Dispute over $4.5m El Caballo loss

A $4.5 million loss incurred on the sale of the El Caballo lifestyle village has triggered a dispute between the South West Aboriginal Land and Sea Council and Equity Trustees.

The Wundowie property was bought by ASX-listed Equity Trustees as trustee on behalf of the Noongar Charitable Trust for $8.5 million in 2020, as part of an overall $12 million deal for the lifestyle village and resort at El Caballo.

El Caballo was purchased by the trust with the intention of repurposing it as an accommodation for vulnerable Noongar people by the Aboriginal Housing Recovery Centre (AHRC). 

However, the plan never came to fruition, and the El Caballo lifestyle village was sold recently for just $4 million to ASX-listed Aspen Group, in a deal brokered by Knight Frank.

El Caballo resort, purchased for a further $3.5 million, is also on the market and remains unsold.

In a statement, SWALSC said its board did not request or approve the purchase of any property by the Noongar Charitable Trust, in particular at El Caballo, and placed responsibility for the deal in the court of Equity Trustees.

“The sale of the El Caballo lifestyle village has resulted in a massive financial loss in the trust, which is a great concern for the Noongar people,” it said.

In February 2023, SWALSC requested the WA Charitable Trusts Commission investigate the 2020 purchase of the properties. The investigation is ongoing.

“We eagerly await the findings of the Western Australian Charitable Trusts Commission’s investigation,” the board said.

“We are hopeful that a thorough examination will provide insight into why the funds held on trust for Noongar people were used this way.”

However, Equity Trustees disputed SWALSC's version of events when contacted by Business News. 

The company’s official response said it was approached with a request to support its plan for a social disadvantage initiative, and that the council asked it to release the capital from the Noongar Charitable Trust to fund the El Caballo acquisition.

“Equity Trustees denied the request for a capital distribution, however agreed to acquire it within the Noongar Charitable Trust,” it said.

“Equity Trustees would never have purchased these properties, but for the request of SWALSC to support their housing and homelessness initiative.” 

Equity Trustees said SWALSC requested it work with the Aboriginal Housing Recovery Centre to set up the facility but did not specify whether that request came from the board.

SWALSC later withdrew its support for the project.

“Later SWALSC advised that they no longer supported the social housing project being run by AHRC and requested that Equity Trustees engage with SWALSC for all matters relating to the properties,” Equity Trustees said.   

SWALSC's former chief executive Wayne Nannup did not have his contract renewed in 2020, with board members expressing concern over the deal for El Caballo at the time. 

Concerns were also raised over the make-up of AHRC in a letter by then SWALSC chair Jeanice Krakouer, who expressed that the board initially understood the AHRC to be a wholly-owned subsidiary of SWALSC but later found that was not the case. 

Mr Nannup later pursued the SWALSC and Ms Krakouer over claims of defamation relating to material published in a newsletter. 

In a Supreme Court writ in March 2023, AHRC claimed Equity Trustees no longer wished to proceed with the project and was taking steps to sell El Caballo.

Located at 51 Josco Rise, El Caballo was famously home to the Spanish-inspired El Caballo Blanco resort which ran between 1974 and 1999 and was best known for its dancing Andalusian horses.

Marketing material for the sale published in August 2022 said the lifestyle village contained 34 occupied homes, four display homes and major infrastructure, with development approval for 131 lifestyle lots.

Formerly Perth-based, Aspen Group provides accommodation in residential, retirement and park communities. Business News has contacted Aspen for more information on its plans for the property.