AFL legend in legal stoush over Collingwood pub
Carlton Football Club legend Stephen Silvagni is involved in a tricky legal stoush over a $386,000 loan for the Prince Patrick Hotel on Victoria Parade that he agreed to serve as guarantor for.
By serving as guarantor, Silvagni is responsible to cover the loan of the Collingwood pub if it was not repaid.
In trying to protect himself should the loan default, Silvagni wanted business partners Donato Smarrelli and John Cappellin to sign a separate security agreement giving him a claim over units in a trust which owned the hotel.
The agreement became messy, when in March 2021, Silvagni’s self-managed super fund Gulfmead agreed to serve as guarantor for the loan taken out by a company called Prince Patrick Properties.
The Supreme Court heard that the loan that was taken out from the Bank of Melbourne, was due to be paid by 27 December 2021.
In November 2022, Silvagni was forced to launch legal action seeking costs of about $45,000.
Silvagni’s solicitor sent 11 emails to the defendants’ solicitors between May and August last year with regard to the proposed security agreement.
The matter could not be resolved.
In a small concession, a lawyer for Smarrelli said the delay around the security agreement “would strain the patience of Job”.
Delays were caused by Cappellin being hospitalised and one of the defendants’ lawyers contracting COVID.
The Prince Park loan was supposed to be paid out by the sale of another pub, the Royal Mail Hotel in West Melbourne, but that fell through on 4 November.
By 10 November, Silvagni started court action.
Court documents show solicitors for Mr Smarrelli said the proposed security agreement involved several shortcomings that needed to be addressed.
The loan was temporarily extended and was paid out in late January and early February, discharging Silvagni from his guarantor obligations.
However, Silvagni’s legal team sought costs after the matter had been prolonged in a “high-handed” manner.
Judge Richard Attiwill awarded the costs and directed the parties to go work out an agreed amount.
Irit Jackson, 26th April 2022
