[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
HEADNOTE
[This headnote is not to be read as part of the judgment]
Silversea Cruises Australia Pty Ltd (the appellant) has appealed against the decision of the primary judge to dismiss all claims against Mr Perven Salas Abellanoza (the respondent) for various orders in aid of the recovery of moneys defrauded by the respondent's wife, except for one claim of $1,829.08 which the respondent conceded that he had knowledge of.
The respondent's wife, Ms Mary Ann Abellanoza, was an employee of the appellant. Ms Abellanoza fraudulently transferred over $3.5 million from the appellant's bank accounts between 2014 and 2017 to various other bank accounts in her own name or into accounts jointly held by her and the respondent. Most of the defrauded moneys appear to have been dissipated by Ms Abellanoza through gambling. Payments of $299,588.90 were identified as having been made into a joint account held by the respondent and Ms Abellanoza with St George Bank Limited (St George Bank) and $511,967.63 into a joint account also held by them with the Australia and New Zealand Banking Group Limited (ANZ). The balance of the defrauded moneys was paid into bank accounts not held by the respondent, including accounts with the National Australia Bank (NAB).
The appellant brought proceedings against Ms Abellanoza as the first defendant and the respondent as the second defendant seeking to freeze the funds in the accounts referred to above and for various orders in aid of the recovery of the amount defrauded. The Statement of Claim described the type of claim as "[m]oney had and received, breach of contract (employment related), breach of fiduciary duty". The only claim initially made against the respondent was that creditor payments made to the defendants were payments made by the appellant under a mistake of fact or law and is money had and received which the defendants are liable to pay to the appellant. It was not disputed that Ms Abellanoza gambled with moneys withdrawn from the accounts into which the defrauded moneys were paid into. The 'gambling winnings' were subsequently paid into two bank accounts with the Commonwealth Bank of Australia (CBA) held by the respondent. The Statement of Claim was amended to make claims against the respondent in respect of moneys paid in and withdrawn from these accounts.
The primary claim by the appellant related to cheques totalling $154,030.71 in respect of gambling payouts which Ms Abellanoza provided to the respondent to deposit into one of his two CBA bank accounts. The essential allegation by the appellant was that the respondent ought to have known that the moneys that his wife had provided to him to deposit into his two CBA accounts had been obtained by dishonest means.
The alternative claim by the appellant related to $20,000 withdrawn by the respondent from his second CBA account and given to Ms Abellanoza after she provided him with a copy of the summons seeking asset freezing orders against her. The essential allegation in respect of the alternative allegation was that the respondent knowingly dealt with the moneys obtained by dishonest means by withdrawing $20,000 from his second CBA account and giving this amount to Ms Abellanoza.
There were three main issues on appeal. First, whether the claim of knowing receipt was pleaded or conducted at trial. Second, whether the appellant's claim for knowing receipt was entitled to succeed. Third, whether the appellant's claim for money had and received was entitled to succeed.
Pleadings of knowing receipt at trial
1. Leaving aside the payment of $20,000 on 26 April 2018, the case was neither pleaded nor conducted as a first limb Barnes v Addy knowing receipt type claim. The appellant should not be permitted on appeal to advance a new claim that was not pleaded or pursued at trial. It would be unjust to the respondent to determine the case on this basis: [45]-[49], [58] (Bathurst CJ); [111]-[114], [119] (Gleeson JA).
Barnes v Addy (1874) LR 9 Ch App 244; Commerciale SA En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11 referred to.
1. The equitable claim for knowing receipt was pleaded at trial. Sufficient allegations were included to provide an adequate pleading of an equitable claim for knowing receipt of moneys which, being fraudulently obtained, were impressed with a constructive trust. There is no basis for rejecting the appellant's claims on appeal on the ground of inadequate pleading at trial: [77]-[88] (Basten JA dissenting).
Barnes v Addy (1874) LR 9 Ch App 244; Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34; Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 referred to.
Claim for knowing receipt
1. With respect to the payment of $20,000, the respondent's failure to make inquiry of the source of the funds prior to paying the amount to Ms Abellanoza makes him liable to account to the appellant for that amount. Receipt of the summons was sufficient to give the respondent notice of the fact that the poker machine winnings in the July CBA account may have resulted from gambling with funds obtained by fraud on the appellant. An honest and reasonable person in the circumstances would have made inquiry of the source of the funds: [59] (Bathurst CJ); [118] (Gleeson JA).
2. The trial judge erred by failing to address the question of whether the respondent had knowledge of circumstances which would tell a reasonable and honest person that Ms Abellanoza had an unexplained source of income. The appellant is entitled to succeed on its equitable claim for knowing receipt of fraudulently obtained payments against the respondent. The inference that an honest and reasonable person in the respondent's circumstances would have formed a view as to Ms Abellanoza's source for the moneys with which she was gambling is inescapable: [92]-[103] (Basten JA dissenting).
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 referred to.
Claim for money had and received
1. The claim for money had and received failed because the funds once withdrawn from the ANZ and St George Bank accounts and gambled in the poker machines lost their character as funds to which the appellant had legal title: [51]-[52] (Bathurst CJ); [115]-[116], [119] (Gleeson JA).
Russell Gould Pty Ltd v Ramangkura (2014) 87 NSWLR 552; [2014] NSWCA 310 referred to.
1. The appellant is entitled to succeed on its claim for money had and received. The respondent was a volunteer and did not give valuable consideration for the money which he recovered from Ms Abellanoza's gambling and paid into his own account [67]-[73], [103] (Basten JA dissenting).
Black v S Freedman and Co (1910) 12 CLR 105; [1910] HCA 58; Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548; In re Diplock [1948] Ch 465; Westdeutsche Landesbank Girocentrale v Islington London Borough Council [1996] AC 669; Fistar v Riverwood Legion and Community Club Ltd (2016) 91 NSWLR 732; [2016] NSWCA 81 referred to.