AFL WAG Rebecca Klodinsky and then partner Greg O’Shea have been ordered by a Brisbane court to pay almost $300k to a private lender for a 2016 property investment gone wrong.
The Melbourne pair had enlisted a Gold Coast finance syndicate to fund the acquisition of 800,000 one dollar units in a commercial property trust.
The transaction was structured by way of the lender – ABF Smith Syndicate No 2 – buying the units and the borrower agreeing by way of a put and call option, to acquire them at the price of $800k within 12 months.
Having declined to exercise their call option or complete the purchase of the units following exercise of the put option in August 2017, ABF’s solicitors promptly forfeited the investors’ $100k security bond and issued a default notice demanding payment of the outstanding $700k.
O’Shea told Klodinsky – who queried the demand with him – “that it had all been paid” and “you have nothing to worry about”.
ABF subsequently accepted an offer to acquire the units at $0.54 ea, thereby realising a loss – after taking into account a small income distribution on the units – of $241k.
In response to ABF’s lawsuit which was not started until April 2020, Klodinsky – a swimwear entrepreneur – swore she hadn’t signed the deed because having regard to her other commitments, she could not possibly have been at the solicitor’s office on the time and date alleged its execution had occurred.
Klodinsky – who agreed “it looks like my signature” – appointed a handwriting expert to examine the original document but no report from the expert was ever produced.
Judge Bernard Porter QC had no difficulty accepting the evidence of the two solicitors involved in the execution of the agreement that it bore her signature.
“Her evidence on this point was a self-serving reconstruction,” His Honour concluded. She “had a poor recollection of events and is an unreliable historian”.
She also contended – as did her partner O’Shea, who didn’t attend the three-day trial – that the lender’s failure to pay the $1 put option fee put it in breach thereby vitiating any obligation they had to proceed with the purchase when called on to do so.
That argument was also rejected by Judge Porter who ruled that even if the agreement was not a deed the payment of the Put Option Fee was not a condition precedent. The promise to pay was an enforceable term of a binding contract.
He further observed that – unfortunately for the bikini designer – Klodinsky appeared to have “paid little attention to Mr O’Shea’s business affairs and was content to go along with what he said about them and what he asked her to do”.
Judgment was entered against them for $293,000 inclusive of interest.