Dual Australia founder Damien Coates says Josie Gonzalez pushed forward proposals to use a legal firm associated with her husband at meetings to discuss her employment, despite it not being “on the table”.

Mr Coates said Gonzalez presented a plan for a “one stop shop” for claims management and legal services at a second meeting at Melbourne’s InterContinental Hotel in 2010, although he had told her that claims management was the priority.

“She kept making the proposal because it was going to suit her needs,” he told a County Court trial today.

Among the suggestions raised was one for Dual to invest in the firm.

“The only thing that was on the table was to join Dual as an employee,” Mr Coates told the jury.

The prosecution this morning continued to present its case against Josie and Alvaro Gonzalez, who have each pleaded not guilty to 14 charges of obtaining a financial advantage by deception. 

It’s alleged that Dual was defrauded of $17.4 million as a result of more than 400 false invoices for legal services in a period extending a little more than two years from March 2011.

The in-house claims system established with the assistance of Gonzalez started in March 2011 and the first invoices from their legal firm Jaag Lawyers were received that month.

The court heard that Josie Gonzalez had said Jaag’s invoices related to counsel fees and should be entered into the system in that way, instead of using the firm’s name.

But Mr Coates said counsel fees were typically included on the invoices of the solicitor firms that appointed them, and Jaag was never on Dual’s legal panel.

He agreed under cross-examination that Dual did not have a formal tender process for appointing panel lawyers at that time, and there was a more ad hoc approval process involving him and the insurers.

But Mr Coates rejected defence counsel suggestions that he had heard of Jaag Lawyers before the alleged fraud was uncovered, and had agreed to use a firm associated with Josie and Alvaro Gonzalez.

“There was no agreement outside the employment agreement,” he said. “I am not lying.”

Mr Coates last week told the court that Gonzalez was “exceptional at her job” when handling Dual claims while she was employed by Proclaim. Her work ethic was outstanding, staff enjoyed working with her and she had become “part of the Dual family” before her formal employment.

“We were excited about her joining,” he said.

The trial is continuing. Click here and here for our previous coverage.

By Wendy Pugh, at the County Court of Victoria