Witnesses in the WA Supreme Court case levelled by besieged property developer Luke Saraceni against the financiers and receivers of his stalled Raine Square project were yesterday grilled over the intricacies of mortgage documents and bank cheques.
On the first day of the trial, lawyers for Bankwest and receivers KordaMentha called a senior Bankwest executive and a banking and finance partner at Norton Rose, the law firm that helped draft mortgage documents over Mr Saraceni's assets.
Mr Saraceni and his Raine Square partner, Hossean Pourzand, are trying to have KordaMentha thrown out as receivers of their $500 million central Perth project and clear the way to recover loans understood to exceed $330 million.
Sydney silk Justin Gleeson, for Mr Saraceni and his company Westgem Investments, quizzed the two witnesses over what he alleged were significant defects in mortgage documents used to seize Raine Square and other assets.
One of the limbs of Mr Saraceni's case is that a charge over his assets executed in April 2008 was invalid because the assets were specified separately, in a facility agreement.
Bankwest director of property finance Stephen Nagle disagreed under cross-examination that "the bank held the driving hand in respect to the charge and facility agreement".
"Why," Mr Gleeson asked.
"At all times during drafting (Mark) Clohessy (property finance specialist) was a strong and aggressive negotiator, clearly for or on behalf of Westgem," Mr Nagle replied.
Raine Square was put into receivership on January 11, three days after Mr Saraceni missed a $50 million payment to Bankwest and the Royal Bank of Scotland.
Mr Gleeson also alleged that company charge documents filed by Bankwest with the corporate watchdog in 2008 had recycled stamp duty.
Cross-examining Norton Rose partner Alen Pazin, Mr Gleeson became terse when discussing "the legality of assigning stamp duty already paid".
"I'm sorry sir, are you smiling at me," Mr Gleeson asked. "No sir, I'm not," Mr Pazin replied.The case was launched before listed litigation funder IMF agreed to bankroll a damages case against Bankwest on behalf of Mr Saraceni in pursuit of $150 million to $200 million. The trial is continuing.