Fitzgerald v Deloitte Services Pty Ltd

Judgment

1. BATHURST CJ: I have had the advantage of reading the judgment of Acting Justice Emmett in draft. For the reasons given by his Honour, I agree the appeal should be dismissed with costs.
2. PAYNE JA: I agree with Emmett AJA.
3. EMMETT AJA: The question in this appeal is whether the appellant, Mr Kevin Fitzgerald (Mr Fitzgerald), is liable for losses suffered by the respondent, Deloitte Services Pty Ltd (Deloitte), in connection with project management services provided to Deloitte by HBO EMTB Interiors (NSW) Pty Ltd (In Liquidation) (Interiors) and HBO EMTB Projects Pty Ltd (In Liquidation) (Projects). Deloitte commenced proceedings in the Commercial List of the Equity Division for recovery of the losses suffered. The defendants in the proceedings were Interiors, Projects, Mr Fitzgerald and three other individuals. The proceedings were subsequently settled as against the other three individuals.
4. For reasons published on 15 November 2016, [1] a judge of the Equity Division sitting in the Commercial List (the primary judge) concluded that Mr Fitzgerald is liable to account to Deloitte for the sum of $3,636,368. On 29 November 2016, the primary judge made declarations that Interiors and Projects engaged in conduct in contravention of s 18 of the Australian Consumer Law, which prohibits any person from engaging in conduct, in trade or commerce, that is misleading or deceptive or is likely to mislead or deceive. His Honour also declared that Mr Fitzgerald was involved in those contraventions within the meaning of the Australian Consumer Law. His Honour directed the entry of judgment for Deloitte against Mr Fitzgerald in the sum of $4,626,682.39, being the amount of $3,636,368 plus interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) in the amount of $990,314.39. Finally, his Honour ordered Mr Fitzgerald to pay Deloitte's costs of the proceedings as agreed or assessed. By notice of appeal filed on 13 December 2016, Mr Fitzgerald appeals to this Court from those orders.

Background

1. In October 2002, Deloitte retained an architectural practice controlled by Mr Fitzgerald. The purpose of the retainer was to provide design and project management services for commercial office premises, which were to be occupied by Deloitte Touche Tohmatsu, a group of companies and individuals, who provide audit, tax, consulting, financial advisory, risk management and related services. The architectural practice consisted of a number of entities, including Interiors and Projects, described as the HBO+EMTB Group. The arrangement was that one of the companies within the HBO+EMTB Group would provide design services to Deloitte and another company would provide project management services.
2. Initially, Deloitte contracted with Interiors for the provision of project management services. Subsequent contracts were made with Projects in 2011 and 2012, when Deloitte engaged one or other of Interiors and Projects to provide project management services for the fit out of nine commercial premises located in Parramatta, Melbourne, Sydney and Launceston. Six contracts were entered into by Deloitte, one with Interiors and five with Projects. The services were in fact provided by Projects, although for the sake of convenience, the primary judge ignored the distinction between Interiors and Projects. No complaint has been made about that aspect of his Honour's reasons and it will be convenient to adopt the same approach from time to time in these reasons.
3. The contractual duties of Projects (or Interiors where relevant), up to the point at which a contract was made between Deloitte and a contractor, consisted of the following:

• the preparation and issue of tender documents;
• analysing the tenders received and making a recommendation to Deloitte; and
• issuing a letter of acceptance to the contractor selected by Deloitte to carry out the works. The tender documents stipulated that Deloitte was the principal and that the contract between Deloitte and the successful tenderer was to be on specified terms, being a modified version of the AS 4000 standard form of contract that was current at the time.

1. Upon a letter of acceptance being issued to the successful contractor by Interiors or Projects, a contract came into existence between that contractor and Deloitte on the terms of the tender. The resulting contracts were all for lump sums, subject to variation, which were payable by progress claims at specified intervals. Once work started, the services provided by Interiors or Projects consisted of:

• the receipt of progress claims from the contractor, which were usually monthly; and
• analysis and certification of those progress claims.

1. Deloitte claimed that, in about June 2003, in the course of discussions between a Mr Wardrop, on behalf of Deloitte, and a Mr Rogut, on behalf of Projects and Interiors, Projects offered to provide a payment service to Deloitte. Mr Rogut suggested that Projects would issue Deloitte an invoice to cover all contractor claims in relation to contracts and Deloitte would then pay those monies into a "client monies trust account" conducted by Projects (the Trust Account). Projects would then on-pay those monies to each of the contractors.
2. Mr Rogut said that the Trust Account had been set up specifically for the purpose of on-paying amounts owing to contractors. Mr Rogut told Mr Wardrop that some clients liked to pay the money to Projects because it was simpler. He said that Projects would manage all the contractor claims and would issue an invoice to Deloitte for all those claims together. Thus, Projects would take on the administrative task of managing all the contractors' claims and Deloitte would pay the monies into trust. Projects would then manage the payment of those monies to each contractor. Mr Wardrop responded: "That sounds good so let's go that way".
3. Mr Rogut did not deny Mr Wardrop's account of the conversation set out above and said that, to his knowledge, Projects had always operated a "client monies trust account". Significantly, he said that he had had numerous conversations with Mr Fitzgerald over many years in which Mr Fitzgerald had said words to the effect that all claims for construction work were to go into the Trust Account and were only to be spent on the contractor claims for a relevant project. Mr Rogut said that Mr Fitzgerald told him that all money in the Trust Account was sacrosanct and was not to be touched. As a result, Mr Rogut's understanding at all times was that the Trust Account was to be used only for the payment in and payment out of amounts owing to contractors and consultants.
4. Mr Fitzgerald asserted in evidence before the primary judge that he had no knowledge of the alleged conversation between Messrs Wardrop and Rogut and that he did not agree to the payment practice suggested in that exchange. Mr Fitzgerald also denied having said words to the effect of those attributed to him by Mr Rogut. The primary judge did not accept Mr Fitzgerald's denial and accepted Mr Rogut's evidence as to what was said. His Honour concluded that, in all the circumstances, despite Mr Fitzgerald's attempts in cross-examination to evade the proposition that the Trust Account was in fact a trust account, it was inherently likely that Mr Fitzgerald would have said to Mr Rogut words of the kind attributed to him by Mr Rogut.
5. On 20 January 2011, Deloitte and Interiors entered into a project management agreement for the first of the fit out projects that are the subject of the proceedings. The agreement described the project management services to be provided to Deloitte, for which Interiors was to be paid fees consisting of a fixed proportion of the "defined cost of the project". The relevant tender documents were in fact prepared by Projects and stated that the successful tenderer would be required to enter into a fixed lump sum contract with Deloitte.

The Claims made by Deloitte

1. Relevantly for present purposes, five issues were formulated by the solicitor who appeared for Mr Fitzgerald before the primary judge. They may be stated as follows:
2. Whether there was a payment practice between Deloitte and Projects and, if there was, what its terms were;
3. Whether Projects over-invoiced Deloitte;
4. Whether Projects failed to pay all progress claims made by contractors;
5. Whether Projects engaged in misleading deceptive conduct in contravention of s 18 of the Australian Consumer Law;
6. Whether Mr Fitzgerald was involved in those contraventions.

Payment Practice

1. In relation to the first issue, Deloitte claimed that the terms of the payment practice between Deloitte and Projects were as follows: 1. Projects was required to certify progress claims made by each contractor engaged to undertake fit out work; 2. Projects was then to invoice Deloitte for the amount so certified; 3. Deloitte was to pay the amount invoiced into the Trust Account; and 4. Projects was then to pay the certified amount of the progress claim to the contractor from the Trust Account.
2. The primary judge concluded that the payment practice alleged by Deloitte was in fact established in about June 2003, and was understood both by Deloitte, through Mr Wardrop, and by Projects, through Mr Rogut, to apply to all the project management contracts thereafter made, whether with Interiors or with Projects. His Honour gave no credence whatsoever to Mr Fitzgerald's denials of the existence of such a practice. His Honour considered that the fact that Deloitte paid the certified amounts into the Trust Account signified that there was a practice recognised and followed by each of Deloitte and Projects such as Deloitte alleged.
3. The primary judge found that, under the contracts between Deloitte and the various contractors, the contractors were required to send their progress claims to Projects for certification. Once certified, the claims were to be provided to Deloitte, which was to pay the amount certified to the contractor. His Honour found, however, that that practice was not followed in any case and that, instead of following the process of certification and payment set out in the contracts between Deloitte and contractors, Projects provided to Deloitte a payment service under which:

• Projects would examine progress claims made by contractors and satisfy itself as to the amount properly payable;
• Projects would invoice Deloitte for the amount that it considered to be payable to the contractor;
• Deloitte would pay the invoiced amount into the Trust Account; and
• Projects would then pay the amount certified to the contractor out of the Trust Account.

1. The primary judge held that the contractual obligation of Projects was to analyse all progress claims, determine the amount properly payable and certify that amount to Deloitte for payment by Deloitte to the contractor. His Honour found that that contractual scheme was modified by the payment practice that was adopted by the parties, but only as to the way in which Projects would inform Deloitte of the amount payable to the contractor and the way in which the amount would be paid. His Honour considered that nothing in the payment practice suggested that there was to be any departure from, or variation to, the obligation of Projects to analyse each progress claim, determine the amount properly payable to the contractor and inform Deloitte of the amount so payable. Nothing in the payment practice suggested that Deloitte was to pay any other amount into the Trust Account or that any amount so paid in was to be paid other than to the contractor.
2. The primary judge also found that, from June 2003 onwards, Deloitte and Projects conducted their mutual business on the basis of that practice, notwithstanding the terms of their contracts and notwithstanding the terms of the contracts between Deloitte, on the one hand, and QBI and other contractors, on the other hand. His Honour was satisfied that the contractors were aware of the practice in question and were prepared to accept it, so long as they were being paid.

Over-invoicing and Short Payment to Contractors

1. Mr Rogut accepted that from time to time he issued invoices to Deloitte for more than the amount of the progress claim received from the relevant contractor. He said that he knew that that should not have been done, but that he did so on express instructions from Mr Fitzgerald. While Mr Fitzgerald denied giving such instructions, his Honour did not accept those denials.
2. More particularly, the primary judge did not accept the assertion by Mr Fitzgerald that there was an arrangement or understanding in place between Projects and Deloitte under which Projects was entitled to invoice Deloitte for more than the amount of the certified progress claims received from a contractor. Having reached that conclusion, his Honour considered that it was clear that, over all of the contracts in question, Projects over-invoiced Deloitte as Deloitte alleged. His Honour found that the total amount invoiced by Projects to Deloitte, in respect of each contract and overall, should have equalled the total amount paid or payable to the contractors in question. However, his Honour found, the total of the amounts invoiced to Deloitte for all six relevant fit out projects, and paid by Deloitte to Projects, was $16,903,595, while the total amount of the progress claims made by contractors to Projects was $15,548,492. Accordingly, the total amount over-invoiced was $1,355,103.
3. The total amount paid to contractors in respect of the projects that are the subject of the proceedings was $13,267,227, as against progress claims totalling $15,548,492. Accordingly the short payment was $2,281,265. Therefore, the overall discrepancy between the total of the amounts invoiced to and paid by Deloitte, and the total amounts paid by Projects to the various contractors, was $3,636,368. His Honour concluded that those facts and figures indicated gross dishonesty on the part of Mr Fitzgerald, given his Honour's conclusion that the over-invoicing was carried out at Mr Fitzgerald's direction. Hence, his Honour directed the entry of judgment for that amount against Mr Fitzgerald.

Contravention of the Australian Consumer Law

1. Deloitte alleged that, having regard to the nature of the project management services provided by Projects, the existence of the terms of the payment practice and the terms of each invoice issued by Projects to Deloitte, Projects made the following representations to it in relation to each invoice:
2. The amount claimed by the contractor did not exceed the sum invoiced for that contractor's work to Deloitte;
3. The contractor was entitled to payment of the sum stated in the invoice from Projects to Deloitte;
4. Deloitte was liable to pay that sum;
5. Upon payment of that sum into the Trust Account, Projects would pay the sum to the contractor; and
6. If, or to the extent that, the sum paid by Deloitte to Projects was not paid by Projects to the contractor, it would be repaid to Deloitte. The primary judge found that Projects made each of the alleged representations.
7. The primary judge held that each of the first three of the five representations alleged followed necessarily from the form of the invoices themselves, having regard to the contractual obligations of Projects as project manager. His Honour held that the fourth and fifth representations followed from the first three representations and from the existence and terms of the payment practice, including, specifically that the invoices from Projects to Deloitte required payment into the Trust Account.
8. The primary judge concluded that each of the first three representations made by Projects was false, and misleading or deceptive, because:

• the total sum claimed was less than the sum invoiced by Projects to Deloitte;
• the contractor had not claimed, and was not entitled to be paid that sum; and
• Deloitte was not liable to pay that sum. His Honour held that, in relation to the fourth and fifth representations, which were representations as to future matters, it had not been shown that there was any reasonable basis for believing the representations, for thinking the representations were true or for representing what was likely or expected or intended to happen, at the time the representations were made. His Honour concluded, therefore, that the reverse onus imposed by s 4(2) of the Australian Consumer Law had not been discharged and that, accordingly, the fourth and fifth representations must be taken to have been misleading or deceptive at the time they were made.

1. In light of the primary judge's finding that the over-invoicing was deliberate, his Honour found that it must have been obvious to Mr Rogut and Mr Fitzgerald that the over-invoiced amounts would be diverted to some purpose other than payment to contractors or refund to Deloitte. His Honour considered that it was clear that Deloitte, through Mr Wardrop, relied on the representations when making the payments claimed by the invoices sent to Deloitte by Projects. Accordingly, his Honour concluded that the conduct of Projects (and Interiors where relevant) contravened s 18 of the Australian Consumer Law.

Involvement of Mr Fitzgerald in the Contraventions

1. Under s 236 of the Australian Consumer Law, if a person suffers loss or damage because of the conduct of another person, and that conduct contravened s 18, the claimant may recover the amount of the loss or damage by action against any person involved in the contravention. Under s 2 of the Australian Consumer Law, a person is to be taken to be involved in a contravention of a provision, or in conduct that constitutes such a contravention, if the person: (a) has aided, abetted, counselled or procured the contravention; or (b) has induced, whether by threats or promises or otherwise, the contravention; or (c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or (d) has conspired with others to effect the contravention.
2. The primary judge was in no doubt that Mr Fitzgerald was involved, within the meaning of s 2, in the contraventions of s 18 of the Australian Consumer Law by Projects. Mr Fitzgerald was the only director of Projects, styled as "managing director". Mr Fitzgerald established the Trust Account and chose that designation for it. He intended that Projects would use the Trust Account to hold monies on behalf of clients and would apply them for the specified purpose. He was always one of two necessary signatories for the Trust Account and was always the person who decided on the amounts that should be paid out of it, when payments should be made, and for what purposes. Further, Mr Fitzgerald knew of the facts that amounted to the contraventions. With that knowledge, he participated in, and indeed caused or directed or procured to be done, the acts that amounted to the contraventions. His Honour found that Mr Fitzgerald well understood the obligations of Projects as a project manager and knew of the payment practice. His Honour also found that Mr Fitzgerald knew, because he directed that it to be done, that Projects was invoicing Deloitte for more than the amounts claimed by contractors. In particular, he knew of the payments that were made out of the Trust Account for purposes other than those permitted, because he directed them.
3. The primary judge found that Mr Fitzgerald understood that money paid into the Trust Account by a client for a particular purpose belonged to that client until the money had been used for that purpose. His Honour found that Mr Fitzgerald knew that monies paid into the Trust Account by clients against invoices for progress payments due to contractors should only be applied for that purpose. In causing the monies to be paid out for other purposes, Mr Fitzgerald directed or procured the acts that falsified the relevant representations.
4. Mr Fitzgerald was informed immediately when Deloitte deposited money into the Trust Account and authorised the payment of all contractors' invoices. The primary judge found that Mr Fitzgerald did not ever tell Deloitte that Projects reserved to itself the right to use, for purposes other than those for which they had been paid in, monies deposited by Deloitte into the Trust Account. His Honour found that Mr Fitzgerald must have been aware that Deloitte paid monies into the Trust Account on the faith of the representations and on the assumption that those representations would be honoured. His Honour therefore concluded that Mr Fitzgerald was knowingly involved in the contravention of s 18 of the Australian Consumer Law by Projects and, therefore, was co-ordinately liable, under s 236 of the Australian Consumer Law, for the sum of $3,636,368.

Additional Findings

1. His Honour also made findings concerning breaches of trust and Mr Fitzgerald's involvement in those breaches of trust. Having regard to the conclusion reached in relation to the contravention of s 18 of the Australian Consumer Law, it is unnecessary to deal those findings and conclusions.

The Appeal

1. Mr Fitzgerald's notice of appeal was signed by a solicitor. Further, written submissions were filed by the solicitor on Mr Fitzgerald's behalf (the Written Submissions). However, when the appeal was called on for hearing, Mr Fitzgerald appeared in person. He indicated to the Court that, for financial reasons, he would not be represented by a lawyer.
2. Mr Fitzgerald indicated that he wished to rely on the grounds of appeal in the notice of appeal and on the Written Submissions. However, he did not add anything by way of oral submission, save for an assertion that he did not agree with the findings made by the primary judge. His attention was drawn to the principle that this Court would not reach a conclusion on a question of fact different from the conclusion reached by a trial judge unless it was clearly demonstrated that the conclusions reached by the trial judge were glaringly improbable or inconsistent with other evidence accepted by the trial judge or inconsistent with evidence overlooked by the trial judge. [2] Mr Fitzgerald did not make any submission directed to persuading this Court as to any of those matters.
3. Further, the Written Submissions accepted that the finding by the primary judge that a payment practice was agreed upon between Deloitte, on the one hand, and Interiors and Projects, on the other, could not be challenged on appeal. The Written Submissions sought to avoid that consequence by suggesting that the terms of the arrangement that arose from the conversation between Mr Wardrop and Mr Rogut were "general, with no specific provision on the nature of the payment and the amount to be invoiced". It will be necessary to return to that contention below.
4. The notice of appeal raised grounds relating to the conclusions reached by the primary judge as to the payment practice, the terms and breach of the trust alleged by Deloitte, the contraventions of s 18 of the Australian Consumer Law and the involvement of Mr Fitzgerald in the contraventions. In the light of the conclusion reached below concerning the contraventions of the Australian Consumer Law and Mr Fitzgerald's involvement in them, it is unnecessary to deal with the grounds directed to the trust and breach of the trust.
5. The relevant grounds may be restated as follows:
6. The primary judge erred in finding that Deloitte and Projects agreed to a payment practice whereby the monies from time to time paid by the Deloitte pursuant to invoices issued by Projects into the Trust Account would be used only for the payment of amounts owing to contractors and consultants.
7. The primary judge erred in finding that Deloitte relied upon representations by Projects that were false or misleading, being over-invoicing by Projects for amounts owed pursuant to the payment practice.
8. The primary judge erred in finding that Mr Fitzgerald was involved in the contraventions of s 18 by Projects and Interiors.

Payment practice

1. The Written Submissions asserted that there was nothing in the terms of the payment practice that imposed a requirement upon Projects to invoice only the amounts of progress claims received and approved, without including in the invoiced amount a sum to cover anticipated invoices from contractors. They asserted that the terms of the agreement as to a payment practice were as follows:

• first, Projects would issue an invoice to cover progress claims by contractors;
• secondly, Deloitte would pay those invoices into the Trust Account;
• thirdly, from the monies received from Deloitte into the Trust Account, in payment of invoices from Projects, Projects would pay the contractors the amount of their progress claims; and
• fourthly, Projects would manage all of the progress claims by contractors and would issue an invoice to Deloitte for all of the progress claims together. Those were not in fact the terms of the arrangement as to the payment practice that were found by the primary judge. The terms found are set out above. [3]

1. The Written submissions then went on to assert there was nothing in the terms of the payment practice that imposed a requirement upon Projects to invoice only the amounts of progress claims received and approved, without including in the invoice amount a sum to cover anticipated invoices from contractors. However, the payment practice, as found by the primary judge, involved Projects invoicing Deloitte for the amount that it considered to be payable to the contractor and Deloitte paying that amount into the Trust Account. The contention advanced on behalf of Mr Fitzgerald to his Honour, that the payment practice also allowed for the invoicing of amounts for "anticipated contractors' invoices", was expressly considered and rejected by his Honour.
2. Mr Fitzgerald asserted in the course of cross-examination that Deloitte had agreed that Projects might over invoice in the way that was done and that it was therefore appropriate that from time to time Projects would do so. However, as the primary judge observed, no such assertion had been made by Mr Fitzgerald in his evidence-in-chief, given by affidavit. His Honour therefore concluded that the evidence given in cross-examination was false. His Honour accepted, without undertaking an analysis on an invoice-by-invoice basis, that it may have been possible that some of the invoices issued by Projects to Deloitte claimed the total of more than one progress claim made by a contractor to Projects. Nevertheless, his Honour found, the total amount invoiced by Projects to Deloitte, in respect of each contract and overall, should have been equal to the total amount paid or payable to the contractor. As indicated above, his Honour found that the total of the amounts over-invoiced was in the order of $1.3 million. His Honour considered that Mr Fitzgerald's attempts to explain away that inconvenient truth were less than convincing. Mr Fitzgerald's submissions do not advance any reason why his Honour's conclusions in that regard were not correct. Certainly nothing has been put to this Court to suggest that any different finding should be made in relation to the terms of the payment arrangement.

Section 18 of the Australian Consumer law

1. The Written Submissions in relation to s 18 of the Australian Consumer Law are somewhat puzzling. They begin by acknowledging that the primary judge did not accept Mr Fitzgerald's evidence that each invoice issued by Projects to Deloitte comprised the amount of the contractor's progress claim together with an amount to cover anticipated invoices from the contractor for future works. The Written Submissions accept that, on the basis of his Honour's determination, the invoices from Projects to Deloitte constituted misrepresentation or misleading or deceptive conduct, in that they purported to be invoices for the same amounts that were invoiced to Projects by the contractors. They then contend, however, that such misrepresentation, or misleading or deceptive conduct, did not constitute a contravention by Projects of s 18 of the Australian Consumer Law because "the element of reliance" was lacking.
2. The submission appears to involve a misapprehension. Section 18 provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Section 18 says nothing about reliance. It is clear that, on the basis of the findings made by the primary judge, Projects engaged in conduct in trade or commerce that was misleading or deceptive and, accordingly, contravened s 18.
3. However, it is tolerably clear that the reference to reliance was intended to be directed to s 236 of the Australian Consumer Law, which relevantly provides that, if a person (the claimant) suffers loss or damage because of the conduct of another person, and that conduct contravened s 18, the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention. Of course, even in s 236 there is no mention of reliance. On the other hand, there must be a causal connection between conduct that contravenes s 18, on the one hand, and the loss or damage claimed by the claimant, on the other. Such a causal connection is usually demonstrated by establishing that the claimant was induced to act to his or her detriment, thereby suffering loss or damage, in reliance upon the misleading or deceptive conduct.
4. The Written Submissions assert that there was no evidence before the primary judge of Deloitte's having relied upon any misleading or deceptive conduct comprised in the invoices sent to Deloitte by Projects. Rather, the they assert, the evidence was that Mr Wardrop, on behalf of Deloitte, relied on his own review and judgment as to the correctness of the invoices, prior to authorising their payment. However, his Honour made an express finding that it was clear that Deloitte, through Mr Wardrop, relied on the representations made by the invoices when making the payments claimed by Projects in the invoices. There was affidavit evidence from Mr Wardrop to that effect. No basis has been advanced on behalf of Mr Fitzgerald for impugning the finding made by his Honour.

Involvement of Mr Fitzgerald

1. The Written Submissions assert that there was no evidence before the primary judge that Mr Fitzgerald was involved in any contravention by Projects of s 18 of the Australian Consumer Law. They contend that there was clear evidence that Mr Rogut initiated and undertook the entire process of certification of contractors' claims and invoicing to Deloitte, with no involvement of Mr Fitzgerald in any part of that process. However, that contention ignores the finding made by his Honour that the over-invoicing by Mr Rogut was done "over his protests" and "upon the express instructions of Mr Fitzgerald". That finding was entirely consistent with the evidence advanced by Deloitte. His Honour made clear the basis upon which he concluded that Mr Fitzgerald was involved in the contraventions within the meaning of s 2 of the Australian Consumer Law.
2. Specifically, the primary judge found that Mr Fitzgerald caused or directed or procured to be done the acts on the part of Projects that amounted to contravention of s 18 of the Australian Consumer Law. Mr Fitzgerald knew of the payment practice established between Projects and Deloitte and knew of the payments out of the Trust Account for purposes other than those permitted, because he directed that the payments be made. Mr Fitzgerald was the only director of Projects, he established the Trust Account and he was always one of two necessary signatories for the Trust Account. His Honour found that Mr Fitzgerald understood that money paid into the Trust Account by a client for a particular purpose belonged to that client until the money had been used for that purpose. There is no basis for any complaint concerning the finding by his Honour that Mr Fitzgerald was involved in the contravention of s 18 within the meaning of s 2 of the Australian Consumer Law.

Conclusion

1. There is no substance in any of the grounds relating to the finding of liability on the part of Mr Fitzgerald under s 236 of the Australian Consumer Law. The appeal must be dismissed with costs.

Endnotes

1. Deloitte Services Pty Ltd v HBO EMTB Interiors (NSW) Pty Ltd (In Liquidation) [2016] NSWSC 1597.
2. See Fox v Percy (2003) 214 CLR 118; [2003] HCA 22.
3. At [21]. 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: 21 June 2017