Federal Court Justice Michael Lee heard Friday that the property at 23 Margaret Street had been sold, but that Tesoriero was questioning the enforceability of the deed for the sale, which requires that the proceeds be paid into a controlled monies account.

The sale of the property, which is controlled by Tesoriero through a discretionary trust, is expected to close of February 9.

Justice Lee said Friday that if Westpac wished to bring an application for special enforcement of the deed before that date, he would deal with it on an urgent basis. The judge indicated any move to block the sale was unlikely to succeed.

“My prima facia view would be that it’s hopeless,” Justice Lee said.

In August, Justice Lee temporarily extended an order freezing Tesoriero’s Australian assets after hearing Westpac was concerned that the property, which was purchased for $4.1 million in 2018, was being marketed for sale at between $3.5 and 3.7 million.

The judge declined to appoint a receiver over the residential property due to concerns about costs, but said he wanted to be sure affidavits concerning assets were played “with a straight bat”. Westpac sought to have a valuer of its choosing assess the property, but Tesoriero had refused to permit the valuation.

Westpac, French investment bank Societe Generale and Japan bank SMBC have filed lawsuit seeking to recoup over $400 million in funds loaned to Forum as part of what Justice Lee said appeared to be an “elaborate” fraud.

The scam at the heart of Westpac’s case involved Forum allegedly arranging a portfolio of equipment leases for its customers and borrowing from the bank to cover the amounts it fraudulently claimed were owed for the equipment.

Westpac’s suit names Papas and Tesoriero as co-respondents, as well as Papas’ partner, Louisa Agostino; Papas’ cousin, Eric Constantinidis; Tesoriero’s father, Giovanni Tesoriero; and 42 companies associated with the Forum Group.

Also, on Friday Justice Lee granted the NSW Commissioner of Police access to materials that were seized during searches of four commercial properties owned by Forum in Sydney, Melbourne, Brisbane and Perth as well as residential premises in Sydney to assist in its criminal investigation into Forum and Papas.

Last month, Westpac won a worldwide freezing order over Agostino’s assets. The judge has also issued freezing orders over the assets of Papas and Tesoriero.

Justice Lee issued an arrest warrant for Papas for contempt of court on October 20 after he allegedly transferred $720,000 to Constantinidis, in breach of the freezing order on Papas’ assets.

In a defence filed on December 23, Constantinidis said he received the money from Papas’ share trading account in July 2021 to repay a $1.265 million loan and to reimburse payments he made to Papas’ lawyers.

Westpac claims Constantinidis volunteered to receive the $720,000 to hold the funds on trust for the bank and is liable to return the amount or pay compensation, which Constantinidis has disputed.

Tesoriero is seeking to discharge the freezing order over his own assets, claiming that Westpac’s case against him is “hopelessly weak”. Tesoriero’s application will be heard in March, when Westpac will have a chance to cross-examine him on his affidavit.

Papas was last seen in Thessaloniki and has not returned to Australia to face the lawsuits against him. Through his former barrister, Jim Johnson, Papas previously told the court he was in two-weeks isolation after contracting COVID-19 and later claimed he did not have the funds to return home.

Westpac is the largest creditor of Forum by far, seeking recovery of almost $300 million. Societe Generale claims a loss of $9 million and SMBC is seeking recovery of almost $99 million paid to a unit of Forum Group and Papas.

The Forum group of companies, launched by Papas in December 2011, specialised in hardware and software solutions for business clients. It offered “flexible financial agreements” to enable businesses to improve their technology, according to the company’s website.

Justice Lee appointed liquidators to Forum Finance in early July, and provisional liquidators to three more related firms, Forum Group Financial Services, Forum Enviro and Forum Enviro (Aust), later that month. McGrathNicol has stepped in to wind up all four firms.

Papas appointed Mackay Goodwin as voluntary administrators over 25 other companies in the group on July 8. At a creditors meeting later that month, which drew over 200 participants, Mackay Goodwin was replaced by McGrathNicol as administrators over 23 of these firms. Justice Lee ordered the winding up of those companies in late July.

Westpac is represented by Jeremy Giles SC, Victoria Brigden and Catherine Hamilton-Jewell, instructed by MinterEllison. Societe Generale is represented by Sinclair Gray, instructed by Ashurst. SMBC is represented by Emma Beechey, instructed by Jones Day. Constantinidis is represented by WH Parsons. Tesoriero is represented by Paul Hayes QC, instructed by Madgwicks Lawyers. Forum Group liquidators McGrathNicol are represented by Nick Kidd SC and Ryan Jameson, instructed by Allens. 

The cases are Westpac Banking Corporation v Forum Finance Pty Limited & Anor, Societe Generale v Forum Finance Pty Limited & Anor, SMBC Leasing and Finance, Inc v Forum Enviro (Aust) Pty Ltd (Voluntary Administrators Appointed) & Anor and In the Matter of the Forum Group of Companies Pty Limited (Administrators Appointed) & Ors.

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