The court heard Three Corner Group Pty Ltd sought the loan to pay Warburn Estate winery creditors. Photo: Oliver Jacques.
The NSW Supreme Court has dismissed a claim by Three Corner Group Pty Ltd, a company directed by Griffith winery figure Pasquale Giuseppe (‘Joe’) Sergi, to recover more than $900,000 from local resident Mariacarmina ‘Carmel’ La Rocca.
The proceedings followed an allegation that the money was wrongly paid into Mrs La Rocca’s bank account without Mr Sergi’s knowledge.
The claim alleged that Sydney broker Matthew Eid had improperly diverted $914,908 to Mrs La Rocca. However, Justice James Hmelnitsky found that the “weight of the evidence suggests” Mr Sergi was informed about the payment and authorised it as part of a broader $7.2 million loan agreement.
Mr Sergi is a director of Three Corner Group and is associated with the longstanding winery Warburn Estate, which was founded by his late father Tony in 1968. According to the published judgment, the winery entered external administration after experiencing financial difficulties in early 2023, at which time it allegedly owed grape growers – mostly local families – around five million dollars.
The court noted that Mr Sergi was “anxious to find a way to pay them”. He approached Griffith man Jason La Rocca for help, who connected him with Mr Eid to secure a loan to pay back the growers and other creditors.
Court documents state Mr Eid negotiated a $7.2 million loan for Three Corner Group, including an initial $2.5 million advance. Of that amount, $914,908 was transferred into the account of Mrs La Rocca, Jason’s mother. Mr Eid argued this was an intended investment in a cryptocurrency finance venture called Carbon Dollar X, which was being promoted by Jason La Rocca and an associate.
Mr Sergi disputed this during the proceedings, maintaining he had no knowledge of the payment to Mrs La Rocca. He alleged Mr Eid breached his fiduciary duty – the legal responsibility to act in a client’s best interest. While Justice Hmelnitsky confirmed that Mr Eid did owe fiduciary duties as an agent, he found no breach occurred because the evidence indicated Mr Sergi had authorised the transaction.
Justice Hmelnitsky noted that Mrs La Rocca’s initial claim in her defence that she did not receive the money was “demonstrably false”, as bank records proved the funds were deposited into her account. Although she did not give evidence at the trial to explain where the money went, the judge noted this did not establish any wrongdoing on her part, as the payment was found to be authorised by the plaintiff.
Crucially, a solicitor involved in the transaction produced a file note of a video call confirming she had verified the payment details with Mr Sergi, who raised no objection at the time.
“In my view, it is inherently unlikely in the light of all the evidence that Mr Sergi’s only purpose in borrowing funds on 7 March was to pay Warburn Estate’s creditors, as he claims. He clearly had some other purpose in mind, which he has not explained,” Justice Hmelnitsky ruled.
Ultimately, the judge found no basis to conclude Mrs La Rocca had acted improperly and ruled she is not required to repay the funds.
The claims against Mr Eid also failed. While Justice Hmelnitsky confirmed that Mr Eid owed fiduciary duties as an agent, he found no breach occurred because the evidence indicated Mr Sergi had authorised the transaction. However, the judgment was critical of Mr Eid’s evidence, saying he was “selective in choosing what to recall and what not to recall in the witness box”. Nevertheless, he accepted Mr Eid’s evidence that Mr Sergi told him that he wanted to make an investment in the cryptocurrency venture as well as borrow funds to pay Warburn Estate’s growers.
Justice Hmelnitsky dismissed the claims against both defendants and ordered Three Corner Group to pay their legal costs.
Warburn Estate’s assets were sold to another Griffith business, Meditrina Beverages Pty Ltd, in early 2024.
Original Article published by Oliver Jacques on Region Riverina.
