King v Adams

[2017] NSWCA 277

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:	King v Adams & Ors [2017] NSWCA 277
Hearing dates:	24 August 2017
Decision date:	06 November 2017
Before:	Gleeson JA at [1] White JA at [2]; Emmett AJA at [56]
Decision:	1. Appeal dismissed.  2. Appellant pay the costs of the first and third to fifteenth respondents.
Catchwords:	EQUITY – Trusts – winning lottery syndicate arranged by first respondent – whether appellant was a member of the winning syndicate – no error in primary judge’s finding that appellant was not a member   EQUITY – Tracing – whether moneys of another syndicate of which appellant was a member were used in purchase of winning ticket – no error in primary judge’s finding that the only moneys used were moneys collected from members of the winning syndicate – no question of principle
Cases Cited:	Brendan Wilfred King v Robert Lawrence Adams and 14 Ors [2016] NSWSC 1798 Byrnes v Kendle (2011) 243 CLR 253; [2011] HCA 26 Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 Legal Services Board v Gillespie-Jones (2013) 249 CLR 493; [2013] HCA 35
Category:	Principal judgment
Parties:	Brendan Wilfred King (Appellant) Robert Lawrence Adams (1st Respondent) Matthew John Adams (3rd Respondent) Bradley Robert Adams (4th Respondent) Silvestre Gavina Mico (5th Respondent) Peter Andres (6th Respondent) Davendra Singh (7th Respondent) Robert Eric Beaver (8th Respondent ) Sean Cheak (9th Respondent) Peter Salendra Prasad (10th Respondent) Robert Griffiths (11th Respondent) Hassan Hashim (12th Respondent) Phongsavath Sengchangsavang (13th Respondent) Quem Singue Lai (14th Respondent) Viengxay Thattamanivong (15th Respondent)
Representation:	Counsel: L V Gyles SC with I C McMeniman (Appellant) N C Hutley SC with W A D Edwards (1st; 3rd – 15th Respondents)   Solicitors: Shine Lawyers (Appellant) Harris Friedman (1st; 3rd – 15th Respondents)
File Number(s):	2017/81905
Decision under appeal	Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Division Citation: [2016] NSWSC 1798; [2017] NSWSC 117 Date of Decision: 14 December 2016 Before: Sackar J File Number(s): 2016/152625

Judgment

1. GLEESON JA: I agree with White JA.

2. WHITE JA:   This is an appeal from orders of the Equity Division (Sackar J) made on 24 February 2017 dismissing the proceedings and giving judgment for the first and third to 15th defendants on the plaintiff’s further amended statement of claim (Brendan Wilfred King v Robert Lawrence Adams and 14 Ors [2016] NSWSC 1798). The dispute is whether the appellant, Mr King, was a member of a syndicate that won a lottery prize of $40,445,165.25. The winning ticket was purchased on 4 May 2016 in Powerball Draw 1042. The ticket was drawn on 5 May 2016.

3. Mr King was the plaintiff below. He was employed as a Production Manager at Prysmian Group Pty Ltd (“Prysmian”) at its factory in Liverpool. Prysmian is a cable manufacturer.

4. The first, third and fifth to 15th respondents were also employees of Prysmian. The first respondent, Mr Adams, organised and conducted syndicates for the purchase of lottery tickets. The New South Wales Lotteries Corporation Pty Ltd was a defendant in the proceedings below. It played a submitting role in the proceedings. It was also named as a respondent in the appeal. By consent, the appeal was discontinued against it.

5. Mr King does not dispute that the first and the third to 15th respondents were members of the winning syndicate. He contends that he was also a member. The primary judge rejected that claim.

Background

6. Mr Adams was an inveterate organiser of lottery syndicates. Prior to January 2016 he ran a syndicate comprising about 20 members and had done so for the previous 10 to 15 years. At any given time there was a group or syndicate of about 20 men who contributed on a weekly basis. Mr Adams described this as the “Core Group”. Mr King was a member of the Core Group. Mr Adams also ran other syndicates on a one-off basis.

7. By late 2015 Mr Adams was tired of running the Core Group. He was tired of chasing people for small amounts of money. He closed the Core Group by early January 2016. He started another syndicate which began in March 2016 which had 12 members. They were himself, his son Bradley (the fourth respondent, who was not employed by Prysmian) and 10 other Prysmian employees, including another son, Matthew. Mr King was a member of that syndicate. Each member of that syndicate was to pay Mr Adams $50 at intervals as requested.

8. Mr Adams initially collected $570 from the syndicate of 12. (One of the members initially paid only $20 rather than $50.) He spent $270.48 buying tickets in a lotto draw held on 19 March 2016. That purchase returned winnings of $262.44. He then collected a further $600 of contributions, which included a payment of $70 by one member, but this did not include a second contribution of $50 from Mr King. This brought the balance of money held by Mr Adams for the syndicate of 12 to $1,161.96. He drew down on that kitty in spending $186 for the tickets purchased in a Powerball Draw held on 28 April 2016, $186 for tickets purchased for the Powerball Draw of 5 May 2016, and $328.25 for the cost of tickets purchased for a Powerball Draw held on 7 May 2016. The tickets purchased for the syndicate of 12 for the 5 May Powerball Draw returned $13.65.

The Second Syndicate

9. After the jackpot was not won in the Powerball Draw of 28 April 2016, Mr Adams decided to arrange a second syndicate to purchase more tickets in the 5 May Powerball Draw. Mr Adams contacted 12 fellow employees who each agreed to contribute $50 to be part of the second syndicate. These included nine of the 10 employees who were members of the syndicate of 12. Mr Adams himself and his sons Bradley and Matthew were also members of this second syndicate. Mr Adams did not invite Mr King to be a member of the second syndicate. This was not because he intended to exclude Mr King. Rather, he did not see him, and did not get to speak to him, between deciding to put together the second syndicate and the draw taking place on 5 May. There were three individuals who joined this second syndicate for the purchase of tickets in the Powerball Draw held on 5 May who were not part of the syndicate of 12. They were Mr Phongsavath Sengchangsavang (“Phong”), Mr Quem Singue Lai (“Lai”) and Mr Viengxay Thattamanivong (“Xay”).

10. As noted above, Mr Adams also bought tickets in the 5 May Powerball Draw for the syndicate of 12, but those tickets only returned $13.65 for an outlay of $186.

11. Mr Adams deposed that by the time his shift finished at 10.00 pm on Tuesday, 3 May 2016 he had collected a total of $600 in cash from the second syndicate which he put on a clip in an exercise book he kept. The $600 included $50 that he and his two sons had each paid. Two people who had been approached and had agreed to participate had not paid; namely Xay and a Mr Silvestre Mico (“Mico”). They paid before the draw took place on 5 May.

12. Mr Adams deposed that he kept the cash received from the different syndicates separately. He said that on the morning of Wednesday, 4 May 2016 he transferred the $600 that he was then holding on behalf of the second syndicate that had been clipped to an exercise book into an envelope or a plastic bag. At 11.48am he bought 32 Powerball tickets in Draw 1042. Each ticket cost $18.60. The total sum outlaid was $595.20. His shift started at 2.00pm on 4 May 2016. He arranged for photocopies to be made of the tickets that he had purchased and distributed copies to all of the members of the second syndicate, except for himself and his two sons. Before his shift finished, Xay and Mico each gave him $50. Mr Adams deposed that, because he had already bought the tickets for the second syndicate, he retained the $100.

The Primary Judge’s Findings

13. The primary judge accepted Mr Adams’ evidence. The primary judge’s findings included the following:

“[232]   Having carefully considered the evidence and the parties’ submissions, I entirely accept Mr Adams’ evidence.

…

[234]    It is clear that Mr Adams not only nominated the persons concerned but chose the timing of each venture. People generally responded positively by indicating their willingness to participate. But some did not. This was either because they did not want to, because they could not afford to at the time or because they could not be contacted. …

[235]   It seems that there was also an understanding that copies of tickets would be usually distributed to persons who made contributions or posted on the Factory Three notice board. …

[236]   I am satisfied that Mr Adams never assumed, nor did his workmates always expect, to be in every syndicate or draw Mr Adams organised. Of course, they trusted him if he was holding the proceeds of a win to exercise his discretion as to whether to distribute the funds or reinvest them. In those circumstances, much would depend upon the size of the ‘kitty’, as it was called.

[237]   Certainly, after the payment of money from any participant, Mr Adams assumed a responsibility to acquire a ticket and there was an expectation on the part of the participant that he would do so and perhaps distribute a photocopy of the purchased ticket or post it on the Factory Three notice board. I am satisfied that Mr Adams was acutely conscious of the fact that he was dealing with workmates who could not always afford to go into a draw especially when asked to contribute $50. That is the reason why I think he made contact on each occasion so as to enable that person to assess whether he wanted to or could afford to go in any given draw. This was unless Mr Adams was already holding funds on their behalf, in which case Mr Adams would exercise a direction to either reinvest in a new draw or distribute these funds.

…

[239]   I am satisfied on the evidence that from early 2016 when Mr Adams put his new regime in place, despite his practice in the past, his new and invariable approach was to make contact with each person prior to including them in a draw. This was whether they were from the 2016 Core Syndicate or otherwise. Mr Adams made no assumptions and either collected the money immediately or, after the express agreement from his fellow workmates, proceeded without money. This is entirely inconsistent with any notion that there was some overarching or implicit arrangement, that each member of the 2016 Core Syndicate would be included without any contact having first been made.

…

[259]   As I have already said, I am satisfied that the reasons why Mr King was not included in the Winning Syndicate were that Mr Adams had already included him in the 2016 Core Syndicate ticket for the very same draw and that Mr Adams simply did not approach Mr King or see him in the period when he decided to form the Winning Syndicate. I am also satisfied that because the men did not have any contact with each other, Mr Adams did not intend to purchase a ticket on behalf of Mr King. I am also satisfied that Mr King did not at any point agree to participate in the Winning Syndicate.”

14. There was no dispute that Mr Adams did decide on or about 29 April 2016 to establish a separate syndicate to purchase tickets in the Powerball Draw 1042 to be drawn on 5 May 2016. There is now no dispute that, as he had done in the past, Mr Adams could properly arrange separate syndicates to participate in a single draw. It is common ground that he did not speak to Mr King between 29 April (when he decided to establish a separate syndicate because the jackpot had not been won on 28 April) and 5 May. There is no dispute that Mr King did not pay $50 to participate in the second syndicate and was not given a copy of the tickets purchased for the second syndicate. He was given a copy of the tickets purchased in the same draw for the syndicate of 12.

The Appeal

15. Mr King contends that the primary judge erred in taking into account and relying upon evidence of the alleged subjective intention of Mr Adams in deciding who Mr Adams intended to be members of the second syndicate (Byrnes v Kendle (2011) 243 CLR 253; [2011] HCA 26; Legal Services Board v Gillespie-Jones (2013) 249 CLR 493; [2013] HCA 35). But the objective circumstances point strongly to the primary judge’s conclusion being correct.

16. The primary judge had the advantage of seeing and evaluating each of the witnesses. The primary judge properly took into account that over the course of many years Mr Adams had earned the trust of his fellow employees.

17. Mr King’s case was narrower on appeal than it had been at trial. On appeal he contended that Mr Adams’ intention, assessed objectively, was that Mr King was a member of the second syndicate. Critical to this contention was Mr King’s submission that although the tickets purchased on 4 May 2016 cost approximately $600, Mr Adams had not collected (so it was said) more than $450 from the members of the second syndicate. Mr King submitted that this showed that Mr Adams intended to buy the tickets for the syndicate of 12 because $50 x 12 = $600. Alternatively, he contended that because Mr Adams had not collected $600 from members of the second syndicate by the morning of 4 May 2016, when he purchased the tickets that included the winning ticket, he must have used moneys held for the syndicate of 12, including the moneys held for Mr King, in buying the tickets for the second syndicate. On that basis, it was said that Mr King was entitled to trace his beneficial interest in the moneys held for him as a member of the syndicate of 12 into the winning prize moneys.

18. Hence, the principal question of fact argued on the appeal was whether the primary judge should have found that Mr Adams used $150 of moneys he held for the syndicate of 12 in the purchase of the winning tickets on 4 May 2016.

19. The primary judge accepted Mr Adams’ evidence that he had collected $600 (including $50 he contributed himself) before he went to the newsagency on 4 May and bought the winning ticket. Mr Gyles SC, who appeared with Mr McMeniman for Mr King, accepted that it was critical to Mr King’s case that he demonstrate that that finding should be overturned. If the finding is not overturned, the objective indications of Mr Adams’ intent as to who were the members of the second syndicate are overwhelming. Mr Gyles submitted that if that finding were overturned, then the primary judge’s acceptance of Mr Adams as an entirely credible witness would also have to be set aside.

20. I accept that that would be a consequence of overturning the primary judge’s finding that Mr Adams had collected $600 from members of the second syndicate (including his own $50) before he purchased the winning ticket on 4 May 2016. If that finding were overturned, it would not follow that Mr King’s primary case that he was always a member of the second syndicate would be upheld. The objective indications to the contrary would indicate otherwise. That is, Mr King was not asked to join the second syndicate and did not agree to join. He did not pay a $50 contribution. He did not receive a copy of the tickets purchased for the second syndicate. The moneys collected by Mr Adams included two sums of $50 from individuals who were not members of the syndicate of 12.

21. Nonetheless, undoubtedly additional questions would arise in respect of the second way in which Mr King put his case, namely that the moneys of the syndicate of 12 were used in the purchase of the tickets on 4 May.

No Error in Primary Judge’s Factual Findings

22. Each of the other 13 members of the second syndicate gave evidence. All except two, Xay and Mico, said that they had paid $50 to Mr Adams before 4 May. Mr Gyles submitted that the primary judge should have found that three members of the second syndicate (who were also members of the syndicate of 12) had not paid their $50 prior to Mr Adams’ buying the tickets on 4 May 2016. They were a Mr Andres, a Mr Singh and a Mr Cheak.

23. Mr Adams did not go into detail of exactly when each of the other members of the second syndicate paid him $50. His evidence, that was accepted by the primary judge, was that by the end of his shift on 3 May he had collected $600 and used the moneys he had collected from the members of the second syndicate, together with his own $50 to buy tickets before he went to work on Wednesday, 4 May.

24. In his affidavit, Mr Andres said that early in the week commencing Monday, 2 May 2016 he was in the lunchroom with Mr Singh and a couple of other workmates when Mr Adams said words to the effect: “There’s a big Powerball coming up. How about we all throw in $50?” Mr Andres deposed that he gave Mr Adams $50 cash on the spot.

25. In his affidavit, Mr Singh deposed that early in that week he was in the lunchroom with Mr Andres, Mico and Mr Adams, and Mr Adams said words to the effect of “There is a $40 million Powerball. If you want to play, it is $50 each”. Mr Singh said that $50 was a lot of money for him and he wanted to speak to his wife before agreeing to go in the draw. He did not give Mr Adams his money on the spot. But with the approval of his wife he gave Mr Adams $50 the next day.

26. Mr Cheak deposed that on Monday, 2 May he was in the lunchroom with Mr Adams, Mr Andres, Mr Singh and Xay and that Mr Adams said something like “There’s a big one this week. $50 a head. I am collecting the money tomorrow.” Mr Cheak deposed that he went to his locker immediately after the meal break, got $50 and gave it to Mr Adams that day, and that Mr Adams clipped his $50 into his book.

27. The primary judge did not accept all of the evidence of these witnesses. But he did accept that they each paid Mr Adams their $50 before 4 May. In relation to Mr Andres the primary judge found (at [298]):

“On balance, while I have doubts over when exactly Mr Adams spoke to Mr Andres about entering the Winning Syndicate, I am satisfied that such a conversation occurred prior to the 4 May, that Mr Andres paid $50 to Mr Adams before the 4 May and received a copy of the ticket prior to the draw.”

28. In relation to Mr Singh the primary judge found (at [294]):

“I am satisfied that, after checking with his wife, Mr Singh paid Mr Adams the $50 and received a copy of the ticket prior to the draw, not necessarily on 2 May but likely to be on the 3 May when he crossed shifts with Mr Adams.”

29. In relation to Mr Cheak the primary judge found (at [282]):

“Mr Cheak may well be in error when he purported to recall the circumstances in which Mr Adams spoke with him. However, regardless of who he was with, I still accept that he gave Mr Adams the $50 following a conversation with him prior to the draw.

30. The primary judge did not expressly find that Mr Cheak paid his $50 prior to 4 May, but that is necessarily implied from his acceptance of Mr Adams’ evidence. In relation to Mr Adams’ evidence the primary judge found (at [251]-[252]):

“[251]   Mr Adams denied that he had subsidised anybody when he purchased the winning ticket. The plaintiff’s alternative case would have to be, if accepted, that he had subsidised the purchase by a considerable margin. Their analysis of the case invited the Court to accept that Mr Adams simply could not have collected anywhere near $600 by 4 May when he went to the newsagency. I do not regard that as a viable theory on the facts. It runs contrary to Mr Adams’ sworn evidence which I have already indicated I accept. The Plaintiff meticulously analysed the Prysmian time records to attempt to undermine each of the various defendants who purported to corroborate Mr Adams version of events. However, I still regard the defendants’ responses and analysis to be more plausible and persuasive.

[252]   Absent some wholesale conspiracy, a case theory which unsurprisingly was not put, all the inconsistencies that arose between the various defendants and Mr Adams were in my view perfectly understandable.”

31. Mr Gyles submitted that para [252] of the primary judge’s reasons set up a straw man and it had not been Mr King’s case that there was a wholesale conspiracy. That may be accepted. But that does not diminish the force of the primary judge’s observation that inconsistencies in the recollection of witnesses called for the defendants were perfectly understandable. Such inconsistencies did not require the primary judge to reject Mr Adams’ evidence.

31. The reason Mr King attacks this evidence is that each of the employees at the Prysmian factory had to clock in and clock off. They worked different shifts between 5am to 10 or 11pm. They clocked in and clocked off some little time before the beginning and after the end of shifts.

32. On Monday, 2 May 2016 the shifts of Mr Adams, Mr Cheak and Mr Singh overlapped by a little over 20 minutes between 1.39pm and 2.02pm. Mr Andres finished his overnight shift that morning at 6.04am and did not clock on for his next shift until 5.09am the following day. On 3 May 2016 Mr Adams, Mr Andres, Mr Singh and Mr Cheak were at the factory between 1.41pm and 2.00pm. On that day Mr Adams clocked in at 1.41pm and clocked off at 10.15pm. Mr Andres was there from 5.11am to 6.00pm, Mr Singh from 5.46am to 2.00pm, and Mr Cheak from 5.48am to 6.00pm.

33. Mr Gyles argued that a lunchtime meeting could not have taken place on Monday, 2 May 2016 with all four individuals (Messrs. Adams, Andres, Singh and Cheak) because Mr Andres had clocked off at 6.04am that morning. A lunchtime meeting between all four individuals could have taken place on 3 May 2016. But if the lunchtime meeting took place on 3 May, Mr Singh could not have paid his $50 until 4 May 2016 at the earliest because he conferred with his wife overnight about participating in the syndicate. Mr Adams purchased the tickets before he arrived at work on 4 May. Mr Gyles argued that the meeting probably occurred on Wednesday, 4 May 2016, but if Xay attended the meeting, then it probably did not occur until 5 May 2016 because on that day all of the relevant people were at the factory at the same time and for an extended period of time.

34. Mr Adams collected the money from his sons, Matthew and Bradley, at home. He could not say when the other members of the syndicate paid their $50 (except for Mico and Xay who did not pay until after the tickets had been bought). He said: “I can’t remember when my boys gave me the money, but the guys at work, I didn’t start collecting until after I started my shift, Monday 2.00pm”. He agreed that it was consistent with his recollection that he told “at least certain people” about his intention to have the Powerball syndicate whilst he was in the lunchroom. When Mr Singh’s evidence of the lunchtime meeting was put to Mr Adams and he was asked whether he agreed that it was most likely that the meeting would have taken place in the meal break, his response was “It could have been the meal break, it could have been change of shift.” He also said that “we do pass each other quite often in the warehouse and it’s not like we just ignore each other, we do talk, so it’s quite possible that conversations will take place on the warehouse floor.” When Mr Andres’ version of a meeting in the lunchroom was put to Mr Adams and he was asked whether that jogged his memory, his response was “No, not really”.

35. He gave the following evidence:

“Q.    That means to the extent that there [was] a meeting that took place between you and others in the lunchroom it may have happened on the Monday?

A.   Yes.

Q.   It may have happened on the Tuesday?

A.   As well, yes.

…

Q.   It could have happened on the – this, the meeting could have happened on the Wednesday?

A.   No, I put the Powerball on Wednesday.”

37. He adhered to his evidence that he had collected the $600 before the tickets were purchased.

38. The primary judge was not bound to accept the evidence of Mr Singh, Mr Andres and Mr Cheak that all three were present with Mr Adams at a meeting in the lunchroom when he advised them that he was collecting money for the Powerball Draw. It is only if that evidence was correct, and that was the only occasion upon which Mr Adams spoke to those individuals about collecting their money, that there is any inconsistency in the accounts as to how the money was collected. Such inconsistency as there was between the accounts of those witnesses and the factory time records did not require the primary judge to reject the evidence of Mr Adams that he had collected the money from all but two members of the second syndicate at the time he purchased the tickets on 4 May 2016. Nor did it require the rejection of the evidence of Mr Andres, Mr Singh and Mr Cheak that they had paid their moneys by 3 May 2016.

39. Mr Adams kept an exercise book. He deposed that he recorded in that book the names of the 14 members of the syndicate who won the $40 million Powerball prize on 5 May 2016. He did not say that he wrote down the names in the order in which the individuals gave him money. He deposed that he recorded all of the information on the page before the draw. He deposed:

“56. On 29 April 2016 I sent a text to Peter Prasad and invited him to go in the draw. From 29 April 2016, I invited workmates with whom I came into contact to contribute $50 to join the Winning Syndicate and by the time my shift finished at 10pm on Tuesday, 3 May 2016, I had collected a total of $600 in cash which I put on a clip in the exercise book. The $600 included $50 that Brad, Matt and I had each paid. It also included $50 collected from each of the other people [identified] on page 7 of annexure RLA2 except Vientxay Thattamanivong, (whom I know as Xay) and Silvestre Mico. However, each of them told me that they wanted to take part in the Winning Syndicate.

57.   I wrote down the names of the people who gave it to me in the exercise book.”

40. The page in question lists 14 names beginning with Mico and Phong. It has a series of ticks against the names and in handwriting the words “Bank $100”. It also has the number 14 encircled. The words “Bank $100” refer to a kitty, as Mr Adams did not deposit the cash, but kept it clipped to the exercise book.

41. Mr King challenged the authenticity of this document as a contemporaneous record completed prior to the draw. It was put to Mr Adams in cross-examination that the names were not listed in order of receipt of payment. He agreed with that proposition. It was then put to him:

“Q.   So this is not a contemporaneous running record that you made at the time of being given the money is it?

A.   No.”

42. The cross-examination continued:

“Q.   Therefore – and given the fact that you’ve got all of these names on the list, it can only have been prepared after you received the last payment; that’s right, isn’t it?

A.   Yes, that makes sense, yes.”

43. In fact, the premise of the question is incorrect. It does not follow from the fact that the document was not a contemporaneous running record made at the time payments were made that it could only have been prepared after the last payment was received. Mr Adams’ assent to the proposition contained in the question was an assent to what was put to him as the logical corollary of the document’s not being a contemporaneous running record of receipts. Later, the question was put to him more directly:

“Q.   … This is a list that’s been prepared after you received all the money; that’s right, isn’t it?”

44. Mr Adams responded:

“A.   The only thing I can suggest if I may, is because –

HIS HONOUR:   Mr Adams, I’m going to interrupt you. I’d like you to answer the question first that’s just been posed, and then move on, and make your suggestion. So put it again, Mr Gyles.

…

Q.   What I’m putting to you was that this document must have been prepared after all the moneys had been received.

A.   I don’t know.”

45. The following exchanges then occurred:

“HIS HONOUR:   I’m not sure that I’ll allow that, Mr Gyles, because it really doesn’t speak for the universe. There are permutations and connotations which you’ll have to live with, unless you want to—

GYLES:   All right.

Q.   Mr Adams, you are not saying, are you, that when, for example, Matt paid you his $50, you had this book there, you wrote Matt’s in and you ticked it off at the time, are you?

A.   No.

HIS HONOUR:   Can I just interrupt you just one moment, Mr Gyles.

GYLES:   Sure, your Honour.

HIS HONOUR

Q.   [Mico] is the person whose name is at the top of the list, correct?

A.   Yes, your Honour.

Q.   But he was a person who was one of two, I think I said a little earlier who were the last person or persons to pay you?

A.   Yes, your honour.

Q.   Is another possibility that you comprised the list, and then ticked people off as they paid you?

A.   Yes.

Q.   Because otherwise if [Mico] paid you virtually last, along with [Xay], logically, unless you had pre prepared the list, you would expect to find those names, wouldn’t you, I don’t know, second last and last on the list?

A.   I think that’s what I’ve done.

Q.   Well, but in other words, you’ve comprised the syndicate, if I can call it that, or the group, whatever reason, and however you have, and then you’ve ticked people off as [and] when they’ve paid you?

A.   Yes.”

46. No objection was taken to the primary judge’s questions. Later, Mr Adams, in response to a question from Mr Gyles, said that he thought he used a green drum card in the beginning (this was a piece of cardboard) to record the time at which money was received by the individuals in the syndicate and then recorded what was in the drum card into the exercise book. In response to a question from the primary judge, Mr Adams said he believed that he created the page in the exercise book before the draw. When asked why, he said “Well that’s how I worked every lotto. The names would be either on a drum card or in the exercise book before a draw.” He rejected the suggestion that he created the record after the draw to seek to establish some formality about the fact that Mr King had been excluded from the syndicate.

47. The primary judge was satisfied that Mr Adams wrote down the names of the 14 members of the syndicate before the draw. His Honour found (at [247]):

“I am also satisfied that he created the list (of the 14) not necessarily in the order that people paid him but perhaps in the order he met them and/or they indicated they would be party to the syndicate. I consider it likely that he ticked their names off when they paid him. Although it was put to him that this was not the case, I am satisfied that he created the list and ticked the names off prior to the draw.”

48. That is the obvious inference from the form of the exercise book. If it had been a contemporaneous record of receipts of payments, there would have been no need for Mr Adams to have both written the name of the individual making the payment and then to have placed a tick against that person’s name.

49. Mr Gyles submitted that it was inappropriate for the primary judge to have engaged in the cross-examination in the way his Honour did and then to have made findings consistent with the suggestions his Honour put to the witness. He submitted that Mr Adams’ main evidence had “been really blown out of the water because he was relying upon a document which wasn’t, he accepted, a contemporaneous running record.”

50. I do not accept that submission. The primary judge’s intervention was occasioned by a question that was apt to confuse the witness, and which did confuse the witness. The question suggested that because the page in the exercise book was not a contemporaneous running record of receipts, it could only have been prepared after the last payment was received. In my view the primary judge was right to intervene before Mr Adams was led down a path based upon his acceptance of the proposition that, as a matter of logic, the list could only have been prepared after he received the last payment. It would have been better for the primary judge to have sought clarification by way of non-leading questions, but no objection was taken to those questions. The framing of the questions may have been influenced by the judge’s assessment of the degree to which Mr Adams was flummoxed.

51. The evidence concerning the preparation of the page of the exercise book did not necessarily damage Mr Adams’ credit. Contrary to Mr Gyles’ submission, Mr Adams’ evidence on this topic was not “blown out of the water”. I do not consider that the primary judge has been shown to have committed any error in his assessment of Mr Adams’ credit. There was no fact clearly established by objective evidence or uncontested testimony with which Mr Adams’ evidence was inconsistent. His Honour’s findings were not in the least improbable, let alone glaringly so (Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [28]-[29]).

52. Mr Gyles submitted that if Mr Adams had only collected $450 at the time the tickets were purchased, then it should be concluded that his intention, as objectively ascertained, was to buy the additional tickets for the syndicate of 12, of which Mr King was a member. Mr Gyles submitted that he must have been purchasing for 12 people because he bought $600 worth of tickets and was dealing in lots of $50. This does not follow. It is not disputed that Mr Adams had received payment from two individuals (Phong and Lai) who were not members of the syndicate of 12. Even if Mr Adams had only collected $450 it does not follow that it should be inferred that Mr Adams intended to buy the tickets for the syndicate of 12. It must be inferred that he was buying tickets for a syndicate that included at least two individuals who were not members of the syndicate of 12, but had paid their money.

53. Because Mr King has not demonstrated that Mr Adams used moneys held for the syndicate of 12 in the purchase of the tickets that included the winning ticket on 4 May 2016, it is unnecessary to consider his alternative case that, as a member of that syndicate, he had a beneficial interest in the $40 million prize because he had a beneficial interest in the moneys he contended had so been used.

Conclusion

54. In summary, the objective facts point to Mr King’s not having been a member of the second syndicate that won the winning ticket. There is no sufficient reason to reject the primary judge’s acceptance of Mr Adams as a witness of credit. There is no sufficient reason to reject the primary judge’s conclusion that Mr Adams had collected $600 from the members of the second syndicate that was used to purchase the tickets that included the winning ticket.

55. For these reasons, in my view, the appeal should be dismissed with costs.

56. EMMETT AJA: The question in this appeal is whether the appellant was a member of a syndicate that won a lottery prize in excess of $40 million. The appellant brought proceedings in the Equity Division claiming that he was entitled to share in the prize as a member of the syndicate, for which the winning ticket was purchased by the first respondent. A judge of the Equity Division concluded that the appellant was not a member of the syndicate and dismissed the proceedings. The appellant then brought this appeal to the Court of Appeal. I have had the advantage of reading in draft form the proposed reasons of White JA for concluding that the appeal should be dismissed with costs. I agree with his Honour’s conclusions for the reasons proposed by him.

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Decision last updated: 26 March 2018