[1988] HCA 17
Australian Competition and Consumer Commission v Jutsen (No 3) (2011) 206 FCR 264
[2011] FCA 1352
Australian Competition and Consumer Commission v Kaye [2004] FCA 1363
Baltic Shipping Co v Dillon (1993) 176 CLR 344
The Age Company Pty Ltd v Gayle
The Federal Capital Press of Australia Pty Ltd v Gayle (2019) 100 NSWLR 155
Source
Original judgment source is linked above.
Catchwords
[1988] HCA 17
Australian Competition and Consumer Commission v Jutsen (No 3) (2011) 206 FCR 264[2011] FCA 1352
Australian Competition and Consumer Commission v Kaye [2004] FCA 1363
Baltic Shipping Co v Dillon (1993) 176 CLR 344The Age Company Pty Ltd v GayleThe Federal Capital Press of Australia Pty Ltd v Gayle (2019) 100 NSWLR 155[2019] NSWCA 172
Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486
HIS HONOUR: Hopeful on embarking upon a change of career path in 2018, the first plaintiff (Mr Campbell) took steps to become a mortgage broker. Calamitously, it did not work out well for him.
[4]
Overview
His dealings with the first defendant, Monika Tran (Ms Tran), started well enough. He was somewhat in awe of her abilities and, at points during their business relationship with one another, described her as his "fairy godmother". After initial contact via a training course, Mr Campbell underwent mentorship arranged by Ms Tran, for which he paid monies to the second defendant, a company associated with her (Red Sienna).
Subsequently, Mr Campbell alleges, he sold properties to Ms Tran and paid over the proceeds to her in the belief, based (according to Mr Campbell) on representations made by Ms Tran, that he was buying into a share of a business known as "MAP Home Loans" (MAP Business) of which Ms Tran was allegedly a part owner. Ms Tran was not, in fact, a part owner of the MAP Business. Mr Campbell's dealings with her ended with his mentorship being terminated and without him obtaining any tangible interest in the MAP Business or having any other property or financial interest of value in exchange for his payment of money and properties to Ms Tran.
Mr Campbell with his wife Sherne, the second plaintiff (Mrs Campbell), sued Ms Tran and Red Sienna to cover their losses. The properties sold by the plaintiffs were residential properties at Oran Park, New South Wales (Oran Park Property), Labrador, Queensland (Labrador Property) and Longford, Tasmania (Longford Property).
I have determined that the plaintiffs are entitled to certain relief.
Ms Tran represented herself on the hearing. I will remark upon the context in which that occurred and aspects of her representation below.
I will cite the evidence in the proceeding by reference to the Court Book (CB), transcript pages and exhibit numbers, and cite the submissions by reference to the plaintiffs' closing written submissions (which incorporated the plaintiffs' opening submissions) (PCS) and transcript pages.
[5]
Main cast and entities
The plaintiffs married in 2014. They have three young children. While Mrs Campbell is a party to the proceedings as the second plaintiff, the claims and subject of the proceedings centre on the actions of Mr Campbell and his interactions with Ms Tran. As such, I will at times refer to the plaintiffs' claims below as those of Mr Campbell or "the plaintiff".
Ms Tran has been married twice. Her first marriage ended in or around January 2002. She has a daughter, Savannah, from that marriage. She married James Tran (Mr Tran) in 2013. He died on 10 January 2021. She has three children from that marriage.
Ms Tran played various roles in the events the subject of the proceedings.
Ms Tran was a teacher and facilitator of a Certificate IV Finance and Mortgage Broking course (FMB course) offered through the Finance & Related Services Training Academy (FARSTA).
Relevantly, in addition to that role, Ms Tran was, or claimed to be, a Senior Mortgage Broker working for "MAP Mortgage Brokers Pty Ltd" (MAP Company). Craig Vaughan (Mr Vaughan) relevantly held a financial services licence and is the sole director and shareholder of MAP Company. Evidence discloses that he is also involved with various other companies including Mortgage Processing Services Pty Ltd (MPS).
As at 17 October 2018, one of Ms Tran's "email signatures" (i.e. the block of text at the end of an email message containing contact details and other information) identified her as "Senior Mortgage Specialist" with "MAP Home Loans". The email signature was above a logo containing the words "MAP Home Loans… Specialists in temporary & non-resident home loans": CB 255.
"MAP Home Loans" as a name appears to be associated with a business and corporate structure.
Curiously, given the plaintiff's claims in the proceedings, the plaintiff did not adduce evidence regarding ownership of the business name "MAP Home Loans" per se. Nor did the evidence show the precise legal structure and details of the MAP Business. Nonetheless, Ms Tran gave evidence that "MAP Home Loans" was the business name that was used by the business owned by MAP Company (T 145.50-146.2), and she believed that Mr Vaughan owned the "legal trading name" of "MAP Home Loans": T 188. That is, MAP Company owned the business I have referred to above as the MAP Business.
[6]
Mortgage broking qualification
A person embarking upon a career as a mortgage broker may take a number of steps to be trained, receive any necessary accreditation and to work. The particular requirements involved in a career of mortgage broking were not explored in any deep way in the evidence. Nonetheless, certain features of mortgage broking which were pertinent to the plaintiff's claim emerged in the hearing.
Initially, a trainee or potential broker undertakes a form of certificate and/or diploma course. After undergoing the course, the potential broker locates a mentor and enters into a form of mentorship agreement as part of the steps necessary to becoming a fully-fledged broker. In this case, the evidence suggested that the requisite period for mentorship was two years.
Seemingly, for a mortgage broker to be able to introduce loans to a lender, and to get paid by the lender, he or she would normally need to engage in work with an "aggregator": T 103. Exactly what is meant by an "aggregator" within the mortgage broking industry was not defined by the evidence. It is not clear that the sort of work undertaken by aggregators is necessarily limited to acting as a form of intermediary between brokers and lenders. It may be assumed that their precise scope of work is case specific.
Other than working with an aggregator, the evidence indicated that a mortgage broker would need to obtain membership with one of two industry bodies, being the Mortgage and Financial Association of Australia (MFAA) and the Finance Brokers Association of Australia (FBAA): T 147.
In Mr Campbell's case, the steps enabling qualification included: (a) attending a certificate course and completing the requirements to obtain a certificate (CB 248) and a diploma (CB 364) with FARSTA; and (b) undergoing a period of mentoring. It appears that the mentoring must be carried out by an existing member of one of the two above-mentioned industry bodies. As a mentee, Mr Campbell was tasked with acting as a form of broker support officer "shadowing" more senior brokers at the MAP Business.
Early on Mr Campbell incorporated a company called Humble Home Loans Pty Ltd (Humble). Precisely what was to occur with Humble is a little unclear. What appears to be common ground is that it was to be used as the form of legal vehicle for Mr Campbell to engage in the mortgage broking business in some way.
[7]
Real issues
I will set out below in more detail the main claims in the proceedings. However, broadly speaking, there were two aspects to Mr Campbell's claim to which I have alluded above.
One aspect was associated with mentorship and the marketing of Humble. A second and more significant aspect related to alleged representations by Ms Tran for Mr Campbell to purchase an interest in the MAP Business.
In respect of the first aspect, Mr Campbell pleaded that Ms Tran agreed to:
1. provide mentorship services for a fee of $30,000 (mentorship fee) to be paid in two instalments of $15,000; and
2. facilitate marketing, website creation or enhancement, advertising and "lead generation" in relation to Humble for a fee of $35,000 (sales and marketing program fee). Ms Tran is said to have expressed interest in taking a 50% ownership of Humble.
On the face of the plaintiffs' pleading, there was some uncertainty whether the sales and marketing program fee formed part of the overall mentoring arrangement between Mr Campbell and Ms Tran. The sales and marketing program fee was not pleaded as a material fact but reference to it was contained in the particulars to the paragraph dealing with the mentorship agreement: CB 6-7[7]. The tenor of the pleading is that the agreements as to the mentorship fee and sales and marketing program fee collectively form the mentorship agreement. I will deal with it on that basis.
Mr Campbell claimed a breach of the mentorship agreement by Ms Tran. He appeared to frame that, at least initially, as an action for breach of contract although, as I note further below, the mentorship agreement claims were primarily framed in some form of count for money had and received in closing submissions.
The second and main aspect of the plaintiff's claims related to seven alleged representations by Ms Tran, the most significant of which were as follows:
1. on certain dates (including on or about 15 August 2018), Ms Tran represented that she was an owner of the business trading as "MAP Home Loans" (i.e. the MAP Business) where she also worked as a senior mortgage planner (MAP owner representation); and
2. on or about 9 October 2020, Ms Tran represented to the plaintiff that he could invest in MAP Business and become a 50% owner of the MAP Business (including a 50% interest in the trailing commissions on loans brokered by the MAP Business/the "MAP Loan Book") in exchange for the payment of $500,000, and that the two of them (Ms Tran and Mr Campbell) would operate and work in the MAP Business together (MAP investment representation).
[8]
Court proceeding
The principal events in the proceedings spanned a period of approximately three and a half years from August 2018 up until 1 March 2022, when the plaintiffs filed their statement of claim.
Initially, a firm Hunt & Hunt acted for Ms Tran and Red Sienna and filed notices of appearance.
On 13 May 2022, the plaintiffs filed an amended statement of claim, with each defendant filing a defence on 11 August 2022. The plaintiffs formally filed a reply on 3 May 2023.
On 4 April 2023, Hunt & Hunt filed a notice of ceasing to act for the defendants.
In July 2023, the plaintiffs sought urgent interlocutory relief to attempt to restrain Ms Tran from entering the Oran Park Property that had been sold to her.
Although the proceedings had been on foot for almost two years prior to the hearing, neither of the defendants had filed any evidence in support of their defence of the claim until the day before the hearing.
On 5 June 2023, Registrar Walton made an order precluding the defendants from adducing lay evidence which had not been served by 15 June 2023 without leave of the Court.
On 3 August 2023, Registrar Walton listed the proceedings for hearing before me for three days.
On 28 November 2023, as noted above, I had listed the proceedings for pre-trial directions. Ms Tran appeared on that occasion. For the purposes of that listing no point was taken in relation to her representation of Red Sienna. However, I drew her attention to the fact that, if she sought to represent the second defendant, she would need to consider the provisions of the applicable Court rules to do that in circumstances where the company was not represented by a solicitor. On that occasion, Ms Tran indicated that she was currently seeking legal advice and, due to financial hardship and not having paid fees owed for legal services, her lawyer had terminated services for her. She indicated that she had sought assistance from a bankruptcy lawyer and counsel and asserted that it was not financially viable for her to secure any legal assistance that required payment of legal fees as she was unable to sustain her current living expenses: T 2 (28 November 2023).
Ms Tran requested a period of three months to put on additional evidence. I declined to make any order for such affidavit material to be put on, observing that such a period of time was untenable in circumstances where the matter had been listed for hearing in August 2023 and there was barely two months at that stage before the hearing was due to commence. In January 2024, in circumstances in which Ms Tran asserted difficulty in complying with pre-trial directions due to health issues, I extended time for compliance with certain of the orders to facilitate the hearing, initially on 15 January 2024 and then on 25 January 2024.
[9]
Hearing
On 30 January 2024, the proceedings were listed and Mr Bennett of counsel appeared on behalf of the plaintiffs.
Ms Tran appeared, having evidently travelled from Victoria. I asked her about the correspondence which suggested that she was seeking an adjournment, and sought confirmation of whether that was still the case or if she wished to proceed with the hearing. Ms Tran indicated that she wished to proceed with the hearing.
I raised with Mr Bennett the fact that, having reviewed the Court Book that had been provided, there was a company search which suggested that the second defendant was in liquidation. I queried whether leave had been sought to proceed against the second defendant: see s 471B Corporations Act 2001 (Cth).
Mr Bennett indicated that no such leave had been sought. I indicated that, in due course, the position would need to be regularised and that I would need to understand whether the claim against the second defendant was being discontinued or was to be dismissed.
Consistent with the legal principle regarding the provision of sufficient information to a litigant in person as to the practice and procedure of the Court to ensure that there is a fair trial to both parties, I explained to Ms Tran, in simple terms, various matters including the procedure for reception of evidence, objections to evidence, leave to adduce oral evidence, the purposes of cross-examination and re-examination, and what may permissibly be addressed by way of submissions.
Ms Tran presented as an astute and capable representative of her own interests. It is not necessary for me to address all aspects of the explanation of evidence, practice and procedure given to Ms Tran. Nonetheless, the following may be noted.
First, having explained to Ms Tran the purposes of cross-examination and indicating that I could not advise her as to whether she should cross-examine or not, I asked her whether she wished to cross-examine either of the plaintiffs. Initially, she indicated that she did not wish to cross-examine Mr Campbell: T 11.
I reminded Ms Tran, in simple terms, of the requirements of the principle that lawyers know frequently by the name Browne v Dunn (see Browne v Dunn (1893) 6 R 67); namely, if she wished to ultimately make submissions that the evidence of the witness should not be believed on an issue, it was ordinarily incumbent for her, as the opposing party, to have challenged the witness regarding the issue so as to enable the witness to have an opportunity to respond to material in contradiction of the witness' evidence, for example by the witness giving an explanation or to contradict the inference sought to be drawn from the evidence.
[10]
Issues elaborated
The plaintiffs sought:
1. a declaration that Ms Tran held the Oran Park Property and Labrador Property (which had been sold to her) on a resulting or constructive trust for the plaintiffs and consequential orders for, in effect, retransfer, possession and sale of the properties; and
2. damages at common law and/or pursuant to the ACL, and equitable compensation.
The pleading against the defendants was detailed, running to some 18 pages.
In November 2021, prior to the end of the mentorship period, Ms Tran terminated Mr Campbell's mentorship. Mr Campbell sought damages for breach of the mentorship agreement based on contractual principles.
Mr Campbell says that the mentorship agreement was with Ms Tran. Ms Tran had filed a defence admitting that there was such an agreement, but says it involved her providing mentorship services in consideration of Mr Campbell agreeing to pay the mentorship fee (of $30,000) to Red Sienna. She says that the agreement involved Mr Campbell being provided with mentoring services initially by Mr Tran and then, following his passing, by herself from on or around February 2021 until around October 2021. Ms Tran pleaded that Mr Campbell had ceased the services on his own accord in or around October 2021, in circumstances where he had become aggressive towards Ms Tran and threatened her life: CB 31[23].
As alluded to above, the amended statement of claim pleaded seven representations allegedly made by Ms Tran to plaintiff, or plaintiffs, being:
1. the two noted above (the MAP owner representation and the MAP investment representation);
2. three property representations which, in summary, are as follows:
1. between about 9 October 2020 and 17 November 2020, Ms Tran represented to the plaintiffs that, if they sold the Oran Park Property to her and subsequently paid the net proceeds of sale back to her, she would apply the amount paid to Mr Campbell's purchase of 50% of the MAP Business and that Mrs Campbell could also work within the MAP Business (Oran Park Property representation);
2. between about 7 December 2020 and June 2021, Ms Tran represented to Mr Campbell that, if he and Mrs Campbell sold the Labrador Property to her and subsequently paid the net proceeds of sale back to her, she would apply the amount towards his purchase of 50% of the MAP Business (Labrador Property representation); and
3. in about early to mid 2021, Ms Tran represented to Mr Campbell that, if he sold the Longford Property to her and subsequently paid the net proceeds of sale back to her, she would apply the amount paid towards his purchase of 50% of the MAP Business (Longford Property representation); and
1. two other representations, being what was described as the "Queensland rental representation" and the "financial stability representation".
[11]
Affidavit evidence
On the hearing the plaintiffs relied upon affidavits of themselves, being:
1. an affidavit of Mr Campbell sworn 17 November 2022; and
2. an affidavit of Mrs Campbell sworn 1 December 2022.
Both affidavits were read without objection. Mr Campbell's affidavit made reference to an Exhibit AC-1 which was separately tendered and marked as such. For the purposes of the hearing the plaintiffs had, in compliance with pre-trial directions, prepared a Court Book into which the documents in Exhibit AC-1 had been incorporated.
Ms Tran, as noted, relied upon an affidavit of herself affirmed 29 January 2024 (the day before the hearing).
Ms Tran cross-examined Mr Campbell, and Mr Bennett cross-examined Ms Tran. Mrs Campbell was not cross-examined by Ms Tran.
I had the opportunity to consider the veracity and reliability of the evidence of each of Mr Campbell and Ms Tran.
For a litigant in person, Ms Tran showed very considerable skill in being able to conduct legal proceedings on her own behalf. Subject to a matter I will note below regarding cross-examination by her, in which she did not (at least directly) challenge evidence, Ms Tran showed considerable skill in framing questions to Mr Campbell with apparent ease and fluidity.
[12]
Documentary materials
Prior to addressing in more detail the evidence of Mr Campbell and Ms Tran, it is necessary to make a number of observations regarding the materials in the Court Book.
The history of arrangements between Mr Campbell and Ms Tran did not, to a significant extent, follow the conventional or ordered means that parties in a business setting would ordinarily follow. Certain critical arrangements between them were oral and not formally documented. There is evidence of telephone, text messaging and email communications between them which revealed unconventional practices. Thus, in assessing the evidence, contextualisation is important.
It suffices at this point to simply observe that there were aspects of the evidence which I refer to below which, without contextualisation, might give rise to impressions and conclusions contrary to the true substance of what was occurring in the factual narrative. An example is settlement statements for the sale of the properties which, prima facie, suggest that certain amounts of monies had been paid, when other evidence suggests that was not the case.
In addressing the factual findings below, I have had regard to contextualisation arising from all the evidence in the proceedings, including cross-examination.
In the realm of mortgage broking, and perhaps business generally, there appeared to be a significant disparity in the skill levels as between Mr Campbell and Ms Tran at the relevant times. She was an experienced mortgage broker and teacher/facilitator of the FARSTA course. He had come from a background as a "fitter" with seemingly little business skills.
I address below my impressions regarding Mr Campbell and Ms Tran.
[13]
Mr Campbell - his presentation and credit
In giving evidence, Mr Campbell referred to Mr Vaughan as being the sole director of MAP Company. I asked him whether he meant director or owner. His response was that he understood that "MAP Home Loans belongs to Craig". I asked him whether he understood the difference between directorship and ownership, to which his response was "not really": T 34. He said, and I accept and considered it evident, that he was "very green to business". Mr Campbell indicated in cross-examination that he viewed Ms Tran as being a good mortgage broker, though at the time he had "rose coloured glasses on": T 29. In response to Ms Tran's questioning, he confirmed that he had made up a nickname for her, being "fairy godmother", because he was "Cinderella" with very little happening for him in his life and she came along and showed him a path: T 29; CB 203[205] (e.g. CB 75[55]).
In outlining the plaintiff's case during the hearing, Mr Bennett frankly accepted that it was not too bold to say that Mr Campbell had "not covered himself in glory" and not protected his or his wife's interests in any way: T 128. Mr Campbell appears to have been prepared to do foolish things, including between 1-3 February 2021 signing a statutory declaration stating that he had deposited $15,000 into Ms Tran's account in circumstances where that was false. He states he did that on the basis that he trusted Ms Tran implicitly and did everything that she asked him to do, believing that her intentions were to help him buy into the MAP Business. He rightly acknowledges that, in hindsight, he should not have signed a false statutory declaration: CB 116[113].
Whilst his false declaration does not reflect well on his character, I am satisfied that the evidence, properly contextualised, shows that Ms Tran was in substance guiding or directing Mr Campbell to falsely indicate certain matters to his conveyancer and that he was sufficiently entranced to do so. There are occasions where Mr Campbell has almost blithely parroted back information to the representative acting for him on a conveyancing transaction by cutting and pasting from an email from Ms Tran indicating what she wanted him to say.
One example is in relation to payment of a deposit for the Oran Park Property, where he sent an email that he had received payment of a deposit, when in fact the funds had not been received: e.g. CB 86-87.
[14]
Ms Tran - her presentation and credit
As I have noted, Ms Tran presented as an astute and capable representative of her own interests. Mr Bennett submitted that Ms Tran ably, and with some sophistication, cross‑examined Mr Campbell: T 257.
Ms Tran's affidavit did not, per se, challenge any of the particular conversations, text messages or emails that Mr Campbell had set out in his evidence and exhibit.
Ms Tran, in her cross-examination of Mr Campbell, did not directly challenge his critical evidence regarding conversations he had with her or the content of their text messages.
I had explained to Ms Tran, as I have noted, the rule of procedural fairness (see Browne v Dunn comments above) of addressing with witnesses matters of conflict on evidence so as to give the witness an opportunity of explaining their position, in the event that the opposing party intends to later contradict or discredit the witness on issues.
My impression was, and Mr Bennett accepted, that Ms Tran gave Mr Campbell opportunities to explain his position regarding certain contested issues in her cross-examination of him: T 257. Mr Bennett submitted, and I accept, that Mr Campbell on such occasions explained and gave evidence consistent with his affidavit evidence: T 257.
However, whilst on some matters Ms Tran did comply with the procedural fairness requirements of Browne v Dunn, Mr Bennett submitted, and I accept, that there was at least one notable exception. Namely, Ms Tran did not challenge Mr Campbell in relation to monies that she claimed she had paid him: T 258-259.
Overall, on critical issues I preferred the evidence of Mr Campbell to that of Ms Tran.
Without being exhaustive, I have had regard to a number of considerations in accepting Mr Campbell's evidence over that of Ms Tran on critical issues in relation to whether she made representations about her ownership of the MAP Business, and in relation to the payment of monies (in particular, deposit monies).
First, Ms Tran's alternative "joint venture" version of the investment arrangements between herself and Mr Campbell was not disclosed in her defence, which was filed at a time at which she had legal representation. No reason was proffered for the late disclosure of this "defence".
Secondly, it is evident, as I have noted, that in correspondence with Mr Campbell she was encouraging him to mislead his conveyancer in relation to certain matters including the fact that he had received deposit funds for the sale of the Oran Park Property, when in fact that was not the case: CB 86-87.
[15]
Material facts bearing upon the claims
I outline below, essentially in chronological form, material facts as I find them. The facts are grounded in the affidavit evidence of Mr Campbell, Mrs Campbell and Ms Tran, the documentary evidence and testimonial evidence (being principally the cross-examination of Mr Campbell and Ms Tran).
Prior to Mr Campbell's involvement with Ms Tran, the plaintiffs were the registered proprietors of the three properties being the Oran Park Property, the Labrador Property and the Longford Property.
The Oran Park Property had been purchased by Mrs Campbell in January 2013, and Mr Campbell had become a joint owner of that property in January 2016. The Campbell family lived in that property.
The Labrador Property was purchased by Mr and Mrs Campbell in April 2016 as an investment property, with Mr Campbell owning an interest as tenants-in-common of a 1/100 share and Mrs Campbell owning the balance (99/100 share): CB 771.
The Longford Property was purchased by Mr Campbell in February 2019 as an investment property and registered in his name: CB 723.
In or about August 2018, Mr Campbell enrolled in the FMB course.
Ms Tran was a teacher and facilitator of the FMB course. The course lasted a few days and, during the course, Mr Campbell claims that on 15 August 2018 Ms Tran represented that she, Mr Tran and Mr Vaughan were owners of the MAP Business: CB 47[8]. I accept that she made the representation, which was false.
Mr Campbell alleges that Ms Tran indicated, in relation to a potential mentorship at the MAP Business, he would need to commit to completing a further diploma qualification.
On 3 September 2018, the plaintiff was issued with a certificate from FARSTA acknowledging completion of the FMB course.
In October 2018, Ms Tran offered to act as Mr Campbell's mentor.
The notion of the mentorship was not clarified in any clearly defined way. Nonetheless, it appears that, from at least about that time, Mr Campbell was interned or somehow engaged within the MAP Business, initially as a form of "Broker Support Officer". The role was understood by Mr Campbell to involve him garnering from Ms Tran, or others associated with the MAP Business, an understanding of credit, loan writing, the home loan process and finance, industry compliance and generating leads and other work. Seemingly, during the first 12 months the proposal was that Mr Campbell would "shadow" Mr Nguyen to observe his teaching and build skills, and thereafter he would "shadow" Mr Tran or, following his passing, Ms Tran.
[16]
Claims for relief
The plaintiffs, through Mr Bennett, asserted that they had suffered loss in the form of sale of the properties to Ms Tran and other financial payments made to her.
In final submissions, Mr Bennett essentially submitted that there were alternate competing versions of the case which, on either version, ought to give rise to relief for the plaintiffs.
As I understood him, Mr Bennett principally contended that Ms Tran had made false representations on the basis that she owned (or, more strictly, co-owned) the MAP Business and was able to sell a 50% interest in the MAP Business for $500,000. He contrasted that with Ms Tran's version that she and Mr Campbell were engaging in a form of joint venture arrangement: PCS [1]; T 258.24-.27.
Beyond the generality of the MAP investment representation, at no stage did Mr Campbell seek any clarity regarding precisely what he was purchasing, and Ms Tran, for her part, did not agree that she had offered to sell the 50% interest. None of the documentary evidence allows me to make precise findings of the specifics of what a 50% interest in the MAP Business encompassed. There was no evidence regarding goodwill of the MAP Business, nor any detail of its "loan book" or other makeup of its asset base or value.
The specific claims for relief related to 12 items, being:
1. 4 claims relating to the mentorship agreement (mentorship agreement claims);
2. 1 claim relating to an advance on rent for a property in Queensland (Queensland rent claim); and
3. 7 claims relating to the MAP investment (MAP investment claims).
The monetary claims were particularised as follows (adapted from PCS [7] and omitting the final two columns internally referencing fact references in the submissions, but including two footnotes referable to items 7 and 9):
Item Date Amount Stated Purpose
1 24.01.2020 $40,000 $25,000 - Sales and Marketing Program Fee paid to Red Sienna
$15,000 - Mentoring Program Fee Year 1 paid to Red Sienna
2 28.01.2020 $10,000 Sales and Marketing Program Fee balance paid to Red Sienna
3 28.03.2020 $5,000 GST on Sales and Marketing Program and Mentoring Program Fee paid to Red Sienna
4 17.11.2020 $15,000 Mentoring Program Fee Year 2 paid to Ms Tran
5 03.12.2020 $15,000 Advance on rent for Queensland property paid to Ms Tran
6 25.01.2021 $100,000 Reduction in contract sale price for Oran Park Property
7 25.03.2021 $145,000 [1] Contract for Sale of Oran Park Property deposit stated as having been paid by Ms Tran to Mr Campbell directly, which was not in fact paid
8 29.03.2021 $339,565 Oran Park Property sale proceeds paid to Ms Tran after settlement to go towards investment in the MAP Business
9 12.08.2021 $335,000 $75,000 [2] - Contract for Sale of Labrador Property deposit stated as having been paid by Ms Tran to Mr Campbell directly, which was not in fact paid.
$260,000 - Contract for Sale of Labrador Property amount allowed for at settlement as funds "received previously" from Ms Tran, which was not in fact paid
10 13.09.2021 $99,500 Contract for Sale of Longford Property amount allowed for at settlement (including deposit) as funds "paid direct" to Mr Campbell by Ms Tran, which was not in fact paid
11 17.09.2021 $127,000 Longford Property sale proceeds paid to Ms Tran ($80,000) and paid to Red Sienna ($47,000) after settlement to go towards investment in the MAP Business
12 $33,390.08 Rent paid to Ms Tran for Lease of Oran Park Property (calculated up to 17 October 2022 and continuing at $550 per week)
TOTAL: $1,264,455.08 plus $550 per week from 24 October 2022 onwards
[17]
I sought to clarify precisely the outcome desired by the plaintiffs; in particular, whether the plaintiffs were seeking to receive the properties back (specifically the Oran Park Property and the Labrador Property) or a form of monetary outcome: T 263.
Mr Bennett essentially proposed that I should make determinations in relation to amounts that formed part of the monetary claims: T 263.
Part of the reason for that (as I understood it) is that there is a lack of clarity regarding the current position in relation to the properties. No current searches were adduced for each of the Oran Park and Labrador properties: T 264. Nonetheless, Mr Bennett asserted, and it was not disputed by Ms Tran, that the properties are mortgaged with the Commonwealth Bank of Australia (CBA): T 264. Mr Bennett did not assert that there was any matter in relation to whatever funds the CBA have lent to Ms Tran which would have put it on notice of the fraud (his word in final submissions): T 264. Ms Tran for her part asserted, though without evidence, that the position regarding the CBA was that the properties are "currently in mortgage repossession mode".
I suggested to Mr Bennett and Ms Tran that one possibility was for me to make findings in relation to particular items claimed by the plaintiffs, and then require the parties to propose orders to give effect to the findings. Mr Bennett appeared to embrace this way of approaching the matter: T 264-266. Ms Tran did not suggest otherwise.
[18]
The mentorship agreement claims
The plaintiffs pleaded that the mentorship agreement was with Ms Tran: CB 6[7]. Ms Tran's defence made a specific pleading to this aspect of the plaintiffs' claim, and relevantly stated that Mr Campbell was being provided mentorship services "in consideration for the First Plaintiff agreeing to pay a mentorship fee of $30,000 to the Second Defendant": CB 30[7(b)]. The defence further says that the mentorship agreement involved Mr Campbell being provided with mentoring services initially by Mr Tran and, following his passing, from on or around February 2021, Ms Tran provided Mr Campbell with mentoring services until on or around October 2021: CB 30[7(c)]. Ms Tran otherwise denied the pleading.
There may be some scope for doubt as to whether Ms Tran was alleging that the mentorship agreement was with herself or with Red Sienna. The relevant evidence includes the following:
1. In or around late 2018, Mr Campbell refers to a conversation that he had with Ms Tran by telephone, as set out in his affidavit, regarding her offer of mentorship. On its face it was an arrangement as between Mr Campbell and Ms Tran personally: CB 50[16]. To the extent that it is relevant, that is certainly the way Mr Campbell understood it: CB 50[17].
2. On or around 9 April 2019, when Mr Campbell met with Ms Tran, Mr Tran and Mr Nguyen at Parramatta, he refers to the statement made by Mr Tran to him, in Ms Tran's presence, about Ms Tran bringing him on as a mentee "with MAP Home Loans shadowing Michael and Tom until your skilled enough to shadow Monika": CB 51[20].
3. On 24 January 2020, there were further discussions between Ms Tran and Mr Campbell in which she made reference to the fact that "we're ready to start off your mentoring" and that, to progress, he needed to transfer certain monies: CB 60[34]. After the conversation, Ms Tran sent Mr Campbell a text message providing bank account details which referenced the name "Sienna Home Loans".
Overall, I am satisfied that the evidence, objectively viewed, is that there was a contractual arrangement as between Mr Campbell and Ms Tran. To the extent that she arranged for payment to the bank accounts relating to Sienna Home Loans and subsequently arranged for issue of two invoices in the name of Red Sienna (CB 69[47], 430-431), that was a matter of convenience as to payment rather than an indication that there was another contracting party.
[19]
Nature of the mentorship agreement
The question whether the mentorship agreement is a form of entire contract is a question of construction: e.g. Purcell v Bacon (1914) 19 CLR 241 at 249-250 per Griffith CJ; [1914] HCA 86. If a contract is entire, in the sense of being indivisible and not severable, then nothing can be recovered under it unless it is completed according to its terms, or a new contract is made or is to be implied from the acts of the parties, giving rise to new rights: e.g. Phillips v Ellinson Brothers Pty Ltd (1941) 65 CLR 221 at 234 per Starke J; [1941] HCA 35.
In considering the evidence, and as I will explain further below, I find that the mentorship fee and the sales and marketing program fee formed severable entire parts of the overall mentorship agreement.
As such, it is convenient to distinguish between the claims relating to (a) the mentorship fees for the first and second year, and (b) the fees relating to the sales and marketing program. Accordingly, I will address them separately below.
[20]
Items 1 (part), 3 (part) and 4 - First year mentorship fee and second year mentorship fee
It appears that the mentorship fee formed an entire part of the mentorship agreement, despite being paid by two instalments. In making that finding, I have had regard to the common intention of the parties understood in the context of the surrounding circumstances known to them: Zhong v Shield Resources Pty Ltd [2023] NSWSC 1611 at [12] per Fagan J, citing Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at [22], Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40]. The mentorship fee was expressed as a lump sum of $30,000 in return for a two-year mentorship as required by the mortgage broking qualification requirements. I consider that the instalment method of payment was purely a matter of convenience, as opposed to indicating that the obligation of mentorship was in any material way severable between the first and second year. In particular, I note that the mentorship fee was to be paid in advance, despite Ms Tran accepting 50% of the fee to be paid at a later point of time.
I am satisfied that a total of $30,000 was paid by Mr Campbell to Red Sienna at Ms Tran's request, being $15,000 for the first year on 24 January 2020 (CB 63[37], 382-383) and $15,000 for the second year on 17 November 2020 (CB 464-465).
On the face of it, Ms Tran arranged for Mr Campbell to be provided with mentoring through the MAP Business (initially with Mr Nguyen). On Mr Campbell's own evidence, he appears to have received at least some form of partial mentoring.
I raised the issue regarding the form of entire agreement with Mr Bennett. Whilst he contended that there was a complete failure of consideration, he accepted that, in the event I would find otherwise, there was no particular evidence of damages: T 263.22-.26.
Mr Campbell asserts, and I accept, that the termination of his mentoring arrangement with Ms Tran meant that he was unable to complete the mandatory two-year mentoring period with her or anyone else at the MAP Business: CB 205[209]. Neither Ms Tran nor anyone else from the MAP Business has provided Mr Campbell with any form of certification or mentor declaration to confirm even partial completion of his mentoring period. Mr Campbell acknowledges that this has not impeded his ability to practice as a "loan writer". However, he does indicate that if and/or when he applies to an aggregator to become accredited as a mortgage broker, that will require evidence of at least partial completion of mentorship: CB 205[209].
[21]
Items 1 (part), 2 and 3 (part) - Sales and marketing program fee
As stated above, I consider that the sales and marketing program fee was a severable part of the mentorship agreement. The sales and marketing program fee was purportedly to facilitate marketing, website creation or enhancement, advertising and "lead generation" in relation to Humble for a fee of $35,000.
There is no evidence that Ms Tran did any of those things so as to provide a form of executed consideration for such a fee.
Moreover, in her email to Mr Campbell dated 3 October 2021, Ms Tran appeared to acknowledge, at the very least, that Mr Campbell had not received any "Marketing" services so as to justify the fee. In fact, she was willing to refund the fee, at least in the context of making up his shortfall to the total of what she asserted was Mr Campbell's investment. The email states in part (CB 679):
I am happy to refund you the amount you paid to James Tran for Marketing
I think its fair that the fee charged for the work James was going to do for you is now no longer continuing therefore I shall personally top up your share here below with a refund of $35K paid to me in Jan 2020
On the evidence, I am satisfied that there was no executed consideration provided or, in any event, there was a form of total failure of consideration on the part of Ms Tran. On that basis, I find that the sum of $35,000 is recoverable (along with any GST said to be paid on that amount).
[22]
Queensland rent claim
The fifth item relates to a claim for advance on rent of $15,000, paid by Mr Campbell to Ms Tran on 3 December 2020, for a Queensland property which the plaintiffs would move into as part of their move to Queensland (specifically, the Gold Coast). I accept Mr Campbell's evidence that the payment was made: CB 92[77], 468. There is a distinct lack of clarity regarding what happened with those funds. Ms Tran did not elucidate how the funds were applied in any way, shape or form. On Mr Campbell's evidence, he and Mrs Campbell never found or secured a rental property on the Gold Coast, hence Ms Tran never used the funds for the purpose for which they were given, namely to secure a rental property for the plaintiffs. Rather, the plaintiffs lived with Mrs Campbell's mother for approximately six months before relocating back to New South Wales: CB 204[207].
While this claim was primarily pleaded on the basis of a misleading or deceptive conduct claim arising from what was described as the "QLD Rental Representation", I consider that, in the above circumstances, it is more appropriate for me to order that the amount is recoverable by Mr Campbell on the alternative basis of money had and received.
[23]
The MAP investment claims - legal basis for recovery
[24]
The arrangement
The principal claim made by the plaintiffs was a claim that Ms Tran had engaged in misleading or deceptive conduct within the meaning of the provisions of the ACL.
Mr Campbell gave evidence, which I accept, that Ms Tran made the MAP owner representation on both 15 August 2018 during the FMB Course (CB 47[8]) and on or about 9 April 2019 during a meeting at Parramatta (CB 53[20]).
However, relevantly for reasons which I will explain below, it is necessary for me to address an issue as to whether the representations made by Ms Tran to Mr Campbell were made by the use of postal, telegraphic or telephonic services for the purposes of s 6(3)(a) of the CCA, which extends the operation of s 18 of the ACL (in addition to certain other parts of the ACL) to persons who are not corporations.
I am satisfied that the following representations were made by Ms Tran to Mr Campbell by telephone, email, messaging or online video conferencing:
1. on 16 August 2019, the MAP owner representation was made by email; specifically, by Ms Tran's silence in failing to deny or dispute the statement that she was an owner of the MAP Business in reviewing (CB 316-317) Mr Campbell's business plan dated 15 July 2019 (CB 293). On or about 14 November 2019, the MAP owner representation was also made over Microsoft Teams when Ms Tran failed to deny or dispute the statement that she was an owner of the MAP Business in reviewing (CB 57-59[29], 348-349) Mr Campbell's updated business plan dated 8 November 2019 (CB 322);
2. on 9 October 2020, the MAP investment representation and the Oran Park Property representation were made by telephone: CB 79-80[62];
3. on 7 December 2020 (CB 95-96[80]) and in May 2021 (CB 134[134]), the Labrador Property representation was made by messaging and telephone, respectively; and
4. between 10 and 16 June 2021 (CB 138-142[142]-[145]), the Longford Property representation was made by messaging and telephone.
Mr Bennett raised the issue of the MAP Business ownership with Ms Tran in cross-examination. He put to her, and she accepted, that she did not have an interest in MAP Company and that she did not have an interest in the MAP Business: T 146.8-.13.
Ms Tran's answer that she did not have any such interest, whilst a truthful answer, coupled with her evidence that she accepted Mr Vaughan had thought that "there shouldn't be any offering of an interest in the business that I own by someone who is not me" (T 186-187), suffices to demonstrate that she knew that the MAP owner representation, at the times it was made, was false and at least was misleading or deceptive. By reason of this, it necessarily follows that Ms Tran knew that the subsequent representations as to the MAP investment and the sale of the three properties were false and at least misleading or deceptive.
[25]
ACL
In their amended statement of claim, the plaintiffs appear to rely upon the ACL as it applies as a law of the Commonwealth: see CB 16[24], which defines the "Australian Consumer Law" as the "Competition and Consumer Act 2010 (Cth), Schedule 2". A similar position was stated in the plaintiffs' closing written submissions: PCS [23]. So expressed, the pleading did not distinguish between the ACL (Cth) and the ACL (NSW) (which are defined below).
It is alleged that Ms Tran engaged in conduct, being representations which were misleading or deceptive within the meaning of s 18 of the ACL, giving rise to an action for damages on the basis that the plaintiffs had suffered loss or damage as a result of the misleading conduct: s 236 ACL. The amended statement of claim also made reference to s 30(1)(a) of the ACL, which provides that:
(1) A person must not, in trade or commerce, in connection with the sale or grant, or the possible sale or grant, of an interest in land or in connection with the promotion by any means of the sale or grant of an interest in land:
(a) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation;
…
In addition, reference was made to: s 31 of the ACL (misleading conduct relating to employment); s 37 of the ACL (misleading representations about certain business activities); and s 20 of the ACL (unconscionable conduct within the meaning of the unwritten law): CB 20[30]-[31]. These provisions were not elaborated upon in the prosecution of the plaintiffs' case.
However, the alleged conduct was by Ms Tran as a natural person, rather than a corporation. This raises issues around the operation of the ACL and how it operates as a law of the Commonwealth and as a State law, 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).
The genesis of the legislative provisions dealing with the ACL are discussed in various places, including Halsbury's Laws of Australia - Consumer Protection [100-1].
As a starting point, s 1 of the ACL provides:
This Schedule applies to the extent provided by:
(a) Part XI of the Competition and Consumer Act; or
(b) an application law.
[26]
Fraud
Fraud must be pleaded specifically and with particularity: Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39 (Forrest) at [26] per French CJ, Gummow, Hayne and Kiefel (as her Honour then was) JJ, citing Wallingford v Directors of Mutual Society (1880) 5 App Cas 685 at 697, 701, 704, 709, and Banque Commerciale SA, en Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 285; [1990] HCA 11.
A false statement, made through carelessness and without reasonable grounds for believing it to be true, may be evidence of fraud but does not necessarily amount to fraud: Forrest at [22].
A representee must prove, inter alia, that the representor had no honest belief in the truth of the representation in the sense in which the representor intended it to be understood: Forrest at [22], citing Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 (Krakowski) at 578 per Brennan (as his Honour then was), Deane, Gaudron and McHugh JJ; [1995] HCA 68.
Where fraud is in issue, the question is whether the representor honestly believed the representation to be true in the sense in which the representor understood it, or in the sense in which the representor knew the representee might understand it. The question is not whether the representor honestly believed the representation to be true in a sense that a court, considering the matter objectively, would assign to it: YTO Construction Pty Ltd v Innovative Civil Pty Ltd [2019] NSWCA 110 at [73] per White JA, citing John McGrath Motors (Canberra) Pty Ltd v Applebee (1964) 110 CLR 656 at 659-660; [1964] HCA 1, Krakowski at 576-577.
The pleading must make plain that it is alleged that the person who made the statement knew it to be false or was careless as to its truth or falsity: Forrest at [26]. In this case the pleading does that: CB 21[33].
Thus, it is clear on the pleadings that fraud, in the sense that the representations were made by Ms Tran knowing them to be false or being reckless as to whether they were true or false, was expressly an issue on the hearing.
Damages are not awarded so as to place the representee in the same position as if the misrepresentation were true or so as to "make good the representation", but to cover the losses generated by the fact that the representee has entered a contract because of the misrepresentation: see e.g. NC Seddon and RA Bigwood, Cheshire and Fifoot Law of Contract (11th ed, 2017, LexisNexis Butterworths) at [11.82], citing Toteff v Antonas (1952) 87 CLR 647 (Toteff) at 650-651 per Dixon J (as his Honour then was); [1952] HCA 16.
[27]
"Unjust enrichment"
The plaintiffs' unjust enrichment claim was pleaded in the following way (CB 22[36]) (emphasis added):
1. Ms Tran had no legal or equitable entitlement to receive the sums of money received from the plaintiffs;
2. Ms Tran had no legal or equitable entitlement to retain the sums of money received from the plaintiffs;
3. Ms Tran would be unjustly enriched if she were entitled to retain the sums of money received from the plaintiffs; and
4. the plaintiffs are entitled to recover the sums of money they each paid to Ms Tran as money had and received.
In closing, the plaintiffs submitted as follows (PCS [37]-[38]):
37. There are three (3) elements of unjust enrichment. In BP Exploration Co (Libya) Ltd v Hun (No 2) [1979] 1 WLR 783 at 839 Robert Goff J said:
… the principle of unjust enrichment, presupposes three things: (1) receipt by the defendant of a benefit, (2) at the plaintiff's expense, (3) in such circumstances that it would be unjust to allow the defendant to retain the benefit.
38. Satisfaction of these three elements establishes what the High Court has termed a 'prima facie obligation to make restitution': Australia and New Zealand Banking Group Ltd v Westpac Banking Corp (1988) 164 CLR 66[2] at 673.
In Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560; [2019] HCA 32 (Mann) at [199], Nettle, Gordon and Edelman JJ stated (omitting footnotes):
Unjust enrichment may be conceived of as a "unifying legal concept" which serves a "taxonomical function" that assists in understanding why the law recognises an obligation to make restitution in particular circumstances. But it is in no sense an all-embracing theory of restitutionary rights and remedies pursuant to which existing decisions are to be accepted or rejected by reference to the extent of their compliance with its proportions.
The proposition for which Mr Bennett cites Australia and New Zealand Banking Group Ltd v Westpac Banking Corp (1988) 164 CLR 662 at 673; [1988] HCA 17 (PCS [38] above), which was then applied to the facts in PCS [68], is not quite an accurate reflection of the current law in Australia or the United Kingdom. As the plurality stated in Mann (footnotes omitted):
212. Until recently, one view of English restitutionary jurisprudence was to treat the concept of unjust enrichment as if it were a definitive legal principle that supplies a sufficient premise for direct application by rigid, uniform application of questions concerning whether there is (1) an enrichment, (2) at the plaintiff's expense, (3) in circumstances of an unjust factor, and (4) subject to defences. Within that rigid approach, there was something of a tendency to treat tests for and measures of "enrichment" as governed by a single principle; thus encouraging a view of the benefit abstracted from the contract price. More recently, some members of the Supreme Court of the United Kingdom have cautioned against mechanical application of the "four questions" of enrichment, expense, injustice and defences. In Swynson Ltd v Lowick Rose Llp, Lord Sumption JSC denied that English law had a universal theory which explains all of the cases in which restitution is available. In view of those developments, it may be that the law of restitution in the United Kingdom and the law of restitution in Australia are no longer quite as far apart as was previously imagined.
213. Whether or not that is so, however, in this country restitution arises in recognised categories of case and is not necessarily available whenever, and to the extent that, a defendant is enriched at the plaintiff's expense in circumstances that render the enrichment unjust. Although, over time, novel categories of case may come to be recognised, or existing categories refined, that must occur in accordance with the common law's ordinary process of incremental development: by analogy with decided cases, albeit that, within that process of development and refinement, the four questions may serve to focus attention on the nature, availability and measure of restitutionary relief, and so assist in structuring understanding as to avoid the development of the law of unjust enrichment degenerating into an exercise in idiosyncratic discretion.
[28]
Trust
In another alternative, Mr Bennett submitted that the monies paid to Ms Tran may be held by her on trust, making reference to what is described as a Quistclose trust: Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567 (Quistclose). However, he noted that claims in relation to Quistclose trusts will often depend on a close analysis of the facts and in particular whether the person who provided the money annexed a trust or equitable obligation that it was only to be used for a nominated purpose, and that the mutual intention of the parties and "the essence" of their bargain will be important: PCS [47], citing Quistclose at 580.
It has been argued that reference to the "mutual intention of the parties" is apt to give rise to confusion: J Glister, "Mutual intention and Quistclose trusts" (2012) 6 J Eq 221 (Glister) at 221. Glister contends that the mutual intention aspect of Quistclose is better seen as two linked but discrete questions. First, one should look to the transferor. Did he or she declare a trust, manifest a qualified intention to transfer, or something else? Having established the position when the property leaves the transferor, one then looks to how the property is received by the recipient: Glister at 225.
Quistclose trusts were the subject of specific analysis by Campbell JA in Raulfs v Fishy Bite Pty Ltd [2012] NSWCA 135 (Raulfs) at [32]-[52] (Meagher and Barrett JJA agreeing at [113] and [114], respectively).
In deciding whether there is an intention to create a trust, the Court ascertains that intention by inference from the outward manifestations of intention. In Raulfs, Campbell JA stated at [48]:
Notwithstanding some earlier uncertainty arising from the decision in Commissioner of Stamp Duties (Qld) v Jolliffe (1920) 28 CLR 178 it is now clear that in deciding whether there is an intention to create a trust, the court ascertains that intention by inference from the outward manifestations of intention: Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 at [53]-[59], [102]-[115]. Thus, the task of ascertaining whether there is an intention to create a trust and, if so, on what terms is a similar one to ascertaining the intention of parties to a contract for the purpose of deciding whether there is an intention to enter contractual relations and the terms of any contract that has been entered. …
Campbell JA, at [49], cited the statement in PW Young, C Croft and ML Smith, On Equity (2009, Lawbook Co) at [6.1020] as correctly stating the position:
Cases in this area will often depend on a close analysis of the facts, and in particular, whether the person who provided the money annexed a trust or equitable obligation that it was only to be used for the nominated purpose. The mutual intention of the parties ... will be important. A trust will not necessarily arise just because a lender inquires into the purpose for which a loan is sought and money is paid over for that particular purpose.
[29]
The MAP investment claims - items 6 to 12
As noted above, damages to be assessed under s 236(1) of the ACL (Cth) require 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).
The approach of the plaintiffs on the claim for damages essentially focused upon the sale of the properties and, subject to items 6 and 12 below, sought recovery of:
1. the amounts said to be paid by Ms Tran by way of deposit, which the plaintiffs say were never paid; and
2. the amounts paid over by the plaintiffs, or Mr Campbell, to Ms Tran sourced from the proceeds of sale of the properties.
Ms Tran did not address any submissions regarding recovery of these items and did not specifically dispute that, in the event I found that the plaintiffs were entitled to recovery based on conduct in breach of s 18 of the ACL (Cth), such amounts were not recoverable.
[30]
Item 6 - Reduction in the contract price for the Oran Park Property
The sixth item was a claim for $100,000 in relation to the reduction in the contract price for the Oran Park Property, from $800,000 to $700,000. Clearly, there was such a reduction. However, quite why it is recoverable is not clear to me. On Mr Campbell's own evidence, the value of the property which was transferred was no more than $640,000. The reduction in the contract price from $800,000 to $700,000 appears to have been mutually agreed in a context where Mr Campbell's own solicitor drew up the deed of rescission. I am not persuaded that the amount of the $100,000 reduction in the contract price for the Oran Park Property is recoverable.
[31]
Item 7 - Deposit for the Oran Park Property
The seventh item is a claim for $145,000 for the (unpaid) deposit for the Oran Park Property.
On 25 March 2021, settlement of the sale of the Oran Park Property to Ms Tran took place. The Settlement Adjustment Sheet states that the plaintiffs had received a deposit of $145,000 from Ms Tran. Mr Campbell states he never received those funds from her, or from anybody else: CB 131[127]. Ms Tran gave evidence that she paid a $160,000 deposit in cash, which was never refunded: T 162. I find that Ms Tran did not pay that sum. I find the $145,000 is recoverable by the plaintiffs.
[32]
Item 8 - Sale proceeds for the Oran Park Property
The eighth item is for recovery of sale proceeds in respect of the Oran Park Property, in the sum of $339,565. Ms Tran received the property and, in addition, received those funds. I regard those funds as being recoverable by the plaintiffs.
[33]
Item 9 - Labrador Property allowances
The ninth item is a claim for $335,000, comprising a deposit of $75,000 and an additional amount of $260,000 that was said to have been "received previously" from Ms Tran: CB 659.
Even though the contract for the Labrador Property dated 30 June 2021 (CB 588) states Ms Tran paid "direct to seller" a deposit of $75,000 (CB 590), Mr Campbell states, and I accept, that he never received that sum from Ms Tran, or from anybody else: CB 145[152].
Mr Campbell deposes to a telephone conversation with Ms Tran, on 10 or 11 August 2021, by which she requested him to inform his conveyancer, Melissa Cole at Flood Legal (Ms Cole), of the following (CB 155[165]):
"Say you just tried to call her about the draft settlement statement and fee breakdown. Then say you'd like to instruct her that in the early stages of the negotiations with me you received a large deposit from me, and you'd like that factored into the settlement figures for tomorrow's settlement. Ask her to send an email to my solicitor confirming that you received $260,000, and that is the amount you want factored into the settlement figures."
On 11 August 2021, Mr Campbell sent an email to Ms Cole, in reply to the email she had sent him on 10 August 2021 attaching the draft settlement statement for the Labrador Property, conveying to her the instructions Ms Tran had requested he convey in relation to him holding a "large deposit paid from the buyer" in the sum of $260,000. He says, and I accept, he did not in fact receive this money from Ms Tran. He says, and I accept, he sent the email to Ms Cole because (CB 155[166]):
… I was following Monika's lead on what needed to be done, trusting that the money I said I had received from her, but had not in fact received, was being credited towards the money she told me I needed to pay to buy into the MAP Home Loans business.
Later on 11 August 2021, Sharon Flood of Flood Legal requested remittance slips in relation to the sum of $260,000. Following what I infer were communications with Mr Campbell, Ms Tran had arranged for her solicitors to inform Flood Legal that the monies had been paid over five payments. That was false: CB 155[167]-156[170]. An amended settlement sheet (falsely) recording the payment was prepared: CB 156[169].
On 12 August 2021, settlement of the sale of the Labrador Property took place on the false premise that $335,000 (i.e. $75,000 + $260,000) had already been paid by Ms Tran to Mr Campbell before settlement, despite the fact that amount had not been paid by her to the plaintiffs. The balance paid at settlement by Ms Tran was $416,648.90, most of which was applied to pay out the secured loans owing to St George Bank. Consequently, the plaintiffs only received $3,631.04 by way of net sale proceeds, instead of approximately $338,631.04: CB 156[172].
[34]
Item 10 - Longford Property $99,500
The tenth item is a claim for a sum of $99,500 in respect of the Longford Property. Ms Tran gave evidence that she had paid the $39,500 deposit for the Longford Property in cash: T 166-167. The settlement of the conveyancing transaction proceeded on the basis that $99,500 had been paid by Ms Tran: CB 670. Mr Bennett cross-examined Ms Tran on the basis that Mr Vo had paid her $60,000 for the nomination, which she denied: T 169-170.
On 13 August 2012, Ms Tran corresponded with Mr Campbell on the basis that she was taken to have paid a total of $99,500 (CB 157[174]):
Great news formal approval for Longford done yay. Will sign docos and settle ASAP
Can you email your solicitor the following
Please note a deposit of $60,000 has been received in addition to the original deposit of $39,500 already paid.
Kindly confirm to the vendors solicitor on my behalf,
Kellie Schouten (Ms Schouten) of EL Conveyancing, who was acting for Mr Campbell on the sale of the Longford Property, forwarded to him an email she had received from Ms Tran's conveyancer and asked him to confirm that he had received an additional $60,000 from Ms Tran. Mr Campbell replied to Ms Schouten the same day stating that he had received the funds. However, he did not in fact ever receive a deposit of $39,500 from Ms Tran or a further amount of $60,000, or any other amounts from her or anybody else, for the sale of the Longford Property to her: CB 157[175], 661-664.
His explanation (which I accept) is (CB 157[175]):
I sent this email to Kellie [confirming receipt of $60,000] because I was following Monika's lead on what needed to be done, trusting that the money I said I had received from her, but had not in fact received, was being credited towards the money she told me I needed to pay to buy into the MAP Home Loans business.
I accept that the amount of $99,500 was not paid and is recoverable by the plaintiffs.
[35]
Item 11 - Longford Property $127,000
The eleventh item relates to a sum of $127,000 comprising amounts paid by Mr Campbell of $80,000 to Ms Tran and $47,000 to Red Sienna from the proceeds of sale of the Longford Property. I accept that the payments were made: CB 698. In the email dated 3 October 2021 from Ms Tran to Mr Campbell, she acknowledges that a sum of $126,000, as noted above, had been paid. I reject Ms Tran's evidence that the $126,000 sum referred to in her email is separate from the $127,000 sum: T 234. I regard that the amount, being $127,000, is recoverable.
[36]
Item 12 - Oran Park rent payments
The twelfth item is a claim for $33,390.08, being rent paid by the Campbells to Ms Tran for lease of the Oran Park Property said to have been calculated up to 17 October 2022. It is undisputed that the plaintiffs have been paying the sum of $550 per week for rent from when Ms Tran sought to terminate the lease of the Oran Park Property: T 269.
Mr Campbell asserts that, despite the form of the lease, it was always the intention of himself and Ms Tran that his father-in-law would remain living in the Oran Park Property until he and Mrs Campbell repurchased the property from Ms Tran: CB 131-132[129]. He states that, save for one payment of $2,200 which he made on 17 November 2021, he did not pay any rent for the Oran Park Property (nor did his father-in-law) until about late November 2021, when the relationship between the parties had completely broken down. In particular, he commenced paying rent in circumstances where Ms Tran, on 26 November 2021, caused a notice of termination of the lease to be served on him: CB 132[130].
Mr Campbell states that, up until 26 November 2021, any payments of rent recorded in the rental ledger for the Oran Park Property have been made by Ms Tran herself: CB 132[130].
On 14 April 2022, Mr Campbell gave an undertaking to the Court to make such payments in exchange for Ms Tran's undertaking not to take possession of the Oran Park Property. On that day, Registrar Walton made the following order:
(8) The Court notes the Plaintiffs' undertakings, provided on a without admission basis and whilst reserving all rights in relation to matters pleaded in these proceedings, to continue to adhere to the terms of the Lease for the Premises.
That order was subsequently amended by Robb J on 21 July 2023 as follows:
3. Order that the:
a. First Plaintiffs undertaking in order 8 of the Court's orders of 14 April 2022 be amended to permit, and that his obligations for payment of rent under the Lease of the Premises be complied with by, the First Plaintiff paying the rent directly to Commonwealth Bank of Australia mortgage account XXXXXX (the Mortgage Account);
b. Defendants be restrained from withdrawing any funds from the Mortgage Account or Commonwealth Bank of Australia mortgage account ending XXXX
(referred to in the Commonwealth Bank's email to the First Defendant's on 19 July 2023 at 8:59pm) until further order of this Court; and
c. A copy of these orders be provided to the Commonwealth Bank of Australia.
[37]
Conclusion
The consequence of my above findings is that the plaintiffs are entitled to recover the funds that I have outlined above. As was contemplated during the hearing, I require the parties to bring in short minutes of order to give effect to my reasons for judgment. By that, I mean that the parties should total the amount for which judgment should be entered including, to the extent relevant, any claim for interest.
In the event that the parties are unable to agree on wording of orders or the amount for which any judgment should be entered, they should separately provide their proposed orders and calculations.
The plaintiffs' PCS made a claim for a special costs order. The basis for any such special costs order is not clear to me, other than the plaintiffs' solicitors apparently acting pro bono.
Prima facie costs should follow the event and Ms Tran should pay the plaintiffs' costs on the ordinary basis. Subject to any specific application for any different costs order, that is the order I propose to make and which should be incorporated into the proposed short minutes of order.
[38]
Endnotes
Ms Tran's evidence is this was actually $160,000 cash but she was happy to leave the $15,000 difference excluded.
Ms Tran's evidence is this was actually $150,000 cash but she was happy to leave the $75,000 difference excluded.
[39]
Amendments
30 May 2024 - Coversheet - case reference amended
[283] - change "Barton v Gwyn-Jones" to "Barton v Morris"
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 30 May 2024
During the hearing, an ASIC search was tendered (Exhibit P2) which disclosed that an entity of which Ms Tran is the representative, namely "The Trustee for the Jet Family Trust", had on 15 October 2020 registered the business name "MAP HomeLoans". It will be readily observed that the name appears to be almost identical to the business name "MAP Home Loans", with the difference being that the name which Ms Tran caused to be registered has no gap between "Home" and "Loans" (i.e. "HomeLoans").
The hearing proceeded on the basis that Mr Vaughan was relevantly the owner of the business "MAP Home Loans" and that Ms Tran was not an owner of that business. Significantly, Ms Tran accepted that she did not, at any point, make Mr Vaughan aware that she had registered the trading name "MAP HomeLoans". However, she asserted that she recalled many conversations in which she, Mr Tran and Mr Vaughan discussed the possibility of the name's registration, as opposed to the actual registration: T 190.
Despite the above, it is clear that each of Ms Tran and Mr Tran had some involvement with the MAP Business. Ms Tran, as noted above, asserted that she worked as a Senior Mortgage Broker with the MAP Business. Mr Tran also worked there in some capacity, and Mr Campbell gave evidence that Ms Tran represented that Mr Tran also was a co-owner of the MAP Business: CB 47[8]. Ms Tran asserted that there was no contract or agreement in place between Mr Vaughan and Mr Tran in their working arrangement. She indicated that Red Sienna was paid commissions on a subcontractor basis for "leads" that were written by herself for "leads" generated from Mr Vaughan.
Apart from those persons, it appears that a number of other brokers were associated with the MAP Business, including a Michael Nguyen (Mr Nguyen), Tom (surname not revealed) and Justin (surname not revealed).
The company with which Ms Tran is associated, Red Sienna, was registered on 16 November 2004. Ms Tran is recorded as being the current director of the company, having been appointed on 4 April 2023. She had previously been a director of the company for the period 16 November 2004 to 2 June 2011.
Mr Tran was a director of Red Sienna from 2 June 2011 to the date of his death on 10 January 2021. Savannah (Ms Tran's daughter) was appointed as a director of Red Sienna from 10 January 2021 to 4 April 2023.
Red Sienna was the registered proprietor of the trading name "Sienna Home Loans" from 24 August 2007: CB 754.
On 31 October 2023, a creditor of Red Sienna filed a winding up application in the Supreme Court of Victoria: CB 784.
On 29 November 2023 (a day after I held a pre-trial directions hearing for the matter), Stephen John Michell, a liquidator of the firm PCI Partners Pty Ltd, was appointed as liquidator of Red Sienna: CB 784. There is only one ordinary share in Red Sienna, which is held by Savannah: CB 785.
I will describe the subject of the MAP investment representation as the "MAP investment".
The plaintiffs' claims regarding the MAP investment were framed in the pleading in various ways (which I will refer to below), but essentially were as follows:
1. a misleading or deceptive conduct claim enlivening relief through the provisions of the Australian Consumer Law (ACL) pursuant to the Competition and Consumer Act 2010 (Cth) (CCA), Sch 2;
2. a fraud claim; and
3. "unjust enrichment".
I comment on these claims below. Essentially, the main way in which the case was put by Mr Bennett was in relation to a misleading or deceptive conduct claim pursuant to the provisions of ACL.
A particular feature of Ms Tran's conduct of the proceedings was that she had not complied with the pre-trial directions to provide an outline of submissions addressing the issues in the case. Further, whilst she carefully cross-examined Mr Campbell, she made a deliberate and informed decision to make no final submissions in the matter: T 273-274 (see further below). Accordingly, I was left in the position that, whilst I had the benefit of the plaintiffs' submissions (through Mr Bennett), I was not assisted by any submissions from Ms Tran, even on evidentiary matters.
Up until that point, the only pre-trial direction document that Ms Tran had been able to provide was a list of issues, which I will refer to below.
On 26 January 2024 (Australia Day), Ms Tran sent an email to my Associate indicating that she had attended a medical clinic the prior day, was still very unwell and had been bedridden for the last three weeks with her condition. The exact nature of the condition was not disclosed. A medical certificate signed by Dr Rosie Seagar was attached to the email, certifying that Ms Tran had had a consultation and was unable to attend work and, relevantly, "will be unable to work from 25 January to 31 January".
It is evident from the email communications and the medical certificate that Ms Tran, at that stage, was located in Victoria and had attended the medical surgery or clinic at Taylors Lakes. She asked for advice regarding her options of not being able to attend the hearing in person.
On 29 January 2024, the day before the hearing, I caused my Associate to send an email to Ms Tran and the practitioners for the plaintiffs which addressed a number of matters.
The email summarised in simple terms the extent of assistance that the Court, or a judge, could provide to an unrepresented litigant, making reference to the decision of the Court of Appeal in Bauskis v Liew [2013] NSWCA 297 at [67]-[70] per Gleeson JA.
The email noted that options available for a litigant who claims to be unwell include (a) attempting to present the case notwithstanding the sickness or (b) attempting to seek an adjournment of the hearing. I made reference to the Court's power to grant an adjournment and gave brief observations regarding the procedure by which an adjournment may be sought. The email noted that Ms Tran should, in light of the detail provided, indicate whether she was seeking an adjournment of the hearing or not and, if she indicated that she did seek an adjournment, requested her to provide the evidence sought to be relied upon and any outline of submissions.
In the afternoon of 29 January 2024 at 4:15pm, Ms Tran sent an email to my Associate attaching a short affidavit of herself, affirmed 29 January 2024 in Victoria, and certain other attachments. The email indicated that she did wish to seek an adjournment of the proceedings due to be heard the following day "due to reasons of illness as per medical certificate provided stating illness up to 31 January 2024".
The circumstances in which the rule in Browne v Dunn will require matters to be put to a witness in cross-examination will depend upon the nature of the pre-trial preparation there has been, and whether that pre-trial preparation has been sufficient to give notice to a witness of the submission ultimately intended to be put to the Court: West v Mead [2003] NSWSC 161; (2003) 13 BPR 24,431 at [98] per Campbell J (as his Honour then was).
The rule in Browne v Dunn does not apply where the witness is on notice that the witness' version is in contest: see e.g. Fairfax Media Publications Pty Ltd v Gayle; The Age Company Pty Ltd v Gayle; The Federal Capital Press of Australia Pty Ltd v Gayle (2019) 100 NSWLR 155; [2019] NSWCA 172 (Gayle) at [117] per Leeming JA (Bell P (as his Honour then was) and Gleeson JA agreeing at [1] and [4], respectively), citing J D Heydon, Cross on Evidence (11th ed, 2017, LexisNexis Butterworths) at [17445].
The rule is not applied mechanically. The very nature of the rule is such that what is sufficient in any given case to meet the requirements of procedural fairness will vary. Even when the rule applies so as to require a matter to be addressed in cross-examination, it should not be thought that the rule in Browne v Dunn requires that each individual inconsistency be put to the witness: Gayle at [123]-[128] per Leeming JA, clarifying comments of the Court of Appeal in Oneflare Pty Ltd v Chernih [2017] NSWCA 195 at [40].
In this case, Ms Tran had not served any affidavit evidence until the day before the hearing.
Ms Tran revisited her decision regarding cross-examination and then proceeded to cross-examine Mr Campbell extensively over parts of the first two days of the hearing.
Further, it was not until the cross-examination of Mr Campbell that her alternative version of what had been proposed between them in terms of any investment (that is, alternative to the MAP investment) emerged. Thus, other than what might be gleaned from Ms Tran's defence, Mr Campbell had not had any extensive opportunity to consider any detailed affidavit evidence from Ms Tran other than her affidavit of 29 January 2024, which did not expressly address many of the matters in his evidence.
Secondly, at the commencement of the third day of the hearing (at which point she was still under cross-examination), Ms Tran asked me a series of questions bearing upon the conduct of the proceedings, which I answered.
Thirdly, during the course of the third day of the hearing, Ms Tran sought leave to adduce evidence from two witnesses, being Mr Vaughan and Mr Timothy Miller, whom Ms Tran described as being the IT Manager for "MAP Home Loans" (in context the MAP Business): T 197-198. Mr Bennett opposed the application. Ms Tran clarified that she did not have anything in writing from either of the witnesses and was asking for the Court's permission to adduce oral evidence from them. She indicated that they had been alerted to that prospect, however they were both based in Queensland. The practical reality, as Ms Tran agreed, was that they would not be able to physically attend court on that day, being the third and final day of the hearing.
Up until the day before the hearing, the case had proceeded on the basis that Ms Tran had the opportunity of almost 22 months to place evidence before the Court, and the only evidence she had adduced was the belated affidavit of herself. There was no opportunity for Mr Bennett to know what evidence was sought to be adduced from Mr Vaughan and Mr Miller and to prepare for it. In those circumstances, I declined permission for Ms Tran to adduce such evidence.
Fourthly, following the final submissions of Mr Bennett and having been explained the purposes of submissions, Ms Tran indicated that she did not wish to make any final submissions: T 273. I clarified with her that she understood she had a right to make submissions and reiterated what those submissions may permissibly address. She indicated that she understood that, but nonetheless did not wish to reflect upon or change her decision not to make any submissions. Ms Tran confirmed that the decision to make no submissions was a decision made on her part on an informed basis: T 273-274. Lest there be any doubt about it, my exchange with Ms Tran was as follows (T 273.18-274.6):
HIS HONOUR: Thank you. Ms Tran?
DEFENDANT: Thank you your Honour. I don't have any final submissions that I'd like to make.
HIS HONOUR: All right. Just so it's clear, you have the right to make submissions, do you understand that?
DEFENDANT: Yes I do your Honour.
HIS HONOUR: And in making those submissions you may address any evidence that you contend that I should accept or reject, do you understand that?
DEFENDANT: Yes I do your Honour.
HIS HONOUR: And you may also address for example any matters on which you say cast doubt on or defeat the plaintiffs' claim or this claim, in this case Mr and Mrs Campbells' claim, do you understand that?
DEFENDANT: Yes I do your Honour.
HIS HONOUR: And you may also address any matters that you say support any of the defences that you rely upon, do you understand?
DEFENDANT: Yes I do your Honour.
HIS HONOUR: And so it's not for me to require you to make submissions, the decision is entirely in your hands, but if you make a decision not to make submissions, just to be clear you would be doing that on an informed basis of understanding what you are permitted to do and then consciously choosing not to do it; do you understand?
DEFENDANT: Yes I do your Honour.
HIS HONOUR: All right, so in light of what I've just said, do you wish to reflect on your decision to not make any submissions to me?
DEFENDANT: No your Honour.
The MAP owner representation and the MAP investment representation were the foundation on which the three property representations, from the plaintiffs' perspective, induced them to sell their properties and provide moneys to Ms Tran (i.e. on the basis that Mr Campbell would be receiving a 50% interest in the MAP Business).
Up until the hearing of the proceedings, the defence of Ms Tran involved denial of the representations.
For the purposes of the hearing, the plaintiffs supplied a list of 27 issues. Ms Tran provided a list of 16 issues which, at least in part, were not strictly speaking issues but a type of elaboration of her defence to the claim.
As the hearing unfolded, it became clear that Ms Tran was asserting that the arrangements between the parties had been, in substance, recorded or agreed to as between them in email correspondence sent by her to Mr Campbell on 3 October 2021 (contained in Exhibit D1 and CB 678-680), with Mr Campbell agreeing to the contents by response email (3 October 2021 emails).
Ms Tran acknowledged that she had received "about $500,000" from Mr Campbell from the sales of the properties (T 129.5-.19), but denied that she tried to sell an interest in the MAP Business: T 129.
Rather, Ms Tran's case appears to be that the funds she received from Mr Campbell from the property purchases were for the purpose of a "joint venture", which seemed to involve purchasing a franchise or interest in the aggregator "Loan Market": T 46.35-47.2. Ms Tran did not contribute any funds to the supposed joint venture and, while there are isolated instances of a "joint venture" or "partnership" (joint venture) being referred to in the Court Book, including from Mr Campbell (e.g. CB 151[162], 720), the only substantive explanation of her joint venture purpose "defence" is contained in the Exhibit D1 email (CB 678-680).
The email formed a fairly significant part of Ms Tran's presentation of her defence of the case, including cross-examination, and for that reason I will incorporate below the contents of the 3 October 2021 emails.
Ms Tran also gave evidence as to the reasons she believed Mr Campbell needed to sell the properties: T 221-222.
There was lengthy cross-examination by Mr Bennett in relation to the 3 October 2021 emails: T 227-235.
Ms Tran's case in defence of the plaintiffs' claims regarding the MAP Business seems to be that:
1. the proceeds of the property sales were to go towards a joint venture with Loan Market (potentially to purchase a franchise);
2. she was not contributing any funds to this venture; and
3. separately to the joint venture, she had agreed with Mr Campbell to take a 50% ownership of Humble, but she had not taken any steps to purchase any shares in the company.
Ms Tran accepted that no legal structure had been decided for the alleged joint venture and the Exhibit D1 email was the extent of the proposal's progression: T 230.13-.40. Other than this "joint venture" proposal, Ms Tran did not seem to provide a positive justification for why she is entitled to retain the funds received from Mr Campbell.
When questioned about the "disclaimer" in the Exhibit D1 email, which states "if you choose to quit at any time during our partnership term then you will walk away at your own choosing with no claim/recourse/action against me or my businesses", Ms Tran indicated that (T 228.8-.10):
A. I was advised in doing business dealings just to always have that statement as a non-disclaimer for every electronic item I sent out in relations to negotiations or business related matters.
A second example is that, on 10 December 2020, Ms Tran drafted text in an email for Mr Campbell which, unamended, he cut and pasted into an email he then sent to Sheree Hayden, his own conveyancer in relation to the Oran Park Property: see CB 486-487.
Another example of Ms Tran preparing an email for Mr Campbell to send to his solicitor, this time in relation to the sale of the Labrador Property, is on 21 June 2021: CB 585-586. Mr Campbell sent the email to his solicitors on the transaction completely unamended, the content of which was false, and it is evident that they acted upon it: CB 585-587.
When questioned by Ms Tran about his understanding of what the proceeds from the sale of his properties was going to be required for, Mr Campbell asserted that the reason he was selling his properties was to "come up with $500,000 to invest into MAP Home Loans": T 46.35-.37. I accept his evidence.
A critical interaction between Mr Campbell and Ms Tran is revealed in the 3 October 2021 emails: CB 678-681. In Mr Campbell's affidavit evidence, he indicates that he received and read the email from Ms Tran and felt relieved that all of the transactions had finally been completed and that he had done what was asked of him in order to fund his investment into the "MAP Home Loans business": CB 165[188]. He said he felt powerless in relation to the "PS" section of the email (which I set out below), noting that it was never the agreement between himself and Ms Tran that he would be responsible to "fund Simon" (Mr Campbell's father-in-law) in relation to the Oran Park Property. He said, despite the fact that he disagreed with what she had stated in that section, he did not contest it as he felt that any pushback on his part may result in conflict, which he wanted to avoid. Mr Campbell said that, if things went sour, he was in a vulnerable position because he had already sold all of his properties to Ms Tran and had nothing else to show for it: CB 165-166[188]. Ms Tran cross-examined him about her email, which makes reference to a business market venture mentioning the "Loan Market" group. The question and answer were as follows (T 51.3-.5):
Q. So you were never aware of any sort of concept or idea or business venture discussed with me that mentions the Loan Market group?
A. No. Again it's been MAP Home Loans equity the entire time.
My impression is that, having considered the evidentiary material and seen Mr Campbell give evidence, I have serious doubts that he understood that Ms Tran's 3 October 2021 email was setting out a version of their arrangements which was different from his belief that he was receiving a form of equity in the MAP Business.
Overall, my impression of Mr Campbell's evidence was that he was attempting to tell the truth, to the best of his recollection, as to what occurred. Contextualised as I have noted, I accept Mr Campbell's evidence.
Thirdly, during cross-examination Ms Tran accepted that, having regard to a text message sent on 13 November 2021, she was willing to falsely state or certify that Mr Campbell had done two years of mentoring when in fact he had only done 20 months of mentoring: CB 194; T 149.11-.13.
Fourthly, in relation to payments of deposits, Ms Tran asserted that she had paid certain amounts in cash. In relation to the sale of the Labrador Property, she sent an email to Mr Campbell asserting that she had already paid the sum of $150,000 as a deposit: CB 579. Ms Tran was cross-examined about this, and asserted that she had paid it in cash. Yet, despite Mr Campbell's evidence that he had not received any deposit monies, she did not address that issue in her affidavit evidence: T 157. When questioned further about the matter and asked where she had obtained $150,000 in cash, she indicated that she had access to "a lot of cash at that time". At that time, she was living in Victoria and Mr Campbell was living in New South Wales. She was asked whether she drove up to New South Wales to deliver the cash and answered that she could not recall the actual day it happened: T 160. Ms Tran also asserted she paid Mr Campbell $39,500 in person, but could not recall the location of the payment: T 167.5-.28.
Ms Tran's evidence was "light" on details of the alleged payments. It is contrary to the evidence of Mr Campbell. Ms Tran was asked if she, at any point of time, got receipts for any of these deposits. She responded: "I made [Mr Campbell] sign receipts but it was very much on a trust basis". Mr Bennett called for those documents: T 167.32-.35. The following day, Ms Tran was unable to produce any receipts for cash payments: T 193. She sought an opportunity to potentially speak with her conveyancer to see if she could email some receipts or documents to her, and then estimated it "would take me a minimum of approximately a week" in order to locate such documents: T 194.40-.41. I consider it implausible that she would have made the payments. I do not accept her evidence regarding payment of monies to Mr Campbell.
Fifthly, when asked about the reason for her leaving the MAP Business in December 2021, Ms Tran accepted that it was because Mr Vaughan had found out about the property transactions she had undertaken with the plaintiffs, which he was not happy about it. Further, she accepted that he (Mr Vaughan) had thought that "there shouldn't be any offering of an interest in the business that I own by someone who is not me": T 186-187.
Sixthly, it is evident that Ms Tran had prepared a letter dated 14 March 2021 purportedly in the name of Mr Tran as director of Red Sienna, which confirmed Mr Campbell's employment as a "full-time employee" of "MAP Home Loans - Melbourne", with an annual income of $182,648 per annum, "as a senior mortgage analyst": CB 515. The problem with the letter is that it was purportedly signed by Mr Tran in circumstances in which he had died two months prior to the date of the letter. The content of the letter, asserting that Mr Campbell was a full-time employee of the business and a senior mortgage analyst, was false.
At some stage, Ms Tran made Mr Campbell aware that she was looking to switch aggregators and was contemplating connecting in some way with an aggregator named Astute. She indicated, according to Mr Campbell, that she would keep him posted as to how the talks with Astute were progressing, finalise commencement of his mentorship and get him "onboarded" with Astute.
On 9 April 2019, Mr Campbell was attending a meeting at Parramatta during which, he asserts, Ms Tran again represented that Mr Vaughan owned the MAP Business with herself and Mr Tran: CB 53[20].
Part of the modules of learning for Mr Campbell's diploma course involved business planning, which required him to submit a self-generated business plan for a hypothetical business that he would build one day in the future: T 35.
On 2 July 2019, Mr Campbell caused Humble to be incorporated.
On 15 July 2019, Mr Campbell prepared a form of business plan which, relevantly, included reference to the fact that Ms Tran was an owner of the MAP Business: CB 290, 293. The plan was submitted to Ms Tran for review.
On 16 August 2019, Ms Tran emailed Mr Campbell noting that she and Mr Tran had reviewed his business plan and set out a number of comments in relation to it: CB 314. The comments did not take issue with the description of her as an owner of the MAP Business.
On 8 November 2019, Mr Campbell prepared a revised business plan (again with reference to Ms Tran as an owner of the MAP Business): CB 319, 322.
On 13 November 2019, Ms Tran corresponded with Mr Campbell regarding the revised business plan, but again did not correct the statement regarding her ownership of the MAP Business: CB 348, 349.
On 28 November 2019, Mr Campbell received the diploma from FARSTA.
Coming into the 2019 Christmas period, Mr Campbell and Ms Tran agreed that the mentorship period would commence in the new year of 2020.
Ms Tran proposed that, at that stage, Mr Campbell would pay to her the sum of $50,000, which included 50% of the mentorship fee to be paid then (in January 2020). The balance of the mentorship fee (50%, or $15,000) would be paid in one year's time in January 2021, after he had started to earn some income. The balance of the $50,000, being in the sum of $35,000, was proposed to be some form of sales and marketing program fee for services that she would offer him towards marketing Humble, of which she sought to take a 50% ownership.
On 24 January 2020, Ms Tran asked Mr Campbell for the monies and forwarded to him (by text message) bank account details for Sienna Home Loans: CB 60-62.
On or around that day, Mr Campbell paid to Red Sienna the sum of $40,000: CB 63[37].
On 29 January 2020, he made two further payments of $5,000 (totalling $10,000): CB 63[39].
In early February 2020, Mr Campbell was given access to the MAP Business computer system.
From about February 2020, Ms Tran arranged for Mr Campbell to work within the MAP Business "as part of the team" in a capacity as a "broker support officer": CB 69[46]. He continued to be engaged in that capacity until November 2021.
Whilst the precise time at which Ms Tran became aware of the plaintiffs' properties is unclear on the evidence, Mr Campbell informed Mr Tran of his and his wife's ownership of the three properties during a training session on 7 February 2020: CB 68[43].
On or about 24 March 2020, Red Sienna issued two invoices to Mr Campbell. The first was for the sum of $15,000 plus GST (being for 50% of the mentorship fee), and the second in a sum of $35,000 plus GST (being for the sales and marketing program fee): CB 430-431.
In July 2020, Mr Campbell had a discussion with Ms Tran part of which involved a proposed move to the Gold Coast by the Campbells. Mr Campbell accepted that initially it was his and his wife's idea, as they wanted a lifestyle change: CB 71[51]; T 29. By this time, Ms Tran already knew of the plaintiffs' properties and stated, as part of that discussion, that she needed Mr Campbell "to be open to negotiations about those properties" in order to invest in the MAP Business: CB 72[51]. Ms Tran requested that he "draw up the numbers" for her so that they could understand what Mr Campbell's "equity position" was, and Mr Campbell subsequently ordered valuations for each of the properties.
On 30 September 2020, Mr Campbell sent Ms Tran valuations for each of his three properties: CB 463. The valuations, in summary, were as follows (CB 439-463):
1. the Oran Park Property - $640,000;
2. the Labrador Property - $575,000; and
3. the Longford Property - $254,159.
On 9 October 2020, Mr Campbell asserts that Ms Tran put a proposal to him of investing into the MAP Business with a minimum of $500,000 to buy, by payment to her, a portion of the MAP Business "loan book", using equity from the sale of the Oran Park Property to her: CB 79[62].
On 17 November 2020, in messaging as between Ms Tran and Mr Campbell, she indicated that in order to secure a rental property for him and his family in Queensland, he needed to sell his shares and deposit the funds into her account. Ms Tran also said that he needed to address paying the remaining $15,000 for his mentorship before the second year of his mentorship started. He agreed to transfer the balance of the mentorship fee as soon as possible and to initiate a sell order for some Air New Zealand shares which he owned: CB 85-86. He did that immediately and transferred a sum of $15,000 to Ms Tran: CB 86, 464.
On 21 December 2020, the plaintiffs and Ms Tran entered into a contract for sale of the Oran Park Property for a price of $800,000, purportedly with a deposit of $160,000: CB 500.
On 6 January 2021, on the pretext that a valuation of the Oran Park Property had come in short by $100,000, Ms Tran emailed her conveyancer, Janet of Home Lawyers, to request that the plaintiffs reduce their purchase price down from $800,000 to $700,000: CB 502. Within a few hours, Mr Campbell sent an email to his conveyancer noting that he agreed to reduce the price: CB 503.
On 25 January 2021, a deed of mutual rescission of contract was prepared by Mr Campbell's conveyancer to give effect to the reduction in purchase price: CB 505. A new contract was issued with a revised price of $700,000: CB 509.
On 25 March 2021, there was a settlement of the sale of the Oran Park Property: CB 519-523. On 29 March 2021, the plaintiffs transferred to Ms Tran the sum of $339,565 from the property settlement: CB 131[128], 540.
On 13 April 2021, Ms Tran asked Mr Campbell to keep the proposed business deal confidential from Mr Nguyen, a colleague in the MAP Business: CB 133[131].
On 26 April 2021, a form of lease as between Ms Tran and Mr Campbell was entered into in relation to the Oran Park Property (albeit that the lease purports to have been made on 25 March 2021): CB 524-537. The lease purports to be for a rent of $550 per week: CB 525.
In or about May 2021, Mr Campbell deposes to a phone conversation with Ms Tran in which she asserted that he was behind schedule and yet to complete his investment of $500,000 for the business, and in order for the business deal to go through she was now forced to take the Labrador Property off his hands: CB 134[134].
On 30 June 2021, contracts for sale of the Labrador Property were exchanged which, notwithstanding the intervention of a seller's agent, purported to show a deposit of $75,000 being paid direct to the seller: CB 588, 590.
On 4 July 2021, contracts were exchanged as between Mr Campbell and Ms Tran for the sale of the Longford Property, for the sum of $395,000: CB 617-634. The deposit was recorded as $39,500.
On 29 July 2021, in a context where contracts had been exchanged for all three properties, Ms Tran engaged in text messages with Mr Campbell in which she congratulated him on the fact that he was "now officially a business partner in this new brand", but nonetheless requested that he keep it "completely hush hush" and indicated that only "Sav" (her daughter) and he knew about it: CB 148-150.
On 1 August 2021, Ms Tran nominated another person, Tran Ngoc Vo (Mr Vo), to complete the purchase of the Longford property: CB 637. It transpired that Mr Vo was someone whom, Ms Tran asserted, she had known at high school in roughly 1992 to 1994: T 165.
On 11 August 2021, Ms Tran instructed Mr Campbell to tell his solicitors that a sum of $260,000 had already been paid by her for the Labrador Property and he, I find naively, complied with her request, which was false as to the assertion of monies paid: CB 154-155, 649-650.
On 12 August 2021, the sale of the Labrador Property settled. Mr Campbell asserts, and I accept, that the sums of $75,000 and $260,000 had not been paid to him: CB 156.
On 13 August 2021 (the following day), Ms Tran instructed Mr Campbell to tell his solicitors that, in relation to the Longford Property, he had received not only the deposit of $39,500 but an additional deposit of $60,000: CB 157. Yet again, naively, Mr Campbell did so: CB 664.
On 13 September 2021, the sale of the Longford Property settled with the sum of $99,500 ($39,500 plus $60,000) said to have been paid by Ms Tran. I accept Mr Campbell's evidence that no such amounts had been paid: CB 159[179], 670.
Between 15 and 17 September 2021, Ms Tran chased Mr Campbell for proceeds of $129,410 from the sale of the Longford Property: CB 160[182]-163[185].
On 17 September 2021, remarkably, Mr Campbell paid Ms Tran $127,000 (being $129,410 less a credit for rent of $2,200, and a rounding down of $210), which involved paying $47,000 to Red Sienna and $80,000 directly to Ms Tran: CB 164[186], 677 and 698.
Ms Tran's email sent on 3 October 2021 at 1:35pm, which I have referred to above, is as follows (Exhibit D1; CB 678-680):
Hi Anthony,
*** Please note this is a Non Disclosure Agreement disclaimer - this is all private & confidential and not to be discussed revealed in any detail without my written permission
A proper NDA agreement will be required to documented and signed by us both.
This is to provide receipt for you for the funds investment in our business venture.
I note that you have sold your investment properties to liquidate the cash.
This will allow us to continue to work together for 5 year period as agreed to help you build your own Mortgage Franchise.
2 years of Mentoring is almost completed Jan 2022
Mentoring commenced Jan 2020 - Jan 2022
Plus 3 years additional time to build business.
Humble Home Loans Pty Ltd ( 50% ownership by me for the company - agreed upon at mentoring agreement)
I wish for this to remain private and I trust that no legal changes need to be noted.
You will remain Director of Humble ( taking into consideration the LM Project may require a certain structure - which we can restructure if needed)
Build Loan Market/MAP Home Loans together for total 5 years
The LM Franchise/Humble will belong to you 100% once we complete the 5 years.
The requirement is you continue your full time training & running of the business full time
Write minimum $40M per year for at least 5 years to 2026.
I will break this down into further detail for you in a separate email when we do financial forecasting & targets/KPI's
We can slowly add via email notes to build our deeds of agreement (working partnership arrangement)
As we both agree this will be better as a work in progress together as we build on our working partnership
Please feel free to add any feedback.
These emails notes will form the agreement eventually.
We both agree that this is a mutually simple working arrangement and do not wish to get too technical as we agree all things being fair and equal can be discussed and agreed upon as we go.
The only key point I wish to strongly note is if you choose to quit at any time during our partnership term then you will walk away at your own choosing with no claim/recourse/action against me or my businesses.
FUNDS
Here is a breakdown of the deposits received from you to date.
In Summary your total cash investment is made up of
Deposit 1. $339,565 +
Deposit 2. $126,000 = $465,565.00
We agreed upon a total cash investment of $500K in order to make this partnership a 5 year FT term.
As a result of your shortfall and needing to withhold $30K savings to yourself.
I am happy to refund you the amount you paid to James Tran for Marketing
I think its fair that the fee charged for the work James was going to do for you is now no longer continuing therefore I shall personally top up your share here below with a refund of $35K paid to me in Jan 2020
Therefore your full share of investment is now complete.
$465,565+ $35,000=$500,565
We both agree you have no further interest in Oran Park or Labrador or Longford as all properties were sold to help you fund this new venture for your new business.
You have chosen to collaborate with me and there is no force/pressure/coercion herewith.
Please read carefully and reply to confirm you have read and understand all the terms here in the above.
The funds have now been fully confirmed by me and we are officially in partnership - Congratulations!!
Well done on your progress to date. You are doing exactly what you promised to do so keep up the hard work always.
Hustle Hard but with Heart & Humble 😊
Regards,
Mon
PS. We will need to MAP out the Oran Park rental for Simon to continue to reside as my tenant
The rent is $550 per week so we will need to factor this in for you next as you are now funding Simon officially moving forward.
We will brain space this next along with your personal outline of your will & testament that you will detail for Sherne's understanding of the access to equity and how you purchased the business.
Mr Campbell's response sent at 5:15pm on the same day was, in contrast, succinctly short (CB 681):
Hey Mon,
Agree with your email. Thank you for your help in getting me this far.
Onward and upward 😊
Warm regards
Anthony Campbell
On 4 November 2021, Ms Tran locked out Mr Campbell from the MAP Business computer systems: CB 166-167. The pretext for doing so was expressed by Ms Tran in the text correspondence as being a directive to Mr Campbell to take time off as mentally he needed a break: CB 167-170.
In particular, on 5 November 2021, Ms Tran sent a text indicating that Mr Campbell had been cut out of "VM" "because as I explained I no longer need you to help me run MAP VIC biz. This is my decision": CB 170. (I pause to note that "VM" is a reference to a "virtual machine". The MAP Business staff operated with laptop computers, but a virtual machine allowed them access to MAP Home Loans data hosted by a server, which could be anywhere in Australia: T 239.35-.44.)
Also on 5 November 2021, Ms Tran stated in a text to Mr Campbell "MAP leads are not your problem whilst on leave": CB 169.
Later that day at about 8:30pm, Mr Campbell received a call from Mr Vaughan in which he made a disclosure to Mr Vaughan about his arrangements with Ms Tran: CB 172-173.
Over the period 6 to 14 November 2021, there was further extensive messaging as between Ms Tran and Mr Campbell: CB 175-200. Various observations could made about the tenor of that correspondence. Mr Bennett cross-examined Ms Tran to the effect that, in this period, she started seeding comments in the text messages to make it appear as if Mr Campbell was being unprofessional or threatening in a context where there was no proper basis for her to make such comments: T 238. She denied that proposition. Rather, she alleged that, at that point, Mr Campbell had generated about 20 active live deals that were in the system and she was stressed and upset at having to deal with the fact that Mr Campbell had been on and off work, his performance had dropped, he was taking medication, suffering from mental health and marital problems and had monetary issues: T 239.
It is not necessary for me to make particular findings in respect of mental health and marital problems. Relevantly, a hallmark of the correspondence is that Mr Campbell was seeking to speak directly with Ms Tran by telephone and she was ignoring or avoiding such contact.
On 14 November 2021, Ms Tran sent a text to Mr Campbell stating, inter alia, "[w]e haven't started any business officially yet with Loan Market that's the part where you were suppose[d] to get accredited and start writing loans for yourself from Jan 2022": CB 199.
On 14 December 2021, a firm of solicitors, Vaikom Law, sent a letter on behalf of Mr Campbell to Mr Vaughan and MAP Company which made a number of claims, including asserting that Ms Tran had (purportedly with Mr Vaughan's actual or ostensible authority) offered to sell his shareholding and management interests in the business entities associated with the MAP Business to Mr Campbell for $500,000: CB 687-688.
On 22 December 2021, Rouse Lawyers, acting on behalf of MPS and Mr Vaughan, responded to the letter by, relevantly, disputing that Ms Tran had any authority to act on Mr Vaughan's behalf or sell any of his interests: CB 714-716.
Proximate to this time, Ms Tran made a post to her LinkedIn profile noting that she was leaving the MAP Business: CB 201. The context, as noted above, was considered by her to be one in which Mr Vaughan had found out about the property transactions that she had undertaken with the plaintiffs: T 186-187.
The conversation which Mr Campbell says he had with Ms Tran on 24 January 2020 also related to the sales and marketing program fee for the sum of $35,000. Likewise, I am satisfied that the evidence, objectively viewed, is that there was a contractual arrangement as between Mr Campbell and Ms Tran in relation to that fee. To the extent that she arranged for payment to the bank accounts relating to Sienna Home Loans and subsequently arranged for issue of the invoices by Red Sienna, that was a matter of convenience as to payment rather than an indication that there was another contracting party.
The first four items claimed by the plaintiffs, as noted above, are:
1. $40,000 - being $25,000 referable to the sales and marketing program fee, and $15,000 in relation to the mentorship fee for the first year;
2. $10,000 - being the balance of the sales and marketing program fee;
3. $5,000 - being the GST on the sales and marketing program fee and the mentorship fee; and
4. $15,000 - being the mentorship fee for the second year.
These items, whilst not precisely clear on the pleadings, were primarily claimed by the plaintiffs as a form of restitution as part of a claim for money had and received in the PCS: PCS [65]-[69]. I will treat these claims as distinct from the "unjust enrichment" issue in respect of the MAP investment claims, with which I deal more comprehensively later in these reasons.
Mr Campbell states, and I accept, that he never received any wages from the MAP Business, Ms Tran or any other entity for the broker support work he performed for the MAP Business: CB 205[210].
Mr Campbell did not lead any particular evidence to demonstrate whether the form of mentoring he had received, if not certified by Ms Tran or someone else at the MAP Business, would suffice in any way as a form of partial mentoring for the purposes of him being accredited. If anything, the brief evidence he provided on the matter appeared to suggest that an application for accreditation with Purple Circle, an aggregator, at least contemplates that there might be cases of partial mentoring which may potentially count towards whatever is necessary by means of accreditation: CB 205[209].
In Baltic Shipping Co v Dillon (1993) 176 CLR 344; [1993] HCA 4, Mason CJ relevantly stated at 350 (footnote omitted):
When, however, an innocent party seeks to recover money paid in advance under a contract in expectation of the entire performance by the contract-breaker of its obligations under the contract and the contract-breaker renders an incomplete performance, in general, the innocent party cannot recover unless there has been a total failure of consideration. If the incomplete performance results in the innocent party receiving and retaining any substantial part of the benefit expected under the contract, there will not be a total failure of consideration.
From the above, it is clear that while Mr Campbell was not able to complete the mandatory two-year mentorship period, there has not been a total failure of consideration in respect of the mentorship fee part of the mentorship agreement. As I have noted above, Mr Campbell was under an obligation to pay the mentorship fee in advance and it appears that he has received a substantial part of the benefit he expected under the agreement. In those circumstances, Mr Campbell cannot recover the $30,000 sum paid (or any GST paid on that amount).
I am prepared to accept that Ms Tran by her actions brought the mentorship agreement to an end without fault on Mr Campbell's part, which enlivened a claim to sue for damages for breach of contract. However, in the absence of evidence of what the damages might be, I find myself unable to specify an amount of damages.
I am satisfied that the MAP owner representation and the MAP investment representation were intended by Ms Tran to induce the plaintiffs, and in particular Mr Campbell, to sell their properties to her. Mr Campbell, in his dealings with Ms Tran, permitted her to hold the deposit monies, and paid over the balance of the monies received on settlement, in relation to the Oran Park Property, Labrador Property and Longford Property, on the basis that he was receiving a 50% interest in the MAP Business. Ms Tran received the monies on that pretext and for that stated purpose, irrespective of her own undisclosed intentions of never providing such a 50% interest in the MAP Business to Mr Campbell. I have referred above to Mr Campbell's evidence that the reason he was selling his properties was to "come up with $500,000 to invest into MAP Home Loans": T 46.35-.37.
Ms Tran cross-examined Mr Campbell on the basis that the arrangement with her was a form of potential joint venture to purchase a franchise associated with an aggregator, Loan Market. He denied that: T 46-47.
I do not accept Ms Tran's evidence regarding a form of joint venture proposal. To the extent that she relied upon the terms of her email dated 3 October 2021, I consider the better view of that email is that it was a narrative written by Ms Tran, well after the event, likely intended by her to provide a plausible, but in fact false, narrative of what the true arrangements between the parties were. To the extent that Mr Campbell, by his responsive email, agreed with the contents of Ms Tran's email, I consider that, as I have noted above, he was simply responding for the purposes of pleasing Ms Tran without there being any true agreement.
In any event, Ms Tran accepted that although she had received funds (approximately $465,000) for the future joint venture, she had not taken any steps to formally start the business: T 231. When cross-examined about a text message sent on 7 November 2021, she accepted that the so-called joint venture had not started at that point: T 241.
In selling the three properties, Mr Campbell states, and I accept, that he relied upon and was motivated by the representations of Ms Tran that the sale proceeds of the properties would be applied towards buying him an interest in the MAP Business. He indicates that he had only previously tried to sell the Labrador Property and had no intentions of selling the Oran Park Property or the Longford Property. Rather, he had intended to keep them and continue to build his and Mrs Campbell's property portfolio: CB 203[206].
An "application law" is, in turn, defined in s 140 of the CCA as:
(a) a law of a participating jurisdiction that applies the applied Australian Consumer Law, either with or without modifications, as a law of the participating jurisdiction; or
(b) any regulations or other legislative instrument made under a law described in paragraph (a); or
(c) the applied Australian Consumer Law, applying as a law of the participating jurisdiction, either with or without modifications.
In New South Wales, the relevant "application law" is contained in s 28(1) of the Fair Trading Act 1987 (NSW) (FTA (NSW)), which provides:
(1) The Australian Consumer Law text, as in force from time to time -
(a) applies as a law of this jurisdiction, and
(b) as so applying may be referred to as the Australian Consumer Law (NSW), and
(c) as so applying is a part of this Act.
Section 32 of the FTA (NSW) also states:
(1) The Australian Consumer Law (NSW) applies to and in relation to -
(a) persons carrying on business within this jurisdiction, or
(b) bodies corporate incorporated or registered under the law of this jurisdiction, or
(c) persons ordinarily resident in this jurisdiction, or
(d) persons otherwise connected with this jurisdiction.
(2) Subject to subsection (1), the Australian Consumer Law (NSW) extends to conduct, and other acts, matters and things, occurring or existing outside or partly outside this jurisdiction (whether within or outside Australia).
Thus, the application law for the purposes of the New South Wales jurisdiction is described as the Australian Consumer Law (NSW) (ACL (NSW)).
Insofar as the ACL operates as a law of the Commonwealth (which I will refer to as the ACL (Cth)), s 131(1) in Part XI of the CCA relevantly provides that:
(1) Schedule 2 applies as a law of the Commonwealth to the conduct of corporations, and in relation to contraventions of Chapter 2, 3 or 4 of Schedule 2 by corporations.
The "Note" to s 131(1) of the CCA provides:
Note: Sections 5 and 6 of this Act extend the application of this Part (and therefore extend the application of the Australian Consumer Law as a law of the Commonwealth).
Section 131(2) of the CCA extends the application of certain other sections of the ACL as a law of the Commonwealth to persons. It provides:
(2) Without limiting subsection (1):
(a) section 21 of Schedule 2 also applies as a law of the Commonwealth in relation to:
(i) a supply or possible supply of goods or services by any person to a corporation; or
(ii) an acquisition or possible acquisition of goods or services from any person by a corporation; and
(b) section 147 of Schedule 2 also applies as a law of the Commonwealth to, and in relation to, a corporation as a supplier referred to in that section; and
(c) Division 2 of Part 5‑1 of Schedule 2 also applies as a law of the Commonwealth to and in relation to a person if the other person referred to in section 219 of Schedule 2 is a corporation; and
(d) section 33 of Schedule 2 also applies as a law of the Commonwealth to, and in relation to, the conduct of any person.
None of those sections and provisions are obviously engaged by the facts here.
It follows that 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).
The legislative scheme allows for the ACL as given effect to by a relevant "application law". Thus, as noted above, the operation of ss 28(1) and 32(1) of the FTA (NSW) may apply to a claim against an individual for contravention of s 18 of the ACL (NSW): see Zervas at [57]. However, if it applies, any liability that arises would be a liability under s 236 of the ACL (NSW) and not the ACL (Cth).
There was no express pleading of a case under the ACL (NSW), as distinct from a case under what (in context) appeared to be the ACL (Cth). There was no pleading that Ms Tran was a person carrying on business within New South Wales, was ordinarily resident in New South Wales, or was otherwise connected with New South Wales. In the circumstances, I consider that I have to grapple with a case under the ACL (Cth).
I note that this Court has jurisdiction to entertain such a case 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).
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].
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].
Certain of the alleged representations (in particular, some of those constituting the MAP owner representation) are said to have occurred orally and in person: e.g. CB 5-6[6]. However, most of the representations and conduct alleged against Ms Tran took place by means of phone calls, text or Whatsapp messages and emails.
It seems to me that, in addressing the case under the ACL, s 6(3) of the CCA applies so as to extend the application of the ACL as a law of the Commonwealth to Ms Tran as an individual.
The above evidence satisfies me that the MAP owner representation (by email and video conference), the MAP investment representation and the Oran Park Property representation (by telephone), the Labrador Property representation (by messaging and telephone) and the Longford Property representation (by messaging and telephone) were made by Ms Tran to Mr Campbell by telephone, email, messaging or online video conference.
Based on my findings of fact above, I find that Ms Tran contravened s 18 of the ACL (Cth) in making the above-mentioned representations.
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.
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]. I address this issue further below.
In Toteff, Dixon J stated at 650-651 (omitting footnotes):
In an action of deceit a plaintiff is entitled to recover as damages a sum representing the prejudice or disadvantage he has suffered in consequence of his altering his position under the inducement of the fraudulent misrepresentations made by the defendant. When what he has been induced to do is to make a purchase from the defendant and part with his money to him in payment of the price, then, if the transaction stands and is not disaffirmed or rescinded, what is recoverable is "the difference between the real value of the property, and the sum which the plaintiff was induced to give for it" per Abbott L.C.J. Pearson v. Wheeler. As Sir James Hannen P. in Peek v. Derry pointed out, the question is how much worse off is the plaintiff than if he had not entered into the transaction. If he had not done so he would have had the purchase money in his pocket. To ascertain his loss you must deduct from the amount he paid the real value of the thing he got. It may be objected that the point of the application of this doctrine lies in identifying "the transaction" and that what Mayo J. has done is to identify it as the purchase of the goodwill and that only. But what is meant is the transaction into which the representation induced the plaintiff to enter. The measure of damages in an action of deceit consists in the loss or expenditure incurred by the plaintiff in consequence of the inducement on which he relied diminished by the corresponding advantage in money or moneys worth obtained by him on the other side: Potts v. Miller. You look to what he has been induced to part with as the initial step. He is entitled to say that but for the fraud he would never have parted with his money: per Coleridge L.C.J., Twycross v. Grant. But he cannot recover the entire price he has paid unless the thing prove wholly worthless. If the thing has any appreciable value the damages must be reduced pro tanto: per Cockburn L.C.J., Twycross v. Grant. It must not be forgotten that after all deceit is an action on the case for special damage incurred in consequence of the defendant's fraudulent inducement.
More generally, redress in cases of deceit is available to put the plaintiff into the position he or she would have occupied if no false representation had been made: Smith New Court Securities Ltd v Citibank NA [1997] AC 254 at 281 per Lord Steyn; Carolyn Sappideen et al, Fleming's The Law of Torts (11th ed, 2024, Thomson Reuters) at [26.60].
Whilst fraud was pleaded, and reference was made in the PCS to that pleading (PCS [11]), the PCS did not appear to pursue relief based on a cause of action in fraud. Specifically, the issues described in the PCS (at [14]) did not identify fraud as an issue. Further, in outlining the principles and authorities, the submissions in the PCS outlined principles in relation to various claims, but not fraud. The PCS addressed the ACL, resulting trusts, Quistclose trusts and the nature of indefeasibility of title (PCS [22]-[48]), and an alternative claim made reference to unjust enrichment both in relation to the MAP investment claims (PCS [60]-[64]) and the fees associated with the mentorship and sales and marketing program (PCS [65]-[69]).
Given my findings in relation to the misleading or deceptive conduct claim, I do not propose to make any findings as to the claim of fraud.
The way in which the "unjust enrichment" (or, more accurately, the money had and received) claim was pleaded in this case is not conventionally how a claim for restitution for money paid ought to be pleaded. In Mason & Carter's Restitution Law in Australia (4th ed, 2021, LexisNexis) (Mason & Carter), the learned authors explained that (at [2908]) (footnotes omitted):
The shift from implied contract to unjust enrichment as the conceptual basis of most restitutionary causes of action means that the general structure of a pleading in such a claim for restitution of money paid should be:
(1) the payment (or other benefit) provided by the plaintiff (at the plaintiff's expense);
(2) the basis for the claim, such as a request by the defendant, the plaintiff's title or an operative unjust factor (for example, mistake); and
(3) the causal link between (1) and (2).
While the plaintiffs' pleadings do not explicitly disclose an "operative unjust factor", the tenor of the pleaded unjust enrichment case is that the operative unjust factor was a failure of consideration. The plaintiffs' closing submissions reiterated this (and, in respect of the mentorship and the sale and marketing program fees, an "undue advantage") as the relevant unjust factor said to be operative in the present case: PCS [62], [69].
The term "failure of consideration" is used in the law to mean several things.
In Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516; [2001] HCA 68 (Roxborough), Gummow J observed at [101], quoting SJ Stoljar, "The Doctrine of Failure of Consideration" (1959) 75 LQR 53, 53:
First, a consideration fails because the defendant's promise is insufficient or illusory or formally void, the failure thus being an initial invalidity preventing a contract from being formed. Secondly, we say that the consideration fails where a promisor fails to perform; the failure is now simply a breach of contract, though usually a substantial or important breach. But, thirdly, failure of consideration has also a much older and specialised sense, one that describes a specific remedy when, upon the collapse of a bargain, the promisee seeks to recover money had and received by the promisor. Thus failure of consideration specifies not only a claim, but also the particular basis for that claim. …
Identifying the consideration or "basis" of the payments is a matter for objective interpretation: Barton v Morris [2023] AC 684 at [232] per Lord Burrows JSC. One must look at the common, objectively discernible basis of the payment: Mason & Carter at [408], citing Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd (2005) 63 NSWLR 203 at 250-255 per Mason P; [2005] NSWCA 83.
In this way, failure of consideration claims can be contrasted to those of mistake, which concentrate on what caused the plaintiff subjectively to decide to make the payment, whether or not this was known to the defendant: Mason & Carter at [408].
What is meant by, and what might suffice as, a "total" failure of consideration generally requires some particular analysis, including what was contemplated as the basis for the payments the plaintiffs seek to recover and the remedies available to the plaintiffs: see e.g. Roxborough at [104]-[109] per Gummow J.
Principally because of the lack of submissions from Ms Tran, the requirement that there be a common, objectively discernible basis or state of affairs was not the subject of detailed submissions. On one view, each of Mr Campbell's and Ms Tran's version of events demonstrate that they were bargaining for quite different things. Even accepting Mr Campbell's evidence, it is not entirely clear, from an objective interpretation, what the joint understanding or common basis of the transactions were, as distinct from what caused him subjectively to make the payments.
In the above circumstances, given my findings in relation to the misleading or deceptive conduct claim I do not propose to make any findings based on the unjust enrichment case.
Ultimately, one needs to analyse an individual fact situation for the purpose of deciding whether there is an intention to create a trust, and, if so, on what terms: Raulfs at [51] per Campbell JA.
There may be cases where monies are paid pursuant to a proposal for investment and the Court finds that the monies paid into a bank account are paid for a specific purpose, such that if the proposal fails then the monies will be held on a form of Quistclose trust: e.g. Puddick v Dyamond Developments Pty Ltd [2019] NSWSC 431 (Puddick) at [92] per Robb J (appeal dismissed in Dyamond Developments Pty Ltd v Puddick [2020] NSWCA 32).
In such a case, where the recipient has applied the money for unauthorised purposes, the recipient is obliged, as a defaulting trustee, to replenish the trust funds and is personally liable to pay equitable compensation to the extent that the trust fund has been dissipated: see Puddick at [93], citing White v Shortall (2006) 68 NSWLR 650; [2006] NSWSC 1379 at [269]-[270] (affirmed on other grounds: Shortall v White [2007] NSWCA 372).
The conversations which preceded the payments by Mr Campbell did not address repayment of the monies, and this was not explored on the hearing. In any event, there was a lack of evidence that the funds were only to be used for a nominated purpose.
Mr Bennett made brief reference in closing submissions to the possibility of a Quistclose trust: T 270-271. The requirements of Quistclose trusts were not debated by Ms Tran and I propose not to make a finding on it.
I find that both amounts were not paid by Ms Tran and are accordingly recoverable.
The orders I have outlined above appear to be the extent of the Court's dealing with the Oran Park rent issue. On the hearing, Mr Bennett had indicated that "the plaintiffs have been paying the rent of $550 a week into Court, so there is an amount of money into Court that is growing weekly, because the plaintiffs continue to pay the 550 rent": T 269.14-.16. He said further: "with your Honour's judgment, at some point that will possibly need to be a small matter post-judgment because there is money in Court that will need to go back to one or other of the parties": T 269.39-.41.
However, no such order formalising that arrangement (i.e. that the rent payments be made into Court) appears on the Court file. In those circumstances, there is some ambiguity as to the status of the Oran Park rent payments.
Had Ms Tran not made the MAP investment representation, the plaintiffs would not have transferred the Oran Park Property to her and, hence, would not be in the position of having to pay rent to her in order to keep Mrs Campbell's father living there. I am satisfied that there was no proper arrangement for Mr Campbell or the plaintiffs to pay rent to Ms Tran and, accordingly, find that whatever rent was paid by them is recoverable.