MJ CONCEPTS KOTARA PTY LIMITED v PANDORA JEWELLERY PTY LIMITED (No 2) [2026] NSWDC 262 | Case summary | Zoe

NSWNSWDC

MJ CONCEPTS KOTARA PTY LIMITED v PANDORA JEWELLERY PTY LIMITED (No 2)

[2026] NSWDC 262

District Court of NSW|2026-07-31|Before: Hollo SC DCJ

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At a glance

Source facts

Court

District Court of NSW

Decision date

2026-07-31

Before

Hollo SC DCJ

Catchwords

Third-party fraud – interception of email account for purpose of requesting payment by electronic funds transfer Estoppel by representation – ostensible authority – whether Plaintiff bound by representation of authority – whether reliance on representation reasonable – whether Defendant put on inquiry Contract – Failure to mitigate – whether claim for recovery of monies was an action in debt – assessment of date of breach of contract – whether failure to alert Defendant amounted to a failure to mitigate Estoppel by representation – silence – whether failure to respond to Defendant’s emails was a representation that contract had been complied with – whether reliance on Plaintiff’s conduct reasonable

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Catchwords

Third-party fraud – interception of email account for purpose of requesting payment by electronic funds transfer Estoppel by representation – ostensible authority – whether Plaintiff bound by representation of authority – whether reliance on representation reasonable – whether Defendant put on inquiry Contract – Failure to mitigate – whether claim for recovery of monies was an action in debt – assessment of date of breach of contract – whether failure to alert Defendant amounted to a failure to mitigate Estoppel by representation – silence – whether failure to respond to Defendant’s emails was a representation that contract had been complied with – whether reliance on Plaintiff’s conduct reasonable

Judgment

Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.

Medium Neutral Citation: MJ CONCEPTS KOTARA PTY LIMITED v PANDORA JEWELLERY PTY LIMITED (No 2) [2026] NSWDC 262

Hearing dates: 15-18 and 26 June 2026, final submissions 30 June 2026

Date of orders: 31 July 2026

Decision date: 31 July 2026

Jurisdiction: Civil

Before: Hollo SC DCJ

Decision: See [431] below

Catchwords: Third-party fraud – interception of email account for purpose of requesting payment by electronic funds transfer
Estoppel by representation – ostensible authority – whether Plaintiff bound by representation of authority – whether reliance on representation reasonable – whether Defendant put on inquiry
Contract – Failure to mitigate – whether claim for recovery of monies was an action in debt – assessment of date of breach of contract – whether failure to alert Defendant amounted to a failure to mitigate
Estoppel by representation – silence – whether failure to respond to Defendant’s emails was a representation that contract had been complied with – whether reliance on Plaintiff’s conduct reasonable

Cases Cited: 183 Eastwood Pty Limited v Dragon Property Development & Investment Pty Limited [2023] NSWCA 72
Advanced National Services Pty Ltd v Daintree Contractors Pty Ltd [2019] NSWCA 270
Alexander v Cambridge Credit Corporation Limited (1987) 9 NSWLR 310
ASIC v Hellicar (2012) 247 CLR 345
Australian and New Zealand Banking Group Limited v Liebmann [2010] NSWSC 545
Bak v Glenleigh Homes Pty Limited [2006] NSWCA 10
Banque Commerciale S.A., En Liquidation v Akhil Holdings Limited (1990) 169 CLR 279
Behan v Obelon Pty Ltd [1984] 2 NSWLR 637
Byron Shire Council v Vaughan [2002] NSWCA 158
Calabria Community Club Limited v Christer Nominees Pty Limited [2025] NSWCA 65
Ceerose Pty Ltd v The Owners – Strata Plan No 89074 [2025] NSWCA 235
Chand v Commonwealth Bank of Australia [2015] NSWCA 181
Commercial Union Assurance Co of Australia Limited v Ferrcom Pty Limited (1991) 22 NSWLR 389
Commissioner of Taxation v Bendel [2026] HCA 18
Crabtree-Vickers Pty Limited v Australian Direct Mailing Advertising & Addressing Company Pty Ltd (1975) 133 CLR 72
Dare v Pulham (1982) 148 CLR 658
Edwin Davey Pty Ltd v Boulos Holdings Pty Ltd [2022] NSWCA 65
Essington Investments Pty Limited v Regency Property Pty Limited [2004] NSWCA 375
Factory Direct Fencing Pty Limited v Kong AH International Company Limited [2013] QDC 239
Freeman & Lockyear v Buckhurst Park Properties (Mangal) Limited [1964] 2 QB 480
Hexiva Pty Ltd v Lederer [2006] NSWSC 1129
Hill Foundation Pty Ltd v 131 MVR Pty Ltd [2022] NSWSC 520
Jones v Dunkel (1959) 101 CLR 298
Karacominakis v Big Country Developments Pty Limited [2000] NSWCA 313; (2000) BPR 18,235
Kramer v Stone (2024) 210 CLR 484
Kuhl v Zurich Financial Services Australia Limited (2010) 243 CLR 361
Lodge Holes Colliery Company Limited v Wednesbury Corporation [1908] AC 323
MJ Concepts Pty Limited v Pandora Jewellers Pty Limited [2026] NSWDC 150
Mobius Group Pty Limited v Inoteq Pty Limited [2024] WADC 114
Netforce Pty Ltd v ITC Group Pty Ltd [2010] NSWSC 443
Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
Philipp v Barclays Bank UK PLC [2023] UKSC 25
Robinson v Harman (1848) 1 Exch Rep 850; 154 ER 363
Sherson & Associates Pty Ltd v Bailey [2000] NSWCA 275
TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd (1963) 180 CLR 130
Thompson v Palmer (1933) 49 CLR 507
Tina Motors Pty Limited v Australian & New Zealand Banking Group Limited [1977] VR 205
Tobin v Broadbent (1947) 75 CLR 378; [1947] HCA 46
Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152
Young v Queensland Trustees Ltd (1956) 99 CLR 560

These proceedings concern how parties to an agreement for the sale and purchase of assets should bear the financial consequence of a fraud that was perpetrated by an unknown third-party or parties by gaining access to an email account operated by the Plaintiff, and then by impersonation, sending from that account an email which contained a request for payment by electronic funds transfer.
Relying on the details provided by the fraudster(s) through the interception of the Plaintiff’s email account, the Defendant paid monies into a bank account which was not operated or associated with the Plaintiff. Unfortunately, almost all of those funds were dissipated, and so far as the evidence reveals, were unable to be recovered before the parties realised that the funds had been transferred into the fraudster’s bank account, rather than an account operated by the Plaintiff.
In simple terms and shorn to its essence, the Plaintiff says that the Defendant has failed to pay the agreed amount under and in accordance with the agreement between the parties. It says that it made no nomination to the false bank account; that was made by the fraudster(s).
The Defendant says, again shorn to its essence, that it received and acted on the nomination of a bank account from an email address operated by the Plaintiff, that it acted reasonably in relying on that email and paying the money into the nominated bank account, and that the Plaintiff did not, despite receiving subsequent emails concerning the payment, alert it to the transfer of funds into the wrong account until it was too late.
The Plaintiff, MJ Concepts Kotara Pty Limited (MJC) was the franchisee of a jewellery shop in the suburb of Kotara near Newcastle in New South Wales pursuant to a franchise agreement (Franchise Agreement) granted by the Defendant, Pandora Jewellery Pty Limited (Pandora).
MJC was ultimately owned and operated by members of the Matthews family. The Matthews family operated other jewellery stores in the Newcastle area. This included a store which was also the subject of a separate Pandora Franchise Agreement in the suburb of Charlestown.
In mid-July 2023 Pandora notified the Matthews family that it would not renew the Franchise Agreements for the Kotara store or the Charlestown store. At the same time, it offered, in relation to each store, an early termination of the Franchise Agreement and the purchase of assets including a buyback of inventory up to a fixed amount. Following negotiations, Pandora and MJC entered into an Asset Sale Agreement (ASA) on 22 January 2024 for the purpose of recording the terms on which Pandora would purchase assets from MJC with respect to the Kotara store.
The Matthews family business was operated by husband and wife, Stephen and Donna Matthews, and Stephen’s two sons, Samuel (or Sam) Matthews and Adam Matthews. For convenience I will refer to members of the Matthews family by their first names without intending discourtesy to any of them.
Stephen was the sole director of MJC. However, MJC was ultimately owned by a company of which he and Donna were shareholders. Donna had an active role in the family’s businesses, including in the Kotara store. Her role and function and ultimately, her authority as it was represented to Pandora, was put in issue in the proceedings. Sam and Adam worked in the family business during the relevant time.
Pandora is the Australian arm of the international Pandora jewellery business which has its headquarters in Denmark. As explained below, the international business provided shared services to the Australian and other Asian arms of its operations. This included shared transaction accounting functions and the processing of payments. Relevantly, these accounting and payment processes were based in Shanghai, China and described as the Global Business Service.

MJC now sues on the ASA claiming that the purchase price for the sale of its assets in the amount of $467,378 has not been paid to it. It claims it has complied with its obligations under the ASA, including the delivery of the assets defined in the ASA. MJC seeks to recover the purchase price as a debt, or alternatively, as damages for breach of contract. It also claims interest on that amount under the ASA.
The ASA contained terms permitting the purchase price to be paid by electronic funds transfer into an account nominated by MJC. I have set out the relevant terms of the ASA below. Pandora claims that it has paid the purchase price in accordance with the ASA because it received a notice from Donna’s email account nominating a bank account into which it paid the purchase price, and that MJC should be estopped from denying Pandora’s reliance on that notice. It is not in issue that Pandora has received the stock and other assets defined in the ASA from the Kotara store.
Pandora pleaded it received a notice by email from Donna on 8 March 2024 at 2.16am (AEST) directing it to pay the purchase price into a nominated account with the National Australia Bank (NAB) (the 2.16am email). Pandora pleaded that the 2.16am email was from Donna and was a nomination by MJC of a bank account within the meaning of the ASA ([10(a)-(a1)] of the Amended Defence). Pandora paid the purchase price into the bank account nominated in the 2.16am email but that was not a bank account held by or operated by MJC.
In its Reply filed 17 March 2025, MJC denied that the 2.16am email was from Donna and said that she did not send it, and that MJC did not have knowledge that it would be sent (at [2] of the Reply). It further pleaded that Donna had no authority to act for the Plaintiff by nominating a bank account to receive funds payable to MJC under the ASA, and that even if it be found that Donna sent the 2.16am email, that email would not be a nomination in writing for the purposes of the ASA (at [3] of the Reply).
At trial, MJC submitted that the email was not a genuine email of MJC but was the product of what was described as a Business Email Compromise attack by an unknown third-party or parties. It relied on expert evidence from a Mr Geoffrey Campey.
By way of a Rejoinder filed on 29 April 2025 to MJC’s Reply, Pandora pleaded in substance:

MJC’s claim is a claim in contract for the recovery of the purchase price under the ASA either for the payment of a debt or for damages for breach of the terms of the ASA. It is not in issue that the purchase price has not been paid to MJC.
In the way the arguments were developed by the parties, the first matter which I think needs to be determined is what, if any, bank account MJC nominated for the purpose of the ASA? As set out below, prior to 8 March 2024, MJC had referred in email correspondence to Pandora to an account which MJC held with NAB.
Ultimately, in final submissions, counsel for Pandora did not submit that the Court should find that Donna had sent the 2.16am email, or that she caused it to be sent. Counsel for Pandora did not make a submission either way that anyone else in the Matthews family business caused the 2.16am email to be sent (Transcript 385).
Nevertheless, Pandora maintained a defence to MJC’s claim by reason of an estoppel by representation as to Donna’s authority to act on behalf of MJC. This was cast in final submissions on the basis that, whether or not Donna had sent the 2.16am email, MJC represented that Donna had authority to act on its behalf, which included the authority to send to Pandora a nomination of its bank account for the purpose of the ASA; that Pandora reasonably relied on that authority by acting in accordance with the 2.16am email because it had been sent from Donna’s email address and that it suffered detriment by the payment of money into the fraudster’s bank account. In the circumstances it was submitted that MJC should be estopped from denying reliance by Pandora on the 2.16am email. The resolution of the arguments raised by this defence is, broadly, the second matter for determination.
MJC resisted this estoppel argument at several levels, including on the basis that it fell outside of the pleaded case and that, in any event, the alleged representation would not bind MJC. MJC also argued that Pandora had not established the representation as to Donna’s authority that it alleged and that Pandora’s reliance on the 2.16am email was not, in the circumstances, reasonable.
The third matter which arises if Pandora is unsuccessful in establishing the estoppel it wishes to raise, is whether there was a failure by MJC to mitigate any loss it had suffered in the circumstances. This defence raised two further issues:

Finally, the fourth matter raised by the parties was, in terms of [5] of the Rejoinder to which I have made reference in [16(d)] above, whether by not responding to two emails sent by Pandora at 9.11am and 2.12pm on 8 March 2024 (that is after the 2.16am email), MJC should be estopped by its conduct from denying that Pandora complied with its relevant obligations under the ASA by making payment into the fraudster’s bank account.
Before addressing these issues, it is convenient to set out the relevant contractual arrangements and the events and communications as they unfolded. For a large part, those events and communications were not the subject of dispute. The time stamps I record for emails sent or received are in Australian Eastern Daily Time (AEDT) unless otherwise specified.
Each of Stephen, Donna, Sam and Adam gave evidence for MJC and were cross-examined. Ms Danielle Stephenson (whom I will refer to as Danielle in these reasons, again with no discourtesy intended) was employed by the Matthews family as a finance manager and human resources manager and was responsible for managing accounts, wages and leave entitlements. She was also cross-examined.
Mr Adrian Cutcliffe, who is a Network and Franchise Management Director of Pandora, and Ms Shrestha Sunder, a Commercial Finance Specialist at Pandora gave evidence for Pandora and were also cross-examined. Mr Cutcliffe was not directly involved in the communications or events of 8 March 2024, but as explained below, Ms Sunder was.
It will be necessary to refer to some of the evidence given by these witnesses in resolving the issues, as they were framed. Generally speaking, I formed the view that each of the witnesses were attempting to give their best recollection of the relevant events. While criticisms were made of the evidence given by some of the witnesses including Donna and Stephen, I have not made adverse credit findings in respect of the evidence of any of the witnesses.
Mr Geoffrey Campey gave expert evidence for MJC. He too was cross-examined. I will refer separately to his evidence because I think it is necessary to understand the manner in which the 2.16am email was sent from Donna’s email address, and the subsequent communications between the parties on 8 March 2024.

Stephen signed the Franchise Agreement as its sole director, and also as a guarantor. Donna signed as a guarantor. Donna was not a director of MJC. It was not submitted that Donna acted as a de-facto director, or that she was appointed or conducted herself as a director or officer within the meaning of the terms in s 9AC and s 9AD of the Corporations Act 2001 (Cth). However, it was not controversial that Donna held a 50% interest in MJC’s parent company and that she was a director of that parent company.
At a meeting in Belrose in mid-July 2023, attended by various Pandora representatives, Stephen and Donna were advised that Pandora would not be extending the Franchise Agreement for the Kotara and Charlestown stores.
By letter dated 18 July 2023 addressed to the directors of MJC and marked to the attention of Stephen and Donna, Pandora confirmed its intention not to extend the Franchise Agreement beyond 3 October 2024. On the same day, by email to Stephen and Donna, Pandora put forward a proposal to offer an early termination of the Franchise Agreement with the repurchase of stock and the purchase of assets.
The parties negotiated the terms of this proposal over the ensuing months. Relevantly, on the part of MJC, the negotiations were conducted by Stephen and one of his sons, Sam. It does appear that, to the extent these negotiations were conducted by email communications, Donna was copied into at least some of those communications, but she did not send any of them. Those negotiations culminated in the execution of the ASA, styled “PANDORA A**sset S**ale A**greement (Kotara)” dated 22 January 2024.
Under the ASA, MJC was described as the Vendor and Pandora as the Purchaser. Stephen again signed as the director of MJC. Stephen and Donna also executed the ASA as covenantors.
Under the ASA, Pandora agreed to purchase certain inventory and assets.
The ‘Assets’ that were the subject of sale under the ASA were defined in clause 1.1(3) and included Plant and Equipment, Point of Sale Materials (POSMs), Hardware and Software, and Stock.
‘Stock’ was in turn defined in clause 1.1(54) as all jewellery stock used or to be used in the business at the opening of the business on the Completion Date, which is owned by the Vendor and which it is authorised to sell under the Franchise Agreement.
The Purchase Price, defined in clause 1.1(47), was set out in Item 5 of the Schedule to the ASA, relevantly, to mean $55,000 plus Stock Value, subject to any adjustments at Completion. Stock Value was the value of the Stock, calculated in accordance with clause 5 of the ASA.
Clause 5 prescribed a process in detail for the determination of the value of Stock, including the arrangement of a full physical stocktake to be carried out on the day prior to the Completion Date in the presence of representatives of Pandora, and the compilation and the provision to Pandora of a complete list of Stock ascribing values to each item in Stock. By clause 5.4, Pandora agreed to purchase Stock up to a maximum amount of $350,000 in total, including GST.
The operative provision for the sale and purchase under the ASA was clause 3 which provided:

Stephen said he negotiated what he described as the ‘exit’ with Pandora. In doing so he worked with his son, Sam. Sam was responsible for overall sales, marketing and finance aspects of the business. Sam had previously worked at the Commonwealth Bank of Australia for approximately 13 years.
Between September and December 2023, Stephen exchanged several emails in relation to the proposal put forward by Pandora for the early termination of both the Kotara and Charlestown franchises and the payments to the Matthews businesses in connection with that proposal. Stephen exchanged emails first with Mr David Allen and then Mr Travis Little, who had responsibility for Pandora’s Australian and Asian businesses.
Donna does not appear to have sent any of the email communications for the purpose of these negotiations. She was, however, copied in on emails, as was Sam, between Stephen and Mr Allen, and then Mr Little. The emails sent by Stephen were most often sent under a signature block ‘Stephen Matthews, Director’. There is no evidence that Donna made any proposals or conducted these negotiations on behalf of the Matthews family for either store.
As observed earlier, MJC and Pandora executed the ASA on 22 January 2024. Stephen and Donna were covenantors to that agreement.
On the same day MJC and Pandora executed a Deed of Termination and Release (Deed of Termination). The Deed of Termination was signed by Stephen as the director of MJC. Donna did not sign this Deed.
By clause 5 of the Deed of Termination the parties gave each other mutual releases in respect of claims they might have had but for the Deed against one another. These included claims under the Franchise Agreement. Clause 5.2 provided that the Deed may be pleaded by Pandora in bar of any “Franchisee Claims”. The effective date of the Deed of Termination was expressed to be 3 March 2024. Pandora did not argue that the Deed of Termination prevented recovery by MJC of the purchase price under the ASA.
On 28 February 2024, Navnita Damodran, who was a paralegal working in Pandora’s business in Australia, sent an email to Stephen and Donna asking MJC to provide a tax invoice for Fixed Assets and Points of Sale Material (or POSMs) for the purpose of the ASA. As I have observed, item 5 of the Schedule to the ASA specified that the purchase price would comprise “$55,000 plus Stock Value”. The amount of $55,000 evidently represented the agreed sum for the Fixed Assets (or Plant and Equipment) and the POSMs to be sold under the ASA.
In any event, a tax invoice for $55,000 plus GST was required to be issued for Fixed Assets and POSMs (as part of the purchase price) for the Kotara store, and an amount of $25,000 plus GST for the Charlestown store. The email from Ms Damodran was sent to both Stephen and Donna and copied to Ashleigh Mckinnon and Shrestha Sunder of Pandora. Ms Sunder was a Finance Manager, and she was responsible for transaction accounting and financial reporting, including payment transactions. Ms Sunder worked in Sydney. Ms Mckinnon was the Franchise Operations Co-ordinator; she supported Mr Cutcliffe in the day-to-day operations of the franchise function of Pandora’s business.
Ms Damodran requested that MJC provide its bank account details on the invoice. In her 28 February 2024 email, Ms Damodran stated:

At 9.52pm on 5 March 2024 Ms Damodran sent an email to Stephen and Ms Sunder, copying Sam, Ms Mckinnon and Mr Cutcliffe, thanking Stephen for providing the invoices. In the body of her email she wrote “@S**hrestha Sunder please see attached”. Donna was not copied into that email.
Pandora discovered that the invoices had not included amounts for GST. Accordingly, later that day Ms Damodran sent a further email to Stephen and Donna and copied to Sam and also, Ms Mckinnon and Ms Sunder advising that “we have just noticed that the invoice attached does not include GST”.
Stephen forwarded Ms Damodran’s request to Danielle. He also forwarded the email to Sam seeking clarification from both of them as to how to amend the invoices. He did not seek Donna’s assistance or send this email to her.
Within an hour or so of Ms Damodran’s request, Stephen provided, by email, corrected invoices for both the Kotara and Charlestown stores, including the GST component. The email simply attached the corrected invoices, with no text other than Stephen’s signature block, and was sent to Ms Damodran and to Sam and Danielle. The email was not sent or copied to Donna. In respect of the Kotara store the amount of the invoice increased by 10% to $60,500. Otherwise, the tax invoice was in the same form as the one that had been sent earlier. It included the details of the Kotara NAB account and the same remittance information.
Having received the corrected invoices, Ms Damodran replied to Stephen and Ms Sunder (copying in on this occasion Sam, Danielle and Ms Mckinnon) again thanking Stephen and again advising Ms Sunder of the attached updated invoices with GST.
The stocktake at the Kotara store was completed on 5 March 2024. Donna supervised the stocktake which was conducted with Pandora staff including Kristen Barr, Divisional Manager, and Ann Langridge, Regional Sales Manager and four other Pandora staff members. The stocktake was completed at about 2pm. Sam attended the Kotara store thereafter and reviewed the final count with Ms Barr and signed off on the stock numbers and corresponding dollar values. Donna handed the keys of the Kotara store to Ms Barr after Sam had agreed that the stocktake was in order.
On 6 March 2024, following the stocktake at the Kotara store, Mr Zhang sent an email to Stephen and Donna, and copied to a number of Pandora employees including Ms Damodran, Ms Sunder, Ms Barr and Ms Phoebe Zhang (who worked with Mr Zhang in the Global Business Services Team). In this email Mr Zhang advised that the Fixed Asset and POSM amounts, and the final stocktake credit had been processed. The total stock credit, excluding GST, was $320,852. Mr Zhang advised that the net payment to MJC including GST, considering all outstanding balances to date, was $467,378. This was then the agreed purchase price under the ASA. It included adjustments as contemplated in Item 5 of Schedule 1. Mr Zhang stated in this email:

On 7 March 2024 the parties participated in a meeting on Microsoft Teams in the early afternoon (Teams Meeting). Stephen, Donna and Sam attended the Teams Meeting on behalf of MJC. The Pandora representatives included Ms Sunder, Ms Barr and Ms Mckinnon. Sam’s evidence was that the purpose of the meeting was to review the numbers which had been provided by Mr Zhang in his email of 6 March 2024 and to confirm the settlement of the stocktake which had been completed on 5 March 2024. Sam’s evidence was that the meeting took about 15 minutes. The parties appear to have been content with the net payment to MJC for the Kotara store as set out in Mr Zhang’s email of 6 March 2024.
There was no evidence of any discussion at the Teams Meeting concerning the banking details that had been provided to Pandora on the tax invoices supplied by Stephen on the previous day. There was no suggestion at the meeting that MJC had changed or created a new account for the purpose of receiving the purchase price of the ASA, or that they had any intention of doing so. There was also no evidence that Donna played any role in the discussions that took place at that meeting.
It appears that an issue arose at or following the Teams Meeting as to the entitlement of the Matthews’ businesses to be credited for marketing fees in October of the previous year. This issue did not affect the settlement figure for Kotara as Pandora had proposed to allow the credits for the Kotara store to stand, but not for the Charlestown store.
Sam addressed these matters with Pandora, ultimately with Mr Liddle, and in doing so, stated to him that he considered that Pandora was not acting in good faith in not allowing the credits to stand for the Charlestown store. The underlying dispute is difficult to follow but it does not appear to have involved a substantial amount. In any event, the issue was ultimately resolved in favour of the Matthews business following prompt approval by Mr Cutcliffe.
Importantly, following the Teams Meeting on 7 March 2024, Ms Sunder sent an email at 3.19pm to Sam, Stephen and Donna of MJC and to Mr Zhang and Mr Adrian Cutcliffe of Pandora, copied to Ms Damodran, Ms Mckinnon, Ms Phoebe Zhang and Ms Barr (7 March 3.19pm email). The email was under the subject ‘Kotara final statements’. In this email to Sam, Stephen and Donna, Ms Sunder summarised some matters relating to the Teams Meeting including the issue concerning the credits of marketing fees to which I have referred above. She also confirmed the remaining stock credit that could be paid the following week for Charlestown. As the parties had agreed on the calculation of the Purchase Price, Ms Sunder addressed the following to Mr Zhang:

Mr (Jonathan) Zhang also worked in Shanghai in the Global Business Services team. Mr Cutcliffe’s evidence was that Mr Zhang had a management role in the accounts receivable function. According to Ms Sunder, he also reported to Mr Yuqi Zhan. The signature block on Mr Zhang’s emails suggested that the Global Business Services team was operated by Pandora Jewellery (Shanghai) Company Limited.
Mr Cutcliffe’s evidence was that Ms Phoebe Zhang worked with and assisted Jonathan Zhang in the Shanghai office. Although she was not mentioned in the Westpac remittance document, she was a recipient of the 2.16am, 9.11am and 2.12pm emails.
Donna’s evidence was that she did not see the 2.12pm email.
Danielle did, however, receive the 2.12pm email, while she and other members of the Matthews family were having lunch at the Race Day. Her evidence was that she did not open the remittance attachment. Danielle recalled seeing the Outlook notification on her mobile phone while she was seated at the table at the Race Day luncheon. Danielle said that she told Stephen that she had received the email notification gesturing to her phone but did not recall precisely what she said to him. She recalled that he said words to the effect of “Oh*, that’s great Danielle*”. Stephen accepted that Danielle had told him something to the effect that money is coming in from Pandora.
Sam also gave evidence that during the lunch at the Race Day, Danielle had gestured to her phone and although he couldn’t recall what she had said, gave him the impression that she had received an email confirming that payment from Pandora had been processed. He did not see this email.
Adam gave evidence that he recalled Danielle gesturing to her phone during the lunch. He could not recall the specific words that she used but he got the impression that ‘it was only a matter of time before the settlement monies could be recovered’.
Donna’s evidence was that she checked her email in response to Danielle ‘saying something positive about Pandora’. She recalled saying to Danielle ‘I didn’t get anything’.
The gesture or comment by Danielle that she had received an email from Pandora about payment was therefore communicated, in one way or another, to Stephen, Donna, Sam and Adam during the course of their luncheon at the racecourse.
There was also evidence of a further email purporting to be from Jonathan Zhang to Donna and Danielle, sent at 3.53pm on 8 March 2024 (the 3.53pm email). The 3.53pm email contained the same text as the 2.12pm email and also the same attachment, namely, the Westpac remittance record. However, the 3.53pm email did not contain in its thread (unlike the 2.12pm email) the earlier 2.16am email or Ms Sunder’s 9.11am email. This omission was not explored by the parties in the evidence.
Adam gave evidence that in the weeks after the improper payment had been detected, he reviewed emails from Donna’s email account and Danielle’s email account. He noticed in conducting this review, the 3.53pm email in which a Pandora address was misspelt. He could not recall whether the 3.53pm email which he retrieved was from Donna’s email account or Danielle’s email account, but it was from one of them.
The 3.53pm email was provided to Mr Campey, an expert called by MJC. Mr Campey gave evidence that the 3.53pm email was sent from the email address “jonzh@padnora.net” with the associated display name “Jonathan Zhang”. This was not the email address from which the 2.12pm email had been sent (jonzh@pandora.net). His evidence was that the email was sent to two email addresses namely, “dm@matthewsjewellers.com” with the associated display name of “Donna Matthews” and “danielle@matthewsjewellers.com” with the associated display name of “Danielle Stephen**son”.
Mr Campey’s evidence was that the 3.53pm email was also carbon-copied to five additional email addresses. This included:

On 12 March 2024 Donna attended to and supervised the stocktake with various Pandora officers at the Charlestown store. Adam came to the store to finalise the stock check. Adam had to take stock from the Charlestown store as there had been too much stock left over. Adam returned to the Charlestown store on the following day to complete the stocktake as there was still excess stock.
At that time the Matthews family was setting up a new jewellery store at 122 Darby Street, Newcastle. On 13 and then on 14 March 2024 Donna attended to the set-up at that store.
The evidence of each of Stephen, Donna, Sam, Adam and Danielle, as to whether they made any enquiries of the receipt of payment into the Kotara NAB account, will be addressed below. In short, they each gave evidence that until 14 March 2024 none of them considered that there was anything suspicious or untoward in relation to the anticipated payment of the purchase price or the non-receipt of funds into the Kotara NAB account. I will refer to some of this evidence below in addressing the mitigation issue.
At 9.00pm on 13 March 2024, Mr Zhang provided information by email to Stephen and Donna of information concerning the settlement of the Charlestown store.
At 8.00am on 14 March 2024, Sam responded to Mr Zhang setting out questions about charging of the credits for marketing and royalty funds in respect of the settlement for the Charlestown store. Mr Zhang provided details for those invoices by an email at 12.12pm on that day.
At about this time, around 12.00pm or 12.30pm, Sam met with Danielle at the Matthews Jewellers Newcastle office. He said it was his usual practice to meet with Danielle on a weekly basis to discuss cash flow matters and payables. During the course of this meeting, he raised the purchase monies from the settlement of the Kotara store. Danielle responded, “We haven’t got that money yet”. Danielle logged into the NAB online banking and it was observed that the monies had not been received.
At 12.44pm on 14 March 2024 Sam informed Mr Zhang by email that MJC had not received the $467,378 payment for Kotara; he asked Mr Zhang:

I find that Donna did not send the 2.16am email. Although put in issue in the pleadings, it was not submitted in closing submissions that I should find that she did.
Each of Stephen, Sam, Adam and Danielle gave evidence that they did not send the 2.16am email or authorise it to be sent. It was not put to any of them in their cross-examination that they sent that email or caused it to be sent. I find that no member of the Matthews family or Danielle sent the 2.16am email or caused it to be sent.
I am fortified in making these findings by expert evidence adduced by MJC to which I refer below. There was some suggestion during the course of the hearing that the 2.16am email might have been sent by someone within the Matthews family business; effectively that the deception was an ‘inside job’. The theory was not, however, developed and was not ventilated in closing submissions.
There was some evidence that Adam had ‘administrator access’ to Donna’s email account; that inference may also be drawn from Adam’s capacity to undertake the reviews of the email accounts of both Donna and Danielle after 14 March 2024. However, it was not put to Adam that he sent the 2.16am email or caused it to be sent. It was not suggested any other person in the Matthews family jewellery business was responsible, and no such person was identified. For the avoidance of doubt, I conclude there is no evidence that the 2.16am email was sent or caused to be sent by a person working within the Matthews’ jewellery business. Again, I am fortified in reaching this conclusion by Mr Campey’s evidence.
The Plaintiff called expert evidence from Mr Geoffrey Campey who prepared a report dated 22 September 2025. Mr Campey holds qualifications in both computer science and law. He has expertise in computer and mobile device forensics, and he has provided expert evidence in digital, mobile and online forensics in civil and criminal matters in various State and Federal courts. He is a lecturer in Cyber Crime and Cyber Security at the University of Newcastle.
His expertise and experience to give evidence in the form of his report in these proceedings was not challenged.
The principal question asked of Mr Campey was whether Donna sent to Pandora the 2.16am email referred to in paragraph 10(a) of the Amended Defence. In answering that question, Mr Campey also analysed and made observations about other email communications which followed the 2.16am email. Mr Campey expressed his conclusion at [1.5] – [1.6] of his report as follows:

Under clause 8.3 of the ASA, payment could be made by direct transfer to a bank account nominated in writing by the party to whom the payment is due.
By providing the invoices to Pandora on 4 March 2024 and then again on 5 March 2024 for the Fixed Assets and POSMs, Stephen, on behalf of MJC, nominated the Kotara NAB account for the purpose of clause 8.3 of ASA. The amount specified in these invoices were, and were understood by the parties, to be part of the purchase price under the ASA.
As observed above, the invoices provided by MJC for Fixed Assets and POSMs were significant to the parties because a valid tax invoice needed to be issued for that part of the Purchase Price which comprised a taxable supply for GST purposes. Ms Damodran contemplated that the balance of the Purchase Price would be paid into the same account as nominated by MJC in these invoices. Ms Damodran passed on both the original and updated invoices that she had received from Stephen to Ms Sunder.
On 6 March 2024 at 5.24pm Mr Zhang confirmed the total net payment of the purchase price of $467,378. In the email, he asked for the provision of banking details “if not already provided to our legal team”. Mr Zhang had not been copied into the emails from Stephen attaching the earlier invoices; these had been provided to Ms Damodran. Accordingly, there was no need to respond to this aspect of Mr Zhang’s email of 5.24pm.
It was in these circumstances that Ms Sunder sent her email of 7 March 2024 at 3.19pm after the Teams Meeting. She asked Mr Zhang to arrange for payment of the purchase price to the bank account in the attached invoice; that invoice was for the Fixed Assets and POSMs with GST included that had been sent by Stephen on 5 March 2024. Ms Sunder’s email “snipped” the details of the Kotara NAB account from the 5 March 2024 invoice. At this point, both parties understood that the bank account into which the purchase price was to be paid was the Kotara NAB account contained in the updated invoice attached to Stephen’s email of 5 March 2024.
It is also to be observed that there was no evidence of any discussion at the earlier Teams meeting on 7 March 2024, the purpose of which was to review the figures provided by Pandora for the purchase price on the previous day, that MJC had changed or were proposing to change the details for the bank account into which the purchase price monies were to be paid.
In the circumstances, for the purpose of determining the first issue I have identified above, I find that as at the close of business on 7 March 2024, MJC had nominated the Kotara NAB account for the purpose of the payment of the purchase price under the ASA and Pandora had accepted that nomination.
This leads to the consideration of the effect of the 2.16am email, and Pandora’s contention that MJC should not be permitted to deny Pandora’s reliance on the 2.16am email as a nomination of the account to which funds could be transferred under the ASA.

In closing submissions, counsel for Pandora made and developed a submission that MJC’s claim in contract should fail because of a ‘defence of estoppel by representation’ as to Donna’s authority to act on behalf of MJC. This was put on the basis that MJC had represented over a course of dealings between the parties, including by the failure to correct assumptions as to Donna’s authority, that Donna had, in effect, plenary authority to act on behalf of MJC, which included the authority to send to Pandora a nomination of the bank account into which the purchase price was to be paid in accordance with the ASA.
It was submitted that Pandora had relied reasonably in the circumstances on that representation of authority by acting upon the 2.16am email which was sent from Donna’s email account. Pandora submitted, to the extent that payment into the false NAB account was a breach of contract, its reliance upon the 2.16am email was detrimental. The funds transferred into that bank account were dissipated before action could be taken such that only a very small proportion of those funds were able to be retrieved.
As counsel for Pandora put it in final submissions, in its essence, whether or not Donna sent the 2.16am email, by reason of its representations as to her authority, MJC should be estopped from denying Pandora’s reliance on the 2.16am email.
MJC resisted the raising of this argument in final submissions on the basis that it was not open on the pleadings because the pleading of ostensible authority (or to the same effect, an estoppel by representation as to Donna’s authority) in the Rejoinder was expressly put on the basis that Donna had in fact sent the email. Even if Pandora were permitted to run the point, counsel for MJC submitted that the estoppel, or reliance on the principles of ostensible authority, could not be maintained if Donna was found not to have sent the 2.16am email. Counsel for MJC also argued that the representation as to Donna’s authority had not been made out on the evidence, and if it was, Pandora had not reasonably relied on the representation in the circumstances and that it was put on inquiry by the content of, and the circumstances surrounding, the 2.16am email and its attachment.

MJC joined issue to these allegations by its Surrejoinder, specifically alleging that if it be found that Pandora relied on the representation, it acted or failed to act reasonably in doing so, in circumstances in which there was a need for inquiry ([3(b)] of the Surrejoinder).
It can be seen that the allegations as to the representation of authority in the Rejoinder were pleaded specifically on the basis, as alleged in [10(a)] of the Amended Defence, that Pandora received a notice by email from Donna. The pleading of ostensible authority was specifically pleaded on that basis; and expressly that Donna had ostensible authority to send the 2.16am email ([3(c)] of the Rejoinder). Accordingly, as pleaded, the reliance on ostensible authority was deployed on the footing that Donna had sent the 2.16am email and [10(a)] of the Amended Defence had been amended to clarify that allegation.
In a commercial cause such as this, where the parties have exchanged detailed pleadings setting out the claims and the issues they wish to agitate, there is much to be said for holding parties to those pleadings. Counsel for the Plaintiff indicated in his oral opening, that MJC did not agree to the case ‘veering off the pleadings’. Although MJC did itself formally seek leave to amend during the course of the hearing, I took that to mean that MJC did not acquiesce to any departure from the pleadings: see Banque Commerciale S*.A.,* En Liquidation v Akhil Holdings Limited (1990) 169 CLR 279 (Banque Commerciale) at 287 (Mason CJ and Gaudron J). Pleadings and particulars serve to afford procedural fairness to the parties and to define the issues for decision in the litigation: see Dare *v Pulham* (1982) 148 CLR 658 at 664; Banque Commerciale at 286. Further, r 14.14(2) of Uniform Civil Procedure Rules (UCPR*)* requires that a defendant must plead specifically any matters that may take the opposite party by surprise or which the defendant alleges makes any claim of the opposite party not maintainable, or which raises matters of fact not arising out of the proceeding pleading: generally see, Calab**ria Community Club Limited v Christer Nominees Pty Limited [2025] NSWCA 65 at [52]-[53].
It is true, as counsel for Pandora pointed out, that a representation as to Donna’s authority was pleaded in [3(a)] of the Rejoinder and reliance on that representation was pleaded in [3(b)] of the Rejoinder in terms of an alteration of Pandora’s position by paying the purchase price into the false NAB account. It is also true, as counsel for Pandora pointed out, that [10(a1)] of the Amended Defence raised the issue of Pandora’s reliance on the 2.16am email from Donna’s email account as a nomination in writing for the purpose of clause 8.3 of the ASA. Nor, as counsel for Pandora submitted, should the Court be too focused on taxonomy in this area of discourse, especially in respect of the particular species of estoppel relied upon. Counsel for Pandora submitted that no narrow or technical approach should be taken having regard to the allegations in [3] of the Rejoinder and that Pandora’s submission was based on a ‘traditional’ estoppel by representation.
I accept that the Court should not take a too technical approach to the task of considering whether an argument falls within the boundaries of the issues defined by the pleadings and that it should, where possible, look to the substance of the matters sought to be put, rather than rely on legal categorisation which may differ from time to time in the decided cases.
However, in this case, there was a close attention by the parties to the pleadings; the filing of a Reply, a Rejoinder and a Surrejoinder demonstrated that the parties, quite appropriately in a case such as the present, had defined the issues for decision in this litigation with care and with precision. By those pleadings, and especially [10(a)] of its Amended Defence and [3] of the Rejoinder, insofar as its claims for estoppel arising from representation as to Donna’s authority are concerned, Pandora made a decision to defend the case on the basis that Donna sent the 2.16am email.
I have real difficulty reading the pleadings otherwise. Pandora did not raise a defence on the pleadings that any relevant representation was made by MJC, if the 2.16am email was not sent by Donna, other than the estoppel argument raised in [5] of the Rejoinder. That understanding of the pleadings is reinforced by the preamble to [5] of the Rejoinder which made it clear that the estoppel by representation in [5] was put on the basis that Donna did not send the 2.16am email (which was not admitted) and Donna did not have actual or ostensible authority to send the 2.16am email (which was denied).
In these circumstances, r 14.14 of UCPR required, it seems to me, that the broader contentions now sought to be raised on the basis that Donna did not send the 2.16am email, be pleaded. They were not, and no amendment to the pleading, at least in this respect, was sought at any stage of the proceedings.
My reading of the pleadings is confirmed by the parties’ approach to the issues raised by the pleadings prior to final submissions.
Regrettably, the parties did not provide opening written submissions in this matter as the Standard Orders for Hearings annexed to District Court Civil Practice Note 16 do not require them. The parties did however exchange a Schedule of Issues. Pandora’s Statements of Issues relevantly couched, as the first issue the following:

Whatever representations were made by MJC about the authority of Donna to act on its behalf, I do not think that they bind MJC in the circumstances of this case.
As I have observed above, the circumstances of the sending of the 2.16am email and the evidence of Mr Campey demonstrate the engagement of an unknown fraudster or fraudsters of what Mr Campey described as a Business Email Compromise attack. Those person or persons, whose identity is not known, gained access to and control of Donna’s email account and caused the 2.16am email to be sent. The person or persons who sent the 2.16am email or caused it to be sent are not before the Court and are unknown.
There was no pleading and no submission by Pandora that any act or omission of MJC (or Donna) caused or enabled the unknown fraudster to intercept Donna’s email account. This was a form of digital forgery; the fraudster used the email address of Donna and MJC’s email domain and, impersonating Donna, copied her signature block in causing the 2.16am email to be sent to Pandora. It appeared to be, but was not, an email from the purported sender. There is no basis in the evidence, even if it were to have been pleaded to find that MJC or Donna clothed or held out the fraudster with any authority.
The person or persons who sent the 2.16am email plainly did not have any actual (express or implied) authority to send the email. Nor did MJC hold out the fraudster or fraudsters as having authority to send the 2.16am email. MJC made no representation, whether by silence or otherwise, that the person or persons who did cause the 2.16am email to be sent were authorised to do so.
Here the act which Pandora says should be binding on MJC is the act of sending the 2.16am email from Donna’s email address. However, the person or persons who did that act had neither actual nor ostensible authority to do so. Accordingly, as the reasons of Brennan J in Northside Developments set out in [193] above demonstrate, MJC cannot be bound by the act of the fraudster in gaining access to Donna’s email account and sending the 2.16am email.
The reasons of Dawson J and Toohey J compel the same conclusion. A document which in truth is a forgery may bind a company if the company holds out the person who signs the document or affixes the company seal, has authority to act for it. The 2.16am email was a forgery. However, MJC did not, by silence or otherwise, hold out the fraudster as having the authority to create or send the 2.16am email. When a person, as in the position of the fraudster in this case, creates and sends an email from a company account has neither actual nor ostensible authority to do so, then the company is not bound. Rather the document, the 2.16am email, is a nullity.
The position can be no different if looked at through the principles or taxonomy of estoppel by representation. MJC is not in any sense resiling from a representation, assuming it was made, that Donna had plenary authority. She did not send the email or cause it to be sent and was not purporting to exercise any authority of her own when the fraudster attacked her email account.
In the course of closing submissions, Pandora referred to Tina Motors Pty Limited v Australian & New Zealand Banking Group Limited [1977] VR 205 (Tina Motors) as an example of the type of estoppel relevant to the present case.
In Tina Motors, a Mr and Mrs Italiano opened two used car businesses through a corporate entity, being the plaintiff. A Mr Stella, who was Mrs Italiano’s brother-in-law, came to be involved in the operation of the company. Mr Stella forged Mr Italiano’s signature on several cheques.
During the period the forgeries were being perpetrated, a manager at the ANZ Bank spoke to Mr Italiano about Mr Stella’s cheque activity. Crockett J found that on two occasions Mr Italiano said to the bank manager:

Accordingly, the case was decided in the context of the mutual duties of care owed by bank and customer: see now the exposition in Philipp v Barclays Bank (to which I have referred at [198] above) as to a bank’s obligation to make enquiries, which had come to be known as the Quincecare duty following the decision in Barclays Bank plc v Quincecare Limited [1992] 4 All ER 363. Even so, it is difficult to see how the case assists Pandora.
The representation by Mr Italiano which Crockett J found on the evidence to be established was that the signature upon any cheque presented by Mr Stella for payment was genuine. Mr Italiano was himself authorised to sign cheques and it appears that when he spoke to the bank manager he was speaking as and for the plaintiff company. In any event, either Mr Italiano or the company represented that the signatures, which had been forged by Mr Stella, were genuine. The bank acted on these representations. In these circumstances, Crockett J found the requirement for an estoppel to be made out such that the plaintiff was precluded from denying the representations made by Mr Italiano.
The case does not, I think, assist Pandora. The representation found by the judge was a representation that cheques presented by the fraudster, Mr Stella, were genuine. Such conduct finds no analogue in the circumstances of the present case. Any representation by MJC about Donna’s authority was not a representation about the authority of the fraudster to create and send an email, which was not hers, for the purpose of nominating the bank account for transfer of the purchase price under the ASA.
Assuming that a representation about Donna’s plenary authority could be made out, that representation only extended to Donna’s authority to make decisions for, and send communications on behalf of, MJC. It did not convey any authority for an unknown third-party to make decisions for, and communicate on behalf of, MJC.
It is notable also that in Tina Motors the bank made enquiries of Mr Italiano because, as Crockett J found, it was in real doubt as to the authenticity of the signatures of the cheques being presented by Mr Stella. The representation relied upon from Mr Italiano was procured in the course of the bank’s performance of its obligation to make enquiry of its customer.
Putting to one side the obligations created by the relationship of bank and customer, Pandora made no inquiry of MJC about the authenticity of the 2.16am email when it processed the payment and transferred the purchase price to the false NAB account. This is a matter I will return to in addressing reliance on the representation alleged by Pandora.
In these circumstances, Pandora’s arguments relying on estopped by representation or ostensible authority, if they be different, must fail.
The 2.16am email was in substance a forgery by digital means. It was not in fact sent by Donna or by MJC. It was in circumstances where no estoppel or authority could be sheeted home to MJC, a nullity. For these reasons, it could not constitute a lawful nomination by MJC of a bank account for the purpose of clause 8.3 of the ASA.
I am fortified in reaching this conclusion by two decisions in the District Courts of other states which were helpfully drawn to the Court’s attention by the parties: the first is Factory Direct Fencing Pty Limited v Kong AH International Company Limited [2013] QDC 239 (Factory Direct) at [74] per Andrews SC DCJ. The second is Mobius Group Pty Limited v Inoteq Pty Limited [2024] WADC 114 (Mobius Group) at [183]-[187] per Massey DCJ.
In both cases, a fraudster impersonating one party emailed the other requesting payment to the fraudster’s bank account. In each case, the Court found that the disputed emails were not sent by the party whose email address was used by the fraudster. I note that in neither case, was there an argument raised as to ostensible authority or estoppel by conduct of the party whose email accounts had been accessed and used by the fraudster. In Mobius Group, Massey DCJ found at [183]-[184] and [186]:

Pandora submitted that MJC represented in its dealings with it, including by silence, that Donna had authority to act on MJC’s behalf. This was confirmed in closing submissions as a plenary authority to act on behalf of MJC.
Counsel for Pandora explained that the parties communicated with a manner of informality, usually by email. In these circumstances, Pandora made the following submissions.
First, the nature of the authority itself was relevant. In this case it was the provision of bank account details, not the entry of a significant transaction. They pointed to a level of informality in the act of providing bank account details, both in this case and in general.
Secondly, Donna was not an ordinary employee; she had a 50% interest in the parent company that controlled MJC and was a director and secretary of that parent company.
Thirdly, Donna referred to herself in her dealings with Pandora as the “franchisee”.
Fourthly, Donna was appointed by Pandora as a representative of franchisees on its franchisee panel.
Fifthly, there was no evidence of any communication to Pandora that Donna’s authority was limited in any way. Contrary to MJC’s assertion that Stephen only was authorised to deal with financial matters, the evidence was that Sam was directly involved in financial aspects of the transaction. As a family business, it was submitted, there was an informal allocation of roles internally which was not communicated to Pandora.
Sixthly, Donna was a named party to some of the key franchising agreements including, as I have observed above, as a Guarantor to the Franchise Agreement and a Covenantor and Vendor Party under the ASA.
Seventhly, Donna made decisions committing MJC financially such as a decision in September 2020 to create pop-up stores.
Eighthly, it was submitted that MJC allowed Pandora to labour under a misapprehension that Donna was a director.
For its part, MJC disputed the contention that it had represented to Pandora that Donna had plenary authority.
First, it took issue with the proposition that the provision of bank account details was not a significant transaction. The nomination of the bank account occurred in circumstances where that determined where the entire purchase price for the store assets and stock would be paid. In these circumstances the provision of bank account details was of great significance.
Secondly, the evidence was that Donna was a salaried employee of MJC. She was not involved in setting her own salary; she was not a director or officer of MJC. The fact that Donna had an interest in the parent company, was not relevant to whether Donna had ostensible authority to act on behalf of MJC. More fundamentally, the evidence revealed that while Donna was copied into some communications in respect to the negotiations of the ASA, she did not send any of the emails and does not appear to have made or responded to any proposals in respect of those negotiations.
Thirdly, MJC submitted that references by Donna to herself as the franchisee, where they appeared, were incapable of representing any form of authority to bind MJC in respect of financial decisions.
Fourthly, the appointment of Donna as a representative on Pandora’s franchisee panel, did not indicate one way or another whether Donna had authority to act on MJC’s behalf. Stephen was not cross-examined about Donna’s role on the franchisee panel and there was no evidence that membership of any such group conferred any authority at all.
Fifthly, MJC submitted there being no plain representation of plenary authority, that there was no need for any communication setting out the limits on Donna’s authority.
Sixthly, MJC accepted that while Donna was a main party to the key franchise agreements, these agreements defined her role as guarantor and covenantor. It emphasised that Stephen executed each of the formal agreements entered into with Pandora as the sole director of MJC.
Seventhly, MJC submitted that the evidence relied upon by Pandora as establishing that Donna made decisions committing MJC financially, did not establish that fact. They submitted that the evidence relied upon showed the limited role that Donna played in the operation of MJC; those emails related largely to Donna seeking permission from Pandora and help in addressing minor matters, clearly restricted to the day-to-day operation of the Kotara store.
Eighthly, in relation to Pandora’s submission that it laboured under a misconception that Donna was a director, MJC submitted that no person inside or outside of the group that approved the payment to the false NAB account, gave evidence that they believed that Donna was a director of MJC. Ms Sunder did not give evidence to this effect; her evidence was that she assumed that Stephen and Donna owned and operated the Kotara store together.
I am not satisfied that I could make a finding on the evidence that MJC represented to Pandora that Donna had, in effect, plenary authority. Donna’s role in the business related principally to stock selection and the day-to-day store management issues concerning the Kotara store. She did not sign the Franchise Agreement or the ASA as a director of MJC, and she did not sign the Deed of Termination and Release at all. She does not appear to have conducted the negotiations for the ASA or negotiated the deal which was capsulated in that document; at its highest, she was copied into emails concerning that subject matter. I do not think that the evidence concerning Donna’s appointment to Pandora’s franchisee panel advanced Pandora’s case; nor do I think that the email correspondence showing Donna asking for permission from Pandora to negotiate with Westfield in respect of a pop-up store in 2020 advanced Pandora’s case.
More significantly, while emails were sent to both Stephen and Donna concerning the performance and completion of the ASA agreement, including the requests by Ms Damodran for the tax invoices on 28 February, 4 March and 5 March 2024, on each occasion, Stephen responded to these emails by himself, and without copying in Donna. I do not regard the provision of bank account details under the ASA as a trivial matter.
While Donna attended (with Stephen and Sam) the 7 March 2024 Teams Meeting, there was no evidence that she led or contributed to any issue that was discussed at that meeting.
Even if it is accepted that Pandora, through Ms Sunder, believed that Stephen and Donna owned and operated the Kotara business, there was no clear and unequivocal representation by MJC that Donna had plenary authority to act for MJC. On the evidence Stephen, and to some extent Sam, addressed Pandora with respect to financial issues concerning the matters required to finalise the sale under the ASA.
While Pandora sent or copied in Donna to several emails in the period after 28 February 2024 without demur by MJC, I do not think the circumstances called for specific action from MJC to avoid Pandora from being misled, or to countermand a previous representation of plenary authority (see Essington Investments at [188] above). The email communications sent by Pandora did not require that Donna herself should carry out any particular task or respond to a particular matter in relation to the ASA. Further, when action or response was required by MJC, it was Stephen (or Sam in the case of the dispute concerning marketing credits) who responded on behalf of MJC.

The authorities establish that there are important limitations to the operation of the doctrine of ostensible authority which are concomitant with the requirements of an estoppel by representation. As Gaudron J said in North**side Developments, “if a person has knowledge of facts or ought to have knowle**dge of facts putting the person to further inquiry, that is a matter which tells against the party sought to be bound having played such a part in the adoption of the assumption that he or she should be held to it.” This principle also finds expression in the law of agency concerned with the ostensible authority.
The protection of the expectation of a third-party, which acts in reliance on a representation by a principal that an agent has authority to bind the principal, is only justified if reliance on the representation is reasonable. A third-party cannot rely on the apparent authority of an agent if it failed to make the enquiries that a reasonable person would have made in all the circumstances to verify that the agent had that authority: see the authorities and principles referred to at [194]-[195].
The submissions made by Pandora on reliance, tended to go to general matters relating to the circumstances in which they submitted the representation of plenary authority had been made.
Pandora referred to obligations under the Franchise Agreement to ensure that all hardware and software was secure from unauthorised access or use (clause 17.10(2)(f)) and further obligations relating to the protection of confidential information in the Franchise Agreement (clause 23.3): see [36] above. Pandora also raised compliance with the Privacy Act 1988 (Cth) during the course of the hearing and in closing submissions. These matters were said to inform the reasonableness of Pandora’s reliance on the representation made by MJC about Donna’s authority. However, neither of these obligations were pleaded or referred to in the Schedule of Issues or in the oral opening.
These matters could only be of relevance if, as I have found, Donna did not send the 2.16am email. Unsurprisingly, there was no evidence as to what, if any, steps had been taken by MJC to ensure that its hardware and software were secure from unauthorised access or use or to maintain the confidentiality of information. Nor was there any evidence of what was required by Pandora to comply with relevant obligations under the Franchise Agreement. There was, for example, no evidence of Pandora’s ‘Retail Management Guide’ referred to in clause 17.10(2)(f) of the Franchise Agreement (see [36] above). Also, perhaps unsurprisingly, there was no evidence from either of the witnesses who gave evidence for Pandora that they relied on the compliance by MJC with the relevant contractual or statutory obligations. In particular, Ms Sunder who received the 2.16am email, did not mention in her evidence that the clauses identified by Pandora in the Franchise Agreement had any effect on her consideration of that email.
In final submissions Pandora complained that MJC had avoided calling any real evidence relating to the circumstances of what it described as “the data breach” and called in aid the failure to call evidence from witnesses who had not addressed the topic: Commercial Union Assurance Co of Australia Limited v Fe**rrcom Pty Limited (1991) 22 NSWLR 389 at [27]. I think that these submissions are not sustainable in view of the manner in which the case was pleaded and opened. The issues that Pandora sought to litigate as reflected in its pleadings, did not, it seems to me, call into question the extent to which it maintained the security of its systems from unauthorised access. Rather, as I have found, Pandora’s case in this respect was pleaded on the basis that Donna sent the 2.16am email, and that she had authority to do so.
Ultimately, I do not think that, in these circumstances, obligations under the Franchise Agreement with respect to the security of MJC’s hardware and software, the protection of confidential information, or compliance with the Privacy Act 1988 (Cth) advanced Pandora’s case that its reliance on the representation concerning Donna’s authority was reasonable. There was no evidence of communications between the parties about these matters. There was, for instance, no evidence about the steps, if any, which were taken by MJC to comply with its contractual or statutory obligations or any steps taken by Pandora to ensure or direct compliance by MJC. Neither of Pandora’s witnesses gave evidence on these matters.
Pandora submitted that the parties communicated informally and primarily by email, and cited as an example of this, Stephen’s issuing of the tax invoices without any information in the body of the email and addressed to a paralegal. Pandora also emphasised that the relevant act was the nomination of a bank account rather than entry into a contract. I accept that these matters are relevant to an assessment of the reasonableness of Pandora’s reliance on the 2.16am email in the circumstances it was sent. They were not, however, determinative.
Pandora also relied on Ms Sunder’s evidence that when she read the 2.16am email, she did not notice anything unusual about it or its attachment and that she did not see the exposed email address of Stephen, which, as I have observed above, was incorrect. It will be necessary to assess this evidence in the context of the content and circumstances of the sending of the 2.16am email and Ms Sunder’s oral evidence.
The circumstances surrounding Pandora’s reliance on the 2.16am email and the NAB attachment are also relevant to the resolution of other remaining issues in the proceedings; including the further estoppel relied on by Pandora.
Had it been necessary for me to do so, for the following reasons I would not have found Pandora’s reliance on the 2.16am email, as a nomination of a bank account for the purpose of the ASA, reasonable. In my judgment, the circumstances and content of that email and its attachment, ought to have put Pandora on enquiry to check or verify that Donna (or whoever else sent the email) had authority to do so.
The request for payment into a new and different account was one that I think required close attention in circumstances where MJC had, upon request, provided invoices with the NAB Kotara account on two occasions in the previous days. Pandora had requested those invoices and they had been provided. While Stephen’s emails attaching those invoices did not contain further information, it was not necessary for him to do so. The request to which he was responding was clear, and the information contained in the attached invoices was also clear. The request for the provision of those invoices was required under the terms of the ASA. There was no mention in the days leading up to 8 March 2024 that MJC had changed its bank account details or that it was intending to do so.
As submitted by MJC, the 2.16am email was sent and received at 2.16am in the morning. The email purported to be sent from Donna, a Newcastle resident, and was received by Ms Sunder in Sydney at that time. This was an unusual and suspicious time for the email to be sent. In her affidavit evidence, Ms Sunder said it was not unusual for her to receive emails overnight. In cross-examination she said that she could not say for certain whether she took note of the time the email was sent when she looked at it on the morning of 8 March 2024 but gave this evidence:

The 2.16am email was not, as I have observed above, a response to the most recent and relevant email in the thread concerning the arrangements for the payment of the purchase price. It was a response to the 6 March 2024 email from Mr Zhang, and not the 7 March 2024 3.19pm email from Ms Sunder. This is of significance because the email did not pick up Ms Sunder’s own direction to Mr Zhang to direct payment to the NAB Kotara account. Moreover, the context of the 2.16am email was that a valid tax invoice had been provided earlier and accepted. Ms Sunder had participated in a Teams Meeting with both Stephen and Donna on 7 March 2024 in which no mention had been made of a change of a bank account and then provided a request to the group asking Mr Zhang to arrange the payment to a specified bank account. As MJC submitted, the fact that the purported change in bank account details came in the early hours of the next day in those circumstances, was odd and suspicious.
The 2.16am email made no express reference to and effectively ignored the earlier invoices which had been provided upon request by Pandora. The 2.16am email did not purport to provide new invoices with updated bank account information. As matters stood, the earlier invoices which had been provided for GST purposes, did not match the false NAB account. This was inconsistent with the manner in which Ms Damodran had indicated that the payment would be made in her email of 28 February 2024 – the fraudster’s nomination did not align with the details provided in the invoices.
I consider that the fact that the bank account details came from Donna and not from Stephen, who had sent both invoices for the Kotara and Charlestown stores on 4 and 5 March 2024, was unusual. Stephen had not copied Donna into his emails sending the relevant invoices. Ms Sunder received from Ms Damodran each of Stephen’s emails attaching the invoices that had been requested. The 2.16am email would have appeared to be the first email sent by Donna concerning MJC’s bank accounts or the exit arrangements with Pandora.
MJC submitted that the ‘snip’ in the 2.16am email which set out the false NAB account details was substantially larger than in the email sent by Ms Sunder to Mr Zhang on 7 March 2024, and this was a factor that should have put Pandora on inquiry concerning the 2.16am email.
In my opinion, the NAB attachment ought, on an ordinary reading, have generated suspicion:

I accept Ms Sunder’s evidence that she did not see that the email address used for Stephen had been misspelt in the 2.16am email. The copy of the email exhibited to her affidavit did not expose the addresses of the recipients and Ms Sunder gave evidence that the program she used was not set to expose the addresses on emails. And as Mr Campey explained, the registration of the domain ‘matthesw.jewellers.com’ on 8 March 2024 meant that subsequent emails sent by Ms Sunder and Mr Zhang would not be returned undeliverable (see [138] above).
Ms Sunder’s role and responsibility in arranging for the payment to be made, was not entirely clear. Her evidence was that as Finance Manager at Pandora she was responsible for transaction accounting and financial reporting including payment transactions. She said that she was responsible for ensuring that payment was for the correct amount and correctly processed. However, her evidence was that the Global Business Service team provided shared services to the Australian business, and that shared transaction accounting functions for Australia, New Zealand and other parts of Asia were based in the Shanghai office of, I infer, Pandora Jewellery (Shanghai) Company Limited (see [97] above). These included the transaction accounting team who processed all payments made by Pandora to franchisees in those areas. Significantly, in her 9.11am email when she directed Mr Zhang to make payment of the Purchase Price, she requested Mr Zhang to send through a remittance “as soon as the payment is authorised”.
This suggests that there was an authorisation function for the Global Business Service team in Shanghai of which Mr Zhang formed a part. The Westpac remittance which was attached to the 2.12pm email, as I have observed earlier, identified that three persons were involved in creating or authorising the payment from Pandora’s Westpac account (see [95] and [96] above). That document identifies that Ms Lin processed the request for payment and that it was then authorised by two others, first Ms Li and then Mr Yuqi Zhan, whom Ms Sunder described as ‘the boss’ of the shared business service in Shanghai. The process of authorisation, it can be inferred, was a matter of significance for Pandora. Two persons, including the head of the team responsible, other than the person initiating payment, were required to give their authorisation.
The role of and the actions taken by the shared business team in processing and authorising the payment of the amount transferred to the false NAB account was not identified with any clarity in the evidence. None of Mr Zhang, Mr Yuqi Zhan, Ms Lin, Ms Li or Ms Phoebe Zhang gave evidence in the proceedings. It is not clear what, if anything, they looked at or what, if any, steps they took if any of them did inspect the 2.16am email and the NAB attachment. Nor is it clear what processes needed to be undertaken to identify and authorise a beneficiary of new account details to make the electronic funds transfer on Westpac’s electronic banking systems; for instance, whether there was a process for matching the account details with the account holder, or identifying the new account holder.
The evidence disclosed that the amount was transferred to the false NAB account on the same day it was processed, notwithstanding the size of the payment, that it was to a new account for the beneficiary of that payment, that it was an interbank transfer and the remittance referred to an ‘overnight’ payment method. No explanation was proffered as to how this occurred.
Ms Sunder’s evidence confirmed that the reference on the Westpac remittance document to ‘Additional Payment Information’ was to internal approval processes of Pandora to make the payment. She explained that Ms Lin and Ms Li, so far as she was aware, did not still work for Pandora. Mr Yuqi Zhan however, did. Mr Cutcliffe’s evidence was that Mr Jonathan Zhang and Ms Phoebe Zhang, who worked in Mr Zhang’s team in Shanghai, were still with the organisation. Otherwise, there was no explanation by Pandora why none of the personnel who worked in Shanghai, apparently for Pandora Shanghai, and participated in the approval process for the payment, or received the 2.16am email, were not called to give evidence in the proceedings. In these circumstances, I am entitled to assume that the evidence of Mr Yuqi Zhan, Mr Jonathan Zhang and Ms Phoebe Zhang, would not have assisted Pandora: Jones v Dunkel (1959) 101 CLR 298; Kuhl v Zurich Financial Services Australia Limited (2010) 243 CLR 361 at 384-385 [63]-[64]; ASIC v Hellicar (2012) 247 CLR 345 at 409 [155].
MJC also submitted that I should draw inferences from Pandora’s failure to call other recipients of the 2.16am email. I am not persuaded that I should draw inferences from the absence of evidence from the other recipients. For instance, the evidence was that Ms Mckinnon was the Franchise Operations Co-ordinator reporting to Mr Cutcliffe, and that Ms Barr was the Divisional Sales Manager whose role was described as managing some of the practical, ‘on-the-ground’ processes, relating to the transfer of business. There was no suggestion in the evidence that these persons were involved in the processing or authorisation of the payment of the purchase price.
However, Pandora did not raise any queries in relation to the 2.16am email with MJC. There was no phone call or email communication asking anyone at MJC to check the new account details were correct and could be relied upon. Ms Sunder’s 9.11am email requested Mr Zhang to arrange for payment and to send through a remittance advice once payment was authorised by the Global Business Services Team. It did not ask MJC to do anything or to check anything before the payment was authorised and made.
For these reasons, I do not consider, had it been necessary to do so, that I would have found Pandora’s reliance on the 2.16am email and its attachment to be reasonable in the circumstances. Pandora failed to make enquiries that a reasonable person would have made to verify that the nomination in the 2.16am email, to pay into a new and different bank account, was authorised by MJC.

Pandora submitted that its reliance on the representation it alleged was detrimental in that it led to the payment of monies to the false NAB account. As I have observed, Ms Sunder received no bounce-back to the incorrect email address for Stephen when she provided the payment instruction to Mr Zhang at 9.11am. Ms Sunder’s evidence was that if she had been informed of the fact that the banking details were incorrect or that the 2.16am email was not authentic, she would have taken steps with Westpac to stop the payment or asked Westpac to contact NAB and inform it of the fraud.
Pandora submitted that when the fraud was disclosed to NAB, it was able to remove the funds that remained in the false NAB account within a matter of hours – a transaction report dated 14 March 2024, which it tendered, showed the removal of funds from the false NAB account at 5.08pm.
On this basis Pandora submitted that its detriment in relying on MJC’s representation equates to the total sum of its liability.
MJC did not, so far as I could tell, put on submissions addressing this issue.
I accept Ms Sunder’s evidence that if she had been informed of the fact that the bank account referred to in the 2.16am email was not a bank account of MJC or that the 2.16am email was not authentic, she would have taken further action. If it had been necessary to determine, I would have found that Pandora suffered detriment by reason of its reliance on the representation it alleged.
For completeness, MJC had raised, during the course of the hearing, the operation of s 14 of the Electronic Transactions Act 2000 (NSW), which concerns the attribution of electronic communications. However, it disavowed reliance upon that section in its closing submissions, in view of the fact that no finding was sought by Pandora that Donna had sent the 2.16am email. Accordingly, it is not necessary for me to consider the operation or effect of s 14. However, without there being dedicated argument on the matter, I do have sympathy with Pandora’s submission that s 14 expressly preserves reliance upon communications sent by a person within the scope of that person’s apparent authority; that seems to me to be the effect of s 14(2).

As mentioned earlier (at [293] above), in Hill Foundation, Macfarlan JA observed that, suing in debt, the plaintiff’s task was, relevantly, to prove a contractual promise by the defendant to pay a specific sum that has accrued and is ascertainable under contract without any need for independent assessment by the Court.
MJC submitted that the sum comprised by the Purchase Price had been earned. The consideration for the Purchase Price was the sale and delivery of the Assets (as defined in the ASA). This occurred on the handover of the Kotara premises and the stock following the stocktake on 5 March 2024.
As discussed above, the Purchase Price was calculated under the ASA by reference to Item 5 of Schedule 1 to the ASA (see [45]). It was defined in Item 5 as $55,000 plus Stock Value (calculated in accordance with clause 5) less the value of Employee Liabilities Adjustment. The Value of Employee Liability Adjustment was nil. Accordingly, the Purchase Price was $55,000 plus Stock Value, subject to any adjustments at completion.
The stocktake was conducted on 5 March 2024. The parties subsequently agreed on the amount to be paid as the Purchase Price, being the amount of $467,378. This amount was set out in Mr Zhang’s email of 6 March 2024 at 5:24pm which itemised the net payment, including GST, considering all outstanding balances to date. MJC accepted the amount and following the Teams Meeting on 7 March 2024, Ms Sunder (in her email of 7 March 2024 at 3:19pm) asked Mr Zhang to arrange payment of $467,378 to the Kotara NAB account. I accept MJC’s submission that there was nothing further for MJC to do and that consideration was no longer executory by 7 March 2024.
So far as MJC was concerned, it had delivered the Assets and handed over the keys and access to the Kotara premises. There is no uncertainty in the amount that was to be paid by Pandora, and it, in fact, attempted payment of the agreed amount but paid it into the false NAB account.
Pandora sought to meet MJC’s characterisation of its claim as a liquidated amount in debt, firstly on the basis that there was not a promise to pay a ‘sum certain’ under the ASA. It submitted that there was no promise in the ASA to pay $467,378 by a certain date. Rather, the Purchase Price was to be determined as the amount payable for the Assets in Item 5 of Schedule 1 to the ASA. That calculation included the determination of Stock Value in accordance with Clause 5 of the ASA.
Accordingly, it submitted that at the time of entering the ASA the promise to pay the Purchase Price was not a promise to pay a ‘sum certain’, nor was it for an executed consideration. There was, it submitted, no ‘sum certain’ under the ASA for a liquidated amount.
I do not think that the fact that the ASA did not set out a sum certain for the payment of the Purchase Price, necessarily changes the character or nature of MJC’s claim. The promise by Pandora was to pay a specific sum (to be calculated in accordance with the terms of the ASA). That amount was, as Macfarlan JA said in Hill Foundation, ascertainable under the ASA without any need for independent assessment by the Court. As mentioned above, the Purchase Price was calculated by the parties following a stocktake and other adjustments and agreed to by the parties. Pandora attempted to pay that sum. It was not asserted that any other amount was payable under the terms of the ASA.
Pandora’s submissions properly accepted that a debt may still exist notwithstanding the requirement for subsequent calculation of the relevant sum. In Commissioner of Taxation v Bendel [2026] HCA 18, the High Court observed (at [176]):

Here there was in fact, by 7 March 2024, no further need for the parties to calculate or assess the sum to be paid as the Purchase Price. It had been determined to the satisfaction of both parties.
I am also not able to accept that so far as MJC was concerned, consideration was executory. It had dealt with and delivered the Assets as defined in the ASA and had handed over the keys and access to the Kotara premises. It was not suggested that there was anything more for MJC to do. Indeed, it was on that basis that Pandora tried to effect the payment of the Purchase Price.
In this sense, the relevant sum, being the Purchase Price, had been ‘earned’. The right to payment under the ASA had matured into a debt payable upon the performance by MJC of its obligations under the ASA and in accordance with terms in the ASA prescribing the manner of payment of the Purchase Price: see Advanced National Services at [47] and [52].
As discussed below, under Item 7 of Schedule 1, the ASA required the Purchase Price to be paid within five business days of the date of Completion.
Pandora also made a second argument on the basis that MJC’s claim for damages was pleaded upon a breach causing ‘loss and damage from such breach’, citing [11] of the Amended Statement of Claim. It submitted that MJC alleged in [8] and [10] of the Amended Statement of Claim breaches of clauses 6 and 8 of the ASA, which included executory consideration in the form of conditions precedent to be performed by MJC at completion.
To the extent that this argument relied upon the fact that MJC made a claim for damages, I think it is tolerably clear that MJC seeks recovery of the Purchase Price under the ASA for breach of contract, in the alternative. That does not, it seems to me, prevent it from seeking recovery of that amount as a debt. This was the purpose of the amendment which MJC brought to [9] of the original Statement of Claim, and in respect of which leave was granted on the basis that it was not opposed by Pandora. MJC is entitled, it seems to me, to pursue alternative remedies to recover the purchase price under the ASA.
Insofar as the second argument raised by Pandora relies upon consideration being executory in the form of conditions precedent to be performed by MJC at completion, as I have found above, in my view, MJC had performed its obligations under the ASA; it had ‘earned’ the Purchase Price under the ASA.
For these reasons I consider that the claim by MJC against Pandora in these proceedings for the payment of the Purchase Price under the ASA in the amount of $467,378 is a claim or action for the enforcement of a contractual debt. It follows from the authorities to which I have referred above that the question of whether MJC failed to mitigate its loss, does not arise.

The next issue which arises, if I am wrong in finding that MJC’s claim is one for the enforcement of a contractual debt, is the date of Pandora’s breach of the ASA, assuming there to have been a breach. This issue is of significance because the parties both accepted that, in accordance with the authorities I have mentioned above, that the innocent party’s so-called duty to mitigate loss in a contract case arises on breach, subject to the question of knowledge, and not when damage is first suffered or noticed. In this case the date of breach is relevant because by 12 March 2024 a very substantial portion of the monies had been removed from the false NAB account: see [111]-[112] above.
Under Item 7 of Schedule 1 of the ASA, the payment of the Purchase Price was required to be paid to MJC within five business days of the date of Completion. As no Deposit was paid, the entire Purchase Price was subject to this temporal stipulation.
Pandora submitted, focusing on the requirement in Item 7 for payment to be made to the V**endor, the date of breach should be taken to be 8 March 2024, which is when the payment was made into the false NAB account: see [110] above. It pointed out that clause 8.3 relevantly permitted that the payment could be made by immediately available funds to a ‘bank account nominated by the party to whom the payment is due’. Accordingly, it submitted that, assuming that there was a breach, the breach was the making of the payment which was not in accordance with the nomination of MJC.
I do not accept these submissions accord with the proper construction of the ASA. On a plain reading of its text, Item 7 of Schedule 1 required the Purchase Price to be paid to the vendor within a specified time, namely within five business days of the date of Completion. This is what a reasonable businessperson would have understood Item 7 to mean. It was only upon the expiry of that period that Pandora was in breach of its obligation to pay. This is consistent with the commercial purpose of such a clause. A number of matters might conceivably cause some short delay after completion in the ability of the purchaser to effect payment of a not insubstantial amount to the vendor. This could possibly relate to the immediate availability of funds or to the ability of a purchaser to effect successful payment by electronic funds transfer to the account of the vendor.
By way of illustration, I do not think that Pandora would have been in immediate breach of the ASA if those authorising the payment had, by an inadvertent typographical error, paid monies to a different account. Those funds might be able to be retrieved from the erroneous recipient within the stipulated period, or Pandora could choose to pay the amount within the stipulated period and seek to recover the funds erroneously paid, without being in breach of the agreement. And in the circumstances of this case, if the funds could have been retrieved from the false NAB account within the period specified in Item 7, I do not think that the breach would have accrued upon which MJC could have sued under the ASA. As MJC submitted, the ASA did not oblige Pandora to refrain from paying any monies to any person for any reasons. It simply imposed a positive requirement to pay the Purchase Price in a manner specified and by the time stipulated in Item 7.
The parties’ commercial bargain was that the purchaser had a period of time to effect payment after Completion. The breach did not accrue until after that time had expired. No submission was made about any anticipatory breach.
It will be recalled that Item 7 of Schedule 1 of the ASA required that the Purchase Price be paid to the Vendor “within five (5) business days of the date of Completion”. Completion was defined in clause 1.1(10) as:

Donna gave evidence that she did not see either the 2.16am or the 2.12pm emails. As will be recalled, Adam’s evidence was that he found emails from Pandora sent or copied to Donna and referring to the sale of the Kotara business in a folder that was not contained in her inbox. I have accepted her evidence that she did not see either email.
The 2:12pm email was undeniably seen by Danielle, and she made reference to it at the Race Day luncheon on 8 March 2024 to each member of the Matthews family.
Donna’s evidence was that she told Danielle that she did not receive any email when the issue was raised by Danielle at the Race Day. Pandora submits that this is relevant because Donna was both listed as a recipient to Mr Zhang’s 2:12pm email and the person to whom his salutation was directed.
Danielle did not recall Donna saying that “I didn’t get anything” in relation to the 2:12pm email. Danielle did accept it would have been odd if they did not receive emails at the same time as it was addressed to both of them.
Accepting that Donna said something to the effect that she did not receive anything in relation to the 2:12pm email, I do not think this circumstance rises so high as to create a suspicion on the part of any of the Matthews family that may have heard this exchange that payment had been processed to be transferred into the wrong account, or that payment would not be made into the Kotara NAB account in the usual course of events.
Donna’s evidence was that she was not expecting any email about payment for the Kotara store on 8 March 2024, the day of the Race Day luncheon. Pandora submitted that Donna’s statement to Danielle that she had not received the email when Danielle raised it at the luncheon, was contradictory with her earlier evidence and the Court should accept that the true position was that Donna was expecting to receive an email about the Kotara store. But I did not see a substantial inconsistency in Donna’s evidence – that she was not expecting an email about payment on the day after the Teams Meeting on 7 March 2024, does not seem to me to be inconsistent with a statement that she did not get the email that Danielle referred to at the luncheon. The burden of the evidence was that, although she received emails from Pandora after 28 February 2024 and attended the Teams Meeting, Donna did not involve herself in the communications required to effect payment under the ASA.
Donna’s evidence was that she had not seen the 2.16am email or the 9.11am email until shortly prior to the hearing. I accept this evidence and it was not challenged in cross-examination. It was not put to Donna that she had ever seen the 2.12pm or 3.53pm emails.
Donna agreed that she was pleased that Danielle had communicated to her something positive about Pandora making payment, and that she had lost trust at this point with Pandora. Donna’s evidence was that she did not have access to the Kotara NAB account but accepted that there were other members of the family who could have checked the account.
A challenge was made to Donna’s credit on the basis that she did not accept that she had an interest in the receipt of the Kotara monies. However, it seems to me that Donna understood the questioning to relate to whether it was her role to check the bank account in respect of which she said – “I didn’t deal with that type – part, part of the business”. There then followed an exchange where it was put to Donna:

While Danielle had alerted Stephen at the Race Day luncheon that she had received an email from Pandora concerning the payment, I do not think that there is reason to disbelieve Stephen’s evidence concerning his expectations as to payment by Pandora.
A challenge was made to Stephen’s credit on the basis that he denied that he had an expectation that money was “coming in” from 8 March 2024 and that such denial was self-serving. However, Stephen’s denial was expressly qualified by his ‘previous comment’ which included the passage of his evidence which I have extracted at [352] above. That evidence was consistent with surrounding circumstances which were not in dispute. There was some documentary evidence suggesting that it had taken Pandora some time for credits in favour of MJC to be processed. I formed the view that Stephen gave his evidence in a direct and calm manner, and made appropriate concessions, such as the souring of relations with Pandora. I did not form the view that his evidence was ‘self-serving’.
In essence, Stephen did not believe, despite the fact that relations between franchisor and franchisee had soured, that there was going to be an issue with the payment of the purchase price. He assumed that others would be checking when the payment would be made.
Sam’s evidence was that he did not have access to the Kotara NAB bank account, but from time to time he asked Danielle to check matters in that account. He said, candidly, that he did not have complete trust in Pandora, but that he “wouldn’t have thought that Pandora would hold back a payment like that”. Sam had over 13 years’ experience working at the Commonwealth Bank of Australia. His understanding was that the transfer was an international payment coming from Shanghai and that such a payment “regularly takes three business days at least to process”. It appears that on this basis he had not asked Danielle to check the bank account on the Monday morning. I accept that evidence
Sam did receive the 3.53pm email. He said he did not recall when he first opened that email but said that if it wasn’t on the afternoon of 8 March 2024, it would have been on the following day. He did not recall opening the attached remittance in that email. He accepted that it was possible that he did.
Sam was taken to the Westpac remittance document and maintained his evidence that he assumed that the monies were coming from overseas. He said that he did not assume that MJC was to be paid from an Australian bank account.
Adam did not receive the 9.11am, 2.12pm or 3.53pm emails. He did recall that at the Race Day luncheon Danielle gestured to her mobile phone but could not recall the specific words that she used. He said that the impression he received from the interaction that it was only a matter of time before the settlement monies would be received.
Adam said that he did check the Kotara NAB account during the following week, but he did not have any concerns about the money being received. He didn’t know how long it would take for the money to come through.
Adam did not gain the understanding from his interaction with Danielle at the Race Day luncheon that the payment had been processed. Adam, it should be noted, had not been privy to the email communications concerning the completion of or the purchase price for the Kotara transaction. Adam could not recall at what point the purchase price was agreed upon.
Adam said that he had access to the Kotara NAB account from NAB’s online portal which he could access on his mobile phone. He said he could not recall whether he checked the Kotara NAB account on the Friday or over the weekend, but he did recall checking a couple of times in the week of 11 March 2024 to see if the money had come in. He said he thought that it may have been two or three times.
Adam accepted that when he checked the bank account, he must have seen that the money had not arrived, and he accepted that he did not tell anyone about the fact that it hadn’t arrived. Adam explained why he did not do so in his oral evidence:

As I have said, Danielle did receive the 2:12pm email. This email attached the Westpac remittance document and contained the threads of the 9:11am and the 2:16am emails. Danielle said she did not read the earlier emails or the attachment. I do not think that there is any reason not to accept her evidence. She is no longer employed by the Matthews family businesses, and I found she gave her evidence in a measured way and made appropriate concessions.
I do not think that the 2:12pm email on its face would have excited enquiry or aroused suspicions of wrongdoing or irregularity; it stated that payment was already processed and attached a ‘payment remittance’. It did not say that payment had been effected and did not state the account into which payment had been processed or provide any details of that account.
On the face of the email sent to her, there was no particular reason to check the remittance advice, or to check the accuracy of what had been represented in Mr Zhang’s email, even if Donna said that she had not received it. Danielle’s evidence was that she did not usually check remittance advices because her practice was to perform reconciliation manually using the business’ ‘Xero’ system upon payment.
In the circumstances, I do not think it was unreasonable for Danielle not to read the remittance advice.
The remittance, had it been read, did not say that payment had been made; rather, that payment was in progress. Importantly, the remittance did not set out the actual details of the proposed recipient account.
The remittance document did say, as Pandora submitted, that the payment method was ‘overnight’. It submitted that this conveyed the fact of a payment being processed ‘overnight’. However, coupled with the reference that the status of the payment was in progress, I do not think that, even if it had been read, the payment method ‘overnight’ would have conveyed that the payment would be made and received by the recipient overnight. This was especially so in circumstances where the payment type was a new beneficiary. It would have been understood that the payment would be processed from Pandora’s account by the paying bank overnight.
Danielle gave evidence that she did not recall Pandora paying any amounts to MJC; the amounts Pandora owed to Kotara were credited to amounts MJC were required to pay Pandora under the Franchise Agreement. Her evidence was that, had she read the remittance document, she would have regarded the statement that ‘the account details for this beneficiary had not been used previously’ as true. In these circumstances, the fact that a new beneficiary was stated on the document would not itself have excited a suspicion. As I have said, the remittance document did not set out the actual details of the new but false NAB account.
Danielle did not read the earlier emails, including the 9.11am and 2.16am emails which appeared in the thread under the 2.12pm email. She had not been sent those earlier emails so that their significance would not have been apparent to her. Mr Zhang’s 2.12pm email was sent to her, presumably because Danielle’s name appeared below the account details of the false NAB account in the 2.16am email. However, that same statement had appeared in the invoices which she had helped Stephen prepare on 5 March 2024. As the person responsible for accounts receivable for MJC and the Matthews group, it would not have been, in my opinion, a surprise to receive an email of the kind sent by Mr Zhang.
The email stated that the payment had been processed. It called for no particular action to be taken by MJC and did not on its face reveal that something untoward may have happened. It did not state in terms that new account details had been provided to Pandora, or to check or confirm those details. In the circumstances, I do not think it was unreasonable for Danielle not to have read the emails which appeared in the thread below the 2.12pm email.
As I have said, Sam received the 3.53pm email which also attached the Westpac remittance. He opened that email. He understood that the payment had been processed but that it would take at least three business days, based on his experience, to arrive at the receiving bank.
Sam said that it was possible that he read the Westpac remittance attached to the email. Had he read it, it would not have revealed either the details of the false NAB account, or the name of the person or entity who held that account. His evidence was that there would be a delay on account of the international nature of the transaction. Accordingly, I do not find that had Sam read the attachment, it would have aroused suspicions.
The 3.53pm email, as I have said, did not include in its thread the 2.16am email. Whatever might have been the reasons of the fraudster for excising the 2.16am email, its presence could not have been detected by Sam.

Further, in assessing the overall reasonableness of MJC’s conduct, I must take into account, as I have found, that Pandora did not breach the ASA until 13 March 2024. MJC raised concerns on the following day, by which time all but a very small proportion of the purchase monies had been dissipated. The reasonableness of its actions falls to be assessed from 13 March 2024. However, there was nothing in particular that was received by MJC or brought to its attention by Pandora from that time that would have caused MJC to entertain suspicion about the payment, or to make a claim on Pandora immediately upon the funds not having been paid in accordance with the ASA.
Ultimately, having assessed the evidence of each member of the Matthews family and Danielle, and given consideration to the other matters to which I have referred, I am not persuaded that MJC acted unreasonably by failing to alert Pandora that the Purchase Price had not been paid into the Kotara NAB account until 14 March 2024. As Giles JA said in Karacominakis, a high standard of conduct is not required. The manner in which the fraud was perpetrated had the consequence that Stephen did not receive any of the key emails. The only person who saw the 2.12pm email was Danielle. The reasons given by each of the witnesses for not raising concerns at an earlier time, assessed individually and collectively, were not in the circumstances unreasonable. The terms conveyed in the 9.11am and 2.12pm emails were not such as to arouse suspicion, if they had been read, that something was amiss and the non-receipt of funds into MJC’s account for a relatively short period would not have excited concern where the payment appeared to have an international character and there had been some previous delays in Pandora making payments. And, MJC did in fact raise concerns with Pandora about payment on the day after Pandora had breached the ASA by failing to pay the Purchase Price.
The defence raised by Pandora that MJC failed to take reasonable steps to mitigate its loss, must fail.
It follows that if I have concluded wrongly that MJC’s claim for the Purchase Price can be brought as an action in debt, MJC can sue for breach of contract. Pandora has breached the terms of the ASA by failing to pay the Purchase Price within the period and in the manner specified in Item 7 of Schedule 1 of the ASA. The appropriate measure of damages in this case would be to seek to put MJC in the same position as if the contract had been performed: Robinson v Harman (1848) 1 Exch Rep 850; 154 ER 363. If the contract had been performed, MJC would have received the Purchase Price as assessed by the parties. Subject to the consideration of the further estoppel pleaded by Pandora, MJC would be entitled to judgment in that amount.
In its closing submissions, Pandora submitted that it did not cause MJC’s loss, but rather MJC had caused any loss it suffered by failing to take steps to confirm that the payment had arrived in the Kotara NAB account once it was on notice that the payment had been processed.
In its closing written submissions, Pandora referred to Alexander v Cambridge Credit Corporation Limited (1987) 9 NSWLR 310, where McHugh JA stated at 361:

The first email relied upon by Pandora is the 9:11am email sent by Ms Sunder. In that email, Ms Sunder requested Mr Zhang to arrange payment of $467,378 and send through a remittance “as soon as the payment is authorised”. As MJC submitted, this was not a representation that Pandora had complied with its obligations under the ASA by making payment of the Purchase Price to the false NAB account in terms of the pleaded representation in [5](a) of the Rejoinder. Rather, it was a statement that Ms Sunder requested arrangement for the payment, the authorisation for which had not yet been made.
MJC did not in fact respond to that email. However, the email did not ask MJC to do anything, whether to check the details of, or to confirm, a new account. On the face of the email, there was no reference to a new bank account. Ms Sunder’s email contemplated that payment still needed to be authorised. In these circumstances, the fact that MJC did not respond to this email could not amount to a clear and unequivocal representation that Pandora had complied with its contractual obligations.
For the reasons I have developed earlier, the email was not received by Stephen or seen by Donna. It had not been sent to any other person associated with MJC. The 9.11am email did not, however, ask for a reply, nor did the subject matter call for a reply. If read, it was an information update as to the stage that the payment process had reached.
The second email relied upon by Pandora is the 2:12pm email, with the Westpac remittance attached. I have made observations concerning that email at paragraphs [372] and [373] above. In that email, Mr Zhang confirmed that payment ‘is already processed’ and provided a payment remittance. As MJC submitted, the email was a further update as to the stage of the payment process had reached. In the context of the 9:11am email, the phrase “the payment is already processed” would have been understood as conveying that internal approval processing of the payment had been completed, and along with the remittance, that payment had been processed with Pandora’s bank.
The 2:12pm email did not request any action on the part of MJC. It invited the recipient to inquire if there were any questions, but it did not ask for any account details to be checked or confirmed and did not refer to the fact that a new or different account had apparently been nominated. It did not call for any reply. The email stated that payment had been processed, not that it had been made.
As I have found above, the 2:12pm email was not received by Stephen, and Donna did not see the email because it was not in her email inbox. Danielle did receive the email and did raise it with members of the Matthews family who attended the luncheon at the Newcastle Racecourse. However, the evidence reveals that what she conveyed was that, in substance, the payment had been processed; that is, that it would be, but had not been paid: see [100]-[104] above.
I have made observations about the remittance advice which was attached to the 2:12pm email in the course of considering the failure to mitigate at [368] to [370] above. Those observations are apposite here. Importantly, the remittance advice did not state that payment had been made, rather that it was in progress. It did not contain the account details of the false NAB account, or the name of that account holder, or the beneficiary’s bank information. The remittance made it clear that payment was in progress rather than having been made.
The terms of the content of the 9:11am email and the 2:12pm email can be contrasted with the explicit requests made by Ms Damodran in her 28 February 2024 email in making her original and subsequent requests for tax invoices (see [68] above) and the explicit request by Mr Zhang in his email on 6 March 2024 to provide banking details, if they had not already been provided to the legal team. Neither of the emails relied upon by Pandora made any request for confirmation or checking, and neither of them, on their face alerted MJC to the fact which must have been apparent to Pandora that there had been a recent change in the bank account details which had been provided to it.
In the circumstances, I am not prepared to find that by its silence, in response to the 9:11am and 2:12pm emails, MJC made a representation that it accepted that Pandora had complied with its contractual obligations under the ASA. The terms of the emails themselves in the circumstances in which they were sent, and the relationship between the parties was not one that called for a positive response to those emails, especially in circumstances where payment was not required to be made under the terms of the ASA until five business days after the date of Completion.
MJC was not aware that Pandora was under a mistaken belief that it had processed payment into an account that had been nominated by MJC such that it believed it had complied with its obligations under the ASA. There is no suggestion in the evidence that any of the members of the Matthews family or Danielle had such an awareness or even a suspicion that the payment that had been processed was into someone else’s account. I have referred to their evidence at [342]-[375] above. They each expected that payment would be made, not that it had been made, and until 14 March 2024, none of them was aware or suspected that payment had or would be made to an unfamiliar account. Accordingly, there was no relevant duty to speak so as to correct the mistaken assumption that had apparently been formed by Pandora.
The ‘confirmation’ emails indicated that payment had been approved and processed by Pandora and by implication that Pandora expected that payment to be effected, that is transferred from its bank account to the account nominated by MJC. They did not call for a specific response, and they did not ask that the bank details be checked or confirmed. In my judgment, the absence of a response to the emails in the circumstances, did not amount to a clear and unequivocal representation that Pandora had complied with the ASA.
I also accept the submission made by MJC that there is no evidence that any person at Pandora made an assumption by reason of the absence of a response to the two emails, to the effect of the representation pleaded. Mr Zhang (who sent the 2.12pm email) and the payment authorisers, Mr Yuqi Zhan and Ms Li, did not give evidence. None of the other recipients (on the Pandora side) of the 9.11am and the 2.12pm emails were called to give evidence. There is no evidence that any such persons relied upon the silence to abstain from acting. As I have found earlier, Ms Sunder did give evidence that she would have acted if she had been told that the 2:16am email was not a genuine email (see [25] of her affidavit). However, this was not evidence related to the pleaded estoppel which relied on the failure to respond to the confirmation emails to support a representation that Pandora’s contractual obligations had been complied with.
I am not satisfied that there was evidence of reliance, reasonable or otherwise, by Pandora on the pleaded representation that its contractual obligations had been complied with.
As Dixon J said in Grundt v Great Boulder at 675 and picked up and explained by Gaudron J in Northside Development**s (in the extract referred to at [197] above), whether or not a person will be allowed to depart from an assumption depends on the part played in the adoption by the other. If the latter has knowledge of facts, or ought to have knowledge of facts putting him or her to further inquiry, that is a matter which tells against the former having played such a part in the adoption of the assumption that he or she should be held to it.
For the reasons I have identified earlier in these reasons, the content and circumstances of the sending of the 2.16am email ought to have put Pandora on inquiry. Without repeating all of the observations and findings I have made at [256] to [278] above, the 2:16am email was suspicious due to the time it had been sent, and from whom it had been purportedly sent, due to there being no suggestion by MJC that the bank account had or would be changed prior to 8 March 2024, due to the fact that it was not responsive to Ms Sunder’s email of 7 March 2024 at 3.19pm, and due to the date of and the errors and omissions in the NAB attachment. In the circumstances, Pandora did not either before or after payment of the Purchase Price had been transferred from its account into the false NAB account, check with MJC to confirm the reliability of the 2.16am email.
In these circumstances, I do not think that, if Pandora did rely on an assumption that the ASA had been complied with, MJC played such a part in the adoption of that assumption that it should be held to it. Pandora’s reliance on the absence of response to the 9.11am and 2.12pm emails to form an assumption that the contract had been complied with was not, in the circumstances, reasonable.
If, contrary to the findings I have made, the pleaded representation was made out and Pandora had reasonably relied on it, I would have found that Pandora had changed its position by failing to take steps to stop the payment or to recover payment from the false NAB account, such that it would have satisfied the element of detriment for the purposes of the estoppel.
For these reasons, the defence founded on an estoppel as to contractual compliance must fail.
It is possible to have some sympathy with the position of Pandora as a victim of the fraud that I have found, that was executed through the gaining of access to MJC’s email domain and the impersonation of an email from one of its employees. However, I am required to determine the matter on the basis of the pleadings. No allegation was made to found any claim in the defence (or any cross-claim) on the basis that MJC’s systems were in some way inadequate or deficient so as to allow, encourage or permit the fraud to be perpetrated. It could not be submitted as the matter was pleaded, that MJC courted the risk of an attack by the way it managed or operated its information technology systems or its email domain.
It is noteworthy that an attempt had been made by Pandora to introduce claims under the Civil Liability Act 2002 (NSW) to apportion liability to other third parties such as the fraudster, the owner of the domain and mail service from which the 2.16am email had been sent, or MJC itself. An application to amend the Defence to include such claims was made a few weeks before the hearing; but that application was refused by a Judge of this Court: MJ Concepts Pty Limited v Pandora Jewellers Pty Limited [2026] NSWDC 150.
Rather, a forensic choice appears to have been made that Donna sent the 2.16am email. It was on this basis, as I have observed above, that the pleadings concerning representations as to Donna’s authority and ostensible authority arose and were developed. In closing submissions, counsel for Pandora (quite properly on the evidence) did not ask the Court to find that Donna had sent the 2.16am email.
Further, following the grant of leave to MJC to amend its claim so as to clarify that it had a claim in debt, the defence raising a failure to mitigate was further exposed because Pandora accepted (again quite properly) that such a defence was no answer to an action in debt.
Ultimately, in the way that the fraud was perpetrated, Pandora was, on my findings, put on inquiry that the 2.16am email was a nomination by MJC of the bank account into which the monies were to be paid. Pandora did not in its subsequent emails to MJC seek that the new bank account details should be checked or confirmed. In this way, although both parties were innocent to the fraud, for the reasons that I have earlier developed, the loss should fall, in the words of Dixon J in Tobin v Broadbent (see [388] above), on Pandora ‘by whose indiscretion it has been occasioned’.

MJ CONCEPTS KOTARA PTY LIMITED v PANDORA JEWELLERY PTY LIMITED (No 2)

At a glance

Court

Decision date

Before

Catchwords

Source

Email me a plain-English summary of this case

Catchwords

Judgment

JUDGMENT

Introduction

The Plaintiff’s Claim and the Pleadings

Issues in dispute

Franchise Agreement and the Asset Sale Agreement

Events leading to 8 March 2024

Events of 8 March 2024

Other events after 8 March 2024

8 March 2.16am email and Mr Campey’s evidence

Nomination of the Bank Account for the purpose of Clause 8.3 of ASA

Estoppel by Representation and Ostensible Authority

The pleading point

Principles

Can the representations as to Donna’s authority bind MJC?

MJC’s representation as to authority

Was reliance on the representation of authority reasonable?

Detriment

Failure to mitigate

Principles

Action in debt for a liquidated amount

The date of breach

Resolution of the issue of the failure to mitigate

Evidence of the Matthews family and Danielle

Some General Considerations

ESTOPPEL AS TO CONTRACTUAL COMPLIANCE

Principles

Consideration

Conclusion, Interest and Costs

Interest

Costs

SCHEDULE A

SCHEDULE B

Amendments

07 September 2026

Parties

Legislation Cited (1)

Cases Cited (57)