Small v McGoldrick [2008] NSWSC 1381

New South Wales Supreme Court

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

Geoffrey Small (First Plaintiff) Douglas Gentles (Second Plaintiff) PARTIES : 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.