Lewis & Anor v Hickox [2005] NSWSC 516

New South Wales Supreme Court

CITATION : Lewis & Anor v Hickox [2005] NSWSC 516

HEARING DATE(S) : 09/05/05, 10/05/05, 11/05/05, 12/05/05, 13/05/05, 17/05/05

JUDGMENT DATE : 8 June 2005

JUDGMENT OF : Gzell J

DECISION : Further amended statement of claim to be dismissed.

CATCHWORDS : CONTRACTS - General Contractual Principles - Construction and Interpretation of Contracts - Plaintiffs placed funds with defendant for investment in a fund dealing in futures - Defendant said funds were repayable at any time - Whether a personal gaurantee - Whether representations misleading or deceptive under Fair Trading Act 1987 - Whether plaintiffs entitled to refund of investments - No principles involved

LEGISLATION CITED : Fair Trading Act 1987

Brian James Lewis - 1st Plaintiff PARTIES : Megan Natalie Lewis - 2nd Plaintiff Fraser Hickox - Defendant

FILE NUMBER(S) : SC 2432/03

Mr F G Lever SC - Plaintiffs COUNSEL : Mr S Finch SC/ Mr R N Gye - Defendant

Swaab Attorneys SOLICITORS : Stanford Lawyers

LOWER COURT JURISDICTION :

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

GZELL J

WEDNESDAY 8 JUNE 2005

2432/03 BRIAN JAMES LEWIS & ANOR v FRASER HICKOX JUDGMENT 1 The plaintiffs, Brian James Lewis and his wife Megan Natalie Lewis, invested funds through the defendant, Fraser Hickox. The moneys were lost. Mr and Mrs Lewis claimed that Mr Hickox was liable to repay the funds.

1st Contract Claim 2 In June and July 1994, Mr and Mrs Lewis were on holidays in the Cotswalds in England. Mr Hickox met with them on a number of occasions. He had invested $50,000 in HKST Pty Ltd, a company through which Hamish Watson was trading in the futures markets in Australia. 3 Mr Lewis was aware that Mr Hickox had invested some money on his behalf, but did not ask how much. He was told that profits had been earned. He was aware that Mr Watson was working the floor of the Sydney's futures exchange. In August and September 1994, he received communications from Mr Watson that his investment was intact and making profits. Mr Lewis said he had no knowledge of HKST and was not interested in the investment as he had not sought it. 4 In October 1994, Mr Lewis met Mr Hickox in Sydney. He said that as Mr Hickox was apparently making money for him, he should give him some capital. He said Mr Hickox replied: "Why don't you give me $50,000. I will put the money into a fund that I control. You can have the money back at any time; just let me know". He said that Mr Hickox also said: "You'll get quarterly interest and profit payments. And you can have your capital back, whenever you want it". Mr Hickox said he asked Mr Lewis to make the cheque out to HKST and Mr Lewis did so. Mr Lewis did not recall anything about HKST. He said if he made out the cheque to HKST he did so at the direction of Mr Hickox. 5 To determine the precise terms of a contract gleaned from informal discussions is a difficult task. Whether he identified the fund as HKST or not, Mr Lewis was aware that Mr Hickox was to invest the $50,000 in a fund. The money was not to be invested by Mr Hickox himself. Mr Lewis was also aware that the moneys he was refunding to Mr Hickox were invested on the Sydney futures exchange by Mr Watson. The fund to which Mr Hickox referred must be taken, in my view, to be the one for which Mr Watson was making money in futures trading. It was from that fund that Mr Lewis was to get quarterly interest and profits. Mr Hickox must be taken, in my view, to have indicated by his remark that the constitution of the fund provided for such disbursements. And when Mr Hickox said that Mr Lewis could have his capital back at any time, Mr Hickox was, in my view, referring to an entitlement of fund members to call upon the fund to redeem their investment. I do not construe the statements of Mr Hickox as a personal promise that he would repay Mr Lewis whenever he wished his money back. 6 By their further amended statement of claim, Mr and Mrs Lewis alleged that in October 1994, Mr Lewis and Mr Hickox entered into an agreement pursuant to which Mr Lewis agreed to provide $50,000 to Mr Hickox to invest for him, Mr Hickox agreed to pay Mr Lewis interest or other profits quarterly and Mr Hickox agreed to repay the $50,000 to Mr Lewis on request. I do not construe the contract in that fashion. 7 In the course of cross examination, Mr Lewis agreed that he did not understand the arrangement to be one pursuant to which Mr Hickox had to pay him back from his personal resources if the investment were lost. 8 The further amended statement of claim alleged that in January 2002, Mr Lewis requested Mr Hickox to return the $50,000, together with other amounts invested by Mr and Mrs Lewis, and Mr Hickox failed to repay the money in breach of contract. 9 In my view, this cause of action must fail. On its proper construction, the first contract did not require Mr Hickox to repay the funds. The funds were to be repaid by the fund controlled by Mr Hickox. The failure of the fund to reimburse Mr Lewis was not a breach by Mr Hickox of the first contract.