Joy O'Sullivan
187 Ms O'Sullivan's employment with FAF Beenleigh Heads resulted from her seeing an advertisement to which she responded. At that time she was unemployed. She had previously worked at the Real Estate Institute of Queensland as the manager of its training facility on the Gold Coast. When she responded to the advertisement she was interviewed by Mr Graeme Beattie and obtained the position. She commenced at the Miami premises on 22 September 2008. She was employed to interview customers, to perform general office work, such as keeping banking records, and to approve and process funding. She would greet each customer, ask about his or her requirements and then process any applications for funding. Mr Beattie, who was running the office, trained her for a couple of days. She understood that she was to replace him. She observed the way in which he dealt with customers and was taken through the basic steps in the process, including the "pro forma work". He showed her how to operate a software package.
188 When a customer came to the office he or she would generally tell her what they were looking for, usually funding of some description, or a loan. She said that they had two "facilities". One involved the sale of diamonds. The other offered business finance. The first step was to determine which of these models was to be used. The customer would then fill in an application and Privacy Act form so that credit checks could be performed. The customer was also required to provide a copy of a driver's licence, proof of income and various other supporting documents. The customer might then leave the office whilst Ms O'Sullivan processed the application and performed the credit checks, so that she could respond to the customer's request within an hour. Customers could also apply online. When an application was made online, Ms O'Sullivan would generally call the customer to see whether he or she wanted to come in with the relevant documentation. Some customers would telephone in order to initiate a transaction. She said that when a customer came in, she would ask about the purpose for which the funding was sought, in order to determine whether it was required for a business purpose. If it was not, then the customer would be told that there was a facility which was not a loan, but was based on the sale of diamonds.
189 Ms O'Sullivan would fax the Privacy Act consent form to the head office in Nerang and wait for a response to the credit check. When the credit check was returned she would work through the application, looking at the budget and the bank statement. She would then assess the viability of the proposal and, in particular, whether it would fit the criteria for the customer to be, "given the funding or be sold the diamonds or whether they were doing the business loan". She would then call the customer and advise the outcome. In the event that the application was successful, she would invite the customer to come back to the office in order to complete the paperwork. She would insert the relevant information into the computer programme. It would generate the relevant documentation, including the contract for the sale of diamonds, "which was the Purchase Agreement". She would form a "stack" of paperwork which the customer was to sign, and another "stack" which she would keep for her files. In the case of a transaction involving diamonds, she would first show the customer the Sales Agreement. She would ask the customer to read through it, initial each page and sign on the back page. She said that she would say, "Just have a look at it and when you're happy with it - if you've got any questions - this is the document that sells the diamonds to you". After the customer had signed and initialled the document, she would move to the next document and say, "This is the document that sells the diamonds back again".
190 In the following extract from the transcript, Ms O'Sullivan gave an account of the process which she adopted in having the documents executed:
… the sales one, which was selling them the diamonds, was the first form that they would be given, which I always did put in front of them, upside down to myself, so that I would to say to them, "Read through this. I need an initial on each page" - I think it was a three page document - "initial on each page and a signature on the back page." And I said, "Just have a look at it and when you're happy with it - if you've got any questions - this is the document that sells the diamonds to you." So when they had looked at that and initialled on each page and signed the back one, I would move on to the next one. And I would say to them, "This is the document that sells the diamonds back again." So - - -
Do you recall - sorry to interrupt. Do you recall what the name of that particular document was? This would have been the second in the pile; is that correct? - - - Second in the pile. I can't recall off the top of the head - my head but I know it's the one that said - this is where - "You will see that it says vendor, which means you're selling the diamonds back." So they would look at that. Then I would move on to the next document, which would be - if it was secured, it would be the collateral security agreement document, which secured the vehicle for the duration of the funding until it was paid out. So they would sign those three lots of documents and they would be - on those documents, they would be given a tax invoice. This is what I would give them to take away: tax invoice, a Bill Buddy information - that was another form that they had to sign - the direct debit agreement as well. So that was all signed then I would give them a document that was a tax invoice and the information on Bill Buddy and I would point out to them that they were paying an instalment and that it was so many payments over approximately 31 weeks. And that's what they go away with, with my business card clipped in the top. "If you've got any questions, just give me a call."
(ts 198 ll 6-31.)
191 With reference to the documents concerning Ms Thompson, Ms O'Sullivan's attention was drawn to exhibit 49, a Sales Agreement, exhibit 50, a Collateral Security Agreement, exhibit 51, a Purchase Agreement, exhibit 52, a direct debit request and exhibit 53, a tax invoice. Ms O'Sullivan identified the documents as examples of those to which she had been referring. Ms O'Sullivan remembered dealing with Ms Thompson, but had no specific recollection of such dealings. Ms O'Sullivan was asked about her explanations to the customer of the various documents. Concerning the Sales Agreement, she said that she would say to the customer, who would be sitting opposite her that:
"This is the sales agreement that sells the diamonds to you. If you just have a look here you will see that we're selling you diamonds. Have a look at it. When you're happy with it, initial down the bottom. Have a read through that. When you're happy, initial down the bottom. And at the end of it we will need a signature from you." And I would identify where they needed to sign.
(ts 201 ll 6 - 10.)
Concerning the Purchase Agreement she would say:
"This is the purchase agreement where you're selling the documents back. So have a look at this. You will see it identified here, what's on here, but you will notice that in this case you're the vendor, so you're selling the diamonds back. When you're happy with it, sign it."
(ts 201 ll 26 - 29.)
Concerning the Collateral Security Agreement, she would say:
If it was secured, this - I would explain to the client that this is the collateral security agreement that - what's the word - that encumbers your vehicle for the duration of the term of the instalment plan, which means that it's held in our file. It only becomes an issue if there's a problem with the repayments of the instalment plan. It's released as soon as the account is finalised. And again, I would go through and have them initial each page. And I used to actually turn the pages for them so that they could be looking, and encouraging them to have a look at it, signature on the back two pages.
(ts 201 ll 34 - 41.)
192 The last document was exhibit 52, the direct debit request. Again she would invite the customer to look at it, and explain that it allowed a direct debit to the customer's bank account. She would then ask him or her to sign it.
193 Ms O'Sullivan was then taken to exhibit 53, the tax invoice. She was asked how it fitted into the overall scheme. Ms O'Sullivan said that it was given to the customer. She would point out that there would be a certain number of payments, at a certain amount per fortnight, from the commencement date, so that the first direct debit would come out of the account on a particular date. She said that the customer would take away the tax invoice, a "Bill Buddy transaction [document] and a Bill Buddy fee advising document as well". Those documents seem to have been at the back of the "pile" of documents. All of the documents were stapled together, with a business card in the top left-hand corner of the front page of the bundle. The business card was that of Fast Access Finance.
194 Ms O'Sullivan was also referred to exhibits 119, 120 and 121. Exhibits 119 and 120 were the Bill Buddy documents. Exhibit 121 is a product disclosure card, presumably similar to exhibit 91. Ms O'Sullivan said that sometimes she would read the product disclosure card to a customer, and sometimes she would give it to the customer to read. It would be given to him or her prior to the signing of the documents. Ms O'Sullivan said that FAF Burleigh Heads had started using the card, "later in the piece". She said, concerning the product disclosure card, that when a customer came in to sign the paperwork:
I would say to them, "You need to read this, or I can read it to you, whatever would be your preference, but I've got to let you know about this PDS". It only was there for a short time. I only had that - in the time I worked there, I think this only actually came into being in about the last five months.
(ts 203 ll 22 - 26.)
195 The customer did not keep the card. It was retained in the file. She thought that the document was used from some time late in 2011. After the customer had read it, or she had explained it, she would sign and date it.
196 Ms O'Sullivan said that she was "fairly specific" in what she said to customers because they had to see what they were signing, and that, "You can't get them to sign something with diamonds all over it if they don't know what they're signing. They won't sign it." See ts 204 ll 41 - 42. That statement is quite significant. I shall discuss it at a later stage. She said that her explanation did not differ as between customers, although she would be more specific with new customers. To customers who had returned on several occasions to buy diamonds, she might say, "This is the … paperwork". However she would still, "do it the same way, turn it around, you need an initial here'". She was asked whether customers made inquiries or questioned her about diamonds. She said that sometimes, clients would ask if they could have the diamonds. She would say, "Sure, you can have the diamonds if that's what you want". The customers did not ever want the diamonds. They rather wanted money. They might ask if the diamonds were held on the premises. She would say that they were not. There might be general conversation about diamonds. No customer ever asked questions about why diamonds were referred to in the documentation. Had a customer done so, the matter would have been explained to him or her. In the four years that Ms O'Sullivan worked at FAF Burleigh Heads, nobody ever complained about the fact that the funding was done through diamonds. Nobody expressed any concern about entering into such a transaction.
197 Ms O'Sullivan was again taken to exhibit 49, a Sales Agreement involving Ms Thompson. Her attention was directed to the third page of the document, and to the handwriting on that page. She recognized her signature above her name. She said that she had signed that document after the customer had signed it, and whilst the customer was still there. She did not recall signing this particular document. Her practice was to sign each document immediately after the customer had signed. Ms O'Sullivan was then taken to exhibit 50, a Collateral Security Agreement. On p 4 she identified her handwriting opposite the words, "Signed by the Grantor Nicole Thompson in the presence of". On p 5 she identified her signature, opposite the name "Nicole Thompson". She said again that she would sign immediately after the customer had signed each document. She was taken to exhibit 51, a Purchase Agreement. Ms O'Sullivan recognized her signature on the right of the page. Her practice was to sign each such document after the customer had signed it and whilst the customer was still present. This evidence also seems to be of no ultimate relevance.
198 Customers frequently used the words "top up funds". She, herself, did not use that expression. When she was asked to explain how diamonds were involved in the transaction, she would explain that the diamonds were sold to the customer and then purchased back from him or her. There was never any request to see the diamonds. At no time did she say to a customer that the diamonds were not real. She believed that they were real, although she had never seen them. She had been told that they were real and had no reason to believe that they were not. She had seen the database where the sales of diamonds were recorded. She said that, "… as we sold diamonds they would count down the number of diamonds that were available. And we did use [sic] to run out of them". See ts 208 ll 22 - 23. The "specifics" concerning the diamonds would be explained when the customer came in to sign the paperwork. Once it became obvious that the customer was going to have, "a consumer type funding", he or she would be told that there was a facility whereby FAF Burleigh Heads could offer funding through the sale of diamonds. The matter would be addressed more specifically when the customer was signing the documents. Ms O'Sullivan did not use the phrase "virtual diamonds". I infer that if any explanation was given, it was given only after the customer had indicated that he or she intended to accept the offered funding and perhaps, had commenced to execute the documents.
199 Ms O'Sullivan recalled dealing with customers prior to the adoption of the diamond model and thereafter. A particular customer of that kind was Ms Thorne. She met Ms Thorne on only one occasion. Her transactions were always done by email. She had a "dodgy" printer. They met once in person, but Ms O'Sullivan could not remembered when it was, "in the scheme of things". The meeting took place at the Miami office. She said that when she dealt with such a customer:
They would have to be explained to that we no longer could offer the previous funding arrangement but we did had a - have a new facility whereby - which was done through diamond - through the sale of diamonds. So they would be explained to as if they were a brand new client."
(ts 209 ll 31 - 35.)
She told such a customer that the reason for the change was a change in legislation. She had never said that the references to diamonds had no meaning.
200 She recalled Mr Streat, and that he would often text or telephone the office, saying that he required funds. He was an established client. She did "several sales" to Mr Streat but could not remember the details. She knew a person called "Marilyn" who had been employed to relieve her when she was on leave. At one stage Marilyn acted in her place on Fridays. Ms O'Sullivan also recalled Mr Sharplin. She said that when he made an application, she thought that he was an unlikely client. He had obtained employment after working at the council and had a contract in Papua New Guinea. He showed her the contract as, "substantiation of his ability to repay the instalment".
201 Ms O'Sullivan was asked to describe the Miami premises. She said that they were in a building which comprised a group of about seven shops. The office was upstairs and to the left of the building. It had a reception area and a few little offices, mainly used for storage, a small kitchen and her office beside the reception area. There was a sign at the front of the building, bearing the words "Fast Access Finance". There was a similar sign on the door into the office. There was a sign which said, "Diamonds Sold Here" and, "No Diamonds Kept on the Premises". There was also a notice identifying the hours of trade. Ms O'Sullivan was shown a document which is now exhibit 6. She said that there was a sign similar to the sign at the bottom of the photograph, except that it said, "Fast Access Finance (Burleigh Heads) Pty Ltd", rather than "Fast Access Finance (Townsville) Pty Ltd". It was affixed to the front door of the office. The sign "Diamonds Sold Here" was just inside the door. It may have been sitting on a coffee table, propped against the wall.
202 Ms O'Sullivan was then taken to a number of computer "screenshots". She identified exhibit 122, as being a "screen dump of the LMS". Exhibit 123 is headed "Create New Sales". One of the entries opposite the word "quantity" is "out of stock". Apparently this indicates that there were no diamonds to sell. Exhibit 124 is a similar screenshot. It shows that a quantity of diamonds was available for sale. Using this screen, one could identify the required number of diamonds for a proposed transaction. One could then enter the date for the first repayment, the minimum repayment amount and whether it was weekly or fortnightly. Exhibit 125 shows a "drop down" box, displaying the number of diamonds for sale. Ms O'Sullivan was shown exhibit 126 which is headed "Stone Stock Status". It showed the number of diamonds available for sale at any particular time. Exhibit 127 is headed "Stones Sales History". It showed the number of diamonds sold and the number available. Ms O'Sullivan was taken to a document which seems to be part of exhibit 3. Although that email appears to be from her to Ms Thorne, she did not remember sending it.
203 In cross-examination Ms O'Sullivan said that she worked at FAF Burleigh Heads for four years. During that time she saw no diamonds and showed no diamonds to customers. She would have seen hundreds of people in that time. None, "bought a physical diamond". She understood that Fast Access Finance advertisements included terms such as "fast cash", "quick funds" and "bond loans", although later evidence suggests that she had not, herself, seen the advertisements. She had sometimes heard general comments about advertising in the Gold Coast Bulletin. She understood the term "bond loan" to refer to a loan for the purpose of providing a residential leasing bond for four weeks' rent plus two weeks' rent in advance. People commonly sought funds from FAF Burleigh Heads for that purpose. The diamond model ceased operation around April 2012. Ms O'Sullivan continued in her employment until the end of 2012. She understood that bond loans were always a personal, rather than a business use of funds.
204 If a person telephoned seeking a loan, Ms O'Sullivan would say that "they" had a "facility", but would not necessarily go into detail as to how funding was effected. She would provide such details when the customer came into the office. On the telephone she used the term "facility" rather than "loan". She had been told not to use the word "loan", but customers used it. She denied using the words "loan" or "lending" to customers. She was asked whether she agreed that she had used the terms "loan" and "lending". She said that she did not recall. She said that "we" were told not to use the word "loan". She agreed that she may possibly have used such a term, but she did not recall doing so. She insisted that the customers were always told that it was a "diamond transaction". She agreed that she probably did not say to customers who used the word "loan", that they were not getting loans.
205 Exhibit 4 is a letter headed "Fast Access Finance" and dated 8 May 2009. It is from Ms O'Sullivan to a Mr Chenery. The subject matter is said to be "Field Call". The letter purports to authorize Mr Chenery, on behalf of FAF Burleigh Heads, "for a field call to the following borrower". That borrower was Ms Thorne. Attached are "details of arrears". Exhibit 5 is a letter dated 8 May 2009 to Mr Chenery. The exhibit consists of only one page, with no signature. It seems that there may have been at least one other page. This letter also relates to Ms Thorne. It refers on numerous occasions to the "borrower", presumably Ms Thorne. Ms O'Sullivan said, concerning this letter, "It's a form letter. I wouldn't have actually made that error myself. It's a form letter". She said, however, that she had access to it, and that it was on her computer. She did not know who had prepared the document. It came out of "head office".
206 Exhibit 49 is a Sales Agreement with Ms Thompson. Ms O'Sullivan recognized her own signature on the third page. She did not recall the particular transaction. She agreed that she would have understood any reference to a loan for a bond to be a loan to enable payment of a bond for the rental of residential premises. She agreed that she would have told Ms Thompson of the documentary information which she would have to supply. She regularly gave such advice over the telephone. She cannot recall whether Ms Thompson made an online application. Ms O'Sullivan did not think that she would, herself, have filled in the application form on the basis of information provided over the telephone.
207 In exhibit 48, an application form, at the foot of p 2, there is a comment to the effect that, "You can set up periodic payments to come out of our bank". Ms O'Sullivan was asked if, "that sounded similar to the advice that she would give to customers". Ms O'Sullivan said that the document had come from an online application and that the borrower, Ms Thompson, had written that statement. She agreed, however, that she might well have told customers that they would pay by direct debit on a weekly or fortnightly basis. She said that the document had not been completed by her, and that it was an online application. She said, however, that the writing on the front page had been written by her after Ms Thompson had visited the Miami premises and whilst Ms O'Sullivan was assessing the application. Her handwriting also appears on p 2, including the figures "$256 fn" meaning "$256 per fortnight". The application form had originally shown the fortnightly repayment as being in the amount of $250. It seems that $256 was the standard amount. Ms O'Sullivan could not recall contacting Ms Thompson to tell her that her loan had been approved, and that her husband could not, "go on the loan because of bankruptcy". She may have said that he would be ineligible to apply.
208 Ms O'Sullivan said that upon receiving such an application, she would generally have called the customer and told him or her of the sorts of documents which she would require, such as "utility bill, bank statement, identification, car …", (presumably car registration). She agreed that she would have said as much to Ms Thompson. On occasions she may have provided her fax number so that the customer could fax documents to her.
209 She was taken to exhibit 47 which contains the documents supplied to Ms O'Sullivan by Ms Thompson. Some of the faxed documents bear markings which show the originating addresses of the fax transmissions. The finance application, exhibit 48, has been amended by deleting reference to Ms Thompson's husband. Ms O'Sullivan agreed that it would be inappropriate to sell diamonds to a person who was bankrupt. It would also be inappropriate to advance funds to such a person. She could not recall when she had discovered that Mr Thompson was bankrupt and had amended the application. Ms O'Sullivan said that funds would not be credited to a customer's account on the same day. Rather, they were credited overnight. She may have pre-printed the relevant documents before Ms Thompson came into the office. She would have explained that the repayments were to be $256 per fortnight, asked her to initial each page and indicated where she should sign the document. She disagreed with the proposition that she had not told Ms Thompson to read the document. She seemed also to assert that she discussed diamonds with her. She would have done so whilst going through the paperwork. During 2009, all offices were being encouraged to sell more diamonds. There was, however, a specific complaint that FAF Burleigh Heads was not processing enough transactions. She said that for a company which was using a diamond business model, and did its funding through the sale of diamonds, there was nothing strange or unusual about such transactions.
210 Ms O'Sullivan agreed that customers came into the office to borrow money and used the language of "loan" and "topping up a loan". She did not correct customers who used such language but went through the paperwork with them. She said that she told every customer who entered into such a transaction that there was a contract for the sale of diamonds. She was taken to a number of documents concerning Ms Thompson, of which exhibit 55, a Sales Agreement dated 21 June 2011, is one. It was put to her that prior to the printing of those documents, she had received a telephone call from Ms Thompson, asking for a "top up" of an existing loan to meet medical expenses. Ms O'Sullivan recalled that Ms Thompson had sought funds for medical expenses at some stage, but did not recall whether it was on this occasion. She did not recall any request for a "top up". However she agreed that Ms Thompson may have made such a request. It was put to her that she replied: "I need to look at what you paid to see if we can do it, to distribute more funds". She replied: "Doesn't sound like what I would say but I would have needed to look at the status of her account before I could consider selling her any more diamonds". It was put to her that Ms Thompson had asked for an amount in excess of $1,000, and that Ms O'Sullivan had indicated that she could only have $1,000. Ms O'Sullivan said that this proposition might be correct. She was asked if she had said, "Come in and sign the paperwork and the money will be in your account by 2 pm the next day". She said that she would have used the expression "overnight". It was put to her that when Ms Thompson came in on the second occasion, she produced the documents and indicated to her where she should sign and initial them, but that she did not explain that the transaction involved diamonds. She replied that, "Well, that would be a breach from my normal protocol where I said to her, 'This is the sales agreement selling you the diamonds'". She also said: "Well, I don't recall specifics but that was what I normally said to people".
211 A number of other matters were put to Ms O'Sullivan concerning conversations with Ms Thompson. However she was only able to describe her normal practice. She had no real recollection of the conversations. She agreed that some customers communicated with her by email, and that she may have communicated with Ms Thompson in that way. She agreed that there may have been other transactions involving Ms Thompson. Ms O'Sullivan was then taken to exhibit 121 a product disclosure card. She said that a document in this form was in the office but was not laminated. It was on A4 paper.
212 Ms O'Sullivan recalled dealing with Ms Thorne. When Ms O'Sullivan met her she was already an existing customer of Fast Access Finance. She could not say exactly when they met. Exhibit 98 is a Sales Agreement dated 18 September 2008. Ms O'Sullivan started at FAF Burleigh Heads on 22 September 2008. Ms O'Sullivan was then taken to exhibit 100, a Collateral Security Agreement dated 18 September 2008. Her attention was drawn to p 5. In the material there are a number of versions of this document, but at least one of them appears to be signed by Ms O'Sullivan. She agreed that it was her signature. She initially agreed that 18 September 2008 may have been one of the days on which she was being trained, but then said that her training occurred after she commenced her employment on 22 September 2008. She could not explain how her signature came to be on a document dated 18 September 2008. She thought that Mr Beattie may have started the transaction and that she had finished it off. She cannot remember whether she met Ms Thorne in connection with that transaction or with some other.
213 She agreed that Ms Thorne may have rung her at some stage, asking for a "top up", and that she may have then come into the office. Ms O'Sullivan agreed that Ms Thorne would not have needed to produce identification and associated documentation as she was an established customer. It was put to her that on the occasion on which she met Ms Thorne, she had presented her with the documents and said that, "You will see here it says all about diamonds and cuts and all that. It's just some new legislation. It doesn't change anything", and that she then told Ms Thorne where to sign and where to initial. Ms O'Sullivan said that she had not made that statement. She had never spoken to anybody about cuts. She did not remember such terminology. At the time of the transaction on 18 September 2008 Ms Thorne had already purchased diamonds. Ms O'Sullivan agreed that Ms Thorne had come to the office on one occasion and that the other transactions were primarily by email. It was put to her that she had been involved in three transactions with Ms Thorne, on 7 December 2010, 15 April 2011 and 10 January 2012, and that in each case, Ms O'Sullivan responded by email to an inquiry by Ms Thorne. She said that Ms Thorne had come into the office on one occasion.
214 Ms O'Sullivan said that Ms Thorne had a faulty scanner and agreed that some of the loan documents in evidence appeared to have been poorly reproduced, suggesting that they had been sent by email. It was put to her that if a transaction was effected by email, she would not have given Ms Thorne the product disclosure statement. Ms O'Sullivan said that she may have mailed the product disclosure card to Ms Thorne. She agreed that she had been instructed not to give the card to customers. It was for office use only. She did not recall sending a copy of the document to Ms Thorne. If she had sent it, she still could have initialled it and put it on the file. She agreed that she did not, as a matter of course, provide copies of the product disclosure card to customers. She could not recall any occasion on which she had done so. She simply read it to the customer or allowed the customer to read it, initialled it and put it in the file. She said that she dealt with very few customers online and could not recall how she proceeded with customers of that kind. She agreed that she may not have posted the card to such customers. There are some obvious curiosities about this evidence.
215 Ms O'Sullivan was taken to documents concerning Mr Streat's transactions. Exhibit 68 is an application form dated 3 January 2009, apparently submitted online. At least some of the handwriting on the document is that of Ms O'Sullivan. Opposite the words "purpose of loan" the word "personal" appears, apparently one of the drop down boxes on the computer programme. On the document Ms O'Sullivan has written the word "bond". She said that after speaking to Mr Streat, she would have known that the loan was not a business loan. She probably called Mr Streat in response to his application, telling him that she had received it, and inviting him to come in to discuss the matter. She understood the term "bond" to refer to a rental bond for residential premises. She recalled meeting Mr Streat on several occasions but could not recall the first occasion. Exhibit 69 is a Privacy Act consent form dated 3 January 2009. She said that once she had seen his payslips and the other documentation she would have made a determination as to whether he was a viable applicant. She could prepare the loan documents in advance of such a decision. It was put to her that when she first dealt with Mr Streat, there was no explanation concerning the sale of diamonds. She disagreed with this. She said that she had given such an explanation.
216 Ms O'Sullivan was asked whether, on the next occasion on which Mr Streat contacted her, on 2 June 2009, he had asked for a "top up" loan for car registration. She could not recall but agreed that it was possible. She denied having told him that she would see how much she could lend. She would probably have said that she would look at the database and, "see where we're at with your instalments". She was asked whether there was a time, whilst the diamond model was being used at FAF Burleigh Heads, when she used the words "lend" and "loan" in relation to diamond transactions. She said that she could have done that early in the piece. She could not remember when the "head office" directed that the word "loan" not be used. She did not recall actually using that word herself. The customers used it constantly. She did not recall Mr Streat asking about the purpose of the diamonds, or saying that he had no diamonds to give. She did not say anything about virtual diamonds. She did not believe that the diamonds were virtual diamonds. She believed that they were real diamonds. She had never seen them. She had never shown diamonds to a customer. Nobody had ever bought or received a physical diamond from her.
217 She understood that the diamonds were held offsite. She said that she was instructed that if anybody ever asked to buy diamonds she was to contact "head office", so that they could procure the diamonds in order to have them there. She was told that customers could buy diamonds if they wished. She agreed that many of the customers desperately needed the funds that they were seeking. She agreed that they did not come in to buy diamonds, but to seek loans, and that the funding was done through the sale and purchase of diamonds. She said that she did not think that customers cared about the source of the funding. She agreed that customers thought that they were getting loans. She did not recall a conversation in which Mr Streat asked whether he would get the diamonds back at the end of the transaction.
218 Counsel suggested to Ms O'Sullivan that in May 2011, Mr Streat might have dealt with Marilyn. Ms O'Sullivan said that she (Ms O'Sullivan) may have been "in the States" at that time. She was then taken to exhibit 78, a Sales Agreement dated 24 May 2011, apparently signed by her. She said that by that date, she had returned to Australia. She did not recall whether, on this occasion, she had asked Mr Streat the purpose of the loan, or whether he had said that it was for vehicle modification. It was put to her that she had not offered any explanation concerning diamonds, or invited him to read the documents carefully. She said that she adopted that procedure with all customers. She may not have been as specific when dealing with a past customer, but she always said, "This is a sales agreement, have a look at it, initial it at the bottom and sign it on the back page". She would always say that it was a Sales Agreement for buying diamonds.
219 Ms O'Sullivan was then taken to exhibit 87, a Collateral Security Agreement dated 13 February 2012. She was asked if at that time, she was dealing with Mr Streat via email. She said that it looked as if that was the case, but that she did not recall. She agreed that Mr Streat may have telephoned, asking for a loan of $1,500, and that she replied, "That shouldn't be a problem. Just send through the documentation for the new vehicle". She agreed that she would probably have said as much, if he had paid his previous instalment. Ms O'Sullivan also said that the "encumbrance" would have been released. She seems to have meant that Mr Streat had fully repaid an earlier advance, and that the Collateral Security Agreement had been discharged. Her attention was drawn to the marking on header of the exhibit. She agreed that it seemed that the document had been faxed after execution. She has signed the document on the fourth page. It was suggested to her that she may have signed that document before Mr Streat had signed it. She said that this was not possible. She was then taken to exhibit 88, a Sales Agreement dated 13 February 2012. Ms O'Sullivan has signed it on the third page.
220 Exhibit 89 is a tax invoice, apparently sent to Mr Streat and returned by him. It was pointed out to Ms O'Sullivan that this was not a document which he needed to return. Ms O'Sullivan was then taken to exhibit 90, a Purchase Agreement dated 13 February 2012. It appears also to have been faxed to her. She agreed that it seemed that this was not an occasion on which she dealt with Mr Streat face to face. She was then taken to exhibit 91, a product disclosure card. Mr Streat had not initialled it, and there were no fax markings on it. She said that she could not recall what she had done with it. She agreed that had she emailed it to Mr Streat, it would have been contrary to the instructions which she had been given. She did not recall reading the document to Mr Streat or showing it to him. She had not seen him on that particular occasion.
221 Ms O'Sullivan remembered Mr Sharplin. At the time she thought that he had a good job and had been in that employment for some time. She was taken to exhibit 145, a finance application. Ms O'Sullivan's handwriting appears on the front page. There is reference to "borrower ID" and "loan ID", language used internally within Fast Access Finance to refer to customers involved in diamond transactions. On the third page, under the heading "Funding Request", the purpose is said to be "bond loan". She understood this to be a request for an amount for four weeks' rent plus two weeks' rent in advance, or part thereof. She could not remember when Mr Sharplin came to the office. However she believed that she saw him on the first occasion that he visited, and would have given him documents to complete. It was put to her that at some time prior to 23 November 2010, Mr Sharplin contacted her, asking for $2,500 to $3,500. Ms O'Sullivan said that he may have done. However she did not recall it. It was put to her that she said, "We can loan you the money, and you can choose three or six months to pay it back?". She denied this, saying that funding was "set up" over approximately 31 weeks. There was no such thing as a three month "thing". She agreed that she would have told him that they would show him how much the repayments would be.
222 On the same page, opposite the heading, "How much can you afford to pay?" the range of $40 - $50 has been written and then struck out. The amount of $64 per week has been inserted, apparently in Ms O'Sullivan's handwriting. Ms O'Sullivan agreed that she had asked Mr Sharplin to provide documents such as payslips, car registration, a utility bill and a driver's licence. She did not know at that stage how much money he could get, but she understood that he had requested $1,000. That amount is written in his handwriting under the heading "Funding Request". She said that she explained to him that, "This is a sales agreement selling you the diamonds". She also identified to him the Purchase Agreement by which diamonds were purchased back.
223 Ms O'Sullivan agreed that Mr Sharplin came in on two or three occasions. Exhibit 150 is a Sales Agreement dated 17 January 2011. She was asked if there had been a chart on the wall in the office, showing diamonds and the monetary value of diamonds. She agreed that there was such a chart. She accepted that Mr Sharplin may have seen it on the second occasion on which he came to the office. It was suggested to Ms O'Sullivan that he asked about the chart. She did not recall. It was put to her that she had said, "That's got nothing to do with you. Don't worry about that, it's just how we do it. That's how we do business. You're not actually buying any diamonds". She denied this suggestion. She said that there was no reason why she would, on this occasion, have not followed her usual practice of explaining the documents which were being signed.
224 Ms O'Sullivan agreed that in April/May 2011 Marilyn would have been in the office in her place. Her attention was then directed to a fourth transaction, said to have occurred on or about 7 June 2011, after she had returned from the United States. It was put to her that Mr Sharplin had said on that occasion, "I may pay this loan out early, as I am expecting to earn good money". She recalled an occasion on which he had shown her a contract indicating that he had procured a job in Papua New Guinea. She thought that it may have been the final occasion on which she dealt with him. She agreed that he said that he might pay out the loan early. It was put to her that she said that there was no point in doing so, as he would not get a discount. She agreed. She disagreed with the suggestion that she had not, on this occasion, explained the Sale and Purchase Agreements.
225 Ms O'Sullivan was questioned concerning signage. She said that the sign on the door was a sticker. There was a second-hand dealer's licence on the reception desk. There was also a sign saying, "Diamonds Sold Here. No Diamonds or Cash Kept on the Premises". She was asked questions concerning a photograph showing signage which is exhibit 6. The sticker "Fast Access Finance" was on the door. The sign concerning diamonds was on the coffee table inside the office, leaning against the wall. She said that all of the signs were in the office but she could not remember where they were. When one entered the premises one looked directly at the coffee table. The reception desk was to the right of the door.
226 Ms O'Sullivan was then taken to exhibit 147, a Sales Agreement. It shows, opposite the word "Goods", the statement "8 x loose modern brilliant cut diamond, 0.10cts, colour "H", clarity P1". She said that this description appeared on all of the documents, although the number might vary. She took no steps to identify specific diamonds to be sold to Mr Sharplin. She did not produce any diamonds. There were no photographs displaying the diamonds or, in particular the "exact diamonds". They were only identified in the database. She never saw them, and the customer never saw the computer. Her attention was then directed to clause I2 headed "Delivery". The delivery date is in blank. A default provision provides for delivery, "3 business days from the date of this agreement". She said that had the customer requested the delivery of the diamonds, she would have gone "further up the chain", to have them delivered. She pointed out that although the document provided for delivery within three days, the diamonds would have been "sold back" by that time, presumably to DCH.
227 Concerning exhibit 148, a Purchase Agreement dated 24 November 2010, Ms O'Sullivan said that her understanding was that one document involved the sale of diamonds to the customer, and the second document involved the sale of those diamonds by the customer to DCH. She agreed that nothing in the Purchase Agreement indicated that the diamonds being sold were those acquired pursuant to the relevant Sales Agreement. She said that she had not looked at the transactional documents carefully. She understood how the scheme worked. Ms O'Sullivan agreed that customers came to the office, looking to borrow money, and that they believed that they were getting loans. There was never an occasion on which she delivered diamonds to a customer. Nonetheless, she said that if a customer requested that they be delivered, her understanding was that they would have been delivered. She agreed that customers were after money for personal expenditure, and that there was never any real prospect that they would request that the diamonds be delivered to them. Finally, it was put to her that on no occasion did she give Mr Sharplin any explanation of the diamond transactions. Ms O'Sullivan responded that she did so with every one of her customers, explaining the Sales Agreement, the Purchase Agreement and the Collateral Security Agreement.
228 There are a number of curiosities in Ms O'Sullivan's evidence. First, there is her concern that the references to diamond purchases and sales in the documents would be likely to discourage customers from signing unless they clearly understood the nature of the transaction. This view seems not to take into account the difficult circumstances in which many customers approached FAF Burleigh Heads. One wonders what purpose Ms O'Sullivan was seeking to fulfil in giving detailed explanations to such people when she knew that they were only interested in obtaining money. She may well have accepted, at face value, that the diamond model was a legitimate business model. Nonetheless, in view of the pointlessness of any explanation of the transaction, at least from the customer's point of view, it is likely that she was less than fully thorough in such an explanation. She might be forgiven for having thought that the less said the better. It was not in the interests of FAF Burleigh Heads to communicate information which might deter customers from borrowing, and the customers were not likely to listen anyway. Further, at some stage FAF Burleigh Heads was under pressure to "sell more diamonds".
229 No doubt "head office" insisted that terms like "loan" not be used in order to ensure that each transaction looked as much like an unconditional sale as possible. However it seems unlikely that Ms O'Sullivan would have been particularly careful or consistent in her explanations. It seems more likely that, as ASIC's evidence suggests, she sometimes mentioned the purchase and sale of diamonds, and sometimes not, probably depending upon whether the particular customer had noticed references to diamonds in the documents or otherwise raised the issue with her. It may also be that when the diamond model was first adopted, she was more consistent in her explanations than she was subsequently.
230 Another difficulty with her evidence is her equivocation about the product disclosure statement which, she suggested, may have been posted to Ms Thorne, notwithstanding that she had been directed not to allow the document to leave the premises. For these reasons, I generally prefer the evidence of the various customers where their evidence conflicts with Ms O'Sullivan's evidence.