Commonwealth Bank of Australia v Mohamad Saleh & Ors [2007] NSWSC 903

Commonwealth Bank of Australia v Mohamad Saleh & Ors [2007] NSWSC 903

The Court found that the plaintiff was deceived through a complex fraud perpetrated by various defendants, including Mr Edge and Mr Qureshi, who knowingly participated by preparing and presenting false documents. The $7 million advanced by the plaintiff was immediately impressed with a constructive trust for its benefit. None of the defendants into whose hands the funds passed proved themselves bona fide purchasers for value without notice, and equitable tracing applied. The Bank was therefore entitled to declarations of beneficial ownership and tracing orders against all recipients, compensatory damages equal to remaining losses, and exemplary damages against the primary fraud...

Parties
Plaintiff: Commonwealth Bank of Australia; First Defendant: Mohamad Saleh; Second Defendant: Neil Petts; Third Defendant: Zia Ul-Islam Qureshi; Fourth Defendant: Australia and New Zealand Banking Group; Fifth Defendant: Hassanien Saleh; Sixth Defendant: Perpetual Trustees Australia Limited; Eighth Defendant: Quaid Real Estate Pty Limited; Tenth Defendant: William Lowe Edge; Eleventh Defendant: Qureshi & Associates; Twelfth Defendant: Abdullah Saleh; Thirteenth Defendant: Faowzi Saleh; Fourteenth Defendant: Khadige Saleh; Sixteenth Defendant: Fatima Saleh
Jurisdiction
Australia
Judgment Date
28 August 2007
Procedural Posture
Civil / Final Judgment After Full Trial, Reasons With Orders and Directions for Short Minutes
Outcome
Judgment for the plaintiff; declarations and orders to be brought in by short minutes; damages and exemplary damages awarded as specified, subject to detailed quantification.
Legal Topics
Fraud, Receipt and Tracing of Proceeds, Misleading and Deceptive Conduct, Restitution and Unjust Enrichment, Negligent Misstatement, Constructive Trusts, Conspiracy to Defraud, Exemplary Damages
Equity Banking and Finance Commercial Law Fraud Receipt and Tracing of Proceeds Misleading and Deceptive Conduct Restitution and Unjust Enrichment Negligent Misstatement +3 more

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Parties

Commonwealth Bank of Australia

Plaintiff

Mohamad Saleh

First Defendant

Neil Petts

Second Defendant

Zia Ul-Islam Qureshi

Third Defendant

Australia and New Zealand Banking Group

Fourth Defendant

Hassanien Saleh

Fifth Defendant

Perpetual Trustees Australia Limited

Sixth Defendant

Quaid Real Estate Pty Limited

Eighth Defendant

William Lowe Edge

Tenth Defendant

Qureshi & Associates

Eleventh Defendant

Abdullah Saleh

Twelfth Defendant

Faowzi Saleh

Thirteenth Defendant

Khadige Saleh

Fourteenth Defendant

Fatima Saleh

Sixteenth Defendant

Procedural Posture

Civil / Final Judgment After Full Trial, Reasons With Orders and Directions for Short Minutes

Legal Issues

  1. 1 Whether the defendants fraudulently induced the plaintiff to advance $7 million for a receivables finance facility;
  2. 2 Whether the funds advanced were immediately impressed with a constructive trust in favour of the plaintiff;
  3. 3 Whether the plaintiff can trace the misappropriated funds into the hands of the defendants;

Ratio Decidendi

The Court found that the plaintiff was deceived through a complex fraud perpetrated by various defendants, including Mr Edge and Mr Qureshi, who knowingly participated by preparing and presenting false documents. The $7 million advanced by the plaintiff was immediately impressed with a constructive trust for its benefit. None of the defendants into whose hands the funds passed proved themselves bona fide purchasers for value without notice, and equitable tracing applied. The Bank was therefore entitled to declarations of beneficial ownership and tracing orders against all recipients, compensatory damages equal to remaining losses, and exemplary damages against the primary fraud...

Court Disposition

Judgment for the plaintiff; declarations and orders to be brought in by short minutes; damages and exemplary damages awarded as specified, subject to detailed quantification.

Orders

  • Declaration that the plaintiff has at all times been the beneficial owner of various traced funds as identified in bank accounts of the named defendants and third parties.
  • Orders directing banks and other recipients (including ANZ, Perpetual Trustees, Quaid Real Estate, Biady & Associates) to pay specified traced sums to the plaintiff.