Fraud claims against solicitors should be investigated: judge
Multimillion-dollar fraud claims against solicitors John Voitin and Simon Nixon and Mr Voitin's wife, Clare Sowersby, should be properly investigated, a judge has found.
Federal Court judge Justice Jennifer Davies on Friday raised concerns about a deal struck between orchardist Giuseppe Rullo and a Hong Kong company associated with Ms Sowersby that allowed Mr Rullo to avoid bankruptcy.
Mr Voitin, Mr Nixon and Ms Sowersby have been accused of using offshore companies as part of a scheme that allows financially troubled rich Australians to avoid bankruptcy.
Justice Davies ordered Mr Rullo made bankrupt after setting aside a personal insolvency agreement under which his creditors were to be paid about 4¢ in the dollar.
Ms Sowersby's Hong Kong company, Athena Commodities & Trading, voted for the personal insolvency agreement at a meeting of creditors in February.
Its vote was crucial because the $1.265 million it claimed to be owed represented more than half the total $2.365 million Mr Rullo owed to unsecured creditors.
Athena claimed to be entitled to the money because it had a judgment from the Victorian Supreme Court after Mr Rullo failed to meet his end of the purported bargain.
However, Justice Davies said, there were "serious questions" about the validity of the debt.
She said she was "troubled" by the evidence of farmer David Cross, whom Mr Rullo owed more than $368,000.
"The evidence is very sketchy and inferential in nature but does show connections between Athena and some of the other unsecured creditors," she said. "The evidence does not permit any view to be formed as to whether there was anything improper, but equally I could not, on the material, dismiss the allegations made by Mr Cross as fanciful or frivolous or lacking in foundation.
"Given the nature of the allegations, there is a public interest in a proper investigation into Mr Rullo's affairs..." She described as "neither adequate nor satisfactory" attempts by Mr Nixon, who acted for Athena, to explain inconsistencies in documents supporting Athena's deal with Mr Rullo.
Peter Goodin, Mr Rullo's trustee, was right to have suspicions about the Athena debt, she said.
"The responses from Athena's solicitor were unsatisfactory and inadequate, and far from rebutting the trustee's suspicions, gave the trustee proper and justifiable cause for suspicion."