Plaintiff v Defendant

Plaintiff v Defendant - [2018] VSC 3 - VSC 2018 case summary — Zoe

[212]

COUNSEL: Mr Charan, were you involved in matters such as determining the salaries, bonuses, retainers and benefits for staff at CTT?

MR CHARAN: I do not recall.

COUNSEL: Can the witness be shown court book 0451 and could we go to the last two pages of that document. Do you see at the very foot of the left-hand page, Mr Charan, is the start of the e-mail to which I want to draw your attention. You see you have sent an e-mail on 3 December 2013 in which you have said: "Hi guys. Can we offer Elise a retainer based structure? Let's give her $850 per week retainer as a subcontractor. We will deduct this amount off her commissions payable when due, hence we are calling this a retainer based model. The commission rate is as follows: $150 on commencement of training." Do you see that?

MR CHARAN: I do see that, yes.

COUNSEL: Does that refresh your memory about being involved in late December 2013 with determining payments and retainers for subcontractors?

MR CHARAN: I don't recall this e-mail, no.

COUNSEL: Were you involved in approving retainer amounts and commission rates for subcontractors of CTT?

MR CHARAN: I do not recall.

COUNSEL: Do you see a little further up the left-hand page Ms Celona responding to you: "Hi. I do not have an issue. Will check with Maria how to set this up. What happens if she does not get signups. Also is she getting this 850 monthly or fortnightly." That's Ms Celona, the chief executive officer of CTT, seeking advice from you about the payment structure for a new CTT employee. Do you agree?

MR CHARAN: That's what it says on this e-mail, the face of it, yes.

COUNSEL: Are you able to explain to His Honour why, if you had nothing to do with the day-to-day operations of CTT beyond the accounting matters you have referred to, you were involved in determining the retainer and commission rates for new subcontractors at CTT?

MR CHARAN: Again, I don't recall this e-mail, hence I am not wanting to get drawn into it.

COUNSEL: Do you see at the top of the page, Mr Charan, you have written a further e-mail on 3 December, again to Ms Celona: "Hey salary can get paid when everyone else gets paid. If she doesn't bring in enrolments after 4 weeks, we will replace her with someone more active in this space. I will be sourcing more sales staff for CTT." What's your explanation for that, Mr Charan?

MR CHARAN: Again, I don't recall this e-mail so again, I am not going to be drawn into a guessing game.[63]

[221]

COUNSEL: Mr Charan, I want to put to you that it's inconceivable that at the time you gave your evidence last Thursday you had forgotten having had a 27 minute conversation with Mr Brown less than three days earlier [27 February] and a 51 minute conversation with him in the same week [24 February]?

MR CHARAN: Again, Your Honour, those questions were thrown at me. Some of them were mumbled towards me. I didn't understand what he was saying. It was pretty quick. I would have - and I did - I did have - draw a mental blank on the day, or that 30 seconds-odd. I did have the luxury to think about it over the weekend, Your Honour, and here I am presenting as accurately as I can regarding the version of events.[69]

...

COUNSEL: Let me see if I can refresh your memory. The call lasted 354 seconds. That's a little under six minutes. You made it at 11.52 in the morning. Now, on Thursday, 23 February, Ms Schoff opened your case before His Honour and the court took its morning break, according to the transcript, between 11.44 am and about 12.01 pm does that assist you?

MR CHARAN: No, not really but if I did, it would have been regarding - and it looks like I have. It would have been regarding instructions given by my team to get information for this case.

COUNSEL: Who from your team, during the morning break of 23 February, asked you to call Mr Brown?

MR CHARAN: Again, I am not saying it was done that morning. It would have been done a week ago, two weeks ago. It was probably a follow-up call regarding that. I don't know what it was and I can't recall what it was, what the conversation was. But, as I said, again, I can see it, it's on my Telstra record. I would have but the content of the conversation I do not recall.[70]

...

COUNSEL: Where were you when you made that call to Mr Brown during the midmorning break on Thursday, 23 February?

MR CHARAN: Again, I do not recall. I don't know. Again, I couldn't give you an accurate description of my whereabouts. I don't know.

COUNSEL: Where do you go during the midmorning break?

MR CHARAN: Again, I don't know. I go numerous of places. A lot of places. Anywhere.[71]

...

COUNSEL: When you gave evidence last Thursday that you couldn't recall any phone conversations with Mr Brown last week or the week before, that you knew that evidence was false because you had called him three times on a single day, Wednesday, 22 February?

MR CHARAN: No, that's your opinion. That's definitely not mine. As I said to Your Honour, I make thousands of calls on a monthly basis to keep up with each one of them - I have got a bad memory as it is. To keep up with each one of those calls it's a massive task. I know it is frustrating but it's a massive task to remember everything. [72]

...

COUNSEL: When you gave evidence last Thursday that you couldn't recall any phone conversations with Mr Brown that week or the previous week, you knew that evidence was false because you knew you had called him for 38 minutes on 16 February?

MR CHARAN: No. Again that's your opinion, definitely not mine. You bombarded me with these questions in 30 seconds and at that point I drew a blank and yes, I did not recall but I have had the luxury to think about it over the weekend and here I am, giving the recollection of what the true state of play is, to the best of my knowledge.[73]

[225]

MRS CHARAN: Well, there's two parts to that. Primarily when he first saw the article, I observed him feeling the devastation, the embarrassment, the shock, the anger; and then secondary to that has been the litigation and what I have observed, as far as him almost falling into a depression as it's increasingly getting closer to the trial and since the trial commenced. Very - lack of focus and disengaged.

COUNSEL: How has that manifested itself, the lack of focus or the disengagement?

MRS CHARAN: In a sense it's affected the family. He would often take the children to their sporting commitments and it's become more irregular for him to do that so there's been a lot of pressure in the sense that I have had to pick up that slack. He has also - we have been at several events, birthday parties, we have been at the tennis. Anywhere we are it seems that the topic has been brought up. Not always by himself, other people are asking him how things are progressing and it tends to take over every situation that we are in.

COUNSEL: Can you recall something that happened when you were at the tennis with him?

MRS CHARAN: I believe when we were at the Australian Open in January was when he found out that the defendants were asking for some personal relationship details and he became quite agitated and distracted and that was at about lunchtime, I recall, and from that time he wasn't there. It was just his body there, his mind was off. So the whole day we were there with the family and - yeah.[77]

...

COUNSEL: The events at the Australian Open and the letter he received, has that had any other effect on him since that time?

MRS CHARAN: Definitely. He's been a lot more lethargic, very stressed and I generally can't get him to communicate properly, in the sense of - I will give an example of even just yesterday. I had said to Prakash that, "Melinda called me and I am going to give my evidence tomorrow at about 11 o'clock." "Okay", he acknowledged that and then it came to the afternoon at about 5 o'clock or so and he said, "Did anyone tell you, you were going to give your evidence tomorrow?" and I went, "I just told you that at lunchtime". So it's conversations like that that are taking place more regularly, probably since late November.

COUNSEL: Have you ever seen your husband display those kinds of signs before?

MRS CHARAN: No. Definitely - I suppose another one of the signs is the sleeping and the lethargy. He would never be one to have a nap during the day and things like that. It's just the demotivation, I think. He's deflated.[78]

[255]

HIS HONOUR: Mr [Charan], are you telling me that not only did you give these answers the other day to me on your oath but also, you don't now recall with any precision whatsoever, when your solicitors asked you to get in touch with Mr Brown? Is that what you are telling me?

MR CHARAN: I do not recall. I will give you a date and it will be wrong, Your Honour. The best people to speak to would be my team.

HIS HONOUR: No. The best bet may be that I speak to you?

MR CHARAN: Okay.

HIS HONOUR: Because you are the one who has the personal knowledge of these matters and the other day you told me on your oath that you haven't spoken to Brown effectively over the last month. Now, as I follow it, what you are now going to tell me is that you have revised the evidence that you gave and that you no longer adhere to it. Is that correct?

MR CHARAN: No, Your Honour. Again, the question is do I recall when? No, I do not recall exactly when my team spoke to me about it. Initially it would have been probably I would say January, probably middle of January, when they first started talking to me about getting some information from Ivan Brown but there were subsequent discussions which I don't know when it took place, after that, to get further information about the case to assist us in the preparation of the case. Again, Your Honour, until then I have not made contact with Ivan Brown since probably, I would say early to mid-2015. I bumped into him and another thing that I have recalled. It wasn't January that I bumped into him. It was prior to me leaving for Singapore and I did confirm that with my wife on the weekend and it was, I would say, prior to 25 December. 26th is when I went to Singapore. I bumped into him at William Street, I spoke to him then. I didn't make any phone conversation or any phone calls after that day. I spoke to my counsel when I bumped into him. I explained to her exactly what I spoke about and from then, up until my counsel and my team including my lawyers - lawyer asked me to contact him, that's the only time I have contacted him, Your Honour. I am willing to - again, I am willing to provide phone records if that will give you any comfort. Now, what did give me - or I got concerned about, Your Honour, was the fact that you were a bit - I suppose a bit confused as to what relationship I held or hold with Ivan. Let me tell you one thing. He is not a friend. Someone who does that to you is not a friend, is definitely not on my Christmas card list and I can assure you now, I have not spoken to him up until my counsel gave me clear instructions to request certain information regarding the case and that was, I would say, early to mid, maybe even late January. And again, I am willing to provide you with the phone records as far back as I can. I think actually I did speak to Telstra. The number - this new number that I have got, I got on - was it February 2015 and that's the furthest back I can go on this number. I can probably provide you with the other numbers as well to show you exactly how many times I have spoken to him since 2015, my exit, up until today. I am willing to do, that Your Honour.[89]

[269]

COUNSEL: I want to suggest to you that the substance of the text exchanges over the period 31 July to about 5 August were substantially concerned with the Ernst & Young audit then being conducted in relation to AMA?

MR CHARAN: No. Again, I don't think so. I don't recall it, and it would be silly and it would be a big problem for Ivan if he did let that information out, outside of his group or the board members he had. That would be a breach of his fiduciary duty and that's something that - and a CEO and a board member takes very seriously, Dr Collins.

...

COUNSEL: I am just putting it to you as a matter of fairness and asking whether that explains that flurry of text message exchanges on 31 July?

MR CHARAN: First of all, Dr Collins, we have established that it's not 112. It could be one text message. It's not 112 so stop misleading the court. It's not 112 text messages, it could be one. You said there are many multiple towers or reception towers that that could pick up and hence, it's got an inflated number. Now, that's the first thing. The second thing is again, why would I be talking about something that I have never spoke about and that's not within my domain, my interest, nor my speciality. I am not a technical person, I am a sales and marketing dude. I am a sales and marketing person and that was my role within CTI. Why would I be talking about an audit when I am not even in that company? I mean, it doesn't make sense, Dr Collins.

...

COUNSEL: Can you explain to His Honour why it is that you consider that Mr Brown is the sort of person who would commit a massive breach of trust and the sort of person who would put a tracking device in your car but is not the sort of person who would breach his fiduciary duty?

MR CHARAN: Again, that's a question you need to ask Ivan Brown but having an independent view on your question, breaching a - your fiduciary duties, there's huge penalties attached to it. Huge penalties attached to that. I mean, that question does not make sense to me. I am sorry.[95]

[307]

COUNSEL: Mr Charan, they are the only text messages that have been produced in response to the call made yesterday for all text messages passing between you and Mr Brown from 1 February to today's date. Correct?

MR CHARAN: To my knowledge that is incorrect. I do believe I have deleted a couple that had some sort of profanity or pictures that I didn't want my 7 year old daughter or my kids or even my wife to see.

COUNSEL: Just let me understand that. You have deleted text messages passing between you and Mr Brown, have you?

MR CHARAN: Yes, yes.

COUNSEL: How many have you deleted?

MR CHARAN: Again, I don't recall but I recall there were things that he sent that was inappropriate which I deleted.

COUNSEL: When did you delete text messages passing between you and Mr Brown?

MR CHARAN: Again, I am not sure but it was definitely not yesterday.

COUNSEL: Was it over the weekend?

MR CHARAN: To the best of my knowledge, I don't recall. ...

COUNSEL: Mr Charan, we will just go through these pages. Do you see on the page, if we leave aside the hang up message which is the third message on the left-hand page, there are 10 messages produced... They are the only messages you had on your phone passing between you and Mr Brown from 1 February onwards as at 2.36pm yesterday, being the time at the top of the screen?

MR CHARAN: Yes. Again I don't know the dates and all that but that's all the messages that were on my phone, correct, as up until Toby inspected it.

COUNSEL: Mr Charan, you know, don't you, that the Telstra records show that there were 39 text messages exchanged between you and Mr Brown between 1 and 27 February?

MR CHARAN: That figure, you are probably making it up, because I don't - I haven't seen it. ...

COUNSEL: Mr Charan, I want to put to you that you deleted 29 text messages passing between you and Mr Brown because you knew that if they were produced to the court they would damage your case?

MR CHARAN: Again, that's your opinion. That's definitely not mine. I don't do that.

COUNSEL: Mr Charan, you gave evidence yesterday to His Honour, on your oath, that all of your communications with Mr Brown in the period since 1 February were in connection with gathering information to assist you in your case. Do you remember giving that evidence?

MR CHARAN: No, that's your opinion. What I did say, the dominant reason for it was to gain evidence. The dominant reason.[110]

[318]

COUNSEL: Do you see, Mr Charan, that that's an email to the Federal regulator, the ASQA? Do you see that?

MR CHARAN: Yes, I do, Your Honour.

COUNSEL: You can see Mr Kochhar has written: 'Please find the attached application for notification of material change'. You can see that?

MR CHARAN: I do, Your Honour. ...

COUNSEL: Box 2.1.1 has got a cross in it, 'new chief executive officer of RTO' and then your name appears, 'Name of new chief executive officer'. Do you see that?

MR CHARAN: I do see that. I do not recall this document, Your Honour. ...

COUNSEL: Were you at any time the chief executive officer of Thoan and AMA?

MR CHARAN: Not to the best of my knowledge, Your Honour. ...

COUNSEL: Could the operator go to page 10 of 13 in that document, 1404 at the top of the page [statutory declaration]. That's not your handwriting, is it, Mr Charan, on the left hand page?

MR CHARAN: No, Your Honour.

COUNSEL: On the right-hand page that's not your signature either, is it, or is it?

MR CHARAN: Are you telling me or are you asking me?

COUNSEL: I am asking you is that your signature?

MR CHARAN: No, it's not, Your Honour. ...

COUNSEL: Mr Charan, what's your reaction to seeing a statutory declaration on the screen purportedly in your name but not signed by you?

MR CHARAN: Your Honour, do I have to answer that, Your Honour?

HIS HONOUR: Yes, you do, because I have got some concerns about this document...So, I think it is helpful to me to know what you think of this document.

MR CHARAN: Yes. I mean, I am surprised and I am, I suppose, confused.

HIS HONOUR: I think the better question, what I suspect Dr Collins was getting at, was can you proffer an explanation for why your signature would, in effect, be forged by someone else for the purpose of this document?

MR CHARAN: I couldn't elaborate on it. I would be guessing.

HIS HONOUR: I don't want you to guess.

MR CHARAN: Believe you me, I will go to town on anyone who is going to do something like that but again, I am measured and I need to be measured in my response and I am trying to be as accurate and as truthful as possible. I am as truthful as possible.

HIS HONOUR: You can't proffer an explanation for why this might be in the form it's in? Do I understand that?

MR CHARAN: Absolutely not, Your Honour. ...

COUNSEL: Mr Charan, as I understood what you just said to his Honour, you would go to town on anyone who you knew had, in effect, forged your signature on a statutory declaration. Is that what you said to his Honour?

MR CHARAN: That's what I said, Your Honour.[114]

[347]

COUNSEL: The obvious meaning of that, Mr Charan, I suggest to you, is Mr Brown suggesting that the accounts for CTI should be falsified by backdating payment from one financial year to the previous financial year. Is that how you read it?

MR CHARAN: That's one way to interpret it, I suppose, yes. Again, I don't recall this e-mail but if I am taking a stab at it, that's probably one way to look at it.

COUNSEL: Because he says: "The income needs to be backdated in order to pump up the 2014 financial year income, we have to." You understood that to mean that the income should be backdated to make the company look as though it had more revenue in the year ended 30 June 2014 than it in fact had?

MR CHARAN: Again, that's your opinion. You can interpret it in any way but as I said again, that's one possible way of translating it. The best person to speak to is Ivan Brown.

COUNSEL: Can you suggest any other plausible interpretation for that sentence?

MR CHARAN: Again, I'm not wanting to get involved in a guessing match. I don't recall this e-mail and that's it. I mean, the best person to speak to is Ivan Brown. He is the one that wrote that e-mail.

...

COUNSEL: I want to suggest to you, Mr Charan, that there is only one plausible interpretation of that line ['Just let me know what to do from my side and I will get it done'] and that is that you were prepared to do what needed to be done in order to give effect to the matters raised by Mr Brown, which included committing a fraud by backdating July income for CTI to the previous financial year in order to pump up the income for that financial year?

MR CHARAN: No, I don't take that view. Again, you are putting words in my mouth. To me, I do not recall this e-mail and I am not going to guess it. It could mean anything. There's five sentences or paragraphs there. That could relate to any of those five or it could relate to some other e-mail. Again, I am not going to have a stab in the dark which from time to time I do but again, Your Honour, if you want me to I can definitely have a crack at it but again, I am only going to have a stab in the dark if I was to elaborate on it.

COUNSEL: Mr Charan, are you able to offer His Honour any plausible interpretation for that sentence, other than that you were prepared to assist Mr Brown to commit a fraud?

MR CHARAN: No. Again, I have answered it before and if you want I can repeat my answer. I do not recall this e-mail. There could be many reasons or many translations to that sentence. On the face of it, as I said, there's five paragraphs there. It could relate to any of that. But again, I am not willing to take a stab in the dark, unless Your Honour wants me to.[128]

[922]

COUNSEL: I want to suggest to you that there's nothing improper with - I am not suggesting that the enrolments were proper but I want to suggest to you that prior to attending and determining that students were not suitable or appropriate, there is nothing wrong with arranging an enrolment session for students who may come from a non-English speaking background, is there?

MS EBEJER: I understand that. You weren't there. I can't explain to you, whether you have knowledge or [sic] RTO and how they work. On that day this enrolment in my professional view was inappropriate. It was not consistent with ASQA standards.

COUNSEL: I don't want to suggest to you that it's inappropriate to have enrolled those students and to have continued. What I want to suggest to you is that there is nothing wrong with arranging an enrolment session and then determining that as a result of what occurs at that enrolment session students are not appropriate?

MS EBEJERjer: No because when you are dealing with a student and you enrol a student that is in front of you, you as a BD or as a trainer will determine right there and then whether that particular person is eligible to do this particular course, or capable of doing a course of that level with the level of LL&N in front of you. At that point that person should not move forward in enrolling. There's no documents that should be filled after that.

COUNSEL: I want to suggest to you that the documents did not go further than that?

MS EBEJER: They filled out their VET fee forms, they filled out their enrolment forms, they filled out their Kangan Batman forms; they filled out all those documents on that day.

COUNSEL: I want to suggest to you that nothing happened to those documents afterwards because Helen Lechte decided they were not appropriate students to continue to enrol?

MS EBEJER: I understand that but it shouldn't have happened in the first place. It's when you enrol a student you find out about the student. You sit down and talk to the student. You find out where they would like to go, what other things would like to do in receiving other certificates. Are they capable at that level? If they are, great. If they are not then you find a pathway for those to go down that pathway and achieve their goals. Not like it was done on that day. It's a one-on-one interview, not a group interview.

[1003]

COUNSEL: Did you observe what Harris and the two associates were doing in the space that you made available?

MR CAGE: They were - again, the call centre was quite large and that's why I had a manager and they would sit right up the front. They had pens in their hands and they were, yeah, going through LLN forms.

COUNSEL: What's an LLN form?

MR CAGE: Language, literacy and numeracy. That's something that's required even before you enrol in a course to justify that you are capable of doing the course.

COUNSEL: Did you see the forms?

MR CAGE: Yes. We all know what they were.

...

COUNSEL: What did you observe Harris and the two associates doing with the LLN forms?

MR CAGE: Again, they had a pen in their hands and I mean, yeah, they were either marking them or filling them out. One or the other, I cannot - yes, specifically - - -

COUNSEL: Are you able to say which one it was?

MR CAGE: Again, they had a pen in their hands and I am not too sure if I was to say one or the other. I mean, yeah, there was a considerable amount of them and that's basically, yeah.[554]

...

COUNSEL: Are you alleging that there's anything wrong with that conduct?

MR CAGE: - - - Well, it's very rare that anyone would go over the LLNs. I mean, they are usually with the actual enrolment forms.

...

COUNSEL: So it would have been appropriate, would it not, for him [Harris, as a trainer] to have been assessing LLNs?

MR CAGE: Why were his two accomplices doing the exact same thing.

COUNSEL: Who were his two accomplices?

MR CAGE: I am not sure. They both had the same complexion and the same ethnic background as Harris.

...

COUNSEL: Always in the company of the same two associates?

MR CAGE: It could always be - there was the same one but there was always a different person.

...

COUNSEL: She [Ms Mantzis] was responsible for - she would have been responsible for conduct such as Mr Faiz's?

MR CAGE: The whole reason that this has come up is that it's very strange for a trainer - it's maybe not strange for a trainer to be marking LLNs but it's strange when there's a handful of other people marking them as well. [555]

[1068]

658 There are a number of other factors which persuade me that the representations are reliable and should be acted upon in relation to the conduct of CTT in 2014. First, the students are, in effect, a random sample. Although their names were nominated by DET, it could not have been known what the interviews were likely to reveal. Second, the weight of numbers is persuasive. Even allowing for a potential overlap (as argued by Mr Charan in regards to the two diabetes audits) the numbers are damning. If only a couple had said they had not participated or enrolled in the course then I doubt that there was much probative value in that evidence. On the other hand, the numbers are highly persuasive, particularly given the limited size of the sample, and make it far more likely that not only are the representations as a group accurate, but that the conduct occurred. Third, the auditors had no motive to record anything other than the answers that were provided by the students. Whether they could recall the individual interviews is neither here nor there. A significant point is that each gave evidence that they conducted the audit in accordance with the processes laid down and that the students were interviewed and asked the question about course enrolment and course participation. I am satisfied that the answers recorded on the test sheet (ultimately part of the attachment) were recorded accurately by auditors carrying out their job. It is worth mentioning that notwithstanding the microscopic analysis of this material by Mr Charan's lawyers that no major inconsistency has been demonstrated between the answers recorded by the auditors and the contents of the audit reports and their attachments. Fourth, there is no opinion evidence contained in these reports - it is simply a record of an answer given by the student. Fifth, calling senior management of DET or Protiviti is a red herring. The question here is what was the nature and quality of the representation made by the student to the auditor, not what high level management decisions may or may not have been made. Finally, the criticism that the students did not state when they commenced training is close to absurd given that the representations relied upon relate to students who did not either enrol or participate in the course. What is relevant is that these students were said to be enrolled in 2014 when Mr Charan was still involved in the management of CTI companies.

[1153]

714 I have set out my reasons for accepting and attaching weight to the contents of the representations made to the auditors in relation to student participation in CTT courses. That reasoning applies here. First, the students are, in effect, a random sample. Although their names were nominated by DET, it is clear that it was not known what these interviews were likely to reveal. As with course enrolment and participation, if the student interviews had demonstrated that no students had been offered an incentive, then that would be powerful evidence for Mr Charan to rely upon in contradicting the allegations of the offering of incentives. Second, and as with the course enrolment and participation questions, there could be no ambiguity about the integrity of questions requiring a binary answer - and this also, to a large extent, answers the criticism that there has been no opportunity to test the evidence of the student. The question was simple - did you receive an incentive to enrol in the course - and a binary answer - yes/no. There is little room for error. Third, the weight of numbers here is also persuasive. I readily accept that if only one or two students had said that they received an incentive, then that would be of relatively low probative value. However, the greater the number who have said that they were provided with incentives (in this case thirteen in total), then the more likely it must be that this occurred. Fourth, as I indicated earlier, the auditors had no motive to record anything other than the answers that they were given. Whether they could recall the individual interviews is of no real significance; indeed, this concession speaks more of their probity than against it. What is important is that, as far as I could tell, each seemed confident that the transposition of the responses from the test sheet to the spreadsheet - which became the attachment to the report - was accurate. As I mentioned earlier, Mr Charan has not pointed to any significant inconsistency.

At a glance

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Judgment (1398 paragraphs)

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Cases Cited (22)