Sandbar Cafe: Gold Coast eatery in liquidation after court stoush between real estate agents Greg Bell and Ajay Bakshi

A Gold Coast beachfront cafe is in liquidation after a stoush between two real estate agents wound up in court.

A GOLD Coast beachfront cafe is in liquidation after a stoush between two real estate agents wound up in court.

In a judgment handed down in the Supreme Court Friday morning, the company behind Sandbar Cafe, on the Esplanade at Surfers Paradise, was placed into provisional liquidation amid questions over the solvency of the business and a lender circling over non-payment of a high-interest loan. The company also has a tax debt of more than $370,000.

Ipswich realtor Ajay Bakshi applied in September to put the company, named 52 The Esplanade and directed by high-profile commercial agent Greg Bell, into liquidation.

Cafe Surfing - Sandbar

ASIC lists Mr Bell as sole director of 52 The Esplanade. Another company - 4 Orchid Avenue - directed by Mr Bell is a 50 per cent shareholder.

A company directed by Mr Bakshi is listed as the other 50 per cent shareholder.

Court documents show the Esplanade company bought the cafe in June 2020 from its previous owners Jo-Anne and Greg Short, who had started it in 1988.

The Shorts sold the cafe business to the Esplanade company for $520,000, with the sale settling in November last year.

Documents lodged with the court show Mr Bell and his company 4 Orchid Ave, as well as Mr Bakshi and his company 100 Brisbane Street, were guarantors for a $632,000 loan taken out with Goldsmith Farrington Capital to purchase the cafe business.

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Greg Bell. Picture: Tertius Pickard

The loan was secured against three properties registered to Mr Bakshi or his company, including his Ipswich home, as well as the cafe business and its assets.

Court documents claim the loan was due to be paid in full by November 20 this year, but was in default from October, earning more than $30,000 a month in interest with a balance rising to $723,000 by November 12.

On that date, court documents say, the lender issued a demand for possession of the secured properties.

In his affidavit to the court, Mr Bakshi said he believed the cafe was trading insolvent; that he’d been denied access to financial records; that the company owed more than $300,000 to the tax office; that it was behind in rent; that it was in debt to suppliers and also owed superannuation and other entitlements to staff.

According to the Judgement, the Esplanade company, directed by Mr Bell, resisted the application for a liquidator, claiming Mr Bakshi’s company “lacks standing” to make the application.

In its defence, the Bell-directed Esplanade company said Mr Bakshi’s Brisbane Street company had “never been a shareholder”, despite it being registered as such with ASIC, claiming Mr Bakshi merely held them in trust for Mr Bell’s business partner Kevin Carey.

Mr Bell’s The Esplanade company denied it was trading insolvent and said appointing a liquidator would be “futile”, according to the Judgement.

The court documents said Mr Bell appointed Mr Carey, with whom he’d previously operated Gilley’s Bar, as operations manager for the cafe.

In his affidavit, Mr Bell said he, Mr Carey and Mr Bakshi had first met to discuss Sandbar in May 2020.

The affidavit said Mr Bakshi was the sales agent for the cafe and that Mr Bell and Mr Carey had planned to buy the cafe, securing finance for the purchase against property they owned.

Mr Bell’s affidavit said he and Mr Carey wanted to help Mr Bakshi who “had defaulted on his personal mortgage affairs”

The affidavit said Mr Bell and Mr Carey agreed to help Mr Bakshi retain his properties in exchange for them being used as temporary security against the Sandbar loan.

Cafe Surfing - Sandbar

As a result, Mr Carey transferred a vacant block of land worth $150,000 into Mr Bakshi’s name and loaned him $28,000 to meet his mortgage repayments, the affidavit said.

Mr Bell’s affidavit said Mr Bakshi was only listed as a shareholder in the Esplanade company because the lender required it.

It said Mr Carey had transferred his 50 per cent interest in the Esplanade company to Mr Bakshi, who had never paid for the shares, and “it was agreed and understood that the shares were merely held by Mr Bakshi in a position of trust as was required by the lender”.

“It is within my knowledge that at no time has Mr Bakshi made any payment for a purchase of shares, made any payment for the purchase of property, repaid any loan made to him, or made any financial contribution whatsoever to the purchase and operations of Sandbar,” Mr Bell said in his affidavit.

“In fact, it is my view that Mr Bakshi ought to be considered a debtor of the company where he has been enriched with property and funds for which he has failed to return or repay.”

An affidavit lodged by Mr Carey said he’d loaned Mr Bakshi $18,000 to meet his mortgage repayments, and had temporarily transferred the vacant land to Mr Bakshi to help him out.

An affidavit lodged by Mr Carey said he’d initially intended to use the land as security for the Sandbar, and its transfer “disrupted” the finance.

As a result, the affidavit said, Mr Bakshi agreed it could be used as security and returned to Mr Carey once he and Mr Bell refinanced the loan.

Judge J Kelly found that, as registered shareholder and guarantor for the Sandbar loan, and a potential creditor of the Esplanade company, Mr Bakshi’s company did have sufficient standing to apply for the liquidation.

The judge was critical of the defence, saying “the affidavits of Mr Bell and Mr Carey did little more than contain bare denials and mere assertions”.

“There was a notable lack of exhibited material correspondence, financial records or books of account and there was also a distinct lack of detail and proof of any facts underlying the denials and assertions contained in the affidavits,” the Judgement said.

The judge said the evidence showed the Esplanade company had defaulted on interest and full payment of the loan and that it owed $370,253 to the tax office.

The Esplanade company had provided no evidence of its solvency, the Judgement said, nor had it demonstrated compliance with its tax or employee obligations, explained why it had defaulted on the loan or proven there had been any efforts at repayment.

Judge Kelly ordered Terry Rose be appointed provisional liquidator of 52 The Esplanade, and within 14 days provide the court details of its solvency, assets, liabilities and other relevant information.

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