This article is from the Australian Property Journal archive
THE Supreme Court of Western Australia has dealt a blow to Perth developer Luke Saraceni's bid to win back control of the $500 million Raine Square project.
However Saraceni said the loss has not discouraged him from going forward with a $200 million damages claims against the banks.
Saraceni, backed by litigation funder IMF Australia, took the receivers and managers KordaMentha to court, claiming that their appointment by financiers Bankwest and BOS International was invalid.
Bankwest and BOSI appointed KordaMentha to Westgem Pty Ltd in January last year after Saraceni missed a $50 million debt repayment deadline on December 30 2010. The banks also appointed Ferrier Hodgson to other companies associated with Saraceni.
In April last year, Saraceni challenged the legality of the appointment and attempted to win back control of Westgem, the company undertaking the development of the prized $500 million Raine Square development, a 23-storey commercial tower comprising 44,000 sqm of office space over 20 levels and 13,000 sqm of retail space over three levels.
The Raine Square site was acquired by Saraceni and his associate Hossean Pourzand in July 2004 for $21.5 million. Located at 298-306 Murray St, the project is one of Perth’s largest office projects and is the corporate headquarters of Bankwest.
Justice Michael Corboy has ruled that the receivers were validly appointed and dismissed the application.
Yesterday Saraceni told the media that the loss was just was a “preliminary matter” and he would continue to pursue the banks on the basis of their conduct with the receivership.
He also said he will shortly be lodging a $200 million damages claim against the banks and receivers.
Saraceni’s litigation funder, IMF Australia yesterday said it is not expected that the dismissal of the receivership application will have any material impact on the damages claim.
KordaMentha partner Mark Mentha said the decision was a strong acknowledgment against Saraceni and that the joint financiers, who have provided Westgem with hundreds of millions of dollars and will now pursue the enforcement to get their money back.
“I would not be surprised if Mr Saraceni appealed the decision and took other steps to stymie the financiers’ rights. In my view, it is more about Mr Saraceni avoiding reality,” he added. “Mr Saraceni has made other applications and appeals, which have been unsuccessful in the courts. Most recently on 7 September 2012, the High Court refused to grant Mr Saraceni special leave to appeal the decision of the WA Court Of Appeal which upheld the constitutionality of orders for the examination of Mr Saraceni in relation to some companies in the Saraceni Group,”
Mentha said he is looking forward to similarly positive outcomes in other matters, including in the application for the return of $1.3 million which Saraceni allegedly withdrew from the Westgem bank account and transferred to a related party shortly before the receivers’ appointment.
Bankwest said in a statement, “Bankwest and the receivers are keen to put the distraction of these particular legal proceedings behind them so they can focus on the completion and sale of the project,”
In July this year, Saraceni also lost a legal bid to block the banks and Ferrier Hodgson from auditing his companies.
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