Multi-millionaire at 21, broke at 23, multi-millionaire at 27 … lost $10 million at 29-30; on the way up again.
Jim Byrnes, Who’s Who in Business in Australia 19921
When Jim Byrnes first met Alan Bond in 1993 he was only thirty-five years old, but he had already lost several million dollars of other people’s money and claimed to have lost a few million more of his own.
He had been bankrupted for the second time in June 1992, just two months after the banks had put Bond under, but in typical fashion that no doubt recommended him to Alan, he hadn’t let it affect his lifestyle. He continued to drive two Rolls-Royces—a lilac Corniche convertible for when the sun was shining, and a blue hardtop for when it wasn’t—which were owned by a convenient family trust that kept them away from his creditors. ‘I’ve been rich, I’ve been poor, I’ve been in jail,’ he told a journalist, ‘but I’ve always had a Rolls-Royce.’2
Before his latest financial difficulty, Byrnes had managed to get himself into the pages of Who’s Who in Business in Australia with the following entry: ‘Multi-millionaire at 21, broke at 23, multi-millionaire at 27, just under $20 million in assets; lost $10 million at 29–30; on the way up again’. But now he was heading down once more, having borrowed $8.5 million to invest in property just as the boom was ending.
In many ways, Jim Byrnes was cast in the same mould as the man he was now enlisted to help, for he was a great charmer, storyteller and attractive rogue. And while you had to wonder whether anything he told you was true, you somehow didn’t care if it wasn’t, because his tales were so entertaining that it hardly mattered. Doubtless, this was why he had got so far in life and why finance companies continued to lend him millions when they should have known better.
It helped, of course, that Jim was a good-looking fellow who could have been mistaken for a successful boxer or a famous footy player. He was a big man with even bigger Italian suits and a chubby almost babyish face. But with his close-cropped hair and wire-rimmed glasses there was also an unmistakably studious air about him, as if a bouncer had been cross-bred with an art dealer. And in a way this hybrid summed up his character, for Jim cultivated a hard-man image to help him in business, and had a genuine love of art and antiques, even if he was occasionally accused of omitting to pay for them.
Jim also loved food, wine and pretty women, but his passion in life was cars, which were constantly getting him into trouble. In his time he had driven a red Porsche cabriolet, a Mustang convertible, a red Corvette and a Jag, as well as a number of Rollers and Bentleys. And he had been famous for his gold Mercedes coupé with the number plate HIT ME, in which he had not surprisingly been stopped by police in Kings Cross who asked to see his licence. Jim had been forced to admit that he didn’t have one and had promptly been convicted in July 1992 of driving while disqualified for the third time in three years, for which he was given 100 hours community service and disqualified yet again, this time for six months.
Byrnes’s and Bond’s paths first crossed in early 1992 before Bond was made bankrupt, when Jim rang out of the blue to offer Alan assistance. By this stage, Byrnes had gathered so much personal experience of dealing with angry banks and creditors that he was putting it to good use by earning a quid as a debt consultant. And there was certainly no bigger debtor in Australia than Alan Bond.
Some fifteen months later, it was Bond who got back in touch with Byrnes to ask for help, and this collaboration proved to be much more fruitful. Jim was now advertising in the Australian Financial Review, telling people with financial problems that he could get rid of their debts ‘for less than 10 cents in the dollar’. But he had also been recommended personally to Bond by someone that Alan had met in the bar at the Sheraton Wentworth Hotel. Jim had helped this man settle with his creditors, and had supposedly done a great job.
Some of Byrnes’s methods were a bit cruder than Bond’s, and they were not always successful. In fact, two of his smaller clients were convicted in 1997 of defrauding their creditors after following Jim’s advice to remove $55,000 from their ailing business and park it in their children’s bank accounts.3 His two strengths were that he had an encyclopaedic knowledge of the bankruptcy laws and could drive his pursuers to despair. During attempts to make him bankrupt in 1992, one of the lawyers acting for the finance company that had lent him $8.5 million filed a wonderful affidavit setting out the way in which he had managed to delay proceedings. He had told this young woman over the phone that she and the finance company were wasting their time, and would never get anything out of him:
I don’t think I will have any problems in stalling this matter for at least three years. I am a professional staller. I’ve read the Bankruptcy Act and I can make approximately 27 applications by way of instalments before I will ever be bankrupted … Even if you get this matter listed before a Registrar again, I will produce an air ticket to say I am going overseas. You won’t be able to get this matter heard. So why fight?4
A little later, the lawyer had asked him where he had got the money for the red Porsche that he was still driving around town, despite his massive debts and, indeed, his lack of licence, to which he had replied: ‘The car’s not mine. It’s a friend of mine’s and I’m trying to sell it for him. I’m not stupid you know. I don’t have anything in my own name’.
When Byrnes wasn’t fighting off bankruptcy or driving expensive cars, he seemed to spend most of his time in court. In fact it was a miracle that he had time for business, because he was forever fighting with bankers, builders, tenants or acquaintances, or being prosecuted by the police. In early 1992 he got into a fight with a bank over a Jaguar belonging to a friend who was behind with the payments. Jim tried to extract $12,000 from the bank for telling them where they could find the missing car, and almost ended up in jail as a result. He was ultimately made to pay the bank’s legal fees, even though he wasn’t a party to their court case, and was then singled out by the judge for a most unflattering assessment of his character:
Mr Byrnes was evasive, prevaricated, gave conflicting evidence and, as any observer of him in the witness box would have found, was an untruthful witness … I have not the slightest doubt that Mr Byrnes is a thoroughly dishonest man who would say whatever he perceived to be convenient to his own interest.5
Alan Bond could be forgiven for not having read this particular judgement when he signed up Byrnes to act as his emissary, but he could hardly have been ignorant of Jim’s colourful history, because it was a favourite topic of the gossip columns in Sydney’s tabloid newspapers, and Jim had worse stains on his record than telling porkies in court or making a fool of the bankruptcy laws. Four months before teaming up with Bond, he had been charged with fraud in relation to a stolen $30,000 cheque, and around the same time, a process server had sworn an affidavit that Byrnes had attacked him physically as he tried to deliver him a bankruptcy notice.6 Even worse, as a young man in the 1980s, he had acquired convictions for aiding and abetting a malicious wounding, stealing a motor vehicle and supplying heroin.
Byrnes’s explanation of this episode in his life was that he had been young and naïve and had taken the fall for a drug deal that he had never been involved with. Still, he had been sentenced in 1986 to five years in prison, of which he served two, after time off for good behaviour, in Sydney’s Long Bay and Silverwater jails. There, he once again claimed to have turned adversity into triumph, by coming out on day release to run the family car yard in Sydney’s auto alley, Parramatta Road. In doing this, he said, he had made a fortune, buying the car yard and a house for his parents, borrowing $500,000, and getting himself a Rolls-Royce Silver Shadow, complete with chauffeur, to drive him to and from his prison cell. ‘So not only am I a Rolls-driving bankrupt,’ he boasted, ‘I was also a chauffeur-driven prisoner.’7
The official history of the Byrnes car yard was a little more tarnished than this. Records at the New South Wales Consumer Affairs Department show a raft of complaints from customers about the cars, and the business eventually crashed, owing large amounts of money to a finance company called Custom Credit. But you had to agree that Jim’s version of the story was a great deal more fun.
Before bonding with Bondy, Byrnes’s main claim to fame had been his brief marriage to the singer Jackie Love, who had been famously photographed in 1986 at the opening of Bond’s Observation City, kicking up her heels between Alan and his mate Laurie Connell. She was taller than both of them, as well as blonder and more beautiful, with long, slim legs that one critic had labelled the loveliest in Australia. And in March 1992, after a whirlwind romance, she and Jim had tied the knot.
For the first few weeks, Byrnes rang the papers regularly to tell them how smitten he was with his new bride: ‘I love that girl, I’d do anything for her. I’d die for her’.8 And Jackie was equally enthused, telling another journalist in an exclusive interview: ‘Jim is warm, generous and caring. He’s a sweety’.9
But before a year had gone by, Jackie had fled, with grand piano, waterbed and clothes, and Jim was again hitting the phones to tell the papers how he felt: ‘I am totally devastated,’ he told the Telegraph Mirror, ‘I am in a rage one minute, and I am upset and crying the next.’10 The next day he was front page news, with a passionate plea for Jackie to come back. ‘If I could say anything to her, I would say I love you, I’ll always love you, and I won’t stop loving you.’ Yet somehow he also couldn’t help adding his views on what might have gone wrong, telling her she had to choose between him and her mother, and then giving her a free personality assessment. ‘Sometimes she can be warm and loving, but sometimes she can be as cold as a mackerel,’ said Byrnes, adding philosophically, ‘sometimes you go to bed with a warm and loving person and you wake up with a fish.’11
One of the problems, it seemed, was that Jackie had been shocked to hear about Jim and his exploits. And to be fair, it must have been a rapid education, for not only had she discovered he had a criminal record and financial difficulties, but she had also collected him from hospital after he had taken a beating from a creditor who believed in more traditional methods of debt collecting. Not-so-lucky Jim had been sitting in his North Sydney office one morning in June 1992 when a couple of blokes had barged in and beaten the bejasus out of him. He had woken up an hour later in the Royal North Shore Hospital to find a couple of teeth missing, a huge black eye and several large lumps on his head, which was how he had appeared in court a few days later to be finally made bankrupt.
Byrnes reckoned, however, that his battle scars were a plus when it came to helping Bond, because he was ‘a corporate street-fighter … a no-holds-barred type of guy, and that’s what Alan needed’.12
By this time, Bond had spent a huge amount of money on lawyers fighting court cases, and apparently felt he was getting nowhere. He was also desperate to get Ramsay off his back and to get out and do deals again. Never the most patient of men, he wanted his passport back so he could travel, and he wanted to be free of all these pesky people inquiring into his affairs. And Byrnes offered him another opportunity of getting all these things to happen.
In June 1993, Byrnes flew to Perth at Bond’s expense and agreed to a deal in which he would approach Alan’s major creditors to get support for a settlement of around $6 million, which was less than a hundredth of what they were owed. In return, Byrnes would get all his expenses paid and would receive a fee of $100,000 if he could get Bond released from bankruptcy.13 On top of that, if he could persuade creditors to settle for less than $6 million, he would get 10 per cent of the shortfall. Byrnes happily signed the inevitable confidentiality agreement and then rang the Australian Financial Review to tell them that a compromise between Bond and his creditors was now looking likely. When asked by the paper what he stood to gain from any settlement and why he had become involved, he replied that he was doing it for love and was ‘not drawing a cent in fees’, which was a bit loose with the truth, to put it mildly. But truth, as we know, was not Jim’s strongest point.
By the end of the month Jim had already made half-a-dozen phone calls to the Hongkong Bank alone, and sent several faxes to its chairman Willie Purves in Hong Kong, telling them that seven big creditors who were owed $100 million were now keen to settle with Bond for around one cent in the dollar. He was also badgering Don Argus, chairman of the National Australia Bank, with a similar story that creditors were eager to work out a compromise. And in each case he tried spinning the line that the banks had already got all their money back from Bond and shouldn’t be chasing him for more.
The banks and big creditors mostly told Byrnes they weren’t interested, but this did not discourage him. Jim simply stuck to the principle that all great pants men employ, which is that if you ask enough girls to come to bed with you, you are bound to find one who says yes. And sure enough, the Commonwealth Bank eventually came across. Typically, Byrnes had been chasing big debts and going straight to the top in his attempt to get satisfaction, but this time he found someone working late in the bank’s collections department and used his immense charm to persuade him that this was an offer he could not refuse. The bank was owed only $14,000 on one of Bond’s credit cards, and Byrnes was able to smooth talk them into handing it over for a measly $400. Crucially, he was then smart enough to get the offer accepted in writing, in case the unfortunate fellow’s superior attempted to backtrack.14
When Byrnes phoned Parker & Parker to tell them the news, they were apparently incredulous, because Byrnes had been told to deal with the big debtors, like the Arab Bank and Tricontinental, who were owed hundreds of millions of dollars, and he had come back with one of the smallest debts on offer. But it was hardly a defeat, because Jim’s $400 purchase would now give him access to all creditors’ meetings. So the lawyers rapidly prepared a weighty legal document for the Commonwealth Bank to sign.
The bank’s senior managers, meanwhile, opened their morning newspapers to discover the appalling truth of what had happened. For Jim had not only told the press that he had bought the debt, but had spun them the story that the Commonwealth Bank was coming to Alan Bond’s rescue. Naturally, the bank was desperate to get out of the deal, but the written offer of acceptance made it impossible for them to renege. So after a bit of chest thumping by lawyers on both sides, the bankers were forced to live with the consequences. They had undoubtedly spent far more in management time and legal fees than the $400 that Byrnes had paid them, and they had bought themselves a heap of bad publicity to boot, but Byrnes for his part now had standing as a creditor, which would allow him inside the citadel where he could do his best to wreak havoc.
Byrnes was fond of quoting from the famous Chinese text The Art of War by Sun Tzu, which advised you to defeat your enemies by creating confusion, and he now set about doing just that, by attacking Bob Ramsay and attempting to sow discord among Bond’s creditors. To this point they had been united in their desire to chase Bond’s offshore assets, and convinced that Ramsay was doing a decent job, but Byrnes was hoping that when he had finished they would be bickering among themselves and worrying that the trustee was wasting their money.
This strategy made perfectly good sense, because Ramsay could only make progress in Switzerland if creditors continued to pay for his investigations and legal actions, and if the whole process of Bond’s bankruptcy could be made sufficiently difficult and frustrating, those creditors might well lose patience and give up. Thus far, almost all the bills had been paid by Tricontinental, who were keen to press on, and by the Hongkong Bank, who were much less so. And Byrnes now tried to make it more difficult for both of them by suggesting to other creditors that the two banks might gobble up all the spoils.
Meanwhile, he also tried to take Ramsay’s eye off the ball by jumping up and down and making a nuisance of himself, at which he was a master. In early July he fired off a letter listing eighty-six questions to Ramsay about the way he was running Bond’s bankruptcy, and demanding immediate answers. Some of these questions were aimed at discovering how close the investigators had come to finding Bond’s offshore assets, and asked Ramsay to tell where he had been, whom he had hired, how much money he had spent, what he had spent it on, who had provided it, how much money remained, whether he had found or seized any property or money, and what if anything he was still looking for. But some of the questions were just plain mischievous.
Not surprisingly, Ramsay replied that he was not prepared to discuss the progress of offshore investigations because it was vital that they remained secret. And he brushed off most of the other enquiries by saying that he simply did not have the time to deal with them. But then the skirmishing began in earnest.
Byrnes wrote back to say he was extremely dissatisfied with Ramsay’s conduct and had no option but to complain to the Official Receiver, the Inspector-General in Bankruptcy and the Attorney General. He also sent letters to the Australian Taxation Office, who were owed some $23 million by Bond, criticising Ramsay’s management of Bond’s affairs. And then, to spice things up even further, he wrote to the Hongkong Bank to tell them that Ramsay had taken a secret commission, or to put it bluntly a bribe, from the ABC’s Four Corners in exchange for supplying information to them. This was complete nonsense and Byrnes was soon writing to Ramsay to apologise—yet it all helped to stir the pot.
At the first creditors’ meeting he attended in September 1993, Byrnes came armed with his list of eighty-six questions, and harried Ramsay and the Hongkong Bank for two hours, finally declaring his intention to report Ramsay to the Attorney General for failure to carry out his duties. Byrnes recalls with a chuckle that people yelled at him to sit down and threw their papers onto the floor in annoyance, which was exactly what he had hoped to achieve.
Byrnes’s behaviour made Ramsay so angry that he wrote to the Attorney General’s Department asking them to change the law to prevent people from infiltrating the ranks of creditors by buying up debts. He also fired off a letter to Parker & Parker asking them who had put Byrnes up to the purchase and where his money had come from. But it was all to no avail. There was nothing that could be done to get rid of him.
Whether Byrnes really succeeded in weakening support for Ramsay or was just a minor irritation is hard to discover. In the long term, he almost certainly did make a difference, but in late 1993 things still seemed to be going well for Bond’s creditors—except in Switzerland. Their legal right to Bond’s $2.7 million super fund had been upheld by the Appeal Court in November, and the Administrative Appeals Tribunal had confirmed in August that Bond was indeed liable to pay creditors half his notional income. In fact, the tribunal had even increased the amount that his mates would have to find for 1992–93 to $345,000, because Bond had spent far more on legal fees than Ramsay had dared to imagine. So it looked like the new law was working well.
In late 1993, Parker & Parker, John Bond, Jody Bond, Jurg Bollag and Graham Ferguson Lacey were therefore served with demands from the Official Receiver to pay up on Bond’s behalf.
All that now remained was to force Alan Bond to tell the Federal Court (as the law said he must) about the money that Bollag was hiding in Switzerland, and Ramsay would be home and hosed.
Surely victory was now in sight.