Glynis Carrier v John Georges & Anor [2013] NSWSC 401

Supreme Court New South Wales

Medium Neutral Citation: Glynis Carrier v John Georges & Anor [2013] NSWSC 401 Hearing dates: 27.02.13, 28.02.13, 26.03.13 Decision date: 24 April 2013 Before: Nicholas J Decision: Par 52 Catchwords: CONTRACT - duress - allegation of employee's fraud - whether employer threatened to inform police - whether express or implied contract not to prosecute - reliance on spoken words - burden of proof - whether evidence sufficient to establish duress - turns on facts - no question of principle Cases Cited: Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 Mirror Newspapers Ltd v Harrison [1982] HCA 50; (1982) 149 CLR 293 Scolio Pty Ltd v Cote (1992) Aust Contract Reports 90-013 Watson v Foxman (1995) 49 NSWLR 315 Category: Principal judgment Parties: Glynis Carrier - plaintiff John Georges - first defendant Koala Clothing Australia Pty Ltd - second defendant Representation: Counsel: G Foster - plaintiff M Condon SC/P Wallis - defendants Solicitors: Valenti & Valenti - plaintiff Price & Company - defendants File Number(s): 12/126286

Judgment 1By her second amended statement of claim filed 28 February 2013 the plaintiff claims from the defendants the sum of $240,000 as money had and received by the defendants as money paid to them under duress. The plaintiff alleges that the payment was induced by illegitimate pressure resulting from the threat by the first defendant (Georges) to the effect that if the payment was made to the account of the second defendant he would not have her brother, Mr Derek Wales (Derek), charged for stealing money from the second defendant. 2In the alternative, the plaintiff claimed recovery of the sum by way of restitution on the ground that the defendants had received payment of the sum of $521,986.62 from National Australia Bank (NAB) as compensation for the loss of the money stolen by Derek so that retention of the sum paid by her was unconscionable. However, during final submissions this claim was abandoned (T p 140). 3The claim which proceeded was pleaded in the second amended statement of claim as follows: "5. On or about the 20 May, 2009, a the 1st Defendant contacted the Plaintiff and advised her that the said DW had stolen approximately $237,000.000 from the 2nd Defendant; b the 1st Defendant threatened to report DW to the police and have DW charged; c the Plaintiff held the opinion that, should DW be charged, he would be most likely to go to gaol and might not survive, and so the Plaintiff advised the 1st Defendant she would try and see what she could do to remedy the situation in fear that, without such payment, DW would be charged and would go to gaol and might not survive; d the Plaintiff raised $240,000.00 and advised the 1st Defendant of same; e the 1st Defendant agreed not to have DW charged should $240,000.00 be paid into the account of the 2nd Defendant by the close of business of the following Friday, 22 May; f $120,000.000, being part of the said funds, were deposited into the account of the 2nd Defendant; g At all material times the Plaintiff cared for and deeply loved DW as her brother, that she found herself bound to do anything in her power to save him from Gaol." 4The claim is denied. Although it is accepted the plaintiff paid the amount to the second defendant, the defendants deny any threat to refer Derek to the police. They assert that the payment was made on behalf of her brother as repayment of the monies stolen by him. 5In summary, the plaintiff claims that in a telephone conversation on 20 May 2009 Georges informed her that Derek, then employed by the second defendant as an accountant, had stolen about $237,000.00 from the second defendant. She alleges that he told her that he would have no choice but to have Derek charged. She alleges that after that conversation she discussed the matter with her husband and they decided to pay from their joint account the sum of $240,000.00 to the second defendant. She then had a second telephone conversation with Georges in which she told him the payment would be made, whereupon he thanked her and provided details of the second defendant's bank account. On 20 May 2009 the plaintiff paid the amount of $120,000.00 to the second defendant's account, and on 21 May 2009 she made a further payment of $120,000.00. The plaintiff claims that Georges' statements coerced her to make the payments to procure his agreement not to refer the theft to police and/or to have Derek charged. 6The plaintiff and Georges gave conflicting versions of the conversations. It will be necessary to evaluate the reliability of each as a witness. In doing so, it is important to keep in mind that the relevant events took place over three and a half years ago, and that neither kept a contemporaneous diary note or other record. The evaluation of their evidence of the conversations requires an understanding of the events which preceded them, the circumstances in which they took place, and subsequent events. 7The following background matters were not controversial, and in any event, there was ample evidence of them. 8The plaintiff, a nurse, is the wife of Mr Miles Carrier, an airline pilot. She has a sister, Loretta Wales (Loretta), and a brother, Edward Wales (Edward). Her other brother, Derek, died on 4 August 2010. There was a close family relationship between them. 9The plaintiff and Loretta were aware that in about 2000 Derek had been convicted of stealing a large amount of money whilst working as an accountant in Sydney, and was sentenced to a period of detention. 10Georges is the director of the second defendant which carries on business in the clothing industry. In about 2002 he arranged for Derek to be employed by the second defendant in charge of its accounting, banking, and bookkeeping requirements. At all material times he was ignorant of Derek's prior criminal history, and Derek never disclosed it to him. The second defendant banked with NAB and St George Bank. Georges, the plaintiff, and Loretta have known each other for some years and have had a friendly relationship. In particular, Loretta, Georges and his wife met frequently on social occasions and developed a close relationship. 11In about mid May 2009 Georges was informed by an officer of NAB of the unauthorised withdrawals by Derek of substantial amounts from the second defendant's bank account. Some days later, after receiving further details from NAB, Georges confronted Derek about the thefts. He confessed to taking $237,000.00. 12On 20 May 2009, Georges had a telephone conversation with Loretta, and two telephone conversations with the plaintiff. Later that day the plaintiff deposited the sum of $120,000.00 into the second defendant's account with St George Bank. On 21 May 2009 she deposited a further sum of $120,000.00 into that account. 13On 22 May 2009 the plaintiff sent an email to the defendants in the following terms: "As per telephone discussion with you, I have deposited to Koala Clothing (John and Doreen Gorges [sic]) the sum of $120,000.00 (one hundred and twenty thousand dollars) on 20 May 2009 and $120,000.00 (one hundred and twenty thousand dollars) on 21 May 209 [sic] on behalf of my brother Derek Wales." 14On 2 September 2009 Georges reported Derek's fraud to the police at Marrickville Police Station. 15On 11 December 2009 Derek was arrested and interviewed by Detective Senior Constable Waugh. The ERISP transcript records that he had not disclosed to Georges his criminal history. He was charged on account of obtaining money by deception, and was released on bail. 16On 1 March 2010 the plaintiff sent to DSC Waugh by fax details of the payments made to the second defendant on 20 and 21 May 2009. 17On 4 March 2010 Derek was sentenced to a term of imprisonment at Kogarah Local Court. 18On about 9 March 2010 the second defendant and NAB agreed to settle the claims arising from Derek's fraudulent misappropriations by the payment to the second defendant of the sum of $523,000.00. 19On 7 June 2010 the District Court heard Derek's appeal and confirmed the sentence. The facts sheet dated 3 June 2010 prepared for the court recorded that Derek misappropriated from the second defendant's account with NAB the total amount of $521,980.62. It also recorded the following: "44 ... The accuseds' [sic] sister has paid $240,000.00 to the victim, John Georges in 2009 to compensate for loss of money taken. The victim has also been paid by the NAB compensation for the full amount of $521,980.62. Police are seeking compensation on behalf of the National Australia Bank in the amount of $281,980.62 being the total amount less the $240K given to Georges by Mr WALES' sister ..." 20On 4 August 2010 Derek died. 21By letter of 31 August 2010 to the second defendant the plaintiff's solicitor advised as follows: "We act for the abovenamed who are the sister and brother in law of the late Mr Derek Wales. We also acted for Mr Wales in relation to his sentencing in the District court. In sentencing Mr Wales, the Court made a finding of fact that the sister of Mr Wales, Glynis Carrier had restituted [sic] the sum of $240,000.00 to you. We understand that in addition to this $240,000.00, you have been further reimbursed for the whole amount by the National Australia Bank. Accordingly, you have been overpaid. Please refund the sum of $240,000.00 to us on behalf of our client within 10 days from the date hereof." 22On 20 April 2012 the statement of claim was filed.