$1.4M horse and art ‘sting’ alleged

Press, 5 December 1985, Page 70

$1.4M horse and art ‘sting’ alleged

NZPA-AAP Melbourne A Melbourne art consultant was the victim of a $1.4 million horse and painting “sting,” the Supreme Court in Melbourne was told yesterday. The man, Brian Redmond Pearce, yesterday obtained a Supreme Court injunction against David Waterhouse. The injunction prevents Mr Waterhouse, of Sydney, from selling, encumbering, dealing with or removing three valuable paintings from Victoria.

Mr Pearce and his family company, Brival, said the paintings were the only assets owned by Mr Waterhouse which they could obtain in payment of money allegedly owed to them. Dr Cliff Pannam, Q.C., described a long, involved list of allegations against Mr Waterhouse as a “bizarre story.” The Judge described it as “more out of this world.”

He said David Waterhouse had fooled Mr Pearce into making transactions and dealings with works of art and also with the ownership of a number of racehorses, including two in Sydney, Rudd’s Point and Star Western.

He said Mr Waterhouse

had said that he could arrange a deal for three valuable paintings through the director of the New South Wales Art Gallery which would return them “big money” because there were other buyers waiting to repurchase them at a much higher price. In an agreement about April this year between Mr Waterhouse and Mr Pearce it was agreed they would buy three paintings by the artists McEvoy, Le Poittevin and Gainsborough to resell at a profit. The cost of the paintings would be $200,000 for the McEvoy, $250,000 for the Le Poittevin, and $1.2 million for the Gainsborough.

Dr Pannam said that Mr Pearce claimed that Mr Waterhouse told him that a George Edser had indicated his agreement to purchase the McEvoy for $550,000 and the Le Poittevin for $600,000 and Tommy Smith, the racehorse trainer, had indicated agreement to purchase the Gainsborough for $3 million.

It was claimed that Mr Pearce was induced to enter an agreement to pay Mr Waterhouse $1,025,000 to buy the paintings. Later a Melbourne art expert put a

value of $5OOO on the McEvoy and $9OOO on the Le Poittevin. Mr Pearce was told the Gainsborough was probably a fake and worth about $20,000. He said that in July this year Mr Waterhouse offered Mr Pearce the chance to buy a one-sixth share in the racehorse, Star Western, for $50,000.

Later Mr Waterhouse had offered Mr Pearce the opportunity to purchase a onethird share in Rudd’s Point for $300,000.

Dr Pannam said that in order to induce Mr Pearce, Mr Waterhouse said that Tommy Smith had said the horse could win the 1985 Melbourne Cup and was worth $900,000.

Dr Pannam said the representations made were false in that Tommy Smith had not said the horse could win the Cup or that it was worth $900,000.

Dr Pannam said there were also transactions whereby Mr Pearce arranged the sale of interests in a nursing home to Mr Waterhouse and also loans to Mr Waterhouse for betting.

In the affadavit read to the Court, Mr Pearce, who said he was a pharmaceuti-

cal chemist and also an art consultant, said that on August 1, 1985, Mr Waterhouse rang him from Sydney and said he wished to borrow some money for use at the Sydney races.

Mr Pearce said he borrowed $40,000 cash and took it to Sydney, where he and Mr Waterhouse drove to Randwick racecourse. There Mr Waterhouse informed him that certain betting investments had been successful.

Mr Pearce said that during the week beginning August 11, Mr Waterhouse, who had been staying at his home, mentioned to him a race meeting in Sydney at which he believed he was certain to make money.

“He asked me if I could lend him up to $600,000 and agreed that on or before Thursday, August 22, he would repay it in full, together with interest,” Mr Pearce said.

The loan was made on those terms.

Mr Pearce said that on August 26, on learning that Waterhouse intended to fly overseas, he flew to Sydney to see him at the airport.

He said Mr Waterhouse told him he did not have any of the money he owed

him. Mr Waterhouse said he had used the money in buying another horse for $3.9 million. <

Mr Pearce said Mr Waterhouse said he had agreed to sell the horse to Mr Robert Sangster for $6 million.

Mr Waterhouse said that one reason for the overseas trip was to get a $600,000 deposit for the horse from Mr Sangster. “Although I said to Waterhouse that I simply wanted my money back and no further interest in a horse, he said it was too late and that I should simply find the relevant papers,” he said. “He produced some papers allegedly relating to the horse and I signed them. I do not recall what the papers were or the name of the horse,” he said.

He said that Mr Waterhouse spoke to him from England and told him he had received a cheque for $600,000 from Mr Sangster and this money had been transferred, together with $200,000 from Mr Hancock for the sale of a painting, to the A.N.Z. Bank at Moonee Ponds.

Mr Pearce said this was not done, nor had Mr Waterhouse made any subsequent payments to him.