)(a) of the ACL relevantly provides that a reference in the ACL to "engaging in conduct" is a reference to "doing or refusing to do any act", and s 2(2)(c)(i) relevantly provides that a reference to "refusing to do an act" includes a reference to "refraining (otherwise than inadvertently) from doing that act".
Referring to the judgments in Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31, the Court of Appeal stated in Allianz Australia Insurance Ltd v Haddad [2015] NSWCA 186 at [42]: … there are different approaches which can be taken to the characterisation of conduct as misleading or deceptive where, as here, it consists of or includes an omission to provide information. One approach is to consider whether in the circumstances the conduct, including any such omission, conveyed a representation which was misleading or deceptive. Another is to inquire whether those circumstances were such as to give rise to a reasonable expectation that if some relevant fact existed a particular thing would not be done, or not done, without disclosing that fact.
There is no general duty of disclosure; the question is simply whether, having regard to all the relevant circumstances, there has been conduct that is misleading or deceptive or that is likely to mislead or deceive: Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 32 per Black CJ, see also 41 per Gummow J (with whom Cooper J agreed). In Rafferty v Madgwicks (2012) 203 FCR 1; [2012] FCAFC 37, the Full Court observed at [278] (emphasis in original): 278. The authorities recognise that the circumstances in which silence may support a finding of misleading or deceptive conduct are not properly subject to any unifying principle. Nonetheless, the authorities also acknowledge that, if the circumstances of a particular case would give rise to a reasonable expectation that, if a fact existed, it would be disclosed, then the failure to disclose that fact may give rise to an inference that the fact does not exist. In this situation (i.e., where there is such a reasonable expectation), a failure to disclose the existence of that fact could constitute misleading and deceptive conduct. See, e.g., Kimberley NZI Finance Limited v Torero Pty Ltd (1989) ATPR (Digest) 46-054 at 53,195; Demagogue v Ramensky at 32, 41; Winterton Constructions Pty Ltd v Hambros Australia Ltd (1992) 39 FCR 97 at 114 ("Winterton Constructions"); Warner v Elders Rural Finance Ltd (1993) 41 FCR 399 at 405; and Software Integrators Pty Ltd v Roadrunner Couriers Pty Ltd (1997) 69 SASR 288 at 296-298.
As I have stated above in relation to Mr Marino's use of his Oracle Law email address, neither Mr Pacifico nor Mr Parrella pointed to anything specific in email correspondence sent to them by Mr Marino which gave them the impression that Mr Marino was a lawyer carrying out a form of legal work.
There was no indication that Mr Polo had known that Mr Marino had represented himself to the plaintiffs to be a lawyer. Nor was there any indication that Mr Polo had known of Mr Marino making any similar representations in the past (as distinct from representing that he had an ownership interest in Oracle Law).
Contrary to the plaintiffs' pleaded ACL claim against Mr Polo, I do not consider that his conduct, as pleaded, conveyed a representation that Mr Marino was entitled to engage in legal practice. In any case, while I have found that Mr Marino did, at times, engage in legal practice, his Oracle Law title of "Business Development Manager" (or its abbreviation "BDM"), business card and email address did not of themselves represent Mr Marino to be a lawyer. In the circumstances, I do not consider that there was a reasonable expectation on the part of Mr Polo to disclose that Mr Marino was not a lawyer or entitled to engage in legal practice. Mr Polo's alleged failures, of themselves, did not give rise to an inference that Mr Marino was a lawyer or entitled to engage in legal practice. Mr Polo's conduct was not misleading or deceptive or likely to mislead or deceive.
Even if I were incorrect in that conclusion, I find the plaintiffs' pleading problematic in that the claim for damages under s 236 of the ACL is said to arise by reason of Mr Marino's representations, not any representation of Mr Polo: CB 25[62(g)]. It cannot be said that the plaintiffs' loss arising out of the investment proposal and the AMAs was suffered "because of" the pleaded conduct of Mr Polo: s 236(1)(a) ACL.
In the above circumstances, I am not prepared to make a finding that Mr Polo is liable to the plaintiffs on the basis of any breach of the ACL.

[113]

Cross-claim

The relief sought by Mr Polo against Mr Marino, namely for "contribution towards or indemnity for" any verdict recovered against him by the plaintiffs, is relevantly set out in the statement of cross-claim, and is said to be based upon the following "pleadings and particulars" (CB 65-66): 1. The Second Defendant shared office space situated at Office 7 Mermaid Shopping Centre 2563 Gold Coast Highway Mermaid Beach in the State of Queensland with the First Defendant. 2. The Lease was in the individual names of the First Defendant and the Second Defendant but was not leased to the Second Defendant's practice known as Oracle Law. 3. The First Defendant operated his own business affairs separately from the Second Defendant. 4. From 19.7.2017 to 26.8.2017 the First Defendant travelled outside of Queensland and thereafter did not return to the office and the Second Defendant occupied the office alone. 5. The lease was due to expire on 31.3.2018 and on 9.2.2018 the Second Defendant entered into negotiations with a Company trading as Energy Options to share the office space in place of the First Defendant. 6. The negotiations failed and the Second Defendant vacated the office on 31.3.2018. 7. From about February, 2017 the First Defendant was operating his own affairs from his rented residential address at 28 Tosti Street Bundall Queensland and at the office of Mr. Craig Bax at Southport for his company matters. 8. At the time of the First Defendant issuing his Client Information Sheets dated 4.9.2018 there was no business or professional relationship between the First and the Second Defendant and the First Defendant used the Second Defendant's email address without informing the Second Defendant that he continued to use that address and without permission. 9. At the time of the agreement between the Plaintiffs and the First Defendant dated 25 September 2018 the Second Defendant had parted company with the First Defendant and had no business or professional association with the First Defendant and had not done so for at least 6 months and that last contact was only for the purpose of discussions as to the termination of the least [sic] between the parties and the Landlord's Agent.
Mr Jamieson did not address any submissions in relation to the entitlement of Mr Polo to succeed on the cross-claim against Mr Marino.
However, in light of the findings that I have made, there is no occasion to address the cross-claim as there was no verdict recovered against Mr Polo by the plaintiffs.
However, if I am incorrect in relation to that conclusion, I note that the pleaded claim for indemnity against Mr Marino by Mr Polo does not demonstrate any basis, whether contractual or otherwise, so as to enliven an entitlement or right of indemnity by Mr Polo against Mr Marino for the particular loss suffered by the plaintiffs.

[114]

Costs - preliminary observations

At the commencement of these reasons, I made some observations regarding the obligation of parties to conduct litigation with a view to resolving the real issues in such a way that the cost to the parties is proportionate to the importance and complexity of the subject matter in dispute. I also made an observation regarding this on the seventh and final day of the hearing: T 439.17-.21.
The plaintiffs and their legal representatives left no stone unturned in their efforts to secure relief against the defendants. The proceedings spanned seven days of hearing, and there were six volumes of the Court Book incorporating 2,745 pages of materials.
Early on the first day of the hearing as Dr Baron Levi was outlining the plaintiffs' case, he essentially accepted my preliminary observation that the contractual case against Mr Marino was straightforward and might have taken about 20 minutes or so to articulate, and that the rest of the claim was directed to effectively proceeding against Mr Polo: T 28.25-.50, 29.34-30.26. According to Dr Baron Levi, the particular reason why the claim was brought in this Court was to invoke its inherent jurisdiction as to the control and discipline of solicitors in its compensatory arm: T 29.29-.32.
There is an obligation on the parties and their legal practitioners to facilitate the just, quick and cheap resolution of the real issues in the proceedings: s 56 of the CPA. Further, there is a statutory dictate that the procedures of the Court should be implemented with the object of resolving the real issues in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute: s 60 CPA.
Those preparing the Court Book did not heed the pre-trial directions for email chains to be disassembled and placed in chronological sequence, and for the Court Book not to contain duplicates of the same document. The result was that there were numerous copies of the certain emails and other documents scattered throughout the Court Book, and email chains often appeared in reverse chronological order.
The Court Book contained significant material to which neither of the active parties took me. Without being exhaustive, I note the following. 1. Under Tabs 7 and 8 of the Court Book, the parties included a request for particulars of Mr Marino's initial defence and his response, which material comprised approximately 50 pages of the Court Book (CB 75-125). When I enquired as to what the parties wished me to do with those documents, Dr Baron Levi indicated that I should note them in the same manner as the pleadings as "they may inform the pleadings": T 22.7-.19. I noted those documents. However, they were not referred to again, in any opening outline of submissions or otherwise, during the hearing. 2. Under Tabs 16 to 19 of the Court Book, the parties included notices to admit issued by the plaintiffs on Mr Marino and Mr Polo (both original and amended) and a notice of disputing facts by Mr Polo. Those documents comprised approximately 100 pages of the Court Book (CB 212-312), but were not referred to on the hearing. 3. Between Tabs 20 to 32 of the Court Book, there were various notices to produce and subpoenas, together with certain documents that were produced, comprising over 360 pages of Court Book (CB 313-677). Other than a subpoena for Mr Marino to attend to give evidence, none of those materials were referred to with one exception. On the fifth day of the hearing, Mr Jamieson (at T 369) requested that Mr Marino be shown an email at CB 521. However, that email also appears at CB 343, 377, 425, 473, 558, 595, 1864-1865 and 2217. 4. Most of volume 6 of the Court Book as supplemented (CB 2282-2745), being 463 pages and including an NAB transaction history comprising 84 pages, were not referred to on the hearing.
The result was that about 35% of the Court Book was not referred to during the hearing and the balance of the Court Book contained numerous duplications of documents.
In my estimation, the presentation of the Court Book in the manner that I have described inhibited the efficient and smooth running of the hearing. Further, it impeded my consideration of the evidence and the issues in preparing these reasons for judgment.
More generally, the parties' approach to the case begs the question of how much time (especially court time) and effort ought to be committed to recovering $10,000 for one plaintiff and $200,000 for another plaintiff, and defending those claims. I have no express reason to doubt that the parties and their legal representatives were well-intentioned in their endeavours to prepare the case. However, the proportionality issue concerns me. In the above circumstances, I require the parties to specifically address the amount of costs incurred and provide some breakdown of the costs, so as to enable me to address the question of costs appropriately and in light of s 60 of the CPA.

[116]

Endnotes

The transcript incorrectly records the word as "quanta".
See EFEX Group Pty Ltd v Bennett [2023] FCA 508 [118]-[119] (Besanko J).
Schokman [33].
Nicola Howell, 'Solicitor lending to consumers: a study of interest only loans and asset-based lending practices in Victoria' (2004), 9-10.
See, for example, Asplund v Selected Investments Inc, 103 Cal Rptr 2d 34 at 48-9 (App 2001) (also involving the display of a plaque); Prospect Industries Pty Ltd v Anscor Pty Ltd [2003] QSC 296; BC200305228 at [74], [75] per Philippides J; Cowburn v Leventis, 619 SE 2d 437 at 448 (SC App 2005).
See, for example, Harvey v New South Wales [2006] NSWSC 1436; BC200610778 at [176], [200] per Johnson J.
See, for example, Raclaw v Fay, Conmy and Co, 668 NE 2d 114 (Ill App 1996) (permitting the occupation of offices, the use of telephones and a receptionist, and access to company stationery); McFarland v Entergy Mississippi Inc, 919 So 2d 894 (Miss 2005) (putting a purported agent in an electric company vehicle).
415 F Supp 2d 6 (D Mass 2006).
CSX Transportation Inc v Recovery Express Inc, 415 F Supp 2d 6 at 11 (D Mass 2006).
CSX Transportation Inc v Recovery Express Inc, 415 F Supp 2d 6 at 12 (D Mass 2006).
CSX Transportation Inc v Recovery Express Inc, 415 F Supp 2d 6 at 12 (D Mass 2006).
See, for example, Thesenga Land Co v Cirrus Warehouse Inc, 2003 Minn App LEXIS 1433 (business card designating an agent as vice-president of the principal); Viet Hai Petroleum Corp v Ng Jun Quan [2016] 3 SLR 887; [2016] SGHC 81 (business card with title 'Chief Operating Officer').
See, for example, Piper Group (1978) Ltd v Shearson Equities Ltd (1986) 78 NSR (2d) 413 at 417 per Nathanson J (SC) (where the corporate principal, in addition to permitting the agent to use a company business card, introduced the agent to the third parties as holding an executive position in the principal, and arranged matters so that all dealings would be through the agent); Heperu Pty Ltd v Morgan Brooks Pty Ltd (No 2) [2007] NSWSC 1438; BC200710862 (revd but not on the specific point of ostensible authority: Perpetual Trustees Australia Ltd v Heperu Pty Ltd (2009) 76 NSWLR 195; [2009] NSWCA 84; BC200903119) (where the defendant mortgage provider (MB), by allowing C to act and represent himself as manager of its business - wherein (i) MB authorised C to trade using prominently the MB name, logos, livery and email contact address; (ii) MB required C to use letterhead and business cards showing the MB name prominently, without containing any express limitation on C's authority; and (iii) the placing of the MB signage and livery on C's offices was done with MB's express authority - led Palmer J to conclude that C had ostensible (but not actual) authority to advise clients how to invest borrowed funds: at [69]-[85]).

Adelaide Concrete Cutting & Drilling Pty Ltd v Marino

At a glance

Court

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Judgment (117 paragraphs)

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Legislation Cited (20)

Cases Cited (197)

Cited By (1)