Vadarlis v Ballanbrae Pastoral Coy Pty Ltd

[2019] VSC 712

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
TRUST, EQUITY AND PROBATE LIST

S ECI  2019 03836

ERIC VADARLIS	Plaintiff
v
BALLANBRAE PASTORAL COY PTY LTD (ACN 005 490 737) in its own capacity and its capacity as trustee of the KAYES FAMILY TRUST	Defendant

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	6 September 2019
DATE OF RULING:	31 October 2019
CASE MAY BE CITED AS:	Vadarlis v Ballanbrae Pastoral Coy Pty Ltd
MEDIUM NEUTRAL CITATION:	[2019] VSC 712

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PRACTICE AND PROCEDURE — Application to strike out originating motion — Where originating motion does not disclose a cause of action — Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 23.02(a).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr AT Schlicht	Tasiopoulos Lambros & Co
For the Defendant	Mr JL Smith	Bernie O’Sullivan Lawyers

HER HONOUR:

Introduction

1. Christopher Robin Franklin Kayes died on 12 September 2015.  Probate of the deceased’s will dated 15 August 1997 was granted to Eric Vadarlis on 4 April 2016. 

1. At the date of his death, the deceased owned shares in Ballanbrae Pastoral Coy Pty Ltd (‘Ballanbrae’), which is the trustee of the Kayes Family Trust.  The Kayes Family Trust is a discretionary trust.  The shares in Ballanbrae were an asset in the estate of the deceased.  Any dealings by Mr Vadarlis concerning the shares were in his capacity as administrator of the estate and not as trustee of the Kayes Family Trust.  At no time was Mr Vadarlis the trustee of the Kayes Family Trust.  Between 13 September 2015 to 24 July 2019, Mr Vadarlis was the sole director of Ballanbrae.   

1. In a separate proceeding brought by the beneficiaries of the estate, they allege, inter alia, that Mr Vadarlis has claimed to be entitled to trustee’s commission for his administration of the Kayes Family Trust (‘the beneficiaries proceeding’).[1]

   [1]S ECI 2019 02236.

1. By orders made on 21 June 2019 in the beneficiaries proceeding, Mr Vadarlis was to make any claim for trustee commission, pursuant to s 77 of the Trustee Act 1958, by 24 July 2019.

1. On 24 July 2019, Mr Vadarlis filed a summons seeking, inter alia, trustee commission in the probate proceeding.

1. Prior to a directions hearing on 8 August 2019, the beneficiaries submitted that an application for trustee commission pursuant to s 77 of the Trustee Act 1958 could not be pursued in the probate proceeding.  Consent orders were made in the beneficiaries proceeding extending the time to 19 August 2019 within which Mr Vadarlis could commence a proceeding for trustee commission.

Application by Mr Vadarlis

1. By originating motion filed 23 August 2019, Mr Vadarlis commenced this proceeding.  He subsequently filed a summons on 29 August 2019, seeking:

That the plaintiff as the sole director between 13 September 2015 to 24 July 2019 of [the defendant] be allowed remuneration for his services to the defendant as disclosed in the books of record of account of the defendant or the Kayes Family Trust or such other amount as is in all the circumstances appropriate or reasonable.

Procedural history

1. On the return of the directions hearing on 6 September 2019, the defendant sought orders that the originating motion be struck out with costs, pursuant to r 23.02(a) of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’), on the basis that the proceeding does not disclose a cause of action. It was submitted that the substantive relief claimed by Mr Vadarlis was not trustee commission, pursuant to s 77 of the Trustee Act 1958, and that he was not at any time a trustee of the Kayes Family Trust. 

1. Orders were made for the filing of written submissions in respect of the application to strike out the proceeding. 

1. In response to the defendant’s submissions, Mr Vadarlis notified the Court that, in order to avoid further costs and delay, he would seek that the proceeding continue as if it had been commenced by writ, pursuant to r 4.07 of the Rules, and attached a proposed statement of claim, which relies on the following grounds:

(a)   The work carried out by him as a director of Ballanbrae was inextricably linked to his work as executor of the estate of the deceased and, other than for the technical issue of him not being the trustee of Ballanbrae, but rather a director, all work done by him in respect of the Kayes Family Trust was as a result of him being the executor of the estate of the deceased.  Accordingly, in those circumstances, he is entitled to be treated consistently in respect of the work carried out in respect of the estate and the Kayes Family Trust.

(b)   Alternatively, he is entitled to reasonable remuneration for the work carried out by him as a director of Ballanbrae on the basis of a conventional quantum meruit claim.

1. Mr Vadarlis submitted that the defendant’s application to strike out the originating motion should be refused on the basis that his draft statement of claim pleaded a cogent and complete cause of action that adequately defines the issues in dispute and puts the defendant on notice of the case that it is required to meet and which satisfies the requirements of a pleading in civil proceedings.

1. Further written submissions were filed by the parties and the Court informed the parties that the application would be determined on the papers. 

Ruling

1. On 25 October 2019, the Court ordered that, pursuant to r 23.02(a) of the Rules, the plaintiff’s originating motion be struck out and within 14 days the plaintiff file and serve an amended claim. Short written reasons were provided to the parties and they were informed that, if required, written reasons would be provided. By email dated 29 October 2019, Mr Vadarlis required the Court to provide written reasons for the ruling.

Reasons for decision

1. The response by Mr Vadarlis in providing a draft statement of claim failed to address the defects in his originating motion.

1. It is not at all clear that a claim for remuneration for services as a director ought be commenced by originating motion.  In any event, whether by originating motion or by the draft statement of claim, the claims fail to identify any statutory, equitable or contractual basis for the relief sought by Mr Vadarlis.  He seeks remuneration for his services yet no contract for services is pleaded pursuant to which remuneration might be payable.  

1. There are also no material facts or particulars set out as to what is disclosed in the books of record of account or how an entitlement to remuneration might arise from those records. 

1. The defendant does not know what is alleged against it for Mr Vadarlis’ services as a director. 

1. In these circumstances, the Court allowed Mr Vadarlis a further opportunity to amend his claim.

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