|Oliver Trajcevski - invoiced |
Richard Albarran for mystery
It’s a fair question. When Joe & Joe was brought to the Hall Chadwick duo in early 2009 the only problem that appeared unsolvable was the dispute between the company’s two shareholders, the Kossaifi and Elias families.
Financially, Joe & Joe virtually creaked under the weight of its assets, which comprised a largely completed mixed residential and commercial development at North Narrabeen. By comparison, its liabilities represented a wafer of total value.
Sick of the bickering the Koassaifis asked their laywer, Farshad Amirbeaggi, to find someone who could undertake a voluntary liquidation. Neither they or the Elias family had any sense that their company was insolvent, or likely to become so.
The Koassaifi plan was to liquidate the assets, pay out the creditors and distribute the surplus – estimated at one point at more than $2 million – between the two families. Liquidation however posed a problem for the Elias family’s builder’s license. On February 9, 2009 the company was placed into voluntary administration. Pleash and Albarran were appointed joint VAs.
Since their appointment as voluntary administrators and then as administrators of a Deed of Company Arrangement (DoCA) on March 31, 2009, Hall Chadwick and its lawfirm Etienne Lawyers have allegedly billed Joe & Joe more than $1.5 million in fees and disbursements. The administrators, who argue it is significantly less, blame the families for preventing them from achieving a resolution.
Well before the fees reached this level though the Elias family lashed out, suing Pleash and Albarran for handling the DoCA in a way that was prejudicial to the interests of the company’s creditors and members. The Elias family want Albarran and Pleash removed as deed administrators and they want the court to rule that the fees are excessive. The defendants, Pleash and Albarran, reject the allegations.
Defence counsel Andrew Smith told the court his clients would seek to have much of the plaintiffs’ claim either permanently stayed or struck out. Pleash and Albarran’s lawyers commenced interlocutory proceeding to this effect last week.
Smith was also partially effective in convincing Justice Ashley Black to either reject or restrict with limiting orders, sections of two independent expert reports tended by the plaintiffs.
The expert evidence is critical to the plaintiff’s case that the Pleash and Albarran failed to provide adequate instruction to Etienne Lawyers and other suppliers in regards to costs and failed to sufficiently examine invoices tended by suppliers.
“Our allegation is fairly and squarely that there’s been overcharging,” the plaintiff's barrister, Roger Marshall said.
Much of the day was given over to Marshall’s opening. He queried why the defendants and their lawyers felt required to insert into the DoCA a complex share buyback scheme that he said would not normally be found in a DoCA.
“Many people have tried to understand why this was made a condition of the DoCA,” Marshall told the packed court.
“It just seems to be there, we say, for no reason and your honour will hear it isn’t something the shareholders resolved to occur.
“What it did was create lots of red tape and expense in having it fulfilled,” he said.
The most intriguing example of mystery costs to emerge from the day however involved what Marshall described as a “disturbing” $16,000 payment made by Joe & Joe to Shalton Consulting, a company associated with Dinimus Capital founder, Mr Oliver Trajcevski.
Advising the court that the invoice was made out to Richard Albarran and that requests for an explanation as to what services had been provided were “vague”, Marshall said there is “no evidence of any productive work done for the company (Joe & Joe) by Shalton Consulting.
“The first and second defendants paid a bill that has no proper basis,” he said.
An email offering Mr Trajcevski the opportunity to comment for this story had not been replied to at time of writing. The hearing resumes today at 10.00am.