Case: Prentice v Cummins [2002] FCA 1503 ; 124 FCR 67
Outcome: cited
The question that I am considering at this stage is whether there is presently no evidence at all to support the case of deceit against Mr Flammia or, alternatively, whether such evidence as there is of deceit is so inherently unreliable or equivocal that the Court should be satisfied that Colonial has not discharged the relevant burden of proof ( Prentice v Cummins [2002] FCA 1503 ; (2002) 124 FCR 67 at [109] ). Since the only issue in the cross-claim is whether Colonial's claim arose out of dishonest or fraudulent acts or omissions on the part of Mr Flammia, a similar question arises in relation to LawCover's defence to Mr Flammia's cross-claim. 9 When the proceeding was commenced by Colonial, Mr William Anastasiadis, a director of Alliance, was joined as second respondent in the proceeding. However, a compromise was subsequently reached between Colonial and Mr Anastasiadis and it is therefore not necessary to deal with the allegations that have been made by Colonial against him, except in so far as they are material to the question of whether Mr Flammia has a case to answer in deceit. 10 Mr Flammia conducted his practice as a solicitor under the name Manna &amp; Flammia from an office in Castlereagh Street, Penrith, New South Wales. On 11 October 2001, Mr Flammia wrote to Colonial on his firm's letterhead. The letter was addressed to Colonial at an address in Parramatta. The letter was entitled " STANLEY STEVENS: MEMBER No TRAC353913 "; that was the membership number of Mr Stanley Gordon Stevens in the SuperTrace Fund. The letter said: "We note we act for Mr Stevens. We are instructed to withdraw our client's superannuation from the fund as he has retired and is no longer working. Please find enclosed signed ETP form and client's authority. Please forward a cheque in favour of ' Manna &amp; Flammia Solicitors Trust Account' in the sum of $449,025.01 as soon as possible. Should you have any queries please contact the writer." The letter was received by Colonial on 15 October 2001. Three documents were enclosed with the letter. 11 The first document was a copy of a letter dated 2 October 2001 purporting to be written by Stanley G. Stevens to Mr Flammia. The letter stated the following address for Mr Stevens: "18 Abercombe St Warrnambool 3280 PO Box 399 VIC" The letter said as follows: "As I intend to move to Sydney permanently to live in the near future I would like to appoint you as my legal representative. You are hereby authorised and instructed to act on my behalf finalising my superannuation fund. All monies is [sic] to be paid directly into your trust account and held there until further instructed by me. The details of my ETP will be faxed to you together with this authority letter. Should you need to discuss this matter with me you can contact me on my mobile number which is 0412-427-400. I would greatly appreciate all correspondence regarding this matter to be held by yourself as I am currently moving around Australia with work. Thanking you for your support in this matter." While the post office box stated in letter of 2 October 2001 was correct for Mr Stanley Gordon Stevens, the street address was fictitious. Further, at all relevant times during 2001 and 2002, mobile number 0412 427 400 (the Bogus Stevens Number) was held in the name of Ms Helen Oliver of Coorparoo, Queensland. Mr Stanley Gordon Stevens had no connection with the number. The letter of 2 October 2001 was purportedly signed by Mr S.G. Stevens. The signature was a forgery. Significantly, the signature had an apostrophe between the " n " and the final " s " of the name Stevens. 12 The second document was headed " ETP Pre-Payment Statement - Superannuation Payer ". That document contained relevant particulars of Mr Stanley G. Stevens, including the post office box at Warrnambool. Details of the eligible termination payment to which Mr Stevens was entitled, calculated to 13 September 2001, were inserted in the appropriate spaces in the document. The amount was $449,025.01. 13 The third document was entitled " Individual's Payment Instructions to the Superannuation Payer ". That form was completed in typescript with details of the name of Mr Stanley G. Stevens and his date of birth. Particulars of Mr Flammia's firm and its address were inserted in handwriting in the spaces for the name of an agent. The amount of $449,025.01 was inserted in handwriting in the appropriate space for the amount of the payment requested. The document was purportedly signed by Mr S.G. Stevens. Again, the signature had an apostrophe between the " n " and the final " s " of the name Stevens. The signature was a forgery. 14 In fact, Mr Stanley Gordon Stevens had given no instructions to Manna &amp; Flammia to withdraw his entitlement to superannuation from the SuperTrace Fund. He knew nothing of Manna &amp; Flammia. 15 On 18 October 2001, Mr Flammia telephoned Colonial's office. He was told that his letter of 11 October 2001 had been received and that it would be fifteen to twenty working days before the matter would be finalised. 27 The third document (the St George Authority) was a single sheet containing the following handwriting: "Attention: Narrelle: St George Bank Manager I Stanley G. Stevens authorise my legal representative to deposit my Commonwealth Bank cheque for the sum of $438,802.80 into the Manna + Flammia Trust Account. Thank you. Regards." Underneath that handwriting appeared another purported signature of S.G. Stevens. Once again, an apostrophe appears between the " n " and the final " s ". That signature was a forgery. Underneath the signature was a further copy of the New South Wales driver's licence that was contained in the 30 October Certificate. It is apparent from the markings on that copy that it was a photocopy of the copy that appears in the 30 October Certificate. 28 On 16 November 2001, the bank cheque was deposited for credit to the trust account with St George Bank of Manna &amp; Flammia. 29 As at November 2001, Mr Anastasiadis was a director of Alliance. Mr Anastasiadis was the sole signatory on the account of Alliance with the St Mary's branch of Westpac. About a week prior to 19 November 2001, Mr Anastasiadis spoke to Ms Suzanne Margaret Richardson, who was the manager of the St Marys branch of Westpac. Mr Anastasiadis wanted to know what procedures had to be taken to withdraw an amount of cash in the vicinity of $400,000. Ms Richardson offered to provide him with a bank cheque free of charge in lieu of cash but Mr Anastasiadis said he wanted cash. Ms Richardson told him that the funds he wanted to draw on had to be cleared funds and that he would have to give at least 48 hours notice of the withdrawal. 52 The statutory declaration is a typed document and purports to be a declaration made by S.G. Stevens before Mr Flammia at Penrith on 12 October 2001. The terms of the declaration are as follows: "I, Stanley. G. Stevens of PO Box 399 Warrnambool VIC 3280 in the State of Victoria 3280 do hereby solemnly declare and affirm that: I have ceased working and am now officially retired. And have been since January 2001." It covers two pages, each of which is purportedly signed by Stanley G. Stevens. Once again, there is an apostrophe between the " n " and the final " s " of Stevens. The signatures are forgeries. 53 The letter of 13 November 2001 is headed in the same way as the letter of 2 October 2001 and is as follows: "Please deposit my superannuation funds from Colonial in the sum of $438,802.80 into your trust account until further notice. I shall endorse the bank cheque so that you may deposit it without delay. I understand your fees will be for $2,000 for acting for me in this matter and appreciate your assistance. Should you need to discuss anything further with me please contact me on my mobile, 0412 427 400." The letter purports to have been sent from Victoria, in so far as the Warrnambool address and PO Box 399 Victoria are on the letter. Once again, the signature that appears on the letter of 13 November 2001 has an apostrophe between the " n " and the final " s " of Stevens. The signature is a forgery. 54 It is significant that the letter of 13 November 2001 states the precise amount of the cheque that was received from Colonial on 14 November 2001. The letter has a date stamp of 14 November 2001 on it, similar to the date stamp on the original of the letter of 8 November 2001 from Colonial. There is no evidence that Mr Flammia was informed of the amount of the cheque before it was received by him. That suggests that the letter was not brought into existence until 14 November 2001 at the earliest and that Mr Flammia must have known that it was not sent by Mr Stevens from Victoria on 13 November 2001. 56 The file contains a copy of a third letter purporting to come from Stanley G. Stevens, dated 19 November 2001. The letter has the same address for Mr Stevens and is addressed in the same way to Manna &amp; Flammia. It is in the following terms: "I refer to our telephone discussion this morning and I hereby by authorise and direct you to draw the funds held in your trust account on my behalf. Less your fees, in favour of Alliance Property Investments Pty Ltd. I shall arrange for a courier to collect the cheque later in the day. Should you have any further queries please contact me on my mobile number." The letter is date stamped 20 November 2001. There is an emphatic apostrophe between the n and the final s of Stevens. The signature is a forgery. 57 Mr Flammia's file also contains two handwritten notes. The first is in the following terms: " approx 30 mins, 12/10 Conf. Mr Stevens - rec comprehensive instr. - produced ID - signed Stat Dec" The second is as follows: " 19/11 Mr Stevens rang He said to draw funds less our costs to 'Alliance Property Investments A/C' Cheque will be collected after 2 pm today. Told client to confirm in writing for our records." There is no record of the comprehensive instructions that the first note sates were received. The brevity of the second note is remarkable having regard to its contents. It is anomalous that Mr Flammia did not ask for full written instructions from a new client before undertaking the steps that he took in relation to such a large some of money. The inference is open that both notes were brought into existence to add verisimilitude to an otherwise totally unconvincing narrative. 58 Mr Flammia would have to have been extraordinarily na&iuml;ve to believe that he had been chosen at random to withdraw such a large sum of money and then pay it to a company dealing with real estate, without some explanation. He drew a cheque for the bulk of the funds without any further communication from his client. There was no telephone communication between Mr Flammia and the telephone number purportedly given by Mr Stevens at that time. There is nothing on Mr Flammia's file to explain such extraordinary actions.