For the reasons already set out, the following representations are true and therefore I am satisfied that those representations are not misleading and deceptive:
(a) Mr Gupta pleaded guilty to 41 charges of fraud;
(b) Mr Gupta stole money from his clients;
(c) Mr Gupta committed tax fraud against Mr Singh;
There was no evidence that Mr Gupta or Taxplanners engaged in multi-million-dollar fraud.
Mr Singh's central contention is that, if Mr Gupta and Taxplanners engaged in fraud in relation to his closest friends, I can infer the plaintiffs acted in the same or a similar way to other clients. Extrapolating from the amount of the known fraud and assuming similar conduct in relation to all of Taxplanners' clients, the fraud would, in Mr Singh's submission, amount to millions of dollars.
I do not accept that submission. There is no evidence to support it. Mr Singh made applications for discovery and sought leave to subpoena numerous documents he submitted would establish his allegations. To the extent that those applications were granted, the documents he obtained did not establish his defence that the representations were true. To the extent that those applications were dismissed, they were dismissed because he had failed to establish an evidentiary basis for the applications that amounted to anything more than a fishing expedition.
It is not sufficient for Mr Singh to assert a conclusion based on speculation and invite the Court to draw that conclusion. He has not established that Mr Gupta or Taxplanners engaged in a multi-million-dollar fraud. The fraud he has established amounts to tens of thousands of dollars.
The representation is misleading and deceptive or likely to mislead or deceive as to the quantum of the fraud in which Mr Gupta and Taxplanners engaged.
There was no evidence before the Court to support the allegation that Mr Gupta used the money he stole from clients to purchase properties. This appears to be an allegation based entirely on Mr Singh's belief that Mr Gupta is engaged in fraud and has funnelled the proceeds of that fraud into properties.
There was some limited evidence about the properties Mr Gupta owned. There was no evidence as to the source of funds for the purchase of those properties that could establish the truth of those representations.
The representation is misleading and deceptive as to the use Mr Gupta made of the funds he stole from clients.
The evidence of Mr Singh and the other witnesses he called, established that monies paid by the ATO were paid into the Taxplanners' account and not remitted to clients.
Mr Gupta said by 2013, Taxplanners had 6,800 clients[224] and about 16 staff. He did not prepare the tax returns himself. His subordinates would prepare the tax returns. He would review the returns that required review before lodgement.
The authorisation to lodge tax returns was given to Taxplanners, and Taxplanners lodged the unauthorised amended tax returns.
Although Taxplanners is a separate legal entity, Mr Gupta was its director and the controlling mind of the organisation.
Mr Gupta gave evidence that the failure to remit a refund in some instances was the result of an administrative error made by his staff. Even if that were true, for legal purposes, the error was an error by Taxplanners. Similarly, fraudulent conduct, even if carried out by Mr Gupta, was fraud by Taxplanners.
I have already found that Mr Gupta stole money from his clients. The conduct of Mr Gupta was in his capacity as the director of Taxplanners. Mr Singh has established the truth of the representation that Taxplanners stole money from clients and thus it is not misleading or deceptive.
For the same reasons, I am satisfied that Mr Singh has established that it is true that Taxplanners committed a tax fraud against him. The representation is not misleading or deceptive.
Did the plaintiffs suffer loss and damage arising from misleading and deceptive representations.
Mr Gupta gave evidence that, as a result of the emails, Taxplanners had lost 80 to 85 clients and suffered a $300,000 to $400,000 drop in revenue.
He called evidence from witnesses who said they had ceased using Taxplanners as a result of the representations.
Mr Amardeep Dabas said he stopped working with Taxplanners after receiving the email. He said he and his wife changed accountants because they did not want to take a risk. He said "it's probably not his fault"[225] but it was "just for our peace of mind"[226]. He was more concerned that his personal details may have been leaked to a "random person"[227], than that there had been fraud. Mr Dabas did not know Mr Singh.
I am not persuaded that the loss of Mr Dabas as a client was because of the misleading and deceptive representations relating to multi-million-dollar fraud or the purchase of properties with stolen money. Mr Dabas' concern was that his information had been leaked and that, whether or not the representations were true, he did not want to take a risk. I can infer from that evidence that, if he had known it was true that Mr Gupta or Taxplanners had stolen from clients or committed fraud against clients, he would have removed his business in any event. That is, I am not satisfied that the misleading representations caused the loss.
Mr Saurabh Baid gave evidence that "there .. [were] a lot of rumours in the market about the fraud" and, though "Nobody was willing to believe it," his business partner and board did not want to continue with Mr Gupta. [228] When asked what his partner and the board had said specifically, he said "they took it from a different perspective that they thought I'm very close to him, and because ... I used to be the one who used to communicate with him about all the accounts and everything, so they thought it's better to ... not have any conflict of interest ... it was a business decision that was made in simple."[229] He said he showed the board the email and the board asked him whether he wanted to continue the relationship with Taxplanners.
Mr Baid said "the relationship with my partners and the board was more important"[230]. Mr Baid estimated that the value of the work to Taxplanners was about $32,000 to $35,000 a year.[231]
Mr Baid's evidence establishes that the email was, at least in part, responsible for his company removing its business from Taxplanners. Doing the best I can from his evidence, it appears that his partners and board were concerned that there was a conflict of interest arising from his close relationship with Mr Gupta and Taxplanners continuing to be the accountants for his company, in circumstances where allegations were made about Mr Gupta and Taxplanners. They left the decision to him, and he elected to discontinue the relationship.
However, it is not apparent that the misleading representations were the cause of any loss to Mr Gupta or Taxplanners. It is unlikely that the partners and board who were concerned about a potential conflict of interest would have been reassured if they had known that, while allegations of fraud and stealing from clients were true, the fraud was not in the multi-millions of dollars, and Mr Gupta had not bought properties with the proceeds of that fraud. I am not persuaded that Mr Baid would have made any different decision if the misleading or deceptive representations had not been made.
Mr Revathi Shirishin Sheruku gave evidence that she had tried to refer business to Mr Gupta but "nobody was willing to give him any business".[232] She attributed that reluctance to the email. I am not persuaded that it was the misleading representations that caused people not to take her up on the referral and therefore was the cause of any loss to the plaintiffs. There was no evidence that it was the misleading, as opposed to the true, representations that caused people to decline a referral to Taxplanners.
Mr Kamaljeet Singh Pahwa gave evidence that he recommended Mr Gupta to a close friend who knew about the allegations. Mr Pahwa could not remember the exact conversation but thought it was "along the lines" of fraud allegations.[233] He did not know whether his friend ultimately accepted the recommendation and went to Taxplanners. This evidence does not establish any loss to the plaintiffs arising from the misleading representations.
Mr Vijay Kumar Mishra gave evidence that when he first saw the email, he did not know whether it was true or false but thought "someone directly sending me to might having some sense, otherwise how could I able to receive this email?"[234] He said the allegations in the email caused him "some fear"[235] and he thought it was better to move to a different accountant. He said the value of his business to Taxplanners was about $20,000 or $25,000 a year.[236]This evidence does not establish any loss caused by the misleading representations.
Mr Kanhai Danesh Desai gave evidence that he had received the email and after 2020 he stopped referring clients to Taxplanners. This was because he did not want people he referred to Taxplanners to receive the same sort of emails. He stopped using Taxplanners after that time. He said he did not want to keep getting emails, and he had concerns about the allegations. He estimated the average value of the work Taxplanners did for him was about $10,000 a year. This evidence suggests the primary concern for Mr Desai was the use of his email address by Mr Singh. He was concerned about the allegations but did not specify which allegations caused him concern.
Mr Raja Ramesh Reddy gave evidence that after he received the email in 2020, he stopped referring work to Taxplanners because, "If I refer someone they will take my name, and if they come up with the same thing, I don't want it to be, you know, 'Why you put me in there?' I don't want to be in this situation, so I never referred him later."[237] I asked Mr Reddy: "So is what I understand you saying [is that] you didn't want to refer people to Tax Planners because you didn't want them to be getting the same sorts of emails that you were getting from Mr Singh?" Mr Reddy replied: "Whatever he's going through, we don't want to be - you know, if I'm there, I have seen it. I don't want to know if my - you know, my friends or family or anyone. It's not particularly about this, but this is one concern."[238] Mr Reddy also said he stopped using Taxplanners and that previously the work he gave to Taxplanners averaged about $10,000 a year. He was asked whether "this", being the email, was one of the main reasons he stopped using Taxplanners. Mr Reddy said it was one of the main reasons but did not elaborate on the others.
Mr Akash Ahluwalia gave evidence that, although he had not received the email, he was aware that an email had been sent containing allegations of misconduct and inappropriate practices.[239] He said there was "an event" where Mr Gupta was going to manage a large portfolio of his businesses but due to the email, some of "our stakeholders" refused to engage Mr Gupta's services. He said that the "committee" declined to engage Mr Gupta on the basis of the email. It was not clear from the evidence whether Mr Ahluwalia was on the committee. He estimated the value of the work that his portfolio of companies would have given to Mr Gupta in the region of $400,000 to $500,000.
In summary, a number of witnesses gave evidence that they had either moved accountants, had stopped referring work, or were aware that the allegations had factored into decisions about whether to engage Mr Gupta and Taxplanners for work. However, none of the witnesses were asked, nor gave evidence about the specifics of the representations made. Some of the witnesses had not seen the email and were aware of its content only in general terms. Some of the witnesses had seen the email. None of the witnesses referred to the "multi-million-dollar fraud" or the purchase of properties in their evidence.
I am not persuaded I could infer that a misleading representation of multi-million-dollar fraud would cause any more damage than true representations that Mr Gupta and Taxplanners had engaged in fraud against Mr Singh and stolen clients' money.
I am not persuaded that a misleading representation that Mr Gupta used stolen funds to purchase property would cause any additional damage, having regard to the representations I have found are true.
I am not persuaded the witnesses who gave evidence would have acted differently if the misleading representations had not been made, given the seriousness of the true representations.
The plaintiffs have not established that any additional damage was caused, or any additional loss was suffered, as a result of the misleading representations.
Accordingly, the plaintiffs are not entitled to recover any damages for the misleading representations. These claims are dismissed.
Taxplanners pleads that Mr Singh, on behalf of his company, Amex Australia, and himself, entered into a business contract with it on December 2010, for the provision of software services for the CRM system.
A term of that business contract was that Amex Australia and its agents, which included Mr Singh, would be granted access to, and would keep secret, confidential information.
Taxplanners claims that Mr Singh and Amex Australia were at all times under an equitable duty of confidence towards it in respect of the confidential information.
Taxplanners says that at the conclusion of that work, Mr Singh and Amex Australia were required to return, destroy or delete the confidential information.
Taxplanners says that in breach of the obligation of confidence and without its consent, Mr Singh and Amex Australia unlawfully and without authorisation made use of Taxplanners' confidential information otherwise than for the limited purpose for which it was communicated.
Taxplanners says this has caused Taxplanners to suffer loss and damage and Taxplanners is entitled to an order for equitable compensation for the profits made by Mr Singh and Amex Australia and is entitled to an injunction requiring Mr Singh and Amex Australia to deliver up "any records" in relation to Taxplanners' clients.
Mr Singh and Amex Australia say that no such business contract was ever entered into, that Amex Australia was not retained by Taxplanners to develop a software system, that neither he nor Amex Australia had access to confidential client data, did not retain such data and did not use such data in breach of any confidentiality obligations.
(a) Whether Taxplanners has established that the defendants, or one of them, had access to, retained and used confidential information in breach of the alleged agreement; if so
(b) Whether Taxplanners has suffered any loss as a result of the unauthorised use of the confidential information, such that it is entitled to compensation, or, alternatively, has established that the defendants profited from the use of the confidential information, such that it is entitled to an equitable distribution of the profits.
Mr Gupta said he was aware that about 65 people had received the email from Mr Singh but he thought the number might be higher.[240]
Mr Gupta's wife, Ms Shen, said she thought "more than 100" people had received the email and they were all people who had been clients in 2011.[241] She said none of the clients who joined the firm after 2017 had received the email.[242]
Taxplanners relied on evidence from a number of witnesses who had received the email from Mr Singh. Mr Giutam Divekar gave evidence that he had been a client of Taxplanners since 2008 and had received the email. He had not provided his email address to Mr Singh or Amex Australia. Mr Raja Ranesh Reddy said that he received the email from Mr Singh and he had never given his email address to Mr Singh or to Amex Australia. He had been a client of Taxplanners in 2009 but was no longer a client. Others, such as Mr Kamaljeet Singh Pahwa and Mr Akash Ahluwalia, had not been clients of Taxplanners at the time it was alleged that Mr Singh had access to the Taxplanners' database. They had not received the email.
Taxplanners called evidence from 12 people who were clients or past clients. Eight were clients before 2013. Of those, all but one, Ms Revathi Sheruku, had received the emails. Four had become clients after 2013. None of them had received the email.
Taxplanners submits that I can infer that Mr Singh obtained the email addresses for the Taxplanners' clients as at the date that Mr Singh deleted the database, in around November 2013. It says I can infer that this is why people who were not clients at that time did not receive the email. This supports an inference that Mr Singh had access to the database and used confidential information such as the identity of Taxplanners' clients and their email addresses for an unauthorised purpose.
Mr Singh said he did not have access to Taxplanners' database. He said over the years he had developed his own database of people he has met through his various connections. He obtained some of the email addresses from group emails in which he was included, or which had otherwise come to his attention, including emails from Mr Gupta.
Did the defendants' breach a duty of confidence to Taxplanners?
Taxplanners must persuade me, on the balance of probabilities, that the most likely reason that Mr Singh had access to client names and email addresses was from the Taxplanners' database or from another source which Mr Singh owed Taxplanners a duty to keep confidential.
It is possible that Mr Singh had access to the Taxplanners' database and used information obtained from that database to email clients. It is also possible that Mr Singh obtained the names and email addresses elsewhere, including from group emails from Taxplanners of which he was a recipient, and from other documents, including documents that were produced in previous court proceedings.
Both explanations are possible and I am not persuaded that the most likely explanation is that Mr Singh downloaded that information from Taxplanners' database.
I have found that the agreement between Amex Australia and Taxplanners was not as alleged by Mr Gupta. Mr Gupta has not established what the content of the business contract was between Taxplanners and Amex Australia, and I am not satisfied that Mr Singh required access to Taxplanners' database to fulfil the terms of that contract.
Taxplanners has not proved that Mr Singh or Amex Australia had access to Taxplanners' database, nor that, in breach of his confidentiality obligations, he used it for his own benefit.
Mr Singh has provided a plausible alternative explanation as to how he has contact details for some of Taxplanners' clients to whom he sent the emails. The plaintiffs have not discharged their onus in relation to the breach of confidentiality claims.
Taxplanners has not discharged its onus to establish that Mr Singh or Amex Australia breached a duty of confidentiality by deleting or retaining client details from Taxplanners' database.
Accordingly, its breach of confidentiality claim is dismissed.
As a result of my findings in relation to each cause of action pleaded by the plaintiffs, the plaintiffs' claims are dismissed in their entirety.
I will make orders entering judgment for the defendant and dismissing the proceeding.