Joe & Joe solicitor sued for $2.9 million

ONE of the shareholders in beleaguered builder Joe & Joe Developments is suing solicitor Farshad Amirbeaggi for alleged professional negligence, six years after the company was placed into voluntary administration in a bid to resolve a rancorous dispute between its members.

When contacted, Amirbeaggi rejected the basis of the $2.9 million complaint and told SiN his lawyers believe the claim, which was filed in the NSW Supreme Court on February 6, 2015, is statute-barred given the time elapsed. 

If the Court disagrees and allows the matter to proceed, his professional indemnity insurer may in turn launch action against Hall Chadwick partners Blair Pleash and Richard Albarran and possibly their law firm, Etienne Lawyers.

The plaintiffs are Joseph and Dolly Kossaifi, co-owners of Joe & Joe Developments, which has been subject to a deed of company arrangement (DoCA) since March 31, 2009.

In a decision handed down last year by Justice Ashley Black Joe & Joe Developments (Subject to a Deed of Company Arrangement) Pleash and Albarran were found to have acted in a manner prejudicial to Joe & Joe's creditors by failing to adequately monitor the invoicing of Etienne, which had acted for the pair in their capacity as Joe & Joe's deed administrators.

"I am satisfied, for the purposes of s 447E of the Corporations Act, that Messrs Albarran and Pleash have managed the Company's business in a way that is prejudicial to the interests of its creditors or members, or have made an omission that is prejudicial, by reason of their failure to undertake appropriate review of the invoices which they had received from their former solicitors, and thereby to supervise the work undertaken by those former solicitors," Justice Black said at paragraph 184 of his 111 page judgement. 

Black qualified his finding by describing Pleash and Albarran's failure as "significant" but "unintentional". He also made multiple references to the difficulties the deed administrators had had in their dealings with the company's shareholders. The action before Black was initiated in October, 2012 by Joe & Joe's other shareholder, the Elias family.

As part of his judgement Black ordered that Pleash and Albarran produce a Scotts Schedule of the work undertaken by Etienne. Once concluded, their reviewed estimates then have to be admitted, reduced or denied by the Elias and Kossaifi families and their advisors.

The Scott's Schedule is yet to be completed. It will ultimately guide the court on ruling how much relief Joe & Joe's shareholders will be entitled to from as much as $770,000 paid to Etienne. In the meantime, the Kossaifis appear to have decided that Amirbeaggi bears some responsibility for their predicament.

Wily's bankruptcy portfolio no bonanza - yet

Former bankruptcy trustee
Andrew Wily.
Image courtesy ArmstrongWily

WHEN it was revealed in February this year - exclusively by SiN - that Andrew Wily was relinquishing his registration as a trustee in bankruptcy, there was speculation around how many of his active files might have to be transferred to other trustees. Opportunity was in the air.

At the time, Wily was trustee appointed to a veritable hill of bankrupt estates and word was that Nicholas Crouch, of Crouch Amirbeaggi Insolvency Accountants, would snare the lion's share. But as it turned out, only 150 or so are active.

Nicholas Crouch
Image courtesy Crouch Amirbeaggi

On February 24, 2015, 11 days after SiN broke the story, the Australian Financial Security Authority (AFSA) issued a statement confirming Wily had voluntarily offered to resign.

It also laid out a time line for concluding the process by which Wily would conclude those jobs that he could and make appropriate arrangements for the remaining appointments.

"It presently is anticipated that the Inspector-General will accept Mr Wily’s request to cease to be registered shortly after 30 May 2015. In the interim, Mr Wily is not accepting new appointments," AFSA said.

Calls to the regulator last Friday seeking to determine if the process had been concluded were not returned. A spokeswoman said in an email that AFSA "does not comment on individual bankruptcy cases". Wily did not reply to calls and emails seeking comment.

What is known is that Crouch, who referred SiN's enquiries to Wily, took about 12 jobs and a further 16 went to former Hall Chadwick partner and barrister Geoff McDonald, who told SiN the files he took on "involve some complex unfunded litigation".

Barrister Geoff McDonald
Image courtesy: Windeyer Chambers 

The questions for AFSA are: how many of Wily's jobs were finalised prior to the May 30 cut-off: how many active files have been transferred to the Official Trustee, and of those, how many might ultimately be farmed out to the profession so creditors can at least resume entertaining the expectation of some action?

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Crouch poised to cherry pick portfolio

Andrew Wily showing there's more to life 

than being a bankruptcy trustee.

Photo courtesy Andrewwily.com.au

SITTING on a beach at Byron Bay, Crouch Amirbeaggi co-principal Nicholas Crouch is a long way from the worries occupying fellow insolvency practitioner Andrew Wily.

The head of armstrongWily is currently organising his voluntary retirement from life as a registered bankruptcy trustee, part of which entails working out what to do with more than 400 bankruptcy appointments prior to the deadline imposed by AFSA.

That date is described by the bankruptcy regulator in the following, somewhat flexible terms: "It presently is anticipated that the Inspector-General will accept Mr Wily’s request to cease to be registered shortly after 30 May 2015."

SiN understands about 150 of Wily's bankruptcy files are active. When contacted Crouch confirmed he'd spoken with Wily about taking over some of the jobs. However he said he "wanted to see what was in them" first and mentioned that Wily was speaking to other trustees. It's possible the pick of the portfolio might go to tender.

The most obvious way to effect the transfer of bankrupt estates to other trustees is via Section 181 of the Bankruptcy Act which states: "The creditors may, by resolution, at a meeting of which not less than 7 days' notice has been given, remove a registered trustee appointed by them, or a registered trustee who is, by virtue of subsection 156A(3), the trustee of the estate of the bankrupt concerned, and may at the same or a subsequent meeting appoint another registered trustee to be trustee in his or her place."

Another avenue might be by applying to the court for an order apportioning the jobs to specific trustees named in the application. That however would deny creditors their right to object to the nomination of a particular trustee without having to incur the cost of opposing the nomination through the courts.

None of that of course is occupying the mind of the sports-loving Crouch who - presently ensconced on the NSW far North Coast - is about as far away from Wily's woes as a Sydney-based insolvency practitioner can get, apart of course from those who've already jetted off for San Francisco for the INSOL Conference, which kicks off next Sunday.

See also EXCLUSIVE: Wily relinquishes bankruptcy ticket

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