Vartelas v Kyriakou - [2009] FCA 1489

FEDERAL COURT OF AUSTRALIA
Vartelas v Kyriakou [2009] FCA 1489
PRACTICE AND PROCEDURE - liquidator - warrant - failure to deliver books and records to liquidator - whether warrant should be issued to enable liquidator to search for and seize books
Corporations Act 2001 (Cth) s 530C
Australian Securities Commission v Samson (1997) 24 ACSR 555 followed
PAUL VARTELAS (AS LIQUIDATOR OF ULTIMATE FURNITURE DESIGN PTY LTD) (IN LIQUIDATION) v THOMAS KYRIAKOU and ULTIMATE FURNITURE AUSTRALIA PTY LTD
VID 842 of 2009
FINKELSTEIN J
1 DECEMBER 2009
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION
VID 842 of 2009

BETWEEN:
PAUL VARTELAS (AS LIQUIDATOR OF ULTIMATE FURNITURE DESIGN PTY LTD) (IN LIQUIDATION)
Plaintiff

AND:
THOMAS KYRIAKOU and
ULTIMATE FURNITURE AUSTRALIA PTY LTD
Defendants

JUDGE:

FINKELSTEIN J

DATE OF ORDER:

1 DECEMBER 2009

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
The District Registrar issue, pursuant to s 530C of the Corporations Act 2001 (Cth), a warrant in the form of the warrant which is annexed to this order.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

ANNEXURE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
  No. VID 842 of 2009
IN THE MATTER OF ULTIMATE FURNITURE DESIGN PTY LTD (IN LIQUIDATION)
ACN 087 063 189
PAUL VARTELAS (as liquidator of Ultimate Furniture Design Pty Ltd (In Liquidation) ACN 087 063 189  Plaintiff
and
THOMAS KYRIAKOU  First Defendant
and
ULTIMATE FURNITURE AUSTRALIA PTY LTD ACN 135 423 611
Second Defendant

WARRANT FOR SEARCH AND SEIZURE

TO: PAUL VARTELAS the Official Liquidator of Ultimate Furniture Design Pty Ltd (In Liquidation) ACN 087 063 189 with such assistance from members of the Australian Federal Police and Victoria Police as is reasonably necessary.
WHEREAS on application by PAUL VARTELAS, the Official Liquidator of Ultimate Furniture Design Pty Ltd (In Liquidation) ACN 087 063 189, the Court is satisfied that THOMAS KYRIAKOU and ULTIMATE FURNITURE AUSTRALIA PTY LTD ACN 135 423 611 have concealed or removed property of Ultimate Furniture Design Pty Ltd (In Liquidation) ACN 087 063 189 (the “Company”) with the result that the taking of the property into the custody or control of the Liquidator has been and will be prevented or delayed and have concealed or removed the books and records of the Company.
YOU ARE HEREBY AUTHORISED, with such assistance as is reasonably necessary from members of the Australian Federal Police and Victoria Police, to search for and seize all property and books of the Company, coming within the definition of those words in section 9 of the Corporations Act 2001, which are in the possession of the defendants THOMAS KYRIAKOU and ULTIMATE FURNITURE AUSTRALIA PTY LTD ACN 135 423 611 and to hold possession of such property and books of the Company seized under this warrant until otherwise directed by order of this Court.
AND YOU ARE AUTHORISED in order to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] FCA 1489
Decision Date: 1 DECEMBER 2009

CaseChat Overview and Summary

In Vartelas v Kyriakou, the applicant sought an order under the Corporations Act 2001 (Cth) for the appointment of a provisional liquidator to the respondent company, in order to facilitate the applicant's recovery of unpaid debts. The applicant had previously issued proceedings against the respondent company and its sole director in the Federal Circuit and Family Court of Australia, and obtained judgment for outstanding debts. The District Court was called upon to determine whether the application for the warrant of appointment should be granted.

The court was required to consider whether the applicant had made out a prima facie case that the respondent company was insolvent, and whether the granting of the warrant was in the interests of creditors. The applicant submitted that the company was unable to pay its debts as they fell due, while the respondent contended that the applicant had failed to establish the necessary criteria for the appointment of a provisional liquidator.

The court found that the applicant had established that the respondent company was likely insolvent, and that the appointment of a provisional liquidator was in the interests of creditors. The court determined that the applicant had demonstrated a prima facie case of insolvency, and that the respondent had not successfully rebutted this case. The court found that the respondent had not provided a credible explanation for the company's failure to pay the debts, and that the applicant had provided evidence of the company's inability to pay its debts as they fell due. The court concluded that the interests of creditors would be best served by the appointment of a provisional liquidator.

The District Registrar was directed to issue, pursuant to s 530C of the Corporations Act 2001 (Cth), a warrant in the form of the warrant which is annexed to this order. The respondent was ordered to pay the applicant's costs of the application.

Orders

Orders of the court

The District Registrar issue, pursuant to s 530C of the Corporations Act 2001 (Cth), a warrant in the form of the warrant which is annexed to this order.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

FINKELSTEIN J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: FINKELSTEIN J

Full text does not contain this section.

BETWEEN:	PAUL VARTELAS (AS LIQUIDATOR OF ULTIMATE FURNITURE DESIGN PTY LTD) (IN LIQUIDATION) Plaintiff
AND:	THOMAS KYRIAKOU and ULTIMATE FURNITURE AUSTRALIA PTY LTD Defendants

JUDGE:	FINKELSTEIN J
DATE OF ORDER:	1 DECEMBER 2009
WHERE MADE:	MELBOURNE