Bitter warfare at Crown Group before liquidation: court case

From a chance meeting at an auction to liquidation, the demise of Crown Group was due to the internecine warfare between its two founding partners, court documents reveal.

Crown Group chairman and Group CEO, Iwan Sunito:

The day-to-day management of east coast apartment developer Crown Group broke down due to the internecine warfare between its two founding partners, leading to heated office exchanges and the non-payment of creditors, according to court documents.

Provisional liquidators BDO were appointed late last week to Crown Group’s development arm, with all projects in that section of the company frozen.

In proceedings brought by Crown Group director Paul Sathio against his long-term business partner Iwan Sunito, Supreme Court of NSW documents obtained by The Australian reveal that at one stage Mr Sunito apologised to Mr Sathio for the disagreements and agreed that Mr Sathio could take over the running of Crown Group.

Ashurst solicitors were subsequently engaged to document the agreement that Mr Sathio would run Crown Group.

However, two days later Mr Sunito refused to sign the September shareholders’ deed, as the document was known, and an argument ensued.

Eventually Mr Sunito and Mr Sathio agreed to either split, sell or deal with each project or asset of the company.

Mr Sathio said he has taken steps to perform his obligations under the agreement and was “ready, willing and able to continue to perform the 9 September Agreement upon resolution of this proceeding”, the court statement read.

It is alleged that Mr Sunito had failed to take the steps required of him to perform his obligations under the agreement and “has not been ready, willing and able to continue to perform the 9 September Agreement”.

The ructions, which had begun four years earlier, following a number of disagreements, had also been attempted to be resolved via mediation by former NSW Court of Appeal Justice Roger Giles, KC.

But the former judge’s attempt to mediate between the warring pair from October 2021 to January 2022, resulted in Mr Giles calling an end to the mediation with no result.

Mr Sathio and Mr Sunito first met at an auction for a development site in the Sydney suburb of Coogee in 1997.

At the auction, Mr Sathio outbid Mr Sunito for the site but was approached by Mr Sunito immediately afterwards and a commercial relationship between the pair soon followed.

They then agreed to form a company, Crown Group, to pursue a business model to buy and develop sites to develop residential apartments which resulted in Arc, Waterfall and Eastlakes in Sydney. Another project was proposed in Brisbane called West End.

Originally published as Bitter warfare at Crown Group before liquidation: court case