Federal Court Stops Vincents Receivership

“The precepts of Natural Justice apply that affirm a natural sense of what is right and wrong.” Lord Esher, 1885

 

Report on Federal Court Hearing, December 3-6 

By Gi Linda

Steven Staatz, Vincents

A four day hearing set for December 3-6 in Qld Federal Court to decide an application for receivership by Vincents' liquidator Steven Staatz came to an embarrassing halt for Staatz on the third day, after conflict of interest by Vincents was exposed.

Staatz is requesting receivership of the company Wollumbin Horizons, disputed owner of a contested Mt Burrell property, now designated as part of Nightcap Village/ Bhula Bhula International Community.

Adrian Brennock, Tyler Tolman at "Nightcap Village"

Staatz is alleged to be facilitating an illegal phoenix move enabling Adrian Brennock, company director and fiduciary to the estate, to retain private ownership of the property, while continuing to operate a lucrative land-share scam.

Collaborators include neighbouring landowner, Peter van Lieshout, brother of Queenslands' top billionaire, Super A-Mart founder, John van Lieshout. The venture is promoted by American health celebrities Don Tolman and son Tyler.

Ian McKinnon, alleged conflict of interest

Barrister Ian McKinnon joined Vincents Chartered Accountants in 2002 as a forensic accountant with particular focus on financial crime. In 2016-17, Nightcap Village FAQ was sent to potential investors, listing Vincents and Ian McKinnon as professional advisors to Nightcap Village.

When previously questioned about conflict of interest, Staatz and McKinnon  denied any prior association and Brennock dismissed the naming of Vincents and McKinnon as advisors to Nightcap Village as "a mistake".

Nightcap Village FAQ lists Vincents as advisors

Collusion between Vincents and Brennock was revealed by defrauded investor Ron Berry at the Federal Court hearing, with evidence that Vincents' Ian McKinnon was deeply associated with Brennock.

Contrary to denial by Staatz and McKinnon, further testimony by Brennock's former partner, Mark Darwin, confirmed long-term friendship and collaboration between Vincents' McKinnon and Brennock prior to initiation of liquidation by Vincents and appointment of Staatz as administrator.

Phoenix Activity

Phoenixing, causing more than $5 billion annual loss to the Australian economy, has become an easy way for directors to burn an indebted company, revive the same business under a changed name and defeat creditor claims. See The Rise of the Phoenix.

Corporate regulators, ASIC, ARITA and the courts usually turn a blind eye, as phoenix activity operates in a permissive twilight of white-collar crime under shadow of law. AccountantsDaily reports one rare case where illegal operators have come under a spotlight. The Federal Court has commenced public examinations on entities connected to one dodgy pre-insolvency adviser: Suspected dodgy advisers, directors head to court after ATO swoop.

Vincents' convicted  liquidator Stuart Ariff

Vincents is still smarting from NSW District Court's conviction of liquidator Stuart Ariff in 2011, on 19 criminal charges involving phoenix activity.

Ariff was ordered to pay $4.97 million compensation and jailed for six years, but paroled in 2015. His trial by jury triggered a Senate inquiry into the insolvency industry in 2010, though little changed as a result. See ASIC report.

If successful, the intended phoenix move by Vincents and Brennock would transfer land title to Brennock in his private capacity and divest over $2.2 million in liabilities and debts to defrauded investors, including myself and more than twenty others.

Since Staatz initiated the Federal Court hearing in January 2017, Judge Derrington has indicated intention to allow Staatz to sell the land with a lien covering his fees and legal costs. Instead, evidence of conflict of interest by Vincents forces a closer look at a notorious legal loophole that allows corporate crime to flourish with impunity.

The Federal Court hearing was halted a day early, on December 5th by Judge Derrington, with orders that Staatz provide to the Court by December 21 an explanation regarding evidence of conflict of interest.

Defendants must respond by January 25 and a further hearing is listed for February 25, 2019.

Meanwhile, investors whose class action for proprietary relief and cross-claim against Staatz in June 2018 was summarily dismissed as "scandalous" with no hearing and a suppression order over Court documents are preparing an appeal to the High Federal Court charging Staatz and Brennock with criminal activity.

The Rise of the Phoenix

"He who was but now the sire comes forth from the pyre the son and successor;

Between life and life lay but that brief space wherein the pyre burned."

Claudian, The Phoenix  (Roman poet, 4AD) 

 By Gi Linda -

According to legend heard at Heliopolis in Egypt, there exists a fabulous bird called the phoenix, like an eagle, with feathers of red and gold. When this bird's life draws to a close he builds a funeral pyre, commits himself to the flames and dies. Out of self-immolation a maggot emerges and a new phoenix appears on the fiery altar. 

In modern commerce the phoenix bird is an icon, inspiring businesses burned by debts to rise from the ashes of destruction and continue trading under a different name, leaving their creditors behind. 

Phoenixing is illegal, but that's not much of a deterrent, and it's become a booming business for delinquent company directors and their facilitators, insolvency liquidators, lawyers and judges.

As the Australian government promises to legislate new phoenix offenses to deter illegal phoenixing, a case now in Qld Federal Court is challenging alleged phoenix moves by Vincents liquidator Steven Staatz and company director Adrian Brennock, that involves 21 defrauded investors who paid more than $2 million as intended co-owners of property in a NSW community land-share venture.

The economic impact of illegal phoenix activity

An Australian Inter-Agency Phoenix Taskforce made up of 29 government agencies aims to reduce the impact of illegal phoenix activity. In July 2018, the Phoenix Taskforce published a report, The Economic Impacts of Potential Illegal Phoenix Activity, that defines as illegal phoenix activity the deliberate and systematic liquidation of a corporate trading entity which occurs with the intention to continue the operation and profit taking of the business through other trading entities, while avoiding liabilities:

"Phoenix companies arise from the ‘ashes’ of a collapse of a commercial entity, leaving behind a trail of avoided outstanding payments to tax authorities, creditors, businesses, customers and employees."

According to the report, the annual impact of illegal phoenix activity is now over $5 billion a year. 

Thirteen Commonwealth government agencies, including ASIC, the ATO and  Fair Work Ombudsman have powers to investigate and prosecute "phoenix activity" or "phoenixing". But usually they don't.

Australian courts have absolute authority to stop illegal phoenix activity and to impose penalties on delinquent directors and liquidators. But, usually they don't, as self-represented defrauded investors challenging Vincents' liquidator Steven Staatz discovered when a Brisbane Federal Court Judge refused to hear their evidence of phoenix activity, and slapped a suppression order on their request for justice.

Curbing the Flight of the Phoenix describes how phoenix moves are used by companies in insolvency to divest liabilities:

"Like the mythical bird that dies and then resurrects, phoenixing is the deliberate liquidation of a company to avoid paying tax, creditors or employees and then the ‘resurrection’ of the business through a different entity. It is illegal. The negative impact of insolvency is magnified by phoenixing, which enables a company that owes money to creditors and employees to restart without paying its debts.
 
"Regulators are aware of the problem. ASIC announced in September it will conduct surveillance of 1,400 target companies and approximately 2,500 individuals... Concurrently, the ATO announced it will investigate 2,000 property developers..."

Jotham Lian reports at accountantsdaily.com.au:

Suspected dodgy advisers, directors head to court after ATO swoop

"The Federal Court has commenced public examinations on entities connected to a dodgy pre-insolvency adviser, in a move welcomed as shining the light on illegal operators.

"ATO deputy commissioner Will Day has confirmed that more than 45 service providers, clients, employees, and alleged ‘dummy directors’ of phoenix companies connected to pre-insolvency adviser Philip Whiteman will be examined in the Federal Court on the grounds of suspected promotion and facilitation of phoenix activities and tax schemes."

Until now very little has curbed the rise of the phoenix as companies in default increasingly use liquidation as a means to divest liabilities.

Australian Restructuring Insolvency & Turnaround Association (ARITA) chief executive John Winter told Accountants Daily:

“These unregulated and almost-always unqualified advisers promote their wares to often unsuspecting people who are in financial distress, and what they offer them is generally illegal solutions...They are a scourge on the economy, ripping off creditors, employees and taking advantage of people at their weakest moments. The message needs to be sent to these so-called advisers and the directors who use them that they will be found out and prosecuted.”

The Flight of the Phoenix

By Gi Linda-

In Australian courts, news reports and blogs, victims of "Nightcap Nightmare" are warning that sovereignty activists Mark Darwin and Adrian Brennock are selling home sites with idyllic views of Mt Warning on environmentally protected property without development approval.

Victims of Nightcap Nightmare warn that "Freemen" Darwin and Brennock scammed them of life savings, inheritances and much goodwill, making false promises muscled by contrived urgency to induce payment of money into a dubious land-share venture cloaked as a visionary initiative managed by credible and trustworthy professionals.

Under a functional legal system, such dishonest scamsters would be stopped, but Nightcap Nightmare has confronted justice for more than three years in four jurisdictions: the Supreme Court, Federal Court, Magistrates Court and the Land and Environment Court. As "Freemen" they expect the courts to bow to them.

During 2014-15, Adrian Brennock and Mark Darwin solicited “interest” from investors at public events and secured finance without adequate contractual procedure.

Potential investors attracted by online marketing, public presentations and private meetings with Mark Darwin, were deceived by promises about legal advisers, legal structures and process, financial management, potential and permissible land use, property management and the status of development applications for land-share occupancy.

The required payment was $40,000 from mid 2014, then rose to $80,000 in February 2015 and increased to $120,000 by July 2015, with uncertain caps on the maximum number of intended participants.

During 2014-15, Investors provided $1,913,000 in purchase monies for Land, with additional loans and payments of superannuation. These purchase monies were not registered. Most were held on trust by “Community Lawyer” Wroth Wall, principal of Wall & Company Lawyers.

NightCap Eco Village Nightmare

Local outrage opposing Nightcap Village in 2007.

Dreamweavers of deception spin webs of delusion, selling dreams of idyllic utopia. Poetic sophistry blended with snakeoil sets the snare. Trapped in a cave of shadows, it's hard to escape when the quest for restitution only leads to a tilted stage of injustice where the sword cuts both ways.

NightCap Eco Village, promoted by American health gurus, Don and Tyler Tolman, is a dream spun from deception, misleading investors to drain their bank accounts into a communitarian venture in northern New South Wales, Australia, that has already left a long trail of victims clamoring for restitution.

Read more

Litigation related to evident "Phoenix action" by NightCap Village has been ongoing in NSW Supreme Court and Brisbane Federal Court since 2017 by investors who lost life savings, inheritances and pension funds in mistaken trust of the controllers of the proposed land-share development that began in 2014-15 as "Bhula Bhula Village Community", and is now called  "NightCap Eco Village".

This litigation by investors who paid for the land during 2014-15, is intended to achieve restitution by stopping the transfer of  land to the same controllers under the new name NightCap Village, or Nightcap Eco Village, or NightCap on Minjungbal. The name always changes but the scam remains the same.

Eight years ago, the marketing offer was the same as today: co-ownership of land with membership of an Intentional Community in exchange for purchase moneys for property... but that is not what duped investors got during 2014-2018! 

Despite assurances by Tyler Tolman in his promotional video for Nightcap Eco Village that investors will have title to the land they purchase, the proposed multiple occupancy development does not have prior development approval, as required by local authorities. It is located on environmentally sensitive land subject to protective regulations, with intense local opposition to the proposed "village". 

Inspired by his successful brother, property developer and A-Mart billionaire, attempts by Peter van Lieshout to build "Nightcap Village" on his 3,000 acre Mt Burrell property date back to 2007, when his wife, Joan van Lieshout, was Mayor of Tweed Shire Council. A development application was approved by the council despite intense local opposition to the proposed 300-home development in an environmentally protected region.

The project was revived in 2016 when landowner Peter van Lieshout offered shareholder agreements to Adrian Brennock, Mark Darwin, Cherie Stokes and Phillip Dixon, after their "Bhula Bhula Community Village" on the adjoining property failed and those who had paid for the land were violently evicted without return of their investment.

Prospective investors in the current "NightCap Village" are also not informed that the opportunity to obtain development approval is already closed. 

 

Misleading, confusing, conflicting marketing claims by Oliver Baker and Tyler Tolman affirm that the current "NightCap Eco Village" already has development approval, while they also claim that applications will be filed before August 2018 and the process of approval is expected to take four months, or maybe "some time".

Marketing offers and promises based on deceptive town planners' reports claim that "NightCap Village" benefits from continuation of the DA approval granted to Peter van Lieshout's "Nightcap Village" in 2007. 

The falsity of these representations is evident in council records and newspaper reports confirming that the first attempted Nightcap Village failed due to high infrastructure costs. Development approval lapsed in 2009 and has not been restored. 

Potential new investors who have read the NightCap Village marketing disclaimer, in tiny font, that actual events may turn out to be quite  different from any marketing promises, and have done due diligence as suggested, will discover that August 2018 is the statutory cut off for approval of land-share development applications in Mt Burrell region.

Tweed Shire Council was asked to respond to Nightcap Village marketing claims that development applications would be filed before the "cut-off date" of August 2018, and that approval could be expected within four months. 

Tweed Shire Council confirms the application process for such a complex development normally takes two years and there has been no change to the cut-off date for completion of development approval applications already in process, with a "6 August deadline for the cease of permissibility of rural landshares in the Tweed."

"On 5 August 2016 the NSW State government repealed State Environmental Planning Policy (SEPP) No 15 – Rural Landsharing Communities. NSW SEPP (Integration and Repeals) commenced on 6 August 2016.  This SEPP will be repealed on 6 August 2018. This SEPP provided a legislative tool, for a predetermined period of time, for landsharing communities to have an approval path following the repeal of the previous SEPP.
 
The application cannot be determined after the repeal date of 6 August 2018 as rural landsharing communities currently rely on this SEPP for permissibility within the Tweed Shire Local Government area.”   

This means that the final date for approval of rural landsharing communities at Mt Burrell is August 6, 2018.

Until now, no development application has been lodged for the proposed "Nightcap Eco Village" marketed by Oliver Baker and Richy-Rich Moate, with the helpful celebrity endorsement from Tyler and Don Tolman.

New names, nice faces, fake promises, old lies...

So before investing in  a home site on Tolman Ridge, take note that earlier investors are currently suing with claims over $2 million against the "NightCap Village Team", or "NightCappers" who ensure in their Info Kit smallprint disclaimer, as earlier investors discovered to their great cost, that these sophists and slanderers take no responsibility for actual outcomes that may significantly differ from their promises:

The information provided in this kit is true and correct at the time of publication, however this project is in its early stages and so the Directors, Founders and any other members of the NightCap Village team accept no responsibility for actual outcomes. 

  

Buyer Beware! 

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