The Independent Liquor and Gaming Authority, the regulatory body for clubs, approved the appointment of EY as administrator to the Cyprus Community Club in NSW (The Cyprus Club). The first meeting under this new administration was held on Friday, 4 October 2024, attended by creditors and members.
This development comes at a time when the Cyprus Community is unable to proceed with its plans to redevelop a significant parcel of land in Stanmore due to a court injunction. Ongoing litigation has prevented members from meeting to discuss the future of the Community and the redevelopment of the property.
The administrator, Mr Morgan Kelly, addressed the gathering, explaining that his role was approved by the regulator to protect the Community’s assets, ensure the Club remains operational, and to secure its long-term viability. He emphasised that his appointment was not solely to benefit creditors, noting that the administration process could take 4-6 months. During this time, his main goal is to clarify the Community’s financial situation, revealing that its total debt amounts to approximately $13 million and exploring options for creditors.
Mr Kelly explained that the board’s powers are suspended during the administration, and any significant actions he takes must receive creditor approval. He reassured members that the administration aims to continue running the Club as normally as possible.
Dorothy Bassil, a member of the Community and director of one of the Community’s largest creditors, sought a court injunction to prevent a meeting of members scheduled for Sunday, 25 August 2024. This meeting would have allowed members to discuss the future of the Stanmore property. Ms Bassil had previously blocked a members’ meeting scheduled for 11 February 2024 in a similar manner. Together with her brother, Dr Con Costa, they also influenced the Community board to cancel a further meeting on 3 December 2023.
The administrator mentioned the nomination of Ms Bassil’s cousin to replace him, but clarified that since her cousin was not approved by the regulator, he could not be a candidate. In response to a question about whether the Club was trading while insolvent, Mr Kelly confirmed that it holds a substantial portfolio of real estate assets, and that all members’ rights are preserved. He assured attendees that the Club continues to operate without disruption, with all staff still employed, and that the language and dancing schools remain operational. However, the court action prevents members from making decisions about the property.
The meeting highlighted that the administrator’s primary role is to safeguard the Community’s assets, guide members in making decisions about the property, and ensure the Club is set on a stable foundation for the future. He also pointed out that the Community’s current constitution is “not fit for purpose” and announced plans to propose a new constitution to the members, with a meeting to be held in due course. A special resolution will be needed to amend the constitution.
Mr Kyriakos Panayi, the Club’s Secretary, expressed his frustration, stating, “The court orders deprive Club members of a say.” He added, “No matter who calls any meeting or what documents are provided, a precedent has been set to stop members from meeting and deciding on the Club’s property.”
The President of the Cyprus Community of NSW, Michael Kyriacou, echoed this sentiment, saying, “The members clearly want a say.”
Assistant Secretary Mr Andrew Paschali added, “A few cannot stop the many from asking questions and forming their own opinions. If members don’t like a proposal, they can reject it. If they don’t like the information or documents provided, they can say so. If they have other ideas, they can present them. Now, outside individuals appointed by the regulator are here to ensure all members have the opportunity to vote.”
The meeting ended in turmoil, with shouting and physical altercations between members, leading to chairs being thrown. The incident, which took place in front of officials appointed by the regulator, is now under police investigation. This is reminiscent of the brawl that broke out during the 2023 annual general meeting, which also ended in violence.
President Kyriacou emphasised that the future of the Club is not just about real estate or money, nor about elections or factions. “It is about respect and the next generation,” he said. “I’ve said it many times – we all have an obligation to welcome and nurture our youth. To do this, we must not fuel toxic, personal, and destructive talk disguised as debate, nor engage in harmful gossip, character assassination, misinformation, provocation, or intimidation.”
Mr Kyriacou added that the regulator had appointed the administrator “to guide the institution, protect the Club’s assets, ensure members’ rights to make informed decisions based on facts from an independent source, and expedite the renewal of the institution to secure a dynamic and meaningful future.”
He also appealed to the community, stating, “I understand many are upset, angry, and confused. I ask all compatriots who truly care about our community, heritage, youth, schools, and legacy to protect the Community so that all Australians can see the best of us. This is an opportunity to move forward, renew the Community, and engage with our neighbours, stakeholders, young families, and youth – staying true to our sacred mission.”
Assistant Treasurer Mr Con Costi commented that the regulator had appointed the administrator to prevent the Community from falling into a spiral of endless litigation and disruption, characterised by anti-social behaviour, which outsiders witnessed firsthand during the meeting.
A key creditor in this situation is Cyprus Capital Ltd, a member-owned entity established to fund the Club. According to the Australian Securities and Investment Commission (ASIC), Ms Bassil and her brother Dr Con Costa are two of the three directors and control approximately two-thirds of the company’s shares.
Just a day before the Friday meeting, on Thursday, 3 October, the Supreme Court allowed Cyprus Capital Ltd to register a nearly three-year-old charge over the entire Club. This decision was made despite the court hearing that the three houses mortgaged by Cyprus Capital are worth significantly more than the loan, and that the Club is not insolvent. The Club remains entangled in legal proceedings involving Ms Bassil and Cyprus Capital, instructed by Ms Bassil.
The administrator further clarified that the formal verification of creditor claims will be handled through a thorough adjudication process, ensuring creditors’ claims align with the Community’s books and records. As part of the administration process, creditor voting rights may be limited to nominal amounts if there are doubts or litigation pending.
