How one small businessman triumphed in court over $500,000 in liquidator’s fees for a $28,000 debt
Thursday, December 11, 2014/
Small businessman John Viscariello won a lengthy legal battle against liquidator PPB Advisory and law firm Minter Ellison on Tuesday.
The Chief Justice of the Supreme Court of South Australia found in Viscariello’s favour in his claim of improper conduct against PPB and Minter Ellison.
Viscariello’s retail business Bedroom Mazurka which included 18 outlets in South Australia went into administration in 2001 and lawyers and liquidators spent more than half a million dollars chasing a debt of just $28,000.
Justice Kourakis found liquidator Peter Macks, formerly of PPB and now of Macks Advisory, had fabricated documents and given “evasive and unconvincing testimony”.
The court lifted the veil of legal professional privilege to include damning evidence including minutes of meetings between PPB and Minter Ellison which stated “The number one rule is to protect the insolvency practitioner at all cost”.
Viscariello fought a string of legal proceedings brought by Macks and brought his own against the legal practitioners board.
The court found the continuation of the proceedings could only be explained by Macks’ concern for his own personal financial and reputational interests.
“The disconnection between the legitimate purpose of the litigation and Mr Macks’ personal purposes, and the way in which it was funded, were calculated to corrupt the proceedings,” the court found.
PPB was not named as a party to the proceedings as PPB’s former Adelaide office was an affiliate relationship that ran independently.
PPB chairman Stephen Parbery said in a statement that the insolvency firm is “disappointed” a former affiliate has been found to have acted improperly.
“This type of conduct is not condoned at PPB Advisory and we maintain very high standards of professionalism and integrity,” he says.
“Insolvency law reform is an area where PPB Advisory has been very proactive putting forward a number of recommendations, and we believe such reform will help to strengthen our profession and the conduct of all practitioners.”
In a statement to SmartCompany, Macks said he respected the court’s decision and was pleased “the whole of Mr Viscariello’s case concerning my conduct as administrator of the companies was thrown out”.
“However, I am deeply disappointed by its findings concerning the litigation that I pursued in good faith for the benefit of all creditors. I am currently reviewing the contents of the judgment and taking further advice regarding my options, including as to any appeal to challenge those findings.”
Minter Ellison declined to comment while Viscariello did not respond to SmartCompany’s request for comment prior to publication.