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A Sydney property developer who sponsors the Wests Tigers NRL club and runs a popular inner west cafe has been accused of breaching a Supreme Court injunction in a legal brawl with the buyers of one of its Sydney projects.
Businessman Costa Meitanis beamed alongside Wests Tigers chief executive Justin Pascoe last year as it was announced his upmarket Concord eatery, Organica, would become the team’s jersey sponsor for three years.
Developer Costa Meitanis with former prime minister Scott Morrison.Credit:Facebook
But Meitanis sat stony-faced in the NSW Supreme Court this month as Justice Stephen Robb described his development company’s alleged breach of court orders as a “serious matter”, noting directors could face imprisonment if contempt was proven.
The company was accused of “ripping” $2 million out of an unfinished development in breach of court orders, and terminating the buyers’ contracts so it could resell the properties at a higher price, both claims it vehemently denies.
Meitanis, an entrepreneurial 40-year-old who lists his address as a $4.6 million waterfront mansion in Cabarita, has had a stellar rise in business. He followed his father into the masonry trade before founding Bespoke Development, which has embarked on projects at Homebush, Hunters Hill and Camden.
Meitanis has also been busy expanding Organica’s operations, opening a new outpost at Leichhardt last year.
Costa Meitanis (left) leaving the Supreme Court last week. Credit:Edwina Pickles
Its social media accounts showcase a string of high-profile figures – including former prime minister Scott Morrison, former federal MP Fiona Martin, Mayor of Canada Bay Angelo Tsirekas and Wests Tigers stars – posing alongside Meitanis at events hosted by the business.
But the Herald can reveal Organica is facing its own legal strife after the business quietly changed hands last year.
A liquidator has flagged the transfer with the corporate watchdog, alleging the business was sold to a related party for “no consideration”, which may have been an “uncommercial transaction and a breach of director duties”.
The Supreme Court dispute relates to Greenlands Estate, a 25-lot subdivision at Thirlmere, in the Macarthur region, south of Sydney.
Costa Meitanis (right) and Wests Tigers chief executive Justin Pascoe.Credit:Facebook
It is being developed by Miacro Group, of which Meitanis is the sole director, and his family company is one of two shareholders.
The stoush erupted earlier this year when Miacro tried to terminate the contracts of off-the-plan buyers who had put down deposits on the house and land packages.
The company relied on a sunset clause that allows developers to pull out of a contract if a project isn’t completed by a specified date due to circumstances beyond their control.
The law was tightened in 2015, forcing developers to seek court approval, following claims unscrupulous operators were delaying completion so they could relist their properties in booming housing markets.
The buyers have been fighting the termination of their contracts in the Supreme Court and won an injunction in March, prohibiting Miacro from further encumbering the land until the dispute was resolved.
Miacro has now been accused of breaching the injunction by refinancing and increasing its borrowings against the property by $3 million, allowing it to pay out nearly $2 million to its shareholders.
Barrister for the buyers, Anthony Cheshire, SC, told the court Miacro’s actions put it in contempt, regardless of whether it intended to breach the injunction.
“The corporate director, Mr Meitanis … effectively said I didn’t understand the terms of the injunction,” Cheshire noted.
Miacro’s barrister, Franco Cosaro, SC, told the court the $2 million had been used to pay back lenders keeping the project financially afloat.
“It’s a technical breach, if it’s a breach at all,” he said.
Cosaro argued the injunction should be modified so the project could continue to be progressed.
Cheshire returned fire, contending the $2 million had not benefited the development but was “ripped out” of Miacro to help associated companies meet their debts.
He dubbed it a case of “robbing Peter to pay Paul” to help “these gentlemen to survive with their other assets”.
Cheshire said the buyers preferred not to pursue expensive contempt of court proceedings but wanted Miacro to be made to reverse its actions.
Robb said he was unaware of any case in which a court ordered a contempt to be reversed but where the party that committed it was not punished.
“It sounds like a good idea, but I’m not sure of the court’s authority to do that,” he said.
Cosaro said his client had a “profoundly good case” when it came to terminating the contracts because it had substantial expert evidence that a dispute involving Sydney Water was to blame for the delays which saw it miss the sunset date.
“The developer has done everything humanly possible to get this going,” Cosaro said.
Cheshire said his clients would “hotly dispute” those arguments and believed the developer was trying to take advantage of rising property prices.
Robb said it did not appear to be a typical case where “the developer smells a greater profit in the wind” but there were complex considerations at play.
He warned there remained a possibility the developer would go broke before the development was finished.
“You might already be sailing in RMS Titanic,” he said to Cheshire.
He reserved his judgment.
Meitanis did not return the Herald’s calls.
Liquidator Doug Ljubic of Tribeca Advisory told the Herald his investigations into the sale of the Organica business were ongoing.
The company that sold the cafe business, TMCM Enterprises Pty Ltd, went into liquidation in April.
Meitanis was one of four directors of TMCM until September 2021, when Marina Meitani, of Kiama, took over as its sole director.
In corporate filings, Ljubic said he had submitted a confidential report to ASIC containing “details of the offences which may have been committed by the officers of the company”.
Organica Group Pty Ltd, which now owns the cafe, is owned by Meitanis’ family company, and he is its sole director.
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