ICAC probes "sham" documents ... Water, water everywhere ... When shares in Di Girolamo's waterworks company transformed into a loan ... The O'Greeds ... Claims of "false instrument" ... Barrister questioned at ICAC ... Defamatorium
GEOFFREY Watson SC, counsel assisting at ICAC's current inquiries, Operations Credo and Spicer, has argued that slippery Liberal Party wheel-greaser Nick (Grange) Di Girolamo had secretly sold half his shares in Australian Water Holdings to the Obeids.
The Obeids and Di Girolamo says, oh no, it was a $3 million loan paid by the Obeids to Nick.
Watson said what purported to be a loan agreement between Eddie Obeid jar and Di Girolamo in November 2012 was a "sham [and a] false instrument".
Sydney barrister Sue Chrysanthou was brought in by Di Girolamo to get the paper work in order and as a result ICAC wanted her to explain what went on.
She drew up a draft deed of confirmation about the loan after a series of conferences with Di Girolamo in February 2013.
This occurred after Fairfax Media had published stories in 2012 about the wheeler-dealer's financial arrangements with the Obeids and their involvement in AWH.
See, for example
ICAC is investigating whether the Eddie Obeid snr used his political influence to lobby for AWH's interests, without disclosing his financial involvement in the company.
In evidence, Chrysanthou confirmed that she had drawn-up a draft deep of confirmation for the loan agreement and she was acting on Di Girolamo's instructions.
She said that than an earlier agreement had not been executed properly and there was some uncertainty as to the identities of the parties.
A heads of agreement document dated November 4, 2010 sought to create an arrangement whereby the Obeid Family Trust purchased shares from Di Girolamo in AWH and its associated company Australian Water Pty Ltd.
Chrysanthou said there was uncertainly in that earlier document as to whether the money given to her client was for "the purpose of purchase or the purpose of lending".
She said the agreement "made no sense".
Di Girolamo: gave instructions
Chrysanthou agreed with Watson that the words "loan ... borrow ... [or] principal" did not appear in the agreement. Also, there was no schedule of repayment.
"My recollection is I was told that at the time the heads of agreement was entered into in November 2010 the parties contemplated that there would be a share purchase but at some stage between November 2010 and November 2012 the parties changed their mind and didn't go ahead with that agreement and instead made an oral agreement for the borrowing of $3 million to my client."
Chrysanthou was junior to barrister Tod Alexis in the drafting process.
Alexis also appeared for Di Girolamo at the ICAC inquiry and asked Chrysanthou:
"Your particular role I think was to deal with prospective defamation proceedings having regard to what had been published at or about or in about, I should say, February 2013 concerning Mr Di Girolamo?
Chrysanthou: "Yes, and articles I think that were published at the end of 2012 as well."
[snip]
Commissioner Megan Latham: "Sorry, could I just clarify, do I, do I take it that the conferences you had with Mr Di Girolamo in February 2013 that gave rise to the draft deed of confirmation, were those conferences in the context of the prospective defamation proceedings?"
Chrysanthou: "Yes."
Stuart Littlemore said he would like to cross examine but, "I can't think of any questions".
Chrysanthou's barrister, Bruce McClintock, asked who came up with the idea for the deed.
Chrysanthou: "I think Mr Alexis and I both agreed that the earlier documentation was unsatisfactory and we both advised the client in conference on February 25 that a deed of confirmation should be prepared and then Mr Alixis confirmed that advice in writing on February 25...
[snip]
There was an assertion in a number of Fairfax articles that my client had acted corruptly in that he'd attempted to hide an interest of the Obeid family in Australian Water Holdings amounting to $3 million.
My instructions were that that was incorrect and that it was a loan.
I wanted to ensure that if any defamation proceeding was commenced that the arrangements between the parties were clear so that I could deal with any justification defence that arose."
McClintock: "... who did you obtain instructions from ...?
Chrysanthou: "My instructions came from my client."
Just as he was about to assist ICAC with his evidence Di Girolamo's solicitor, Dennis Vuaran, was taken ill in the chambers of his barrister Martin Einfeld, and rushed to hospital in an ambulance.
Di Girolamo wanted $100,000, plus legal costs and an apology from Fairfax, over "hurtful and unfounded allegations" that he had engaged in "secret financial arrangements on behalf of the Obeid family when in charge of Australian Water Holdings".
His case is in the defamation list.
If ICAC does find that the loan was a sham that would mean Di Girolamo's defamation action would be a sham and that the loan documents brought into existence to defeat Fairfax's justification defence were a sham.
In those circumstances not only would Di Girolamo have sought to mislead ICAC, but also the court.
It will be interesting to discover whether Di Girolamo's reputation was really damaged by the newspaper articles or whether he was trying to cheat his way into a juicy damages verdict.
The findings are awaited with interest.
Barrister Sue Chrysanthou questioned at ICAC about Di Girolamo loan document. Transcript