Raised by a solo dad in tight financial circumstances, Elijah Taylor made it in the tough professional arena of rugby league playing for the Kiwis and NRL teams: Warriors, Penrith and West Tigers. Former bankrupt Ian Miles preyed on his financial naivety to rip him off misappropriating some $440,000. When sued, Miles bankrupted himself again in a doomed attempt to escape the financial consequences.
It was only through determined detective work by Elijah’s wife Poko that the fraud was discovered. Professional firms came to his aid: Accounting firm Deloitte tracked down the extent of the fraud at no cost; lawyers worked for a reduced fee.
The High Court was told Elijah made his first grade debut with the Warriors in 2011. Whilst on a base salary of $70,000, a new contract offer was made at some $200,000 a season. His then agent recommended he accept. Miles was in the background. He had been offering mental skills coaching to members of the wider Warriors’ squad. On Miles recommendation, Elijah turned down the offer, later appointing Miles as his agent because he thought he would ‘do a great job’ in getting a better offer. By late 2011, Miles was acting as his sports agent.
The NRL requires all player/sports agent contracts to include standard terms, a requirement intended to curb exploitation of players. Elijah signed a standard contract. It allowed Mills to receive seven per cent of his cash salary (the norm in the NRL), but Miles suggested he be given signing authority on Elijah’s bank accounts (which is not the norm). Within three months, Miles was making unauthorised withdrawals. Two years later, Miles had Elijah sign a second athlete/manager contract having five per cent of cash salary going to a company controlled by Miles. While Elijah though he was now paying only five per cent, Miles took commissions stated in the combined contracts: twelve per cent of salary. The High Court was to later rule this 2013 contract unenforceable as an unconscionable bargain arising from Miles undue influence over his client. Elijah never read the 2013 contract nor got independent advice; he signed when told.
This 2013 contract was signed at a time when Elijah joined the Panthers on a A$360,000 annual salary. As had happened in New Zealand, Miles ensured he had access to Elijah’s Australian bank accounts including a credit card operating off Elijah’s account.
The High Court was told that over a three year period Miles actioned over one thousand unauthorised transactions on Elijah’s bank accounts both in New Zealand and Australia. He supressed these misappropriations by having bank and credit card statements sent to his home address in Christchurch. Any liquidity difficulties were explained to Elijah as excessive credit card spending by his wife Poko. Annoyed and frustrated by these insinuations, Poko unearthed details of Miles’ internet banking authorisation, changing the delivery address for their bank and credit card statements to have them delivered to their Sydney home. The fraud was quickly exposed.
With the benefit of Deloitte’s forensic accounting work, Elijah sued in the High Court. Miles immediately filed for bankruptcy. After an undefended hearing, Justice Doogue ruled the 2013 contract void and ordered Miles pay $A340,000 plus NZ$42,900.
The general bankruptcy rule is that court judgments are unsecured debts, forming part of any bankruptcy. Debts arising from fraud are an exception. These debts survive bankruptcy and can be enforced after a bankrupt’s discharge. Justice Doogue highlighted that her High Court order against Miles was based on a claim for fraud.
Taylor v. Miles – High Court (17.12.20)
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