13 Exhibit A is made up of three statements made by Mr Carr, the first dated 17 July 2001, the second dated 15 May 2002 and the third, 2 December 2002, the first day of the hearing of the action.
14 The first statement deals with general background information, not least in some detail of the resolution of the litigation against McDonalds. On receipt of the settlement monies Mr Carr said that he had a conversation with Mr Roberson of the defendants, in relation to the investment of monies through an entity with which the defendants were apparently connected, namely IPAC. Certain information was given to the plaintiff about a possible return on an amount to be invested about which he was "not very excited". He decided to take a year off and let his money sit in the St George Bank. In cross-examination the plaintiff struck me as being deficient in his recollection and indifferent as to substance if not detail when he was cross-examined on what became exhibit 1, namely what I will describe as the IPAC recommendations.
15 The plaintiff was unable to locate the advertisement to which he responded (exhibit 10) which is in the following terms:
"PARTNERSHIP INVESTMENT
$25,000
RETURNS $4,000 p.a.
2 p.c. partnerships offered in commercial building, ground floor medical arcade. Return is guaranteed as total area is fully pre-leased to chemist, radiologist, dentist, physiotherapist, 8 G.P's, 4 specialists, etc.
Phone Mr Roberts on 9949 1634 or 018 968 409".
16 According to his evidence in chief Mr Carr rang Mr Roberts, and was told that the investments "involved bricks and mortar and high guaranteed rental returns". On that information he went to a site at Fairfield and inspected a property. Mr Roberts brought to the plaintiff's home a brief outlining the nature of his investments which impressed Mr Carr. As a sign of "good faith" and in order to show Mr Roberts that he was financially capable Mr Carr provided a deposit in the sum of $100,000. He was given a unit trust certificate which is annexure "A" to his first statement.
17 In May of 1996 according to Mr Carr Mr Roberts said that there were more units available to purchase. Mr Carr handed to Mr Jack Roberts a cheque for $50,000 for the purpose of the acquisition of $50,000 worth of units. The cheques were issued in the name of the second plaintiff. Annexure 'B" to the Mr Carr's first statement is a unit trust certificate.
18 In May of 1996 for a few months Mr Carr went to England for a holiday and was contacted there by Mr Roberts who indicated that more units were available for another $150,000 and that he, Mr Carr, could become a director of the unit trust.
19 Upon his return to Sydney, according to his first statement, Mr Carr said he "immediately" placed a call to his solicitors and was put through to Brian Hor, to whom he could recall saying the following:
"I answered an advertisement in the Sydney Morning Herald placed by a Jack Roberts for an investment in a building to be occupied by a Medical Centre. I have invested some monies with the Fairfield Medical Arcade Trust at 103 The Crescent, Fairfield. I hold certificates for the current investment. I have been offered a greater share in the Unit Trust and have been requested to put more monies into the Trust. I will need someone to check out the investment for me and also to look at the promoter, Jack Roberts. Bruno Cara is his Solicitor in Brookvale. I would like to come in and talk to you in further detail about your investigations".
20 Mr Carr then made an appointment to see Brian Hor later that day. He estimated that he would have spent an hour with Mr Hor at the offices of Champions. He said that he instructed Mr Hor in words to the following effect:
"Boston Holdings Pty Limited is my company which currently holds a number of units in the Trust.
Boston Holdings Pty Limited paid $150,000.00 for those units.
The initial investment in the Unit Trust was for an investment in bricks and mortar involving a solid building opposite Fairfield Station being a two storey strata building.
I have inspected the building and it is being currently fitted out as a Medical Centre.
Jack Roberts told me that the building is called the Crescent Medical Centre and there will be eight doctors who pay a base rent of $60,000.00 per year.
I want and need the investment to be fully checked out including the Unit Trust, and to make sure my investment is fully secure.
Check whether the Unit Trust is a safe investment".
21 Mr Carr said in his statement that he remembered giving Brian Hor instructions in relation to the general turnover of the business in the medical centre and the number of specialists. He was aware that there were pathologists, x-ray specialists, a chemist and a physiotherapist. He said that he recalled specifically instructing Mr Hor to investigate Jack Roberts in order to see whether he was or ever had been bankrupt. He said that he said words to Mr Hor to the following effect:
"I want to know everything about this guy, whether he has ever been a bankrupt and about everything he has ever done. This is important to me because I have been asked to put in more money and I have also been asked to be a Director of the Unit Trust".
22 Mr Carr said in his statement that this was important to him because he would not have invested any further monies with Jack Roberts if he suspected he was a financial risk. He said that he also asked Brian Hor:
"Do a company search on the Fairfield Medical Arcade Pty Limited and all other related companies".
23 He said that he also asked Mr Hor:
"Please look at and advise me in relation to whether the Unit Trust was an appropriate structure to protect my investments or whether some other structure may be more appropriate".
24 I will complete the narrative of events as set out in Mr Carr's first statement. In July 1996 Mr Carr said he told Mr Hor that he was going skiing and that he could be contacted on his mobile phone. A message was received that way and Mr Hor advised Mr Carr:
"I am still waiting for the Trust's accountants to provide me with further information. I have spoken to Council and they say the proper address for the development is 103 The Crescent not 101. As a result of this confusion, I have not been able to check whether the Trust in fact owns the property. I will keep you posted when I get further information".
25 On or about 28 July Mr Carr said that he had a telephone conversation with Mr Hor saying words to the effect that he had been asked to put in an extra $150,000 "by tomorrow" and whether he wanted to be a director. Mr Hor had replied, "Everything is fine with the investment. Everything is fine to go ahead" (at paragraph 13).
26 On 29 July Boston Holdings Pty Ltd paid a further $150,000 to acquire more units in the Trust; a Trust Certificate was produced and is annexure "C".
27 In his third statement Mr Carr refers to paragraph 13 of his first statement and what he had said had been a telephone conversation on 28 July. In the third statement he said it was not 28 July but Friday 26 July that Brian Hor telephoned him at home. In the third statement Mr Carr expressly denies saying the words that were set out in paragraph 13 of his first statement. What words were said were to the effect of:
"I said: "What's the score?
He said: "From what I have done everything looks fine with the investment" ".
28 As to both date and content, this represented a significant change in the testimony of Mr Carr.
29 In the first statement Mr Carr says that on 1 August he was informed that Mr Hor had tried to contact him; he returned Mr Hor's call and told him: "Boston Holdings Pty Limited has now been employed by the Unit Trust as a P R Manager and it is getting $500.00 per week. Boston Holdings has now put a total of $300,000.00 and owns 24% of the Unit Trust. Boston Holdings Pty Limited now sub-contracts my services as a P R Manager". Mr Hor said that he would send a letter confirming everything.
30 That letter was dated 29 August 1996 and is annexure "D" to Mr Carr's first statement. Mr Carr said that Champions did not provide him with a copy of the Trust deed for the Fairfield Medical Arcade Unit Trust; that he became aware that the Trust had a mortgage over the Fairfield property in respect of the sum of $850,000 which was borrowed towards the purchase of the property and establishment of the Medical Centre. Mr Carr said that he was not made aware of whether and if the Trust had power to further borrow using his investment as part-collateral for borrowings.
31 Mr Carr swears as to reliance on the advice of Champions of 29 August 1996. In October 1996 Boston Holdings invested $200,000 into the Crescent Medical Centre to acquire a one third interest in the business of that Medical Centre which was operated by the Fairfield Medical Arcade Unit Trust.
32 In December 1996 Mr Carr said he was told by Mr Roberts that the property was valued at $1.2 million and on 11 December Boston Holdings invested another $100,000 into the Trust which took Boston Holdings' total investment in the Trust to $400,000. It was Mr Carr's belief that that amount amounted to one third of the value of the Trust property. He was provided with a document from Mr Roberts to that effect and that is annexure "H" to his first statement. That document is on Fairfield Medical Arcade Pty Ltd Unit Trust letterhead and states, "Received $100,000 from Boston Holdings bringing total share value to 33 1/3%", signed J Roberts and is dated 11 December 1996.
33 In December 1996 Mr Carr said that he was receiving $5,000 approximately per month from the property.
34 In June of 1997 Jack Roberts asked the Mr Carr if he wanted to invest in the Penrith Plaza Medical Centre, Jack Roberts purportedly saying, "This is identical to the Fairfield Arcade Unit Trust, except that the property is leasehold, owned by Lend Lease, and the Penrith Plaza Medical Centre Unit Trust only runs the business of the Penrith Plaza Medical Centre". Boston Holdings paid $150,000 to the Penrith Plaza Medical Centre Unit Trust in June, $150,000 on 1 July, and eventually received $9,000 per month in respect of the investments in the Penrith Plaza Medical Centre Unit Trust.
35 From 23 July 1997 Boston Holdings received approximately $4,400 per month and from 1 September 1997 this had increased to approximately $9,000 per month.
36 In February 1998 Jack Roberts informed Mr Carr, according to Mr Carr, that he had been approached by a doctor to establish a day surgery centre being the South Western Day Surgery Centre and had also been approached to establish a Rapid Detox Centre at Liverpool. Mr Roberts offered him ten per cent in both these Centres; they were two different entities. Boston Holdings invested $200,000 at the request of Jack Roberts on 3 December 1998 and a receipt is appended as annexure "A" to Mr Carr's first statement.
37 In 1999, in August, as a result of conversations between Mr Roberts and Mr Carr in relation to the Big Bear Medical Centre at Neutral Bay and the flotation of an entity called the Private Health Group Pty Ltd, Boston Holdings paid $100,000 on 16 August.
38 In December 1999 monthly cheques due to Boston Holdings were not paid on presentation. An excuse given by Mr Roberts was to the effect that the money was placed in the wrong account and would be available soon. After December 1999 payments fell behind. A cheque for $40,000 was received in or about March 2000 with a request that it not be banked until he, Mr Roberts, had come to some arrangements.
39 On 3 June 2000 Mr Roberts telephoned Mr Carr to arrange a meeting at the Eastern Creek Raceway on which occasion Mr Roberts told Mr Carr that Receivers had been appointed to all the companies and "we have to sort out some way of getting them out". An explanation given by Mr Roberts to Mr Carr for this situation was that he had had bank bills and the bank had always just rolled them over, but for some reason they had stopped.
40 Mr Carr then states that receivers and managers were appointed to the Crescent Medical Centre Pty Ltd, Coastline Medical Pty Ltd, Fairfield Alternative Medicine Pty Ltd, Rapid Detox Centre Australasia Pty Ltd and Fairfield Medical Arcade Pty Ltd. A report in relation thereto is attached to his statement.
41 Mr Carr then goes on to state all that he would have done or not done had the defendants complied with what is asserted to be the terms of their retainer.
42 In his second statement dated 15 May 2002 Mr Carr recalls a conversation some time in July in 1996 with Mr Hor to the effect that Mr Hor asked Mr Carr, "How old would you say Jack Roberts is?" to which the reply was, "He is an old man. I'd say he's in his sixties". Additionally he states further matters he would have done or would have done had there been compliance with the asserted retainer.
43 In his third statement dated 17 July 2001, prepared on the first day of the hearing, Mr Carr corrects some earlier statements, stating that upon his initial approach to Mr Roberts, Mr Roberts had said words to the effect that, "the guaranteed return is about 12% per annum". He also states, on the first day of the hearing, that when he saw Mr Hor in his office on 11 July 1996 he stated, "Jack Roberts wants the money on the day the medical centre opens on 29 July. So I have to have everything sorted out by then". Further, in the third statement, in relation to the meeting at the Eastern Creek Raceway, Mr Carr says that Jack Roberts gave him $10,000 in cash.
44 In paragraph 12 of his third statement Mr Carr states the following:
"I then spent some time trying to deal with the receivers of the various properties. In about August 2000 I went to see Geoffrey Roberson, of Champion Legal, at his office and I said to him words to the following effect:
'Roberts has gone into receivership. I've since found out by reading the Trust Deed that my money was not protected and I suspect, although I'm not sure, that Jack Roberts was a bankrupt'.
I then showed Geoffrey Roberson the letter from Champion & Partners dated 29 August 1996. He appeared to read that letter and then said words to me to the following effect:
'We're gone. You'll have to get another lawyer'
I said: 'I've never dealt with another law firm. I don't know any other lawyer'.
He said: 'I recommend Matthews Folbigg'."
45 The cross-examination of Mr Carr commenced:
"Q. Mr Carr, last week when a process server came to your home, did you tell him that if he came back you would blow his head off with a shotgun?
A. Yes".
46 This and other matters of cognate character were in due course resolved by explanation as to fears of home invasion by reason of recent events in Mr Carr's neighbourhood and the proffering of apologies if there had been any misunderstanding between Mr Carr and the solicitors for the defendants.
47 Mr Carr was cross-examined at some length in relation to IPAC (see exhibit 1.2), the investment advisory body with which the defendants were connected. In this regard I have no hesitation in finding that his rejection of the recommendation was informed and complete. The fact that he had received some information from that organisation plays no role in the case in terms of any perception that Mr Carr reasonably could have as to the expertise of the defendants as business advisers. On the contrary, in view of the steps taken by Mr Carr to leave the money in a bank and then make his first investment of $150,000 in response to a newspaper advertisement, it is eloquent of the reliance Mr Carr placed upon himself.
48 As to the first contact he had with Mr Roberts, Mr Carr remembered nothing, that is, the first telephone contact in answer to the advertisement. His memory then improved and the substance of the conversation was apparently that what was involved was a property for a medical centre, and Mr Roberts told Mr Carr about the sort of rents he would get from doctors and pathology companies and "things like this". Mr Roberts apparently dropped a package off to Mr Carr's home, the details of which were beyond Mr Carr's recollection. He did recall "checking the property out", making sure that it was the right property; he went there and saw that it was being fitted out and he was quite satisfied that it was going to become a medical centre and that it was not just a vacant property. As far as Mr Carr was able to give any evidence that purported to be in any way reliable on historical matters, he proceeded to inform me that he decided to buy $100,000 worth in the end so he bought four of the shares for $25,000 each; before that he had been told in a conversation that it was a unit trust and "my money was secured". Again, he had seen the building and had seen the construction starting to happen in about April, he thought. He used to go down to the building "all the time" and have a look at it.
49 As I understand his testimony, the first time he met Mr Roberts was at a coffee shop in Penrith Plaza. Mr Roberts probably gave him some figures at the meeting; no other meetings could be recalled apart from one at the site and one at the coffee shop. There would have been others, however, according to Mr Carr because he was "investing some money in the property, and I was very interested in it". As far as he could recall, the conversation about likely return was that Roberts had said, "you will be guaranteed probably a minimum of twelve per cent on it, maybe more, but that depends on the tenants".
50 Interestingly, Mr Carr gave Mr Roberts $100,000 as a sign of his, that is, Mr Carr's, good faith and to show Roberts that he was financially capable. He could not remember precisely the mechanism by which he gave the $100,000 to Mr Roberts. In any event, he did keep a document, setting out some months and sums, which became exhibit 9, which says something of Mr Carr's record keeping, as to the amounts he paid over.
51 Mr Carr did however remember speaking to his accountant, Mr Yu, who had been his accountant since commencing in the butchery business twenty-five or so years previously, about the investment but before paying over in April the first $100,000. It appears that the second payment of $50,000 was made without further enquiry by Mr Carr about the investment and was made shortly before he went overseas. This was in May of 1996. It was his anticipation after making payments to Mr Roberts that the Fairfield Medical Arcade Unit Trust would be making payments by way of income thirty days after he gave him the money. How was the money to be paid? Mr Carr gave to Mr Roberts a deposit book for the banking account of Boston Holdings.
52 Mr Carr was cross-examined on the first contact he had with Mr Hor of the defendants, which was by telephone. He agreed that he had told Mr Hor, in this first contact by telephone, that he had invested money in the Fairfield Medical Arcade Unit Trust which was at 103 The Crescent, Fairfield, which was believed to be the address at the time. He had received certificates for his investments and had prior to 11 July received certificates relating to the investments of $100,000 and $50,000. He was asked whether he told Mr Hor that he put in sixteen per cent; there was a dispute about his recalling whether he told him that because in fact the correct figure was twelve per cent. He agreed that he had been offered the opportunity to make a larger investment and that he had been offered a position of director.
53 It was put to Mr Carr that he told Mr Hor on the telephone that he wanted him to undertake some work in relation to checking out the investment, "yes"; Jack Roberts was the "promoter" who had put in the same amount of money as Mr Carr. This was agreed to. Mr Carr gave Mr Hor details of Jack Roberts' solicitors. In the telephone conversation Mr Carr agreed that he told Mr Hor that the opening date of the Centre was 29 July.