Patricia Catherine Anthony v Vince Perry - [2015] NSWDC 120

District Court

New South Wales

Medium Neutral Citation: Patricia Catherine Anthony v Vince Perry and Anor [2015] NSWDC 120
Hearing dates: 6 July 2015 – 8 July 2015
Decision date: 17 July 2015
Jurisdiction: Civil
Before: Mahony SC DCJ
Decision:
Verdict and judgment for the plaintiff
For Orders see [160]

Catchwords: Contractual indemnity for currency trading losses
Cases Cited: Andar Transport Pty Limited v Brambles Limited (2004) 217 CLR 424
Bofinger v Kingsway Group Limited (2009) 239 CLR 269
Jones v Dunkel (1959) 101 CLR 298
Manly Council v Byrne and Anor [2004] NSWCA 123
MSPR Pty Limited v Advanced Breaking Technology Limited [2013] NSWCA 416
Texts Cited: Modern Contract of Guarantee by O’Donovan & Phillips, 2015 Thomson Reuters
Category: Principal judgment
Parties: Patricia Catherine Anthony (Plaintiff)
Vince Perry (1st Defendant)
Perry Properties Pty Limited (2nd Defendant)
Representation:
Counsel:
D L Cook (Plaintiff)
P J English (Defendant

Solicitors:
Taperell Rutledge Lawyers
Houston Dearn O’Connor

File Number(s): 14/127711
Publication restriction: Nil

Judgment

The Plaintiff’s Claim

The plaintiff sues the defendant for the sum of $204,062.00 plus interest on the basis of an agreement made on 10 September 1999 (“the first Agreement”). Pursuant to that agreement the plaintiff alleges that she agreed to advance to the first defendant the sum of $250,000.00 for the purpose of trading currencies, and further, that the first defendant indemnified the plaintiff against the loss of that sum and the second defendant guaranteed to the plaintiff the repayment to her of that sum.
On or about 13 September 1999 the plaintiff alleges the sum of $250,000.00 was paid into an account nominated by the defendants for the purpose of currency trading. On 2 November 1999, a variation was made to the first Agreement by which the parties agreed to vary the first Agreement by increasing the capital sum paid by the plaintiff by a further $250,000.00 on identical terms and conditions (“the first Variation Agreement”). On 3 November 1999, the plaintiff paid a further $250,000.00 into an account nominated by the defendants.
On 1 February 2000, the plaintiff alleges that the parties agreed to further vary the first Agreement by increasing “the Patricia Anthony capital” by $200,000.00, bringing “the total investment sum to $700,000.00, incorporating the identical terms and conditions as previous stated” (“the second Variation Agreement”).
In or about February 2000, the sum of $200,000.00 was paid into an account nominated by the defendants.
By the end of the year 2000 the whole of the capital sum had been lost on currency exchange transactions.
The plaintiff claims that between May 2001 and December 2009 the defendants paid to her instalments totalling $472,938.00, in part reduction of the capital sum. In addition, it was agreed that the plaintiff had received chattels from the first defendant to a value of $23,000.00, thereby leaving a balance the plaintiff claimed as owing in the sum of $204,062.00.

The Defence to the Plaintiff’s Claim

By an Amended Defence filed on 24 February 2015, the defendants deny that the second Variation Agreement was entered into at all, and further deny that any agreement was made between the plaintiff and the defendants on 1 February 2000. Further, the Defence pleads:

“6(c) Say in further response that:
(i) An oral agreement concerning a capital sum of $200,000.00 was entered into between the defendants and Ms Renee Schipper with the said capital sum to be used for the purpose of currency trading.
(ii) The aforementioned oral agreement did not include any agreement that the defendants would indemnify the plaintiff against any loss of the $200,000.00 capital sum referred to at (c)(i) above.
(iii) Some time after 30 June 2000, probably on or around 8 September 2000, the plaintiff visited the first defendant and asked him to sign a document, which the plaintiff told the first defendant was a ‘guarantee’ to cover Ms Schipper for the $200,000.00 referred to at 6(c)(i) above.
(iv) The first defendant was not provided with the original or a copy of the alleged indemnification agreement at the time it was signed.
(v) The alleged indemnification agreement is not enforceable by the plaintiff against the first or second defendants.”

The defendants plead that the sum of $200,000.00 referred to was paid at the sole discretion of Renee Schipper. The defendants claim that by 15 December 2009 the capital sum owing to the plaintiff had been reduced by payments totalling approximately $577,000.00 and that all monies owed by the defendants had been paid to the plaintiff. This was on the basis that, in January 2002, the plaintiff and first defendant had agreed that Ms Schipper’s loss of $200,000.00 would be shared equally between them, making a total amount of $600,000.00 payable by the defendants to the plaintiff. When the amount of $577,000.00 plus chattels valued at $23,000.00 are added together, they total $600,000.00, which is the amount agreed to be paid by the defendants to the plaintiff in full and final settlement of the capital sum and the defendants’ obligations in respect of the Statement of Claim.

The Evidence

The plaintiff relied on two affidavits. The first was affirmed on 2 October 2014. To that affidavit were exhibited documents which became exhibits A1 to A24 in the plaintiff’s case. The following summary of the history of the dealings between the parties contain my findings of fact, unless otherwise indicated. Any relevant factual issues in dispute are dealt with in my determination of the matter.
The plaintiff deposed that in July 1999, on advice from her then accountant, she established the Patricia Anthony Family Trust. She had met Mr Perry through her then partner, Renee Schipper, and sought investment advice from him. She deposed that in about August 1999 she met Mr Perry at his office. She told him that she would like him to become her accountant. It was in that conversation that she alleges Mr Perry suggested to her that she should invest some of her money in the foreign exchange market using his account with Ord Minett Jardine Fleming (“Ord Minett”).
On 10 September 1999 the plaintiff attended Mr Perry’s office with Ms Schipper. It was there that the first Agreement was drafted (exhibit A1). It provided as follows, excepting spelling errors:

“I Patricia Anthony, of 155 Blackman’s Creek Rd Hartley, hereby enter into a joint venture agreement with Vince Perry and Perry Properties Pty Ltd under the following terms and conditions:
A $250,000 advance for the purpose of trading currencies, with Ord Minett.
Jardine Flemming under the current number 8604.
Vince Perry personally indemnifies Patricia Anthony as to her capital of $250,000.
Perry Properties Pty Ltd, of which Vince Perry is the sole director and share holder, who personally guarantees Patricia Anthony as to her capital of $250,000.
Net profits on trading shall be distributed in equal shares between Patricia Anthony and Perry Properties Pty Ltd.
The management of the currency shall be in the absolute discretion of Vince Perry.
Profits generally shall be distributed on a monthly basis. If there is no profits then the capital shall not in any event be distributed in lieu of profits.
Termination of this agreement by either party must not require reasonable time to recover any adverse movements in currencies.
Statements of trading shall be provided weekly to Patricia Anthony.”

The document contained several spelling errors which had been corrected and was signed by Mr Perry on behalf of himself and the corporation, Perry Properties Pty Limited, and by the plaintiff. It was also signed by Renee Schipper as witness.
It is common ground that the account operated by the first defendant at Ord Minett, had a balance of $28,000.00 prior to the plaintiff depositing the sum of $250,000.00 into that account. That amount was refunded to Mr Perry. It is common ground that the sum of $104,058.00 was paid by the first defendant to the plaintiff and the second defendant from the Ord Minett account between 28 September 1999 and 31 January 2000. One question to be determined by the court is whether that sum was paid by way of share of profits earned on currency transactions, or whether it was a repayment of the plaintiff’s capital sum.
On 2 November 1999, the plaintiff deposed that she told the first defendant that she would like to invest another $250,000.00 with him. She deposed that that was achieved by the first defendant writing on the bottom of a copy of the first Agreement the following in his own handwriting:

“On this second day of November, 1999, the parties agree to increase the Patricia Anthony’s capital by another $250,000.00 upon the identical terms and conditions as the above.”

The document was then signed by the plaintiff and the first defendant (exhibit A7).

On the same day, the plaintiff deposed that a typed version of that document was produced (exhibit A8). This document was also signed by Mr Perry on behalf of the first and second defendants, and by the plaintiff, and witnessed by Ms Schipper. That document included the further typed entry:

“Further to our original agreement between Vince Perry of Perry Properties Pty Limited and Patricia Anthony, the parties agree to increase Patricia Anthony’s capital by a further $250,000.00 incorporating the identical terms and conditions as stated in the above agreement, on this day the 2nd of November 1999.”

The plaintiff deposed that in January 2000 she had telephoned the first defendant and said to him, words to the effect:

“Renee (Ms Schipper) is jealous of the profits we are making. She wants to part of it. She has $200,000.00 to invest.”

The plaintiff alleges Mr Perry said words to the effect:

“I don’t want to make a separate agreement with her. I’ll add the funds as a continuation of our agreement under the same terms and conditions.”

On 1 February 2000, the typed version of the first Variation Agreement was further endorsed in handwriting, alleged to be that of Mr Perry, in the following terms:

“On the 1st Feb 2000, the parties agree to increase the Patricia Anthony’s capital by another $200,000.00 upon the identical terms and conditions.”

The document was then said to be signed by Mr Perry (exhibit A11). However, he denies that the handwriting and signature are his.

A typed version of that addendum was then prepared which read:

“On the 1st of February 2000, the parties agree to increase the Patricia Anthony capital by another $200,000.00, bringing the total investment sum to $700,000.00, incorporating the identical terms and conditions as previously stated.”

That document was signed by Mr Perry on behalf of himself and Perry Properties Pty Limited and by the plaintiff (exhibit A12). It was witnessed by Ms Schipper.

In August 2000, Mr Perry advised the plaintiff that all the money had been lost.
In about October 2000, the plaintiff and Ms Schipper purchased a property at Kanimbla Valley. They did so with the assistance of a mortgage advance arranged by her solicitor. In December 2000 the plaintiff alleged that a conversation took place with Mr Perry in which she told him that she had taken out a bridging loan and that the repayments were $1,967.00 per month. She told Mr Perry that she wanted him to help her out because the loan was only necessary because of his inability to pay her out. He said words to the effect:

“Yes I’ll do that. The payments I make will come off what I owe you.”

The plaintiff produced a handwritten list of repayments provided by Mr Perry (exhibit A13). That list included the list of payments up to 31 January 2000, totalling $104,058.00, referred to above, and the chattels valued at $23,000.00.
The plaintiff deposed that some further payments were made by Mr Perry up until March 2002. The plaintiff deposed that in the middle of 2003 she sent a letter to Mr Perry, a draft of which was exhibit A23. It read:

“Dear Vince
Thank you for your phone call on Saturday, informing me about the sale of Crystal Street, and what the agent had to say about it possibly going to sell in a few weeks. That was a bit heartening.
I would like to confirm my understanding of what you said with regard to monies you still owe me, and that is that you have ear marked 4100,000 for me as part payment of the $650,000 still outstanding. I would like to know when you think that would be forthcoming, as I am in a rather desperate position presently. Could you please indicate an example of when it will be possible to pay me, for example one week after the settlement date or two days after. Please let me know.
Further to this I need you to give me an undertaking as to when you intend to finalise your payments to me, I need to have a clear time frame between us, as I can no longer go on indefinitely without a clear-cut off. I believe I have been very patient over the past two years, waiting for the currency to appreciate, which it has done recently, as you well know. However this has not resulted in you trading in the currency at all, due to lack of funds which I was aware of too late, had I known you had used the 50,000 you said you had kept aside for just such an appreciation of the AUD, perhaps I could have approached things differently. I would like to redefine our agreement after you pay me the 100k, and draw up a proposal from you to me, outlining your intentions with regard to settling your debt.
I would like you to do this so that I don’t continue to hassle you, and that we both know where we stand with regard to this matter.
Thank you
Trisha Anthony”

The plaintiff deposed that in April 2003, Ms Schipper terminated their de facto relationship. She deposed that she had a very difficult time and later fell ill, undergoing several surgical procedures.
At the end of 2009 the plaintiff deposed that she attended the first defendant’s office with a friend, Rita Kelly, and had a conversation with the first defendant to the following effect:

“Plaintiff: When will you pay me the rest of the money you owe me?
First Defendant: I have paid to you $500,000.00. The other $200,000.00 was just us being greedy. You and Renee snuck it into my account.
Plaintiff: That is ridiculous, I want to get copies of all the faxes you received when you are trading so I can substantiate the losses you say occurred.”

The plaintiff then obtained copies of daily operating statements from Ord Minett, for the period 20 October 1999 to 14 February 2002 (exhibit A24). The plaintiff also asked the first defendant for a reconciliation statement of payments he said he had made to her. That document was sent to her (exhibit A13, referred to in [22] above).
Finally, the plaintiff deposed that she accepted that the total value of chattels given to her by the first defendant was $23,000.00 and that the first defendant had paid to her a total sum of $472,938.00, in part reduction of the total sum owing to her.
Leave was granted for the plaintiff to rely on a further affidavit affirmed on 22 June 2015, which was substantially in reply to the affidavit of the first defendant. In that affidavit she deposed that by January 2002 she had made payments to reimburse Ms Schipper for her payment of $200,000.00 as follows:

“(a) On 22 December 2000 I paid Ms Schipper the sum of $160,000.00 from my personal account with St George Bank.
(b) I provided a cheque in the sum of $40,000.00 as the deposit on exchange of contracts for the Kanimbla Valley property on 20 December 2000. However, the account from which the deposit was drawn was closed before the cheque was presented for payment and I therefore made the following payments for the deposit:
(i) On 9 February 2001 I paid $11,000.00 from my personal account with St George Bank; and
(ii) On 9 February 2001 I paid a further $29,000.00 from the Patricia Anthony Family Trust Account St George Bank.”

In addition to those amounts, the plaintiff deposed that she also paid stamp duty in the sum of $13,494.00 on the contract for sale and interest on a bridging loan in an approximate amount of $11,000.00.

Cross-examination of the Plaintiff

The plaintiff was cross-examined about the creation of the first Agreement. It was first handwritten by Mr Perry, however, she had no recollection of how it became typed as set out in [11] above (exhibit A1). She assumed that Ms Schipper typed the document. She gave evidence that it was not until Mr Perry provided her with the indemnity that she was willing to make the investment. When she signed the agreement she was aware that it was an indemnity concerning her capital of $250,000.00.
The plaintiff agreed that she was paid $104,058.00 between September 1999 and January 2000 (see exhibit A5). She agreed that those payments were made when the account was in surplus, and she agreed that they were made randomly from time to time. The last payment she received was for $28,000.00 on 31 January 2000.
At para 16 of her affidavit the plaintiff stated:

“While I did not at that time fully understand the process of trading in foreign exchange, the reports given to me by Mr Perry from time to time of the profits earned from Mr Perry’s trading in the period 10 September 1999 to November 1999 gave me confidence in the security of my investment.”

It was put to her that the fact that she was making interim profits gave her confidence in the security of her investment, which she denied. She said that while she was confident at that point, she was completely confident by virtue of the fact that she had a guarantee of her capital.
Exhibit A7 was the first Variation Agreement made on 2 November 1999. It was the plaintiff’s recollection that Ms Schipper typed the handwritten annotation to the agreement. Ms Schipper witnessed the signatures on the document. The plaintiff was aware that she now lived on the Central Coast but did not have any contact details for her. The plaintiff gave evidence that she made no enquiries to have her attend to give evidence in the proceedings.
The plaintiff gave evidence that she was aware that prior to the first Agreement Ms Schipper had $100,000.00 to invest. She told Ms Schipper of the monies she was receiving by way of the currency trading activities of Mr Perry. She acknowledged the entry in para 19 of her affidavit where she deposed that Ms Schipper was jealous of the profits that they were making, and wanted to be part of it. She agreed that Ms Schipper invested $200,000.00 of her own money with Mr Perry and Perry Properties Pty Limited in order to trade currencies. She agreed that Mr Perry never said to her that he was personally guaranteeing Ms Schipper for the $200,000.00.
The plaintiff agreed that she had received $104,058.00 “by way of interim profit payments”, and that she had received from Mr Perry the total of $600,000.00.
The plaintiff agreed that the sum of $104,058.00, received by way of interim profit payments, was income received by her. It was put to her that she did not inform the Commissioner of Taxation about the receipt of those monies and there was no disclosure of it in her personal income tax return for the 1999 – 2000 financial year. Her explanation was that she gave the information to her accountant, who advised her it was in the nature of a capital sum and that she was not required to disclose it.
The plaintiff was further cross-examined about the document produced on subpoena by her current accountant, Mr Adam Murphy, which included ledger entries for report, for the year ended 30 June 2000, and identified the series of interim profit payments. The plaintiff agreed that each entry recorded the payment as “funds loaned to trust”. She agreed that she was the only person who could have loaned those funds to the trust (exhibit 2). The plaintiff gave the following evidence:

“Q: You never drew it to Mr Murphy’s attention that the 1999-2000 tax return in your own name needed to be amended?
A: I did.
Q: You did? What did Mr Murphy do about that?

A: He didn’t do anything, but I said to him, ‘Where are the profits?’ He then investigated and said, ‘These are, this is capital return to you by Vince’, and I had to leave it at that.”

The plaintiff was challenged about her evidence that she attended Mr Perry’s office on 1 February 2000 with Ms Schipper.
It was put to the plaintiff that she had no recollection of how the typed document in exhibit A12 was brought into existence. Her answer was:

“A: My recollection is on the day that we went there, we signed this document. How it came into existence, no. …
Q: The document at tab 12 – but all Mr Perry signed that, that was a document he signed after 1 February 2000. Do you accept that?
A: No.
Q: Again, Ms Schipper was a witness to both documents at tab 11 and 12?
A: Correct.
Q: When was the last time you spoke with Ms Schipper?
A: Six months ago. Seven months ago.”

It was put to the plaintiff that she had no such conversation with Mr Perry at the end of 2009 when she went to see him with her friend, Rita Kelly, at his office at Enmore. That conversation was set out in para 47 of the plaintiff’s affidavit, affirmed on 2 October 2014. It was also suggested to her that she never sent a letter, exhibit A23, to Mr Perry in mid 2003 (set out at [23] above). She denied both propositions.
The plaintiff agreed that she had held the originals of pages 1 and 2 of exhibit A13. However, upon a call for those documents, no documents were produced. Her evidence was that she never had repayments by Mr Perry tallied until she received exhibit A13 in 2009. She was asked:

“Q: Well it’s, it’s not the case, I suggest to you, that Mr Perry would keep you abreast and would give you updated copies of this document over time when you met with him?
A: No, sir, never.”

It was put to the plaintiff that, at first, Mr Perry gave her verbal updates, and her evidence was:

“A: I’m just not sure what you’re saying. I mean, I have my bank statements. That’s what I was reliant upon. What went in and what didn’t go in.
Q: So you were conducting your own reconciliation with your bank statements were you?
A: No I wasn’t. I was, at that point, I wasn’t well and I was not conducting any reconciliation. It was nowhere near the amount, so I was just waiting for Vince to get into a better place.”

The plaintiff agreed that she met with Mr Perry at the Krispy Kreme premises at Penrith in around January 2002. She denied the conversation deposed to Mr Perry, namely:

“Plaintiff: What am I going to do about the $200,000.00 that Renee has lost on the currency trading? I’ll have to pay her out.”

She was then asked:

“Q: And Mr Perry said to you, you know there’s no guarantee on Renee’s money? He said that to you didn’t he?
A: He did say that. But there’s no – that wasn’t the conversation that then took place.
Q: And you said to him, ‘I have to pay her back because it affects the amount I have to pay her under out property settlement’?
A: That’s not correct. That’s not the conversation that took place.”

It was then put to the plaintiff that it was at that time that the plaintiff asked Mr Perry to sign the document, exhibit A12, which she denied.
In respect of the payments made by the plaintiff to Ms Schipper on 22 December 2000, she agreed that she paid the sum of $160,000.00 to Ms Schipper as a loan. She had written on her own bank records that that loan had been made to “shut up Ms Schipper”. It was put to her that she had paid Ms Schipper that money for personal reasons, to which she responded:

“A: Yes, she was upset and I could understand why. …
Q: And when you loaned that $160,000.00 to Ms Schipper you loaned it to her – this is what you were thinking at the time – so you could both purchase the Kanimbla Valley property. Correct?
A: That’s correct, so she could appear on the title.
Q: And the same with the $40,000.00 that you refer to in your second affidavit. You used that, did you not, to pay a deposit for that property? Is that right?
A: That’s correct.”

The plaintiff agreed that she paid more than $200,000.00 after she had paid interest on a bridging loan to an approximate value of $11,000.00 and stamp duty of $13,494.00.
The plaintiff was asked about the termination agreement that she had signed following her separation from Ms Schipper on 6 March 2007 (exhibit 6). She agreed that under cl 9 of that document, she and Ms Schipper agreed to release and indemnify each other in respect of any claim that one may have against the other in respect of any involvement of either party with Mr Vince Perry, any investment of money by either party with him or financial dealings by either party with him.
In re-examination the plaintiff was asked what conversation took place at the Krispy Kreme premises at Penrith. Her answer was:

“A: I recall Vince began with, ‘We need to discuss the investment capital’, and I said, ‘What do you mean?’ and he said words to the effect that I had no guarantee with her and I then pointed out that I paid her out in December of 2000 which I told him about to keep her pacified. She was very upset. And as a consequence, words to the effect of, ‘There’s no more to talk about. I’ve paid her and assume that debt because we had the agreement’. It was always with me, anyway.
Q: Did Mr Perry say anything?
A: I asked him. He didn’t say anything immediately then, but I asked him. I said ‘Are you expecting me to lose another $100,000.00 on top of the $200,000.00 I’ve already given her?’ And he said, ‘No’, and that was the end of the conversation. And that was the reason I hadn’t brought it up in the previous affidavit, because it didn’t seem that important to me at the time.
Q: How would you describe the breakup with Ms Schipper?
A: Acrimonious.”

Evidence of Ms Rita Kelly

By affidavit affirmed on 19 June 2015, Ms Kelly deposed that she first met the first defendant, Mr Perry, in 2008 when she attended a lunch with the plaintiff and Mr Perry at Woy Woy. On that occasion a conversation took place in which the plaintiff told Mr Perry that she needed money.
Towards the end of 2009, Ms Kelly went with the plaintiff to Mr Perry’s office at Enmore. A conversation took place between the plaintiff and the first defendant about the amount owing to the plaintiff. Ms Kelly deposed that the following conversation took place:

“Plaintiff: I am sure you owe me more than that including the $200,000.00 that Renee put in.”
Mr Perry: I don’t know how that got in there. I never agreed to that being part of the contract. You put it into the account overnight. You snuck it in. It was never part of the original contract with you.
Plaintiff: You know full well that when I rang you, you said it would be fine and would be under the same conditions as the original contract.
Mr Perry: I never agreed.”

Mr Perry then provided access to records from Ord Minett and allowed those records to be copied. Whilst going through those records, Ms Kelly came across two documents which were annexed to her affidavit and marked ‘A’. She gave those documents to the plaintiff to photocopy. The two documents that were copies became exhibits A11 and A12.
Ms Kelly was cross-examined. She said she had known the plaintiff for 36 years and had been asked to affirm an affidavit in the proceedings approximately six weeks to two months prior to the hearing. When asked about the process by which documents were copied, she said that she had placed them in date order and then passed them to the plaintiff to copy. When asked whether she had taken any document from the premises, she replied “Absolutely not”.
In addition to the documents in exhibit A, the plaintiff tendered exhibit B which comprised a request for particulars and answers provided to those particulars by the defendants’ solicitor.

Evidence of the Defendants

The first defendant, Vince Perry swore an affidavit on 2 December 2014 in which he set out his history as an accountant and registered tax agent. He deposed that he first met the plaintiff through her partner, Ms Renee Schipper, in around 1996. The plaintiff was referred to him on the basis that he could potentially act as her accountant. Mr Perry deposed that he had never acted for the plaintiff as her accountant. Notwithstanding that, the plaintiff visited him on numerous occasions at his office. On those occasions she would ring to make an appointment and discuss investments for the plaintiff. Mr Perry deposed that he suggested to the plaintiff, for example, that she may wish to consider tourism accommodation as an investment.
On one occasion Mr Perry discussed with the plaintiff the Reuters interactive screen on his desk, which led on to a discussion about currency trading, including the use of leverage or borrowings in such trading.
In around August 1999 Mr Perry deposed that he had a conversation with the plaintiff, to the following effect:

“Plaintiff: Please can I go into partnership with you to invest in currency trading, in property or in hotels. If you buy half, we can go into these ventures together.
Mr Perry: No. There are too many relationships that turn sour with property transactions, I will never go into a business partnership with anyone again. I learnt my lesson with the Garfield Street project in the 80’s, early 90’s.
Plaintiff: Will you be my accountant?
Mr Perry: No.”

Mr Perry deposed that he never agreed to be the plaintiff’s accountant because he was, at that time, working on selling his share of his accounting practice. By June of 1999, he deposed that he had entered into an interim agreement with other staff to sell his share of the practice to them and that he was not taking on any new clients. Mr Perry sold his share of the accountancy practice in March 2001.
Further, Mr Perry denied receiving any records for the plaintiff or her Family Trust, from her previous accountant.
Mr Perry deposed that over a period of almost two years the plaintiff came to his office to discuss investments and a possible partnership. Over that period of time, he deposed that he was “just worn down by Patricia” and agreed to go into business together when he said to her “Okay, we can do some currency trading as a joint venture”. He showed the plaintiff some financial statements from his Ord Minett currency trading account and said to her:

“I will trade on your behalf and guarantee your investment. I have a very large property portfolio and if we lose money on foreign exchange, I can sell one of my properties to recoup the loss.”

At around the same time, he recalled a further conversation to the following effect:

“Mr Perry: If we go into a joint venture together for currency trading I will guarantee your capital contribution, you will walk out with at least what you put into the joint venture.”

The plaintiff said:

“I understand because that’s like a capital guarantee fund in share trading for trusts.”

Mr Perry annexed to his affidavit a file note that he had made prior to 10 September 1999, which was marked VP4. It was exhibit A6 in the plaintiff’s case and contained the handwritten note “power to hold = 99.999% success”.
Mr Perry denied that he told the plaintiff that he had stop losses in place to prevent losses. At no time did he ever have stop losses in place as he always “rode the waves” of currency trading.
The only controversy about the first Agreement concerns how it was typed. Mr Perry deposed that he did not know who typed the document. However, he deposed that he signed it, and that the plaintiff agreed to deposit the sum of $250,000.00 into his Ord Minett account.
Similarly, there is no controversy over the first Variation Agreement on 2 November 1999. Mr Perry deposed that he did handwrite on the bottom section of the first Agreement, words appearing in exhibit A7, the only controversy appeared to be how that document became typed as exhibit A8. Mr Perry had no recollection of signing that document. Again, he did not deny that a further $250,000.00 was paid by the plaintiff into his Ord Minett account.
The area of controversy is the sum of $200,000.00 that was deposited into Mr Perry’s Ord Minett account on 1 February 2000. He deposed that on the morning of 1 February 2000 he received a call from Ms Schipper and he rang her back at home. The following conversation took place:

“Ms Schipper: I want to be part of the action in trading currencies. I’m going to drive to the Westpac Bank at Lithgow this morning to deposit $200,000.00 into the Ord Minett account.
Mr Perry: Okay you do that and we’ll talk about it.”

There is no dispute that the sum of $200,000.00 was paid into Mr Perry’s account. However, Mr Perry deposed that at no time did he ever agree that he or the second defendant would guarantee that sum. He denied that he met with the plaintiff or Ms Schipper on 1 February 2000, on the basis that his phone records and business orders records provided proof that he was away from the office after 9.00am that day.
Mr Perry denied that the handwriting on exhibit A11, being the handwritten section at the base of the typed first Variation Agreement, was his handwriting or his signature. He deposed that the first time he saw that document was on 26 August 2014, after these proceedings had been commenced. Further, the first time he received a copy of exhibit A12, being the typed second Variation Agreement, was after the proceedings had been commenced. He could not be certain that the document, exhibit A12, was in fact a copy of the document signed by him. Rather, he deposed that on or about 8 September 2000 he met with the plaintiff and signed a document which the plaintiff told him was “a guarantee that you will cover Renee for her losses”. He was not given a copy of that document.
Mr Perry deposed that he personally contributed $62,000.00 by way of margin calls on the Ord Minett account. He agreed that sometime after 30 June 2000, and probably on or around 8 September 2000, he met with the plaintiff at his office and signed a document, the purpose of which was to provide a guarantee for the losses suffered by Renee Schipper. He was unable to say whether that document was exhibit A12.
Mr Perry deposed that in January 2002 he met with the plaintiff to discuss the amount owing to her. He deposed that the following conversation took place:

“Plaintiff: What am I going to do about the $200,000.00 that Renee has lost on the currency trading? I’ll have to pay her out.
Mr Perry: Trish, as you know there is no guarantee on Renee’s money (i.e. the $200,000.00).
Plaintiff: But I have to pay her back as it affects the amount of money I have to give her under our property settlement.
Mr Perry: We were both stupid. You wound Renee up about the profits of the joint venture at the start, and encouraged her to put her own money in, and I am stupid for accepting Renee’s money. We can go halves in Renee’s loss. I’ll bear $100,000.00 and you bear $100,000.00. So total I owe you $600,000.00.
Plaintiff: That would help towards my property settlement with Renee.”

Mr Perry deposed that, at the time, he made a note of this agreed split on the handwritten document which had become exhibit A13, which was annexed to his affidavit as annexure VP12. That entry read:

“13/9/1999 = $250,000.00, 2/11/1999 $250,000.00
= $200,000.00 = $700,000.00 less $100k = $600,000.00”

Mr Perry denied receiving the letter, exhibit A23, which is extracted in [23] above. Rather, he deposed that by 23 October 2009 he had repaid to the plaintiff the whole of the $600,000.00 he alleged is owing to her in accordance with his reconciliation of the amounts paid to her as set out in exhibit A13. Included in that sum was the amount totalling $104,058.00 paid to the plaintiff during the period September 1999 to January 2000. The balance of $495,942.00 was paid by way of cash and chattel payments.
In respect of the documents photocopied at his office by the plaintiff and Ms Kelly in 2009, Mr Perry deposed that the document, exhibit A12, was never in his possession before the plaintiff commenced the proceedings. Also annexed to his affidavit was an Excel spread sheet, prepared by Mr Perry’s assistant in July 2014, showing a total payments made by the defendants to the plaintiff totalling $599,995.96.

Cross Examination of First Defendant

With leave, Mr Perry gave further evidence in chief about the content of para 77 of his affidavit which concerned a spread sheet that he had created to make a record of the payments made to the plaintiff. He gave this evidence:

“Q: So at 77 you say, ‘I did send to Patricia a spread sheet which identified the payment I and the second defendant made to her during the years 2007 to 2009’. By what manner did you send that spread sheet to Ms Anthony?
A: It would be faxed, if it was this document here, showing the additional payments.
Q: You’re referring to VP12 are you, when you’re holding it up there?
A: Page 61. There were other times when she was given a spread sheet and I was doing weekly payments. She’d want a list, so I’d email her a detailed list of every payment, so then she could check her bank statement with it.”

VP12 was an annexure to Mr Perry’s affidavit, which was exhibit A13.

In cross-examination, Mr Perry agreed that the document, VP12, was not the spread sheet he had referred to in para 77 of his affidavit.
Mr Perry agreed that he was an experienced and competent accountant, and an experienced businessman. He had deposed in his affidavit that the plaintiff was introduced by Ms Schipper to him on the basis that he would potentially act for her as an accountant. He said that he saw her as a friend of Renee Schipper, and that he had a closed book on clientele at that time. He eventually sold his interest in the business in 2001.
Mr Perry denied acting as the plaintiff’s accountant. He would not agree that an accountant is someone who prepares tax returns for clients. Rather, he agreed that he had acted as the plaintiff’s tax agent. He agreed that he had not disclosed to the court that he acted as the plaintiff’s tax agent.
Mr Perry was cross-examined about a letter that he had sent to the plaintiff on 7 October 1999, regarding the information he required for the preparation of her 1999 tax return (annexure ‘D’ to the plaintiff’s affidavit of 22 June 2015). He gave this evidence:

“Q: I can take it from that that you must have had some discussions with Ms Anthony about her financial affairs to be able to know to ask for these various documents?
A: Yes.
Q: But you say you didn’t do that as her accountant, but as her tax agent. Is that correct?
A: No. You were referring to her income tax return as a tax agent.
Q: You had investigated her financial affairs sufficiently to be able to know what documents were required to prepare her tax returns by October 1999?
A: This is a standard letter from the practice.
Q: When you were asking Ms Anthony about her financial affairs, your evidence was that you weren’t doing this as her accountant and only as her tax agent. Is that correct?
A: All that happened was her personal income tax return. Nothing else happened.”

Mr Perry agreed that he had lodged her 1999 personal income tax return.
Mr Perry gave evidence that he never received the books, records, cheque butts or deposit books from the plaintiff’s previous accountants. The plaintiff went to Mr Perry’s office on several occasions over a period of two years to have meetings, but he was not acting as her accountant. The purpose of the meetings was to discuss her future investments, employment and business strategies. He was asked:

“Q: Aren’t those the sort of things that one might discuss with one’s accountant?
A: Yes they are.”

Mr Perry agreed that the plaintiff had sought his advice in respect of the investment of a large sum of money that she had received.
Mr Perry deposed that the plaintiff was a sophisticated investor who appreciated the risks involved in leverage currency trading. It was put to him that he had given that evidence because he was concerned that the court would take a dim view of him as her financial advisor, investing in currency trading if she was not a sophisticated investor.

Mr Perry agreed that he had deposed that the plaintiff had asked him what the Reuters Interactive Screen was on his desk. He agreed that he was the one who proposed to her that she become involved with him in relation to currency trading. He gave the following evidence:

“Q: You were the one who explained to her that you would be able to trade in currency trading such that you could ensure a 99.9% success rate. Correct?
A: Yes, providing there was the power to hold the position.
Q: And the power to hold the position required that you have enough funds. Correct?
A: Correct.”

Mr Perry agreed that the plaintiff had the funds. He gave this evidence:

“Q: And so you suggested to Ms Anthony that she should give you her part of her funds so that you could trade. Correct?
A: Give me funds in a joint venture.
Q: Part of her funds so that you could trade?
A: In a joint venture.
Q: But to trade. Correct?
A: Yes.
Q: And you gave her assurances that her funds would be safe?
A: Yes
Q: You personally guaranteed her that she would have her money kept safe?
A: Yes.
Q: And you assured her that you were able to make that guarantee because you had property that you could sell if you had to do so?
A: Yes.”

It was put to Mr Perry that his evidence that he had been “worn down” by Ms Anthony’s repeated requests to go into business with him was nonsense, with which he disagreed. He agreed that he did not refund the $200,000.00 that “Ms Schipper had snuck into his account”.
Mr Perry was cross-examined about the balance of $28,000.00 in his Ord Minett account at the time the plaintiff had invested $250,000.00. He gave this evidence:

“Q: That wasn’t enough funds to trade with 99.999% safety?
A: It would have been if there is small parcels.
Q: Correct, but then would have very minimal trading and very small trades at that:
A: You can do a million dollar trade with $28,000.00.
Q: You couldn’t trade safely with $28,000.00 at that level?
A: If you traded $400,000.00 you could trade very safely. That would cover you for a 25% movement in the currency.
Q: Well, if that was so, why didn’t you ask Ms Anthony only to invest another $28,000.00 in your venture if you could safely at $28,000.00?
A: Because I couldn’t be bothered trading with such a small parcel of money.
Q: The profits would be marginal, wouldn’t they, on $28,000.00. It would not be worth it?
A: A lot of people do.
Q: You weren’t prepared to do that?
A: No.
Q: You needed to have more money to be able to trade at a level that the profits would be worth the effort?
A: Correct.”

In respect of Mr Perry’s contention that the plaintiff was badgering him to invest her money, he gave this evidence:

“Q: And you’re only doing this so she’ll stop badgering you?
A: To keep a good face, correct.
Q: Notwithstanding all of that, you agreed to do two things. You’ll do all the trading. Correct?
A: Yes.
Q: And you’ll guarantee her personally that her investment will be safe?
A: Yes.
Q: That was a very generous response to the badgering wasn’t it Mr Perry?
A: Sure.
Q: Can I suggest to you it’s far more likely that what in fact was happening is that you were trying to convince Ms Anthony to invest what in essence is her retirement money in a venture with you. Correct?
A: No.
Q: You were trying to allay her concerns about the risks of investing in such a venture by giving her a personal guarantee that her investment would be safe?
A: It was safe. She got all her money back.
Q: You were trying to persuade her that you were a man of substance with a large property portfolio who could give that guarantee?
A: Correct.
Q: You were pursuing her, not the other way around Mr Perry?
A: No. I disagree.”

Mr Perry agreed that his handwritten notation “power to hold = 99.999% success” was part of the assurances he gave the plaintiff in relation to the investment.
Mr Perry was cross-examined about the circumstances in which the first Agreement was signed. He could not remember whether Ms Schipper was present or whether the document was signed at his premises. He agreed that Ms Schipper “possibly” could have typed the document.
With respect to the first Variation Agreement made on 2 November 1999, he agreed that he accepted the plaintiff’s further investment of $250,000.00 and stated:

“Yes, we all felt good about it.”

He gave this evidence:

“Q: You didn’t feel that you were being pursued any further by Ms Anthony at that stage did you Mr Perry?
A: We were all winning and everyone was happy.
Q: Yes. And you were only too happy to take another $250,000.00?
A: We were all winning, we were all benefitting at that time.”

He agreed that prior to making a margin call, he had not put any of his own money into the Ord Minett account, after the plaintiff made her investments. He agreed that at all times he was playing with the money of the plaintiff and later Ms Schipper.
The second Variation Agreement was dated 1 February 2000. He denied that the handwriting on exhibit A11, at the bottom of the page, was his handwriting. He gave this evidence:

“Q: You would accept that there is a certain degree of similarity between this handwriting and the one at tab 7 (exhibit A7), wouldn’t you?
A: It’s a good copy, yes.
Q: You say it’s a copy of your handwriting?
A: It’s a good copy of my handwriting.
Q: Are you suggesting this is a forgery?
A: I’m suggesting that it’s not my handwriting.
Q: But it’s a copy of your handwriting?
A: It’s a copy of my handwriting.”

Mr Perry denied that the signature at the bottom of exhibit A11 was his signature. He was asked:

“Q: So you say that that’s a forgery?
A: I say it’s not my signature. I don’t know what it is, but it’s not my signature.
Q: You agree that it purports to look like your signature?
A: Yes, but if you it together with other signatures you’ll see that they are different. It is not my signature.
Q: Well, I won’t characterise it, but you say that that appears to be your signature but you deny it is your signature?
A: Correct.
Q: And you accept from that evidence then, Mr Perry, that somebody must have attempted to forge your signature on this document?
A: It appears that way, yes.”

Mr Perry gave evidence that it was not possible that he had signed that document on 1 February 2000 because he was not at his office after 9am on that day. He denied that before 1 February 2000 he had spoken to the plaintiff about Ms Schipper wanting to become part of the action. He further denied the evidence given by the plaintiff that he had said to her:

“I don’t want to deal with Ms Schipper. I’ll only deal with you. I’m happy to deal with you and to amend our existing agreement.”

When questioned about his phone call with Ms Schipper on 1 February 2000, he agreed that her call came out of the blue, that she told him she was going to deposit $200,000.00 into the Ord Minett account without giving him any choice at all and that thereafter, she deposited that sum. He agreed that had given no further evidence of any further discussions with Ms Schipper about her investment and his reason was “because the monies were virtually lost days after”. Nowhere in his affidavit had Mr Perry deposed to any discussion of the deposit of those monies with Ms Schipper.
Mr Perry was questioned about the meeting he held with the plaintiff in January 2002 at Penrith. He gave this evidence:

“Q: You say during their conversation you told Ms Anthony that she knew that there had been guarantee given to Ms Schipper?
A: It was around that time, yes.
Q: So you would have his Honour believe that Ms Schipper was prepared to put her $200,000.00 into the joint venture without any guarantee from you?
A: Yes.
Q: Without any document to record the terms under which the investment was to be made?
A: Yes.
Q: Notwithstanding that Ms Schipper had been a witness to the first Agreement with Ms Anthony?
A: Yes.
Q: Notwithstanding that Ms Schipper would have known that Ms Anthony got a written guarantee from you and your company to secure her capital?
A: Yes.
Q: Ms Schipper was nonetheless happy to put $200,000.00 into the account without any guarantee from you?
A: It was never discussed. That’s correct.
Q: Mr Perry that is simply unbelievable evidence, isn’t it?
A: No.”

Mr Perry denied meeting with Ms Anthony and Ms Schipper on 1 February 2000 and signing exhibit A11. He further denied that he gave Ms Anthony the same guarantee in relation to the further sum of $200,000.00 that he had given her for the first and second deposits that she had made. He agreed that Ms Schipper had never demanded her money from him and that all of the dealings in relation to the matter of the joint venture had been with the plaintiff. He did not accept that it was improbable that Ms Schipper would have telephoned him out of the blue to tell him that she was depositing money into an account without having first had some discussion with him about joining the joint venture.
As to his movements on 1 February 2000, Mr Perry agreed that he did not have a clear recollection of where he was on that day until he gathered evidence from his phone accounts and his shoe orders. He accepted that the distance between the offices of Perry Egan Accountants and his warehouse at Ashfield was a 10 or 12 minute drive.
As to Ms Kelly’s evidence that she found exhibit A11 in Mr Perry’s file, Mr Perry gave evidence that he had been unable to find that document. He agreed that if the document had been in his records, then that could possibly be a difficulty for his case. It was put to him that exhibit A11 was the document that he had referred to in his affidavit as being signed by him in September 2000. As at that date, he agreed that he did not voice any objection to providing a guarantee for Ms Schipper’s investment, even though the money had been lost. Notwithstanding that, he had never kept a copy of those documents and did not even know what he had signed. He gave the following evidence that he signed something without reading it:

“Q: So you signed a document without reading it, correct? Is that what you say to his Honour now?
A: Correct.
Q: Knowing that it was a guarantee?
A: Not knowing what it was.
Q: You knew what it was, Mr Perry?
A: It was to appease the relationship.
Q: You knew it was a guarantee because you were told, on your version, by Ms Anthony. Correct?
A: May, possibly.
Q: Notwithstanding that didn’t read this guarantee that you were asked to sign, you never asked or made a copy of that document. Correct? Is that what you say to his Honour?
A: Correct. The copy was not made.
Q: So you ask to his Honour to believe that, as an experienced businessman like your, an experienced accountant like you, was prepared to sign a guarantee without reading it and without even keeping a copy of it for your records? Is that your evidence that you’re asking his Honour to accept?
A: That is my evidence.
Q: Do you not accept that this is just implausible in the extreme Mr Perry?
A: No I don’t.”

Mr Perry agreed that he had signed exhibit A12 which was the typed version of Exhibit A11. He was then asked:

“Q: You say it’s possible that tab 12 is the document Ms Anthony asked you to sign, you say in September 2000?
A: Yes.
Q: Do you accept it’s a one sentence document?
A: I accept that, yes.
Q: Do you accept that it would take a moment to read a document that short?
A: If I didn’t have my glasses with me at the time, no.
Q: Are you saying that Ms Anthony asked you to sign this document, you didn’t have your glasses with you?
A: Potentially, yes.
Q: Are you speculating now Mr Perry, or is that what you recall?
A: I’m not speculating, it is true.
Q: Do you sign documents without your glasses, Mr Perry?
A: Sometimes I do yes, sometimes I don’t.”

Mr Perry was then asked a series of questions about backdating documents. He gave evidence that that document was not backdated, not because the date of 1 February 2000 appeared on it, but because the signatures and the witness’s signatures had not been dated. When it was put to him that that evidence was simply incredible, he did not agree.
Mr Perry did agree that when he signed exhibit A12 he knew that he was agreeing to increase the capital amount of the plaintiff by another $200,000.00.
It was put to Mr Perry that the purpose of the meeting at Penrith in January 2002 was that the plaintiff wanted to know what he was going to do about repaying her capital. He denied that, and gave this evidence:

“Q: At that meeting you said to her words to the effect, ‘I shouldn’t have to pay the $200,000.00 that Renee paid because she snuck it into the account’, do you recall saying words to that effect?
A: Words to that effect?
Q: Yes?
A: I said or?
Q: That you said, yes?
A: Yep.
Q: You agree?
A: The conversation didn’t happen like that, but go on.
Q: No, I need you to know, do--
A: To that effect?
Q: Yes. Did you say at the meeting at Krispy Kreme that you thought that Renee had snuck the money into the account? Did you say those words or words to that effect?
A: Words, something like that, yes.
Q: On that basis, you said to Ms Anthony it wasn’t fair that you should have to pay the $200,000.00 back. Correct?
A: Words to that effect, yeah.
Q: Ms Anthony said, ‘Nonsense’. She rejected any suggestion that you shouldn’t have repay the $200,000.00?
A: I disagree with that.
Q: You wanted to split the difference, as it were, such that you would only be responsible for $100,000.00 of those losses. That’s a proposition you put to Ms Anthony at the Krispy Kreme, isn’t it?
A: Words to that effect, yeah.
Q: And Ms Anthony wouldn’t have a bar of it would she?
A: No, she agreed to it because she hadn’t paid anyone back any money at that time.
Q: Well your evidence in paragraph 72 is Ms Anthony agreed to be responsible for $100,000.00 of the $200,000.00 that was lost. Correct?
A: Yes.
Q: Up until that point you were on the hook for the full $200,000.00?
A: No.
Q: So you were on the hook for any of that money?
A: I was on the hook for nothing.
Q: So this was an act of generosity on your part to volunteer to assume a liability of at least $100,000.00 on your version?
A: It was a separate agreement that we made to share that loss.
Q: So there was no obligation on you at that stage to pay anything, you say, in respect of the $200,000.00?
A: That’s right, correct.
Q: So notwithstanding that you had lost a substantial amount of money in trading, you took it upon yourself to in fact give $100,000.00 to Ms Schipper’s cause. Correct?
A: To give it to Trish to assist her in settling her property and other affairs with Renee.
Q: So it was really a donation by you. Is that what you want this court to believe?
A: Effectively, yes.
Q: Notwithstanding that at that time you were in severe financial difficulty. Correct?
A: I had cash flow difficulties, yes.”

Mr Perry agreed in his evidence that in about January 2002 he made a note of this agreement referred to in the handwritten note at the top of annexure VP12 to his affidavit (exhibit A13). That was the document that he had described in his affidavit as one which had been written in his own handwriting “over the period from 1999 …” He agreed that the document had not been created in 1999 but that it was created after the losses were incurred in 2000. It was put to Mr Perry that that document was only prepared after he had the meeting with Ms Anthony when she was accompanied by Ms Kelly and she demanded to know when he would pay the rest of the money owing to her. He disagreed with that proposition. It was put to him that the document, VP12 (exhibit A13), was an attempt by him to justify that he owed no money to the plaintiff, which he denied.
Mr Perry admitted that he could not recall exactly when the document exhibit A13 was created, but said that it was done one and a half to two years after the losses were incurred. He agreed that the notation at the top of that document could only have been made after he had met with the plaintiff. The document comprised three pages, the first two of which were photocopies and the last an original. Mr Perry gave evidence that he believed Ms Anthony had the original of the first two pages. When asked what the basis for his belief was, he said “Because I don’t have them”.
A call was made on the plaintiff for those original documents but no document was produced.
Mr Perry referred to the document as being manufactured or created over time. At the end of the second page there was a balance owing noted as at 7 December 2006. He kept a running total of each payment he made. From approximately 2001, each time he made a payment he wrote on the document. He denied that he wrote the third page after his meeting with the plaintiff in 2009.
It was put to Mr Perry that he had never discussed with the plaintiff that he was going to pay her weekly payments of $1,612.98. He said that that was resolved at a meeting. However, he had given no evidence of that meeting. It was put to him that in preparing the instructions to his bank to make the weekly payment of $1,612.98 he was only going to pay a total of $600,000.00 to Ms Anthony. His answer was:

“A: I disagree with that. Wholeheartedly, I disagree with that.
Q: And around October 2008 you decided that that’s all you were going to pay Ms Anthony was $600,000.00, so you worked out how much you still had to pay her and you divided that by 52 weeks and that’s the amount you unilaterally decided to pay her?
A: I disagree.
Q: Well, how did you come to the amount of $1,612.98 then Mr Perry?
A: You said I didn’t tell her.
Q: I’m asking you?
A: Because that was the balance that I owed.
Q: That’s the balance that you struck in your mind as to what you thought you—
A: That we struck at our meeting, not in my mind, so I disagree with what you’re saying.
Q: By the meeting, you are referring to the meeting in January 2002, is that correct?
A: Call it the Krispy Kreme meeting, sure.
Q: The Krispy Kreme meeting, yes?
A: Yeah.
Q: Which Ms Anthony denies that she reached any agreement with you?
A: Okay. She has the right to deny it.”

It was put to Mr Perry that there was no running account kept of payments made by him to the plaintiff, which he denied. It was put to him that exhibit A13 was sent to the plaintiff after she demanded that he pay her the monies that she felt were due, after their meeting in late 2009. He denied that and said the running total had been sent to her several years beforehand.
Mr Perry gave this evidence:

“Q: Mr Perry, you gave instructions to your solicitors in this matter to have the original documents, exhibits A11 and A12 to be provided to them for the purposes of having a handwriting expert examine the documents?
A: Yes. Sorry. Say that again?
Q: Let me make it simple. You gave your solicitors some instructions that they should get the original of the documents at tab 11 and 12, those are the documents that you say the handwriting on 11 is not yours?
A: Alright. Yes.
Q: You asked your solicitors to uplift the original of those documents from my client’s solicitors?
A: Yes.
Q: And you gave them instructions so that they could have the documents inspected by a handwriting expert?
A: Yes.”

In re-examination, Mr Perry was asked about his evidence that he spoke to the plaintiff, “virtually daily”, and said that that was while the venture was making money. After the venture ceased earning money, he gave evidence that he continued to have daily discussions with the plaintiff and the nature of those discussions was to “keep on trading on, try and recoup it”. Those discussions occurred until all the money was lost.
In respect of evidence that he had given about not having stop losses, he was asked what he meant when he said what led to the losses in this case was “something else”. He was asked:

“Q: What was that ‘something else’?
A: Well, no, I never took out stop losses, but then after Renee put her money in, I was getting so many phone calls from both of them, right, that they said, ‘take it long’, ‘take it short’, they were just confused me. So I was making the wrong decisions on the trades. That’s what happened.
Q: You just said ‘I was taking phone calls from both of them’?
A: Yeah, because Renee then started ringing me saying ‘Do this, do that, do this, do that’, but that was short-lived. Then they were studying the market, they were studying currencies and what have you.”

Affidavit of Mr Rizzo

The defendants relied on an affidavit of Anthony Rizzo sworn on 1 December 2014. Mr Rizzo was a registered tax agent employed by the first defendant. Mr Rizzo had been asked by Mr Perry to reconcile the handwritten document (exhibit A13) with the data in the accounting software owned by the first defendant. He produced a typed document recording payments made by Mr Perry to the plaintiff and created an Excel spread sheet identifying all payments that had been made by the defendants to the plaintiff. A further spread sheet was created recording all of the Ord Minett transactions. Mr Rizzo was not required for cross-examination following an agreement by the parties that the various spread sheets created by Mr Rizzo depended upon the accuracy of the underlying documents.

The Issues to be Determined

The issues to be determined in this matter are as follows:

As a matter of construction, did the first Agreement provide an indemnity by the first defendant and a guarantee by the second defendant of the plaintiff’s capital investment, or whether there were in fact two indemnities provided, notwithstanding the difference in wording.

Whether the indemnity of the first defendant and the guarantee of the second defendant (howsoever characterised) extended beyond the sum of $250,000.00 invested by the plaintiff, pursuant to the first Agreement.

Whether the second Variation Agreement, dated 1 February 2000, was entered into between the plaintiff and the first defendant.

3.1 If so, did the personal indemnity of the first defendant and the guarantee of the second defendant (howsoever characterised) extend to the plaintiff in respect of the sum of $200,000.00 paid by Ms Renee Schipper?

3.2 If not, is the plaintiff entitled to recover the $200,000.00 invested by Ms Schipper.

Whether the distribution of $104,058.00, to the plaintiff, was by way of share of profits or a reduction of capital.

Was there a separate agreement enforceable at law by the plaintiff and the first defendant, that the first defendant would be liable in respect of $100,000.00 of the sum of $200,000.00 invested by Renee Schipper?

The First Agreement

The first Agreement is set out at [11] above. After the preamble, it included nine bullet points described as “terms and conditions” which were referred to by the parties during submissions as cll 1-9 consecutively. That description is somewhat misleading because the second bullet point is clearly part of the first.
Relevantly, the preamble describes a “joint venture agreement”. Clauses 3 and 4 are relevant to the question of whether the document should be construed as an indemnity and/or guarantee, namely:

“Vince Perry personally indemnifies Patricia Anthony as to her capital of $250,000.00.

Perry Properties Pty Limited, of which Vince Perry is the sole director and shareholder, who personally guarantees Patricia Anthony as to her capital of $250,000.00.”

Relevant to the characterisation of the payments of $104,058.00 made to the plaintiff and the second defendant, are cll 5 and 7, namely:

“Net profits on trading shall be distributed in equal shares between Patricia Anthony and Perry Properties Pty Limited.

…

Profits generally shall be distributed on a monthly basis. If there is no profits then the capital shall not in any event be distributed in lieu of profits.”

Whilst the preamble describes the arrangement as a “joint venture agreement” it is common ground between the parties that that is not a term of art which has particular legal consequences. The agreement is one between the plaintiff and both Mr Perry and the corporation Perry Properties Pty Limited. The consideration is the $250,000.00 paid by Ms Anthony, referred to in cl 1.
The plaintiff submitted that the phrase “personally indemnifies” in cl 3 and the phrase “personally guarantees” in cl 4 both give rise to an indemnity to the plaintiff as to her capital. Both clauses include the word “personally” and the words “indemnity” and “guarantee” are words used interchangeably by lay persons. Therefore, the plaintiff therefore submits that both provide an indemnity to the plaintiff as to her capital.
In the “Modern Contract of Guarantee” by O’Donovan & Phillips, the learned authors at paragraph [1.1100] under the heading “General Principles”, state:

“The performance of an obligation or the payment of the debt of another may be secured not by a guarantee, but by a contract of indemnity. The distinction between a contract of guarantee and a contract of indemnity is that in a contract of indemnity a primary liability is assumed whether or not a third party makes default, while, as has been seen in a contract of guarantee, the surety assumes secondary liability to the creditor for the default of another who remains primarily liable to the creditor.
…
The contract of indemnity is “a contract by one party to keep the other harmless against loss” or ‘secure against loss’ and it not dependent on the continuing liability of the principal debtor. Moreover, an obligation can be an indemnity even if the person indemnified did not enter into a transaction with the third party ‘at the request’ of the indemnifier. The general principle is that, subject to contrary terms, the promisee generally has no right to receive a sum under an indemnity unless it suffers actual, ascertainable loss.” (authorities and citation omitted)

At paragraph [1.1130] the learned authors state:

“In doubtful cases, the courts will decide whether the contract is one of indemnity rather than a contract of guarantee by careful perusal of all the provisions of the agreement to ascertain if the rights of the creditor against the party entering into the contract are different in extent from those available against the debtor. Thus the agreement will be construed as an indemnity if the contract, according to some of its clauses, operates to render the promisor liable in circumstances in which the principal is not in default, or renders the promisor liable for a greater amount than the principal. By reference to these criteria, a contract by which a dealer agrees to indemnify a finance company against losses arising from a consumer credit contract has been held to be an indemnity.
Other factors may also indicate whether the contract is one of indemnity or guarantee. The fact that the words “guarantee” or “indemnity” appear in the instrument are indications of the intentions of the parties, especially if the expressions are repeated a number of times or appear in the heading to the instrument, but they are not decisive and the essential nature of the agreement must always be considered.”

The defendants submitted that any ambiguity in the terms of a contract of indemnity should be resolved in favour of the indemnifier, relying on Andar Transport Pty Limited v Brambles Limited (2004) 217 CLR 424 at [17] – [23]. It was submitted that in the event of ambiguity, the doctrine of “strictissimi juris” should be applied to such a contract, as explained by the plurality in Bofinger v Kingsway Group Limited (2009) 239 CLR 269 at [53]:

“The settled principle in Australia governing the interpretation of contracts of guarantee and indemnity has been stated by this court in authorities the most recent of which is found in the joint reasons in Andar Transport Pty Limited v Brambles Limited. The principle is that a doubt as to the construction of a provision in such a contract should be resolved in favour of the surety or indemnifier. It is implicit in this that the doubt may arise not only from the uncertain meaning of the particular expression but from its apparent width of possible application.”

Having regard to the circumstances in which the agreement was reached between the parties, and the objects which it was intended by the parties to secure, a commercially sensible construction of the first Agreement adopting a purposive approach is that the contract is one of indemnity by both defendants in respect of providing to the plaintiff the assurance she was seeking in respect of her capital. Notwithstanding the use of the phrase “personally guarantees” in clause 4, the essential nature of the agreement was that the second defendant was providing an indemnity to the plaintiff for any losses of her capital she might suffer.
In respect of the first Agreement, that finding has no great significance. It is implicit in the defendants’ submission that the proper construction of the first Variation Agreement meant that the defendants’ liability was restricted to the sum of $250,000.00. This is an acceptance by the defendants of liability by way of indemnity and/or guarantee pursuant to the first Agreement for that sum.

Were the interim payments net profits on trading?

In relation to the proper construction of cl 5 and 7 of the first Agreement, concerning “net profits on trading” and “profits generally”, the defendants submitted that net profits on trading are only derived once the profit that is earned from trading exceeds that which has been invested into the joint venture. The reason for this was that the word “net” would otherwise have no work to do. It was submitted that there was a clear differentiation between “net profits” and what were “profits generally”.
Therefore, the defendants submitted that the sum of $104,058.00 paid to the plaintiff and the second defendant were “interim payments” and that there were, in effect, no net profits for this venture. That was because those payments were paid randomly and as they were not distributed on a monthly basis, they could not be characterised as “profits generally”.
The defendants submitted that because cll 5 and 7 did not apply to those payments, the money paid to the plaintiff was a return of capital to her. Of the monies paid to the second defendant in the same amount, it was submitted that “it operated to reduce their obligation of suretyship to the plaintiff”.
I do not accept those submissions made on behalf of the defendants. The payments totalling $104,058.00 paid to the plaintiff and second defendant, were clearly net profits on trading, being the result of successful trades made by the first defendant and being funds in excess of the capital invested by the first defendant. It did not matter that they were distributed at random times as “monthly basis” was not defined by the agreement. They could not have been capital payments as the second sentence of Clause 7 provides:

“If there is no profits then the capital shall not in any event be distributed in lieu of profits.”(sic)

On the defendants’ own submission that no profits had been generated, as the amount of profits had not exceeded the amount of the investment, then pursuant to cl 7, the capital was not to be distributed. I therefore find in respect of the fourth issue outlined in [115] above, that the distribution of $104,058.00 to the plaintiff was by way of her share of net profit distributed pursuant to cl 5 of the first Agreement. In the same way, the same characterisation applies to the monies received by the second defendant. They could not in any event be by way of capital reduction, as the second defendant invested no capital in the venture.

Did the first variation agreement on 2 November 1999 extend the indemnity of the defendants to the total sum of $500,000 invested by the plaintiff?

The defendants submitted that the first Variation Agreement, being the handwriting of the first defendant, referred to in [14] above, or the typed entry, referred to in [15] above, merely noted that the parties agreed to increase the plaintiff’s capital by a further $250,000.00, incorporating the identical terms and conditions as stated in the first Agreement. The defendants submitted that those terms and conditions, including cll 3 and 4, provided an indemnity and/or guarantee as to the plaintiff’s capital of $250,000.00. The defendants submitted that given the objective circumstances surrounding that transaction on 2 November 1999, where the venture was making money (the plaintiff having received four interim payments), the agreement should be construed that the plaintiff was comforted by the fact that profits had been earned by Mr Perry’s trading for the period 10 September 1999 to November 1999, which gave her confidence in the security of her investment (at [32] above). Therefore, what was intended was that the indemnity should remain at a limit of $250,000.00 as set out in the first Agreement.
I do not accept that submission. The circumstances surrounding this investment are close in time to those surrounding the first investment of $250,000.00 by the plaintiff. The plaintiff in fact denied the proposition that the making of interim profits gave her confidence in the security of her investment. Rather, she was completely confident by virtue of the fact that she had a guarantee of her capital (at [33] above). The intentions of the parties in entering the first Variation Agreement were clear, namely, to increase the amount of the investment from $250,000.00 to $500,000.00 and to adopt the identical terms and conditions, including the indemnity and/or guarantee in respect of that sum. I accept the submission made on behalf of the plaintiff that otherwise there was no purpose to this Variation Agreement, because unless the indemnity is varied to allow for the increased amount of $500,000.00, there is no purpose in recording that the capital was increased by $250,000.00, other than to merely record that.
Therefore, I reject the submission made on behalf of the defendants that the indemnity and/or guarantee of the defendants was limited to the initial investment of the plaintiff of $250,000.00.

Was there a second variation agreement entered into by the parties on 1 February 2000?

The first defendant denies entering into the second Variation Agreement on 1 February 2000, as evidenced by the handwritten entry on the bottom of exhibit A11 and the typed document, exhibit A12. In respect of the first, the first defendant denied that it was his handwriting or his signature. In respect of exhibit A12, the first defendant acknowledged that it was his signature but denied signing the document on 1 February 2000.
His denial was based on the following:

On 1 February 2000, he received a phone call from Ms Schipper early in the morning, which he returned. The conversation that took place is set out in [66] above. Mr Perry gave no further evidence about any dealings with Ms Schipper in respect of that sum, and therefore that conversation must be the basis for the pleading of an oral agreement between him and Ms Schipper as set out in 6(c) of the Amended Defence at [7] above.

Mr Perry denied that he met with either the plaintiff or Ms Schipper on 1 February 2000. The basis of that assertion is that having checked his phone records and business orders records that day, he believes that he was away from his office after 9am on that day.

The first defendant gave evidence that the first time he saw the handwriting on exhibit A11 was in August 2014, after these proceedings had been commenced. Similarly, the first time he had received a copy of exhibit A12 was after the proceedings had been commenced. He adhered to his denial that the handwriting and signature on exhibit A11 were his. His evidence, as referred to in [68] above, was that he may have signed exhibit A12 on 8 September 2000.

Mr Perry contended that exhibit A12 was not executed on 1 February 2000 because there was no date next to his signature.

He further contended that he signed a document, not knowing what it was, merely to appease the plaintiff and to save her relationship with Ms Schipper.

In determining this issue, the credit of the witnesses was relevant. The defendants submitted that the plaintiff was not a witness of credit, because in her year 2000 income tax return she had not disclosed the sum of $104,058.00, received by her as interim payments from the defendants. The plaintiff’s answer to that was that she accepted the advice of her accountant in completing her tax returns.
The second way in which the defendant submitted the plaintiff’s credit was impugned was in relation to the running balance kept by Mr Perry, (exhibits A13 and A5). It was submitted that for the plaintiff, over a course of nine years, not to make any reconciliation or keep any ledger of the amounts that were paid to her, was inherently incredible.
Mr Perry’s credit as a witness was impugned by the plaintiff. In his written outline, counsel for the plaintiff relied on the following matters going to Mr Perry’s credit:

“He gave a version of events in chief as to how Ms Anthony pursued him to invest monies with him which is not only strikingly improbable but also one which he clung to in cross-examination, notwithstanding that the improbabilities were pointed out to him;

He made denials (such as being Ms Anthony’s accountant) which, when contradicted by his own signature on documents (such as the 1999 tax return), he sought to explain by drawing subtle distinctions (such as being her tax agent but not her accountant – but then admitted to giving her advice that an accountant would give);

hIs explanations for matters, such as why it was that he did not read the document he says he signed in September 2000, bordered on the ridiculous (and he was not averse to inventing further explanations in the witness box, such as suggesting that he may not have had his glasses with him);

He became so confused as to which documents he had signed and which documents he said he sent to Ms Anthony that his evidence descended into the unintelligible, a sign that he was either being dishonest about the circumstances under which those documents were created or simply had no reliable recollection of any of such matters;

He was driven to allege that unknown persons had ‘copied’ his handwriting and forged his signature to explain away documents (notwithstanding that it was not put to Ms Anthony by his counsel that any document was a forgery);

His version of the events that occurred at the end of 2009 when Ms Anthony and Ms Kelly attended his offices were diametrically opposed to the recollection of Ms Kelly;

When cornered about when he actually created VP12, he resorted to labelling his evidence in chief which contradicted his version given under cross-examination, as the result of an error in grammar (and could not offer any explanation why his newphew swore an affidavit deposing to a conversation with him which contained the same ‘grammatical error’ – namely, that he had commenced preparing the document in 1999);

Generally, his evidence was inherently improbable (such as his suggestion that he was prepared to offer a personal guarantee to Ms Schipper months after she had paid money to him and after he had lost nearly all of the money, without hesitation when asked to do so, but did not offer any such guarantee when the money was first invested and his evidence that he volunteered out of generosity at the Krispy Kreme meeting to assume a liability for $100,000.00 of Ms Schipper’s loss even though he himself was in financial difficulty) and would not be accepted.”

Generally, I was impressed with the evidence given by the plaintiff. She made an appropriate concession in respect of the preparation of the type-written document, exhibit A1. Whilst her failure to disclose the payments, received by her in the sum of $104,058.00, to the Commissioner for Taxation necessarily affects her credit adversely, she had a reasonable explanation for that, namely, that she relied on the advice of her then accountant. Notwithstanding that, this court is obliged to recommend that the matter be referred to the Commissioner for Taxation.
On the other hand, Mr Perry’s credit was successfully impugned. His evidence that he was at no time the accountant for the plaintiff was clearly wrong, and his attempt to distinguish the role of accountant and tax agent for the purpose of lodging tax returns was misleading. The plaintiff saw him on numerous occasions over a period of two years at his office where he carried on practice as an accountant. She sought investment advice from him, engaged him for the purpose of filing her 1999 tax return and ultimately relied on his assurance of an indemnity in respect of the money she invested with him for him to trade in currencies. The submission, made on Mr Perry’s behalf, that there was no evidence of a retainer, or the charging of fees for accountancy services was somewhat disingenuous, given that his corporation accepted half of the net trading profits of the investment.

Further, he clearly had no recollection of what occurred on 1 February 2000 and his attempt to reconstruct his movements on that day by way of his phone records and shoe orders, was clearly a self-serving reconstruction of events tailored to meet his interests in the litigation. It by no means provided evidence upon which a finding of fact could be made, on the balance of probabilities, that he did not meet with the plaintiff and Ms Schipper that day on the basis that he did not attend his offices after 9.00am on that day. Nor can the court accept his explanation for the plaintiff’s investment, namely, that she wore him down by badgering him into allowing her to invest her monies for him to trade in currencies. It was inconsistent with his own notation that he had explained to her, that he could ensure a 99.999% success rate.
Mr Perry’s denial that the signature at the bottom of exhibit A11 was his signature, whilst acknowledging that it looked like his signature, was less than credible. He refrained from calling it a forgery, although said it appeared that someone had attempted to forge his signature. That was not a matter put by his counsel to the plaintiff in cross-examination. Further, his former solicitors had retained a handwriting expert on his behalf. In the absence of any evidence from that source in respect of exhibit A11, and the lack of any explanation for that absence, an inference may be drawn that such evidence would not have assisted the defendants’ case, per Jones v Dunkel (1959) 101 CLR 298.
I do not accept Mr Perry’s evidence that he signed the document, exhibit A12, at some date in September 2000, or the evidence that he signed a document without reading it, without knowing what it was and without retaining a copy of it. Nor do I accept his evidence that exhibit A12 was not signed on 1 February 2000 because that date did not appear next to his signature. Neither the first Agreement (exhibit A1), nor the first Variation Agreement (exhibits A7 & A8) were dated in that way. Further, the evidence he gave that he signed an indemnity for $200,000.00 invested by Ms Schipper, at a time when that money had been lost, was plainly implausible.
I accept the plaintiff’s submissions in respect of Mr Perry’s credit. His evidence I find was unreliable in numerous respects. I have therefore been cautious in accepting Mr Perry’s evidence unless corroborated by objective contemporaneous evidence, and where his evidence has diverged from that given by the plaintiff, I have preferred the plaintiff’s evidence. I also accept the evidence of Ms Kelly as to what occurred at Mr Perry’s office at Enmore towards the end of 2009, referred to in [51] and [52] above. That necessarily affects my findings in respect of the second Variation Agreement and whether the parties reached an agreement whereby the plaintiff agreed to reduce Mr Perry’s liability in respect of Ms Schipper’s investment of $200,000.00 by $100,000.00.
Also relevant to this question was a submission made by the defendants that an inference should be drawn pursuant to Jones v Dunkel that the evidence of Ms Schipper would not have assisted the plaintiff’s case. The defendants submitted that Ms Schipper’s whereabouts were known to the plaintiff who had spoken to her some six or seven months prior to the trial, and that her absence from the witness box was unexplained.
The plaintiff submitted that no Jones v Dunkel inference could be drawn against the plaintiff for failing to call Ms Schipper because there was no reason to believe Ms Schipper would be in the plaintiff’s camp, given their acrimonious separation.
In MSPR Pty Limited v Advanced Breaking Technology Limited [2013] NSWCA 416, MacFarlan JA, with whom Ward and Gleeson JJA agreed, said:

“53 A Jones v Dunkel inference may be drawn against a party where the party would be expected to, but does not, call a witness who could give evidence on a relevant matter and that failure is unexplained (Payne v Parker [1976] 1 NSWLR 191 at [201]). The inference to be drawn in these circumstances is not that the witnesses’ evidence would have been adverse to the party, but simply that it would not have assisted the party’s case (Kuhl v Zurich Financial Services (2011) 243 CLR 361 at [64]; ASIC v Hellicar (2012) 247 CLR 345 at [168] and [232]). The inference permits the court to make a finding unfavourable to the party with greater confidence (Hellicar at [232]). For example, in G v H (1994) 181 CLR 387 a mother gave evidence suggesting that the defendant was the father of her child. A conclusion as to the defendant’s paternity was able to be reached with greater confidence in the light of his failure to give evidence and to deny paternity (at [391]). As that case illustrates, for a Jones v Dunkell inference to be drawn, there must be evidence that the party against whom it is to be drawn is required to explain or contradict (Schellenberg v Tunnel Holdings Pty Limited (2000) 200 CLR 121 at [51]). This evidence is available to found a judgment against the party. Otherwise, to base a judgment against a party simply upon his or her failure to call evidence would involve the erroneous drawing of an inference that the party’s evidence would have been positively adverse to his or her interests.
54 The High Court has described the foundation of the Jones v Dunkel principle as that ‘the party or his advisers are presumed to know the content of the absent witness’s evidence, otherwise he would not be a witness whom that party might reasonably be expected to call.’ (Brandi v Mingot (1976) 12 ALR 551 at [560]). As Glass JA observed in Payne v Parker, the condition that the missing witness would be expected to be called by one party rather than the other has been described in different terms (at [201]). These include descriptions of it being ‘natural for one party to produce the witness’, and the witness being ‘in the camp of one party, so as to make it unrealistic for the other party to call him’.”

In Manly Council v Byrne and Anor [2004] NSWCA 123, Campbell J (with whom Beazley JA, as her Honour then was, and Pearlman AJA agreed) said:

“54 The inferences licensed by Jones v Dunkel are ones which are drawn, if at all, once all the evidence in the case is in. This has significance in two ways. The first is that, the Jones v Dunkel licenses drawing more confidently, an inference available against the party who has failed to call the evidence, before that can happen there must first be available to be drawn, on the evidence which has been admitted, an inference against that party. As Spigelman CJ said in State Bank of New South Wales v Brown [2001] NSWCA 22 at [17] – [18]:
‘As expressed in Cross on Evidence, above, at [1215]:
…
The rule in Jones v Dunkel permits an inference that the untendered evidence which would not have helped the party who failed to tender it, and entitled the trier of fact to take that into account in deciding whether to accept any particular evidence which relates to a matter on which the absent witness would have spoken, and the more readily to draw an inference fairly to be drawn from the other evidence by reason of the opponent being able to prove the contrary had the party chosen to give or call evidence …’”

The plaintiff gave an explanation as to why Ms Schipper was not called. She and Ms Schipper had an acrimonious separation and had come to a termination agreement (exhibit 6). Pursuant to that agreement the plaintiff had paid Ms Schipper $400,000.00 and both parties had released and indemnified each other “in respect of any claim they may have against each other in respect of the involvement, if any, of either of them with Mr Perry, any investment of money by either of them with Mr Perry or any financial dealings by either party with him”. I therefore find that Ms Schipper could not be said to be in the “plaintiff’s camp”. Further, I was informed that the defendants had issued a subpoena for production to Ms Schipper in the proceedings. In those circumstances, I am not prepared to draw an inference that any evidence called from Ms Schipper would not have assisted the plaintiff’s case, particularly given the fact that the defendant had not put in issue the execution by him of exhibits A1, A7 and A12.
I therefore find that the second Variation Agreement was entered into by the parties on 1 February 2000. I accept the plaintiff’s evidence at [16] and [17] above that she spoke to Mr Perry in January 2000, telling him that Ms Schipper wanted to invest $200,000.00 and that Mr Perry told her that he did not want to make a separate agreement with Ms Schipper, but that he would add the funds as a continuation of their agreement under the same terms and conditions. I also find that that agreement was typed and signed by the parties on 1 February 2000 (exhibit A12).
Consistent with my reasoning in relation to the first Variation Agreement, I find that the words contained therein, “the parties agree to increase the Patricia Anthony capital by another $200,000.00, bringing the total investment sum to $700,000.00, incorporating the identical terms and conditions as previously stated”, involved an extension of the indemnity provided by the defendants in respect of the capital invested by both the plaintiff and Ms Schipper.
In respect of that agreement, the defendants submitted that there could be no agreement as there was no consideration. This was not a matter that was pleaded by the defendants, who submitted that it was a matter that came within paragraph 6(c)(v) of the Amended Defence as set out in [7] above, namely, that the “agreement was not enforceable by the plaintiff against the first or second defendants”. I do not accept that submission as there was clearly a consideration for the agreement, namely, the payment of $200,000.00.
The defendants submitted that there was no ambiguity in the first Agreement in respect of the indemnity/guarantee clauses set out above, but that the words in the first Variation Agreement “upon the identical terms and conditions”, led to ambiguity. The same submission was made in respect of the words “incorporating the identical terms and conditions as previously stated” in the second Variation Agreement.
I find that there is no ambiguity in the agreements as submitted by the defendants. The parties intentions were clear at the time of the making of each agreement that the plaintiff’s monies (and in the case of the second Variation Agreement, Ms Schipper’s monies) were to be protected by the indemnity granted by the defendants. I therefore find that the doctrine of strictissimi juris does not apply so as to limit the indemnity provided by the defendants in the present circumstances as submitted by the defendants.

Was there a separate Agreement enforceable at law between the plaintiff and first defendant, that the first defendant would be liable only in respect of $100,000.00 of the $200,000.00 invested by Ms Schipper?

Mr Perry relied on the evidence set out at [70] above, to submit that an oral agreement was reached whereby the plaintiff acknowledged that there was no guarantee in relation to Ms Schipper’s money and that they would “go halves in Renee’s loss”. The plaintiff denied that that conversation took place (see [44] above). Consistent with the plaintiff’s evidence is the letter she sent Mr Perry in mid 2003, i.e. exhibit A23 (at [23] above). In cross-examination, it was not put to the plaintiff that the sum of “100k” referred to in that letter reflected the agreement asserted by the defendants.
It is clear from the evidence that Ms Schipper was unhappy about losing her investment of $200,000.00, and the plaintiff acknowledged as much. She loaned Ms Schipper $160,000.00 to enable her to jointly purchase a property with the plaintiff. In addition, she paid $40,000.00 as a deposit on that property, together with stamp duty and other outgoings. I accept the evidence of the plaintiff as to the conversation that occurred between her and Mr Perry at the Krispy Kreme premises at Penrith in January 2002, as set out in [49] above. I therefore find that there was no agreement between the parties to share Mr Perry’s liability to repay the $200,000.00 investment, the subject of the second Variation Agreement. Mr Perry’s assertion of such an agreement is inconsistent with his denial that he had given any guarantee or indemnity in respect of Ms Schipper’s investment of $200,000.00. His evidence that it was, in effect, a donation by him was also implausible. I also find that the notation by Mr Perry at the commencement of exhibit A13, deducting the sum of $100,000.00 from the total owing, was not a matter about which the plaintiff had agreed.

Damages

I have found that the payments made to the plaintiff in the sum of $104,058.00 were paid as a distribution of profits and not a capital sum. Therefore, the plaintiff is entitled to an indemnity from the defendants for the whole of the investment of $700,000.00. From that sum has to be deducted the agreed value of chattels given to the plaintiff by the defendants, valued at $23,000.000, together with payments made by the defendants of $472,938.00, leaving a balance owing of $204,062.00.
I further allow interest, as claimed by the plaintiff, on the amount outstanding from 1 January 2010. The plaintiff has provided a schedule of interest up to 31 March 2014 in the sum of $84,341.45, which was agreed mathematically by the defendants.
Therefore, I will enter judgment for the plaintiff in the total sum of $288,403.45.

Orders

I make the following orders:

Verdict and Judgment for the Plaintiff against the Defendants in the sum of $288,403.45.

The Defendants are to pay the Plaintiff’s costs of the proceedings.

Grant a stay of Judgment for a period of 28 days.

Grant liberty to the parties to apply on 7 days notice, by way of Notice of Motion, together with any evidence in support, any application for a special costs order.

I direct that the Plaintiff file any application for a special costs order together with evidence and submissions on or before 24/7/15.

Defendants are to file any evidence and submissions on which they rely in reply on or before 31 July 2015.

By consent, the Costs Orders will be dealt with in chambers.

Exhibits are to remain with the file.

I direct that the Registrar of the Court refer this matter to the Commissioner of Taxation for the reasons set out in [139] above.

**********

Decision last updated: 17 July 2015

Medium Neutral Citation:	Patricia Catherine Anthony v Vince Perry and Anor [2015] NSWDC 120
Hearing dates:	6 July 2015 – 8 July 2015
Decision date:	17 July 2015
Jurisdiction:	Civil
Before:	Mahony SC DCJ
Decision:	Verdict and judgment for the plaintiff For Orders see [160]
Catchwords:	Contractual indemnity for currency trading losses
Cases Cited:	Andar Transport Pty Limited v Brambles Limited (2004) 217 CLR 424 Bofinger v Kingsway Group Limited (2009) 239 CLR 269 Jones v Dunkel (1959) 101 CLR 298 Manly Council v Byrne and Anor [2004] NSWCA 123 MSPR Pty Limited v Advanced Breaking Technology Limited [2013] NSWCA 416
Texts Cited:	Modern Contract of Guarantee by O’Donovan & Phillips, 2015 Thomson Reuters
Category:	Principal judgment
Parties:	Patricia Catherine Anthony (Plaintiff) Vince Perry (1st Defendant) Perry Properties Pty Limited (2nd Defendant)
Representation:	Counsel: D L Cook (Plaintiff) P J English (Defendant Solicitors: Taperell Rutledge Lawyers Houston Dearn O’Connor
File Number(s):	14/127711
Publication restriction:	Nil