ALBURY businessman and prominent racehorse owner Allan Endresz says he is "elated" after receiving confirmation of a notice that he says will pave the way for him to emerge from bankruptcy and pursue a $4.3 billion legal claim against the Commonwealth government.
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Mr Endresz has been in a 23-year legal battle after a government contractor employee, who was not known to him, transferred more than $8.7 million to two of his businesses: Davis Samuel and CTC Resources.
The government contractor employee was later convicted of fraud and jailed.
But in recent weeks, Mr Endresz says he has created a path to have his bankruptcy set aside or annulled.
In an extraordinary twist, in January this year, Davis Samuel acquired the Judgment Debt from the Commonwealth government (for an undisclosed sum).
It means Davis Samuel, of which Mr Endresz is general trustee partner, has successfully acquired the Commonwealth's absolute right title and interest in a $16.92 million Judgment Debt awarded against Mr Endresz in the ACT Supreme Court eight years ago, and unshackles him to take the next steps.
The $4.3 billion civil damages claim had previously seemed to be consigned to the dustbins of history after Mr Endresz was made a bankrupt.
On 27 August 2020, Justice Gleeson, in the Federal Court, rejected the submissions made by Mr Endresz and ordered his bankruptcy. A subsequent appeal to the Full Federal Court was later denied and Mr Endresz was made a bankrupt, despite fending off three previous attempts.
He described the successful acquisition of the Judgment Debt by Davis Samuel as "a fateful mix of good fortune, hard work, meticulous legal planning and a never give up attitude ".
"It's an extraordinary outcome where my firm, Davis Samuel, has now replaced the Commonwealth government as owner of the very Judgment Debt made all those years ago," he said.
"There is no small dose of irony in the fact that Justice Refshauge took five-and-a-half years to make a decision in favour of the government and now I'm in box seat to control the $4.3 billion damages claim and finally be in a position to address a bankruptcy that was forced upon me in a smokescreen attempt to cover the government's own failings.
"You would have to say that this is the first case in legal history where the plaintiff has been replaced by the defendant, and where the hunted is now the hunter."
IN OTHER NEWS
Mr Endresz said he has had to overcome 23 years of "personal adversity, ridicule, reputational damage, financial hardship and legal setbacks" in a bid to get justice for family, friends and investors.
The saga that sparked the legal battle in January 1999 was when an employee working as a Commonwealth government contractor, David Muir, transferred $8.725 million of taxpayers' money in 1998 to Davis Samuel and CTC Resources N.L. The transfers were not authorised but neither Davis Samuel nor CTC ever denied the receipt or that the money would be repaid, according to Mr Endresz.
A subsequent criminal prosecution failed against Mr Endresz and Mr Cain, but the government's own contractor, Mr Muir, served three-and-a-half years jail.
Davis Samuel and CTC responded with a $4.3 billion civil damages claim against the Commonwealth government, claiming they and their shareholders lost that amount (plus interest) when they could not pioneer a capital-raising plan in Australia, which was based on British Premium Bonds.
However, in 2013, in an epic judgment that took Justice Richard Refshauge five-and-a-half years to complete, he struck out the $4.3 billion claim while finding in favour of the Commonwealth government that the $8.725 million transfers were void and illegal under the Auckland Harbour principles (common law restitution) and also under the principles of Barnes v Addy (equitable compensation).
Mr Endresz says that at the time of the trial, the Commonwealth government withheld crucial evidence. He said an Independent Expert's report, produced by Ernst & Young and dated April 1999, detailed questionable financial competence and mismanagement of taxpayer's funds within the Department of Finance.
He said the report highlighted systematic security breaches, password sharing, defective management controls and the loss of taxpayers' funds.
"They (the government) have blatantly refused to accept any responsibility for allowing these transfers to occur in the first place," he said.
"There were no checks and balances. It is simply unfathomably, and quite frankly, unacceptable, that government contractors or employees were allowed to share passwords with direct access to funds in the Reserve Bank.
"It is mind-boggling that the source of the initial mistakes became the aggressor and that me and my family and friends have been subjected to more than two decades of this torturous behaviour."
Speaking for the first time since the Commonwealth government has now given up its Judgment Debt against him to Davis Samuel, Mr Endresz said: "As the general trustee partner of Davis Samuel, I am satisfied that this deal kills two birds with one stone."
"Peter (Cain) and I are now free to pursue a constitutional declaration in the High Court that for $4.3 billion in damages plus compounding interest over 23 years, which is something like $40 billion, and I can now also set aside or annul my bankruptcy ... Words cannot express my elation at this result."
"The government has been repaid the original $8.725 million plus $743,000 in interest while Davis Samuel will now start knocking on the door of the High Court without any government road blocks."
In the meantime, Mr Endresz says he sit back and enjoy watching his horses, including the resurgence of his prized galloper, Alligator Blood, which is now under the care of Gai Waterhouse and Adrian Bott in Sydney.
