Driver Recruitment Pty Ltd (trading as Authorised Solutions) v Wedeco AVP Pty Ltd

PARTIES: Driver Recruitment Pty Ltd (trading as Authorised Solutions) - Appellant Wedeco AVP Pty Ltd - Respondent

COUNSEL: R Marshall - Appellant C Stomo - Respondent

SOLICITORS: Gillis Delaney Lawyers - Appellant Comino Prassas Solicitors - Respondent

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40796/07 DC 4039/05

GILES JA HODGSON JA BELL JA

Tuesday 11 November 2008 DRIVER RECRUITMENT PTY LTD v WEDECO AVP PTY LTD Judgment 1 GILES JA: The respondent was a supplier of equipment and services in relation to water treatment. It engaged the appellant, a recruitment agency, to find a person suitable for appointment as its sales manager for South East Asia. The appellant proposed Mr Stephen Riddell, and the respondent employed him as the sales manager. Eighteen months later the respondent discovered that Mr Riddell's claimed qualifications had been false, he had been bankrupt and was an undischarged bankrupt, and in his business activities he had engaged in fraudulent practices. 2 The respondent brought proceedings against the appellant in the District Court, claiming damages for breach of contract and for negligence and recovery of loss or damage suffered by conduct in contravention of s 52 of the Trade Practices Act 1974 (C'th). The appellant did not dispute that Mr Riddell was unsuitable for employment by the respondent as the sales manager. It contended that it had complied with its contractual obligations towards the respondent, and that in any event the respondent had not suffered recoverable loss from any breach of contract or negligence or contravening conduct. 3 The trial judge, Truss DCJ, held that the appellant was liable to the respondent for breach of contract and in negligence, and also in consequence of contravening conduct. She assessed the damages and the recoverable loss or damage at $164,224, with liberty to apply in relation to interest. It appears that the liberty was not taken up, and that judgment was entered for that sum. 4 The appellant appeals on both liability and quantum.

Liability 5 The engagement of the appellant by the respondent followed a meeting between Messsrs William Dive and Egon Perschk of the respondent and Ms Robyn Holt of the appellant on 7 August 2003 and a subsequent telephone conversation between Mr Dive and Ms Holt. Mr Dive was the respondent's managing director; Mr Perschk was the regional director for South East Asia Pacific. Within the appellant, the recruitment of Mr Riddell was left solely with Ms Holt. A written contract was signed on 13 August 2003, the signatory on behalf of the respondent being Mr Mario Di Noia, its personnel manager. 6 The trial judge held that it was an implied term of the contract that the appellant would undertake thorough background and reference checks in relation to candidates for employment. 7 Mr Riddell provided the appellant with a curriculum vitae, according to which he had since July 2001 been employed as an area manager with Tyco Measurement and Controls ("Tyco"). He nominated as referees Messrs Adam Caly and Glenn McDermott, both within the organisation of which Tyco was part. The trial judge considered that the contract required Ms Holt to contact Messrs Caly and McDermott by telephone. 8 Mr Riddell had in fact ceased to be employed with Tyco in March 2003. Messrs Caly and McDermott gave evidence that they received a telephone call regarding Mr Riddell from a woman in 2003, and that they told the caller that Mr Riddell was no longer employed with Tyco and were unable to speak of his work performance and that she should speak to Mr Vernon Costelow to whom Mr Riddell had reported at Tyco. Mr Costelow gave evidence that he had not been contacted by an employment agency for a reference, and that if he had been contacted he would not have given a favourable reference. He gave reasons for this; without recounting them, Mr Riddell was an unsatisfactory employee in a number of respects, he had been given two warnings, and when he left Tyco Mr Costelow was in the process of recommending his dismissal. 9 The trial judge said that she accepted that the evidence did not establish whether it was Ms Holt who spoke with Messrs Caly and McDermott. Her Honour considered that it could be inferred either that she did and failed to pass on to Messrs Dive and Perschk what she was told, or that she did not make any enquiries of them. 10 The trial judge did not accept a third possibility suggested by the appellant, that Ms Holt passed on to Mr Di Noia what she had been told by Messrs Caly and McDermott. She said - "49. The defendant suggested a third possibility namely that Ms Holt obtained this information and passed it on to Mario Di Noia the plaintiff's personnel manager who in fact signed the contract on the plaintiff's behalf. It was submitted that he had a role to play in the recruitment particularly when Mr Perschk was away (from approximately 20 August to 10 September 2003) and Mr Dive was frequently interstate. 50. It was in this context that the defendant sought to make much of the fact that the plaintiff neither discovered nor produced the personnel file relating to Mr Riddell. There was evidence about a yellow hammock enclosing a number of documents which it was submitted do not appear to answer this description. It emerged from the evidence that Mr Di Noia is no longer employed by the plaintiff but apparently lives in Sydney. The defendant says that whilst it may not be that a Jones v Dunkel inference can be drawn against the plaintiff in this regard, as part of its case the plaintiff has to establish what was or was not done by Ms Holt in performance of the contract and, as Mr Di Noia was a point of contact at least up to 11 September 2003, this deficiency affects the plaintiff's discharge of the onus of proof in relation to this issue. 51. Behind Tab A to the exhibits to Mr Emmerton's affidavit is a record of Ms Holt's client contact. Whilst this indicates that she spoke to Mr Di Noia on 28 August, 26 September and 28 October 2003, significantly there is no reference to the Tyco employment." 11 Her Honour found that the appellant was in breach of contract and of its duty of care owed to the respondent - "52. … by the failure of Ms Holt: · to either speak to the two referees; or · if she did, to speak to Mr Costelow; and · to communicate this information to the plaintiff. 53. I consider this to be the primary and most basic of the enquiries the defendant was required to undertake and that had Ms Holt done so the evidence suggests overwhelmingly it would have become apparent immediately that Mr Riddell was an unsuitable candidate". 12 In relation to contravening conduct the trial judge said - "79. As to the curriculum vitae, this was not supplied the defendant but by Mr Riddell and passed on. It was not endorsed by the defendant, who submitted, and I accept, that a recruiter is neither expected to nor would not be able to verify every piece of information. The defendant however accepts that it was represented to the plaintiff that it had performed the background and employment checks and having regard to my earlier findings I am satisfied that such representation was clearly false insofar as it related to employment checks with Tyco and that the representation in relation to background check was also false given that the enquiries were limited to employment checks. I am satisfied that the defendant's conduct did lead to an erroneous assumption on the plaintiff's part and to that extent, applying the standard of reasonableness, the plaintiff was misled". 13 The appellant's grounds of appeal in relation to liability were - "1. The trial judge erred in finding that the appellant breached its contractual obligations or its duty of care owed in regard to the provision of recruitment services to the respondent.

2. The trial judge erred in finding that the appellant contravened section 52 of the Trade Practices Act 1974." 14 The grounds of appeal were uninformative, and did not comply with Pt 51 r 11(1)(c) of the UCP Rules which requires that the notice of appeal "state … briefly but specifically the grounds relied upon in support of the appeal". 15 The appellant put what amounted to three submissions in support of these grounds. The first and third were not to be found in the written submissions filed by the appellant in accordance with Pt 51 rr 34 and 36 of the UCP Rules, and the appellant's prosecution of the appeal was unsatisfactory in this respect also. 16 The first submission took issue with the trial judge's observation at [45] that "had Ms Holt made the telephone enquiries and ascertained that Mr Riddell was no longer employed by Tyco there would have been no impediment in her communicating with Mr Costelow". It was said that this was contrary to evidence of Ms Gaynor Lowndes, a "recruitment trainer" called by the appellant, that a recruitment agency would not have contacted Mr Costelow without permission of Mr Riddell. On examination of Ms Lowndes' evidence, this was not borne out. In any event, if Mr Holt had spoken to Messrs Caly and McDermott but, because Mr Riddell did not give permission, did not speak to Mr Costelow, that should have been included in the information she gave to Mr Dive or Mr Perschk. The inability to speak to Mr Costelow would be likely, in itself or through provoking further enquiry, to be fatal to Mr Riddell's suitability as a candidate. The submission did not advance the appellant's position. 17 The second and principal submission was directed to the third possibility considered by the trial judge at her [49]-[51] set out above. It was said that, when neither Ms Holt nor Mr Di Noia had given evidence, Ms Holt may have passed on to Mr Di Noia what she had been told by Messrs Caly and McDermott and he may have decided to employ Mr Riddell nonetheless, and that the respondent had failed to discharge its burden of proof when that possibility remained. It was submitted that the trial judge had erred in her reason for declining to accept the third possibility, being that the record of Ms Holt's client contact indicated that she spoke to Mr Di Noia on three occasions but made no reference to the Tyco employment, because other evidence showed that the record of client contact was incomplete. Thus, it was said, Ms Holt may still have told Mr Di Noia what she had found out from Messrs Caly and McDermott. 18 In my opinion it was open to the trial judge to infer, from the record of client contact even if incomplete and the fact that Mr Riddell was employed by the respondent, that Ms Holt had not passed on to Mr Di Noia what she had been told by Messrs Caly and McDermott. It was inherently unlikely, had it been made known to Mr Di Noia that Mr Riddell had given a false account of his current employment and the referees were unable to speak of his employment performance, that Mr Riddell would have been regarded as suitable. Further, the sales manager position attracted the direct involvement of Messrs Dive and Perschk in the recruitment, with Mr Di Noia signing the contract under instruction from Mr Dive, and Messrs Dive and Perschk gave evidence that thereafter they took over responsibility for employment of the sales manager and they and not Mr Di Noia made the decision to employ Mr Riddell after approval from head office in Germany. It is highly unlikely that Mr Di Noia would have decided to employ Mr Riddell without further reference to them, especially if the matters abovementioned had been made known to him. 19 However, in supporting that Ms Holt's record of client contact was incomplete the appellant took the Court to evidence amply demonstrating that Ms Holt had not passed on to Mr Di Noia what she had been told by Messrs Caly and McDermott. The evidence also brought out what the trial judge must have been referring to in relation to contravening conduct when she was satisfied that the appellant had falsely represented that it had performed the background and employment checks. 20 On about 20 August 2003 Ms Holt had a telephone conversation with Mr Dive - "Robyn said: 'I have someone for your who is looking good. His name is Stephen Riddell aged between 43 or 45 I will check that out for you. He is working for Tyco and I believe you know who they are. He is experienced with UV water and waste water and has travelled in Asia extensively. I will email you his CV and will check out his references. He can be available almost immediately as his contract with Tyco is finishing and he does not want to renew it with them. He is seeking new challenges and knows Wedeco well. I will check with Tyco with Tyco what he is like and his CV references when available.'

I said: 'We want a good background check and the best available person.'

She said: 'I will get the references from the CV checked out and follow up with the previous employers'." 21 On 10 September 2003 Ms Holt said in another telephone conversation with Mr Dive, "I have now checked out Stephen's references and everything stacks up". She said again that she had checked Mr Riddell's reference and they stacked up at a meeting with Messrs Dive and Perschk on 7 October 2003, while Mr Riddell was waiting outside to be interviewed by them. 22 Telling Mr Dive and Mr Perschk that the references stacked up could not credibly stand with passing on to Mr Di Noia what Messrs Caly and McDermott had said, and as I have said Messrs Dive and Perschk were the decision-makers. That Ms Holt informed Mr Di Noia of what she had been told upon speaking to Messrs Caly and McDermott was not reasonably open, and the appellant's submission is without substance. 23 No error has been shown in the trial judge's conclusion that the appellant was in breach of contract and of the duty of care owed to the respondent, or in her satisfaction that it was falsely represented that the appellant had performed background and employment checks in relation to Tyco. 24 The third submission was that the basis on which the trial judge found contravening conduct was outside the pleaded case. It was said that the pleaded case was confined to representations by the provision to the respondent of a number of documents, some describing the services the appellant would provide and others being the curriculum vitae, a "personality profile" with respect to Mr Riddell and a reference purportedly from a third party in respect of Mr Riddell alleged to have been false. 25 On one view of the pleadings this is correct, but on another view it was obscurely pleaded that the documents, or at least some of them, founded the continuing representation that "the information provided by the defendant to the plaintiff was information to be relied upon" (statement of claim para 18A), sufficiently to catch a case of misleading conduct by falsely representing that, as the documents conveyed would be done, background and employment checks had been done. 26 In any event, from the acceptance by the appellant as recorded by the trial judge that it was represented to the respondent that it had performed the background and employment checks, and the upholding of the claim under the Trade Practices Act founded on that representation, it appears that any limitations in or difficulties with the pleading were passed over, and that in the conduct of the trial contravening conduct arising from the evidence to which I have referred was in issue between the parties. While counsel for the appellant rather hesitantly suggested what he might have said causing the judge to record the acceptance, the Court was not provided with written submissions or a transcript of oral submissions at trial and in my opinion should proceed on the basis that the trial judge was correct in her perception of the acceptance. She was entitled to find contravening conduct as she did: Dare v Pulham (1982) 148 CLR 568; see also Pt 36 r 1 of the UCP Rules. 27 The appellant's submissions in relation to damages included that the trial judge had erred in arriving at damages without regard to contributory negligence on the part of the respondent. Its submissions in that respect were rather unclear, failing to distinguish between the respondent's conduct in relation to the employment of Mr Riddell and its conduct thereafter in supervision of Mr Riddell's activities as its employee and between contributory negligence and causation. However, it was accepted that contributory negligence does not arise so far as the trial judge upheld the claim under the Trade Practices Act.

Damages 28 The damages claimed by the respondent were set out by the trial judge as follows; I have added in a last column the damages awarded by her Honour. Item Number Description of loss Date incurred Amount Amount Awarded A Salary paid to Mr Riddell 3 November 2003 to 21 April 2005 $144.024.09 $48,000.00 B Credit card fraud 9 February 2004 to 15 April 2005 $38,611.08 $4,124.00 C Travel/expenses less credit card fraud/time for consultation Ross Dive to unravel fraud 9 June 2005 to 22 August 2005 $31,442.30 $2,000.00 D Egon Perschk time and travel to Asia June/July 2005 $13,767.57 $6,537.00 E Louis Wiart travel and accommodation 8 May 2005 to 19 June 2005 $20,770.37 $4,642.00 F Cost for Griffith project fraud February 2005 $61,504.60 $61,504.00 G Cost for Indonesia project fraud February 2005 $23,389.00 $23,389.00 $14,028.00 H Service fee paid to defendant for Mr Riddell 3 December 2005 $14,028.30 ________ Total $164,224.00

29 The trial judge was satisfied that, had the proper enquiries of Tyco been made and communicated to the respondent, it would not have engaged Mr Riddell. She continued - "96. Whilst the defendant submitted that there was no evidence as to what the plaintiff would have done had it not employed Mr Riddell, in my view such evidence would have been highly speculative." 30 This is not entirely clear, but it appears that her Honour considered that the respondent could not be expected to prove what it would have done had it not employed Mr Riddell, which I take to mean whether it would have engaged someone else, and proceeded on the basis that it would not have. 31 The trial judge said that in assessing the respondent's damages she did not think that its entitlement under the Trade Practices Act was "any greater than at common law" (at [94]), and that the appellant was "entitled to damages on the basis which puts it in the position it would have been had the contract been performed properly" (ibid). It was not submitted on appeal that there was material difference (save in relation to contributory negligence) between the respondent's damages for breach of contract, in negligence, or as recovery of loss suffered by misleading conduct in contravention of s 52 of the Trade Practices Act, and it is not necessary to explore whether in some respects the trial judge may have conflated the separate causes of action. In what follows I focus on the claim under the Trade Practices Act. 32 An issue at trial was the respondent's own conduct in supervising Mr Riddell. The trial judge said - "90. Given the length of Mr Riddell's employment, combined with the long term nature of the projects and accepting that Messrs Dive and Perschk believed him to be honest and trustworthy, a difficulty which the plaintiff nevertheless faces in relation to damages is that over that period the evidence suggests that there were minimal efforts to monitor Mr Riddell's employment, accepting that he was in a senior position and working alone overseas. In my view the evidence establishes that to the extent that he was supervised it was very superficial." 33 Her Honour considered that "even a basic monitoring of Mr Riddell's credit card usage [meaning use of the company credit card for personal expenses] is likely to have indicated a potential problem and that this was one simple way of monitoring him as an employee" (at [93]). She said that there was considerable force in the appellant's submission "that had his credit card situation been properly monitored this is a matter [to] which regard could have been had within the first six months of the employment (ibid). 34 There was generality in these observations of the trial judge, and in the consequences ascribed to them in the assessment of damages.

A. Salary paid to Mr Riddell 35 The respondent claimed the whole of Mr Riddell's salary and superannuation for the period of his employment. The trial judge considered that, notwithstanding the evidence concerning failure of the Griffith and Indonesian projects (see below), existing customers continued to give the respondent orders from which a profit was derived and some new customers were obtained, and that "there was some benefit to the plaintiff in employing Mr Riddell although it is virtually impossible to quantify this" (at [101]). Her Honour said that "the lack of supervision and a proper review after 6 months are matters which ought to be taken into account in assessing damages under this head" (at [102]), and - "103. Doing the best I can on the information available, I assess damages under this head at $48,000 being one-third of the amount claimed representing 6 months of entitlements." 36 The appellant's submission as put in its written submissions was - "Her Honour awarded $48,000 being an amount equal to 6 months' worth of entitlements paid to Mr Riddell for superannuation and wages. The appeal against this award should be allowed in full as this has not been proven to be a net loss. Profits were derived by Wedeco from sales made by Mr Riddell." 37 Had the contract been performed properly the respondent would not have employed Mr Riddell, and if the respondent had not employed Mr Riddell it would not have paid any salary and superannuation to him. That was not an end to the enquiry. It seems on the basis that the respondent would not have employed someone else, the trial judge credited against the salary and superannuation which would not have been paid to Mr Riddell a benefit obtained from its payment in fact, in order to arrive at a difference between cost and benefit to the respondent. 38 The credit was for, or at least included, profits derived by the respondent from sales made and new customers obtained under Mr Riddell's management, and it was not necessary to prove that under Mr Riddell's management there was a net loss - indeed, a net loss could mean recovery of the whole of the salary and superannuation. On my understanding of the appellant's submission, then, the importance lay in "being an amount equal to 6 months' worth of entitlements paid to Mr Riddell … ". The appellant took the award as causally cut down, because of lack of supervision and a proper review after six months, to six months of salary and superannuation, and its submission was that for those six months profits were derived by the respondent from sales made by Mr Riddell. 39 I do not think, however, that the starting point of six months of salary and superannuation is correct. In favour of the appellant, the trial judge sought to put a value on the benefit to the respondent from Mr Riddell's services, and evaluated it as two-thirds of the salary and superannuation. The six months was consequential, not a causally derived starting-point. Had her Honour applied a six month causal cut-off to the respondent's loss, there would have been inconsistency with a different temporal cut-off in relation to credit card fraud and no temporal cut-off in relation to the costs for the Griffith and Indonesian projects, see below, and the inconsistency should not readily be attributed to her Honour. 40 When it appears that a loss has been suffered but a precise or even less than precise calculation of the loss can not be expected, it is necessary that the trial judge do the judge's best by a broad estimation: Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31 at [135]-[137] and cases cited. Her Honour did so by taking one third of Mr Riddell's salary as value of the benefit lost by the respondent. In this her Honour paid regard to the lack of supervision and a proper review after six months as causal factors, but in the circumstances as components in the very broad assessment. 41 The appellant at one point suggested that there was double counting in allowing the $48,000 and also allowing the wasted costs in relation to the Griffith and Indonesian projects. The trial judge was presented with the claim to the wasted costs separately from the claim to salary and superannuation paid to Mr Riddell, and had calculation been possible (which it was not) could have come to a value of the benefit to the respondent from Mr Riddell's services excluding the wasted costs and dealt with the wasted costs as specific loss. I think she can properly be regarded as having taken such a course in arriving at her broad assessment. 42 The appellant made no complaint of deficiency in the trial judge's explanation of her reasoning, in relation to this or any other of the items of the damages. I do not think that its particular challenge to the award of the $48,000 should be accepted, and the award should not be disturbed.

B. Credit card fraud 43 Mr Riddell charged personal expenses to the company credit card. A table was produced by Mr Dive of what he said were not legitimate expenses of the respondent but personal expenses of Mr Riddell, over the period February 2004 to April 2005 totalling $43,906.02. After crediting $5,249.94 repaid by Mr Riddell, the respondent claimed the balance of $38,611.08. 44 The trial judge said - "105. Whilst I accept that the plaintiff is entitled to some damages under this head, in view of the observations made earlier in relation to the credit card, I do not consider the plaintiff to be entitled to the totality of personal expenditure for this period. 106. I consider it proper to allow damages in respect of expenditure for the months of February and March 2004 which amounts to $4,124." 45 I understand the "observations made earlier in relation to the credit card" to have been her Honour's view, expressed at [91], that it was obvious from the statements by February 2004 that the credit card was being used for personal expenses but Mr Riddell was allowed to continue. In this instance, in my view, the trial judge applied a causal cut-off after two months. 46 The appellant submitted that the only charges found by the trial judge to have been personal expenses were the charges for "Roses Only/Lush" and "Graysonline", that those charges for February and March 2004 totalled $1,788.21, and that only $1,788.21 should have been allowed for this item of the damages. 47 However, the trial judge did not confine the personal charges to "Roses Only/Lush" and "Graysonline". She referred to those charges in saying that she was not persuaded by Mr Perschk's evidence that they could have been for flowers for a client or for purchasing wine for clients, but that was because the explanation had been offered for the particular charges. More generally, she said at [91] that the credit card statements "reveal items against which he supplied codes which were in my view questionable company expenses". This left acceptance of that other personal expenses had been charged to the credit card. 48 Other than by the trial judge's reference to codes supplied by Mr Riddell, it does not appear from the reasons how she came to the figure of $4,124. Counsel for the appellant and the respondent both said that they could not assist in how the figure might have been arrived at. On one view, however, when the basis for appellant's challenge is unsound it is not necessary to go further. The appellant did not complain that it could not be seen how the trial judge came to the figure of $4,124. 49 There were thirty-three charges to the credit card in February and March 2004, totalling $7,423.12. Mr Dive's table, which was admitted into evidence with its commentary, attributed the majority to personal expenses, including cash withdrawals with the commentary "no company expenses for travel or expenses", a car repair charge and a car hire charge with the commentary that it was Mr Riddell's personal car and unauthorised hire while the personal car was being repaired (in his oral evidence Mr Dive said that Mr Riddell had a car allowance), and a hotel bill said to be a holiday taken by Mr Riddell and his wife. The cross-examination barely touched on Mr Dive's explanations for attribution to personal expenses. In my opinion, the evidence amply warranted coming to the figure of $4,124 if not to a higher figure.

C. Travel/expenses etc 50 The appellant did not challenge the award of this item of the damages.

D and E. Time and travel by Mr Perschk and Mr Wiart 51 The respondent's claim was in relation to travel to Asia to deal with complaints and other problems arising out of Mr Riddell's employment. The trial judge declined to allow amounts for salary paid to Mr Perschk and Mr Wiart, but allowed the claimed travel and accommodation expenses. She referred to the appellant's submission "that the situation appears to have arisen at least in large part by the plaintiff's failure to supervise Mr Riddell and that the defendant ought not be responsible for events which occurred such a lengthy period after the placement", but by allowing the expenses and without other explanation did not accept the submission. 52 The appellant submitted that if Mr Riddell had been adequately supervised by the respondent, the expenses would not have been necessary. In relation to Mr Wiart in particular, it said, he travelled to Asia to deal with a failed project concerning Bootawa Dam, a project about which it said the evidence was so scanty that the respondent did not prove that it was committed to it before Mr Riddell's employment should have been terminated. Again, the appellant's challenge was not as to the sufficiency of the trial judge's reasons. 53 While her Honour considered that monitoring Mr Riddell's credit card usage was deficient, it seems clear that she did not regard failure to monitor it as bringing a causal end to recovery of all loss within a few months of the commencement of his employment. The Court was referred to evidence that misuse of the credit card could have been plausibly explained away with apology, or (as occurred with Tyco) could have brought action less than termination of employment; while there had been continued misuse of the credit card in the employment with Tyco, Mr Costelow was coming to dismissal of Mr Riddell only after some eight months. Consistently with the respondent finding out that Mr Riddell was misusing the credit card, then, his employment could have continued, and it seems to me that the trial judge was of the view that it would have. 54 While the trial judge was critical of the supervision of Mr Riddell's activities as sales manager, and in relation to salary and superannuation paid to Mr Riddell considered that failure in supervision should be taken into account, the particular time at which it became necessary to deal with complaints and other problems arising out of Mr Riddell's employment was not necessarily of consequence. Travel to Asia by executives of the respondent, perhaps not Messrs Perschk and Wiart but equivalent persons, was likely to have been necessary whenever his unsuitability was recognised through complaints and other problems arising out of his performance as sales manager. 55 From the evidence of Mr Perschk, after Mr Riddell's employment was terminated he received complaints that Mr Riddell had falsely said that equipment offered by him for the Bootawa Dam project could do "certain specialised things", and it was necessary for Mr Wiart "to attend to this problem". He was not cross-examined on this. The documentary evidence included a proposal dated 16 February 2005 for the supply of ozone equipment for the project. The evidence was certainly not extensive, but it could be necessary to meet a customer's complaint even prior to commitment to the project and in my opinion it was open to regard the expenses of Mr Wiart's attention to the problem as recoverable. 56 These considerations do not appear from the trial judge's reasons, but there was no complaint of inadequacy in her reasons and a proper basis on which she may be taken to have come to her decision can be seen. In my opinion, she was entitled to be satisfied that the travel and accommodation expenses were loss which was suffered by the appellant's contravening conduct.

F and G. Costs in relation to the Griffiths and Indonesian projects 57 The trial judge explained the projects in the course of recounting the respondent's submissions, relevantly - "The plaintiff also asserts: (a) Mr Riddell provided false information in relation to an Indonesian project for ultraviolet treatment of milk. This is referred to in paras 58 to 63 of Mr Perschk's affidavit which was elaborated upon in his oral evidence.

(b) he also provided false information in relation to a project at Griffiths including the preparation of a false document (paras 47 to 57 of Mr Perschk's affidavit).

(c) because of the conduct of Mr Riddell this damage could not be readily identified.

(d) the situation was compounded by the fact that the projects were not anticipated to produce a profit for 2 or 3 years after coming online and for this reason any problems would not be capable of being discovered until some time in the future." 58 In awarding damages for this item she said only - "115. The amounts claimed are $61,504.60 and $22,389.00 respectively which represents expenses actually incurred by the plaintiff. Having regard to the totality of the evidence I am satisfied that this loss is a direct consequence of the defendant's failure." 59 The appellant submitted that the expenses in relation to the two projects should not have been allowed because it had not been shown that the projects were loss-making. However, it seems clear that the expenses were losses to the respondent. 60 The Indonesian project was the supply of equipment for ultra violet treatment of milk. Mr Riddell falsely represented to the customer that the respondent's technology for ultraviolet treatment of water would also treat milk. Equipment was ordered from Germany and supplied to the project. It then became apparent that the technology would not treat milk. The customer refused to pay. (For this last sentence, in my opinion the part of para 61 of Mr Perschk's affidavit so stating was in evidence. The "leave to clarify" given by the trial judge was in relation to another part of the paragraph, and if there was any rejection it was only for that other part.) 61 Equipment was obtained by the respondent for supply to Griffith Council. Mr Riddell had no authority to incur expenses in relation to the project. After Mr Riddell's employment was terminated the nascent contract with the Council was reviewed by the respondent, and it was found that he had misrepresented what was necessary to be done and that the cost to the respondent would be such that a significant loss would be incurred. The respondent decided not to proceed, but did not recover some of the equipment already delivered and was left with other equipment for which it had no other use. 62 The appellant further submitted that the two projects were undertaken well into the period of Mr Riddell's employment, in the case of the Indonesian project commencing with enquiry in July 2004 leading to supply of the equipment in or after February 2005 and in the case of the Griffith project coming to the nascent contract in January 2005. It submitted that proper supervision would have resulted in the termination of Mr Riddell's employment before the respondent committed itself to either project. 63 However, in my opinion it has not been shown that the trial judge was in error in concluding, as she must have, that despite deficiency in the respondent's supervision of Mr Riddell the loss in incurring these expenses was suffered by the appellant's contravening conduct. Causal connection is not negated by some contribution of the respondent's conduct to the suffering of loss (I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109), and it is enough that the misleading conduct was a cause of the loss.

H. Service fee paid to the appellant for Mr Riddell 64 The appellant was entitled to a fee for its services in the recruitment of a sales manager for South East Asia. A fee of $14,028.30 was paid by the respondent. 65 The trial judge said only - "116. Despite the submission by the defendant that the plaintiff did not establish a total failure of consideration considering that he was employed for 18 months and that some profit was made from sales which took place under his management, having regard to the totality of the evidence, I consider that the plaintiff is entitled to damages representing the full amount of the fee paid to the defendant." 66 As appears from this, speaking of a total failure of consideration came from the appellant's submissions at trial, earlier recorded by her Honour as a submission that the respondent's damages were "restricted to the recruitment fee if the plaintiff were able to demonstrate a total failure of consideration and personal credit card usage for say 1 month". However, the respondent was not claiming recovery of the fee on a total failure of consideration. It was claiming it as damages for breach of contract or negligence, or as loss or damage suffered by misleading conduct in contravention of the Trade Practices Act. 67 The misconception continued in the appellant's submissions on appeal. It submitted in the written submissions that it was "wrong to conclude that there has been a total failure of consideration", and added that the respondent could not "seek damages in contract on the one hand and obtain the return of its fee for the contract on the other". In oral submissions it said that the respondent "should only have the fee back … if there was a total failure of consideration and in this case there wasn't". 68 It is correct that the respondent could not claim both damages for breach of contract and return of the consideration it paid under the contract: see Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 387 per Gaudron J - "In my view, Mrs Dillon's claim for damages, if successful, precludes a refund of the fare. The claim for damages is a claim to the full benefit of the contract, part of that benefit taking the form of money as compensation for its breach. If Mrs Dillon were to receive damages and a refund of her fare as well, she would, in effect, take the benefit of the contract without an obligation to give consideration for it." 69 However, it does not follow that the respondent could not recover the fee paid to the appellant in its claim under the Trade Practices Act, as part of the loss or damage suffered by the appellant's contravening conduct. Had the appellant not falsely represented to the respondent that it had performed the background and employment checks in relation to employment with Tyco, Mr Riddell would not have been employed by the respondent. The trial judge was proceeding on the basis, as I have earlier indicated, that the respondent would not have employed anyone else. If so, the payment of the fee can readily be found to be loss suffered by the appellant's contravening conduct. 70 It could be inferred that the respondent would have employed someone else. It wanted to engage a sales manager for South East Asia. It approached another recruitment agency as well as the appellant. Mr Dive said he was told by Ms Holt to the effect that she did not recommend another candidate because Mr Riddell was an outstanding candidate, suggesting that there was an available pool of candidates. However, the appellant did not submit that this should be inferred, saying only that it was unsatisfactory that there was no evidence about what the respondent would have done had it not employed Mr Riddell. 71 The trial judge's reasons in relation to this item of the damages are, with respect, particularly Delphic, but again a proper basis on which she may be taken to have come to her decision can be seen. I do not think it has been shown that the fee was not part of the respondent's recoverable loss or damage.

Orders 72 I propose that the appeal be dismissed with costs. 73 HODGSON JA: I agree with Giles JA. 74 BELL JA: I agree with Giles JA. **********

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