SV Partners‘ executive director Michael Carrafa is appealing the reputational evisceration he was dealt in December by Supreme Court of Victoria judge Clyde Croft, who ruled that Carrafa had breached his duties as liquidator of Gemwood Projects Pty Ltd (Gemwood) by prosecuting litigation he knew to be hopeless.
As reported by iNO in January the judge had dismissed Carrafa’s insolvent trading claims brought against Gemwood’s directors in proceedings Carrafa commenced in July 2022.
Worse, in response to the defendants’ counter claim his honour found that Carrafa had breached five obligations he owed under the Civil Procedure Act 2010 (CPA), ordered that he be removed as liquidator of Gemwood, denied him remuneration and costs incurred as a result of the proceedings and ordered that he disgorge whatever remuneration he’d already received.
Given the judge indicated his intention to disseminate his findings to both ASIC and to Carrafa’s litigation funder the Commonwealth Carrafa perhaps felt there was lot to be gained from chancing an appeal given how little remained to be lost.
Carrafa confirmed to iNO last week that a notice to seek leave to appeal had been filed.
The orders made on December 19 were subsequently stayed by consent of the parties pending the outcome of the appeal, which will also buy time for Carrafa to deal with the indemnity costs orders handed down on May 8.
As is revealed in Gemwood Projects Pty Ltd (in liq) (No 2) [2026] VSC 269 the judge last week ordered Carrafa to pay the Gemwood parties’ costs on an indemnity basis from the commencement of the proceedings. That order is also stayed pending the appeal.
The judgment makes no reference to whether the Commonwealth, as funder of the insolvent trading proceedings, provided Carrafa with an indemnity that would hold its ground in the face of an adverse costs order bristling with misconduct findings. The Gemwood parties and their lawyers will be praying it did.
Unsurprisingly the parties were less than enthusiastic in replying to iNO’s enquiries, though the Commonwealth did advise that as “aspects remain commercially sensitive and sub-judice, we are unable to answer your queries at this point in time”.
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