This article is from the Australian Property Journal archive
A luxury apartment at Kings Park in Perth, a $17,000 house keeper, a $13,000 personal trainer and $4000 living expenses a week are a few of Norm Carey’s favourite things and at the same time investors in the collapse $300 million Westpoint scheme are left wondering what happened to their money.
Yesterday, Carey was compelled to appear at the Federal Court in Western Australia after the Australian Securities and Investment Commission’s lawyer Stephen Owen-Conway, QC, convinced the court that Carey’s affidavit regarding his assets were "vague and unsatisfactory."
Carey who along with Graeme Rundle, Richard Beck and John Dixon have had their assets and bank accounts had frozen in April this year said that he was a beneficiary to a trust that had $12 million in assets.
He added that he did not declare the Quartz trust in his affidavit in May, because the trust was not controlled by him but by brother.
In Court yesterday, Owen-Conway asked Carey: “Why didn’t you disclose your 4th May affidavit?”
Carey said: “My understanding is it’s a discretionary trust. I’m no more than a general beneficiary.”
Owen-Conway asked: “Do you control the trust?”
And Carey answered: “No.”
“By what means did you obtain these cash payments? How did you physically go about it? Why were you receiving cash?”
““It doesn’t strike you as being unusual, even decidedly odd that all your expenses were paid in cash?” Owen-Conway went on to ask.
Carey said he incurred the expenses while travelling, adding “I don’t know. Do you pay a housekeeper cheques?”
Carey is set to be cross-examined again next week.
Meanwhile, outside the Court, Carey said he was extremely sorry to see investors in this position.
He added that ASIC should have allowed Westpoint to continue operating.
This is not the first time one of Carey family members have been brought to ASIC’s attention.
Last month, ASIC applied to the Federal Court to wind up Lanepoint Enterprises, which Karen Carey, the sister Norm Carey was the sole director.
Karen Carey took over as director of another of her brothers Allan Carey on April 13, 2006.
The sole shareholder of Lanepoint was a company called Bowesco Pty Ltd, which is subject to orders obtained by ASIC and of which Karen Carey is the sole director.
In addition in May this year, ASIC successfully sought orders in the Federal Court against Carey, after discovering funds were transferred to Keypoint, a company where Norm Carey’s sister is a director.
ASIC made an application in the Federal Court after discovering that Richstar Pty Ltd, the fifth defendant, shortly after March 30, 2006, when the Court made orders freezing funds held by Richstar, transferred $875,000 to Keypoint.
In May, Justice French ordered that Keypoint Developments Pty Ltd be joined to the proceedings and that the sum of $875,000 be transferred by Keypoint back to Richstar Enterprises Pty Ltd.
Keypoint is not the subject of any receivership or freezing orders in the proceedings.
In April, Justice French blasted the conduct of former Westpoint directors, Carey, Rundle, Beck and Dixon.
Justice French found “evidence of wide spread and serious misconduct in operation of affairs of group”.
“In my opinion, ASIC has demonstrated that it is necessary and desirable, within the meaning of s 1323(1) that the Court make orders to protect potential claimants against the defendants in respect of liabilities which may be imposed upon them for contraventions of the Corporations Act and other statutes and for breach of common law and fiduciary duties.
“In my opinion, the misconduct indicated by the evidence is wideranging and serious,” he added.
“The precise locus of responsibility for that misconduct and the identification of any liabilities which may arise will require further careful investigation and in the meantime the protection of any assets that may be available to satisfy such liabilities.
“Although the appointment of receivers is a drastic step, I am satisfied that in the serious circumstances of this case, it is justified. I do not think that the necessary protection can be achieved by way of freezing orders or the acceptance of undertakings.” Justice French said.
ASIC’s investigation into Westpoint continues.
By Nelson Yap
