A multimillion-dollar breakup involving a wealthy hotelier has claimed another scalp as his trustee in bankruptcy is left with a $350,000 legal bill.
Louise Thomson has been slammed by a court for running up legal costs and her own fees of hundreds of thousands of dollars when she didn’t need to while administering the bankrupt estate of hotelier Les Young. Meanwhile, four years after a court ordered Mr Young, 75, to pay his ex-wife Joanne Young $3 million, she is yet to see a cent of the money.
The saga began when Mr Young declared himself bankrupt after the Supreme Court in 2013 awarded Ms Young the payment.
The court found Mr Young had wrongly thrown her out of her home at his Wiley Park hotel, put down her two terriers Fluffy and Molly, maliciously told police she had stolen from him and taken off with her best friend, Josephine Smith.
Mr Young and Ms Smith lived in a $5 million harbour side penthouse but instead of putting it on the market to pay Ms Young, Ms Smith, whose jewellery alone has been valued at $850,000, was found to have defied a court order by putting it up as security for a $5.8 million loan for one of her companies to buy the Lucky Australian Hotel at St Marys.
Westpac Bank has since put the hotel into receivership after learning the Pyrmont apartment should never have been used as collateral.
Now Ms Thomson, who was appointed to sort out Mr Young’s bankruptcy, has been found by the Full Court of the Federal Court to have breached her duties as a trustee.
Despite knowing that Ms Smith was the main creditor of the estate, in one move criticised by the court Ms Thomson sent Ms Smith a report by snail mail which arrived five days after the date set for a deadline.
She could have sent it by email, the court found.
The court also found that she had improperly incurred around $350,000 in legal costs on top of $250,000 in remuneration and had done a deal with a litigation-funding agency who would get 35 per cent of what she recovered as part of the bankruptcy.
“That conduct was a breach of her statutory duties,” the court said.
The three Full Court judges said all her accounts dealing with Mr Young’s bankruptcy had to be signed off by the court and she has to personally pay the costs of the latest case, estimated to be around $350,000.
She concealed information and was obfuscating, the court said
A new trustee in bankruptcy has been appointed.
“Warring spouses, a de facto partner and money provide all the necessary ingredients for confrontation and disputes,” Justice Geoffrey Flick said.
“Add a bankrupt husband, his attempts to divest himself of property to his de facto partner and the inadequate discharge by a trustee of her duties as a trustee in bankruptcy and litigation becomes inevitable.” Ms Thomson had denied wrong doing.