Re Maryvell Investments Pty Ltd (in liquidation)
[2009] VSC 61
•25 February 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT
No. 4484 of 2006
IN THE MATTER OF MARYVELL INVESTMENTS PTY LTD (ACN 080 327 073) (IN LIQUIDATION)
| GEORGE VELISSARIS | Plaintiff |
| v | |
| MARYVELL INVESTMENTS PTY LTD (ACN 080 327 073) (IN LIQUIDATION) and LAURENCE ANDREW FITZGERALD (In his capacity as liquidator of MARYVELL INVESTMENTS PTY LTD | Defendants |
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JUDGE: | ROBSON J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 2 February 2009 | |
DATE OF JUDGMENT: | 25 February 2009 | |
CASE MAY BE CITED AS: | Re Maryvell Investments Pty Ltd (In liquidation) | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 61 | |
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CORPORATIONS – Winding up – Sale of company property by the liquidator – Shareholder claim that property improperly sold for under value – Application by shareholder to terminate the winding up – Application by shareholder for an inquiry into the conduct of the liquidation – Claim by shareholder for damages against the liquidator – Standing of shareholder to claim damages – Applications stayed – ss 237, 471B, 482(1), 511 and 536 Corporations Act 2001.
PRACTICE AND PROCEDURE – Application for stay or dismissal of shareholder claims in interlocutory process – Abuse of process – Issues previously litigated in the Federal Court of Australia – Allegations scandalous and vexatious – Lack of evidence to support interlocutory process – Proceeding stayed - Rule 2.4 Supreme Court (Corporations) Rules 2003, Rule 23.01 Ch 1 Supreme Court (General Civil Procedure) Rules 2005.
PRACTICE AND PROCEDURE – Application to direct Prothonotary not to accept for filing from the plaintiff any originating procedure relating to the sale of the property without the leave of the court – Inherent jurisdiction – Rule 27.06 Ch 1 Supreme Court (General Civil Procedure) Rules 2005.
PRACTICE AND PROCEDURE – Costs – Plaintiff alleges fraudulent and dishonest conduct – No basis for claims – Indemnity costs not awarded.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | In person | |
| For the Defendants | D T Forbes | Robert James Lawyers |
Brinson v Rocla Concrete Pipes [1982] 2 NSWLR 937
Cretazzo v Lombardi (1975) 13 SASR 4
Dey v Victorian Railways Cmrs (1948) 78 CLR 62
Donald Campbell & Co v Pollak [1927] AC 732
GT Corporation Pty Ltd v Amare Safety Pty Ltd (no 3) [2008] VSC 296
Knight v Bell [2000] VSCA 48
Latoudis v Casey (1990) 170 CLR 534
Leslie v Hennessy [2000] FCA 1532
Northbourne Developments Pty Ltd v Reiby Chambers Pty Ltd(1989) 19 NSWLR 434
Oshlack v Richmond City Council (1998) 193 CLR 72
R v Smith [1995] 1 VR 10
Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189
Vink v Tuckwell (2008) 216 FLR 309
Vink v Tuckwell(2008) 68 ACSR 265
Young v Parbery (2002) 171 FLR 332
TABLE OF CONTENTS
INTRODUCTION.............................................................................................................................. 2
MR VELISSARIS’ APPLICATION OF 29 JULY 2008................................................................. 3
THE LIQUIDATOR’S APPLICATION OF 18 NOVEMBER 2008............................................ 3
SUMMARY OF CLAIM.................................................................................................................... 4
FITZGERALD AFFIDAVIT SWORN 17 NOVEMBER 2008..................................................... 6
THE RELIEF SOUGHT IN MR VELISSARIS’ APPLICATION IN THE FEDERAL COURT PROCEEDING.................................................................................................................................. 11
VELISSARIS’ AFFIDAVIT SWORN 27 OCTOBER 2008........................................................ 13
VELISSARIS' AFFIDAVIT SWORN 24 NOVEMBER 2008.................................................... 13
VELISSARIS' AFFIDAVIT SWORN 26 NOVEMBER 2008.................................................... 16
VELISSARIS' AFFIDAVIT OF 23 JANUARY 2009................................................................... 16
SHOULD MR VELISSARIS’ APPLICATION BE DISMISSED OR STAYED UNDER R 23.01?.............................................................................................................................................................. 20
IS MR VELISSARIS’ APPLICATION SCANDALOUS, FRIVILOUS OR VEXATIOUS? 25
PROCEEDINGS ON BEHALF OF THE COMPANY............................................................... 24
HIS HONOUR:
INTRODUCTION
By an interlocutory process dated 29 July 2008, George Velissaris has applied against the liquidator, Laurence Andrew Fitzgerald, of Maryvell Investments Pty Ltd (In liquidation) (Maryvell), and Maryvell for, inter alia, orders that the liquidation of Maryvell be stayed, an inquiry be held into the conduct of Mr Fitzgerald as liquidator of Maryvell and damages from the liquidator for breaches of s 180 and s 181 of the Corporations Act2001 (Cth).
Mr Velissaris is the sole director and a shareholder in the company. The company acts as the trustee of the Maryvell Family Trust. Mr Velissaris’ complaint concerns the conduct of the liquidator in the sale of the trust’s sole asset, a property at 333 – 335 Sydney Road, Brunswick (the property) under the company’s right of indemnity. This application has been but one of many in which Mr Velissaris has sought to prevent or otherwise challenge the sale of the property. The liquidator sold the property by public tender for $1.6 million in April 2008. Mr Velissaris complains that it was sold for an under value. He says its true value was $6 million. He complains that the sale was not properly advertised and the term of settlement of 30 days was too short. He also alleges, without any foundation, that the liquidator improperly procured an artificially low valuation prior to the sale to justify selling the property for an under value.
I have before me an application by the liquidator and the company to summarily dismiss or otherwise stay Mr Velissaris’ interlocutory process pursuant to r 23.01 of the Supreme Court (General Civil Procedure) Rules 2005 on the grounds that the process is scandalous, vexatious and an abuse of process of the Court.
For the reasons that follow, I find that the interlocutory process ought to be stayed and that an order ought to be made which prevents Mr Velissaris from further filing applications concerning the sale of the property without the leave of the Court. I believe the appropriate order is to stay the proceeding and the claims therein rather than give judgment on and dismiss the claims.
MR VELISSARIS’ APPLICATION OF 29 JULY 2008
Mr Velissaris’ interlocutory process made under ss 180, 181, 482 and 536 of the Corporations Act 2001. Mr Velissaris claims on the facts stated in his supporting affidavit sworn by him on 20 May 2008 which he re-swore on 27 October 2008, inter alia:
(1) Pursuant to s 482(1) of the Corporations Act2001, an order that the liquidation of the company be terminated forthwith.
(2) Alternatively, pursuant to s 482(1) of the Corporations Act2001, an order that the liquidation of the company be stayed pending the determination of an inquiry into the conduct of the liquidator in connection with the sale of the property to be conducted pursuant to s 536 of the Corporations Act 2001.
(3) A declaration that the liquidator has engaged in serious misconduct and gross negligence in connection with the sale of the property in breach of his duties under the Act and to the Court.
(4) An order that the liquidator pay Mr Velissaris and the other beneficiaries of the Maryvell Family Trust compensation for all loss and damage suffered by them in consequence of the liquidator’s breach of his statutory obligations under s 180 and s 181 of the Corporations Act2001 (Cth) and his duties at common law and in equity.
THE LIQUIDATOR’S AND COMPANY’S APPLICATION OF 18 NOVEMBER 2008
The application before me is made under ss 471B and 511 of the Corporations Act 2001 (Cth), r 1.3 of the Supreme Court (Corporations) Rules 2003 and r 23.01 and r 27.06 of Chapter 1 of the Supreme Court (General Civil Procedure) Rules 2005. The applicants’ claim that on the facts stated in his supporting affidavit, that he and the company apply for the following interlocutory relief, inter alia:
(1) Mr Velissaris’ application of 29 July 2008 be dismissed, alternatively stayed, pursuant to r 23.01 on the grounds that the application is scandalous, vexatious and an abuse of process of the Court.
(2) Alternatively, that the application be stayed until such time as Mr Velissaris has obtained leave to proceed under s 471B of the Corporations Act 2001 (Cth).
(3) Alternatively, that Mr Velissaris be refused leave under s 471B of the Corporations Act 2001 (Cth) to begin or proceed with his application.
(4) The application be dismissed on the ground that all matters arising have been finally determined.
(5) Alternatively, that no further interlocutory process be filed by Mr Velissaris in this proceeding without the leave of the Court.
(6) Pursuant to r 27.06, no further originating process concerning Maryvell or the property be accepted for filing from Mr Velissaris except with the leave of the Court.
SUMMARY OF EVENTS
Before going to the affidavit material it is useful to set out a summary of relevant events.
1984 Mr Velissaris buys the property.
8 October 1997 Maryvell incorporated.
11 October 1997 Bank of Melbourne auctions the property as mortgagee and it is purchased by Mr Velissaris’ daughter. She nominates the company as purchaser.
30 January 1998 Maryvell Family Trust established by deed of settlement.
10 February 1998 Bank of Melbourne transfers to Maryvell the property.
1999 Mr Velissaris is declared bankrupt.
3 October 2002 Mr Velissaris is discharged from bankruptcy.
27 June 2005 Maryvell mortgages to BankWest the property.
15 July 2005 Mr Velissaris removes Maryvell as trustee of the Maryvell Family Trust and appoints himself trustee and varies the terms of the trust to remove the trustee’s right of indemnity.
3 February 2006 Application to wind up Maryvell.
19 June 2006 Maryvell wound up and Mr Fitzgerald appointed liquidator.
26 February 2007 The liquidator retains Fitzroys as agents to auction the property.
2 August 2007 Dodds-Streeton J delivers judgment on entitlement of liquidator to possession of the property.
5 October 2007 Valuation of the property by Sutherland Farrelly.
14 November 2007 Fitzroys auctions the property.
February 2008 The contract of sale rescinded.
19 March 2008 Fitzroys offers the property for sale by tender and tenders close.
April 2008 Settlement of the tenders due.
15 April 2008 Gordon J of Federal Court dismisses Mr Velissaris’ application.
12 June 2008 Settlement of sale of property.
29 July 2008 Mr Velissaris’ application.
SUMMARY OF CLAIM
As mentioned above, the substance of Mr Velissaris’ complaint is that the liquidator sold the property for less than its market value. Mr Velissaris asserts that the market value of the property was approximately $6 million. Mr Velissaris exhibits a valuation assessment of the property as at 22 April 2008 prepared for One Stop Finance by Megaw and Hogg National Valuers and signed by Mr Les Cooper, certified practising valuer, and Mr Drew Hendrey. The report notes that the opinion of the value expressed in the report had been arrived at entirely by the prime signatory, Mr Les Cooper, not the co-signatory, Mr Drew Hendrey.
Mr Velissaris specifically complains that the property was not advertised sufficiently prior to the auction and the subsequent tender sale. Further, he complains that the specified settlement date of 30 days after sale was too short. He claims settlement should have been at least 60 days. During his submissions, Mr Velissaris referred to many sales of other properties and submitted that these sales indicated that the amount realised by the liquidator was grossly deficient. Mr Velissaris also alleges that the liquidator procured an artificially low valuation to justify the sale and fraudulently paid the valuer to do so. He also alleges that the liquidator was fraudulently paid by the purchaser “under the table” to sell it for an under value. He also complains that the liquidator did not sell the property to him.
THE AFFIDAVIT MATERIAL
The applicants rely on the affidavit of Mr Fitzgerald sworn 17 November 2008.
Mr Velissaris relies on four affidavits sworn on the following dates:
(a) 27 October 2008
(b) 24 November 2008
(c) 26 November 2008
(d) 23 January 2009.
It is convenient to set out the substance of the evidence.
FITZGERALD AFFIDAVIT SWORN 17 NOVEMBER 2008
The liquidator says that he retained Fitzroys licensed real estate agents to conduct the sale of the property. He says he asked them to provide an estimation of the realisation value of the property. They valued it at between $1.4 and $1.54 million and communicated this valuation by way of letter dated 26 April 2007. Further, on 5 October 2007, the liquidator obtained from Sutherland Farrelly Pty Ltd, licensed estate agents and certified practising valuers, a marketing report for the property. They valued the current realisable value of the property in the range of $900,000 to $1,050,000.
At the auction in November 2007, the property was sold for the sum of $1.6 million to Mr Richard Aidini with a settlement to be within 30 days. That sale was rescinded and the property was subsequently sold by public tender in April 2008 for $1.6 million. The liquidator says that it was only after consultation with Fitzroys that the property was offered for sale by private treaty. He says that the property was advertised by way of a similar advertising campaign to that used for the November 2007 auction.
Mr Fitzgerald states that Mr Velissaris made a number of offers to purchase the property none of which met the required terms of sale. He further deposes that he doubted that the applicant had sufficient means to make good any offer to purchase the property stating that his “pensioner” status and his lack of fixed address following his removal from the property, amongst other things, led him to such a conclusion.
Mr Fitzgerald also deposes that even if Mr Velissaris could demonstrate the means to purchase the property, he was concerned that entry into a contract of sale with him would only provide a further pretext for him to embark on litigation against him to the detriment of the company’s creditors.
Mr Fitzgerald says that the proceeds of sale of the property were consumed by a payment to the one and only secured creditor of the company, BankWest, to discharge the mortgage over the property. He says this was in the sum of $1.24 million from the $1.6 million sale price. The balance of the proceeds of sale were applied towards the petitioning creditors’ solicitors costs, Mr Fitzgerald’s out of pocket costs as liquidator, legal costs incurred by himself in the numerous court proceedings with Mr Velissaris and his remuneration and expenses as liquidator. The balance of funds after payment to BankWest was not sufficient to cover his remuneration and expenses of the liquidation, including legal costs in full. There were no funds to pay third parties, unsecured creditors of the company, nor any balance of funds therefore to be returned to the company in its capacity as trustee of the Maryvell Family Trust. His legal costs in the proceedings as listed below have been approximately $360,000.
Mr Fitzgerald deposes that Mr Velissaris’ application is the latest application against Maryvell and himself (as liquidator) in a three year history of litigation in relation to the property. Mr Velissaris has commenced various proceedings against him and Maryvell. Mr Velissaris has also been the subject of proceedings issued by Mr Fitzgerald and Maryvell that were necessary in order to sell the property. Mr Velissaris has been unsuccessful in each and every proceeding between himself on the one hand and Maryvell and Mr Fitzgerald on the other. Mr Velissaris has also been ordered to pay costs on numerous occasions but has failed to do so. As a result, a bankruptcy notice was issued against Mr Velissaris upon Mr Fitzgerald’s instructions on approximately 6 October 2008 and served on 22 October 2008. A summary of the proceedings between himself and Mr Velissaris is as follows:
2005
14 October Creditor serves statutory demand on the Company.
11 November Company (then under the control of Mr Velissaris) makes application to set aside the demand.
2006
25 January Master Efthim dismisses application to set aside the demand.
3 February Winding up application filed by creditor in the Supreme Court.
19 June Maryvell Investments Pty Ltd ordered to be wound up by the Court and Mr Fitzgerald was appointed as its liquidator.
22 June Mr Velissaris files notice of appeal from winding up order.
7 July Dodds-Streeton J dismisses appeal from winding up order.
22 September Liquidator issues interlocutory process seeking declaration that a purported lease to Velissaris of May 2006 was void as an uncommercial transaction.
2007
15 February Master Efthim declares that lease of May 2006 by Mr Velissaris to the company was void and unenforceable as an uncommercial transaction.
22 March Liquidator files originating process under order 53 of the Supreme Court rules dated 22 March 2007 seeking recovery of possession of the property from Mr Velissaris.
2 August Dodds-Streeton J dismisses Mr Velissaris’s appeal from Master Efthim, dismisses his application pursuant to 471B of the Corporations Act 2001 for leave to bring a proceeding against the company to establish his claimed entitlement to occupy the property and grants liquidator’s application by originating motion to recover possession of the property from Mr Velissaris.
14 August Mr Velissaris files Notice of Appeal in respect of the orders of Dodds-Streeton J granting the liquidator possession of the property, dismissing his application for leave pursuant to s 471B. He did not appeal the order of Master Efthim declaring the lease of May 2006 as being void as an uncommercial transaction under the provisions of the Corporations Act.
5 September Court of Appeal dismisses Mr Velissaris’s appeal and grants a short stay to enable him to vacate the property.
17 September Velissaris files application for special leave to appeal and drafts notice of appeal at High Court Registry in Melbourne.
19 September Hayne J dismisses application for stay of order for possession pending hearing and determination of application for special leave.
29 October Mr Velissaris makes further application in the High Court for an order that the auction of the property set down for 14 November 2007 be restrained and an application that his application for special leave be reinstated.
1 November Hayne J dismisses application by Mr Velissaris for an order restraining the auction schedule for 14 November 2007.
7 November Mr Velissaris files further application in the Supreme Court in proceeding No. 9288 of 2007 seeking an interim and an interlocutory injunction restraining Mr Fitzgerald from selling the property including restraining the conduct of the auction scheduled for 14 November 2007.
9 November Cummins J in 9288 of 2007 dismisses Mr Velissaris’ applications for interim and interlocutory injunctions.
11 December Mr Velissaris issues application in Federal Court proceeding number VID 1164 of 2007 seeking injunction to prevent sale of the property and damages (“Federal Court proceeding”).
12 December Gray J in Federal Court proceeding dismisses this injunction application and lists the damages application for directions in the corporations list.
21 December Former purchaser of property lodges caveat over property under then contract of sale (“purchaser’s caveat”).
2008
23 January Bongiorno J of Supreme Court of Victoria in proceeding 4120 of 2008 orders Mr Velissaris to remove caveat and further restrains Mr Velissaris from lodging any further caveats over the property indefinitely, and restrains his children from doing so until 23 February 2008.
15 April Gordon J in Federal Court proceeding dismisses Mr Velissaris’ proceeding and orders that no further proceeding concerning the Company or the property be accepted for filing from Mr Velissaris except with the leave of the Court, and orders costs.
12 May Mr Velissaris lodges on behalf of his daughter Mary (although this was denied by Mr Velissaris) a caveat over the property. Settlement of sale of the property was scheduled for 14 May 2008 (“the 12 May 2008 caveat”).
13 May Mr Fitzgerald applied in proceeding number 6144 of 2008 to remove the 12 May 2008 caveat, and sought injunctions to prevent Mr Velissaris and his children from lodging further caveats.
19 and 20 May More caveats lodged over the property by a person unknown to the liquidator, but bearing handwriting similar to those appearing on some of the further caveats (“Gajic caveats”).
20 May 12 May 2008 caveat withdrawn by Mary Velissaris, the day before the hearing of liquidator’s application to have that caveat removed.
21 May Hollingworth J in proceeding 6144 of 2008 ordered that the Registrar of Titles reject for lodgement any dealings concerning the property except dealings relating to the settlement of the sale of the property, orders the rejection for registration of the further caveats, the Gajic caveats and further orders that Mary Velissaris be restrained from lodging any further caveats.
30 May Hollingworth J in proceeding 6117 of 2008 ordered that all other caveats be removed from the registration/title and restrains the further lodging of caveats, and orders in proceeding 6144 of 2008 that Mr Velissaris pay the liquidator’s costs on an indemnity basis.
12 June Settlement of the sale of the property occurs.
13 June Mr Velissaris files/serves appeal against the indemnity costs order made on 30 May 2008 by Hollingworth J.
25 August The Court of Appeal (Maxwell P and Mandie AJA) refuses leave to appeal against the indemnity costs order.
12 September Taxation of costs ordered by Dodds-Streeton J and Court of Appeal in this proceeding. $42,242.26 was taxed.
22 October Bankruptcy notice served upon Mr Velissaris.
27 October Mr Velissaris issues present interlocutory process filed 31 July 2008.
11 November Mr Velissaris files application to set aside bankruptcy notice. This was made returnable on 27 November 2008.
THE RELIEF SOUGHT IN MR VELISSARIS’ APPLICATION IN THE FEDERAL COURT PROCEEDING
Mr Fitzgerald deposes that Mr Velissaris’ present application seeks the same or similar relief and on a similar basis as that sought by him in the Federal Court proceedings, which was dismissed by Gordon J on 15 April 2008 with costs and in which Gordon J further ordered that no further proceeding concerning Maryvell or the property be accepted for filing from Mr Velissaris, except with the leave of that Court.
In the Federal Court proceeding, Mr Velissaris sought, amongst other things, the following:
(a) A declaration that Mr Fitzgerald engaged in misleading, deceptive and unconscionable conduct;
(b) An injunction against Maryvell and Mr Fitzgerald from effecting settlement of the sale of the property, and a mandatory injunction compelling Mr Fitzgerald to sell the property by public auction;
(c) An order for damages arising from Mr Fitzgerald’s alleged conduct in the sale of the property; and
(d) A declaration that Mr Fitzgerald had contravened his statutory obligations under s 180(1) of the Corporations Act together with an order for compensation.
Gordon J dismissed Mr Velissaris’ application for essentially the following reasons:
(a) The proceeding was an abuse of process, vexatious and frivolous, and not shown to have any reasonable prospect of success;
(b) That at paragraph 10 of her reasons, she said: “However, it is of significance that in an earlier application before the Supreme Court of Victoria, Dodds-Streeton J …. determined that Mr Velissaris had no arguable case that he was entitled to possession of the property and refused him leave to sue Maryvell in liquidation. The Court of Appeal declined to intervene and the High Court refused a stay of her Honour’s order for possession.”
(c) That at paragraph 15 of her reasons, she said: “As I have noted above, Mr Velissaris’ complaints are that the property was sold for less than its market value and, secondly, that the term of the sale contract should not have been 30 days. In my view, these contentions are not shown to have any reasonable prospect of success. There have been two separate sales of the property by the liquidator. On each occasion, a licensed real estate agent was engaged by the liquidator to sell the property. The procedures adopted were transparent. The price obtained on each sale was $1.6 million. There is no suggestion that those sales were not at arm’s length. Thirty days is an acceptable settlement period for sale of the property.”
(d) That at paragraph 17 and 18 of her reasons, she said: “In such circumstances, the current proceeding and any proceeding amending in the manner proposed by Mr Velissaris to include a claim in relation to the second contract of sale has not been shown to have any reasonable prospects of success under s 31A(2) of the Federal Court Act. Moreover, having regard to the number and history of proceedings filed by Mr Velissaris in this Court, the High Court and the Supreme Court of Victoria, Mr Velissaris’ conduct in these proceedings and, so far as the proceeding is currently framed, the fact that the first contract of sale did not settle, the existing proceeding is frivolous, vexatious and an abuse of process of the Court. For that additional reason, the proceeding should be dismissed. It is unnecessary to consider Mr Velissaris’ application for an extension of time to file and serve a statement of claim, for the reasons I have already referred to, any extension of time would be futile because the claim would fail.”
VELISSARIS’ AFFIDAVIT RESWORN 27 OCTOBER 2008
This affidavit was originally sworn in May 2008 in response to an application by the liquidator for injunctions restraining Velissaris from lodging further caveats on the property. The relevant paragraphs appear to be 17, 18, 19 and 23, which provide:
“17. The liquidator is guilty of illegal, deceptive and unconscionable conduct and he only cares how to make costs on top of costs and to grab all our assets and he is in full breach of s 420 of the Corporations Act and other relevant sections of the Bankruptcy Act and the duties of a liquidator not to give away a company’s family trust assets.” (I have taken the liberty of correcting the spelling in Mr Velissaris’ affidavit.)
“18. He has done his best to cause me the greatest damages and the biggest losses by not willing to state to me since early July 2006, when I have requested of him in writing to state to me ‘how much moneys he need to settle’, without any further legal process. But he never answered me until November 5 2007 when I received his letter dated 29 October 2007 and after his vexatious and long litigation he created.
19. He completely devalued the property by far too much as he instructed the wrong agents and he requested him to quote a price very – very low when the property was put on auction and was only advertised for two weeks and the worst damage was the 30 days to settle the property.
23. The biggest damage to the value of the property was the 30 days settlement and the wrong publicity, the order of the liquidator to sell at any price and the liquidator did not care at all to get the maximum price, but to sell it at $1,600,000 so he can collect all his costs and expenses and money under the table too, as I have reason to believe after my different inquiries and searches.”
VELISSARIS AFFIDAVIT SWORN 24 NOVEMBER 2008
Mr Velissaris complains about the failure of Mr Fitzgerald to provide information to Mr Velissaris. He complains about being removed from occupation of the property. In paragraph 15, Mr Velissaris says that “in 2007 until June or July 2008, the real estate commercial market in Victoria, and especially in the inner suburbs like Brunswick, was very, very strong and if a property was well marketed for five to six weeks and it was offered at 60 to 90 days settlement, the most important, it would have obtained full market value and top price.”
Mr Velissaris contends that the property was in a well sought after location and was an attractive, fully renovated building. He refers glowingly to the position and the size of the land, in particular the rear land. He says the property could have an attractive rental particularly with the advantage of the rear land. He refers to the valuations obtained by Mr Fitzgerald and says he finds them insulting. He says that he is very sure Mr Fitzgerald paid the valuers moneys under the table or some other “kickbacks” to give him this market appraisal. He says the valuations are not worth the paper that they are printed on. He again refers to other sales in support of his argument that the property was sold for less than its true value. He says in paragraph 35 there is no doubt whatsoever “that his family trust property was undersold by far too much by a biased and money-hungry liquidator to pay himself big – big sums of moneys and not to the creditors he claims he wants to look after.”
He refers to the valuation of Sutherland Farrelly of 5 October 2007 and says it is very wrong and it is insulting to his intelligence, and he can prove them wrong in under-estimating the top location property to one sixth of its real value. He says that Sutherland Farrelly “were ordered by the crook liquidator to put a big undervalue on the property to satisfy his purpose to go give it away and get paid.”
He says he found it extremely difficult to get sworn valuations of the property after he was kicked out on 22 September 2007 as the liquidator did not allow any valuers to have the full internal inspection as is required by law and he had to practically beg the valuers to arrange the inspections.
Mr Velissaris swears that he found out about a sworn valuation of the property done by Megaw and Hogg in August 2008 after the settlement of the sale. The valuation was not obtained by Mr Velissaris until after judgment in the Federal Court proceedings. He says the valuation was done by Mr Les Cooper for and on behalf of the purchasers of the auction of 14 November 2007 and for the lenders of One Stop Finance. He says he has obtained a copy of the valuation and he tenders it. He says he will produce further evidence later on in the proceeding in regards to the property and its full market value.
In paragraph 49, Mr Velissaris refers to the sections of the Corporations Act 2001 he relies on in his application and says the liquidator has done his best to destroy him and his hard-earned assets by giving away for nothing a big valuable property to one quarter of its real market value. He says he believes that Mr Fitzgerald was paid by the purchaser in cash under the table to do so. He produces no evidence to support this allegation of fraud.
Mr Velissaris refers to the duties of a controller of a trustee company’s assets or the company’s assets and says that it is a duty of his to take all reasonable care, to have full property marketing and to have a full public auction and to have at least 60 or 90 days to settle, to give people time to arrange their finances as in busy times the lenders valuers are fully booked for two to three months. He refers to s 420A of the Corporations Act 2001 and the obligations.
Mr Velissaris deposes in paragraph 51 that the liquidator must take the opportunity, especially in a booming hot market as it was in July 2008, and he must not sell the property for less than market value. He again refers to the true market value. He says in particular that by comparing similar properties in the heart of shopping areas and how much they get at a proper auction per square metre on a good, hot market, it is very easy to work out the market value per square metre and these sales, which he refers to, show it very clearly. He believes that the property has the greatest advantage, that the buildings up front can be found left intact, for rental, investment and at the rear land, apartments would sell for $400,000 plus each.
He refers to other sales, which he says support his argument that the liquidator sold for an undervalue. In paragraph 59 he addresses the allegations of Mr Fitzgerald that it is he, Mr Velissaris who has started the long litigation. He alleges that he offered to pay him out, but Mr Fitzgerald is now claiming legal costs of $360,000 and that he is a “disgraceful, money-hungry and self-interested liquidator.”
Mr Velissaris deals with the judgment in the Federal Court of Gordon J and says he was denied natural justice, that she refused to listen to him and she refused to give him an adjournment for only two weeks so he could file the statement of claim. He explains how he was unable to prepare properly for the case before Gordon J. He says that Gordon J was very harsh and unreasonable towards him. He says that she refused to give him time and the chance to put his legal arguments and legal grounds to prove the illegal and wrong at law actions of the liquidator.
Mr Velissaris says that he seeks natural justice as he does know and he does believe that he has been destroyed by the actions of “a real crook solicitor”. He refers to the circumstances in which he retained the solicitors for damage to his home, which ultimately led to the claim by the solicitors for unpaid costs and the liquidating of his company.
In paragraph 63, Mr Velissaris says that “the money-hungry liquidator and his blatant breach of the law and his refusal to give him a lease and pay him any rent he wanted, and even sell the property with a tenant paying $200,000 to $250,000 rental on a new lease, and this would have contributed into obtaining a much bigger price at 5% return on a proper full auction.” He says that for all the above reasons and the further evidence and further affidavits that he will produce to the Court in due course, and as he will engage a competent and honest solicitor who will follow his instructions and not blackmail him for large sums of money at the last moment to do his documents, he submits that he has a valid and legitimate claim for at least $3.5 million and his application must be allowed to proceed and to find the justice that he is seeking in this proceeding.
VELISSARIS AFFIDAVIT SWORN 26 NOVEMBER 2008
This affidavit produces exhibits that were referred to in the affidavit of 24 November 2008.
VELISSARIS AFFIDAVIT OF 23 JANUARY 2009
Mr Velissaris says the family trust did not trade. He says he was the main guarantor and indemnifier for the company’s mortgage loan with BankWest and it was he who paid the mortgage payment on the loan with the help of his children, Mary and Alexandros, and his mother.
Mr Velissaris says that on the last mortgage from BankWest for the sum of $1.1 million obtained in June 2005, he was the sole person to give the bank the most stringent full guarantee and indemnity on 23 June 2005. He says that Maryvell could not get any loans as the BankWest manager, Mr David Pryce, made it very clear to him that as the company was only the trustee and not the real owner of the property.
Mr Velissaris refers to amending the deed of the family trust to remove the indemnity clause in July 2005 and relies on Exhibit GV6 exhibiting the guarantee and indemnities.
He says in paragraph 7 that in the June 2007 hearings on 5 and 6 and 21 June in the Supreme Court in front of Dodds-Streeton J, she refused to give him leave to fully debate who the real owner of the property was and he says that he believes she misunderstood the facts and she denied him justice by her order of 2 August 2007 giving the property to the liquidator so he could “give it away for nothing, and with the worst marketing approach. So he can collect thousands of dollars for his alleged fee.”
In paragraph 8 he says he wishes to produce the trust deed of the Maryvell Family Trust as amended for Court at the hearing if it is needed on 2 February and he states that all the changes have been done legally and are valid as the stamp duties office and ASIC told him.
In paragraph 10 he points out a recent sale in Sydney Road was on a 90 day settlement and he was surprised at the high price it achieved, being a small shop with no land at the rear and no parking. He says this sale shows “what a seven week good and proper professional advertising campaign by a professional and respectable agent can do and, of course, the 90 day settlement was the main contributor into the big interest and bidding to buy the property....” In paragraph 15 he refers to further sales in the area.
In paragraph 19 Mr Velissaris refers to a meeting on 9 August 2006 with Mr Fitzgerald where he asked for the amount to pay him and everyone else out and he offered him up to $100,000 for his costs to settle their claims. In paragraph 21 he deals with the possible paying out the liquidator. He said that BankWest was willing to wait for its moneys.
In paragraph 22 Mr Velissaris says that “the liquidator of his family trust assets has proved to him that he is the most crooked and the most unjust and unreasonable man or animal under the sun and as he was given the licence by the Court he only was caring to hang me upside down and burn me without mercy and by using my assets to destroy me and my family and my only son, Alexandros become mentally sick and to suffer from the severe depression, and while he was a very top and bright student and high school and finished with 98% VCE marks and went to Monash University to study commerce and law, but he stopped after we lost the big asset on 14 November 2007 and was sold for one sixth of its value and he became very depressed and he attends the Melbourne Clinic Psychiatrist but he is a very sick boy.”
Mr Velissaris says that “all this catastrophe is due only to the very vindictive and vexatious and wrong at law money-hungry liquidator, Lawrence A. Fitzgerald, who only tried to go on and on and on protracted litigation.” He again refers to the times that he asked the liquidator to give him a pay-out sum.
In paragraph 24 he again makes complaints about the action of the solicitors who were acting for him in relation to the property damage done to the front of his house. He says “But I do understand if and when injustice is done and I do submit to this honourable Court, that the legal system of this country let me down to the extreme, and allowed the crooked solicitors and the most crooked liquidator to destroy me and my only son and my family and my grandchildren will have nothing from their honest and hard worked grandfather.”
In paragraph 27 he refers to the breaches of s 473(2), (3), (4), (5) and (6) of the Corporations Act2001 he alleges. He complains he was kicked out of a creditors’ meeting by the liquidator. Apparently he was escorted out by security.
In paragraph 32 Mr Velissaris deposes that the sale of 26 March 2008 to Dynami Pty Ltd was not an arm’s length transaction. He says that the liquidator made the sale himself, without the knowledge of the Fitzroys agents, Mr Kris Kombi, and he says that the liquidator sold it for less than what he offered to Fitzroys on 20 March 2008. He says that he has signed a contract and given a bank cheque for part deposit and he said he had the rest of the deposit ready by 24 or 25 March, being $150,000 to give it, but he says they did not respond to his demands to pay it to them.
In paragraph 33 Mr Velissaris says the people who bought the property were the solicitors of the 14 November 2007 purchaser and/or their nominee company, being Sydney Road 333 Pty Ltd. He says the directors of Sydney Road 333 Pty Ltd were Paolo Sayo, born 8 August 1951 and Bruno Strangio born 18 January 1954. Strangio ceased to be a director on 25 July 2008 and was declared bankrupt on 27 July 2008.
In paragraph 35 he says it is beyond his understanding as to why they have sold his trust property to some “mafia crooks” on 14 November 2007 and then to a “snake crook” solicitor who is acting for them on the purchase. He says this is very clear from the caveat lodged on 21 December 2007 on the title by Betty Panagiota Zervas, who is a director and shareholder of Dynami Pty Ltd.
In paragraph 36 he said he would like to exhibit the caveat lodged on 21 December 2007 on behalf of Sydney Road 333 Pty Ltd by Betty Panagiota Zervas and the ASIC searches of both companies, Dynami Pty Ltd and Sydney Road 333 Pty Ltd, which make it clear the liquidator sold the property to another officer of the Court and solicitor, Betty Panagiota Zervas of Stonnington and Zervas with Theo Zervas, her crooked older brother who cheated Mr Velissaris to the extreme and was lying to him. He says that the solicitor must be disqualified as a solicitor and the liquidator must be removed as an officer of the Court and to be punished for all damage he caused to him and his family.
In paragraph 37 Mr Velissaris says that for these reasons he seeks from the Court justice as he still believes that Australia is a fair country. He says that he has been in Australia since 1960 and has always thought that the court system is fair and just, but he has been hurt and disappointed up to now, but he seeks justice and will fight and pursue the crooked people (and he refers here to the liquidator who he says only comes for his pockets and is out to destroy people).
In paragraph 38 he says that any reasonable man would have settled long ago and not to send a 21 year old to severe depression.
He concludes by pleading to the Court to give him justice and to remove the liquidator and to grant him damages.
SHOULD MR VELISSARIS’ APPLICATION BE STAYED OR DISMISSED UNDER R 23.01?
Rule 23.01(1) provides:
Where a proceeding generally or any claim in a proceeding –
(a) does not disclose a cause of action;
(b) is scandalous, frivolous or vexatious; or
(c) is an abuse of the process of the Court –
the Court may stay the proceeding generally or in relation to any claim or give judgment in the proceeding generally or in relation to any claim.
Rule 23.01 gives effect to the inherent jurisdiction of the court to stay or dismiss any proceeding or strike out any pleading which is scandalous, frivolous or vexatious or is an abuse of process.[1] Rule 23.01(1)(b) refers to a proceeding or claim that is scandalous, frivolous or vexations and r 23.01(1)(c) to one that is an abuse of process of the court. Ormiston JA held in Knight v Bell[2] that in substance there is no difference between the two provisions.
[1]Williams Supreme Court Practice 23.01.1: Brinson v Rocla Concrete Pipes [1982] 2 NSWLR 937 at 944.
[2][2000] VSCA 48.
In Dey v Victorian Railways Cmrs[3] Dixon J said that “A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury.”[4] Dixon J referred to the importance of maintaining “the integrity of the principle that under cover of the inherent jurisdiction to stop abuse of process litigants are not to be deprived of the right to submit real and genuine controversies to the determination of the courts by the due procedure appropriate for the purpose.”[5]
[3](1948) 78 CLR 62
[4]Ibid 91
[5]Ibid 92.
In R v Smith[6] Brooking J said that “Civil or criminal proceedings are an abuse of process, not if it can be said of them only that they will very likely fail, but if it can be said of them that it is quite clear that they must inevitably fail.” He further said:
“The very function of the courts is to hear and determine claims, sound and unsound, and to filter out those which are unsound, not (save in extreme cases, where a stay or other summary determination may be appropriate) by declining to deal with them in the usual way, by hearing and determining them… Time and again it has been said that it is only exceptional circumstance that a proceeding, civil or criminal, will be stayed on the ground that it constitutes an abuse of process.”[7]
[6][1995] 1 VR 10 at 15
[7]Ibid 14
TERMINATION OF THE LIQUIDATION
Mr Velissaris’ first application is to terminate the liquidation. The applicants allege that Mr Velissaris does not have standing to seek the termination of the liquidation under s 482(1) of the Corporations Act 2001, and requires leave to do so. In my view he does have standing and he does not require leave to make such an application.
Section 482 provides:
(1) At any time during the winding up of a company, the Court may, on application, make an order staying the winding up either indefinitely or for a limited time or terminating the winding up on a day specified in the order.
(1A) An application may be made by:
(a) in any case – the liquidator, or a creditor or contributory, of the company; or
…
Mr Velissaris has deposed that he is the sole director, the shareholder and the main creditor of the company. The applicants submit that under s 471B of the Corporations Act, whilst a company is being wound up in insolvency, a proceeding in a Court against the company cannot begin or be proceeded with except with the leave of the Court. The applicants allege that the Velissaris application is “against the company” insofar as it seeks termination of the liquidation and restraint of the liquidator. The applicants submit that Mr Velissaris cannot proceed with his application except with leave.
Section 482 expressly gives standing to a creditor or contributory to apply under s 482. In my view, s 471B, being a general provision, must give way to the specific. Accordingly, in my opinion, Mr Velissaris has standing to make the application to terminate the liquidation. I now turn to the merits of his application.
Mr Velissaris’ claim that the liquidation be terminated is founded on the allegation that the liquidator did not properly sell the Sydney Road property; that the liquidator refused to sell the property to him; that the liquidator bribed a valuer to under value the property to justify selling it below its true value; and, the liquidator received a bribe from the ultimate purchaser to sell to it for less that its true value.
Apart from insults and unfounded assertions, Mr Velissaris puts forward no evidence to establish any of these claims. At its highest, he produces an unverified valuation prepared for a finance company by Mr Les Cooper. The valuation is not properly proved. More importantly, even if it was proved, there is still no evidence to suggest that Mr Fitzgerald acted improperly in obtaining the advice of an independent valuer and retaining agents to sell the property as he did. The price that the liquidator achieved was consistent with the valuation of Fitzroys, the independent valuer and the auction in 2007.
Mr Velissaris says he will provide further evidence of the valuation. Under rule 2.4 of the Supreme Court (Corporations) Rules2003, Mr Velissaris’ application was to be supported by an affidavit stating the facts in support of the process. If he was to rely on the valuation he should have proved it. Putting that matter aside, there is nothing to suggest that Mr Velissaris, assuming this evidence was admitted, could succeed in establishing the liquidator acted improperly in the face of the valuations the liquidator obtained at the time.
There is no evidence to suggest that the liquidator paid the independent valuer Sutherland Farrelly Pty Ltd or received any payment or inducement from the ultimate purchaser to sell it for less than its true value. In fact the allegations were merely based on a belief without basis.
As to the alleged failure of the liquidator to sell the property to Mr Velissaris, there is no evidence that Mr Velissaris’ various offers met the required terms of sale. The correspondence between him and Mr Velissaris exhibited to Mr Fitzgerald’s affidavit does not suggest the liquidator acted other than properly.
The Federal Court has already dealt with the allegations that the Sydney Road property was not properly sold by Mr Fitzgerald. To seek to make them again in this Court is an abuse of process.
In my view, the claim to terminate the liquidation on these grounds is hopeless and bound to fail. It should be stayed.
THE APPLICATION FOR AN INQUIRY INTO THE LIQUIDATION
Mr Velissaris’ second claim in the alternative is that an inquiry be conducted into the conduct of the liquidator under s 536 of the Corporations Act2001. The section provides that a complaint may be made to the Court or to ASIC “by any person.” In Vink v Tuckwell,[8] I held that “any person” bears its literal meaning. In doing so, I referred to and relied on Northbourne Developments Pty Ltd v Reiby Chambers Pty Ltd;[9] Leslie v Hennessy;[10] and Young v Parbery.[11]
[8](2008) 216 FLR 309.
[9](1989) 19 NSWLR 434.
[10][2000] FCA 1532.
[11](2002) 171 FLR 332
In Vink v Tuckwell on appeal,[12] Hargrave AJA, with whom Warren CJ agreed, reserved consideration of whether “any person” should be interpreted literally. Nevertheless, for the purposes of this application, Mr Velissaris has an interest in the liquidation. I will proceed on the assumption that Mr Velissaris has standing to apply for an order for an inquiry into the conduct of the liquidator.
[12](2008) 68 ACSR 265
Turning to the merits of Mr Velissaris’ application , for the reasons expressed above on the evidence adduced Mr Velissaris will not establish a prima facie case that there is something about the conduct of the liquidator that warrants an inquiry.[13] On the material presently put before the Court, Mr Velissaris’ application is bound to fail. It should be stayed.
[13]Vink v Tuckwell (2008) 216 FLR 309.
PROCEEDINGS ON BEHALF OF THE COMPANY
In paragraph three of his application, Mr Velissaris seeks a declaration that the liquidator has engaged in serious misconduct and gross negligence in connection with the sale of the property in breach of his duties under the Act and to the Court. I take those allegations as being in support of the application for an inquiry into the conduct of the liquidator in paragraph two and the complaint he makes in paragraph four. I have already dealt with the application and these grounds in paragraph 2.
In paragraph four, Mr Velissaris seeks an order that the liquidator pay Mr Velissaris and the other beneficiaries of the Maryvell Family Trust compensation for all loss and damages suffered by them in consequence of the liquidator’s breach of his statutory obligations under s 180 and s 181 of the Corporations Act2001 and his duties at common law and in equity. The applicants contend Mr Velissaris has no standing to make this application. I agree.
The duties that the liquidator owes under s 180 and s 181 of the Corporations Act2001, at common law and in equity are owed to the company. The Corporations Act2001 does permit a person to bring proceedings on behalf of a company if, amongst other things, the person is a member of the company; or is an officer of the company; and the person is acting with leave of the Court granted under s 237. Mr Velissaris has not sought leave to bring the proceedings on behalf of the company. Accordingly, Mr Velissaris does not have standing to make the claim in paragraph 4 of his application.
In any event, I find that the evidence does not disclose any possible cause of action by the company against the liquidator either under s 180 or s 181 of the Corporations Act2001, at common law or equity. I agree with the submissions of the applicants that Mr Velissaris would not be able to obtain leave either under s 237 or, if applicable, under s 471B of the Corporations Act2001.
The liquidator, however, may be personally liable to the trustee or the beneficiaries of the trust assets held by the company if the liquidator improperly dealt with the trust assets or for some other breach of his fiduciary duty to the beneficiaries.
Mr Velissaris’ third and fourth claims are all based on the complaints made against Mr Fitzgerald referred to above. As indicated earlier, there is no evidence to support any of these complaints. Putting aside any issue of Mr Velissaris’ standing to make these complaints, in my opinion they are bound to fail whether made under the Corporations Act 2001, at common law or equity. They should be stayed.
IS MR VELISSARIS’ APPLICATION SCANDALOUS, FRIVILOUS OR VEXATIOUS?
The applicants assert that Mr Velissaris’ application is scandalous because it is based on scurrilous and baseless allegations of dishonesty against an officer of the Court. They further say it is frivolous because it is unsupported by any admissible evidence and has no prospect of success. They say it is vexatious because the long history of litigation between the parties indicates a determination on the part of Mr Velissaris to vex the liquidator with legal proceedings and other obstacles at every opportunity. I agree with the applicants’ contention.
In conclusion, in my opinion, Mr Velissaris’ claims ought to be stayed.
SHOULD MR VELISSARIS BE STOPPED FROM FILING ANY MORE COMPLAINTS?
The plaintiffs seek an order pursuant to r.27.06 that no further originating process concerning Maryvell or the property be accepted for filing from Mr Velissaris except with the leave of the Court. They also seek an order that no further interlocutory process be filed by Mr Velissaris in this proceeding without the leave of the Court.
Rule 27.06.1 provides:
The Prothonotary may refuse to seal an originating process without the direction of the Court where the Prothonotary considers that the form or contents of the document show that were the document to be sealed the proceeding so commenced would be irregular or an abuse of the process of the Court.
The Court has an inherent power to control and supervise its process to prevent injustice.[14] To that end the Court may direct the Prothonotary as the applicants’ seek. In view of the history of this matter and related matters where Mr Velissaris has taken proceedings against the liquidator and Maryvell, I believe it is appropriate that such an order be made.
[14]Williams Civil Procedure Victoria [I 23.o1.47]
COSTS
The award of costs is in the discretion of the Court or Judge: s 24 Supreme Court Act 1986. The discretion must be exercised judicially: Donald Campbell & Co v Pollak;[15] Cretazzo v Lombardi.[16] The discretion cannot be exercised arbitrarily or capriciously and it cannot be exercised on grounds unconnected with the litigation:[17] or the circumstances leading up to the litigation: Oshlack v Richmond City Council.[18] Costs are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings. The order is not made to punish the unsuccessful party: Latoudis v Casey.[19]
[15][1927] AC 732.
[16](1975) 13 SASR 4.
[17]Ibid.
[18](1998) 193 CLR 72 at 97 per McHugh J.
[19](1990) 170 CLR 534 per Mason CJ at 543, per Toohey J at 562 – 563, per McHugh J at 566 - 567
Normally costs are awarded on a party and party basis. In special circumstances, however, indemnity costs may be awarded.[20] These special circumstances were summarised by Harper J in Ugly Tribe Co Pty Ltd v Sikola.[21] Harper J said:
[20]GT Corporation Pty Ltd v Amare Safety Pty Ltd (no 3) [2008] VSC 296.
[21][2001] VSC 189 at [7].
In seeking costs on an indemnity basis, the first defendant is asking the Court to depart from its usual course: Spencer v Dowling.[22] Special circumstances must be present to justify such a departure: Australian Electoral Commission v Towney (No. 2).[23] These include:
(i) The making of an allegation, known to be false, that the opposite party is guilty of fraud: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd.[24]
(ii) The making of an irrelevant allegation of fraud: Thors v Weekes.[25]
(iii) Conduct which causes loss of time to the Court and to other parties: Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd.[26]
(iv) The commencement or continuation of proceedings for an ulterior motive: Ragata Developments Pty Ltd v Westpac Banking Corporation.[27]
(v) Conduct which amounts to a contempt of court: EMI Records Ltd v Ian Cameron Wallace Ltd.[28]
(vi) The commencement or continuation of proceedings in wilful disregard of known facts or clearly established law: J-Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (WA) Branch (No. 2).[29]
(vii) The failure until after the commencement of the trial, and without explanation, to discover documents the time of discovery of which would have considerably shortened, and very possibly avoided, the trial: National Australia Bank v Petit-Breuilh (No. 2).[30]
[22][1996] VSC 51; [1997] 2 VR 127 per Winneke P at 147 and per Callaway JA at 163.
[23](1994) 54 FCR 383 per Foster J at 388.
[24](1988) 81 ALR 397 (Woodward J).
[25](1989) 92 ALR 131 (Gummow J).
[26](Unreported, FCA, French, J, 3 May 1991)
[27](Unreported, FCA, Davies J, 5 February 1993).
[28][1983] Ch 59.
[29](1993) 46 IR 301.
[30][1990] VSC 395.
It may be suggested that Mr Velissaris’ application constitutes a special circumstance justifying the awarding of indemnity costs. Mr Velissaris has made unfounded allegations against the honesty and probity of the liquidator which, any reasonable person including Mr Velissaris, must know to be false, thereby falling within the first category referred to by Harper J.
On the other hand, it is plain to me that the events that have happened concerning the property have adversely impacted on Mr Velissaris’ judgment. I accept Mr Velissaris was a hard working family man who came to Australia from Greece to start a new life. In 1989, he started a restaurant known as the Greek Bar and Tavern “Kalamata” at the property. His home was damaged and he took proceedings to recover damages. For reasons I do not fully comprehend, those proceedings led to his then solicitor suing for costs and the family company being wound up. It is clear that Mr Velissaris feels a great injustice over this. The liquidator sold the company’s sole property to pay the company’s debts as he was duty to bound to do. Mr Velissaris took all sorts of proceedings to prevent the liquidator from carrying out his duty. He was badly advised in doing so. He says he has come to court to obtain justice. Although, in my view, whilst justice has been done, he will likely be disappointed in the decision of this court.
He has made allegations of dishonesty but they are all obviously groundless. On the question of costs, I prefer to treat these allegations as merely another form of abuse that he has unjustifiably levied at the liquidator. Naturally, for the purposes of considering the merits of his complaints, I treated them as genuine allegations.
As indicated above, costs are in the Court’s discretion although the discretion must be exercised judicially and not capriciously. Accepting these principles, for the above reasons, I have decided not to award indemnity costs but costs on a party and party basis.
CONCLUSION
In conclusion, I accede to the plaintiffs’ application and make the following orders:
(1) The application of George Velissaris of 29 July 2008 in this proceeding and each of the claims therein be stayed.
(2) That no further proceeding or process of any kind in the trial division of the Supreme Court of Victoria, including in this proceeding, 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.
(3) I order that George Velissaris pay the costs of the plaintiffs of and incidental to George Velissaris’ application of 29 July 2008 including their application of 18 November 2008, including all reserved costs. I order that such costs be taxed on a party and party basis and, when taxed, be paid by George Velissaris.
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