NSW court slams $100M Punchbowl deal

The Supreme Court of New South Wales has ruled that insolvent property developer Portman Securities’ 2020 agreement to buy a Punchbowl development site for $100 million was an uncommercial transaction entered into while the company was insolvent, ordering director Mario Pamboris to repay a $5 million deposit and rejecting a cross-claim by vendor Westwood Capital.

Portman Securities was placed into liquidation in 2021 following a winding up petition by Westwood. Liquidator Chris Darin of Worrells later challenged the transaction and sought relief against parties including Mr Pamboris and Westwood. Justice Black found the company had no realistic prospect of completing the purchase, noting its lack of assets, its inability to fund the remaining $4.999 million deposit, and the substantial benefit conferred on Westwood when the contract inevitably collapsed after the instalment payments were released unconditionally.

The Court accepted the liquidator’s case under sections 588FB and 588FF of the Corporations Act that no reasonable director would have caused the company to enter a contract of that magnitude or diverted millions to related entity Waldron Projects, conduct that also breached statutory duties. The judge dismissed Westwood’s defence under section 588FG and sharply criticised the evidence of its director, finding key claims about a personal guarantee and purported refinancing arrangements to be unreliable and contradicted by contemporaneous documents. A separate claim against Athenee Mortgages, which asserted a $5 million loan intended to cure the default, was rejected after the court determined the loan documents were inconsistent and post-dated the company’s incorporation, with no proof of any funds advanced.

Read the decision here.

Steven Golledge SC and Nicola Bailey of 3 St James Hall (instructed by Maddocks) acted for Christopher Darin in his capacity as liquidator and Portman Securities. BE Akinyemi of Hunts Law acted for Mario Pamboris, while James Jordan of Jordan Djundja acted for Westwood Capital.