Plaintiff v Defendants

Supreme Court of Victoria|2011-04-27|Before: FERGUSON J

PRACTICE AND PROCEDURE - Application for leave to commence a proceeding - Orders in place restraining right to commence a proceeding - Leave refused.

1 Mr Velissaris is very upset by events relating to the liquidation of Maryvell Investments Pty Ltd, a company of which he was a director. He believes that others are responsible for causing loss and damage to the company, to him and to his family. I have no doubt that he is sincere in his belief that he has been wronged and so has his family and that they have good reason to be aggrieved.

2 Mr Velissaris seeks leave to file an application to stay or terminate the winding up of Maryvell Investments Pty Ltd in liquidation. Leave is required because of an order of Robson J of 25 February 2009 which provides in part:

... no further proceeding or process of any kind in the trial division of the Supreme Court of Victoria concerning Maryvell Investments Pty Ltd in liquidation, the conduct of the liquidation, the liquidator or the property at 333 Sydney Road, Brunswick, be accepted for filing by the Prothonotary from George Velissaris except with the prior leave of the Court.[1]

3 Mr Velissaris also seeks leave to file and serve a written statement of claim against Lawrence A. Fitzgerald, who is the liquidator of Maryvell and BDO Kendalls Pty Ltd. The proposed claim relates to plant and equipment previously used in a restaurant business which operated under the name Greek Bar Tavern Kalamata and Mediterraneano restaurant. The restaurant was operated from the premises at 333-335 Sydney Road, Brunswick. Leave is required in part because of the orders of Robson J and because of a later order by Sifris J made 14 December 2010 which is in the following terms:

No further proceeding or process of any kind in the trial division of the Supreme Court of Australia concerning Dynami Pty Ltd, Betty Zervas, Theodore Zervas or Stonnington Online Conveyancing Pty Ltd, Maryvell Investments Pty Ltd in liquidation, the property known as 333-335 Sydney Road, Brunswick, or the plant and equipment once used or located therein be accepted for filing by the Prothonotary from George Velissaris except with the prior leave of a judge of the court.

4 Mr Velissaris told me that he has appealed from the orders of Sifris J but the appeal has not yet been heard.[2]

5 Mr Velissaris filed an affidavit in support of his application. He deposed that he sought leave to apply under s.482 of the Corporations Act 2001 (Cth) to terminate or stay the winding up of Maryvell so that the company could pursue claims which he deposed were on foot before the company went into liquidation. The main claim appears to have been the subject of a proceeding in the Victorian Civil and Administrative Tribunal brought by Maryvell against Sigma Constructions (Vic) Pty Ltd in 2005. The status of that proceeding is not clear.

6 Annexed to the affidavit of Mr Velissaris were what appeared to be a copy of a notice lodged with the Australian Securities & Investments Commission stating that Mr Fitzgerald ceased as liquidator of Maryvell on 8 November 2010 and a copy of a deregistration request submitted by Mr Fitzgerald on the same day requesting deregistration of Maryvell on the basis that the company's affairs have been fully wound up under part 5.4 of the Corporations Act and there is no property or the property available is not sufficient to pay the costs of obtaining an order of the court dissolving the company.

7 Mr Velissaris told me that ASIC had informed him that there would be six months before the company would be deregistered.

8 Mr Velissaris has also provided a draft writ and statement of claim with his summons seeking leave. The statement of claim appears to be a combination of the proposed claim he wishes to make against the liquidator and submissions in support of his application for leave. The proposed claim, so far as I am able to understand it, relates to allegations that he is the owner of plant and equipment at 333-335 Sydney Road, Brunswick, which he alleges the liquidator improperly sold. He also has a complaint as to the sale price of the plant and equipment which was $1.

9 Mr Velissaris claims $450,000 for loss of the plant and equipment and a further sum of $400,000 for loss of the goodwill of the restaurant.

10 The draft statement of claim pleads that the proposed second defendant, BDO Kendalls (NSW & Vic) Pty Ltd is controlled by Mr Fitzgerald. It is unclear from the draft statement of claim whether any actual claim is proposed to be made against BDO Kendalls or any relief sought against it.

11 In relation to his application for leave, Mr Velissaris submits that if leave is not granted, this is a denial of justice and in breach of the Charter of Human Rights & Responsibilities Act 2006 (Vic) because all people must be equal under the law and under s.20 of the Act, a person must not be deprived of his property other than in accordance with law.

12 Mr Velissaris has brought many proceedings both in this Court and in the Federal Court of Australia. Relevantly to this application, he brought proceedings in 2009 against Dynami Pty Ltd and Betty Zervas. The trial of the proceeding took place over a number of days in December 2010 and on 14 December 2010, Sifris J dismissed the proceeding and made the order I referred to earlier.

13 In his written reasons, his Honour set out the background information to the claim in the following terms:

Maryvell Investments Pty Ltd ("Maryvell") is a company in liquidation.

Maryvell was wound up by order of this Court made on 10 June 2006. Lawrence Andrew Fitzgerald was appointed liquidator ("the Liquidator").

Maryvell was the registered proprietor of the land situated at and known as 333-335 Sydney Road, Brunswick ("the Property").

By a contract of sale entered into between the Liquidator and the first defendant, Dynami Pty Ltd ("Dynami") on 26 March 2008, Dynami purchased the property("the Property"). Prior to the Contract of Sale and on 20 March 2008, Maryvell entered into a lease agreement ("the Lease") with Stonnington Online Conveyancing Pty Ltd ("the Tenant"). The Lease provided for a monthly rental of $5,000.

Pursuant to clause 22.7 of the Lease, the plant and equipment situated at the Property was sold by the Liquidator of Maryvell to the Tenant for a consideration of $1.

The Liquidator sold the plant and equipment to the Tenant because he was of the opinion that the equipment belonged to Maryvell and as such, he was entitled to sell it. I note immediately that no claim is made against the Liquidator or the Tenant in this proceeding.

The plaintiff contends that he owned, operated and managed a Greek restaurant from the Property. The plaintiff has brought this proceeding in order to recover the value of the plant and equipment and consequential loss. The plaintiff alleges that at all times the plant and equipment, which he has identified in a statement of claim, was his and was not available for sale by the Liquidator.

The Liquidator contends that he was entitled to sell the plant and equipment and the Property. In any event, as pointed out, the Liquidator is not a party to this proceeding. The purchaser of the freehold is a party together with the second defendant, Betty Zervas, who executed a guarantee pursuant to the Contract of Sale. The Tenant is not a party.

Accordingly, the critical issue in this case is whether the plaintiff is able to establish that he and not Maryvell was the owner of the plant and equipment as alleged.[3]

14 His Honour reviewed some of the other proceedings involving Mr Velissaris and stated:

Despite the numerous proceedings, including the proceedings identified above which include claims made by and against the Liquidator, the plaintiff has not sought to make a claim as against the Liquidator that he converted the plaintiff's plant and equipment. The various claims against the Liquidator were associated with his conduct in relation to the sale of the Property.

One may have expected the plaintiff to make a claim against the Liquidator for the plant and equipment. However, he did not do so and now makes this claim not against the Liquidator or the Tenant who purchased the plant and equipment, but against Dynami, the purchaser of the Property from the Liquidator.

From this brief review of the various proceedings it is obvious why such a claim was not made. Any such claim would be contrary to the sworn statement that Maryvell owned the plant and equipment.[4]

15 In relation to the claim before him, Sifris J stated:

The plaintiff alleges, despite swearing to the contrary, that he was the owner of the plant and equipment. The plaintiff gave evidence to the effect that in mid 2003, his daughter, Mary Velissaris Patroungas gave the plant and equipment to him. His evidence was to the effect that his daughter acquired the Property in 1997 at auction. The contract had a nominee clause and Maryvell was incorporated and nominated as purchaser of the Property and presumably, the plant and equipment. The plant and equipment was transferred to him in mid 2003. This is the basis on which he alleges he acquired the plant and equipment. As set out below I reject such evidence as there is not much in relation to the alleged transfer. Further, the evidence is clearly to the effect that Maryvell was at all relevant times owner of the plant and equipment.[5]

Even if the plaintiff did establish that he was the owner of the plant and equipment, a position contrary to the evidence, his claim against the defendants must fail. They did not acquire the plant and equipment. It was acquired by the Tenant who is not a party to this proceeding. No claim is pleaded against the defendants so as to render them liable in the circumstances.

At the stage of final submissions and after all witnesses had given evidence, the plaintiff sought to join the Tenant as a party. I refused to entertain the application. The plaintiff does not have any claim against anyone as he was not and is not the owner of the plant and equipment.[6]

17 In summary, his Honour formed the view that Mr Velissaris was not the owner of the plant and equipment and that Maryvell was the true owner and in any event Mr Velissaris had failed to establish any loss and damage.

18 Mr Velissaris has not put before the Court today any evidence which would support the claim that he seeks to make against Mr Fitzgerald and BDO Kendalls. Essentially he seems to want to make substantially the same claim as the claim in the proceeding before Sifris J; that is, that the plant and equipment is owned by him and has been wrongfully sold by the Liquidator (albeit that the defendants to the proceeding would be different to those in the proceeding before Sifris J).

(a) this Court has already made a finding in relation to the ownership of the plant and equipment which is the very issue which would be central to the proposed claim (albeit that the defendants would be different to those in the proceeding before Sifris J);

(b) no evidence but rather only mere assertions are relied upon by Mr Velissaris to support the proposed claim; and

(c) the proposed statement of claim is not in proper form and if filed and served would be liable to be struck out as disclosing no cause of action,

leave to file and serve the proposed writ and statement of claim should be refused.

20 Mr Velissaris has had a full hearing and has been given the opportunity to put his case for leave. There is no denial of justice in refusing the application nor breach of the Charter of Human Rights and Responsibilities Act in refusing the application. There is also no breach of s.20 of that Act as submitted by Mr Velissaris.

21 After a lengthy trial, Sifris J determined that the plant and equipment is not owned by Mr Velissaris.

22 In relation to the application for leave to apply to stay or terminate the winding up of Maryvell, Mr Velissaris' affidavit is not sufficient to establish that there is a basis for granting the orders that he would seek. Although reference was made to a cause of action against Sigma, it appears that there has already been a proceeding commenced against Sigma in VCAT and its status is unclear.

23 In relation to claims against others, there is only assertion by Mr Velissaris and no evidence that would enable a finding that he has a prima facie case or that there is a serious question to be tried.

24 I will dismiss the application by Mr Velissaris for leave to commence proceedings against the liquidator and BDO Kendalls and to apply to stay or terminate the winding up of Maryvell.

[1] Re Maryvell Investments Pty Ltd (in liquidation) [2009] VSC 61 are the reasons given by his Honour.

[2] His Honour's judgment is Vellissaris v Dynami Pty Ltd & Anor [2010] VSC 587.

Responsibilities Act 2006(Vic)

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