LAWFUEL – The Legal Newswire – Mr James Stanley Phillips, of Blackburn South and Mr Ian Francis Cole,
of Frankston, Victoria, were yesterday sentenced to jail in the Victorian County Court following an investigation by the Australian Securities and Investments Commission (ASIC).
Mr Phillips, 59, was sentenced to two years imprisonment and will serve a minimum of 12 months after pleading guilty to two counts of dishonestly using his position as a director with the intention of gaining an advantage for himself and someone else. The offences related to the payment of approximately $583,000 to creditors of Kings Creek Winery Pty Ltd between May and October 2001.
Mr Cole, 56, was sentenced to 20 months imprisonment and will serve a minimum of six months after pleading guilty to two counts of dishonestly using his position as company secretary with the intention of gaining an advantage for himself and someone else. The offences related to the payment of approximately $375,000 to creditors of Kings Creek Winery Ltd between May and October 2001.
Mr Phillips, who was a partner of the former accounting practice Landy & Company DFK, was also a director of Terra Firma Property Management Pty Ltd and Kings Creek Winery Pty Ltd.
Mr Cole was a consultant of the former accounting practice Landy & Company DFK, the secretary of Terra Firma Property Management Pty Ltd and the chief promoter of the Fyans Street Unit Trust. He is currently bankrupt.
Between May and July 2001, $1,020,000 was received from 13 investors in the Fyans Street Unit Trust, which was to be invested in the purchase of an office building in Fyans Street, South Geelong.
ASIC alleged that almost as soon as investors’ funds were received, Messrs Phillips and Cole began to disburse them for other purposes including Kings Creek Winery Ltd. ASIC alleged that all the funds were re-directed without proper documentation or security for repayment and were never repaid.
The Commonwealth Director of Public Prosecutions prosecuted the matter.
In May 2002, ASIC made an application in the Federal Court of Australia to have a trustee appointed to the Fyans Street Property Trust. Mr Clyde White, of HLB Mann Judd, Melbourne, was appointed as liquidator of the companies and trustee of the
Fyans Street Unit Trust on 29 May 2002. The Fyans Street Unit Trust has now been wound up and the debts from Kings Creek Winery Ltd and the Lake Company Pty Ltd have not been recovered. Investors received 4.6 cents in the dollar on their investment from the liquidator.
Mr White and Mr Phillip Newman of HLB Mann Judd were also appointed as liquidators of Kings Creek Winery Ltd on 29 May 2002. After conducting an investigation, Mr White concluded that Kings Creek Winery Ltd was insolvent as at 31 March 2001 and therefore was insolvent prior to money being raised from the Fyans Street Unit Trust investors and paid to Kings Creek Winery Ltd.