Small v McGoldrick

[2008] NSWSC 1381

CITATION:	Small v McGoldrick [2008] NSWSC 1381
HEARING DATE(S):	1st-3rd & 10 December 2008
JUDGMENT DATE :	10 December 2008
JURISDICTION:	Equity
JUDGMENT OF:	Bryson AJ at 1
DECISION:	Order that judgment be given for the plaintiff for $33,554.26 with costs.
CATCHWORDS:	PARTNERSHIP – joint venture syndicate of six owners of trotting horse “Lost in the Park” – four members appointed manager, took control of horse, raced it and exported it to NZ then USA without allowing two members (the plaintiffs) to participate – no written records of dealings – HELD – defendants were accountable for prize money their manager collected, export of the horse was not authorised and defendants were accountable to syndicate for value at time of export – accounts settled and judgment for plaintiffs, entitlement – decision on facts, no question of legal principle.
CATEGORY:	Principal judgment
CASES CITED:	Baltic Shipping Company v Dillon (1993) 176 CLR 344Watson v Foxman (1995) 49 NSWLR 315
PARTIES:	Geoffrey Small (First Plaintiff) Douglas Gentles (Second Plaintiff) Dennis McGoldrick (First Defendant) David Wonson Jnr (Second Defendant) Michelle Wonson (Third Defendant) Cindy Tracey (Fourth Defendant)
COUNSEL:	Amanda Tibbey (Plaintiffs) William Dalley (Defendants)
SOLICITORS:	Williamson Isabella (Plaintiffs)Lough Wells Duncan (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRYSON AJ

WEDNESDAY 10 DECEMBER 2008

2249/08 SMALL v McGOLDRICK

JUDGMENT

1 HIS HONOUR: The plaintiffs, Mr Small and Mr Gentles, claim remedies relating to a joint-venture to purchase, train and race a trotting horse "Lost in the Park" in harness racing. In 1999 the parties who were then good friends all had an established interest in harness racing. Mr Small was Secretary Manager of the Bulli Harness Racing Club where he had some responsibility for organising race meetings and attended Committee meetings. Mr Wonson Senior, who gave evidence but is not a party, was and still is a trainer with long experience in the industry. He is deeply involved in the events and the dispute. Mr Gentles then did casual work at the Bulli Club. Mr Wonson Junior is the son of Mr Wonson Senior and also had a long connection with the industry. Miss Cindy Lee Tracey is his sister and Mr Wonson Senior's daughter. She has a long established interest in harness and horse racing. Mrs Michelle Wonson is the wife of Mr Wonson Senior and the mother of Mr Wonson Junior and of Mrs Cindy Lee Tracey. She and her daughter in 1999 and later conducted the bistro or restaurant at the Illawarra Steelers Club in Wollongong. Mr Mark Anthony Tracey is now Cindy Lee Tracey's husband. He too is a registered harness racing trainer. Six persons formed a joint-venture to purchase the horse; they are the plaintiffs Mr Small and Mr Gentles and the defendants Mr McGoldrick, Mr Wonson Junior, Mrs Michelle Wonson and Mrs Cindy Lee Tracey.

2 The parties have not kept a written record of the terms of their joint-venture agreement, nor have they kept anything in the nature of books of account, minutes or other reliable records of money dealings. Most of their communications were oral and their written communications are challenged in most cases as not being authentic or completely authentic. Fact finding must take place on the balance of probabilities. There is great room for uncertainty. The difficulties faced by litigants who rely on evidence of unrecorded conversations from many years ago are well stated by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318-319. Even more than in that case most of what I was told about conversations in the past was little more than brief impressions of what must have been much more detailed events. There is very little in the nature of direct quotation. A particularly striking instance was Mr McGoldrick's manner of giving evidence by obviously highly compressed assertions. However, he was not the only witness whose evidence suffered in this way. My principal guide in fact finding is attempting to recognise what is the more probable of competing versions of events. My impression of the reliability of witnesses and their evidence has also been an influence. The dispute and hearing took several days, well out of scale with the amount of money involved and the general importance of the dispute. There were a number of conflicts which, ultimately, came to seem relatively unimportant and to relate to credit only at the highest, and not always to have much influence on credit. I pointed out at a directions hearing and again early in the hearing that if the proposed remedy was taking accounts, I would endeavour to do so myself in the present hearing, rather than refer taking accounts to an Associate Judge or a Referee. I am in a position to do this.

3 Allegations about the terms of the joint-venture in the pleadings suggest that there is not much in issue but disputes became evident when the parties gave their evidence. In the light of the pleadings and evidence I regard paragraph 3 of Mr Small's first affidavit as a reliable statement of what took place when the joint-venture was formed.

3. In or around February or March of 1999, at the Illawarra Steelers Club, I was present with David Wonson (senior, known to me as the father of David Wonson (junior) who is otherwise known to me as “Smokie Wonson”), Michelle Wonson, David Wonson (junior) and Dennis McGoldrick. David Wonson (senior) said words to the following effect:
I am going to buy a yearling from New Zealand. I will train it in exchange for half of the prize money and I’m looking for partners to go into the venture with me, in equal shares. We will share the expenses of the yearling and whilst I am training the horse, I will pay half of the expenses. It will be raced in Australia and whilst I am the trainer I will take half of the prize money. The other partners will share the other half of the prize money in the proportions that they each contribute to the cost of buying the horse. Do you want to be part of the venture and have a share?

4 The part of this passage which was in contention was the reference to "It will be raced in Australia". On the whole the evidence of Mr Small, Mrs Cindy Lee Tracey and Mrs Michelle Wonson confirms that this was expressly referred to. Against that Mr Small was unable to remember this particular expression when he came to give oral evidence although he had sworn to it in an affidavit several years earlier. In my view the reference to Australia is very strongly supported by the circumstances. Even if this was not expressly said, it is not possible to contemplate that the agreement would be carried through and the syndicate dealings with the horse would take place anywhere else than in Australia. The conversation took place in the Steelers Club. Everybody concerned lived in the Illawarra district. The training was to take place in that district and there was a very strong connection with harness racing at Bulli. To send the horse out of Australia incurring air freight expenses to be trained in another country where Mr Wonson Senior is not a trainer was completely outside the scope of the arrangements.

5 There was no term of the joint-venture establishing who was the manager as distinct from the trainer. No change either in the project of racing the horse within Australia or in appointing Mr Wonson as the trainer could take place without an agreed variation. In the early period until June 2001 any business that needed to be conducted was conducted by the trainer Mr Wonson Senior, who took all significant initiatives. He went to New Zealand accompanied by another member and bought the horse there in 1999. The horse was foaled on 23 October 1997. It was looked after in some way in New Zealand until the first part of 2001 when it was brought here. It seems it was entered in a race as early as May and in several races as early as May and June 2001. When there was need to collect money during this period for the purchase of the horse or for other reasons, Mr Wonson Senior collected it in cash from syndicate members. No records were made by him or by anybody else. The claim was made in evidence, although not in the pleadings, that the plaintiffs did not contribute sufficient or appropriate amounts of money towards the purchase of the horse or other expenses at this early stage. The evidence does not make it possible to make reliable findings about who contributed money, how much and when. Attempts to establish that the plaintiffs did not contribute sufficient money or appropriate amounts have been unsuccessful in my view. I accept the evidence of Mr Small and Mr Gentles to the effect that they met every request for money that was made by Mr Wonson Senior. I do not regard Mr Wonson's evidence on this subject as reliable.

6 There has been no reflection in later events of any support for the view that by June 2001 the plaintiffs were less than full members of the joint-venture appropriately qualified financially and otherwise. If they had not paid enough money by that time, there cannot, in my opinion, have failed to have been some controversy about it or demand for money at that period. Indeed, Mr Wonson Senior has said in evidence that he did make demand for proper contributions and pointed out that if the plaintiffs did not do this, they would be treated as leaving the syndicate. He had no authority to do any such thing, I have no reason to think that anything happened which ended or qualified the plaintiffs' membership. As far as I can see any doubt about this was first raised in affidavits in the proceedings. Certainly there was no difficulty about full membership and ownership when all six members were registered as owners of the horse with the Greyhound and Harness Racing Regulatory Authority of New South Wales in June 2001. There was never any change in the registration particulars about ownership well into 2005 when the horse had been taken out of Australia and so far as evidence goes, not after then. Mr Small became manager at the time of the registration in June 2001. He was left with responsibility for prize money and payments until 2004, when payments were diverted elsewhere. It is unlikely that he would have been left with this responsibility if he had not paid his initial capital. I believe what he says about this. There is no need for any further accounting for initial capital or for any adjustment. In any event, further accounting is not possible as there is no record and no reliable evidence, only disputed recollections.

7 Mr Small was appointed manager at a meeting on 4 June 2001 at the Illawarra Steelers Club. He received prize money and paid bills and accounts from 20 June 2001 until the last payment he made on 25 February 2004. He kept rough notes in a ledger book which he did not retain, on which he based a spread sheet Annexure G to his affidavit of 27 November 2008. The spread sheet was not easy to follow until I had the explanations he gave in oral evidence. He did not keep a separate bank account but made all bank transactions on his own cheque account through which a great deal of other business passed, including business with other horses he was interested in and personal business of his own.

8 There was evidence to the effect that both the plaintiffs had expressed wishes or agreed to suggestions that they should leave the syndicate or expressed so little interest in the horse that it ought to be understood that they had agreed to leave or regarded themselves as out of the joint-venture. Especially Mr Small is said to have expressed his interest in colourful profane language which could be thought of as a resignation. No such point was pressed in final address by the defendants' counsel. This was appropriate as there is no evidence of any event which would constitute termination or substantial variation of the joint-venture to go on without them. I can understand a member of a horse syndicate, particularly Mr Small who had a very serious illness in 2002/2003 seeming to have or even speaking about a less than keen interest in horse or harness racing while he was suffering in that way, although that is not his evidence. Several documents, strange in their terms, speak or seem to proceed on the basis that the defendants were a majority but not that they were the only members. Nothing was ever done to vary the registration particulars and repeated expressions of lack of interest would not end contractual rights, only a variation agreed in by all six members could do that. In my view the concession made by the defendants' counsel was appropriate.

9 So I proceed on the basis that the defendants all remained, and in so far as it still exists, still are members of the joint-venture with unqualified rights and liability to participate. It could only be altered by unanimous agreement, having regard to the basis on which it was formed. The basis of the joint-venture did not extend sending the horse outside Australia to race, to selling the horse, to appointing a different trainer. All of these were outside the basic terms of the joint-venture and if they were not done unanimously, they were not done with authority at all. There is another level of decisions on operations within the scope of the joint-venture which I suppose could be made by a majority, but only as is usual for informal associations at a meeting of which reasonable notice showing the business to be dealt with had been given to all members. The majority could change the manager or make banking arrangements, and probably could decide to distribute profits or pay accounts, but only at a meeting of this kind. There were plenty of opportunities for meetings of this kind in social meetings at the Illawarra Steelers Club during the early years. However, the significant decisions for the present purposes were not made by in any regular way.

10 A document which was probably made about April 2003 in the handwriting of Mr Wonson Senior is addressed to Harold Park Pace Way which refers to the Club which conducted meetings at Harold Park. This is headed "Letter of Authority" and says: "We the owners of 'Lost in the Park' request that all monies won by said horse because of banking restraints with lodgement of cheques in multiple names be made out to C Tracey solely". This is a very strange document. Underneath these words are the names of six syndicate members and purportedly their signatures, but the signatures against the name of each of the plaintiffs are not in fact their signature. They say they are not, and no-one else has given evidence that they are. The four defendants did sign. The document was sent to the Harold Park Club apparently in April 2003. A direction like this would have been effective if supported unanimously or by a majority meeting after due notice; but there was no such decision and the plaintiffs were not involved in it at all. This document, perhaps with other events, did lead to the Harold Park Club paying prize money as it directed. Similarly, it seems that other clubs paid prize money but not to Mr Small, I infer, under the influence of similar directions without the authority of the plaintiffs or indeed of the whole syndicate.

11 Another strange document is in typewriting. It is dated October 2003. It was directed to the Authority and does not seem to have had any particular significant outcome as the Authority did not pay out prizes. I notice that refers to the four share holders who signed it or on whose behalf Mr David Wonson Junior indicated it was signed for him, as the majority. I see this as in a manner confirmation that the plaintiffs who were also named were still members. It advises the Authority that Cindy Lee Tracey and Mr McGoldrick had been appointed to manage all moneys, control the accounting process and handle all other situations that arise as managers. The significance of this document is that it clearly involves all four defendants in dealings with money and other conduct by Cindy Lee Tracey and Mr McGoldrick. When such conduct and dealings took place without the plaintiffs’ authority, the defendants who set these two in motion are answerable for anything either of them did, in particular the defendants are accountable for any money which came their way. The plaintiffs had no involvement in the events which led to this arrangement. It constituted a misdealing with the affairs of the joint-venture. In particular, I reject the evidence of Mr McGoldrick who asserted in brief terms, not responsive to any question, that the plaintiffs or particularly Mr Small had notice of intended decisions of this kind including this one. He was most unimpressive in dealing with this subject as indeed with all subjects.

12 When the plaintiffs learned of the letter of authority to the Harold Park Club, they wrote a letter which was signed by them and by Mr McGoldrick saying:

“We as part owners of the above mentioned horse contradict this authority and request that 50 percent of all prize money be payable to Geoffrey Small, solely”

Mr Small's evidence is that his request to the Harold Park Club that half the prize money be sent to him was acted on once only when on 9 January 2004 he received $2300.50 from the Harold Park Club, apparently representing a half share after deductions by the club of a prize of $5,112 won at Harold Park on 26 December 2003. Mr Wonson Senior gave evidence that he handed seven other cheques from Harold Park for prize money in 2003 and 2004 to Mr Small. To my understanding he seems to refer to cheques for half prize money. He described a course of events in which the club would send cheques for prize money to the trainer and the trainer would pass them on to whomever should receive them. As to those cheques, I believe Mr Small's evidence and not Mr Wonson's evidence. Mr Small had a practice of paying everything he received into a bank account which he conducted. Unfortunately, he did not conduct it exclusively for syndicate money. He kept a record from which he compiled Annexure G to his second affidavit. I regard it as very unlikely that Mr Wonson Senior handed any cheques for prizes to Mr Small after April 2003 or in 2004 after participating in preparing and sending two documents which would have had the effect of excluding Mr Small from payments. A letter from Mr Dumesny, Chief Executive of the Harold Park club in evidence says to the effect that between January and October 2004, the club dispatched prize money, the practice was to forward the prize money to the trainer, and prize money was forwarded in respect of races conducted on 9 January, 2,8 and 23 April and 3 and 17 September 2004. I disbelieve what Mr Wonson Senior says about handing cheques for Harold Park prize money to Mr Small. I find that Mr Small only received the moneys he listed as received in Annexure G. I infer that the prize money that Mr Small did not receive was dealt with in some other way as a result of the defendants' intervention in directing the prize money away from Mr. Small and they are accountable for those prizes.

13 Until 20 April 2002, there was only one small prize of $250. Mr Small collected $700 from syndicate members and paid out a series of small charges. There were winnings in April, May and June 2002, some expenses were paid out and $1,243.50 was paid by Mr Small to the trainer Mr Wonson Senior. The horse won $644 at Harold Park on 2 July 2002. I accept Mr Small's evidence that he did not receive this prize money or any part of it. He paid some expenses out of the prize money. The next prize money he accounts for is a prize at Bulli on 27 December 2002 and Fairfield on 19 April 2003 and a prize at Harold Park on 26 December 2003. The last prize money he received was $2,300.50 after deductions by the club won at Harold Park on 26 December 2003, received by him and banked on 9 January 2004. His last payment was to Harness Racing Victoria on 10 March 2004.

14 I am satisfied that Mr Small did not receive any part of any later prize. Annexure G shows that the balance he holds is $9,979.60. He also gives his calculations under which $4,242.05 is payable to the trainer and $5,737.55 is payable to syndicate members. No further accounting is required of Mr Small. I accept his accounting. On a whole view of the entitlements of the trainer Mr Wonson Senior, the $4,242.05 should not be paid over to him as he has already been over paid by the defendants.

15 The horse raced with significant successes and prize money in 2004 and into 2005. In those years it won 16 prizes in 25 starts. Some of the prizes were quite small. The largest prizes were won in its last six starts. By far the largest were prizes in the last two starts, $14,000 in the Sky Channel Trot No 2 at Mooney Valley on 5 February 2005 and $87,500 in the Australasian Trotting Championship at Mooney Valley on 12 February 2005. These prizes were paid out after some deductions by the club. The exact sum paid has not been proved but in Victoria the usual deductions were twelve percent so I will treat $89,320 as the total collected for these two prizes. So the horse won more than half the prize money it ever won in its last two races in its last week of racing in Australia.

16 Mr Wonson Senior was suspended for ten months in a decision given several days before 5 February 2005. So he was then a disqualified person subject to the restrictions in Rule 259 of the Australian Harness Racing Rules which disqualified him from many activities including training or nominating or presenting a horse or being on the course or taking any relevant part. He maintained in evidence that this was not effective for some reason which he did not state clearly but seemed to relate to the power of the controlling bodies in Rule 259(6) to vary the prohibitions, although he did not suggest that this power had been exercised in his case. In this instance he was unable to accommodate his thinking and his evidence to the obvious. His position as a syndicate trainer and the agreement of the syndicate that he should be paid fifty percent of the winnings do not apply to prizes won when he was disqualified as a trainer. As it is the defendants' case that he has been paid half of all the prize money they received, they are not entitled to charge the syndicate with what they paid him out of the last two prizes, but must bear the burden themselves.

17 The horse was exported to New Zealand on 27 February 2005. It was further exported from New Zealand to the United States from 21 March 2005. I am satisfied and I find that the plaintiffs were not told or consulted about exporting the horse. There was no substantial evidence that they were. I disregard what Mr McGoldrick says about this as I regard him as completely unreliable. Exporting the horse from Australia was an act completely outside the basis on which the syndicate was formed. The syndicate related to racing a horse and to Mr Wonson Senior as a trainer, necessarily events which would take place in Australia. This is not a matter of an implied term. It follows from the express terms agreed on orally in 1999, that the whole scope of the arrangement related to activities within Australia. The kind of expense involved in air freighting a horse overseas was completely outside the range of anything contemplated by the syndicate arrangements. This unauthorised act of the defendants made it impossible for syndicate affairs to continue. They should be charged in accounts with the value of the horse at the time it was exported. They put the horse completely out of the reach of the syndicate and its operation, especially out of the reach of the plaintiffs. They are just as accountable as if they had shot the horse on 27 February 2005. They are not entitled to charge the syndicate with expenses connected with the export, training and racing in New Zealand, further export to the United States and dealings with the horse there. I do not regard the material in evidence relating to expenses and earnings overseas as furnishing a basis upon which a clear or reliable accounting could be based. All of this was the defendants' own unauthorised venture. It is very unlikely that they gained any net advantage, even though the horse had a number of starts, won a little money in New Zealand and further money in North America. It is overwhelmingly likely that the export venture was a loss. In any event, it was none of the plaintiffs' business, to gain or lose by it.

18 What the defendants claim should be brought into account is illustrated by a table prepared by Mr Tarrants, a chartered accountant who does not accept responsibility for its contents. Remarkably that table included expenses overseas but does not include any winnings overseas. Mr Small produced a horse performance report which showed winnings in the United States and Canada totalling $US33,781. I take it Mr Tarrants was not told about winnings overseas. He lists large expenses overseas. None of this could lead to charges against the syndicate or the plaintiffs who had no authority, express or implied, to take the horse from the agreed trainer, send it out of Australia and incur a lot of freight and other expense in trying conclusions overseas. This was all obviously not joint venture business. They must bear this cost themselves.

19 There is no satisfactory valuation evidence relating to the horse. I am satisfied that the horse had problems which limited its racing career severely. It could run well, and this was still so in February 2005 when its big successes happened. It made a lot of money for its owners. It could only continue to run well if it had more cortisone injections than were allowed by the controls over equine welfare in Australia. It seems probable to me that the need for relatively higher doses of medication was the reason for deciding to send the horse overseas. Getting good results in Australia resulted in the trainer being suspended for excessive dosing of hydrocortisone or perhaps for dosing at an injudiciously close time before a race. This kind of treatment was not going to go on for long.

20 In February 2005 the horse reached the top Group One races. From then on the horse had to compete, if it stayed in Australia, with the best trotting horses in Australia. It would probably have been handicapped, which it did not face earlier. Winning top races and getting high prizes, which the horse had only just begun to win, was going to be severely difficult. Mr Tippet explained this in terms I found convincing.

21 The horse was foaled in 1997 and was over seven years old in February 2005. It had had a career which started, not indeed in its earliest year, but when it was a three year old. Its career had been characterised by long spells between sessions of races. Real success came only from November 2004 onwards. It would not be realistic to think that the horse had a very long future career, particularly at the top. I think one year in the best circumstances imaginable would be a generous estimate. Valuation based on continued success for several years at the rate experienced in the first two weeks of February 2005 is the wrong basis. The horse's problems with swollen joints, a lump on the hip, swollen legs and distress could not be controlled for a long period under Australian conditions. Mrs Cindy Tracey, who was in a good position to make observations, described the horse's condition. What she said is borne out by the evidence of Mr Tippet and by the evidence of Mr Wonson Snr.

22 The horse's difficulties were shown much more fully and graphically in the evidence of Mr Daniels, the veterinarian, who was in a much better position to make observations, in that he was somewhat removed, had no interest in the outcome and was in a position to be dispassionate. As expressed by Mr Daniels, for reasons which his evidence fully showed, in any sale process the horse would be subjected to veterinary examination, which it was not possible that it would pass. Sale processes available would be severely limited.

23 In my finding, under Australian conditions the horse was nearing the end of its career. It is not too much to say that it was a matter of cortisone in, prize money out. Mr Dow's valuing opinions were not appropriately influenced by the horse's condition. Quite otherwise, he assumed that the horse was sound and healthy, and concluded that the horse may have earned $100,000 plus in one or two seasons. With the benefit of the evidence of Mr Daniels and my findings about the horse's condition, it is clear that this assumption was entirely optimistic, excessively so, and had no real relation to how the horse would appear to prospective buyers had there been a sale or attempt to sell it. One can assume a reasonably well-informed market where people would get veterinary reports before laying out large sums of money, and the same view of the horse's condition that Mr Daniels had would be available to a hypothetical buyer in the market which I must conjecture.

24 In my finding a well-informed market with the benefit of veterinary inspection would have seen that the horse could have won some more money, but might fail straight away, might go on for months, perhaps as long as a year, but would eventually be run into the ground or run off the track; its conditions could well lead to it breaking gait, breaking into a gallop, being disqualified or injuring itself at any time. The likelihood, of something like these would rise the more severe the competition became. A buyer who bargained for cortisone injections at a rate which got the previous trainer suspended would not be taking a reasonable attitude.

25 In my finding there would probably be some buyer in the market who would give money for the horse and run it as hard as he could until the clubs or the veterinarians intervened, or until the horse intervened, but such a buyer would not give much money for it. I have to come to a conclusion on very uncertain materials. I find that the horse was worth $20,000 and the defendants are accountable to the syndicate for this sum.

26 The defendants' material on which any accounting can be based came forward at a remarkably late point of time. A demand in a solicitor's letter for information to be given to the plaintiffs on 15 December 2005 produced no adequate response. It produced a completely inadequate response. The proceedings were commenced in the District Court in 2006 and later removed to this Court. The affidavit of Mrs Cindy Tracey of 27 November 2008, the Thursday before the hearing, contains the first material in evidence by which the defendants give any explanation of their dealings, and it is very inadequate. The appointment for hearing was made six months in advance. I am astonished that the forensic disadvantages of not preparing in due time, but producing a mass of material at the last minute, were not so clearly seen as to prevent such conduct.

27 On the evidence before me I can proceed to settle the accounts. I accept Mr Small's evidence about the money he received, the money he expended, and I act on his Annexure G with his explanations in oral evidence. There are small discrepancies with details elsewhere in his evidence, but he expressly verified Annexure G in detail. As between Mr Small and the syndicate generally, that is the whole six, he should be charged with $9,979.80, the balance after all his dealings.

28 The defendants made no distributions to the plaintiffs and gave no reports on syndicate affairs or prize money while Mrs Cindy Tracey acted as manager. There is no evidence that Mr McGoldrick did anything effective as manager. Mrs Tracey did not keep useful records. She produced in evidence a number of bank statements, not a complete series, relating to several different bank accounts and not showing in any way which could be understood which entries in the bank accounts relate to syndicate affairs. She has done little or nothing useful to establish in detail how she dealt with the money to which the syndicate is entitled. Mr McGoldrick has done nothing at all. She did produce a statement entitled "Profit and Loss Statement" prepared by Mr Tarrants, accompanied by a certificate from Mr Tarrants which shows in a comprehensive way that he accepts no responsibility for its contents. The statement has no value except as a reference point or aide memoire of what the defendants contend is the position.

29 It is significant in appraising the defendants' case that they treated the plaintiffs in a high-handed way and did not respect their rights, but over-rode them.

30 The profit and loss statement opens with particulars about the prize money which are not contentious. It is agreed that the prize money actually available after club deductions is $157,959. Mr Tarrants does not differentiate between prize money received by Mr Small and prize money received by Cindy Tracey. Mrs Cindy Tracey does not say anywhere or in any clear way what prize money she received. I infer that she received or disposed of all the prize money which Mr Small did not receive, and the defendants, who put her in this position, are accountable for it.

31 Mr Small received $12,790.50. I deduct that from the total prize money received in Australia and infer that $145,168.50 of the prize money in Australia was received by Mrs Cindy Tracey and has never been accounted for. What in fact happened to it has not been explained by credible evidence. The defendants should be charged with $145,168.50 and credited with expenditures properly related to the joint venture. They should also be charged with $20,000 as the value of the horse. The total of the charges against them is $165,168.50.

32 Mr Tarrants’ table shows a 50 per cent share of the total prize money for Mr Wonson Snr. I am satisfied that this is more than he was entitled to. The second expense shown is trainer expenses to Mr Tippet, a trainer in Victoria, $3,470. The defendants should be allowed this. A later expense is driver expenses for Greg Bennett, $8,000. Mr Bennett's supporting written statement bears this out. This was disputed, but I am satisfied it was incurred. It was obviously a good idea to retain Mr Bennett and pay him generously. The defendants should be allowed $8,000. The remainder of the charges in the profit and loss statement should not be allowed, in my opinion. They include charges for training, veterinary treatment for the horse overseas, road and air transport relating to export, equipment purchases in the United States. None of these should be allowed. The last item of $9,000 for legal costs was not pressed and should not be allowed.

33 By far the largest item which the defendants should be allowed is fifty per cent share of the prize money payable to Mr Wonson Snr. They should not have paid him a share of the prize money on the last two races, on 5 and 12 February, when he was disqualified. The money which he should have been paid is as follows: Total prize money received $157,959. Deduct prize money on the last two races $89,320. Balance of prize money subject to the trainer's fifty per cent, $68,639. Trainer's 50 per cent, $34,319.50. Mr Small paid the trainer $1,243.50, so the defendants can only get credit for paying him $33,076.50. They paid him much more, but that was not justified.

34 So the defendants get credit for what they should have paid Mr Wonson, what they paid Mr Tippet and what they paid Mr Bennett. These total $44,546.50. Mr Wonson should not be paid anything out of the money still held by Mr Small. The defendants are charged $165,168.50, credited $44,546.50, and should bring into the syndicate $120,622. Mr Small should bring in $9,979.60. The total to be bought into the syndicate is $130,601.60. Each member's one-sixth share is $21,766.93.

35 Mr Small retains $9,979.60 and recovers from defendants $11,787.33. Mr Gentles recovers from defendants $21,766.93. I will give judgment for the plaintiffs for $33,554.26. They should apportion what they recover.

36 The plaintiffs claimed damages for disappointment and distress, and their counsel referred to Baltic Shipping Company v Dillon (1993) 176 CLR 344 and cases which have followed it. In my finding there was no express or implied term in the joint venture agreement that members would confer an enjoyable experience on each other. They were all to be in it together, and their agreement was altogether unlike agreements for providing holidays, shipping cruises or other recreation. They all bought a horse, not a holiday. This claim fails.

37 My order is: Give judgment for the plaintiffs for $33,554.26 with costs.

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