A solicitor turned property developer has succeeded with a claim to have his investment of almost $700,000 returned to him.

Alexander Hamilton, who ceased practising in July 2002 and resigned from the roll in 2004, claimed he was induced to invest a total of $698,888 as a result of fraudulent misrepresentation.

Hamilton represented himself in the High Court trial over his investment in an unregulated foreign exchange futures enterprise known as the Currency Club. The Currency Club eventually folded in 2017 and Daniel Arkian, who was responsible for trading on behalf of the club, ‘vanished’. No funds have ever been recovered from him.

There was no evidence to suggest that Mark Barrow, who set up the Currency Club, told investors that control over their funds would pass from him to a second and then a third party, the judgment said. The way in which investors’ funds were treated was described as ‘cavalier, to say the least’.

Mrs Justice May, in Hamilton v Mark Barrow & Ors, added: ‘The evidence from a number of Mr Barrow’s clients was that Mr and Mrs Barrow’s presentations to them left them with the clear impression that their funds would remain at all times under the control of the Barrows.’

In the 41-page judgment, Hamilton was complimented for his ‘robust, focussed, cross-examination of the defendants’.

The judge said: ‘By the time of trial Mr Hamilton was representing himself, with the aid of a Mackenzie friend. I have been impressed with his grasp of the (voluminous) case documentation, his retention and presentation of relevant legal principles and his robust, focussed cross-examination of the defendants when giving their evidence.’

Investigations about whether any of the trades Arkian had reported were ever placed reached different conclusions, including that the trades were ‘all entirely fictitious’ and withdrawals sent back by Arkian came from new investors’ funds, rather than from trading profits, or that Arkian engaged in trading but stopped after which he made off with the remaining funds.

Finding the defendants, the Barrows and Martin Welsh, jointly and severally liable to Hamilton for damages arising from misrepresentation and breach of contract, Mrs Justice May said: ‘I am entirely satisfied, on the evidence, that Mr Welsh misrepresented the nature of the account which he held with DA and, linked to this, the extent of the control (in fact, nil) which he was to retain over Mr Hamilton’s funds sent for investment.

‘I find as a fact that Mr Hamilton was unaware that his funds…would be used to fund withdrawals made by other investors wanting money out of the club and/or payments of commission to the Barrows or to Mr Welsh said to have accrued from “successful trades”.

‘Had the true position as to the way in which his funds would be applied, the account in which the monies were to be held and DA’s unrestricted control over all investment funds been explained to him, Mr Hamilton would not have invested in the Currency Club in 2015/16.

Hugo Page KC, acting for Mark and Claire Barrow, submitted that the limit of recovery should be the capital amount invested plus interest at a rate of 1% over US$LIBOR. The judge said she would order that amount after giving Hamilton a ‘short time to respond’.

 

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