(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: