Mackay-based developer John Cowley wins court orders to wind up firm that dudded him of $4m

Seasoned Queensland developer John Cowley has lost nearly $4 million in a disastrous investment scheme where a judge found his cash was used to fund the company director’s luxury lifestyle. A judge found the company ‘never actively traded’. Now the battle has hit the courts.

Property developer John Cowley

UP IN SMOKE

A seasoned north Queensland property developer has lost nearly $4 million of his family super funds in a disastrous investment scheme aimed at creating real-estate-related websites.

John Cowley and his missus Rhonda secured Brisbane Supreme Court orders last week to wind up Winter One Investments Pty Ltd, which was overseen by sole director Mark Williams.

Liquidator Marcus Watters will now be sifting through the wreckage, which includes evidence heard in court that Williams loaned himself more than $3 million and improperly used some of the money to splash out on luxury goods (more on that below!).

Cowley, who has run Mackay-based Cougar Developments for more 35 years, invested $2.5 million to secure a 25 per cent stake in the company in 2014.

Winter One, headquartered in Brisbane, aimed to build a global network of internet sites and real estate portals, with grand plans for an eventual IPO and an estimated potential value of $20 million.

When Cowley sought an update on how the business was progressing in late 2018, Williams responded that he needed a further capital injection. Cowley obliged, tipping in another $1.25 million.

But by July last year, Cowley had lost patience with the ill-fated venture and launched court action to pull the plug on Winter One.

DISPERSING FUNDS

In his ruling in the case, Judge David Jackson found that Winter One was a “moribund investment company that has never actively traded’’ and had a bank balance of a meagre $223.

He noted that all of the $2.5 million initial investment had been dispersed within a year, primarily as a $2.33 million personal loan to Williams. Another $118,056 was moved to one of Williams’ related companies.

John Cowley has taken the issue to court to wind up the investment company.

In case that wasn’t enough, Jackson said the $1.25 million top-up in 2018 was redirected immediately as a loan to another Williams-controlled entity called W Media Holdings Pty Ltd.

Yet it wasn’t until May last year that Williams formalised the loan agreements and even then the judge described the terms as “curious,’’ including provisions that he labelled as “nonsensical’’.

It gets worse.

Jackson determined that $150,000 of the $1.25 million investment was used to pay off Williams’ credit card bills “for personal and luxury expenses’’.

“There were also substantial sums paid out towards the personal expenses of (Williams) and his family from the balance that was paid to W Media Holdings Pty Ltd’s accounts,’’ his ruling said.

Despite all this movement of money, W Media Holdings was “financially insolvent’’ by late 2018, Jackson found.

The facts of the case “reveal a strong prima facie case of breach of duty and breach of contract by (Williams)’’, he said.

Over to you Watters!

Painful as this misadventure may be for Cowley, he’s not exactly scrounging for pocket change to survive.

Back in 2016, he offloaded a Brisbane penthouse for $6.2 million while retaining a home on Hamilton Island and a pad on the Gold Coast.

Cowley did not return phone calls seeking comment and Williams could not be contacted.

NEW GIG

Grant Dearlove, a legal eagle and longtime fixture in Brisbane corporate circles, has a new gig.

We learned this week that he will have a far greater hands-on role at Australian Family Lawyers (formerly Navigator Resources), which relisted on the ASX last year after raising $5.9 million.

Dearlove, a former top gun at Shine Lawyers, has served as executive chairman of AFL but he’ll now take on added responsibility as managing director as part of a wider office shake-up.

He replaces founder Ed Finn, who is retiring as MD to head up a market advisory board but will still remain on the board.

Finn, who gave up half his salary in the last financial year, has incentivised the troops by offering to hand out shares to star performers at the completion of an escrow period.

With AFL back in the black, Dearlove said he hopes to have a foothold in all major Australian cities by this time next year.