New South Wales Supreme Court CITATION : Orix Australia Corporation Ltd v Moody Kiddell & Partners P/L & 7 Ors [2005] NSWSC 1209 HEARING DATE(S) : 2-6/05/05, 22/09/05, 17-20/10/05 JUDGMENT DATE : 30 November 2005 JURISDICTION : Equity Division JUDGMENT OF : White J DECISION : See para 177 of judgment. CATCHWORDS : TRADE PRACTICES – Misleading or deceptive conduct – Fraudulent scheme raising finance through a purported hire purchase of non-existent cranes – Where finance was arranged through defendant finance broker – Where application for finance prepared by broker – Application forms represented that the funds were to be used to buy cranes – Plaintiff did not rely on broker to verify information - Claim by plaintiff finance company that defendant finance broker knew or had reason to suspect that the information supplied by applicant was false – Whether conduct by defendant amounted to endorsing the false information provided by the applicant or otherwise warranting its correctness – Held that although broker did more than merely pass on the information, it did not endorse or adopt it - broker had reasonable grounds for making the representations and did not engage in misleading or deceptive conduct - TRUSTS – Claim that director of company which supplied invoices for the fictitious cranes knowingly assisted in the company's breach of trust – Where director knew that company did not have and would not acquire title to the cranes prior to invoicing the finance company – Held that money received by the company from the plaintiff was held on trust – Company paid money into its bank account which was in credit and later paid moneys to applicant for finance – Held that director liable to pay equitable compensation for knowingly or dishonestly assisting company's breach of trust - RESTITUTION – Claim that brokerage was paid under a mistake of fact because the cranes did not exist – Alternative claim that there had been a total failure of consideration on the part of the broker – Brokerage contract construed – Held that introducing business which resulted in finance contracts being entered into was consideration – Judgment in favour of broker. LEGISLATION CITED : Trade Practices Act 1974 (Cth) Browne v Dunn (1894) 6 R 67 Briginshaw v Briginshaw (1938) 60 CLR 336 Yeshiva Properties No. 1 v Marshall (2005) 219 ALR 112 Yorke v Lucas (1985) 158 CLR 661 Butcher v Lachlan Elder Realty Pty Ltd (2004) 79 ALJR 308; 212 ALR 357 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No. 1) (1988) 39 FCR 546 Harkins v Butcher (2002) 55 NSWLR 558 Gardam v George Wills & Co Ltd (1988) 82 ALR 415 John G Glass Real Estate Ltd v Karawy Constructions Pty Ltd (1993) 15 ATPR 41-249 Barclay's Bank Ltd v WJ Simms Son & Cook (Southern) Ltd [1980] QB 677 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 Mason & Carter, Restitution Law in Australia National Mutual Life Association of Australasia Ltd v Walsh (1987) 8 NSWLR 585 CASES CITED : Black v S Freedman & Co (1910) 12 CLR 105 Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 Robb Evans v European Bank Ltd (2004) 61 NSWLR 75 Barrett & Sinclair v McCormack [1999] VUCA 11 Neste Oy v Lloyds Bank plc [1983] 2 Lloyd's Rep 658 Re Goldcorp Exchange Ltd [1995] 1 AC 74 Cowern v Nield [1912] 2 KB 419 Stocks v Wilson [1913] 2 KB 235 Bankers Trust Co v Shapira [1980] 1 WLR 1274 Barnes v Addy (1874) LR 9 ChApp 244 Shevill v Builders Licensing Board (1982) 149 CLR 620 Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 PARTIES : Orix Australia Corporation Ltd v Moody Kiddell & Partners Pty Ltd & 7 Ors FILE NUMBER(S) : SC 6113/04 Plaintiffs: T S Hale SC, S B Docker COUNSEL : 1st to 3rd Defendants: M McCullock SC, J White 5th Defendant: J Chippindall Plaintiff: M D Nikolaidis & Co SOLICITORS : 1st to 3rd Defendants: Ebsworth & Ebsworth 5th Defendant: Adams & Partners LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION WHITE J Wednesday, 30 November 2005 6113/04 Orix Australia Corporation Ltd v Moody Kiddell & Partners Pty Ltd & 7 Ors JUDGMENT 1 HIS HONOUR: Orix Australia Corporation Ltd ("Orix") carries on business as a financier. These proceedings arise from a fraud practised on it by Mr Raymond McCormick and Queensland Construction Equipment Pty Ltd ("QCE"), a company controlled by Mr McCormick. 2 Between June 2001 and September 2003, Orix entered into six agreements to purchase cranes from Nelson Equipment Pty Ltd ("Nelson Equipment"). Nelson Equipment carried on business as a seller of cranes. Orix agreed to lease the cranes to QCE on hire purchase. The bulk of the money Nelson Equipment received for the cranes was passed on by it to QCE. For a time QCE paid the rent under the hire agreements. Eventually it defaulted. Investigations revealed that the cranes did not exist. 3 Nelson Equipment is in liquidation. Mr and Mrs McCormick are bankrupt. QCE and the managing director of Nelson Equipment, Mr Greg Nelson, were joined as parties. QCE did not appear. The major contest was between Orix and a finance broker, Moody Kiddell & Partners Pty Ltd, ("Moody Kiddell"). Moody Kiddell submitted the finance applications to Orix on behalf of QCE. Orix also sued Ms Christine Mathers, an employee of Moody Kiddell, who acted in the transactions. The principal claims against Moody Kiddell and Mrs Mathers were that they knew, or knew of facts that would indicate to them, that Nelson Equipment did not own or have any interest in the cranes purportedly sold by it to Orix. Orix alleged that with that knowledge, they assisted Nelson Equipment to obtain the payments of the purchase price for the cranes from Orix. 4 Orix also alleged that even if Moody Kiddell did not know of the fraud, or the facts indicating the fraud, it nonetheless engaged in misleading and deceptive conduct which caused Orix to suffer loss. It asked Nelson Equipment to issue tax invoices to Orix for the sale of the cranes. It forwarded them to Orix. It sent the finance application on behalf of QCE to Orix. The finance application described the equipment, its location and the use to which it would be put. Orix contends that even if Moody Kiddell was unaware that Nelson Equipment did not own the cranes it was purportedly selling, it nonetheless engaged in misleading and deceptive conduct, which induced Orix to believe that the cranes existed and that it would acquire title to them from Nelson Equipment. 5 Orix also claimed the repayment of brokerage fees and trailer commission. 6 Orix alleged that Mrs Mathers was knowingly concerned in Moody Kiddell's misleading and deceptive conduct, and that she provided knowing assistance to Nelson Equipment in its obtaining the six payments. 7 I have rejected all of Orix's claims against Moody Kiddell and Mrs Mathers for the reasons which follow. Nelson Equipment 8 The principal business of Nelson Equipment was selling used cranes, earthmoving equipment, trucks, trailers, and construction equipment. Its premises were at Penrith in New South Wales. It had an established business relationship with QCE. Nelson Equipment was classified by Orix as an approved supplier from whom Orix was prepared to purchase equipment for the purpose of providing lease finance. Nelson Equipment also provided valuations to Orix and sold on behalf of Orix goods which had been repossessed. Curiously, Orix has continued to do business with Mr Nelson, through another company of which he is a director, after the disclosure of the frauds involving the six cranes the subject of these proceedings. 9 Orix had different internal procedures for settling the financing of an acquisition of equipment, according to whether or not the supplier was a licensed or recognised dealer in the goods. Nelson Equipment was such a dealer. Where the supplier was not a licensed or recognised dealer in the goods, the transaction was classified by Orix as a private sale. Orix's internal settlement checklist provided that if the transaction was a private sale, the settlements officer needed to establish the supplier's credentials, unless the supplier was already known to Orix. Orix also required invoices, receipts or other documents to be produced to establish ownership and that a statutory declaration be completed by the vendor that there were no charges over the goods. If the transaction was not a private sale, that is, if the supplier was a licensed or recognised dealer, Orix's settlement checklist merely required that the supplier's invoice correctly describe the purchaser as Orix Australia Corporation Limited, contain a detailed description of the goods, including make, model and serial numbers, and omit certain notations which were unacceptable to Orix. Thus Orix did not make the same checks to verify the ownership of goods if the supplier was a licensed or recognised dealer such as Nelson Equipment. Moody Kiddell 10 Moody Kiddell is a large equipment and property finance broker, specialising in the finance of earthmoving, mining, construction and transportation equipment. In 2001 it was accredited with a large number of banks and other financiers, including Orix. It has brokered equipment and property finance transactions in which Orix has been the financier since 1986. In the financial year ended 30 June 2000, the value of all of the transactions in which Orix was the financier and Moody Kiddell was the broker exceeded $26,000,000. In the following financial year, the value of transactions in which Orix was the financier, and Moody Kiddell the broker, exceeded $20,000,000. In the following three financial years, the value of such transactions exceeded $30,000,000. 11 In the financial year ended 30 June 2003, it acted as broker on 388 transactions funded by Orix. It earned brokerage of $873,422 and trailer commission of $94,117 in respect of those transactions. 12 Moody Kiddell markets itself as pre-eminent in equipment broking and as the biggest and best broker in this particular area of the market. If a client approached Moody Kiddell with a view to acquiring a particular item of equipment either on lease or hire purchase, Moody Kiddell provided information to the client as to the finance facilities available, including interest rates, and the lending terms and conditions that financiers would impose. It chose the financier to be approached depending upon the client's needs. 13 Under its arrangements with Orix, Moody Kiddell was able to generate all of the necessary forms Orix required to be signed by the client. It was able to generate the standard loan, asset purchase and lease documents. 14 Mrs Mathers was employed by Moody Kiddell as an equipment finance broker. She has worked for Moody Kiddell since March 1994. Her duties involved organising finance for clients to enable them to purchase equipment for their business needs. She acted for QCE from 1995. So far as she is aware, Moody Kiddell was the only finance broker whom Mr McCormick employed. He was one of Mrs Mathers' biggest clients. Mr Nelson had also placed a lot of business with Moody Kiddell. He generally recommended Moody Kiddell as the finance broker when he had equipment for sale. Mr Nelson described Moody Kiddell as Nelson Equipment's preferred broker. Queensland Construction Equipment 15 QCE had carried on an equipment hire business for many years. For more than twenty years, Mr McCormick had dealings with Mr Nelson's father, and after his death, with Mr Nelson. A credit schedule attached to the finance application for the first of the transactions with which these proceedings are concerned showed that as at June 2001, QCE was a party to seventeen current credit contracts with six finance companies, including three with Orix. The three current credit contracts with Orix as at June 2001 were taken out in March 1999, June 1999 and June 2000. It had previously entered into five credit contracts with Orix which had been finalised or re-financed. The earliest of these was taken out in July 1995. Typically the term of the contracts was for two, three or four years. The contracts involved the payment of monthly rental and a residual payment, sometimes called a balloon, at the end of the contract. 16 Thus at the time of the relevant transactions, QCE and Nelson Equipment both conducted established and apparently reputable businesses and had had substantial previous dealings with both Moody Kiddell and Orix. General Features of the Six Transactions 17 Orix sued in relation to six transactions summarised in the table below: DATE DESCRIPTION OF GOODS FINANCE AMOUNT 26.06.2001 1 Franna 18 tonne crane $192,500 10.09.2001 1 Franna 18 tonne crane $187,000 08.03.2002 1 used Franna 18 tonne crane $198,000 15.10.2002 1 used Tadano 50 tonne truck crane $324,500 21.07.2003 1 used Franna 20 tonne mobile crane $297,000 11.09.2003 1 used Franna 20 tonne mobile crane $236,500 18 In each case, Orix entered into a commercial hire purchase agreement (called an "asset purchase agreement") with QCE as the hirer. It purportedly purchased the equipment from Nelson Equipment. The amounts financed for the six transactions totalled $1,435,500. 19 All of the transactions were processed quickly. Mrs Mathers described it as being characteristic of the business that finance applications were processed urgently. She agreed that a client seeing an item of equipment which it wanted would usually wish to arrange the finance and obtain the equipment quite urgently. She said that Moody Kiddell marketed itself as being able to process applications for finance speedily. 20 Orix relied upon this feature as leading to the conclusion that the finance application and information, submitted by Moody Kiddell to it, was meant to be taken at face value, without necessarily being verified by Orix. The close relationship which existed between Orix and Moody Kiddell contributed to the speed with which transactions could be effected, and thus enhanced both Moody Kiddell's business and Orix's business. 21 Until June 2004, Orix's standard procedures did not include carrying out a physical inspection of the equipment which it purchased and hired out. Moody Kiddell and Mrs Mathers knew this. In the case of equipment supplied by a licensed or recognised dealer, Orix relied upon obtaining an invoice from the supplier containing a detailed description of the goods. Orix also received an acknowledgement and declaration from the customer that it had inspected the goods and had tested them to its satisfaction, that the goods were as ordered and were complete and were in good and substantial repair, working order and condition. Orix's standard form customer acknowledgment and declaration contained a note to the customer to inspect the goods to establish that the engine numbers and chassis numbers and serial numbers were correct, and not to rely on the invoices or delivery dockets for that information. 22 Orix relied upon the customer, in this case QCE, and the supplier, in this case Nelson Equipment, to ensure that it had title to the goods. Orix did not deal directly with Mr McCormick, or QCE, or Mr Nelson, or Nelson Equipment. 23 The standard procedure was that the application for finance was prepared by Moody Kiddell from information supplied by Mr McCormick. The finance application identified the equipment, its location, the applicant for finance, (i.e. QCE), the supplier, the price at which the goods were to be acquired from the supplier, the interest rate, the term of the finance, the amount of the balloon payment to be made at the end of the term, and the brokerage. Moody Kiddell obtained the details of the equipment from Mr McCormick. It received information on a daily basis from Orix as to the rates on which Orix provided finance if the transactions were approved. The Finance companies provided Moody Kiddell with their criteria which were required to be met for the finance to be approved. As part of the standard procedure, Moody Kiddell requested the supplier to prepare an invoice to be addressed to Orix. Moody Kiddell generated the documentation from a template used in relation to all finance companies, altered to take account of the particular circumstances of each application. 24 Orix understood that information supplied to them by Moody Kiddell was information Moody Kiddell had been given from another source. Mr Olencewicz, an executive of Orix, gave evidence as to Orix's processes for approving the applications for finance submitted by Moody Kiddell on behalf of QCE. The sole information Orix had was the information received from Moody Kiddell, and a credit reference report which it obtained on QCE. 25 Mr Olencewicz gave evidence that had he been aware that Nelson Equipment might not have title to the equipment, and might not be in a position to convey title to Orix, he would not have proceeded with the deal. If he thought there was doubt about the ability of Nelson Equipment to convey title, he would have stopped the deals. Mr Olencewicz dealt with four of the six transactions. The officer from Orix who processed the other two transactions, a Mr Sykes, did not give evidence. However, I infer that if in any of the six transactions, Orix was aware that Nelson Equipment did not have title to the equipment being sold to it, or that there was doubt as to its title, the transactions would not have proceeded. 26 Mr Olencewicz understood that Moody Kiddell's role in respect of the transactions was to pass on the information they had obtained from their client or Nelson Equipment. He gave the following evidence: " Q. You understood in relation to these transactions that each time Moody Kiddell gave you a piece of information, that that information had come from a source other than Moody Kiddell? A. Yes, I am taking it for granted that they were given the information. Q. They were passing it on to you, a bit like a conduit pipe from [sic] which information flows? A. Yes. Q. You understood that they were not warranting the correctness of information in any way? A. Not to warranting it, but producing it. Q. Producing it in the sense of physically ensuring that it arrived at your office in an efficient way? A. Yes, that's right. " 27 There was no evidence that Orix relied upon Moody Kiddell to check that the equipment to be sold by the supplier to Orix existed, or to check that the supplier had title to it. It is clear that Orix did not rely on Moody Kiddell to carry out such checks. That is an important consideration in determining what representation was conveyed by Moody Kiddell's conduct, and whether its conduct was misleading or deceptive. It is clear from the evidence of Mr Olencewicz that he did not understand that Moody Kiddell was warranting the correctness of the information it supplied. The First Transaction 28 On 20 June 2001, Mr McCormick telephoned Mrs Mathers. He told her that he had spoken to Mr Nelson who had a crane he wanted to buy. He told her the year and type of crane and the price he was to pay. He told her that he wanted to finance the purchase over a forty-eight month term, that the crane would be hired to ASSCO Shipping for use by BHP Steel at Port Kembla for $8,000 per month for four years, and that he would provide her with a copy of the order. 29 Mrs Mathers' personal assistant then prepared an application form addressed to Orix. It named QCE as the applicant and provided its address. It also included the following information: " EQUIPMENT ADDRESS: BHP STEEL, PORT KEMBLA … CONTACT: RAYMOND McCORMICK … NATURE OF BUSINESS: CRANE HIRE … EQUIPMENT: 1 (One) ONLY USED 1998 FRANNA 18 TONNE CRANE NEW OR USED: USED SUPPLIER: NELSON EQUIPMENT, PHONE 47213333, CONTACT GREG NELSON TYPE OF TRANSACTION: CHP COST PRICE: $192,500 BALLOON: 30% RATE: 7.75% BROKERAGE: 4% TERM: 48 MONTHS … ACCOUNTANT: JS BRYANT & CO, PHONE … ADDITIONAL INFORMATION: The applicant is known to Orix via current credit. As with all previously financed cranes, the above machine will be hired to ASSCO Shipping for use by BHP at Port Kembla. Copy of order to be provided (approximately $8,000 per month for four years). … " 30 The finance application was sent by Moody Kiddell to Orix by facsimile on 20 June 2001. It was accompanied by a statement of assets and liabilities of Mr and Mrs McCormick, a schedule showing QCE's current and finalised credit contracts with Orix and other financiers, and a profit and loss account and balance sheet for QCE. 31 The last paragraph of the application form read as follows: " The attached information has been provided to Moody Kiddell & Partners Pty Ltd by or on behalf of the proposed borrower/lessee; Moody Kiddell & Partners Pty Ltd or its licensees cannot and do not accept any responsibility for the accuracy of that information which is provided to you in good faith. " 32 On 21 June 2001, Ms Mathers' personal assistant, Ms Roberts, prepared a request in a standard form addressed to Nelson Equipment requesting it to "prepare a payout/invoice along the following lines". The request set out the format for an invoice to be addressed to Orix to describe the goods to be supplied, stating whether they were new or used, the year model and all relevant identifying features, stating the cost price, GST and the total price, and providing for delivery to QCE, at BHP Steel Port Kembla. Moody Kiddell requested that on completion of the invoice, it should be faxed to its office and the original sent by Express Post. It noted that settlement of the invoice would not take place until all documents and financier's conditions had been satisfactorily completed. 33 This request for an invoice was sent by facsimile to Nelson Equipment on 21 June 2001. On the same day, Nelson Equipment faxed back the invoice to Moody Kiddell. It was addressed to Orix. It described the crane, its serial number and engine number and year, set out the price of $175,000 plus GST, (a total of $192,500), and provided for delivery to QCE, BHP Steel Port Kembla. The invoice stated that the goods were sold in an "as is where is" condition. It contained a form of acknowledgment for signature by the purchaser, whereby the purchaser acknowledged that prior to purchase it had conducted a thorough examination of the equipment and that no warranty, condition, description, or representation in relation to the equipment was given by the vendor. 34 On 21 June 2001, Mrs Mathers at Moody Kiddell received by fax what was or purported to be a covering fax and purchase order from Allied Shipping Service Co Pty Ltd ("ASSCO"). The covering fax from ASSCO referred to an attached official purchase order number JL31005 dated June 2001. The attached purchase order was addressed to QCE and said "Rental of Franna Approx: 48 months at $8,000/month". It bore a signature and had been stamped "confirmation". 35 Also on 21 June 2001, Orix sent a facsimile to Mrs Mathers referring to QCE's application. It stated: " On the basis of the information you supplied in the application for finance dated 20/6/01, Orix Australia Corporation Ltd ("Orix") will consider entering into a finance agreement with the abovenamed applicant subject to Orix's standard conditions for the type of finance and the specific terms and conditions that are briefly set out below. " The document was said not to be an offer of finance capable of acceptance, but a summary of the basis upon which Orix would be prepared to provide finance if the applicants and any guarantors met its conditions. Orix reserved the right to withdraw its approval before the finance agreement was implemented if, inter alia, any representation provided by or on behalf of the applicants was found to be false or untrue in any material respect. The form set out the term, the interest rate, the balloon payment and the brokerage fee. It also calculated the stamp duty and the monthly rental of $3,837.87 per month. One of the conditions was confirmation that the crane would be used predominantly in New South Wales. 36 On 22 June 2001, Moody Kiddell prepared an invoice for the first month's rental and addressed it to QCE. It requested that the cheque be made payable to Orix. 37 Mr McCormick signed the statement of his and his wife's assets and liabilities on 25 June 2001. This was the same statement which was attached to the application of 20 June, 2001. On the same date, he drew a cheque in favour of Orix for the first month's rent. 38 Mr McCormick, on behalf of QCE, also signed a customer acknowledgment and declaration form addressed to Orix. He declared that the goods had been inspected, that they were as ordered, and that they were in a good and substantial repair, working order and condition. He acknowledged for QCE that Orix relied upon the declarations in entering into the asset purchase agreement and in settling with the supplier of the goods. He also acknowledged that Orix had appointed QCE as its agent to take delivery of the goods. The acknowledgement stated that the goods were located at Port Kembla and contained a description of the goods, including an engine number and serial number. 39 On 26 June 2001, Moody Kiddell received a fax which appeared to emanate from ASSCO confirming that the equipment for rental as per its purchase order JL31005 would be on hire in New South Wales only. Moody Kiddell faxed the document to Orix. On 26 June 2001, Moody Kiddell also sent Orix, by facsimile, a copy of an insurance certificate for the crane. 40 Mr and Mrs McCormick signed an asset purchase agreement as guarantors of the obligations of QCE. The asset purchase agreement described QCE as the hirer of the goods. It included a description of the goods and the hiring instalments. It was common ground that the agreement was a hire purchase agreement. 41 Moody Kiddell sent Nelson Equipment's tax invoice dated 21 June 2001 for $192,500 to Orix. Moody Kiddell also sent an invoice to Orix for its brokerage fee of $8,470. On 26 June 2001, Orix paid $7,700 plus GST as its brokerage. It paid $192,500 to Nelson Equipment's bank account in respect of the 18 tonne Franna No. 1 crane, the subject of this transaction. It also paid Moody Kiddell trailer commission of $940.80 plus GST. 42 Nelson Equipment prepared what it called a "recipient created tax invoice" addressed to QCE in respect of the purchase by Nelson Equipment of the relevant crane from QCE. The invoice provided for payment of $175,000, which was the same amount as the amount for which Nelson Equipment had invoiced Orix, less GST. On 2 July 2001, it deposited $175,000 to the bank account of QCE. Evidence of Mr Nelson 43 Mr Nelson gave evidence that Mrs Mathers telephoned him in about mid June 2001. He said they had a conversation to the following effect: " CM Have you spoken to Ray (referring to Ray McCormick)? GN No. CM Ray is purchasing a crane for $175,000. He will be ringing you with the details of the crane. We're organising finance with Orix and they will need a tax invoice from you. Ray will ring you with all the crane's particulars. I will send you through a tax invoice request. " 44 Orix relied upon Mr Nelson's evidence as showing that Mrs Mathers knew or suspected that Nelson Equipment did not own and would not acquire title to the crane before invoicing Orix. Mrs Mathers denied that the conversation occurred. I accept her denial. Mr Nelson was in many ways an unsatisfactory witness. His evidence was confused. His answers were often unresponsive. Remarkably, he professed to recalling the precise words of his conversations with Mrs Mathers, but was then unable to recount the conversations. Senior counsel for Orix accepted that Mr Nelson was far from a satisfactory witness on many aspects. He submitted however, that on issues of timing, that is to say whether he heard first from Mrs Mathers, or from Mr McCormick, his evidence was unshaken. Counsel submitted that his evidence was corroborated by Mr Wilson in respect of the last transaction and that if Mr Wilson's evidence were accepted on an important issue in relation to the sixth transaction, that would lead to a rejection of Mrs Mathers' evidence in its entirety insofar as it was inconsistent with Mr Nelson's evidence. 45 Mr Wilson substantially retracted the evidence he gave in his affidavit in relation to the sixth transaction, and I do not find that his evidence corroborates that of Mr Nelson in any substantial way. Nor, do I think it important whether Mrs Mathers spoke to Mr Nelson before Mr Nelson heard from Mr McCormick. In any event, I am not satisfied that Mrs Mathers spoke to Mr Nelson at all. She was unshaken in cross-examination. While that is not necessarily a sign that she was telling the truth and Mr Nelson was not, I would readily conclude that she was a more reliable witness. 46 If I am wrong in this finding, and the conversation deposed to by Mr Nelson did occur as he deposed to, it would not follow that Mrs Mathers was on notice that Nelson Equipment would not acquire title to the crane to pass to Orix. If the conversation occurred as Mr Nelson deposed to, I would infer that in about mid June 2001 Mrs Mathers knew that Mr Nelson did not already know the details of the crane which Mr McCormick was to purchase. One could infer that Nelson Equipment did not already own the crane and that Mr McCormick intended to purchase it from a third party. However, it would not follow that Nelson Equipment would not acquire the crane from the vendor before selling it to Orix. Mrs Mathers might be put on notice that this should be checked before the transaction was completed. However, Mr Nelson's evidence, even if accepted, would be insufficient to fix Mrs Mathers with knowledge that Nelson Equipment did not own the crane at the time it supplied the invoice to Orix. Evidence of Mr McCormick 47 The proceedings were heard in two stages. In the first phase of the hearing, Mr McCormick's whereabouts were unknown. However, whilst the judgment was reserved, Orix learned that Mr McCormick had been arrested in Queensland. It applied for and was granted leave to re-open its case to call Mr McCormick. He admitted to arranging for the making of finance applications for the acquisition of cranes that did not exist. Mr McCormick said that from 2001 to 2004 his applications for finance ceased to be for existing cranes. He described the "standard procedure" as follows: " It was just a matter of ringing up Christine Mathers and saying 'I want to buy machines for three or four hundred thousand' , whatever it was, 'can you get me finance?' . Her reply would be, 'who is the supplier?' . I would say 'Nelson Equipment'. She would ask me for details of the equipment, which she then would supply to the financier to get a valuation and she would make application to whoever the financiers were at the time and get back to me in a couple of days. " 48 If that evidence is correct, and was a complete statement of what Mr McCormick told Mrs Mathers, there would be no reason why Mrs Mathers should suspect that Nelson Equipment did not own the equipment. 49 However, Mr McCormick went on to say that there was discussion with Mrs Mathers in which Mrs Mathers asked him whether Mr Nelson was supplying the invoice, and he said that he was. At one point, Mr McCormick said that there was no discussion about who in fact was the supplier of the equipment. However, he also said that "on a couple of occasions" he "mentioned" to Mrs Mathers that he was buying the equipment from a private supplier in another State and that Nelson Equipment would supply the invoice. He said that there were a few such occasions which occurred during the period 2001 to 2004. Under cross-examination, he said that the only transaction which he could identify as one where he had told Mrs Mathers that he had sourced a privately owned vehicle, and she had arranged finance through Orix, was a transaction in 2003 or 2004 which did not proceed. There was evidence of a proposed transaction in July 2004 which did not proceed after Orix advised that the crane would have to be inspected. 50 Mr McCormick's evidence lacked precision. The evidence which he initially gave in examination-in-chief which I have quoted above, did not implicate Mrs Mathers. That evidence was consistent with statements made by Mr McCormick when interviewed by members of the Queensland Police Force, two or three hours after his arrest in August 2005. During that interview, Mr McCormick had identified Mrs Mathers as his personal broker. He was asked the following questions and gave the following answers: " Q. When you'd ring Moody Kiddell would you ask for her? A. Correct. Q. So you'd ring then and say 'I'm buying a crane'? A. Mmm … mmm Q. That's right? A. Mmm … mmm Q. What would be the procedure then? A. She'd say' who's the supplier?' I'd say 'Greg Nelson'. She'd say 'OK. I'll see what I can do. Ring you back'. Q. She'd then get on to Greg Nelson? A. No. She'd get my file out; get my finances out; present it to a finance house or whatever; get it approved; then get an invoice from Greg. " 51 When he was cross-examined on this part of his record of interview, Mr McCormick initially denied making those statements to the police. He retracted that denial when shown the videotape of the interview. Initially, however, he denied saying that Mrs Mathers would ask "who's the supplier?". He contended that she did not ask him who the supplier was, but asked him from whom the invoice would come. 52 Orix submitted that although Mr McCormick had admitted to serious frauds, he should be accepted as a witness of truth. His admission of the frauds enhanced his credibility. He believed he was suffering from a terminal illness and was likely to die in gaol. He had no motive to implicate Mrs Mathers. Indeed, he asserted that Moody Kiddell had no knowledge of his fraudulent activity. He did not consider that telling Mrs Mathers that he was buying equipment from a private supplier, but that Mr Nelson would provide the invoice, would implicate her. 53 It appeared to me that Mr McCormick did not distinguish in his own mind between a statement that Nelson Equipment would be the supplier, and a statement that Nelson Equipment would supply an invoice. In respect of the transactions after 2001, he knew that Nelson Equipment was only supplying an invoice, and not the goods, because the goods did not exist. However, he did not tell Mrs Mathers that the goods did not exist. On his own evidence, he told her that he was buying the goods, albeit not from Nelson Equipment. Based on his own evidence, it is likely that he told Mrs Mathers that the supplier was Nelson Equipment. He may have justified that statement in his own mind on the basis that Nelson Equipment would supply an invoice. It is possible, but not likely, that Mr McCormick told Mrs Mathers that he was buying another crane, and that he would get Mr Nelson to supply an invoice. That would not convey to Mrs Mathers that Nelson Equipment did not and would not own the equipment. 54 Mrs Mathers denied that Mr McCormick at any time said that he would get Mr Nelson to give Moody Kiddell an invoice. Her reason for denying that Mr McCormick said this, was that Moody Kiddell had to request an invoice from Nelson Equipment. Otherwise, Mr Nelson would not know to whom to address the invoice. That evidence is logical, and I accept it. 55 The critical question is whether Mr McCormick told Mrs Mathers that he was buying the equipment, not from Nelson Equipment, but from a different supplier. I am satisfied that he did not say that to Mrs Mathers. There was no need for Mr McCormick to have made such a statement to Mrs Mathers, and every reason not to do so, given his knowledge that the equipment did not exist. If he had done so, it may have led to enquiries which would have disclosed his fraud. 56 It was submitted for Orix that that is a matter which should have been put to Mr McCormick in cross-examination if Moody Kiddell were to rely upon the point. I do not consider that to be correct. Before Mr McCormick was called, Moody Kiddell had submitted that there was no need for Mr McCormick to have informed Mrs Mathers about his fraudulent activities. Mr McCormick was plainly confronted with the proposition that he did not tell Mrs Mathers that he was buying the equipment from a private supplier. He conceded that he could not recall any occasion involving a financing through Orix in which he told Mrs Mathers that he was buying the equipment privately prior to the transaction, which did not proceed, in July 2004. Having obtained that concession, it was unnecessary for counsel for Moody Kiddell to further cross-examine Mr McCormick as to other reasons why his earlier evidence of having told Mrs Mathers on a number of occasions that he was buying the equipment from private suppliers, but obtaining an invoice from Nelson Equipment, should not be accepted. In any event, I do not consider that the rule in Browne v Dunn (1894) 6 R 67 precludes my taking into account as an objectively probable fact that Mr McCormick would not wish to advertise his fraud wider than was necessary, and therefore is unlikely to have told Mrs Mathers matters which, if enquired into, might disclose the fraud. It was perfectly clear that Mr McCormick's evidence that he told Mrs Mathers that he was buying the goods privately but that Nelson Equipment would supply the invoice was challenged. It could not be said that this reason for rejecting Mr McCormick's evidence could come as a surprise. There could be no question of Orix or Mr McCormick being ambushed by the submission. 57 There is a further reason why, considered objectively, it is improbable that Mr McCormick would have made such a statement to Mrs Mathers. Had he done so, there is no reason Mrs Mathers would not have sought to process the transactions as private sales. Mr McCormick said that he told her that the invoice would be supplied by Nelson Equipment because finance houses would not accept invoices from small or irrelevant suppliers. I do not accept that he made that statement to her. She was an expert in the area. It is unlikely that Mr McCormick would have told her what finance houses would or would not accept. Moreover, there was no evidence that Orix would not have financed the transaction as a private sale. To the contrary, Orix's own documentation shows that it did provide finance for private sales, although it required its settlement officers to take steps to verify the seller's ownership. There is no reason Mrs Mathers would not have processed the transaction as a private sale, had she been told that that is what it was. 58 It was submitted for Orix that Mrs Mathers went along with Mr McCormick in order not to offend the client, for the sake of the brokerage that would be earned on the transactions, and because the transactions had to be completed urgently. However, I cannot conceive that Mrs Mathers would jeopardise Moody Kiddell's relationship with Orix for these reasons. Mrs Mathers appeared to be intelligent and efficient. I am confident that had she been told that Mr McCormick was buying equipment from a private supplier, she would have dealt with the financing as the financing of a private sale. She would not have jeopardised Moody Kiddell's substantial relationship with Orix by acquiescing in a fraud. 59 There are additional reasons for preferring the evidence of Mrs Mathers to that of Mr Nelson and Mr McCormick. Mr Nelson was in a curious position. Although he is a defendant to the proceeding and was separately represented, he was called as a witness by the plaintiff. It emerged in cross-examination that Mr Nelson had reached an agreement with Orix, whereby Orix would not enforce any judgment which it obtains against him. In my view, his evidence was coloured by a desire to assist Orix in its case against Moody Kiddell. He also sought to minimise his own responsibility for misleading Orix by issuing a tax invoice for goods he knew he did not own and would not acquire, by blaming Mrs Mathers. 60 It is also of concern that after Mr McCormick was interviewed by the police, and before he prepared an affidavit in the proceedings, he had a private interview with Mr Nelson about the proceedings. Mr Nelson was a friend of Mr McCormick's. Mr McCormick was anxious for him to be excluded from the police inquiries. Mr Nelson made a subsequent visit to Mr McCormick with the plaintiff's solicitor, for the purpose of obtaining an affidavit from Mr McCormick. In the course of oral evidence, Mr McCormick denied having been shown Mr Nelson's affidavit. However, Mr McCormick swore an affidavit on 14 September 2005, in which he deposed to having read Mr Nelson's affidavit. I think Mr McCormick's evidence was coloured by a desire to assist Mr Nelson by passing some of the responsibility for the transactions onto Mrs Mathers. Inferences as to Mrs Mathers' Knowledge: the Failed 2004 Transaction 61 Orix relied upon evidence given by Mr Olencewicz in relation to the transaction in July 2004 which did not proceed. In March 2004, QCE asked Mrs Mathers to arrange finance for a machine over a term of five years. Orix gave approval for finance, but only for a four-year term. QCE placed the business with another financier on a five-year term. On 16 July 2004, QCE approached Mrs Mathers to arrange finance for another machine. She said that she would reactivate the undrawn approval facility which Moody Kiddell had on file from Orix if QCE was happy with a four-year term. Mr McCormick said that that would be appropriate. Mrs Mathers contacted Mr Olencewicz at Orix who advised that the 12 March 2004 approval was still valid. Mr Olencewicz advised that so long as the description of goods was the same and the purchase price was no dearer, Moody Kiddell could proceed on that approval. On 21 July 2004, Moody Kiddell sent by courier the standard settlement documentation for the purchase of a Franna crane including an invoice from Nelson Equipment for $302,500, an invoice from Moody Kiddell for brokerage, and the first month's rental cheque. The documents were also sent by email to Mr Olencewicz on 21 July. Settlement had been scheduled for that day. 62 On the morning of 21 July, Ms Riley, a settlements officer at Moody Kiddell, received a telephone call from Mr Olencewicz. He told her that the matter would not settle that day because the insurer was not acceptable to Orix, and that Orix would need to inspect the goods. He told her that there was a new policy regarding inspection and that without an inspection the matter would not settle that day. She took the file to Mrs Mathers. Mr Olencewicz could not recall his conversation with Ms Riley, but I am satisfied that it occurred. 63 Later in the morning of 21 July 2004, Mr Olencewicz and Mrs Mathers discussed the matter by telephone. They differ as to who telephoned whom. In June 2004, Orix had introduced a policy requiring an inspection of the goods prior to settlement. It had not advised Moody Kiddell of its change of policy. According to Mr Olencewicz, he told Mrs Mathers of the change of policy and she responded by saying: " Why didn't you tell me this last week when I discussed the new deal with you? The deal has to settle today. The crane is in Blackall in Queensland. " 64 Mrs Mathers denies saying this, or words like it, in the first conversation on 21 July. According to her, after she protested about Orix applying its new policy to this transaction which was due to settle on that day without having given notice of the change of policy, and after arranging for Mr Moody to call senior officers of Orix about it, she telephoned Mr McCormick and told him of Orix's requirement. Mr McCormick was angry and told her to forget it, as there was "a bloke at the bank who would do it". She said there was no need to do that as they could get the matter attended to that day. She asked him where the crane was located, as it should delay the settlement by only half a day. Mr McCormick told her that it was probably located at Gladstone Wharf. Gladstone is in Queensland. Mr McCormick told her that he would just go through the bank. She asked him to find out exactly where the crane was located, who they should contact, and she would arrange for someone to go there. She told him that it would not cost him anything. Mr McCormick said that he would ring her back. He did not. 65 According to Mrs Mathers, she then rang Mr Olencewicz, and in the second call told him that the crane was at a wharf in Gladstone. She asked if they could settle the matter that day and have the inspection done the following day. Mr Olencewicz said no, she should find out exactly where the crane was. She then telephoned Mr McCormick again. He said that he had rung Gladstone and the crane was somewhere on the way to Blackwater to work on a gas pipeline, and that she should not worry about it as he had spoken to the bank and they would be around in two hours with the papers. 66 The significance of Mr Olencewicz's evidence is that if his recollection of the sequence of events is accurate, Mrs Mathers knew that the crane was located in Queensland before she spoke to Mr McCormick. The invoice showed Nelson Equipment as the supplier, but it had not yet been paid for the equipment by Orix. Orix submitted that it could be inferred that Mrs Mathers knew or suspected, as a result of her previous dealings, that although Nelson Equipmentwas shown on the invoice as the supplier, in fact, it was not the supplier. If it had been, she would have expected the goods to be in Nelson Equipment's possession, not in Queensland. 67 Mr McCormick gave evidence that Mrs Mathers spoke to him about Orix's requirement that the equipment be inspected. He said that Mrs Mathers told him "we have a bit of a problem and they want to inspect the equipment". He said that Mrs Mathers told him that she had told the finance company that the machine had left the day before. According to Mr McCormick, Mrs Mathers told him that Orix thought that the equipment was in Nelson Equipment's yard and it was not. Mr McCormick also said that he told Mrs Mathers that he was purchasing the equipment from people in Gladstone. 68 Orix relied upon this as evidence that in relation to this transaction, Mrs Mathers knew that Nelson Equipment was not the true supplier of the goods. This went to her credit and also provided an inference that she was aware of that matter in relation to the earlier transactions. 69 I prefer Mrs Mathers' evidence to Mr McCormick's evidence. I do not accept that he told her that he was buying the crane from people in Gladstone. Nor do I accept that she told Mr McCormick, in effect, that she had tried to deflect Orix's inquiry by telling Orix that the crane had left Nelson's yard. 70 I also accept that Mrs Mathers did not tell Mr Olencewicz that the crane was in Queensland until after Mr McCormick informed her of that purported fact on 21 July. If her recollection of the sequence of conversations is correct, and I thought she was a generally reliable witness, that would mean that she did not disclose that fact to Mr Olencewicz until the second of their conversations on that day. Whilst Mr Olencewicz was confident that the matter was raised in the first of the conversations, I do not think that this was a matter of such significance that he could be sure that that was so. Neither he nor Mrs Mathers kept a diary note of their conversation. In some respects Mr Olencewicz's recollection of events concerning the transaction was faulty. For example, contrary to his own affidavit, he said that he recalled receiving the documents by courier by Moody Kiddell on 20 July. However it is clear from Moody Kiddell's records and the use of overnight couriers that the documents were not sent to Orix until the following day. Likewise, Mr Olencewicz did not recall talking to Ms Riley, when it is clear that he did. 71 I do not consider that Mr Olencewicz's evidence affects Mrs Mathers' credibility. I do not infer from what she said on 21 July 2004 that she knew or suspected that Nelson Equipment was not the supplier of goods whose purchase was financed by Orix. There may have been many reasons why Nelson Equipment had a crane it owned in Queensland. The fact that Mrs Mathers evinced no surprise at being told by Mr McCormick that the crane was in Queensland does not indicate that she suspected that Nelson Equipment did not own it. It was not put in cross-examination that this was a fact which indicated that Nelson Equipment did not own the crane. 72 Orix submitted that Mrs Mathers' response to Orix's new policy to require that goods be inspected was so extreme, that it could not have been motivated only by a concern in relation to the settlement of the transaction on that day. Particularly is that so when Mrs Mathers suggested that it was not too late to inspect the equipment on that day. She spoke to Mr Moody and tried to have him contact Mr Olencewicz's superiors to persuade them not to apply the new policy in this case. 73 There is no doubt that Mrs Mathers was angry by what she learned on 21 July 2004. Her anger was not with the introduction of the new policy. She was angry that Orix had not told Moody Kiddell, one of its major introducers of business, of its change of policy until the very last moment. She regarded that as inefficient. I do not draw any adverse inference from her reaction to being told of Orix's change of policy. Conclusion on Mrs Mathers' Evidence 74 Senior counsel for Moody Kiddell and Mrs Mathers understandably stressed the principles in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362 as to whether I should find that Mrs Mathers was told of matters which indicated that Nelson Equipment did not have title to the goods for which it rendered its invoices to Orix. It was submitted that the allegation was serious, that it was inherently unlikely, and that the consequences of such a finding for Moody Kiddell and Mrs Mathers would be grave. Before making such a finding, I would need to feel an actual persuasion that Mrs Mathers had been told such facts. It was submitted that I could not be reasonably satisfied that she was told of such facts by "inexact proofs, indefinite testimony, or indirect inferences". All this I accept. However, it would do less than justice to Mrs Mathers to say that I was not persuaded, having regard to the principles in Briginshaw v Briginshaw, that Orix's charge against her had been made good. Rather, I am satisfied that Mrs Mathers was not told that Nelson Equipment did not own the equipment the subject of its invoices. She was not told that Mr McCormick was buying the goods from another person. She did not ring Mr Nelson to advise him that Mr McCormick was purchasing a crane, and ask Mr Nelson to send an invoice when he had the particulars from Mr McCormick. She was not told of facts that might have caused her to suspect that Nelson Equipment did not own the goods the subject of its invoices. I have no hesitation in preferring her testimony to that of Mr McCormick and Mr Nelson. Orix's Claims Against Moody Kiddell in Respect of the First Transaction 75 Orix seeks recovery from Moody Kiddell of $192,500 paid to Nelson Equipment, and the brokerage and trailer commission paid to Moody Kiddell. It acknowledges that the quantum of its claim is to be adjusted to reflect the value of rental payments received from QCE. The determination of the quantum of any such adjustment has been deferred. 76 Orix alleged that Moody Kiddell was knowingly involved in the payment of $192,500 by Orix to Nelson Equipment, and assisted Nelson Equipment to obtain that payment with knowledge that Nelson Equipment did not own or have any interest in the 18-tonne Franna No. 1 purportedly sold to Moody Kiddell, or knowledge of facts that would indicate that to it. Orix alleged that Nelson Equipment held the $192,500 received from Orix on trust for Orix. As I understood the allegation against Moody Kiddell, it was that Moody Kiddell was liable to account to Orix as a constructive trustee for the $192,500 received by Nelson Equipment, presumably, on the ground that it knowingly assisted a breach of trust by Nelson Equipment. Orix did not plead that Moody Kiddell assisted, knowingly or otherwise, in Nelson Equipment's breach of trust in paying $175,000 to QCE. Rather, Orix's claim, as pleaded, was that by assisting Nelson Equipment to receive the money which it held on a constructive trust for Orix, Moody Kiddell itself became a constructive trustee and liable to account for the funds, irrespective of its knowledge of how Nelson Equipment dealt with the trust moneys. However, Orix submitted that it could be inferred that Moody Kiddell understood that Nelson equipment would pay the money to QCE. 77 The second claim was that Moody Kiddell breached s 52 of the Trade Practices Act by representing that Nelson Equipment owned the 18-tonne Franna No. 1, that it would pass title in the equipment to Orix on payment of the purchase price, and that QCE would hire the equipment from Orix. Orix says that it relied on Moody Kiddell's conduct in each of the representations by entering into the asset purchase agreement with QCE, paying the sum of $192,500 to Nelson Equipment, and paying the brokerage and trailer commission to Moody Kiddell. 78 Orix's third claim against Moody Kiddell relates to the brokerage fees and trailer commission. It claims repayment of the brokerage fees as money paid for consideration which has wholly failed, or as money paid under a mistake. It claims repayment of the trailer commission on the ground that on the proper construction of the agreement for the payment of trailer commission and in the events which happened, trailer commission was not payable, and the trailer commission was paid under a mistake. Accessorial Liability as a Constructive Trustee 79 Orix submitted that the facts known to Mrs Mathers would communicate to a reasonable person a general understanding that there was a fraud being committed. This, it was submitted, was sufficient to render Moody Kiddell liable as an accessory (Yeshiva Properties No. 1 v Marshall (2005) 219 ALR 112 at 116-118, [18]-[22]). Orix accepted that to succeed on this cause of action it would be necessary for me to accept the evidence of Mr McCormick, or Mr Nelson, or both, in preference to that of Mrs Mathers. For the reasons I have given, I do not accept their evidence. Mrs Mathers and Moody Kiddell did not know of the fraud practised on Orix by Mr McCormick and Mr Nelson. Nor did they know of facts which would communicate to a reasonable person in their position a general understanding that such a fraud was being committed. It is therefore unnecessary to consider whether the matters alleged, if established, would be sufficient to make Moody Kiddell liable as an accessory for Nelson Equipment's breach of trust. Misleading and Deceptive Conduct by Moody Kiddell 80 In entering into the asset purchase agreement with QCE, paying Nelson Equipment, and paying the brokerage and trailer commission, Orix relied upon the documents supplied to it by Moody Kiddell. The documents were compiled by Moody Kiddell. Moody Kiddell had authority to generate Orix's standard form loan documents. It included in the documents details of the crane to be purchased, the identity of the supplier, location of the crane, purchase price, and the terms of the proposed lease to QCE. The application stated that "the client has been in the crane hire business for many years and all equipment is hired to BHP via ASSCO Shipping at Port Kembla". As the crane did not exist, these statements were misleading. The statements were made by Moody Kiddell from information supplied to it. Mr Olencewicz would not have proceeded with the deal if he had any doubt about the ability of Nelson Equipment to convey title. Nor would he have proceeded with the deal if he had been aware that the crane was not to be used at BHP Steel at Port Kembla and was not to be hired to ASSCO. If he had had any doubts about the existence of the crane he would not have proceeded. This evidence of Mr Olencewicz was not challenged. On the other hand, as I have said, Orix knew that Moody Kiddell had obtained the information from another source and that they were not warranting its correctness. Orix did not rely upon Moody Kiddell to check that the information was correct. 81 Orix referred to Yorke v Lucas (1985) 158 CLR 661 at 666 where Mason ACJ, Wilson, Deane and Dawson JJ said: " It is, of course, established that contravention of … section [52] does not require an intent to mislead or deceive and, even though a corporation acts honestly and reasonably, it may none the less engage in conduct that is misleading or deceptive or is likely to mislead or deceive: … That does not, however, mean that a corporation which purports to do no more than pass on information supplied by another must nevertheless be engaging in misleading or deceptive conduct if the information turns out to be false. If the circumstances are such as to make it apparent that the corporation is not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity, merely passing it on for what it is worth, we very much doubt that the corporation can properly be said to be itself engaging in conduct that is misleading or deceptive. " Orix submitted that Moody Kiddell was not merely passing on information for what it was worth. 82 I do not understand the High Court in Yorke v Lucas, or in Butcher v Lachlan Elder Realty Pty Ltd (2004) 79 ALJR 308; 212 ALR 357, to be saying that in such a case, if the corporation does more than merely passing on information for what it is worth without adopting or endorsing it, and the information is misleading, the corporation necessarily engages in conduct which is misleading or deceptive within the meaning of s 52. Precisely what representation is conveyed or impression is created by an agent who passes on or presents information from another, is a question of fact. It is important to view the agent's conduct as a whole. In this case, Moody Kiddell's conduct in compiling the information in the application form and sending it and associated documents, including Nelson Equipment's tax invoice, to Orix, amounted to more than merely passing on the information for what it was worth. That conduct impliedly conveyed that Moody Kiddell believed the information supplied was correct. It also impliedly conveyed that Moody Kiddell did not know of facts which gave it reason to doubt the correctness of the information supplied. Both of those implied representations were true. On the other hand, Moody Kiddell did not endorse the information as being correct. Orix did not understand it to do so. 83 In Butcher v Lachlan Elder Realty Pty Ltd, all of the judges of the High Court said that the expression "conduct" in s 52 extends beyond "representations". (At [32], [102]-[110], [179]). There is no doubt that one has to examine the whole of a party's conduct, including its actions, inactions and silence, and not isolate parts of it which are representational. In accepting the soundness of the proposition that the expression "conduct" in s 52 extends beyond representations, the majority referred to Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No. 1) (1988) 39 FCR 546 at 555. There, Lockhart J, with whom Burchett and Foster JJ agreed, said that it was not only conduct which was representational in character which was to be considered. In my view it is that to which the High Court in Butcher was referring when it said that the expression "conduct" extends beyond representations. 84 It is difficult to see how one can analyse whether a person's conduct is misleading or deceptive without identifying what message is conveyed by the conduct. In this case, as in Butcher v Lachlan Elder Realty Pty Ltd, the plaintiff alleges that the defendant's conduct conveyed certain representations. Orix alleges that by its conduct Moody Kiddell represented that Nelson Equipment owned or had an interest in the crane, that it would pass title to Orix, that QCE would hire the crane from Orix, if Orix purchased it, and that QCE would hire the crane to ASSCO for approximately $8,000 per month for four years. As in Butcher's case, it is necessary to consider whether the agent did no more than communicate what the supplier and its client were representing, without adopting or endorsing it. 85 In the Court of Appeal in Butcher's case (Harkins v Butcher (2002) 55 NSWLR 558), Handley JA (at 566, [37]): "… it was recognised that someone who did no more than state as information received such information as he has makes no representation as to the truth of that information." In Butcher's case, the majority of the High Court concluded that the agent did no more than communicate what the vendor was representing without adopting it or endorsing it. They reached that conclusion by considering the nature of the parties, the character of the transaction contemplated, and the contents of the brochure. Orix submitted that the same considerations in this case lead to a different outcome. 86 On the question of the nature of the parties, Orix submitted that Moody Kiddell was a substantial corporation which specialised in the financing of construction equipment. It was a trusted broker in the equipment finance industry, having been accredited than by no fewer than eleven financiers. It provided professional and speedy service to its clients. It knew how the financiers operated. It chose the financier depending upon its client's needs. It had access to and could generate Orix's loan documents. It had access to Orix's finance rates. It knew what information was most likely to achieve an approval of an application. It proposed deals to Orix in detail. It earned substantial brokerage and trailer commission of almost $1,000,000. Whilst all this is true, it is not of great relevance. The importance of the nature of the parties in Butcher's case was that the defendant, being a suburban real estate agent, did not hold itself out as possessing research skills or means of independently verifying title details about the property sold. (At [42]). The relevance of this appears to have been that the purchasers would not be expected to rely upon the agent for the correctness of the information as to the location of the boundary. In this case, notwithstanding the differences in the nature of the parties and the character of the transaction, Orix did not rely upon Moody Kiddell for the correctness of the information as to the existence, location, or title to the equipment to be purchased and hired. 87 Orix relied upon five features of the transaction as indicating that Moody Kiddell's conduct represented that Nelson Equipment owned and would pass title to the crane, and that the crane would be hired to QCE. The first feature was the urgency of the transaction, from which it should be concluded that the information provided by Moody Kiddell was to be taken at face value by Orix and not necessarily verified by it. The second was that to Moody Kiddell's knowledge, Orix did not have a policy of inspecting the cranes, but that the transaction proceeded on paper. The third was that the conditional finance approval expressly stated that Orix would consider entering into a finance agreement with the applicant on the basis of the information "you supplied in the application for finance". That document was addressed to Mrs Mathers. The fourth was that Moody Kiddell made substantial commission on the transaction in an amount which was known to Orix, and was paid trailer commission. The fifth was that the transaction was a repeat of earlier transactions, with the same client of Moody Kiddell. This engendered confidence and trust in the information being provided by Moody Kiddell to Orix. Moody Kiddell had acquired a bank of information on their clients. 88 However, none of these considerations indicates that Moody Kiddell was endorsing the correctness of the information. The fact that the transaction was proceeding speedily and on the papers without Orix inspecting the equipment does not indicate that the parties expected Moody Kiddell to vouch for the accuracy of the information. It only indicates that Orix was prepared to advance money without checking on its security in the interests of doing business speedily. It is not a reason for inferring that Moody Kiddell was endorsing the correctness of the information. Nor does the amount of the brokerage, or the fact that the business was repeat business, take the matter any further. The fact that Orix's conditional approval was said to be based on the information supplied in the application form, does not indicate that Orix made known that it was relying on Moody Kiddell to ensure or warrant that the information was correct. 89 Orix submitted that an objective reading of the contents of the finance application leads to the conclusion that Moody Kiddell had adopted the information it contains. It was submitted that in this respect the case was similar to Gardam v George Wills & Co Ltd (1988) 82 ALR 415. There, the question was whether a wholesaler who supplied clothing containing a label attached in manufacture which was false, had made the representation conveyed by the label. While stressing that this was a question of fact, French J said (at 427): " The innocent carriage of a false representation from one person to another in circumstances where the carrier is and is seen to be a mere conduit, does not involve him in making that representation. … When, however, a representation is conveyed in circumstances in which the carrier would be regarded by the relevant section of the public as adopting it, then he makes that representation. It will be a question of fact in each case, but in my opinion the wholesaler who resells goods labelled without attribution of authorship can be taken in ordinary circumstances to adopt the text of those labels. … " Here, Moody Kiddell was and was seen to be a conduit of information, although it did more than merely act as a conduit. It was not regarded by Orix, which is the only relevant recipient of the information, as having adopted it. 90 It was submitted for Orix that the disclaimer quoted in paragraph [31] applied only to the attachments to the form, that is to say, the statement of assets and liabilities, the schedule of current and finalised credit contracts, and the balance sheet and profit and loss account. Orix submitted that the disclaimer did not apply to the information contained in the body of the application form, as such information was not "attached". I agree with that submission. On the other hand, it is not to be inferred from the express disclaimer in relation to attached information, that Moody Kiddell accepted responsibility for the information in the body of the form. 91 Mr Olencewicz said that the clause was a standard clause that Moody Kiddell put in the applications. He understood it as being a "get out clause" which was put in by Moody Kiddell "just to cover themselves". Neither Orix nor Moody Kiddell expected that the clause would be construed closely so as to distinguish between information attached to the application and information contained within it. Certainly, it was not understood by Orix as impliedly warranting the correctness of the information contained within the application form in contradistinction to information attached to it in respect of which no responsibility was accepted. The clause is but part of the overall circumstances that are to be taken into account in characterising Moody Kiddell's conduct. 92 I do not consider that Moody Kiddell adopted the information in the application form about the existence, ownership or location of the goods. Although the words of the disclaimer did not strictly apply to that part of the information, it was self-evident that it was given the information by its client or the supplier and was passing that information on. The information had to be put in the appropriate standard form for it to be considered by Orix. It was the broker's job to produce the information in that form. It was not thereby adding its imprimatur to the correctness of the information it supplied. In this case, the recipient of the information, Orix, would not and did not regard Moody Kiddell as adopting the information. 93 As this is essentially a factual question, a review of other cases which raise the same issue is of limited assistance. Orix referred to John G Glass Real Estate Ltd v Karawy Constructions Pty Ltd (1993) 15 ATPR 41-249. It submitted that Moody Kiddell's expertise in the area of equipment finance was similar to the expertise claimed by the agent in that case. There an estate agent acting for the vendor produced a brochure concerning the property which included a statement of his lettable area which was false. The statement in the brochure was compiled from information provided by the vendor. It was found as a matter of fact that the agent adopted the information and incorporated it as a central feature of its selling effort on behalf of the vendor. One of the grounds for holding that the agent adopted the information as its own was that the agent held itself out as a consultant to institutional investors and developers so that it would not be regarded by potential purchasers of properties as merely passing on information about the property for what it was worth, without any belief in its truth or falsity. In this case, whilst Moody Kiddell had relevant expertise in selecting appropriate finance terms and making applications for finance, their expertise in those areas was not such as to lead to the conclusion that they adopted the information about the existence, location or title to the equipment. Nor was Moody Kiddell regarded by Orix as having done so. 94 Orix submitted that the information that, as with all previously financed cranes, that the machine would be hired to ASSCO Shipping for use by BHP at Port Kembla at a rent of approximately $8,000 per month for four years, was included for the purpose of assisting in the processing of the application. The information showed that the machine would earn income greater than the required repayments. Mrs Mathers gave evidence to that effect. However, I do not think it follows that by including this information on the form, being information with which Mrs Mathers was provided by her client and by the facsimile she received from ASSCO, Moody Kiddell should be taken to have made its own representation that the goods existed, as distinct from a representation that it had information that the machine would be hired out in that way, that it believed that information to be true, and knew of no reason to doubt its accuracy. 95 Orix pleaded that the representations that Nelson Equipment would pass title in the crane to Orix, that QCE would hire the machine from Orix if Orix purchased it, and that QCE would hire the machine to ASSCO for approximately $8,000 per month for four years were representations as to future matters for which Moody Kiddell had no reasonable grounds. I accept that these were representations as to future matters. Section 51A of the Trade Practices Act provides: " 51A. Interpretation (1) For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading. (2) For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation. (3) Subsection (1) shall be deemed not to limit by implication the meaning of a reference in this Division to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead." 96 Moody Kiddell adduced evidence as to the grounds upon which these representations were made. Mrs Mathers was told by Mr McCormick that he was purchasing the crane from Nelson Equipment. She was told by Mr McCormick that the crane was to be hired to ASSCO for $8,000 per month for four years. She received confirmation of the fact that Nelson Equipment would supply the machine from the tax invoice which it supplied to her to be passed on to Orix. She received confirmation that ASSCO would hire the machine for four years from a facsimile she received, apparently from ASSCO, attaching an order for the hire of the goods. There was nothing in any of these documents to give Mrs Mathers any reason to doubt what she was told. In my view, Moody Kiddell had reasonable grounds for the making of these representations. 97 For these reasons, I do not consider that in relation to the first transaction Moody Kiddell engaged in conduct which was misleading or deceptive or likely to mislead or deceive. Restitution of Brokerage 98 Orix pleaded that it made an agreement with Moody Kiddell to the effect that on the purchase of the crane by Orix and its subsequent hire to QCE, Orix would pay Moody Kiddell a brokerage fee. Moody Kiddell admits that it entered into an agreement with Orix whereby brokerage became payable to Moody Kiddell upon the commencement of the asset purchase agreement. It admits that Orix paid it $7,700 plus GST. 99 Notwithstanding those pleadings, senior counsel for Orix submitted that the brokerage was paid by the client and was added to the advance made by Orix for the purchase of the equipment and recovered by the rental instalments. 100 There is no doubt that the brokerage was added to the advance for the purchase of the equipment for the purpose of setting the lease rentals. However, the documents indicate that it was Orix, and not QCE, who was liable to Moody Kiddell for the brokerage. Moddy Kiddell's invoice was addressed to Orix and claimed $7,700 plus GST as "brokerage fee for the introduction of transaction in the name of Queensland Construction Equipment Pty Ltd". The pleadings are thus supported by objective evidence. I proceed on the basis that Orix's payment was made to Moody Kiddell, and it did not discharge a liability of QCE to Moody Kiddell. Had the payment discharged QCE's liability to Moody Kiddell, Orix's payment would properly be characterised as an advance to QCE, and the restitutionary claim against Moody Kiddell would have failed at the outset. 101 The consideration for Orix's payment of the brokerage fee did not wholly fail. Indeed, it did not fail at all. There was scant evidence of the terms of the agreement for payment of brokerage. The amount of brokerage was stated in Moody Kiddell's facsimile of 20 June, 2001. But neither that document, nor the other documents Orix pleaded constituted the contract, specified the event upon the occurrence of which Moody Kiddell was entitled to brokerage. The invoice quoted above stated that brokerage was payable for the introduction of the transaction. As it was paid when the asset purchase agreement was signed, I infer that brokerage was payable upon QCE and Orix entering into the asset purchase agreement. The consideration for the payment of brokerage was provided by Moody Kiddell introducing the transaction to Orix, and Orix entering into the asset purchase agreement with QCE. The fact that the equipment the subject of the asset purchase agreement did not exist, did not mean that the consideration for the brokerage failed. Indeed QCE paid the rental instalments for over three years. 102 Orix paid the brokerage under a mistake. It believed it was acquiring title to a crane referred to in Nelson Equipment's tax invoice and in its hire purchase agreement with QCE. However, that is not a relevant mistake for the purpose of entitling Orix to restitution as Moody Kiddell was entitled to receive the payment. (Barclay's Bank Ltd v WJ Simms Son & Cook (Southern) Ltd [1980] QB 677 at 695; David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 376; Mason & Carter, Restitution Law in Australia, para 438). Put another way, Moody Kiddell was not unjustly enriched by the receipt of the payment made under a mistake, as it was entitled to receive the payment. (David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 per Brennan J at 392). 103 Orix relied upon National Mutual Life Association of Australasia Ltd v Walsh (1987) 8 NSWLR 585. There the plaintiff, a life insurance company, paid commissions and bonuses to its divisional sales manager upon the basis that they were properly due to him as a consequence of the submission of proposals for insurance which the plaintiff believed to be authentic. Contrary to that belief, the proposals had been procured fraudulently, although not by the defendant. Clarke J held that having paid the money under a mistake of fact, the plaintiff was prima facie entitled to recover the moneys, but that the defendant had established the defence of consideration received in good faith, as the moneys represented payment for the performance of his duties as divisional sales manager. Orix submitted that no similar circumstances existed in the present case. 104 In my view, the circumstances in the present case are analogous to those in National Mutual Life Association of Australasia Ltd v Walsh. The payments to Moody Kiddell represented payment for its performance of its work as finance broker. In any event, as the brokerage was due to Moody Kiddell on its introduction of the transaction to Orix and Orix's entering into the sale and hire purchase agreements, the fact that Orix was mistaken in entering into those agreements, does not support a claim for restitution of the payment. The money was due notwithstanding the mistake. Trailer Commission 105 On 2 June 2000, Orix advised Moody Kiddell that it was introducing a scheme of trailing commission to a few selected "A" status brokers, including Moody Kiddell. Moody Kiddell accepted the terms upon which trailing commission was offered. Commission was calculated at a rate of 0.2% per annum of the principal outstanding balance of all qualified contracts at month's end. Any contract more than 30 days in arrears at month's end, and in arrears of $50 or more would not qualify for commission for that month that the contract was in arrears. Orix reserved the right to terminate the arrangement by providing 30 days' notice, whilst acknowledging its obligation to make ongoing payments of commission for all contracts settled while the scheme was in place. The scheme was to apply to "any deals" settled on or after 1 June 2000. 106 Orix pleaded that the "deals" to which the agreement applied were those in which Moody Kiddell introduced a customer to Orix who wished to acquire machinery by way of hire, where Orix purchased the machinery and hired it to the customer, and where Moody Kiddell communicated with all parties to the transaction and generated all of the sale and hire documents. It alleged that as the crane did not exist and was not owned by Nelson Equipment, no deal was settled within the meaning of the agreement for the payment of trailer commission. Hence, it alleged, it was not obliged to pay trailer commission to Moody Kiddell, and that its payment of trailer commission of $940.88 in respect of the first transaction was made under a mistake. 107 I accept that Orix paid the trailer commission when it had the mistaken belief that it had acquired title to the equipment. The question is whether the fact that the equipment did not exist, and Nelson Equipment had no title to it to pass to Orix, means that no trailer commission was payable because no "deal" was settled. In my view, a deal was settled. It was settled when Orix entered into the asset purchase agreement with QCE. Orix received regular monthly rental payments under that agreement. The fact that the equipment did not exist did not mean that Orix did not do a deal with QCE. Trailer commission ceased to become payable when the contract was more than a month in arrears. Until then, trailer commission was payable. Conclusion in Respect of the First Transaction 108 For these reasons, all of Orix's claims against Moody Kiddell in respect of the first transaction fail. The Second Transaction 109 The second transaction involved the purported purchase and hire of another 18-tonne Franna crane in September 2001. The transaction followed precisely the same pattern as the first transaction. On 30 August 2001, Mrs Mathers received a telephone call from Mr McCormick. He told her that he wanted to buy a 1998 18-tonne Franna crane from Greg Nelson. He told her how much he wished to pay for it and that he wanted to finance its acquisition over a 36-month term. He told her that the crane was to be hired at ASSCO Shipping for use at BHP Steel at Port Kembla. Mrs Mathers' personal assistant, Ms Roberts, prepared an application form. In all material respects it was the same as the application form for the first transaction. The details of price, interest rate, balloon payment, brokerage and term of finance differed, but the differences are not material. Mrs Mathers also received a facsimile purporting to come from ASSCO dated 31 August 2001 advising that the equipment for rental as per ASSCO's official purchase order number JL31005 would be on hire in New South Wales only. 110 It appears that the facsimile and order form from ASSCO, either in relation to the second transaction, or both transactions, were forgeries. In relation to both transactions, Mrs Mathers asked Mr McCormick to provide confirmation of work or of the location of the equipment. He told her not to contact ASSCO and that he would get them to fax the information to her. The purported purchase orders from ASSCO dated June 2001 and 31 August 2001, are identical save as to the dates. They have the same order number. The writing on the documents is identical. Had either Moody Kiddell or Orix compared closely the documents received in August with the documents received for the previous transaction in June, it would have been alerted to the likelihood that all was not above board. However, neither did so. Mrs Mathers was not cross-examined to suggest that she ought to have detected an apparent forgery. Nor was it submitted that she should have done so. 111 Mr Nelson gave evidence that in late August 2001, he received a telephone call from Mrs Mathers, who asked if Mr McCormick had been in contact with him, because Mr McCormick wanted to buy another crane. According to Mr Nelson, Mrs Mathers told him the price and model of the crane, that it was being financed through Orix, and that Mr McCormick would ring Mr Nelson to give him the details of the crane. For the reasons I have given previously, I do not accept this evidence. I accept Mrs Mathers' denial that such a conversation occurred. 112 The same reasoning applies to this claim as it does to the first transaction. The fact that the documents apparently emanating from ASSCO may have alerted someone to the possibility that something was amiss is relevant to the question whether Moody Kiddell had reasonable grounds for its representation that the goods would be hired to ASSCO for approximately $8,000 per month for four years. However, Mrs Mathers had reasonable grounds for that representation. She had been given that information by Mr McCormick and it was apparently confirmed by ASSCO. I do not find that she should have appreciated that there was doubt about ASSCO's confirmation. Orix did not advance such a case. Accordingly, I reach the same conclusions in respect of the second transaction as the first. 113 Nelson Equipment received the payment of $187,000 from Orix on 10 September, 2001. On 13 September, 2001, it paid $170,000 to QCE. It did not pass on the sum of $17,000, being the GST paid by Orix. The Third Transaction 114 The third transaction concerned another 18-tonne Franna crane. The transaction was settled on 8 March 2002. Orix paid Nelson Equipment $198,000 for the crane. It paid brokerage of $4,356. Both sums were inclusive of GST. The application for finance was made by facsimile by Moody Kiddell on 26 February 2002. It followed a conversation between Mr McCormick and Mrs Mathers in which he told her that he was buying another crane from Greg Nelson for $198,000, being a used 1998 18-tonne Franna crane. He informed her that the crane was to be hired to ASSCO Shipping for use by BHP Steel at Port Kembla. The application took the same form as previously. On this occasion, Orix's terms of conditional approval did not require confirmation that the crane would be used predominantly in New South Wales. For this reason, Mrs Mathers did not ask Mr McCormick to obtain confirmation from ASSCO. 115 Mr Nelson gave evidence that Mrs Mathers told him that "Ray Bugalugs", (meaning Mr McCormick), was buying another crane and had a contract for it. He said that Mrs Mathers asked him to invoice it, and told him it was being financed with a finance company. According to Mr Nelson, Mrs Mathers advised him of the year and model of the crane, and told him that Mr McCormick would send him the particulars. For the reasons previously given, I reject this evidence. 116 There is nothing which distinguishes this transaction from the previous two transactions, except that Mrs Mathers did not receive a purchase order from ASSCO, or a fax confirmation from ASSCO that the goods would be on hire in New South Wales only. Nonetheless, she had a reasonable basis for the statement in the application form that the goods would be on hire to ASSCO. She believed that to be the case on the basis of what Mr McCormick told her. She had no reason to think otherwise. 117 On this occasion, Nelson Equipment paid QCE the full purchase price of $198,000 which it received from Orix. The Fourth Transaction 118 The fourth transaction was settled on 15 October 2002. Orix paid Nelson Equipment $324,500 purportedly to purchase a 50-tonne Tadano crane which it purportedly leased on hire purchase to QCE. The transaction was again preceded by telephone call from Mr McCormick to Mrs Mathers. He telephoned her on 8 October 2002 and told her he was buying a 1997 50-tonne Tadano crane from Nelson Equipment for $324,500 and that he wished to finance it over sixty months. He told her that it was being hired to ASSCO Shipping for use at BHP Steel at Port Kembla. 119 Again, Mrs Mathers prepared a note of the essential details using Moody Kiddell's pro-forma file documentation. The application to Orix for finance was made on the same day. It was in materially the same terms as the previous applications, save, of course, for the description of the equipment, its price, and the terms of finance. Again the schedule of current contracts was updated. It appears from that schedule that as well as the three contracts with Orix made in June and September 2001 and March 2002, QCE had entered into contracts for the hire of Franna cranes from September 2001 with CBFC, AGC Capital and Westpac. There was nothing to indicate anything untoward. 120 In relation to this transaction, Mr Nelson said that he had spoken to Mrs Mathers before he heard from Mr McCormick. He gave evidence that she told him that Mr McCormick was buying another crane and had a contract, that it would be with ASSCO, that it was being financed through Orix, and that he, Mr Nelson, would be given the details later by Mr McCormick. Again, I reject this evidence. 121 On 10 October 2002, Mrs Mathers sent a facsimile to Mr Olencewicz at Orix advising that the QCE machine was to be rented at $10,000 per month for five years. She had been told by Mr McCormick on 10 October 2002 that ASSCO was going to order the machine at $10,000 per month for five years. The same considerations apply to this transaction as to the previous transactions. 122 Nelson Equipment received the purchase price of $324,500 (being $295,000 plus GST) on 15 October, 2002. On 18 October, 2002, it paid QCE $295,000. It paid QCE a further $10,000 on 31 October, 2002. The Fifth Transaction 123 The fifth transaction concerned the purported purchase by Orix of a 20-tonne Franna crane. The transaction settled on 21 July 2003 when it paid $297,000 to Nelson Equipment and entered into a hire purchase agreement with QCE. It paid brokerage to Moody Kiddell of $9,801 inclusive of GST. Orix alleged that in relation to this transaction Moody Kiddell requested Nelson Equipment to issue a tax invoice to Orix for the sale of the 20-tonne Franna No. 1 crane for $270,000 and advised Nelson Equipment that QCE would provide particulars. It contended that there was a conversation between Ms Niriko McClure on behalf of Moody Kiddell and Ms Cassandra Pulver on behalf of Nelson Equipment to this effect. 124 Ms Pulver was not called. Ms McClure was employed by Moody Kiddell as a personal assistant in July 2003. She recalled speaking to someone at Nelson Equipment known to her as "Sandy" or "Sharon" after Orix approved the request for finance. She asked the person to whom she spoke at Nelson Equipment whether they had received the invoice request, she said that Nelson Equipment should have an invoice request from Moody Kiddell for a Franna crane. She asked when Moody Kiddell could receive the tax invoice. This conversation did not precede an application for finance. Ms McClure did not tell the person to whom she spoke at Nelson Equipment that QCE would provide particulars. 125 Orix tendered a file note prepared by Ms Pulver. There is nothing on the face of the file note which supports the allegation in the pleading that Moody Kiddell advised Nelson Equipment that QCE would provide particulars of the crane for which Nelson Equipment was asked to issue a tax invoice. 126 The application for finance was prepared by Ms McClure and reviewed by a broker, Mr Brooke. It was sent to Orix on 15 July 2003. Prior to the finance application being sent, Ms McClure had received a telephone call from Mr McCormick in which he told her that he needed to organise finance for a freighter. He said that he had seen a 20-tonne 2001 model for $270,000 plus GST. He told her that he did not know if he would be buying that machine and would need to look around. Ms McClure told him that Moody Kiddell would put in an application for finance for that machine, and if he found something else they would send the details to the financier and get them to approve the changes. 127 In this case, the application form described the equipment to be acquired as a used 2000 20-tonne freighter. Against the item for "supplier", Ms McClure inserted "TBA-licensed dealer". She inserted that information because she asked Mr McCormick whether he intended to buy through a private vendor or a licensed dealer and was told that he intended to buy through a licensed dealer. The section of the application for additional information included the statement that the clients were looking to travel to Gladstone on 16 July to inspect a number of trucks and that specific details of the truck would be forwarded "prior top documentation (sic)". 128 There was a change to the equipment to be purchased. On 16 July 2003, Mr Brooke sent a facsimile to Mr Olencewicz advising him that the proposed equipment was a 2001 Tadano 20-tonne crane which would be used on current contracts with BHP and would earn $10,000 per month. He said that the application suggested that the equipment was a truck, but this was a misunderstanding. The application was amended accordingly by Orix. 129 Mr Brooke could not recall from where he obtained the information in his facsimile of 16 July 2003. He had spoken to Mr McCormick as well as to Ms McClure but he could not recall what was the source of the information. He did not speak to anyone at BHP. In its pleading, Orix did not rely upon the facsimile of 16 July 2003 as part of Moody Kiddell's alleged misleading and deceptive conduct. An application was made to amend the pleading to include this letter as a particular of misleading and deceptive conduct. The application was made late on the fourth day of the hearing, after the plaintiff's witnesses had been cross-examined and whilst Mr Brooke was being cross-examined. I refused the application. 130 It appeared from the schedule of current and finalised contracts that by July 2003, QCE had financed the acquisition of three further cranes from Westpac, CBFC and Bendigo Bank since its last transaction with Orix. Orix gave its conditional approval to financing the transaction on 17 July 2003. It was a condition of the approval that there be confirmation of the hire contract with BHP. Orix also advised that no further advances would be made until QCE's June 2003 financial statements had been reviewed. 131 On 16 July 2003, Moody Kiddell faxed its request to Nelson Equipment for an invoice. Nelson Equipment supplied the invoice to Moody Kiddell on 17 July 2003 for the amount of $297,000. Nelson Equipment obtained the details to be inserted in the invoice from Mr McCormick. Moody Kiddell sent the tax invoice to Orix. On 21 July 2003, Moody Kiddell sent to Orix a letter from QCE signed by Mr McCormick advising that the 20-tonne crane would be used predominantly in New South Wales. As I have said, the transaction settled on 21 July 2003. Orix paid Nelson Equipment $297,000. It paid Moody Kiddell brokerage of $9,801. 132 Although the participants from Moody Kiddell in this transaction were different, the transaction raises the same issues. Orix has not established that when Ms McClure asked Ms Pulver of Nelson Equipment to forward the tax invoice, she told Ms Pulver that Nelson Equipment would be advised of the details of the crane by Mr McCormick. Clearly, Moody Kiddell did not represent by its application form that Nelson Equipment had or would acquire title to the goods, or that the goods existed. It later forwarded Nelson Equipment's invoice to Orix and QCE's letter advising that the equipment would be used predominantly in New South Wales. Moody Kiddell did not adopt or endorse the representations made by Nelson Equipment and QCE that Nelson Equipment had title to the goods which it would pass to Orix on payment, nor QCE's representation in the customer acknowledgment and declaration form that the goods had been inspected, nor the representation in Mr McCormick's letter of 21 July 2003 that the goods would be used predominantly in New South Wales. Moody Kiddell did not make the representations pleaded by Orix that Nelson Equipment owned or had an interest in the 20-tonne Franna No. 1 crane, that it would pass title in the crane to Orix, and that QCE would hire the crane from Orix if Orix purchased it. 133 Nelson Equipment received the purchase price of $297,000 on 21 July, 2003. On 23 July, 2003 it paid QCE $270,000. It is not clear whether it also paid $27,000, representing the GST paid by Orix, to QCE. The Sixth Transaction 134 On 11 September 2003, Orix paid $236,500, inclusive of GST, to Nelson Equipment for the purported purchase of a second 20-tonne Franna crane. On the same day it entered into a hire purchase agreement for that equipment with QCE. It paid Moody Kiddell brokerage of $6,565 plus GST. 135 The transaction started on 5 September 2003 when Mr McCormick telephoned Mrs Mathers. He told her that he was buying another crane from Nelson Equipment, that it was a 2001 20-tonne Franna for which he was paying $236,500, and that he wanted to finance it over 48 months. Mrs Mathers prepared notes on the pro-forma sheet from which her personal assistant prepared the finance application. On the same day, the finance application was faxed by Moody Kiddell to Orix. The application described the equipment as a 2001, 20-tonne Franna crane and its address as the address of QCE. As this was a home unit in Broadbeach, this was obviously incorrect. The application did not state where the equipment would be located or to whom it would be hired out by QCE. 136 In relation to this transaction, Mr Nelson gave evidence that Mrs Mathers said to him words to the effect: "Have you spoken to bugalugs (a reference to Mr McCormick)?". He said: "No I haven't.". She asked if Mr Nelson could prepare an invoice. She said that the customer, (meaning Mr McCormick or QCE), had a contract. Mr Nelson asked Mrs Mathers where the crane would work. Mrs Mathers said that it was urgent, and that Mr McCormick would be contacting him regarding the details. For the reasons previously given, I reject this evidence. 137 Orix submitted that Mr Nelson's evidence was corroborated by the evidence of Mr Wilson, an employee of Nelson Equipment. Mr Wilson deposed that in September 2003 he received a handwritten telephone message. It read: "Rod, please call Chris Mathers re this invoice". The "invoice" referred to was an invoice request in the standard form, from Moody Kiddell to Nelson Equipment. Mr Wilson deposed that the request was received by fax on 9 March 2003, (a clear error for 9 September 2003), at 10.22 am. The document which Mr Wilson annexed to his affidavit had that marking on it. He said that he later received a handwritten note marked to the attention of Mr Nelson from QCE on 9 September 2003 at 11.18 am. The handwritten note which he annexed to his affidavit said: "Attention Greg. Chris Mathers from Moody Kiddell will call on Monday 8/9/03 for invoice as follows. 1(1) only used 20-tonne Franna mobile crane, fitted with air-conditioning spredder bar and rhino hook." The note went on to give an engine number, a serial number, number of kilometres, number of engine hours, the year, the price, and that it was for delivery to QCE at Broadbeach. Mr Wilson deposed to a telephone call with Mrs Mathers in which she told him: "the price of the crane is $215,000 plus GST. It is a 2001 20-tonne Franna crane. The total cost is $236,500 including GST. You will get the details of the crane from Ray McCormick.". Mr Wilson deposed that after speaking to Mrs Mathers he wrote on the handwritten note the words "Invoice to Orix delivery $215,000 plus GST 2001 20T Franna $236,500 inc GST". 138 However, Mr Wilson's evidence was not reliable. Mr Wilson reconstructed the sequence of events from the fax markings on the documents shown to him and deduced that he spoke to Mrs Mathers before he saw the facsimile from QCE giving details of the crane. In fact, Mr McCormick had sent his fax from QCE on 5 September, advising of the details of the crane and that Mrs Mathers would call on Monday 8 September 2003 for an invoice. The document was sent again on 9 September. 139 Mr Wilson said that it was possible that he received the telephone message and faxed request for an invoice on 9 September, that he telephoned Mrs Mathers who said to him something to the effect that she understood that Mr McCormick had already sent the details down to Mr Nelson about the crane and that she was waiting to get the invoice, and that he contacted Mr McCormick or had Mr McCormick contacted, and was sent a further copy of the fax with the same information on it. 140 Mr Wilson prepared the invoice from the information supplied by Mr McCormick. 141 Orix relied upon Mr Wilson's evidence as showing that Mrs Mathers knew that Nelson Equipment did not have the details of the crane which Mr McCormick asserted he was buying from Nelson Equipment, and thus knew that Nelson Equipment was only supplying an invoice and the sale was not genuine. Mrs Mathers denied the conversation with Mr Wilson to which he had deposed. 142 I think it likely that Mrs Mathers telephoned Nelson Equipment and spoke to Mr Wilson to press Nelson Equipment to forward the invoice which had been requested that day. There would be nothing remarkable in that. All of the transactions were processed speedily. It was common ground that that was a hallmark of the industry. However, I do not accept Mr Wilson's version of his conversation with Mrs Mathers, which I think is a reconstruction from documents. I am not satisfied that Mr Wilson spoke to Mrs Mathers before he received the fax of 9 September from QCE. I am not satisfied that the information he filled out on the telephone message which was contained on a post-it note attached to Moody Kiddell's request of 9 September for an invoice was filled out during or as a result of his conversation with Mrs Mathers, as distinct from having been filled out from information supplied by QCE. Nelson Equipment sent the tax invoice to Moody Kiddell, apparently on 9 September 2003, although for some inexplicable reason, it was sent under cover of a fax dated 19 August 2003. That was clearly an error. 143 At some point, somebody, who I infer was an employee of Orix, wrote on the application form the words "BHP Port Kembla, $8,500 pm, replacement for CBFC". Orix's internal review of the application noted that there was an increase in the current credit limit to QCE by $237,000 to assist in the purchase of a used 2001 20-tonne Franna crane to be hired to BHP. It is not clear from where Orix obtained this information, although presumably it emanated from Moody Kiddell. Be that as it may, Orix did not plead, in relation to this transaction that Moody Kiddell represented that the goods would be hired to or be located at BHP Port Kembla, or that they would be hired out by QCE for a monthly rent. During the cross-examination of Mrs Mathers, on the fourth day of the hearing, Orix applied for leave to amend to plead an oral representation which was allegedly made by Mrs Mathers to Mr Sykes that QCE would hire the crane to ASSCO for $8,500 per month and that the crane would be located at BHP's premises at Port Kembla. The plaintiff's case had been closed. Mr Sykes did not give evidence. I refused the application. 144 For the same reasons as I gave in relation to the first transaction, Moody Kiddell did not engage in misleading and deceptive conduct in relation to this transaction. 145 Nelson Equipment received $236,500 from Orix on 11 September, 2003. On 17 September, 2003, it transferred $236,500 to QCE by way of two cheques for $215,000 and $21,500. Contributory Negligence 146 Both Moody Kiddell and Mrs Mathers pleaded a defence of contributory negligence to Orix's s 52 claim. As the claim has failed, it is unnecessary to deal with that defence. No submissions were advanced in support of it. The defence was apparently raised under s 82(1B) of the Trade Practices Act. Orix submitted that s 82(1B) did not apply to causes of action that arose before 26 July 2004 and that it had suffered damage in respect of each of the transactions for which it sued prior to that date. Moody Kiddell did not contest these submissions. In the circumstances I need not address the defence of contributory negligence. Conclusion on Claims Against Moody Kiddell 147 For the same reasons as I gave in relation to the first transaction, Orix's claims against Moody Kiddell for being knowingly involved in Nelson Equipment's becoming a constructive trustee of the purchase price paid in the second to sixth transactions, fail. Its claims for the return of brokerage and trailer commission also fail for the same reasons as for the first transaction. Its claims for damages for misleading and deceptive conduct also fail for the reasons given. There will be judgment for Moody Kiddell on the claims against it. Claim Against Mrs Mathers 148 Mrs Mathers was sued as a person who provided knowing assistance to Nelson Equipment in obtaining the six payments from Orix. She was also sued as a person involved within the meaning of s 75B of the Trade Practices Act in Moody Kiddell's alleged misleading and deceptive conduct. For the reasons I have previously given, the claim that she knowingly assisted in a breach of trust, or could be liable as a constructive trustee for providing dishonest assistance to Nelson Equipment's fraud must fail. As the claim that Moody Kiddell contravened s 52 of the Trade Practices Act has failed, the claim against her that she was liable as an accessory in being involved in Moody Kiddell's contravention of s 52 must also fail. However, even if the claim against Moody Kiddell for contravention of s 52 had succeeded, the claim against Mrs Mathers as an accessory under s 75B would have failed. She did not know of the essential facts which would have constituted the contravention of s 52, if Orix's case had succeeded. (Yorke v Lucas at 670). Claim Against Mr Nelson 149 Mr Nelson was sued as an accessory to the alleged breaches of trust by Nelson Equipment. He was also sued as being "knowingly involved in the payment to Nelson Equipment by Orix" of the six payments made between 2 July 2001 and 11 September 2003. It was also alleged against him that he was liable for damages as a person involved in Nelson Equipment's misleading and deceptive conduct engaged in in contravention of s 52 of the Trade Practices Act. 150 I will deal first with the claim for damages under s 82 of the Trade Practices Act. By issuing its invoices to Orix, Nelson Equipment represented that it owned and would pass title to the goods purportedly sold to Orix. Mr Nelson knew that Nelson Equipment did not own the goods. It did not hold them on consignment. They were not held in Nelson Equipment's yard. Mr Nelson was told by Mr McCormick that QCE was buying the goods. He knew they were not being bought from Nelson Equipment. 151 Mr Nelson believed that QCE was using Orix's money to buy the goods. However, he did not believe that Orix would obtain title to the goods. Mr Nelson knew that the tax invoice sent to Moody Kiddell would be passed on to Orix. Mr Nelson intended Orix to think that it was buying the goods from Nelson Equipment. That is why he prepared the invoice. 152 Mr Nelson gave inconsistent and sometimes unintelligible answers to questions directed to his understanding about what title Orix was to acquire to the goods. Some of those answers sought to implicate Moody Kiddell. At one point he said that he understood that Mr McCormick had sourced equipment and that Orix was to buy it and then lease it back to him by way of a commercial hire purchase arrangement. He then denied that he anticipated that Orix would need to own the goods. I do not accept that evidence. He was aware from the sales made by Nelson Equipment between June 2001 and the end of 2003, when Orix financed the purchase, that Orix did not inspect the equipment which was being sold. He understood that the tax invoice was a critical document for the financier. He was not aware of any other documents upon which the financier would rely apart from the tax invoice, to establish ownership of the goods. He asserted a belief that Orix was getting such documents from the broker, but he could not identify what they might be. 153 I find that Mr Nelson knew that the tax invoices which he supplied to Orix represented that Nelson Equipment owned the goods which were purportedly being sold to Orix and could pass title to them. He knew that that was false. To the extent to which it may be relevant, I am also satisfied that he intended that Orix should be misled into thinking that Nelson Equipment was selling goods to which it could pass title to Orix. He said that he only prepared the invoices because he was asked to do so by Mrs Mathers. The effect of his evidence, as I understood it, was that he assumed that because the request came from Mrs Mathers, and because he had dealt with Mr McCormick for many years and regarded him as reliable, he thought that everything was above board. I do not accept his evidence of his conversations with Mrs Mathers. In my view, he sought to implicate her in order to reduce his own responsibility for the fraud practised on Orix. He was knowingly concerned in and a party to Nelson Equipment's contravention of s 52. Orix is therefore entitled to damages against him pursuant to s 82 of the Trade Practices Act. If the quantum of those damages is not agreed, I will refer their assessment to an Associate Justice. 154 Orix also claimed equitable compensation from Mr Nelson as an accessory who knowingly, or dishonestly, assisted in Nelson Equipment's breach of trust. 155 There was no fiduciary relationship between Nelson Equipment and Orix. I accept that Nelson Equipment held the purchase moneys paid to it by Orix on trust for Orix immediately it received the funds. It obtained the funds through fraud. Stolen property is trust money in the hands of the thief. (Black v S Freedman & Co (1910) 12 CLR 105 at 110). In Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 Lord Browne-Wilkinson said (at 716): " … when property is obtained by fraud equity imposes a constructive trust on the fraudulent recipient: the property is recoverable and traceable in equity. " In Robb Evans v European Bank Ltd (2004) 61 NSWLR 75, moneys obtained by fraud were deposited by the fraudster into an account with a company called Benford Ltd which the fraudster controlled. Spigelman CJ, with whom Handley and Santow JJA agreed, held that Benford Ltd held the stolen funds as trustee for the defrauded credit card holders. (At 99, [111]). His Honour said that the trust was better described as a presumed or resulting trust, rather than as a constructive trust. However the trust is classified, it arises upon the receipt by Nelson Equipment of the moneys. ( Robb Evans v European Bank Ltd at [113]-[115], 100; Westdeutsche Landesbank Girozentrale v Islington London Borough Council at 714-715). 156 Moreover, the fraud went to the heart of the contract so that Nelson Equipment received the price from Orix, but gave nothing in return such that there was a total failure of consideration for the payment of the purchase price. It is not merely the fact that the purchase price was received by Nelson Equipment by a fraudulent representation that gives rise to the trust, but the fact that Nelson Equipment gave nothing of value in return. This was explained in a judgment of the Court of Appeal of Vanuatu, (noted in 79 ALJ 600), of Barrett & Sinclair v McCormack [1999] VUCA 11. The Court, after referring to Neste Oy v Lloyds Bank plc [1983] 2 Lloyd's Rep 658, Re Goldcorp Exchange Ltd [1995] 1 AC 74, Westdeutsche Landesbank Girozentrale v Islington LBC, Cowern v Nield [1912] 2 KB 419, Stocks v Wilson [1913] 2 KB 235, and Bankers Trust Co v Shapira [1980] 1 WLR 1274, said: " The fraud here goes to the heart of the contract resulting in a total failure or absence of consideration. The appellants [scil vendor] in essence provided nothing in exchange for the respondent's money. The shares … were a scam. This amounted to theft, the taking of something for nothing in return. The taking of something without anything in return, not qualifying as a gift or some other lawful assignment, is the very basis for the imposition of constructive trusts in the above cases of Nest Oy , Cowern, Stocks and Bankers Trust . In Nest Oy , the payee received money when it knew it could not perform the contract. Likewise, the payee in Cowern provided the payer with nothing in return as the goods the payee supplied were worthless. Further, Cowern , like Stocks , are cases involving infants who could not at law contract for non-necessities. The promises of infants were not legally enforceable against them by the other party. Thus, these infants provided no consideration at the formation of executory contracts where consideration is the exchange of legally enforceable promises. There was an absence of consideration as the party contracting with the infant received nothing in exchange for its promise to provide and subsequent provision of property. The infants in Cowern and Stocks had fraudulently misrepresented their age. The fraud of the infants in Cowern and Stocks went to the heart of the contract as it concerned their ability to contract and provide consideration. In like fashion, though [the vendor] had fraudulently misrepresented the true value of the shares in an arms length vendor-purchaser transaction, their fraud went to the heart of the contract, resulting in the total failure or absence of consideration. [The vendor] was getting something for nothing. In Bankers Trust , the fraudulent parties had defrauded the bank with the use of forged cheques. Again, there was the taking of something without something in return. In every case, a proprietary remedy was appropriate. " 157 Orix contended that Nelson Equipment breached the trust on which it held the moneys received from Orix by paying the moneys to QCE. However, there is a difficulty with this submission. The payments from Orix went directly into Nelson Equipment's bank account. Not all of Nelson Equipment's relevant bank statements were in evidence. However, in relation to the second, third, fourth, fifth, and sixth transactions, Nelson Equipment's bank account was in credit when the moneys were received from Orix. The payments were subsequently made from Nelson Equipment's account to QCE. In relation to the second to sixth transactions, the payments were made to QCE by Nelson Equipment from its own moneys. There is no evidence that in respect of the first transaction, the moneys used to pay QCE were the same moneys as were credited to Nelson Equipment's bank account. There was a breach of the trust upon which Nelson Equipment received the moneys from Orix. However, it pre-dated the payment to QCE. The breach was intermingling the moneys received from Orix with its own funds. 158 No complaint was made by Mr Nelson that the breach of trust was other than that pleaded. 159 Mr Nelson knew of all of the facts which gave rise to the trust. He knew that the moneys received from Orix were paid into Nelson Equipment's own bank account and mixed with its other moneys. He also knew of the payments made to QCE. He provided assistance in the performance of those acts. He prepared, or gave instructions for the preparation of, the invoices to Orix, knowing that Orix would make payments to Nelson Equipment's bank account. Moreover, he acted dishonestly. In my view he is liable to pay equitable compensation to Orix under the second limb of the principle in Barnes v Addy (1874) LR 9 ChApp 244 at 252, as a person who assisted with knowledge in a dishonest and fraudulent design on the part of the trustee, Nelson Equipment. In Yeshiva Properties No. 1 Pty Ltd v Marshall (2005) 219 ALR 112, Bryson JA, with whom the other members of the Court of Appeal agreed, said (at 118 [22]) that: " … it is not necessary that the fraudulent scheme or purpose of the fiduciary or trustee should be fully known, or should be understood in any detail at all; the test is complied with if the known facts would communicate to a reasonable person a general understanding that there was a fraud, breach of trust or breach of fiduciary duty. " (See also Agip (Africa) Ltd v Jackson [1990] Ch 265 per Millett J at 294-295; [1991] Ch 547 per Fox LJ at 568-569). 160 The principle, as formulated by Bryson JA, and as applied by the Vanuatu Court of Appeal in Barrett v McCormack, applies not only where the third party has provided knowing or dishonest assistance to a breach of fiduciary duty, but to a breach of trust or a fraud which arises independently of a pre-existing relationship of principal and fiduciary, or trustee and beneficiary. That is to say, I accept that Mr Nelson can be liable as a third party in assisting Nelson Equipment's breach of trust, even though that trust only arose on its receipt of funds from Orix. 161 However, Orix is not entitled to receive more than its actual loss. Having regard to the agreement apparently made between Mr Nelson and Orix, it is unlikely that any judgment against him would be enforced. However, if it were enforced, and Mr Nelson restored the trust estate by repaying with interest the moneys which Nelson Equipment received and held on trust for Orix, to do equity, Orix would be required to account to him for the moneys it received from QCE by way of rental instalments. Subject to one qualification, in the circumstances of this case, Orix will be in the same position whether it recovers damages from Mr Nelson under s 82 of the Trade Practices Act 1974 (Cth), or equitable compensation for Mr Nelson's knowing assistance in Nelson Equipment's breach of trust. The qualification is that Orix may be entitled to interest at a different rate on a compounding basis under the latter cause of action. No submissions were made about this. Before judgment is entered, Orix must elect which of the remedies it wishes to pursue. It will be entitled to damages or equitable compensation from Mr Nelson in accordance with that election. If the parties are not agreed upon the appropriate quantum, I will refer the determination of quantum to an Associate Justice. Claim Against Queensland Construction Equipment Pty Ltd 162 QCE is indebted to Orix under each of the asset purchase agreements. Orix pleaded three causes of action against QCE. First, that QCE held the moneys paid to it by Nelson Equipment on trust for Orix less any principal amounts paid to Orix in respect to its hire of the equipment. This is a claim for a proprietary remedy on the basis of its knowing receipt of alleged trust moneys. Secondly, that QCE was knowingly involved in Nelson Equipment's breaches of trust in paying the moneys received from Orix to it. I take this to be a claim for equitable compensation under the second limb of Barnes v Addy (1874) LR 9 ChApp 244 at 251. Thirdly, that QCE engaged in misleading or deceptive conduct and is liable for damages for the amounts of the purchase price paid by Orix to Nelson Equipment in the six transactions less any principal payments received from QCE under the asset purchase agreements. No claim is made in the Further Amended Statement of Claim for the debt owing under the asset purchase agreements. 163 QCE has not entered an appearance in the proceedings. I was told that the company was not in liquidation. The only evidence of service was that on 23 November 2004, a copy of a summons and accompanying documents were served on QCE. The summons sought a declaration that QCE held the sum of $900,000 on trust for the plaintiff and was liable to the plaintiff for breach of trust in the sum of $900,000. 164 There is no evidence that QCE either presently, or at the commencement of the proceedings, held the sum of $900,000. There is of course evidence that between 2001 and 2003 it received substantially more than that amount from Nelson Equipment. Although the question was not the subject of argument, it appears to me that the moneys paid by Nelson Equipment to QCE were not moneys beneficially owned by Orix. The presumption is that Nelson Equipment, having mixed the moneys which it held on trust for Orix with its own moneys, used its own moneys and not those of Orix to pay QCE. Further, there is no evidence as to how QCE dealt with the funds, except that Mr McCormick gave evidence of a generalised kind that he used the moneys received from numerous financiers, not only Orix, obtained by the same fraudulent means, to pay the instalments on his existing credit contracts. Therefore, insofar as there is any evidence on the topic, I would infer that QCE disbursed the moneys it received from Nelson Equipment. If it did not, it is probable that it mixed the moneys with its own funds and with other moneys fraudulently obtained through Nelson Equipment, which in turn had received them from other financiers who had been similarly duped. There is no basis for finding that QCE holds any sum on trust for Orix. 165 It would not be appropriate to decide the claims pleaded against QCE in the Further Amended Statement of Claim where there is no evidence that that pleading has been served on QCE. Moreover, whilst the evidence does not show that QCE holds or held a sum of $900,000 on trust for Orix, there are strong grounds for Orix being entitled to a personal remedy against QCE for equitable compensation in respect of QCE's assistance in Nelson Equipment's breach of trust. It appears to me that such a claim would fall within the ambit of the summons served on QCE. Even so, it would be unjust to Orix to enter judgment for it in an amount of $900,000. I infer that it was only after the service of the summons on 25 November 2004, that Orix identified the extent of the frauds practised on it. To enter judgment for Orix for equitable compensation for $900,000 may preclude Orix from proving for a higher sum in a liquidation of QCE. 166 Accordingly, I will adjourn Orix's claim against QCE. If it wishes to pursue its claims and serve the Further Amended Statement of Claim on QCE, and if, as it is likely, there is no appearance by QCE, I will then deal with its claim for default judgment. Moody Kiddell's Cross-Claim 167 Moody Kiddell sues for breach of the agreement between it and Orix for the payment of trailer commission. Under the agreement of 1 June 2000, Orix agreed to pay commission at the rate of 0.2% per annum of the principal outstanding balance of all qualifying contracts at month end. Commission was to be calculated at monthly intervals and be paid quarterly. If a contract was more than thirty days in arrears at month's end, and the arrears amount was $50 or more, the contract ceased to qualify for commission for that month whilst the contract was in arrears. Orix was entitled to terminate the agreement on thirty days' notice, but remained liable to pay commission in respect of all contracts settled whilst the scheme was in place. 168 Commission (called trailing commission) was paid by Orix to Moody Kiddell under that agreement from June 2000 to 31 August 2004. Mr McCormick's frauds were discovered on or about 24 September 2004. Thereafter, Orix ceased to pay any further moneys under the agreement of 1 June 2000. As at 1 September 2004, there were hundreds of contracts in respect of which Moody Kiddell was entitled to trailing commission under the agreement of 1 June 2000. By its cross-claim filed on 18 February 2005, Moody Kiddell pleaded that Orix breached the agreement of 1 June 2000 by failing to make any payments after 31 August 2004 and elected to terminate the contract. It claims that Orix's failure to make any payments in respect of any of the contracts in respect of which trailing commission is payable is a fundamental breach of contract, and a repudiation of it. 169 In its defence to the cross-claim, Orix admits that it has breached the agreement of 1 June 2000, but denies that the breach is such as entitled Moody Kiddell to terminate the contract. In respect of the six transactions which are the subject of the proceedings, Orix pleads that no commission was payable because no deal was settled. It admits that Moody Kiddell is entitled to trailer commission in respect of all other qualifying transactions. It claims to be entitled to set off the trailer commission to Moody Kiddell in respect of the six transactions against the amount owed by it to Moody Kiddell under the agreement. The determination of the quantum of that debt has been deferred. For the reasons which I have previously given, Orix is not entitled to recover the trailer commission paid in respect of those transactions and is not entitled to any set-off. Moody Kiddell is not entitled to any further trailer commissions in respect of those transactions after QCE stopped paying the rental instalments. However, as I understand its pleading, it does not claim to be so entitled. 170 Orix's failure to pay any trailing commission from 31 August 2004 is not only a breach of the agreement of 1 June 2000. It is a fundamental breach of the agreement which evinces an intention not to be bound by the contract. (Shevill v Builders Licensing Board (1982) 149 CLR 620 at 625-626; Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 33 and 40; Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 634, 643, 664). 171 Moody Kiddell was entitled to accept Orix's repudiation of the agreement and terminate it. It has done so. It is entitled to recover as a debt the commission which had become payable prior to its termination of the contract. It is entitled to damages representing the value, of its loss of bargain at the date of termination of the contract, of its loss of future commission. It will be entitled to interest up to judgment on those amounts at the prescribed rate. 172 I was concerned that the payment of trailer commission may have been kept secret from Orix's principal, QCE. However, I accept that it would be inappropriate to refuse Moody Kiddell's claim on this ground. Moody Kiddell may have been able to show that appropriate disclosure of the trailer commission was made had the issue been raised in a defence to cross-claim. 173 Moody Kiddell is entitled to judgment for the amount of commission payable prior to its termination of the contract which was unpaid, and to damages in an amount to be assessed. If there is no agreement on the quantum of those figures, I will refer the determination of the quantum of the debt and damages to an Associate Justice. Conclusion and Orders 174 The claims against Nelson Equipment and against Mr and Mrs McCormick are stayed by virtue of their liquidation and bankruptcy. Claims brought by Orix against Mr Moody and ASSCO were discontinued. 175 I make the following orders: 1. Direct that judgment be entered for the first and second defendants on the plaintiff's claim; 2. Order that the plaintiff pay the first and second defendants' costs of the proceedings; 3. Direct that within 21 days, the plaintiff, by letter to my associate and to the fifth defendant, elect between having judgment against the fifth defendant for damages pursuant to s 82 of the Trade Practices Act, 1974 (Cth) or equitable compensation; 4. Direct that judgment be entered for the plaintiff against the fifth defendant in an amount to be assessed in accordance with its election; 5. Refer the assessment of the quantum of damages or equitable compensation, and interest, payable by the fifth defendant to the plaintiff to an Associate Justice for determination; 6. Order the fifth defendant pay the plaintiff's costs of the proceedings so far as they concerned the claims against him; 7. Adjourn the further hearing of the claims against the eighth defendant to a date to be fixed; 8. Grant liberty to the plaintiff on seven days' notice to relist the proceedings against the eighth defendant; 9. Direct that judgment be entered for the cross-claimant to the First Cross-Claim (Moody Kiddell & Partners Pty Ltd) against the cross-defendant (Orix Australia Corporation Ltd) for an amount of debt and damages to be assessed together with interest at the prescribed rate; 10. Refer the assessment of the quantum of the debt, damages and interest payable by the cross-defendant to an Associate Justice for determination; 11. Order that the cross-defendant pay the cross-claimant's costs of the first cross-claim; 12. Direct that any affidavits to be relied upon by the plaintiff in relation to the assessment of damages or equitable compensation payable by the fifth defendant, be filed and served by 18 January, 2006; 13. Direct that any affidavits to be relied upon by the cross-claimant in relation to the assessment of debt and damages payable by the cross-defendant be filed and served by 18 January, 2006; 14. Direct that any affidavits to be relied upon by the fifth defendant or the cross-defendant in relation to the assessment of the quantum of damages, equitable compensation or debt, be filed and served by 10 February, 2006; 15. Stand over the proceedings to the Registrar's list on 16 February, 2006; 16. Direct that within 7 days the parties' solicitors return to my associate all copies and notes of the contents of documents produced on subpoena by the Director-General of Corrective Services of Queensland. 17. Exhibits may be returned after 28 days; and 18. Grant liberty to the parties to apply on 3 days' notice in the event they reach agreement upon the quantum of the amounts for which judgment should be entered pursuant to the reasons for judgment. ****** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.