Pescott home in a manor of speaking

By · 4 Oct 2013
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Pescott home in a manor of speaking

Bankrupt former Victorian minister Roger Pescott is a lodger in his old mansion, the Administrative Appeals Tribunal has found.

In a lengthy ruling delving into who looks after the garden - Mrs Pescott - and who cleans the pool - Mr Pescott - deputy AAT president Stephanie Forgie has delivered a partial win for Pescott, who was bankrupted in 2010 following the collapse of his forestry group Environinvest.

At the time Pescott, who quit politics in 1997, claimed as "tools of trade" a gun, a cupboard to put it in and a $200 computer. But it is the value of his accommodation at Trawalla House, the $18 million estate in central Victoria long owned by the Pescotts, that was at issue before the AAT.

The two-storey stately mansion, built in 1891, together with outbuildings, shearing shed, pool and gardens, was owned by Mrs Caroline Pescott until early last year, when it was bought by farmer Neil Richmond, of Little River, and his family. Kindly, the Richmonds agreed to allow Mrs Pescott to occupy the mansion for 18 months in return for paying utility bills and maintaining the swimming pool. Mrs Pescott then rented half the house to Mr Pescott for $500 a week.

Since the middle of the year Mrs Pescott has been paying $1800 a month rent to the Richmonds - even though she is still responsible for looking after "minor maintenance and the garden".

However, it's the period during which Mrs Pescott was occupying the mansion (and subletting to hubby) that was in dispute. Roger Pescott had claimed his income should be reduced by the rent he paid for the purposes of calculating how much he should pay his trustee in bankruptcy.

Not so, Forgie found. Instead, partly because he gets his food thrown in as part of the deal, Pescott is a lodger. All parties have been sent away to redo their sums on that basis.

Mariner's tale

It was an attractive image - the chairman of listed cashbox Lemarne Corporation, Darren Olney-Fraser, sitting down at the boardroom table to negotiate a deal with the chief executive of investment company Mariner Corporation, er, Darren Olney-Fraser. Sadly, Olney-Fraser swears it never happened. "I didn't participate in the board meetings of either company when the decisions were taken," he said. "It's an arm's-length transaction. They're not related companies."

In two ASX announcements last week, Lemarne announced it had paid Mariner $400,000 for a convertible note and then said it had increased the size of the investment to $750,000. The money is to be used to pay the deposits on two retirement village developments, Woniora (in leafy Sydney suburb Wahroonga) and Hermitage, in Tea Gardens on the NSW North Coast.

Olney-Fraser reckons the two villages are "very good acquisitions". "Essentially Lemarne has bought those two retirement villages through Mariner," he said. "Essentially Lemarne now owns Mariner."

Mariner still needs to come up with another $13.2 million to finalise the deals, which Olney-Fraser said would be done through a joint venture with a development partner.

Noting Mariner made a $2.4 million loss and liabilities exceeded assets by $980,000, the company's auditors expressed concerns about its viability in its annual report, released this week. But Olney-Fraser seemed unfazed, saying Mariner had rolled over its debt since balance date.

Rich rewards

Shareholders in Australia's biggest bank, CBA, were sent out proxy forms for the company's annual meeting on Wednesday, and there's plenty for them to consider.

This year they are decide whether to reward CEO Ian Narev with bonus shares worth $4.2 million. No doubt he's worth it. Shareholders meet in Adelaide on November 8.

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