Federal Court Stops Vincents Receivership

“The precepts of Natural Justice apply that affirm a natural sense of what is right and wrong.” Lord Esher, 1885

 

Report on Federal Court Hearing, December 3-6 

By Gi Linda

Steven Staatz, Vincents

A four day hearing set for December 3-6 in Qld Federal Court to decide an application for receivership by Vincents' liquidator Steven Staatz came to an embarrassing halt for Staatz on the third day, after conflict of interest by Vincents was exposed.

Staatz is requesting receivership of the company Wollumbin Horizons, disputed owner of a contested Mt Burrell property, now designated as part of Nightcap Village/ Bhula Bhula International Community.

Adrian Brennock, Tyler Tolman at "Nightcap Village"

Staatz is alleged to be facilitating an illegal phoenix move enabling Adrian Brennock, company director and fiduciary to the estate, to retain private ownership of the property, while continuing to operate a lucrative land-share scam.

Collaborators include neighbouring landowner, Peter van Lieshout, brother of Queenslands' top billionaire, Super A-Mart founder, John van Lieshout. The venture is promoted by American health celebrities Don Tolman and son Tyler.

Ian McKinnon, alleged conflict of interest

Barrister Ian McKinnon joined Vincents Chartered Accountants in 2002 as a forensic accountant with particular focus on financial crime. In 2016-17, Nightcap Village FAQ was sent to potential investors, listing Vincents and Ian McKinnon as professional advisors to Nightcap Village.

When previously questioned about conflict of interest, Staatz and McKinnon  denied any prior association and Brennock dismissed the naming of Vincents and McKinnon as advisors to Nightcap Village as "a mistake".

Nightcap Village FAQ lists Vincents as advisors

Collusion between Vincents and Brennock was revealed by defrauded investor Ron Berry at the Federal Court hearing, with evidence that Vincents' Ian McKinnon was deeply associated with Brennock.

Contrary to denial by Staatz and McKinnon, further testimony by Brennock's former partner, Mark Darwin, confirmed long-term friendship and collaboration between Vincents' McKinnon and Brennock prior to initiation of liquidation by Vincents and appointment of Staatz as administrator.

Phoenix Activity

Phoenixing, causing more than $5 billion annual loss to the Australian economy, has become an easy way for directors to burn an indebted company, revive the same business under a changed name and defeat creditor claims. See The Rise of the Phoenix.

Corporate regulators, ASIC, ARITA and the courts usually turn a blind eye, as phoenix activity operates in a permissive twilight of white-collar crime under shadow of law. AccountantsDaily reports one rare case where illegal operators have come under a spotlight. The Federal Court has commenced public examinations on entities connected to one dodgy pre-insolvency adviser: Suspected dodgy advisers, directors head to court after ATO swoop.

Vincents' convicted  liquidator Stuart Ariff

Vincents is still smarting from NSW District Court's conviction of liquidator Stuart Ariff in 2011, on 19 criminal charges involving phoenix activity.

Ariff was ordered to pay $4.97 million compensation and jailed for six years, but paroled in 2015. His trial by jury triggered a Senate inquiry into the insolvency industry in 2010, though little changed as a result. See ASIC report.

If successful, the intended phoenix move by Vincents and Brennock would transfer land title to Brennock in his private capacity and divest over $2.2 million in liabilities and debts to defrauded investors, including myself and more than twenty others.

Since Staatz initiated the Federal Court hearing in January 2017, Judge Derrington has indicated intention to allow Staatz to sell the land with a lien covering his fees and legal costs. Instead, evidence of conflict of interest by Vincents forces a closer look at a notorious legal loophole that allows corporate crime to flourish with impunity.

The Federal Court hearing was halted a day early, on December 5th by Judge Derrington, with orders that Staatz provide to the Court by December 21 an explanation regarding evidence of conflict of interest.

Defendants must respond by January 25 and a further hearing is listed for February 25, 2019.

Meanwhile, investors whose class action for proprietary relief and cross-claim against Staatz in June 2018 was summarily dismissed as "scandalous" with no hearing and a suppression order over Court documents are preparing an appeal to the High Federal Court charging Staatz and Brennock with criminal activity.