Wexford Pty Limited v Doolub

Civil Procedure Act 2005 LEGISLATION CITED : Fair Trading Act 1987 Uniform Civil Procedure Rules

Wexford Pty Ltd (Plaintiff) Praveen Meckraj Doolub (First Defendant) PARTIES : Niteen Meckraj Doolub (Second Defendant) Asset Loan Company Pty Limited (Third Defendant) Tricom Nominees Pty Ltd (Fourth Defendant) Domain Funding Pty Limited (Fifth Defendant)

COUNSEL : CRC Newlinds SC / P A Horvath (Plaintiff) A W Street SC / D F Villa (Defendants)

Jackson Lalic (Plaintiff) SOLICITORS : Middletons (First and Second Defendants) McCabe Terrill (Third and Fourth Defendants) Fifth Defendant (In person)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

22 October 2008 ex tempore (revised 19 November 2008)

50010/07 WEXFORD PTY LIMITED v PRAVEEN MECKRAJ DOOLUB JUDGMENT 1 HIS HONOUR: The plaintiff (Wexford) and the first defendant entered into a written loan agreement on 8 December 2006. Wexford agreed to lend the first defendant $700,000. The term of the loan was stated variously as two months or sixty days. The interest rate was 14 per cent per month, reducible (if that is the correct term) to 10 per cent as an "acceptable rate". The first defendant has defaulted and is now bankrupt. The securities that he gave to Wexford are worthless. 2 Wexford says that the first defendant procured the loan by misleading or deceptive conduct and that his brother, the second defendant, was knowingly involved in that conduct; Wexford seeks to recover the amount of the loan together with interest (although at the more modest rates allowable pursuant to s 100 of the Civil Procedure Act 2005) from the second defendant. (From here on, and for the sake of convenience but without intending any disrespect, I shall refer to the first defendant as "Praveen" and the second defendant as "Niteen".)

The issues 3 The misleading or deceptive conduct alleged by Wexford consists of three representations said to have been made by Praveen through a broker, Corke Financial Pty Ltd (Corke). The representations alleged are:

(1) that Praveen required $700,000 for the purposes of completing the purchase of various parcels of real estate; (2) that Praveen was to be the borrower and recipient of any funds advanced by Wexford; and (3) that any amount advanced by Wexford would be used by Praveen for the purchase of real property.

(1) Did Praveen make those representations? (2) Were they misleading or deceptive either because they were false when made or, as to future matters, were made without any basis for thinking them to be correct? (3) Was Niteen knowingly involved in any such misleading or deceptive conduct? (4) Did Wexford suffer loss by any such misleading or deceptive conduct: specifically because it relied on those representations in entering into the loan agreement and advancing the funds? (5) Wexford also brought a case based on a "purpose" trust. The substance of that case was that: (1) the loan was made for the express purpose of buying some three identified parcels of real estate; (2) that purpose failed; (3) there was thus a trust in favour of Wexford; (4) Praveen was in breach of that trust because he applied the proceeds of the loan to other purposes; and (5) Niteen was knowingly concerned in that breach of trust. 4 Mr Newlinds of Senior Counsel, who appeared with Ms Horvath of counsel for Wexford, conceded that if the misleading or deceptive conduct case based on the first and third representations failed, so would the trust case. For that matter, he conceded, failure of the misleading or deceptive conduct case based on the first and third representations would likewise mean that the case based on the second representation would fail. First Issue: the representations 5 The representations are said to have been made in a letter dated 28 November 2006 from Corke to Wexford together with its enclosures. The author of that letter was Mr Paul Crowley, the principal of Corke. I divert from the present issue to note that he is and was, and for some time had been a friend of Niteen. It was Niteen, so it is said, who introduced Praveen to Mr Crowley.

6 It may not be necessary to consider this issue in detail because the submissions for the second defendant did not take any point that the representations could not (or should not) be spelled out of the letter. 7 So far as it is relevant, the letter reads as follows: … We have the abovementioned party seeking a short term loan and given the profit and short term nature of the transaction, we thought to put it to you. OUTLINE: Praveen Doolub is from an extremely wealthy Mauritius Family. They are based in Singapore. Praveen is an Australian citizen and spends an equal amount of time in each jurisdiction. His uncle is the Chairman of the Bank of Mauritius. He has purchased these valuable properties in which the Vendor is in default with the ANZ bank. Settlement has been expedited. I have arranged for a bridging loan for $3 mil for speedy settlement and he is looking for a further $700k to complete. He is not concerned at the interest rate as he wants these properties and has substantial funds in Singapore, however they cannot be bought here in time and there are issues with the ATO on withholding tax. I have also commended refinancing the properties with traditional lenders. This should not be an issue as the LVR is within an easy range to refinance. Therefore the exit strategy is two-fold, via family funds, traditional refinance within the time frame of the loan, or most likely combination of the two. The three properties are of the highest calibre and the houses and unit are new, which augers well for your security. Details of the loan are as follows: BORROWER: PRAVEEN MECRAJ DOOLUB LOAN AMOUNT: $700,000.00 up to 74% of the property values. TERM 60 days INTEREST RATE: 10% per month capitalised. Total LVR at end of term 76.8% REPAYMENT: 60 days minimum term 60 days with all interest to be paid if any early redemption.

SECURITY: 1. 2nd Registered Mortgage over Unit 301 "The Darby" 185 Darby Street Newcastle being Lot 24 Plan SP 71225 Folio 24/SP71225 (Value $830,000.00) 2. 2nd Registered Mortgage over 10 Pacific Highway, Tea Gardens North Arm Cove NSW being Lot 10 in Deposited Plan 621327 folio 10/621237. (Value $160,000.00) 3. 2nd Registered Mortgage over Lot 192 "The Promontory" Banksia Beach QLD 4507 being Lot 192 on SP 158156 Title Reference 514409903. (Value $2,400,000.00) DOCUMENTS TO SUPPORT APPLICATION: 1. Copies contracts of sale 2. Valuations of all properties 3. Approval Asset Loan Co for first mortgage. 4. Refinance offers La Trobe re NSW Properties. ADVANTAGES OF THE TRANSACTION: 1. There can be no default on the First mortgage as interest has been prepaid for these months. 2. Total LVR is within commercial limits for refinance. 3. Borrower of high calibre. 4. Excellent demographics of properties with all being in arrears [sic] of high demand. All properties have new and high quality dwellings. The Bribie Island property is of exceptional quality in a much sought after ocean front promenade. 5. Messrs Cutler Hughes Harris, the large Sydney Law Firm are acting for Mr Doolub and they act for the family in all Australian Business matters. Settlement is scheduled for Thursday the 30th instant so your urgent attention to this matter would be appreciate.

… 8 The enclosures met the descriptions given to them in the letter. 9 On the face of the letter and its enclosures, it was written on behalf of Praveen. At this stage, I note that although each of Praveen and Mr Crowley had sworn affidavits which Praveen's solicitors had served on Wexford's solicitors, neither Praveen nor Mr Crowley was called, and neither affidavit was read. There was no evidence to explain their absence from the witness box. 10 In the absence of any evidence to suggest that I should not do so, I accept Corke's letter of 28 November 2006 at face value. Thus, I conclude, it was written by Corke (or Mr Crowley) as Praveen's agent or broker (for the limited purpose of seeking finance) and with Praveen's authority. 11 There is no doubt that the letter makes the following representations:

(1) Praveen required the loan to enable him to complete the purchase of certain real property; and (2) Praveen was to be the borrower of the money, which was to be applied for his purposes in completing those purchases. 12 That is a fair reading, or the plain meaning, of the words used. 13 Further, in my view, it follows necessarily from the terms of the letter and its enclosures (which identified three specific parcels of real estate that, it was said, Praveen had agreed to purchase) that Praveen would use the advance to enable him to complete those purchases. 14 Thus, I conclude, Praveen made the three representations alleged, with an irrelevant modification to the second (in that I have found that the letter represented that the money was to be applied for Praveen's purposes rather than that he was to be the "recipient" of it). Second Issue: falsity of the representations 15 It is convenient to consider at this point only the first and third representations. The second representation is inextricably linked to the third issue, in that the case of knowing involvement is based, at least in part, on the proposition that the loan was for the benefit of Niteen, not Praveen. 16 Mr Street of Senior Counsel, who appeared with Mr Villa of counsel for Niteen, submitted that there was no evidence that, as at 28 November 2006, the advance was not needed to facilitate completion of the three purchases. In particular, he submitted, the conclusion that it was not so required did not follow from the facts to which I next refer. Thus, he submitted, there was no evidence that the first and third representations were false when made or that (as to the future element of the third) there was no basis for making it. To some extent, that submission as to the third representation overlooks the reverse onus of proof (see s 41(2) of the Fair Trading Act 1987). 17 Although the evidence is less than transparent, I am satisfied that none of the money advanced by Wexford was used for the purpose of completing any of the purchases in question. On the contrary, I am satisfied from such evidence as there is that the balance agreed to be accepted on settlement of the three purchases (which was 50 per cent of the contractual balances allegedly due) was satisfied from the net advance made by the incoming first mortgagee. 18 Settlement occurred on 8 December 2006 - the day the loan agreement was made and ten days after the letter of 28 November 2006 was written. There is no explanation from Praveen or anyone else as to how settlement occurred on tender of one-half the amount apparently payable in accordance with the contracts. Niteen said that he and Praveen were and are on good terms, and that Praveen had been sitting with him in Court on the morning of the first day of the hearing. Niteen said also that he and a Mr Brendan Burgess, the vendor of one of the parcels of land in question and the alter ego of the corporate vendor of the other two, were and for some years had been friends. Perhaps Praveen or Mr Burgess could have explained what happened on settlement. They were not called to do so, notwithstanding what I have said as to Praveen (including his affidavit). 19 Taking those matters into account, I am not prepared to conclude that the position, as to the amount required to complete the three purchases, changed between 28 November and 8 December 2006. On the contrary, I infer that the position on settlement was one that Niteen and Praveen would have known some ten days earlier. I repeat that they could have shed light on this matter and have not explained their failure to do so. 20 Further, it became clear in the course of Niteen's cross-examination that as at 8 December 2006 the net proceeds of Wexford's advance were needed to assist in carrying out some business project in Mauritius. There was no suggestion that this project was something that had cropped up between 28 November and 8 December 2006. I infer that it was known to Niteen and Praveen as at 28 November 2006. I infer that they then intended that the net funds advanced by Wexford should be used for the purposes of that project. Again, I am comforted in drawing those inferences by the unexplained failure to call Praveen. 21 Thus, I find, Praveen engaged in misleading or deceptive conduct by making those representations. To the extent that it is necessary to do so, and to the extent that the third representation alleged includes a future element, I find that Niteen has not discharged the onus of proof in respect of it cast on him by s 41(2) of the Fair Trading Act.

Third Issue: knowing involvement 22 I repeat that this issue involves also a consideration of the falsity of the second representation (or, to the extent that it may include a representation as to a future matter, the question of whether there were reasonable grounds for making it).

Credibility 23 Before I come to the facts, I shall indicate my conclusions on the credibility of the relevant witnesses. 24 The principal of Wexford is Mr Peter Wray-McCann. He swore affidavits, and was cross-examined at some length. Mr Street sought vigorously to impugn Mr Wray-McCann's credit. 25 I have to say that there were aspects of Mr Wray-McCann's evidence that concerned me. I refer in particular to:

(1) his very guarded evidence as to clause 7.2 of the loan agreement. That clause states that the loan to Praveen was for the purposes of operating his business. It is not on its face completely consistent with Mr Wray-McCann's professed understanding that the loan was for the specific purpose of assisting in the purchase of the three properties in question. Mr Wray-McCann said, in my view unconvincingly, that he thought that clause 7.2 referred to Praveen's "business" of buying those properties. Mr Wray-McCann likewise gave less than consistent evidence as to whether clause 7.2 was or was not inconsistent with his professed understanding; or, indeed, "not inconsistent." For what it is worth, it seems to me to be clear that clause 7.2 could accommodate the specific purpose to which Mr Wray-McCann deposed. That having been said, it is not entirely supportive of his proposition that the mutually understood purpose of the loan was facilitation of the three specific purchases. (2) Mr Wray-McCann said that he did not read all the loan agreement because of the "legalese" (although he was a barrister and solicitor of the Supreme Court of Victoria and apparently is or has been admitted as a legal practitioner in this State). He said that all the important information was contained in the schedule to the loan agreement which he read. But the schedule did not state the purpose of making the loan - something that Mr Wray-McCann insisted was of prime importance.

(3) Generally I thought that Mr Wray-McCann sought to distance himself as much as possible from the terms of the loan agreement. I have the strong suspicion that this reflected his acute awareness of clause 7.2 and its possible inconsistency with what he said was his understanding of the purpose of the loan.

(4) Mr Wray-McCann caused the settlement cheques to be drawn. He must have known that, on their faces, none of those cheques was payable to the vendors to Praveen. (I say that he "must have known," because he had received copies of the front pages of each of the three contracts in which the vendors and their solicitors were identified). His attempts to get around this difficulty were not persuasive. 26 There were other matters on which Mr Street relied. To the extent that they are made good (and some of them - for example, Mr Street's assertion that Mr Wray-McCann was generally prepared to lie, or to engage in illegal conduct, if it suited his purposes, I most definitely do not accept) I have taken them into account. 27 Having said all that, I do not think that Mr Wray-McCann sought consciously to lie. Far less do I think that he fabricated the relevant sections of his evidence. I am quite certain that he regards himself as having been the victim of a fraud, and that this has produced a sense of grievance above what one might expect from the possible loss of $700,000. But I do not think that this sense of grievance, or the understandable desire to recover the money, has caused Mr Wray-McCann to fabricate the passages of his evidence that are relevant to the third issue, or indeed to the question of reliance. 28 There are two key objective factors in Mr Wray-McCann's favour. The first relates to his evidence that in late January and early February 2007, he had a number of conversations with Mr Crowley and with Niteen in the course of which each of them informed him that Praveen had been a "frontman" or "trustee" for Niteen in procuring the loan. Not unnaturally, Mr Wray-McCann said, that made him furious. 29 The third of those conversations took place on 4 February 2007. After it took place, Mr Wray-McCann sent an e-mail to Niteen and to Mr Peter Jackson and Mr Crowley. (Mr Jackson was Wexford's solicitor.) In that e-mail, Mr Wray-McCann sought confirmation of certain of the matters that, he said, had been dealt with in the conversation earlier that day. They included what Mr Wray-McCann said was a statement by Niteen to the effect that Niteen lived in a private apartment at the Westin Hotel in Sydney, and that Niteen was a graduate of the University of Newcastle, School of Medicine. Niteen denied in his affidavit and oral evidence that he had said those things to Mr Wray-McCann; and there was no difference between his denial that he had said those things and his denial that (for example) he had admitted that he and not Praveen had been the "true" borrower. 30 There is absolutely no reason why Mr Wray-McCann would have written those matters in the e-mail unless they reflected what had been said in the afternoon. It was not put to him in cross-examination (among the vast number of peripheral matters that were put) that he had fabricated the contents of that e-mail for the purpose of advancing Wexford's position in prospective litigation. 31 Nor, to the extent that it is relevant, is there any evidence of a reply to the e-mail from Niteen in which he denied that he had made the statements in question. 32 Further, two days later, Mr Wray-McCann spoke to an official of the University of Newcastle. He confirmed the contents of their conversation in a letter sent the same day. It is clear from that letter that Mr Wray-McCann had sought to ascertain whether Niteen had graduated from the University, specifically from the Faculty of Medicine; and it is equally clear that he had been told that Niteen had not done so. 33 I cannot understand why Mr Wray-McCann would have taken those steps unless representations of the kind alleged by him had been made in the course of the conversations leading up to that on 4 February 2007. 34 The second matter is that, as I have indicated, both Niteen and Mr Crowley had said that Niteen, not Praveen, was the real or true borrower. Mr Wray-McCann procured a credit check to be made on Niteen. He had no reason to do so if he had not been told of Niteen's role as the real or true borrower. 35 In my view, the only explanation for the credit check is that in the conversations to which Mr Wray-McCann deposed, there were statements or admissions made of the kind alleged by him, to the effect that Niteen, not Praveen, was the real borrower. 36 Mr Street submitted that I should put little weight on the credit check. It was made about three weeks after the third of the conversations. Why, Mr Street enquired, would Mr Wray-McCann have delayed so long, particularly when it is apparent from an email sent some days earlier that Mr Wray-McCann did regard Niteen as the true borrower? 37 The answer to that seems to me to be that Mr Wray-McCann appreciated that whatever moral claim he might have against Niteen as the "true" borrower, he had no legal cause of action. Thus, there was no need for him to make a credit check at any earlier stage; and there was certainly not the same need for him to make a credit check as there had been before settlement of the loan, when Mr Wray-McCann made a similar check on Praveen. 38 Thus, notwithstanding my reservations, I accept the core of Mr Wray-McCann's evidence, including as to the crucial conversations and their substance. 39 Niteen's evidence did not impress. It is clear - at least on his account of events - that he had an extremely casual approach to undertaking large liabilities. On his evidence, in early 2004, he entered into three contracts for sale, under which he was liable to pay a total of $6.2 million. (The prices, and the total, varied from time to time.) Those contracts related to the very same properties that Praveen later agreed to buy. Niteen had neither the funds in hand, nor approvals for finance, to enable him to complete those purchases. From time to time he, through his solicitors, renegotiated the terms of the contracts and made numerous promises to make payments on account, or to settle. None of those promises were kept. 40 In my view, Niteen's approach to giving evidence was just as casual as his approach to undertaking contractual obligations. I have the very strong impression that for Niteen expediency rather than accuracy was the guiding principle by which he fashioned his responses to questions. 41 An example of Niteen's casual approach to both contractual obligations and the giving of evidence may be found in his response to questions about an increase in the price payable under one of the contracts - from $2.8 million to $3.2 million. One would think that a purchaser might recall the reason for such an increase. But Niteen professed no recollection at all of why the price was increased. I do not accept what he would have had no recall of why it was that he was obliged to pay an extra $400,000 for the property in question. 42 Again, Niteen insisted that he had no idea of when it was that Praveen became interested in buying the three properties, after Niteen's attempts to get finance had failed and the vendors had (apparently) lost patience. Yet, it is clear that the vendors and Niteen agreed to rescind the three contracts to which Niteen was party on the basis that Praveen exchanged and completed contracts to buy those properties. It is clear that Niteen assisted Praveen to obtain finance. It is clear that Niteen was closely involved in the dealings leading up to completion. 43 I do not accept Niteen's profession of ignorance. I think that his profession of ignorance was based on a desire to distance himself from Praveen's activities, both to bolster the proposition that Praveen was his own man and not a front man for Niteen and, because of a desire to repel the "knowing involvement" case. 44 Niteen was questioned about a number of tax invoices for legal fees that Cutler Hughes & Harris had sent to Praveen. On the face of the invoices they, and the work recorded in them, related to matters undertaken by Cutler Hughes & Harris for Praveen. Niteen, however, said that they related to work undertaken for him. He was unable to give any, let alone satisfactory, answer as to why Cutler Hughes & Harris would have addressed and sent those invoices to Praveen. 45 This whole passage of his evidence lacked any trace of credibility. It is clear that his professed lack of recollection and understanding arose from his keen appreciation that the invoices in question showed him to have been closely involved in what, on the face of the invoices, were Praveen's financial affairs. 46 Again, in relation to Praveen's purchase of one of the properties in question - at Darby Street, Newcastle - Praveen nominated Niteen as the contact person who could arrange access to facilitate a valuation. According to Niteen, Praveen in fact lived at that property at that time. Niteen was unable to offer any explanation of why, in those circumstances, Praveen would have nominated him as the person to provide access. 47 The longer Niteen's cross-examination lasted, the more implausible his evidence became. I will refer to one more example only - his evidence as to the events surrounding settlement on 8 December 2006. It seems that Praveen agreed to exchange and settle simultaneously. His solicitors had the benefit (such as it was) of searches and inquiries undertaken earlier for Niteen on the same properties. In addition, they had evidence of payment of various rates and taxes. 48 As I have said, for reasons that remain unexplained by any evidence, the vendors agreed to accept half - $2.5 million - of the total owing on settlement. (As an aside, this may be compared to the totals, variously $6.2 million and $6.6 million, that Niteen agreed to pay.) Niteen was driven to accept that he knew that the amount borrowed from the first mortgagee - $3 million gross or $2.5 million net - was sufficient to settle. However, his evidence on this point was characterised by evasive and non-responsive answers, including as to emails that he was sent (by way of "cc") in relation to the mechanics of settlement. 49 There are numerous other examples that might be given. I will not do so. I am satisfied that Niteen was prepared to give evasive and, if necessary, false answers in an attempt to distance himself from the transactions involving Praveen. I am satisfied that I should not accept Niteen's evidence unless it is against interest, or is corroborated by other acceptable evidence. 50 Thus, I accept the thrust of Mr Wray-McCann's evidence as to the relevant conversations. I am fortified in doing so by Niteen's failure to call Mr Crowley, who was a party to at least some of those conversations. Findings 51 It would seem to follow inevitably from what I have said that Niteen was knowingly involved in Praveen's misleading or deceptive conduct. That would follow, for example, from my acceptance of Mr Wray-McCann's evidence as to Niteen's admission that he (Niteen) was the real borrower and that Praveen was merely a front man or "trustee". 52 In coming to this view, I take into account, in particular, the sequence of events covering Niteen's attempts to buy the properties and the numerous references to Niteen in Mr Crowley's diary over the relevant time in November and December 2006. That was, then (on Niteen's evidence) Praveen was negotiating to buy the properties and, on Niteen's introduction, was dealing with Mr Crowley. However, the only person who Mr Crowley appears to have contacted (so far as his diary reveals) in relation to the proposed loan between 28 November and 8 December 2006 was Niteen. 53 This confirms my view that Niteen was directly involved in Mr Crowley's attempts to raise finance, notionally, or nominally, on behalf of Praveen. I am satisfied that, contrary to Niteen's denial, Niteen was instrumental in Mr Crowley's writing the letter of 28 November 2006. Again, I am comforted in reaching that conclusion by the unexplained absence from the witness box of Mr Crowley. 54 Finally, in this context, there was a very real advantage to Niteen in Praveen's transactions proceeding to completion. If they were completed, Niteen would be released from all liability under his earlier contracts. Niteen recognised that this was a benefit to him. 55 It follows from what I have said that I am satisfied also that the second representation was misleading or deceptive and that Niteen was knowingly involved in Praveen's misleading or deceptive conduct in that respect. Fourth Issue: loss Reliance 56 Mr Wray-McCann said that he relied on the representations that I have found were made. I accept that evidence. As to the purpose: I accept that Mr Wray-McCann did regard the real or true purpose as being to assist in the purchase of the three properties, notwithstanding the terms of clause 7.2 of the loan agreement. I do not think that Mr Wray-McCann turned his mind to the details of the "legalese". 57 Mr Street submitted that I should not accept Mr Wray-McCann's evidence of reliance. He submitted that it was fatally undermined by Mr Wray-McCann's lack of credibility, by the terms of clause 7.2, and by Mr Wray-McCann's failure to look, in detail, at the terms of the loan agreement. Further, in this regard, Mr Street drew attention to Wexford's failure to produce documents relating to the preparation of the loan agreement. 58 Those matters do not dissuade me from the views that I have expressed. Specifically, as to the last of them, I note that the call for production was given orally in the course of Mr Wray-McCann's cross-examination yesterday. I do not accept that any inference should be drawn from the failure to produce documents (if documents exist) in answer to a call for production given at such a late stage. If the documents were thought to be relevant, they could have been requested at some earlier time. 59 In this area also there is corroboration of Mr Wray-McCann's evidence. He said that the purpose was important because it helped to show the equity in the properties that would be available in the event of default. 60 That evidence is corroborated by a spreadsheet prepared by Mr Wray-McCann on 29 November 2006. The spreadsheet showed how the net advance (after legal costs) would be put towards what Mr Wray-McCann understood, on the basis of the letter of 28 November 2006, was the total purchase price payable. In that spreadsheet Mr Wray-McCann sought, amongst other things, to calculate a loan / valuation ratio. This indicates that (as he said) it was of importance to Mr Wray-McCann that the net advance go into the property being purchased, and that it was important for the reason that he gave. 61 Mr Wray-McCann said also that the identity of the borrower was important to him. I accept that evidence - it is confirmed by the credit check that Mr Wray-McCann undertook as to Praveen before the loan agreement was made and settled. 62 Finally, for present purposes, Mr Wray-McCann said that he would not have dealt with Niteen had a credit check carried out on Niteen in December 2006 revealed the matters that were shown by the credit check carried out a couple of months later, on 25 February 2007. 63 The credit check that was then carried out revealed a number of matters. Firstly, it showed that Niteen had a number of "commercial defaults". Four of those related to what was called "repossession loss (after sale of the item). " Two of those related to what was called "clear out". Two of them related to what was called "payment default". 64 Further, the credit check showed that Niteen had two District Court judgments standing against him. 65 The credit reference agency gave details of Niteen's "score result". That score result stated that Niteen was regarded as " - 99.9 times worse than the Veda Advantage average." It stated that:

The odds of recording an adverse with Veda Advantage within 12-24 months of a Veda Advantage inquiry is 40 to 1.

66 I am satisfied that if a credit check performed between 28 November and 8 December 2006 had produced a similar outcome - and there is no reason to think otherwise - no-one would have lent Niteen seven cents, let alone $700,000. 67 Thus, I conclude that Wexford was induced by the misleading and deceptive conduct to enter into the transaction with Praveen and that it would not have done so had the true position been revealed. Amount 68 It was common ground that if Wexford were entitled to succeed, the loss sustained was the principal sum of $700,000, together with interest. Conclusion 69 Wexford is entitled to judgment. 70 I direct entry of judgment for the plaintiff in the sum of $700,000, together with interest thereon from 8 December 2006 up until the date of entry of judgment, at the rate from time to time applicable under Schedule 5 to the Uniform Civil Procedure Rules. 71 I direct that the parties bring in an agreed calculation of interest by 5pm on 23 October 2008. 72 I order the second defendant to pay the plaintiff's costs.

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