Consideration
29The threshold question in this case is whether the plaintiff has proved that the decision to make the payment was induced by pressure exerted upon her by Georges. If the answer is "Yes", the next question is whether that pressure was illegitimate in that it consisted of an unlawful threat to stifle the prosecution of Derek (Crescendo Management, p 46). The conduct alleged to give rise to undue pressure consists of statements made by Georges in two telephone conversations which took place on 20 May 2009. The determination of the questions requires close scrutiny of the relevant evidence.
30The plaintiff's evidence in chief was:
T p 14, l 9 - p 15, l 4:
"Q. I just ask you to take your mind back to that first conversation and tell his Honour what the context was and who said what?
A. I rang Mr Georges to find out what had happened and she said "John what has Derek done?"
Q. And he said?
A. And he said "I have discovered money taken from my account." He didn't say which accounts and I said "how much was taken?" And he told me that day $237,000 that was proven and some cheque that were still in limbo and need to be proven 237,000 proven and other cheques that were still floating that Derek had stolen, amounts unknown.
Q. And any other conversation with him?
A. Well
Q. That is the first telephone call?
A. Yes, so after
HIS HONOUR
Q. Madam, you have told us that John said to you "I have discovered money taken from my account, $237,000 proven and there were some cheques that were still to come in. Now, did you reply to that in this conversation and if so what did you say and did the conversation continue?
A. Yes, sorry.
Q. He said, I said?
A. I told him I would ring him back again. I would check with my husband and find out what we could do about that.
FOSTER
Q. And as a result?
A. I had to telephone my husband. He lives in Malaysia, he was a Malaysian airlines pilot at that time and I had to wait until he was home.
Q. You spoke to your husband you spoke a moment ago about there being two calls on or about 20 May?
A. Yes.
Q. Can I ask you then to address your mind to the second phone call between yourself and Mr Georges, the first defendant?
A. Yes, after I called my husband, he actually told me, yes, we could take that money from our equity loan and we helped, it would increase our loan, of course, but we were willing to do that to help Derek ..."
T p 15, I 21 - l 24
"Q. Can you turn your mind back to the second conversation?
A. I rang John up again and told him my husband and I decided we would give him 240,000 and so then I asked him when was it due? He told me it was 22 May ..."
and l 39 - 49:
"Q. We will start again. You rang John, right?
A. Yes.
Q. I said to him, whatever you said. He said to me. Take your time?
A. I told him my husband and I had agreed that we would give 240,000 to him on Derek's behalf.
FOSTER
Q. And did Mr Georges say anything in reply or did you say more?
A. Yes, he thanked me for that and he gave me his details, bank details."
T p 16, l 1 - l 14:
"HIS HONOUR
Q. What did he say?
A. He said "Thank you very much for that Glynis, very generous of you". And I asked him what his bank what account to put it in, BSB, et cetera, and he gave me his St George account. Numbers I can't remember off hand but that is the details he gave me. And that was that. Okay. Then, sorry, that was the conversation.
FOSTER
Q. So is there anything else in that conversation?
A. Apart from him thanking me, that was about it, I think, and giving me his bank details."
and l 20 - l 50:
"... So I was happy and I said as long as it Oh, sorry, can I go back to the other bit, the other bit?
Q. Which other bit?
A. The second part of that conversation.
Q. Which conversation?
A. Sorry, I had actually told him, I am not sure which part it was, but he I said is "Does that is mean you won't get my brother charged?" Does that mean that you don't have my brother charged, and he told me "He is not just my friend, he is my brother".
Q. So when do you say Mr Georges said that? Which day?
A. That same day, 20 May.
HIS HONOUR: Let me get the sequence.
Q. You tell us that he said to you "Thank you very much, very generous", and gave you his bank account details?
A. Yes.
Q. And it at that point you say "Does that mean you won't have my brother charged?"
A. I think that was it, yes. I am confused now. I have got to get my thoughts together. When he rang me that day I rang him, sorry, to say that I would pay for it I have gone blank. I can't say without telling extra bits. I am a bit confused.
Q. All we want to know is what you said to him and he said to you. Now you have told us he gave you the bank details?
A. Yes."
T p 17, l 1 - l 17:
"Q. And as I understand it you went on to say "Does that mean you won't have my brother charged?" And then as I understand it he made some response to you?
A. That's right.
Q. We have not got clear what the response was?
A. That is what he told me. He said "No I won't have him charged because he is not just my friend", he said "that poor skinny fellow, you know, he won't survive gaol. I would never do that to him. He is not just my friend, he is my brother", and I believed him.
Q. Was that the end of the conversation on this occasion?
A. Yes.
Q. Was that the end of the conversation?
A. Yes."
T p 25, l 1 - l 6:
"FOSTER
Q. Did you have any concerns about what he had specifically told you about Derek having stolen money?
A. Well, yes. After Derek's first offence, you don't have to be a lawyer to know"
and l 14:
"A. I was concerned if my brother went to gaol he would never survive."
and l 30 - l 40:
"Q. As a result of those concerns, what was going through your mind?
A. Well, I was just petrified for Derek. I knew if he went to gaol he would never survive. So that was it, mainly.
Q. And as a result of that petrification, did you make a decision?
A. Yes, I did. That is when I rang my husband. He is the main breadwinner. I actually had to ring him. He lives in Malaysia. I had to actually give him a call. Thankfully, he was at home, otherwise, he would have been flying, and he, thankfully, said, "Glyn", without hesitation, he said, "We will go into our loan", and I was so grateful because it is not even his brother, you know, it is his brother in law."
31In cross-examination the plaintiff said that after the first conversation with Georges she had a telephone conversation with her husband in which they decided to make the payments. She said the decision was a joint decision to pay $240,000.00 from their joint account with HSBC Bank. She said the decision had been made then, and prior to the second telephone conversation with Georges. She then referred to the second telephone conversation with Georges on 20 May 2009 in which she asked when the money was to be paid. She said he replied as follows (T p 29, l 20 - l 21):
"... he said 'The 22nd. My suppliers need to be paid otherwise I will have no choice but to have Derek charged'."
32She said she thought these words were spoken in the first conversation. The cross examination proceeded as follows:
T p 30, l 5 - p 31, l 36:
"Q. You know that when you gave that evidence the first time around you mentioned nothing about a threat being made?
A. It wasn't a threat. I mean, he never blatantly asked me for money. He just said, you know, if that money is not paid I will have no choice but to have Derek charged.
Q. Let me just understand a couple of things. You say that he never made a threat to you; is that right?
A. Not really, no. He said there was no choice, so to me it was no choice.
Q. You didn't regard anything he said to you on either of these conversations to be a threat; is that right?
A. No, I was happy to give it to him.
Q. And you were happy to give it to him because you understood that his company had been defrauded to a tune of over $200,000?
A. No, because to keep my brother out of gaol.
Q. And that was your own decision, wasn't it?
A. That's right.
Q. On this day you knew your brother had been to gaol before?
A. No, home detention.
Q. I apologise. And you say to his Honour you had very serious concerns about whether he would survive incarceration?
A. That's right.
Q. And those were views you formed quite by yourself; is that right?
A. Yes.
Q. And you certainly didn't understand Mr Georges to be saying: unless you pay this money I'm going to report it. There was no threat, was there?
A. Well, like I said, he never blatantly asked me for money, but he did say he would have no choice but to have my brother charged. So I understood that to be pay up or else.
Q. He never said that to you though, did he?
A. Which what did he say?
Q. He never said to you pay up or else, did he?
A. No, he never did.
Q. And as far as you were aware he had never sought to extort money from you, did he?
A. No, but he laid it out to me that he would have no choice but to have Derek charged. So of course that meant, you know.
Q. I want to suggest to you he never said those words to you, he never said anything about reporting Derek to the police?
A. Well, he did.
Q. Were those words of importance to you at the time?
A. Yes.
Q. And did you regard what he said as a matter of some particular significance to you?
A. No, I just thought what a kind, generous man this man was. I mean, anybody else would have put Derek in gaol, report him straight away. But I thought giving us this option to actually pay off Derek's debt that would help my brother out of gaol.
Q. Let's just go back to your earlier evidence. You agreed with me that you attempted to give to his Honour your best recollection of what was said?
A. Yes.
Q. And do you agree with me that you did not on that occasion say anything which referred to gaol being mentioned in that first conversation?
A. No, he didn't say gaol. He said my brother charged. So I presumed it was gaol.
Q. Let me ask the question more precisely. Do you agree that when you first recounted the conversation to his Honour this morning you never mentioned anything in relation to the first conversation about charges being proffered, did you?
A. Well, John Georges himself told me that, that he would have no choice.
Q. Can you just attend to my question. When you gave evidence the first time around this morning about this first conversation you did not refer to Mr Georges foreshadowing that charges might be proffered against Derek, did you, you didn't mention it?
A. I was very nervous."
T p 32, l 7 - l 11:
"Q. Certainly on the 20th you didn't perceive Mr Georges was making a threat to you, did you?
A. No, I thought he was a kind, generous man for giving me this option, an out."
33She agreed that her email of 22 May 2009 to Georges recorded her understanding of their discussions.
34In cross-examination she gave the following version of the second conversation:
T, p 38, l 29 - l 32:
"Q. How did the conversation start?
A. Okay, I just told him, "John, Miles and I have agreed that we will pay the $240,000". And I said what bank and what BSB, et cetera. And that was what he gave me. And I said, "Okay, I will do my best". And I transferred money ...."
and l 42 - p 39, l 1:
"A. Okay. And that was then I actually said, "So, John, does that mean my brother will not be charged?" And told me, "How can I let that poor skinny fellow go to gaol?"
Q. Anything else that was said?
A. Then I said and he thanked me for that.
Q. Was that the first time that you had broached with him, on 20 May, the possibility of Derek going to gaol?
A. I think both conversations I had actually told him."
T p 39, l 39 - l 41:
"Q. So you say on the 20th you thought about or you assumed that if the money was paid Derek would remain in employment; is that right?
A. Derek would not be charged."
T p 41, l 25 - l 44:
"Q. Did you tell Mr Georges in the conversation that you would pay him 240?
A. I did.
Q. He didn't ask you for 240, did he?
A. No. He never asked me for anything. He just said Derek had told him 237 that he knows of and there were some cheques that were, you know, amounts unknown.
Q. As I understand it, and you must correct me if I've got it wrong, he didn't ask you to pay any money, did he?
A. No, never blatantly asked me.
CONDON
Q. He never impliedly asked you, did he?
A. Well, to me it was an implication when he said he would have no choice but to have Derek charged, that was the implication for me.
Q. You said to Mr Georges that you would top it up, correct?
A. Yes."
35The plaintiff acknowledged she had a great many discussions with Loretta about the events of May 2009 which had helped and improved her recollection. She described the number of times they compared notes as "Gazillions" (T p 54). Loretta's evidence was to similar effect (T p 68).
36Also relevant was the plaintiff's evidence in cross examination as to events after May 2009. In July 2009 Derek told her Georges had found that more money had been stolen and was going to have him charged. On 11 December 2009 she learnt of Derek's arrest and paid his bail. On 1 March 2010 she sent to DSC Waugh details of the payments she had made. On 7 June 2010 she and Loretta attended the District Court as witnesses for Derek on his appeal. She read from the police facts sheet that the second defendant had been paid compensation by NAB in the amount of $521,980.62. It was this information which generated in her mind the belief that the defendant had been over compensated. Her evidence was (T p 50, l 18 - l 32):
"Q. Just to understand it, and you must correct me if what I'm putting to you is not what you want me to understand, but is it your complaint that you believe that the $520,000 or $530,000 paid by the NAB was repayment of his total loss?
A. That's right.
Q. So that the 240 was included in that amount and that he's been doubly paid, one by you and two for the same loss by the bank?
A. That's right.
Q. Is that the heart of your concern?
A. That's the heart, yes, definitely.
Q. Was the basis of your belief what you read in the police fact sheet? Is that it?
A. That's it, yes. I mean, I had nothing else to go on."
37After Derek's death she raised her concerns with her solicitor, Mr Valenti, following which the letter of 31 August 2010 was sent to the defendants. It set out the complaint she wished to make about them. She agreed that at the time she had no complaint about the arrangement made on 20 May 2009 about Derek not going to gaol, and that the only issue she had was whether Georges had been over compensated (T 52). She said she had not felt cheated when she learnt of Derek's arrest. She said (T p 49, l 5 - l 16):
"Q. Is the answer to my question that as of December 2009 you were quite content for Mr Georges or his company to have the benefit of the money if it assisted in repaying the debt Derek owed the company; is that right?
A. In a way I suppose, yes.
Q. And your real complaint in this case is that you believe that Mr Georges has been double compensated; is that right?
A. That's right.
Q. And if it was not for that particular issue you would have no complaint about Mr Georges, would you?
A. No."
38On a number of occasions her evidence was that she was happy to give the money to Georges on Derek's behalf because it would keep him out of gaol, and there would be less for him to repay.
39The plaintiff was not re-examined. There was no evidence of the contents of the discussion between the plaintiff and her husband which led to their decision to make the payment. Although present in court during the hearing, he was not called to give evidence.
40Georges' evidence of the conversations on 20 May 2009 conflicted with that of the plaintiff. As to the first conversation his evidence in chief was (T p 75, l 21 - p 76 l 3):
"A. I rang Glynis on 20 May 2009 and I said, "Hi Glynis, this is John", she said, "Hi John, how are you?" I said, "Not very good. I am very upset". She asked me why. I said to her, "Why haven't you or any of your brothers or sisters told me about Derek stealing money from the company he worked at beforehand?" She said to me, "Oh my God, what happened?" I said, "What happened is Derek has been stealing money from my company. I have went, the last few days, to get some money out of the NAB bank and they told me that my account was fully drawn down and that Derek's been writing cheques out in his name, depositing them into his account and also that he is writing cheques out and paying his own personal bills".
She then asked me, "How much has he taken?" I said to her, "He has taken, from what NAB has told me, about $230,000, but we are not quite sure of the exact figure at this stage". She asked me then, "Have you spoken to Derek? I said, "Yes, I have spoken to Derek just an hour before I called you and Derek has confessed to me, he said he has taken about $237,000 but at this stage we still don't know how much that figure is". She then said to me, "Oh my God, the whole family thought that this was behind us and that mum was getting sick all the time because of what Derek has done in the past". I then said to her, "We have been friends and family for a long time. Why hasn't anybody told me about Derek taking money from the previous company he worked at?" She said, "Well, Derek didn't want anybody to know".
I then said, "I think, I don't know where we stand". I then said, "I don't know where we are going to end up. You know, my family and I, and plus the business". I said, "We don't know how much damage has been caused or done". And then, you know, "I wish somebody would have told me about Derek's past". She then said to me, "John, let me speak to my brothers and sisters and I will get back to you and we will see how we are going to either help you out, or we will have a chat to my family and I will get back to you. In the meanwhile don't worry, I will get back to you as soon as possible."
41As to the second conversation his evidence was (T p 76, l 34 - l 44):
"A. She phoned me and she asked me if I was all right or okay. I said, "No, not really". She said, "Well, I have some good news for you. The whole family has decided to chip in and pay you the $237,000. But Derek also told us there is $3,000 that he owes you so we have decided to put the $240,000 together and send it to you on Derek's behalf but we can only do it in two payments. We can do one payment ASAP, immediately, and we can do the other payment in a day or two." And I said, "Thank you very much Glynis". I said, "I wish I had brothers and sisters like you." And she said, "Yes", as jokingly, "only got one". She then asked me for my account number and I have passed the account number on to my wife, to give her the details. And within a day or two, the money had come into the account."
42He adhered to this evidence in cross-examination. He denied that during the second conversation the plaintiff asked whether he would have her brother charged with fraud once the money was paid. He denied offering anything in return for the payment of $240,000.00, or that any deals were made.
43Georges said that he reported the matter to the police at the request of NAB, and provided the statement dated 25 November 2009 (Ex B) to DSC Waugh.
44Georges adhered to his evidence that he telephoned the plaintiff before he had a telephone conversation with Loretta. He denied having any conversation with Edward concerning losses from Derek's fraud.
45The versions of the conversations given by both the plaintiff and Georges rested on their recollection over several years. I preferred Georges' version, which was not undermined in cross-examination. I found it to be the more convincing as a substantially accurate account of what was said. To the extent that Georges' version differed from the plaintiff's, I find that his version should be accepted as probably correct.
46On the other hand, I was left without any confidence that the plaintiff's recollection of the content and sequence of these conversations was reliable. For example, her first account, in chief, included no statement by Georges referable to reporting Derek. Later she said that she said to him "Does this mean you won't get my brother charged?" to which he replied: "He is not just my friend. He is my brother". The plaintiff was uncertain as to which part of the second conversation these words were spoken, and candidly confessed to confusion. In cross-examination, she attributed her failure to mention it earlier to nervousness. Taken overall, her evidence lacked sufficient clarity to enable identification of the content of the conversations upon which the allegations against Georges were made. My impression was that the plaintiff's memory of the conversations was not sufficiently clear to enable actual recall of the words allegedly spoken by Georges on which her case depended. In my assessment, her recollection was the product of reconstruction, probably clouded by her many discussions with Loretta, and the lapse of time.
47Furthermore, on the assumption that Georges' version of the substance of the conversations is probably correct, in my opinion it is incapable of being reasonably understood to convey a threat, either expressly or by implication. I have not overlooked the evidence of Loretta and Edward, but find it of no assistance in deciding the crucial issues.
48In short, my conclusion is that the plaintiff failed to prove with sufficient precision the words actually spoken by Georges to enable the court to be reasonably satisfied that in the conversation he applied pressure, illegitimate or otherwise, which induced her to make the payments (Watson, pp 318 - 319; Scolio, p 89,329). I propose to dismiss the plaintiff's second amended statement of claim.
49Although this conclusion disposes of the proceedings, in deference to the submissions it is appropriate to make some observations. In my opinion the plaintiff's evidence fell far short of proving that anything said by Georges pressurised her to make the payments to procure his agreement not to refer Derek to the police or not to have him charged. She said he made no demand for money, and she did not perceive what he said to be a threat. In my opinion her evidence demonstrates that the decision to make the payments was the joint decision of herself and her husband which was made out of concern to keep Derek out of jail, in circumstances where she knew that he had previously been convicted and sentenced for stealing money.
50Furthermore, in my opinion, the plaintiff's failure to complain, although she was aware from, at latest, 11 December 2009, that Derek had been arrested and charged, was inconsistent with the existence of an arrangement or threat under which the payments were made to stifle his prosecution. She had not felt cheated to learn of the proceedings against Derek which would have been a natural reaction had payment been made under the circumstances alleged. Upon analysis the evidence supports the findings, which I make, that the plaintiff was content to make the payments to assist Derek, that she later came to the belief that Georges had been over compensated under the settlement with NAB and, but for such belief, she had no complaint against Georges. Her only demand for recovery of the $240,000 prior to commencement of these proceedings was based on this belief as evidenced in the letter to the defendants from her solicitor of 31 August 2010.