The fight between ex-Cor Cordis chairman and managing partner Bruno Secatore and former colleagues Jeremy Nipps, Sam Kaso, Daniel Juratowich, Barry Wight and Mark Hutchins is treading a well worn path.
“The plaintiff’s case is that it can be inferred from the circumstances that the defendant behaved improperly and ‘confected’ a reduction in the WIP to reduce the plaintiff’s entitlement.” Associate Justice Matthew Barrett.
After filing his initial 43 page writ in February challenging 2024 WIP reductions made by the directors of Cor Cordis Pty Ltd as trustee for the Ridar Unit Trust (RUT) the defendant unit holders responded by seeking to have struck out various aspects of Secatore’s claim and asking for further and better particulars.
Inevitably that’s led to an ancillary fight over document production and yielded some interlocutory decisions, most recently in the Supreme Court of Victoria last month.
Secatore is not pulling his punches. He’s alleging nothing less than that his former colleagues made the impugned WIP reassessments for a fraudulent and improper purpose, namely to deny him his rightful entitlement. RUT rejects the allegation and is strongly defending Secatore’s claim.
According to a decision of the Supreme Court of Victoria delivered last month by Associate Justice Matthew Barrett, “the nine resolutions passed by the RUT directors were made for the purpose of ‘confecting that it was in fact the plaintiff who was indebted to the [defendant]’ and ‘minimising’ the defendant’s obligations to the plaintiff. The plaintiff accepts that this plea is an allegation of wrongdoing”.
It’s not disputed that on February 27, 2024 that accounts were retrospectively altered so that the WIP, previously recorded as at 30 June 2022 in the amount of $20,612,404, was reduced to $15,612,404 —
a reduction of $5,000,000.
Or that further retrospective alterations brought the WIP recorded down to $12,723,154 as at September 30, 2023, which was the date Secatore, a 20 per cent unit holder, retired. As at that date recorded WIP was in excess of $23 million.
According to Associate Justice Barrett what the defendants argued in their recent strike out application was that the case brought against them is “based on vague and impermissible extrapolations from small samples and alleged general practices”.
Secatore’s response was that the defendant’s complaints about insufficient particulars are being made made in circumstances where RUT has access to the relevant information, has not produced it all, and knows that Secatore does not have all the relevant information.
In their strike out application the RUT defendants submitted that while there’s an allegation of a fraud, there’s insufficient detail about what particular conduct constituted that fraud and submitted that is inconsistent with the rules of pleading and cannot support Secatore’s plea and should therefore be struck out. The judge however wasn’t convinced.
“Looking at the pleading as a whole, it is understandable that the plaintiff has suspicions about the reduction in the WIP having regard to the time the reduction occurred; the fact that the reduction was exactly $5,000,000 in the 2022–2023 year; the fact that no working papers from the accountants
were disclosed or apparently exist justifying the reduction; and the effect that reduction had on the plaintiff’s entitlements”, the judge said.
In concluding he refused to order the portions of the statement of claim complained about be struck out and as we know, costs follow the event.
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