Noongar elders in trust row after millions lost in resort transactions

The depletion of a $38m trust intended to help some of Australia’s poorest Aboriginal people has triggered a brawl between Indigenous leaders and professional trustees.

El Caballo in its hey day. The former resort and horse theme park is now the centre of a brawl between Indigenous leaders and the professional trustees that authorised loss-making purchases.

The depletion of a $38m trust intended to help some of Australia’s poorest Aboriginal people has triggered a brawl between Indigenous leaders and the professional trustees that authorised loss-making purchases.

Equity Trustees, Australia’s leading specialist trustee firm, is in conflict with the South West Aboriginal Land and Sea Council in Perth over a complicated, contentious series of transactions revealed by The Australian, including the purchase of a dilapidated former dancing horse theme park as a social housing and homelessness project.

A draft report by Ernst&Young found the property was not fit for purpose and while it was purchased for $12m, it was worth as little as $7.2m. Equity Trustees signed off on the purchase of El Caballo, east of Perth, from former bankrupt Matthew Pavlinovich, named in state parliament during the WA finance broking scandal as one of the “dirty dozen” operators.

The housing project never got off the ground at El Caballo, despite a further $1.5m of Noongar Trust money being used to try to fix up old resort accommodation on site. In 2020, the SWALSC board fell out with then chief executive Wayne Nannup over the project. He is suing it.

Former South West Aboriginal Land and Sea Council chief executive officer Wayne Nannup.

The current board is now in dispute with Equity Trustees over key facts, including whether the former board endorsed the purchase of El Caballo.

On Friday, it was announced Equity Trustees had sold a portion of El Caballo for $4m. That leaves the Noongar Trust $4.5m out of pocket, after paying $8.5m for the property.

The remainder of El Caballo is still for sale, and remains the property of the Noongar Trust, which does not want it but has been unable to sell it. Separately in 2019, Equity Trustees authorised use of $5m of Noongar Trust money to buy townhouses in Perth’s south.

Those properties are now owned by a breakaway charity called the Aboriginal Housing Recovery Centre Limited. There was furore in the Noongar community, particularly because the Noongar Trust has no control over the properties it paid for or the breakaway charity.

The events are now the subject of an inquiry by the WA government Charitable Trusts Commission.

Central to the dispute is what the SWALSC board knew at the time of the purchases.

Noongar elders Mingli McGlade and Ben Taylor questioned the use of trust to buy El Caballo Resort. Picture: Colin Murty/The Australian

On Friday, Equity Trustees issued a statement defending its role. “South West Aboriginal Land and Sea Council came to us with an initiative to alleviate social disadvantage in the Noongar community and other Aboriginal people … through a social housing and homelessness project,” it said.

“SWALSC then requested the Noongar Charitable Trust release capital to enable the acquisition of the properties. Equity Trustees denied the request for a capital distribution; however, agreed to acquire the (properties) within the Noongar Charitable Trust.

“Equity Trustees would never have purchased these properties, but for the request of SWALSC to support their … initiative.”

In its own written statement on Friday, SWALSC agreed that in 2019 it endorsed a strategy “aimed at addressing Noongar homelessness and rehabilitation”. “However, the board of the land and sea council said it did not request or approve the purchase of any property by the Noongar Charitable Trust.”