Judge loses patience with Forum Finance founder Bill Papas

The Federal Court judge hearing the case against Forum Finance has threatened founder Bill Papas with action for his ‘persistent flouting’ of court orders.

Forum Group and Iugis boss Bill Papas's Audi racing car.

Federal Court judge Michael Lee has issued Forum Finance founder Bill Papas an ultimatum and threatened action for his failure to file an affidavit and “persistent flouting” of court orders.

Justice Lee on Wednesday told Mr Papas’s barrister he had until a hearing on Friday afternoon to submit the document to the court or risk action, after several earlier deadlines were not met.

Mr Papas is facing legal action by Westpac and two other banks over allegations of a $400m fraud relating to his equipment leasing firm.

Justice Lee lost patience with Mr Papas’s barrister on Wednesday, setting a new and final deadline for the document and saying he was not prepared for the matter to “drag on”.

“If it hasn’t been complied with on Friday then that would be an appropriate time … for me to give you notice of what steps the court may, or may not, take on its own motion in relation to what I consider prima facie the basis to be a longstanding flouting of the court’s orders, which undermines the authority of the court,” he said.

“You’ll be given procedural fairness on Friday as to what the indication of that order may be and be able to be heard before any order has been made.”

If Mr Papas was found to be in contempt of court he may be fined or imprisoned, although matters are complicated by the fact he remains in Greece without a firm plan to return.

Mr Papas’s barrister, Jim Johnson, said his client was seeing a ­notary in Greece on Thursday, so the documents could be returned to Australia and filed with the court. He said Mr Papas planned to return to Australia, but required more money for living expenses and to pay for a return ticket.

Mr Johnson revealed a draft copy of one of Mr Papas’s three ­affidavits was emailed to him, bearing the signature of his solicitor Rocco Panetta.

Forum Finance director Bill Papas.

Westpac’s barrister, Jeremy Giles SC, explained his frustration given Mr Papas had previously said through his legal team that he had booked a return flight with the help of his partner Louise ­Agostino.

“It appears that rather than Ms Agostino arranging Mr Papas’s return she was successfully arranging her departure and one finds splashed in the media photographs of Mr Papas and Ms Agostino in Thessaloniki, which are said to be current,” he said.

“It’s beyond not good enough … What the lawyers are instructed to tell your honour including Mr Panetta on oath, pursuant to a ­direction your honour made, just simply turns out to be singularly unreliable.”

Westpac did not seek contempt of court orders, given Mr Papas is in Greece and the bank wants a judgment to be made so it can be filed in jurisdictions offshore.

Mr Giles said Westpac described Mr Papas’s failure to comply with the judge’s instructions as “flouting” the court orders, which acted as an impediment to the bank.

Mr Papas and Ms Agostino have been sighted in the Greek city of Thessaloniki, where he owns several properties and hosts an office for waste management business Iugis.

Westpac, Societe Generale and Japan’s SMBC Leasing and Fin­ance are separately pursuing Forum Finance and founder Mr Papas in court, with total exposures of $400m across Australia and New Zealand.

Mr Papas is the former president of Sydney Olympic Football Club, a position he held until Westpac’s fraud allegations became public early this month, and a car enthusiast.

Westpac alleges he entered into fraudulent leases by forging signatures and seeking finance for leases when the goods or equipment did not exist.

McGrathNicol is administrator of about 24 Forum-related entities, which are being tipped into liquidation after Wednesday’s hearing. One entity – solar business Autonomous Energy – is in administration as a sale process is under way.

The Australian on Tuesday revealed AGL was among more than 10 interested suitors for the Autonomous Energy business, acquired by Forum entity Iugis earlier this year. Another Forum entity was essentially sold last week as part of the administration process, with leases and staff to transfer to the buyer. That was the sale of part of the Forum Group equipment leasing entity to Our Kloud – which is led by Eric Constantinidis, a relative of Mr Papas.

Also a respondent to the legal actions is a director of some Forum entities, Melbourne-based Vincenzo Tesoriero.

Mr Tesoriero’s barrister, Greg McNally, raised issues on Wednesday that his client was having with his property empire, which was complicatedby some entities holding the properties now being in liquidation while others had been foreclosed on by banks.

The court has frozen the domestic and international assets of Mr Papas and Mr Tesoriero.