Powell v Aymkone Pty Limited [2009] NSWSC 103 (4 March 2009)

Last Updated: 5 March 2009

NEW SOUTH WALES SUPREME COURT

CITATION:
Powell v Aymkone Pty Limited [2009] NSWSC 103


JURISDICTION:
Equity

FILE NUMBER(S):
5233/2004

HEARING DATE(S):
12-13 February 2009, 18-20 February 2009

JUDGMENT DATE:
4 March 2009

PARTIES:
Ernest Harry Powell (Plaintiff)
Aymkone Pty Limited (First Defendant)
John Cleeve Pooley (Second Defendant)

JUDGMENT OF:
Bryson AJ

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
Garry Bigmore QC, Henry Aizen (Plaintiff)
Adam Bell SC, Anthony McInerney (Defendants)

SOLICITORS:
Maitland Lawyers (Plaintiff)
Foulsham & Geddes (Defendants)


CATCHWORDS:
TRUSTS and TRUSTEES – Aymkone, Licensed Securities Dealer, received US$310,000 with instructions to invest which identified true owners as Camm and Therrien – reference to Therrien was fictitious – true owner was plaintiff Powell and moneys were impressed with trust for Powell – all funds were paid out on Camm’s instructions – Powell claimed he initiated investment by telling Pooley (principal of Aymkone) on the telephone that Powell was sending the money and limiting the way it was to be invested – on the facts, there was no telephone call to Pooley, Aymkone had no notice of the trust for Powell and was not accountable to him. Proceedings dismissed.

LEGISLATION CITED:



CASES CITED:


TEXTS CITED:


DECISION:
Order: Give judgment for the first and second defendants with costs.



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION


BRYSON AJ

Wednesday 4 March 2009

5233/04 ERNEST HARRY POWELL v AYMKONE PTY LIMITED

JUDGMENT

1 HIS HONOUR: The plaintiff Mr Powell claims equitable compensation in respect of the defendants’ dealings with AUD$483,393.11, proceeds on exchange of US$310,000.00 which Mr Powell caused to be sent to Aymkone’s bank account in Sydney from the Bank of America in California. A large mass of evidence deals with the purposes of the payment and the terms on which Aymkone Pty Ltd the first defendant was to deal with it. There is no doubt that the fund was held by Aymkone as a trustee. The issues relate to the identity of the beneficial owner and the terms of the trust by which Aymkone was bound.

2 Mr Powell’s case relates to the liability of Aymkone and of Mr Pooley the second defendant, as its principal and the person acting in its affairs, to pay compensation for breaches of trust in dealing with the money in a way which, for practical purposes, entirely dispersed it. The claim is not a proprietorial claim to an identifiable fund. If the fund still existed Mr Powell could prove that his money could be traced into the fund and Mr Powell would be the owner of it in equity. The facts and the claim take an altogether different form because there now is no fund and the plaintiff seeks to impose liability on Aymkone for breach of trust. The terms of the trust known to Aymkone establish what Aymkone as trustee was authorised to do and what acts would be breach of trust by Aymkone, and also establish the identity of the beneficial owners to whom Aymkone's duties as trustee were owed.

3 Mr Powell's claim is that the terms of the trust and his identity as beneficial owner were established in a telephone conversation which he had with Mr Pooley. The defendants' case is that the terms of the trust and the identity of the beneficial owner were established by communications, principally a telephone conversation, between Mr Pooley and Mr Camm on or about 2 November 1999.

4 Mr Powell is a United States Citizen. Until 1999 Mr Powell and his affairs had no significant connection with Australia. He retired in 1999 after a working life as a carpenter and conducting business in the construction industry in California. About the time he retired he sold an apartment building and a Cessna aircraft he owned, bringing a net return of approximately US$350,000.00, which he wished to invest. Mr Powell had business dealings relating to his Cessna with Mr Edward Therrien, a director of Brents International Inc. In Mr Powell's account of the facts, he was in Mr Thessien’s office and heard Mr Therrien talking on the telephone to Mr Gary Stirling Camm, who was in Australia. Mr Camm's business interests included interests in aircraft and this brought him into contact with Mr Therrien. Mr Powell says that he overheard Mr Therrien talking to Mr Camm about shares in a company in Australia called Cellnet Telecommunications Group Limited, and Mr Therrien told Mr Powell that Mr Camm had told him that Cellnet shares would increase rapidly in value and that Mr Camm could get an inside allocation of shares. Although the events were not proved in detail it appears that a float or Initial Public Offering of Cellnet shares took place late in 1999, about November. Mr Powell had several telephone conversations with Mr Camm about investing in Cellnet shares; he gives the date as September 1999.

5 Mr Powell had had no significant dealings in shares: his life experience had been in an altogether different direction. He is not sophisticated in business, he did not have tertiary education and he is not highly articulate. He is rather deaf. It should not be taken when Mr Powell uses words which bear on commercial dealings that he is aware that they have particular meanings; he is not of a precise cast of mind. He had disadvantages in giving evidence. He is not familiar with courtroom situations either in California or Australia, the vocabulary is unfamiliar to him and he is unused to the relatively precise use of language lawyers try to make in courts. He is almost 75 years of age. Mr Powell has been retired for almost 10 years and did not appear to me to be completely well. His evidence was interrupted on the second hearing day when he seemed to me to be unable to bring his full attention to bear, and he received some hospital treatment that day.

6 In appraising Mr Powell and his evidence on the credit issue which is central to this decision I keep these circumstances in mind.

7 Early in November 1999 Mr Powell sent US$310,000.00 to the cheque account of Aymkone at the ANZ Bank in Sydney. Mr Powell knew particulars of Aymkone's bank account because he had seen a copy of a fax message from Mr Camm to Mr Therrien in which particulars of the bank account were set out. Mr Powell says that Mr Pooley gave him the same particulars of the bank account in the course of their telephone conversation, and this gave Mr Powell some assurance.

8 Mr Powell had his money on deposit with a bank in California which did not handle international transactions. Mr Powell obtained a bank cheque, called a Cashier's Check in the United States, from his bank and gave it to Mr Therrien: Mr Therrien used Brents International’s account with the Bank of America to transmit the money to Aymkone's bank account in Sydney. For this reason banking records which refer to movement of the money show it as having been remitted by Brents International. The transmission from the Bank of America took place on 8 November 1999 and the money arrived in Aymkone's bank account on what in Sydney was 9 November 1999. After exchange to Australian currency, the amount received in Aymkone's ANZ cheque account was AUD$483,393.11.

9 In issue in these proceedings is whether Mr Powell’s intentions and the arrangements made before and at the time the money was sent created a trust for Mr Powell of which Aymkone was trustee. Mr Powell alleges and founds his case on the allegation that he caused the money to be transmitted in pursuance of an arrangement which he made with Mr Pooley, the principal of Aymkone, in a telephone conversation. Mr Pooley's case is shortly to the effect that the arrangements which Mr Pooley made relating to receiving the money and dealing with it were made only with Mr Camm, that he did not have a telephone conversation with Mr Powell or speak with him or communicate with him in any way, and that he did not know of the existence or interest of Mr Powell until after dealings with the fund had ended.

10 In 1999 Aymkone carried on business as a Securities Dealer and was licensed by Australian Securities and Investments Commission as a Securities Dealer. Aymkone had been in this business since 1988 and continued until about November 2000 when Mr Pooley surrendered its licence to ASIC. Mr Pooley was qualified as an accountant and graduated in Accounting in 1970 from the University of Technology, Sydney. He worked for about 10 years as an accountant with a public company, then worked until about 1989 in stockbroking firms. He worked in their Fixed Interest Departments, trading in Commonwealth Bonds and overseas financial securities. After working with Jacksons Stockbrokers from about 1980 to 1987 Mr Pooley worked as the head of the Fixed Interest Department of Pembrokes Securities until Pembrokes went into liquidation in 1989. Mr Pooley came to know Mr Camm when Mr Pooley worked for Jacksons Stockbrokers. Mr Camm was a customer who dealt in financial securities, and had the assistance of Jacksons Stockbrokers in capital raising projects. Mr Camm dealt with Commonwealth Bonds in cash, and would bring suitcases containing large amounts of money into the office. Mr Pooley's business association with Mr Camm ended when he left Jacksons in 1987.

11 After leaving Pembrokes Mr Pooley and Mr Ian Mann, who also worked with him at Jacksons Stockbrokers and Pembrokes Securities, acquired Aymkone to carry on businesses in fixed interest dealings on behalf of clients. Later Mr Graeme Riley, whom they knew when they all worked at Jacksons, came into Aymkone and all three were directors. Aymkone carried on business under its Securities Dealer’s licence, which enabled Aymkone to operate fixed interest accounts, trust accounts and cash management and managed funds accounts for clients. Aymkone did not ever hold a Stockbroker’s licence, and did not ever trade in equity stocks for or on behalf of clients. Mr Pooley has never traded in equity stocks on behalf of clients during his whole career. Mr Mann left Aymkone in 1993 and Mr Riley left in 1998. Mr Pooley remained as director and was responsible for all trading and business transactions of Aymkone after Mr Riley left. Aymkone had about 100 clients and Mr Pooley was busy. Mr Pooley had other business interests apart from Aymkone.

12 Mr Pooley's evidence is that about 2 November 1999 he received a telephone call from Mr Camm. He had not done any security dealing business or related business for Mr Camm since he left Jacksons in 1987. Mr Pooley's case is that he made arrangements with Mr Camm, on or about 2 November 1999, which established the terms on which Aymkone held the funds. According to the defendants’ case the arrangements between Mr Pooley and Mr Camm established the terms of the trust and identified the beneficial owners of the trust property.

13 Mr Pooley gave evidence that these were the terms of his telephone conversation with Mr Camm in paragraph 20 of his principal affidavit:

On or about to November 1999, I received a telephone call from Camm in which he said to me words to the effect:

I have some international funds that I want you to manage. I am proposing to deal in shares because the market is good for that right now. I'd like you to be responsible for managing the money on my instructions.

Cam also said to me words to the effect:

Edward Therrien owes me money. He is not prepared to repay me at the moment but we have agreed that he will pay the money into a nominated bank account on behalf of both of us and I will give you instructions to invest the money. He and I can both make some money out of it. Therrien will repay what is owed to me from the investment of the money. The money will be approximately US$ 300,000. It will be transferred from an international bank account into your account. It is then to be put on deposit in an account with ANZ Trustees. The funds in the account are to be used to purchase shares. I will give you instructions to buy and sell shares and also when to sell. You will deposit the proceeds of the sales of shares into the account.

I replied with words to the effect that:

OK just let me know when the funds arrive and what you want to do and I can arrange it. I will charge a management and administration fee of 1.25% on all amounts disbursed from the account.

Camm then said words to the effect:

That's fine. Any written instructions that I give you to transfer money to my account have to be countersigned by Edward Therrien. For all other transactions, Therrien's confirmation isn't required.

14 Mr Pooley sent Mr Camm a fax message on 3 November 1999 which gave Mr Camm details of Aymkone's bank account. Mr Pooley referred to Mr Camm as possibly having principals (in the plural).

15 Mr Camm sent a message to Mr Therrien on 4 November 1999:

I have discussed the matter with John Pooley who is a licensed investment broker, you can thus handle the funds and is bound by convention and law.

Please remit Ernies funds to the nominated account:

Aymkone Pty Ltd

ANZ Bank

BSB#: 012 002

ACC#: 2154 89704.

There is just not enough time to activate accounts via HKG BVI, although we should continue with this as that is where the funds have to go.

Please also instruct John that he can release $5,000 USD from the remitted amount which I understand to be $250,000 USD ($5,000 out for you).

You can give John any instructions you wish to and Ernie’ money is safe.

16 Mr Camm referred to the countersigning procedure in a fax message to Mr Pooley on 4 November 1999:

Funds in excess of $300,000 USD will be transmitted to the nominated account broker via Bank of America tomorrow.:

AYMKONE PTY LTD

ANZ

BSB# 012-002 (Branch #)

ACC#: 2154 89704

Edward J. Therrien and myself will give instructions as to the further disbursement of funds by Fax.

It is necessary that we both send you a signed or initialled Fax to enable any transaction.

Please advise me upon receipt of this transfer and immediately transfer to the following account the amount of the equivalent of $5,000 USD.

I am sending a copy of this to Ed requesting he authorise this first disbursement. This will be a template for the method of operation of the account for the duration of the CELLNET operation.

17 The effect of what Mr Camm told Mr Pooley in the telephone call was that the money to be remitted was to be held on behalf of, meaning that it was owned by both Mr Camm and Mr Therrien. Mr Pooley was to take the money from Aymkone’s cheque account and put it on deposit in an account with ANZ Trustees. The money was to be used for purchasing shares, and Mr Camm would give instructions to buy and sell shares. If money was to be transferred to Mr Camm's own account the instructions had to be countersigned by Mr Therrien, otherwise Mr Camm alone would be the source of instructions. Mr Pooley on behalf of Aymkone was to charge management and administration fees.

18 In my finding Mr Pooley's evidence is a substantially correct account of his communications with Mr Camm, and of the arrangements on which Aymkone received and dealt with the funds. However what Mr Camm told him was untrue in basic ways. Mr Camm was telling Mr Pooley and Mr Therrien different stories. Mr Therrien was not the source of the funds. There was no arrangement with Mr Therrien for money to be held on behalf of Mr Camm and Mr Therrien or to be invested for Mr Therrien to make money, and there was no arrangement to make money owed by Mr Therrien available to Mr Camm. There was no arrangement for Mr Therrien to authorise Mr Camm to give directions, and there was no arrangement for Mr Therrien to sign or countersign any instructions. The true position, if sufficient facts had been known, was that Mr Powell was the beneficial owner of the money, that he intended the money to be held by a broker in Australia who would use it to buy Cellnet shares, and Mr Powell believed Mr Camm was in a position to assist in buying Cellnet shares. Mr Therrien had no part in what Mr Powell intended for his money except to assist Mr Powell by arranging for Brents International’s bank to transmit the proceeds of the Cashier's Check to the Aymkone account in Australia. There was no arrangement or intention of Mr Powell or of Mr Therrien that Mr Therrien would have anything further to do with the funds, or give any authorisation to deal with them or would share in any profits arising from using the funds.

19 When funds arrived in Aymkone's bank they were readily traceable to the proceeds of Mr Powell's Cashier's Check and were impressed with a trust that Aymkone should deal with the funds in accordance with Mr Powell's intentions. The issue on which this case turns is whether Aymkone, and Mr Pooley who is to be identified with Aymkone, had notice of the trust in favour of Mr Powell when the funds were received on 9 November 1999. If Aymkone and Mr Pooley received the funds in good faith for value and without notice of the trust for Mr Powell they are not liable to Mr Powell for the way in which they dealt with the funds.

20 Mr Pooley dealt with the funds in accordance with what Mr Camm had told him. The commercial context, the connexion with Aymkone’s business of management of client’s funds and its entitlement to management and administration fees establish that the transaction was a transaction for value. On 9 November 1999, immediately upon receiving the funds, Mr Pooley paid AUD$7,796.66, the Australian dollar equivalent of US$5,000.00, to a bank account of the Stirling Camm Trust, which was under Mr Camm's control. He paid this from Aymkone’s own money, and later recouped the amount from the fund. He did this in accordance with a message by facsimile from Mr Camm dated 4 November 1999. As it happens, this payment was in accordance with Mr Powell's intentions, as Mr Powell had agreed to pay Mr Camm US$5,000.00 for making arrangements for his investment. Mr Pooley transferred the funds forthwith from his cheque account (which did not bear interest) into an ANZ Trustees Investment Account, referred to as an ANZ V2 Account, which did bear interest, and dealt with the funds thereafter by drawings from and deposits to the ANZ V2 Account.

21 After all relevant transactions the balance of the ANZ V2 account stood at $1180.67. When asked in the witness box, Mr Pooley could not wholly explain all the transactions in the interim. He produced no written reconciliation and the explanations he gave in his affidavit and oral evidence seem to leave $488.30 unexplained. Whatever became of the $488.30, it is not now an identifiable fund against which Mr Powell has any proprietary remedy.

22 Most of the payments out were payments for purchases of shares which Mr Pooley carried out in accordance with instructions with Mr Camm. Some payments, significant in amount, were to interests associated with Mr Camm, and Mr Pooley made these on having fax messages which purported to be authorised and countersigned by Mr Therrien with his initials. Mr Therrien's evidence shows clearly that Mr Therrien did not initial or approve these documents, or know of them at all, or have any part in authorising drawings from the funds or dealings with them. These purported authorisations by Mr Therrien continued the fiction initiated by Mr Camm that Mr Therrien was involved, was one of the principals on whose behalf the funds were held and had some continuing concern with them. As Mr Therrien's part in these events was fictitious there never was in truth any requirement, in Mr Camm's intentions or in any reflexion of reality that Mr Therrien should sign or endorse authorisations for disbursement of money. The need for Mr Camm's approval was the only part of what he told Mr Pooley about approvals which had any meaning or effect. I infer that Mr Camm himself signed Mr Therrien's initials, or arranged for them to be signed by someone else without Mr Therrien’s involvement. It is not just that Mr Therrien's authorisations were nullities; the requirement for Mr Therrien's approval was a nullity. There are no adverse consequences for the defendants of Mr Pooley's having been deceived in this respect.

23 Mr Pooley maintained in evidence that at the times of making payments in the interests of Mr Camm, he had authorisations of this kind for each payment, although he cannot now produce all of them. After this interval of time it is unremarkable that he cannot produce the messages that he received; and further it is probable that significant documents were handed by Mr Pooley to one or other of the private enquiry agents and the solicitor who interviewed Mr Pooley on behalf of Mr Powell and obtained information from him late in 2002. These communications with Mr Pooley were conducted in an ethically inappropriate way, as lawyers representing Mr Powell had already decided to consider fully whether Mr Powell should sue Mr Pooley and were proceeding actively to do so; the interviews with him were preparatory steps for suing him. It was unfair and inappropriate to communicate with Mr Pooley in this way without telling him that the claim against him was under active consideration. Mr Pooley's evidence was that he was not intimidated in these interviews; their significance is that they were occasions when Mr Pooley could well have parted with possession of the original messages.

24 Aymkone and Mr Pooley dealt with the funds in ways which in several respects fall short of appropriate management of funds by a trustee, particularly a professional trustee dealing with client’s funds as a licensed Securities Dealer. Mr Pooley withdrew the balance of the funds from Aymkone's cheque account on 9 November 1999 and deposited them in an ANZ V2 account. The ANZ V2 Account was in the name of one Robert Kerry, who as far as ANZ Trustees knew was their customer and beneficial owner of the money in the account. The ANZ V2 account was entirely under Mr Pooley's control under authorisation to operate on it which Aymkone held from Robert Kerry. Mr Robert Kerry was quite unknown to Mr Pooley, who believed Mr Kerry had been a client of Aymkone whose affairs were managed by Mr Graeme Riley; there had been no business conducted for Mr Kerry since Mr Riley left Aymkone in 1998. The account had been inactive for a long time but there was still a credit of AUD$1247.88. Opening a new ANZ V2 account would have meant a delay of a few business days, and Mr Pooley placed the funds in an interest-bearing account under his control which was readily available, with the effect that there was no loss of interest for those few days. However he did not open another account, but continued to leave the fund on deposit in the Robert Kerry account. This was inappropriate in several ways. An ANZ V2 account could have been opened a few days later and the funds could have been transferred to it. It was inappropriate to mix the funds in an investment which also contained Mr Kerry's money. It would always be difficult to recognize what part of interest earned was attributable to the fund and what should be allocated to Mr Kerry. The fund was not completely in Aymkone's control; Mr Kerry could have reappeared and operated on the account; as far as ANZ Trustees knew Mr Kerry was in a position to do that; so the funds were at unnecessary risk. There was no earmark identifying the funds in Mr Kerry's account with the funds about which Mr Camm had made arrangements with Mr Pooley; whereas investments by a trustee should be clearly identifiable in a way which goes beyond knowledge in the trustee’s own mind.

25 The shortcomings became even greater when Mr Pooley received instructions from Mr Camm to buy shares in listed companies, because he bought them by opening accounts in the name of Robert Kerry with share brokers and buying shares the registered owner of which was Robert Kerry. I am unable to see why the shares were not purchased in the name of Aymkone, and Mr Pooley gave no real explanation for his doing this. This could have worked inconveniently or adversely for Mr Kerry himself.

26 None of the adverse results which could have followed from investing in the name of Mr Kerry actually happened. When the shares came to be sold they were sold, and the proceeds were realised and paid into the Robert Kerry account. The main effect of the irregularities has been to call down suspicion on what Mr Pooley was doing, as his conduct was consistent with some project of obscuring or concealing movements of money and investments. However there is no substantial basis in evidence for finding that Mr Pooley was consciously acting in a project like that, and Mr Powell’s counsel did not asked me to make such a finding. There is a general air of unsatisfactory conduct and unsatisfactory management of funds about the defendants' case. Careful scrutiny is called for.

27 Mr Powell's case about the facts and circumstances in which Aymkone came to hold and manage the funds is completely different. His case is that he directly made arrangements with Mr Pooley in a telephone conversation in which he gave Mr Pooley instructions about how his funds were to be managed. Mr Powell’s evidence is to the effect that in 1999 he had funds he wanted to invest, and in or about September 1999 Mr Therrien introduced Mr Powell to Mr Camm. Mr Powell says "I initially overheard Therrien on the telephone talking to Camm about shares in the company in Australia called Cellnett Telecommunications Limited ... Therrien advised me that he had been told by Camm that Cellnet shares would increase rapidly in value and that Camm could get an ‘inside’ allocation of shares.” Mr Camm told Mr Powell that he had a friend who was a licensed broker and who had access to an allocation of Cellnet shares, namely Mr Pooley, that Mr Pooley was a stockbroker and would handle the funds through his company Aymkone, and would make purchases of shares on Mr Powell's behalf. In Mr Powell’s understanding Mr Camm contacted Mr Pooley. Later about 8 November 1999 Mr Camm told Mr Powell that Mr Pooley and Aymkone had a share allocation of Cellnet available for Mr Powell and that Mr Powell should transfer US$310,000 to Aymkone and Mr Pooley. Mr Powell then spoke to Mr Pooley in a telephone conversation.

28 Mr Powell gave this evidence of the telephone conversation (t.26):

A. A little bit later, I don't know the exact date or nothing, I got a call from Camm - or Ed got a call from Camm and asked me is Ernie Powell around in your office today; he said "Yes"; "Could I speak to him". So Ed handed me the phone and I talked to Gary for a second. He said, "I've got somebody on the line for you"; he put him on and he introduced him as John Pooley in there.

I was confident with him, with his voice and all, you know. What made it look good, I asked him, "What's your account number to put the money in?" He read it right off to me.

Q. What I would wish you to do is tell me what the conversation was on the phone with this person.

A. Okay. I told him I had US$310,000 to invest in the stock and "could you handle that". He said, "No problem, I can handle it". That was basically the conversation, sir. You see, I'm not into stock, this was the first time I was doing something like this.

29 The conversation was not long and took a couple of minutes. Mr Powell also said (t.27):

Q. You mentioned a moment ago that the person you spoke to who identified himself as John Pooley?

A. Yes.

Q. Mentioned a bank account number. What happened there?

A. Well, I mean I had, well, a fax like this, a small one, indicating and I had the number off there and I asked him what's the Bank number and I have a copy, he read it off like this - okay?

30 There was also some civil conversation such as about the weather:

Q. Was anything more said during the couple of minutes?

A. No, not really. We just talked, civil conversation, you know, "How's the weather down there?" And "It was nice up here".

31 Mr Powell also said (t.28, l 14):

A. I asked him if he could handle $310,000 for Cellnet's stock and he said he could and that was about the main gist of the conversation.

Q. After the conversation with Mr Pooley what did you do with the telephone?

A. I hung up.

32 At another point in his evidence Mr Powell said that his instructions to Mr Pooley were limited to purchasing Cellnet stocks not other stocks.

33 Mr Powell was in great difficulties when cross-examined. He was disadvantaged by his deafness, and by general unfamiliarity with the kind of business and concepts being discussed. His evidence shows, as was otherwise clear, that in the telephone conversation Mr Powell had spoken to a person who said he was Mr Pooley, and that apart from the person on the phone identifying himself as Mr Pooley, Mr Powell had no means of knowing who it was (t.61-62). He said that there was no discussion about paying fees to Aymkone or Mr Pooley (t.62). When preparing for litigation against Mr Camm in the Supreme Court of Queensland in the year 2000 and making an affidavit in that litigation Mr Powell, in several different statements and in several forms, asserted to the effect that Mr Pooley and Aymkone were Mr Camm’s agents in Australia, and gave accounts in which the task of acquiring Cellnet shares was a task for Mr Camm. He referred to Mr Pooley as one of Mr Camm’s Securities Dealers in Australia. In the litigation against Mr Camm Mr Powell’s accounts of the facts including his evidence gave no prominence to Mr Pooley and said nothing consistent with expressing a grievance against Mr Pooley, or consistent with a claim that Mr Pooley and Aymkone had not conformed to responsibilities which Mr Powell had imposed on them. There are anomalies with respect to the manner in which Mr Powell explained why he agreed to pay US$5,000 to Mr Camm. At times his explanations turned on Mr Camm finding him a broker in Australia, at times in terms of Mr Camm arranging for Mr Powell to buy and sell their shares, at times both. Cross-examination revealed other inconsistencies in the facts as stated by Mr Powell at different times. The facts about which there were inconsistencies are not always of much importance, for example whether it was Mr Camm or Mr Pooley who gave Mr Powell Mr Pooley’s business card. However recurring contradictions and anomalies of this kind are adverse to Mr Powell’s credibility.

34 At some point early in 2000 Mr Powell remitted another US$40,000 directly to Mr Camm; Mr Powell says: “I wired Mr Camm to give it to Mr Pooley to use it in more Aymkone stock”. The US$40,000 did not reach Aymkone. Later US$40,000 was returned to Mr Therrien on behalf of Mr Powell; the source of this was the funds held by Aymkone.

35 By December 1999 Mr Camm was assuring Mr Powell that he would receive a full report and reconciliation, but this did not happen. In evidence Mr Powell explained not contacting Mr Pooley about his concerns by saying that he did not have Mr Pooley’s telephone number and that Mr Camm was giving him reports. By March 2000 Mr Powell was showing signs of extreme concern with his dealings with Mr Camm and his Australian investment. He could get neither money nor explanations, and he came to Australia and spent about two weeks dealing with Mr Camm in Queensland. He was accompanied by Mr Candler, a nephew. He met Mr Camm in Queensland on several occasions over about 10 days in March 2000. The outcome of these communications was that Mr Camm and Mr Powell entered into a written agreement dated 27 March 2000, a strange document drafted by Mr Camm, not altogether clear but giving a clear contractual undertaking by Mr Camm to pay Mr Powell US$310,000. The document is difficult to follow and there may be indications in it that some further profits may be forthcoming; on the other hand it may be that the promise to pay US$310,000 was a final resolution. During the course of this journey to Australia Mr Powell gave Mr Pooley next to no attention. Mr Pooley went to Sydney Airport and spoke briefly to Mr Powell when Mr Powell, who had just travelled from Queensland, was awaiting his departing flight to California. There was a brief conversation on opposite sides of the Custom barrier. Mr Powell’s behaviour during this journey to Australia in pursuit of resolution for grievances did not include any behaviour suggesting that he regarded Mr Pooley as having any responsibility to him; the entire focus of his activity was on Mr Camm. He is very unlike to have behaved in this way if his view of the facts then was that he had entrusted Mr Pooley and Aymkone, as his own broker or Securities Dealer, to hold his money and to use it only for Cellnet Shares.

36 Generally the concept that Mr Powell had some grievance against Aymkone and Mr Pooley or that they had not behaved appropriately in handling his affairs did not emerge until well into the year 2002, when Mr Powell’s litigation against Mr Camm was well advanced. The terms of his claims in the Queensland proceedings against Mr Camm leave little room for there to be any grievance against Mr Pooley. The allegations raised a case in which Mr Camm had all the responsibilities which Mr Powell now claims fell on Aymkone and Mr Pooley. However the Queensland proceedings were not disposed of on that basis; they were disposed of by summary judgment favourable to Mr Powell on the written agreement and the commitment to pay him US$310,000.

37 For Mr Powell to succeed it is necessary for him to obtain a finding that he did in fact speak to Mr Pooley by telephone and give him instructions that he claims. The onus of proof is on Mr Powell. It is necessary to obtain such a finding because unless this actually happened Aymkone and Mr Pooley did not know of the existence or interest of Mr Powell or a person in his position as the true owner of the money, and did not know that the true owner was not Mr Camm, or Mr Camm and Mr Therrien. It is also necessary to establish that the terms of the trust limited what Aymkone and Mr Pooley were authorised to do in a way which they breached if they acted on instructions from Mr Camm and bought shares other than Cellnet shares, or if they paid out funds at Mr Camm’s direction in any other way. Mr Pooley’s evidence was severely tested in cross-examination, with attendance in meticulous detail to circumstances apparently adverse to Mr Pooley; but he adhered altogether firmly to his evidence of what he knew about the terms in which the money was invested, and his denial of any contact whatever with Mr Pooley. There are one or two incidential references which looking backward can be seen to relate to Mr Powell, in messages which Mr Pooley saw, but nothing to warn him or put him on inquiry that Mr Camm had not told him the truth about who owned the money. There is nothing in any message to Mr Pooley which is anything like the reference in Mr Camm’s message to Mr Therrien of 4 November 1999, to “Ernies funds”.

38 Mr Powell is not truly in a position to know or to give evidence that the person with whom he spoke on the telephone was Mr Pooley. According to Mr Powell, the conversation took place on an occasion when he was in Mr Therrien’s office, not attending specifically for the purpose of talking to Mr Camm or still less to Mr Pooley. He gives this account in one of his written statements he made long before the hearing, and again (t.26) in oral evidence which I have set out. According to that account the telephone call was not pre-arranged. Mr Therrien gave evidence of the circumstances of what appears to have been the telephone call of which Mr Powell speaks, in which Mr Camm had told Mr Therrien that he would introduce Mr Powell to Mr Pooley. Mr Therrien said: “Shortly thereafter I received a telephone call from Camm in my office. Powell was present ...”. Mr Therrien’s oral evidence showed that after several conversations with Mr Camm about Mr Powell’s prospective investments: (t.99, l 38): “There was a subsequent telephone call that week where Mr Camm called. I said ‘Mr Powell is actually here at the moment, would you like to talk to him?’ They talked. Actually I walked out of the room because Powell is very noisy when he speaks on the phone and I received another call. When I came back in the room Mr Powell stated he spoke to Mr Camm, he is comfortable with it and he said he was introduced to the gentleman ...”. Mr Powell told Mr Therrien about arrangements that had been made for sending money and Mr Therrien carried them out. In Mr Therrien’s evidence he did not give, and he is unable to give any evidence about what was said on the phone, or about whether the person Mr Powell spoke to actually was Mr Pooley.

39 Mr Therrien was not in a position to know and did not attempt to say in evidence to whom Mr Powell spoke on the telephone or what was said. His account of the event is generally inconsistent with there having been a pre-concerted arrangement for Mr Camm and Mr Pooley to speak on the telephone and for Mr Powell to be in Mr Therrien’s office to take part in the call.

40 Mr Camm gave evidence that his only telephone contact with Mr Powell was through Mr Therrien’s telephone. He said that a conference call was set up – “... We set up a conference call” (t.156), Mr Camm in his office at Noosa Heads Queensland, Mr Powell in Mr Therrien’s office and Mr Pooley in Sydney. There was only one such telephone call. The conversation was: (t.157): “Well it was definitely to do with Cellnet at that stage and only that. It was definitely that the funds would be sent ...”. After objection Mr Camm was directed to give evidence in direct speech and said “I am unable to remember the exact words and, you know, I only remember the substance, so I really don’t know whether I could say much more on the subject.” His evidence went no further. If the telephone call happened at all it must have happened in a pre-arranged conference call. The circumstances given by Mr Therrien and by Mr Powell make it very unlikely that there was a pre-arranged conference call. Mr Camm is the only source of evidence that there was a pre-arranged conference call, and the only source of evidence that Mr Powell participated in such a call. A great deal turns on Mr Camm’s credibility. Mr Camm has strong reasons for adverse feelings against both sides. Mr Powell has sued Mr Camm successfully for a large sum of money and put Mr Camm into bankruptcy. Mr Pooley had some litigation against Mr Camm in Queensland over some business relating to a barge or barges, in the course of which Mr Camm spent 38 days in custody for disobeying a Court Order to restore a barge, until the order for his imprisonment was reversed on appeal. Mr Camm was frank enough to tell me in evidence that he hated both sides of this case. I have no confidence in Mr Camm or his evidence. A number of aspects of his behaviour of which evidence speaks shows that he is a very rash person on whom it would be unwise to rely.

41 I regard Mr Therrien as a reliable witness. I find that there was no pre-arranged conference call: Mr Powell spoke by telephone to Mr Camm, but Mr Therrien’s evidence does not support Mr Powell in showing that Mr Powell spoke to Mr Pooley: or in showing that Mr Powell spoke to someone who said he was Mr Pooley.

42 Mr Pooley's evidence denying that he had any telephone call with Mr Powell, by conference call or otherwise, was clear and firm and was maintained under challenge in cross-examination. Mr Pooley does not bear the onus of proof. I observed nothing about his demeanour which I regard as unsatisfactory. I find Mr Powell unconvincing. His later conduct of the claim against Mr Camm, and the terms of that claim, are strange and anomalous if Mr Powell then had and knew he had a claim against Mr Pooley and Aymkone.

43 In my finding Mr Powell did not give Mr Pooley telephoned instructions as he alleges. The defendants did not have knowledge or notice that Mr Powell was the true owner of the fund. Mr Powell's claim should in my opinion be dismissed. It is not necessary for me to deal with extensive further matters of defence on which the defendants relied.

44 Order: give judgment for the first and second defendants with costs.

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LAST UPDATED:
5 March 2009