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Court documents set out case against former brokerage MD

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Austbrokers Canberra’s former MD allegedly entered into an employment agreement with his wife and paid her a salary despite no significant work being undertaken, according to documents filed at the NSW Supreme Court.

The brokerage is taking the court action to recover funds totalling millions of dollars, which includes money spent on home renovations, apartment leases, travel, luxury vehicles as well as the wage payments.

The action is against former brokerage MD Gregory Wayne Johnston, his wife Melinda Jane Johnston and a number of related companies they owned or controlled either directly or indirectly.

Court documents seen by insuranceNEWS.com.au allege Mr Johnston paid his wife $756,798.36 in gross wages and super from July 1 2008 to October 31 2018 but “at all material times, Mrs Johnston provided no or substantially no services” to the firm.

The documents also allege that Mr Johnston used his position to make payments of more than $2 million to a related company, Auscan, “for no benefit” to Austbrokers Canberra or “no proper company purpose”.

Mr Johnston is alleged to have falsely charged the company for expenses related to a private family holiday to the US in 2014, a trip to Hawaii in 2017 and other travel.

Austbrokers says he caused the firm to pay for repairs and other works totalling $292,346.17 for personal vehicles.

The couple and their children at various times were driving a Ferrari Spider, a Ferrari California, an Audi RS3, a Subaru, a Range Rover Sport, a Maserati GT and a Harley Davidson motorcycle.

The defendants have denied the allegations in the case, listed for a preliminary directions hearing in Sydney last week.

Mr Johnston has argued expenses were for business purposes and they were approved by the Austbrokers Australia board.

AUB Group, the Austbrokers Canberra parent company, disclosed the issues to the market in 2018.

“As it is a matter subject to legal proceedings, we are not making any further comment,” AUB Group CEO Mike Emmett said on Friday.