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[2026] NSWSC 120
General information, not legal advice.
Supreme Court of NSW
2026-02-25
Hammerschlag CJ in Eq
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Lukac v Kassis [2026] NSWSC 120
Hearing dates: 16 – 18 February 2026
Date of orders: 25 February 2026
Decision date: 25 February 2026
Jurisdiction: Equity
Before: Hammerschlag CJ in Eq
Decision: Judgment for:
(1) the first plaintiff for $296,727 together with pre-judgment interest; and
(2) the second plaintiff for $438,507 together with pre-judgment interest.
Catchwords: EQUITY – equitable compensation – breach of trust – where monies paid over by the plaintiffs to the second defendant company to be invested by depositing it into an account of a third party company (as it happened, the operator of a fraudulent Ponzi scheme) were paid into a different account but of an entity which was part of the Ponzi scheme – where the monies would have been lost anyway had they been paid to the correct account number – where had the trustee immediately recovered the money it would have been obliged to have paid it to the second account where it would have been lost – equitable compensation not payable
CONSUMER LAW – misleading or deceptive conduct – Australian Securities and Investments Commission Act 2001 (Cth) ss 12DA, 12GF – where defendants represented to the plaintiffs that an investment is safe and they would do much better out of it than if they put their money in the bank – where the investment turns out to be one in a fraudulent Ponzi scheme and they lose their money but only after they receive some payments in the guise of returns – HELD: liability made out – plaintiffs entitled to damages equivalent to the difference between the position in which they are and the position in which they would have been had the conduct complained of not occurred which must take account of what they received but otherwise would not have
Legislation Cited: Australian Securities and Investments Commission Act 2001 (Cth), ss 12DA, 12GF
Cases Cited: Canson Enterprises Ltd v Boughton & Co [1991] 3 SCR 534
Chen v Chu [2024] NSWSC 1139
In the matter of Courtenay House Capital Trading Group Pty Limited (in liquidation) and Courtenay House Pty Limited (in liquidation) [2018] NSWSC 404
Re Dawson [1966] 2 NSWR 211
Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514
Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484
Category: Principal judgment
Parties: Yvette Lukac (First Plaintiff)
Linda Michele Murphy (Second Plaintiff)
Anthony Espero Kassis (First Defendant)
N & N (No. 1) Pty Ltd (Second Defendant)
Representation: Counsel:
J Kelly SC (Plaintiffs)
A Moses SC / K Anderson (Defendants)
Solicitors:
PJ Ellis Solicitors & Attorneys (Plaintiffs)
Hudson Law (Defendants)
File Number(s): 2022/00384566
Publication restriction: Nil
A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors, and the process is repeated. [1]
One Tony Iervasi (Iervasi) ran a Ponzi scheme called “Courtenay House”. He fraudulently took over $180 million from some 585 investors. He is in prison.
The first defendant, Anthony Espero Kassis (Kassis), a sometime real estate agent and property developer, was a good friend of his. They first met in 1997 socially at the house of Iervasi’s brother Robert and subsequently became good friends.
The second defendant is N & N (No. 1) Pty Ltd (N & N), Kassis’ company. At all times he was its sole director.
The first plaintiff is Dr Yvette Lukac (Lukac), a medical practitioner. The second plaintiff is Ms Linda Murphy (Murphy), a primary school teacher.
Murphy and Kassis first met in 2001 when he acted as the agent on the sale of her home in Coogee (a Sydney beachside suburb). They became friends. They had telephone conversations in 2011 and 2012 during which he told her, amongst others, about problems he was having in his personal life.
Lukac first met Kassis in about 2005. From 2008, they jogged near Coogee. Kassis told her that he was a real estate agent. She told him that she was a doctor. He told her that he was developing properties in Randwick and Eastlakes (also Sydney suburbs). By 2010 they had become friends.
Starting in 2010 as regards Lukac, and in 2012 as regards Murphy, on different occasions and separately, Kassis recommended to each of them that they invest in his friend’s enterprise.
Lukac and Murphy (each of whom was cross-examined at some length but left unshaken) say that Kassis told them that he was close friends with Iervasi, that Iervasi had established a successful financial services business trading in foreign exchange, that Kassis had helped Iervasi establish his business, and had taught Iervasi everything he knew (no doubt now a dubious credit to claim – which is perhaps why Kassis now disavows having said it). They say that Kassis told them that he had himself invested with Iervasi and had made good money. They say that Kassis told them that the investment was safe and that they would do much better out of it than if they put their money in the bank. They say that Kassis suggested to them that rather than invest directly in Courtenay House, they should pay their money to N & N, which would invest in Courtenay House on their behalf. This way, Kassis said, he would be able to monitor their investments, and pull their money out if any problem with the investment appeared. I believe the plaintiffs.
Kassis too, gave evidence and was cross-examined. Senior Counsel for Kassis charitably described him as a “poor witness”. He was, to put it euphemistically, uncooperative. To begin with, Kassis denied that he had conveyed that the investment was safe, maintaining that he continually told the plaintiffs that the investment was risky and that he went so far as to discourage them from investing in Courtenay House. I do not accept his evidence as truthful or credible. The following considerations are consistent with the plaintiffs’ version that Kassis encouraged them to invest and held out that the investment was safe and, correspondingly, are corrosive of his version:
Q. Mr Kelly put to you that you told Ms Murphy that Courtenay House was a safe investment and the returns were very good and you answered that you stated to Linda Murphy that investing in forex and commodities was risky?
A. Yes.
Q. But it was safe in terms of the returns?
A. Yes.
Q. Could you tell me what you meant to convey by, "It was safe in terms of the returns"?
A. Well, I regarded Tony Iervasi as someone I trusted. I regarded Tony Iervasi as someone I'd known quite a while and always kept his word to do things. So that "safe" was in respect to trusting Tony Iervasi with the conduct of his business.
Q. That it was safe to invest with Tony Iervasi, is that the idea?
A. I'd regard it was safe at the time, investing with Tony, yes.
Q. At this time, Tony Iervasi was your friend?
A. Well, he was a friend, yes.
Q. As I understood it, you trusted him?
A. Totally, at that time.
Q. Before all of this went wrong, you thought he was trustworthy and he was successful?
A. Yes.
Q. You invested your own money with him?
A. Yes, yes, your Honour.
Q. May I take it that you wouldn't have invested your own money with him unless you thought he was trustworthy?
A. 100%.
Q. And that the returns that you would get from him were safe?
A. Yes, because he said they were.
Q. Irrespective of whether he said, that's what you thought?
A. Yes.
Q. Then you wouldn't have invested your own money with him, I take it, had you known that he was running a Ponzi scheme?
A. 100%.
Q. You wouldn't, I take it, have let Dr Lukac or Ms Murphy put their money into something which was a Ponzi scheme?
A. Correct, your Honour, correct, I admire ‑ and I say this today ‑ Yvette and Linda, and I respect them totally. If‑‑
Q. Okay, so‑‑
A. ‑‑they ever got into trouble, I would have been for ‑ there for them.
Q. So we can take it, can we, that when you conveyed to Ms Murphy that this was safe in terms of the returns, that was based on the fact that you didn't know that your friend was conducting a fraudulent Ponzi scheme?
A. I had no idea. I thought it was a legitimate business. In fact, his emails pertained to that.
Q. In retrospect, when you told them that this was safe in terms of returns, that wasn't right, was it?
A. Well, in respect to trusting Tony Iervasi and trusting he would be ‑ he would pay the returns.
Q. But it wasn't right because you didn't know that it wasn't right.
A. No.
Q. But it wasn't right.
A. Yes. Yes, it wasn't right in respect of he conducting a Ponzi scheme. I wasn't aware of it, yes. I'm very upset about that.
Q. Yes, I follow that.
Kassis’ own evidence of having not encouraged the investment thus sat uncomfortably with his contemporaneous behaviour. It is also at odds with the inherent probabilities.
Where Kassis’ evidence diverges from the plaintiffs on any material issue I prefer their evidence.
The plaintiffs undoubtedly took Kassis at his word (including that the investment was safe) and relied on it when they themselves decided to invest in Courtenay House. So much was, correctly, conceded on his behalf at the hearing.
On 10 January 2012, Lukac paid over her first $10,000. She paid a further $30,000 on 1 February 2012. Her next payment after that was $20,000 on 20 March 2014. Murphy made her first payment ($50,000) on 18 January 2013.
It is agreed that ultimately Lukac paid a total of $450,000 over to N & N, and Murphy $550,000, to be “invested” with Courtenay House.
At some point, the plaintiffs each wanted something in writing recording their arrangement with Kassis. He produced a number of instruments styled “Service Agreement”, all in materially indistinguishable terms, which he and the respective plaintiffs signed from time to time. The first one between him and Lukac bears the date 18 December 2011. It provides relevantly: [3]
The Service Agreement with Murphy was dated 18 January 2013. It makes reference to the same bank account numbers.
It is to be observed the parties to the Service Agreements are respectively Kassis himself (not N & N) and the plaintiffs, and that Kassis himself was to receive 4% of all investment returns for Lukac and 5% for Murphy, and a service fee.
Moneys paid over to N & N were banked, it seems, into the N & N account with the National Australia Bank referred to in the Service Agreements.
However, none of the money paid over by the plaintiffs was paid into the Courtenay House bank account specified in the Service Agreements (the Account). Amounts paid over by N & N to Courtenay House were paid into a different account operated by an entity called Courtenay House Capital Trading Group Pty Ltd atf Courtney House Capital Trading and Investment Group (which ultimately failed, owing millions to creditors). There is, however, nothing to suggest that the outcome would have been any different had the payments been made to the Account. Indeed, there is everything to suggest that the outcome would have been the same.
Consistent with the usual modus operandi of Ponzi schemes, from the start, N & N started paying the plaintiffs money under the guise of returns on their investments with Courtenay House.
Over the first year, on her initial investment of $40,000, Lukac received (in instalments of differing amounts) $28,830, representing on my calculation, an annual return of 72%. To the middle of March 2014 she received a total of $69,570, representing an annualised return of 80%. On Murphy’s initial investment of $50,000 for the first year, she received $53,100, representing an annualised return of 106%. To the time of her second investment (on 31 July 2014) she received $71,810 representing an annualised return of 90%. The payment figures have been taken from schedules prepared by counsel for the defendants and handed up as aides-mémoire during the hearing. They are adopted for general illustrative purposes only.
The Statement of Claim is, to say the least, not a model of forensic clarity.
The plaintiffs sue for equitable compensation, alternatively for damages under the Australian Securities and Investments Commission Act 2001 (Cth) (the Act), equivalent to the amounts they paid over to N & N. In the case of Lukac the amount claimed is $450,000 and in the case of Murphy it is $550,000, exclusive of pre-judgment interest. References below to sections are to sections of the Act.
A significant question for determination is whether the amounts they received from N & N reduce any judgment to which they may be entitled.
Claims for damages for fraudulent concealment, conflict of interest and breach of financial services licence provisions in the Corporations Act 2001 (Cth) were pleaded but not pressed.
The primary claim put in argument is for equitable compensation for breach of trust.
As ultimately articulated, the plaintiffs argued that:
moneys paid over by them to N & N were impressed with a trust on the terms of the Service Agreements, which bound N & N to apply the moneys strictly in accordance with those terms, that is, to pay them exclusively into the designated Account;
in breach of that trust:
(a) N & N paid the money, not to the Account in accordance with the Service Agreements, but to a different account of a different Courtenay House entity; and (b) N & N used the money for its own benefit because it went into its bank account which was always in overdraft, with the consequence that it received an unauthorised benefit by way of reducing its loan obligations to its bank;
N & N came under an immediate duty to repay the monies misapplied in breach of trust; and
no credit is to be given to the defendants for the “returns” received by the plaintiffs because they were not returns but merely proceeds of fraud and play no role in determining the trustee’s liability to restore trust property. Additionally, the plaintiffs are exposed to claims by the liquidators to repay the money they received.
The plaintiffs’ submissions did not extend to assisting the Court with any analysis distinguishing between the roles played respectively by Kassis and N & N. There is no pleading, and there were no submissions, that Kassis personally received any trust property or was knowingly involved in N & N’s breach of trust. The plaintiffs expressly eschewed any contention that either Kassis or N & N was a party to Iervasi’s fraudulent scheme. In the absence of any basis pleaded or argued against Kassis personally, the claim against him under this head is to be dismissed, and it is.
The defendants did not dispute that the money paid to N & N by the plaintiffs was impressed with the asserted trust (although the Service Agreements were not with N & N). They also did not dispute that the money was paid out in breach of the strict terms of the trust.
Their sole answer was that equitable compensation is not fairly payable for the breach because the money was paid over to Courtenay House (albeit to a different account) and the money would have been lost anyway, even if it had been paid away in accordance with the trust.
In my view, this is an answer to the plaintiffs’ equitable claims. If it be accepted that N & N breached trust by paying to the wrong account, the consequence was that N & N came under an immediate duty to remedy the breach. [5] Remedying the breach would have been achieved by getting the money back. But then N & N had the obligation to pay the money to the Account in accordance with the trust. The plaintiffs would have lost their money anyway. In so far as the plaintiffs rely on N & N receiving some unauthorised benefit by way of a reduction in its overdraft, they made no attempt to quantify it. The benefit (if any) cannot be equated with the full amounts received, because N & N on paid money to Courtenay House, supposedly for the benefit of the plaintiffs. True it may be that it went to the wrong account but the reality is that N & N did not receive the full benefit of that payment. Either way, equity does not dictate that N & N be held to account for the receipt of the full amounts as if it got the full benefit of them. Also, justice does not dictate that the Court pluck a figure out of the air.
It follows that the question of whether there should be a reduction to the benefit of N & N of the amounts paid to the plaintiffs for the purpose of their equitable claim does not arise.
The plaintiffs submitted that the Court should order that “the defendants indemnify the (relevant plaintiff) against any claim upon by the Liquidators of Courtenay House Pty Ltd or Courtenay House Capital Trading Group Pty Ltd to repay to either of those companies in liquidation any return on any investment of the (above sums of $350,000 and $270,000)”. [6] This formulation is, just like the Statement of Claim, infelicitous. Kassis personally is not a relevant defendant. The quoted figures are wrong. It is not an indemnity against any judgment which may be obtained by the liquidators but against merely a claim. It does not grapple with the possibility of any defences the plaintiffs might have such as change of position. Moreover, I do not regard the possibility of the plaintiffs being sued as realistic given the passage of time (now almost 10 years). Even if this claim had otherwise succeeded, I would not have upheld the submission that there be an indemnity.
12****DA Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive.
12****GF Actions for damages
(1) A person who suffers loss or damage by conduct of another person that contravenes a provision of… Subdivision D (sections 12DA to 12DN)… may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.
The central misrepresentations by Kassis and N & N pleaded by the plaintiffs are:
that the plaintiffs were well advised to make an investment in Courtenay House, which investment was a good investment and safe; and
they would get better returns than if they put their money in the bank.
The defendants did not put in issue that the representations complained of were made both by Kassis personally and by N & N. Plainly they were. They also did not put in issue that the representations were misleading or deceptive (which plainly they were – the “investment” was not a good one, was unsafe and they lost their money). The defendants did not put in issue that the plaintiffs relied on the representations in paying over their money and thereby suffered loss or damage (plainly they did and I have so found).
Ultimately the defendants put only that:
the loss suffered by the plaintiffs should take into account what they got from Courtenay House; and
any damages should further be reduced (by some percentage) because the plaintiffs contributed to their own loss by not following advice from Kassis that they should invest in real estate.
As to the first of these propositions I uphold it. The plaintiffs are entitled to be compensated for the amount representing the difference between the position in which they are in and the position in which they would have been had the conduct complained of had not occurred. This is a “no transaction” case. [7] It requires account to be taken of what they got from Courtenay House, which they otherwise would not have got. Senior Counsel for the plaintiffs was unable to articulate any comprehensible proposition to the contrary.
As to the second, even if it is accepted that at some point Kassis recommended (even firmly) to the plaintiffs that they purchase real estate, this plays no part in him having caused them damage by misrepresenting the nature and quality of an investment in Courtenay House. They did not themselves, in any case, contribute to causing the loss they suffered by believing Kassis. Indeed his representations were a good reason to invest with Courtenay House rather than buy real property.
There will be judgment for:
the first plaintiff for $296,727 together with pre-judgment interest; and
the second plaintiff for $438,507 together with pre-judgment interest.
Because it is a “no transaction” case, the award of interest must take into account (by reduction) the value of interest they could have earned on the “returns” they received. I am inclined to think the rates should be the same in both directions.
I will hear the parties on costs and on any remaining issues or arithmetical adjustments required, including how interest should be calculated. I will also deal with any other matter to which my attention is drawn as necessitating determination.
The Exhibits are to be returned.
**********
See Chen v Chu [2024] NSWSC 1139 at [5]; In the matter of Courtenay House Capital Trading Group Pty Limited (in liquidation) and Courtenay House Pty Limited (in liquidation) [2018] NSWSC 404 at [10].
Tcpt, 17 February 2026, pp 180(45)-182(16).
CB 201.
Lukac CB 225-226; Murphy Exhibit F. The documents have some notes made on them by the plaintiffs.
Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484 at [35] citing Re Dawson [1966] 2 NSWR 211 and Canson Enterprises Ltd v Boughton & Co [1991] 3 SCR 534.
Plaintiffs’ Outline of Closing Submissions dated 18 February 2026 at [14].
See eg, Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514.
Paragraph [10(4)]: "information" amended to "explanation".
Lukac
Kassis [2026] NSWSC 120
(1992) 175 CLR 514
(2003) 212 CLR 484
despite initially denying it, Kassis ultimately accepted that he told the plaintiffs that the investment was safe “in terms of the returns”. That he would say so is unsurprising, given that that is what he believed;
he invested his own money with his close friend, Iervasi, whom he trusted;
he was actually receiving very high “returns” on his personal investment in Courtenay House;
he and N & N dealt with the plaintiffs’ money but kept no proper records or accounts of their dealings, a not trivial proportion of which was in cash. These are not the hallmarks of fair and honest business dealings. As is mentioned later Kassis was unable to provide any acceptable explanation for the absence of records;
he gave implausible (bordering on fanciful) evidence that he had no idea what Iervasi was doing but the plaintiffs did; and
each of the plaintiffs was a plausible witness whose evidence sits comfortably with the objective material and the inherent probabilities.
It is apt to set out the following exchange which took place between Kassis and the Court: [2]
If these returns had been genuine, Kassis was right that they were better than what depositing the money with a bank would have yielded. These returns were, to put it mildly, spectacular.
But they were not genuine returns on investments at all.
Money emanating from Courtenay House was nothing more than the proceeds of fraud, not legitimate return on any investment.
More than this, the money paid over by N & N to Courtenay House could not fairly be described as having been invested. Kassis and N & N have no records (because they kept none) recording the existence or terms of any investment made by the plaintiffs in Courtenay House, whether in the plaintiffs’ right or by N & N (or Kassis) on their behalf.
There are no records of how amounts paid to the plaintiffs were calculated and made up, or indeed how they were paid (apart from bank statements which do not record cash transactions with the plaintiffs). There are no records recording any relationship between any amount paid over by Courtenay House to N & N and any amount paid over by N & N to Courtenay House, or for that matter between any amount paid by the plaintiffs over to N & N and any amount paid by N & N over to the plaintiffs. Kassis was unable to shed any light on this, save to say that it was a long time ago.
I interpolate that after Murphy paid her first $50,000 on 18 January 2013, she received $2,500 from N & N (as a supposed return) on 4 February 2013. Whatever else may be said, nothing had been received by N & N from Courtenay House referable to any “investment” by Murphy in that or any other amount. Also, N & N’s bank account shows no debit in that amount. She was no doubt paid in cash. Kassis was cross-examined about the absence of entries in N & N’s bank accounts. His explanation was that there were other bank accounts. Those accounts were called for and not produced. I do not believe him.
Inevitably, Courtenay House failed. It went into liquidation on 16 May 2017. The plaintiffs lost their money.
In my view, given the unsatisfactory state of the defendants’ record keeping, the best record of what each plaintiff received from N & N (as supposed returns) are two handwritten documents (euphemistically described as ledgers) which Kassis brought into account for each of them, apparently when pressed by them to provide information on the state of their account. [4] These ledgers record, and I find, that Lukac received a total of $153,273 and Murphy $111,493. On this footing, Lukac incurred a net economic loss of $296,727 and Murphy $438,507.
I observe that the liquidators’ accounts show that N & N received from Courtenay House $285,554 more than what they had paid to it. The liquidators called on the Kassis interests to disgorge this amount. The claim was settled by Deed dated 20 July 2021, under which the Kassis interests paid the liquidators $205,000.