Vasiliou v Marchesi

Case [2008] FCAFC 129

FEDERAL COURT OF AUSTRALIA

Vasiliou v Marchesi [2008] FCAFC 129

BANKRUPTCY – vesting of properties in trustee in bankruptcy – proper parties to application – whether primary judge erred in factual findings – role of appellate court – no error shown

PRACTICE AND PROCEDURE – no basis for allowing further evidence on appeal – incompetent appeal against interlocutory judgment granting leave to amend application to add a claim under s 121 of the Bankruptcy Act 1966 (Cth)

Bankruptcy Act 1966 (Cth) ss 58, 120, 121
Federal Court of Australia Act 1976 (Cth) ss 24(1A), 27
Federal Court of Australia Rules O 52 r 36
Transfer of Land Act 1958 (Vic)

Abalos v Australian Postal Commission (1990) 171 CLR 167 referred to
Cannane v J Cannane Pty Lid (in liq) (1998) 192 CLR 557 referred to
Council of the City of Greater Wollongong v Cowan (1955) 93 CLR 435 applied
CSR Ltd v Della Maddalena (2006) 224 ALR 1 referred to
Florance v Andrew (1985) 58 ALR 377 cited
Fodare Pty Ltd v Official Trustee in Bankruptcy [2000] FCA 1721 cited
Fox v Percy (2003) 214 CLR 118 referred to
Freeman v Pope (1870) LR 5 Ch App 538 cited
House v R (1936) 55 CLR 499 referred to
Orr v Ford (1989) 167 CLR 316 referred to
Paterson v Paterson (1953) 89 CLR 212 referred to

ANDREW VASILIOU and VASILIKI APOSTOLOU AS TRUSTEE OF THE VASILIOU FAMILY TRUST v BRENDAN JOHN MARCHESI AS TRUSTEE OF THE BANKRUPT ESTATE OF ANDREW VASILIOU, A BANKRUPT

VID 656 OF 2007
VID 755 OF 2007

FINN, KENNY AND EDMONDS JJ
14 JULY 2008
MELBOURNE


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 656 OF 2007
VID 755 OF 2007
ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

ANDREW VASILIOU
First Appellant

VASILIKI APOSTOLOU AS TRUSTEE OF THE VASILIOU FAMILY TRUST
Second Appellant
AND:

BRENDAN JOHN MARCHESI AS TRUSTEE OF THE BANKRUPT ESTATE OF ANDREW VASILIOU, A BANKRUPT
Respondent

JUDGES:

FINN, KENNY AND EDMONDS JJ

DATE OF ORDER:

14 JULY 2008

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The appeals be dismissed.

2.The appellants pay the respondent’s costs of the appeals.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.




IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 656 OF 2007
VID 755 OF 2007
ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

ANDREW VASILIOU
First Appellant

VASILIKI APOSTOLOU AS TRUSTEE OF THE VASILIOU FAMILY TRUST
Second Appellant
AND:

BRENDAN JOHN MARCHESI AS TRUSTEE OF THE BANKRUPT ESTATE OF ANDREW VASILIOU, A BANKRUPT
Respondent

JUDGES:

FINN, KENNY AND EDMONDS JJ

DATE:

14 JULY 2008

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

THE COURT:

INTRODUCTION

  1. This proceeding involved two appeals.

    (1)VID 656 of 2007 is an appeal from orders made on 4 July 2007 including a declaration that the beneficial title to each of three properties has vested in the respondent, as trustee of the bankrupt estate…

Continue reading Vasiliou v Marchesi

Sign in free to access the full text

Details
AGLC
Vasiliou v Marchesi [2008] FCAFC 129
Case
[2008] FCAFC 129
Decision Date

CaseChat Overview and Summary

Vasiliou v Marchesi involved a dispute between the appellants, Mr Vasiliou and Ms Apostolou, and the respondent, Mr Marchesi. The central issue was the validity of a purported transfer of properties from Mr Vasiliou to a trust, the VFT, through Optquest as trustee. The appellants challenged the primary judge’s findings that the transfer was never completed and that Mr Vasiliou retained control of the properties. The appeal raised questions about the admissibility of certain evidence and the primary judge's assessment of witness credibility.

The court examined whether the appellants had provided a proper basis for leave to appeal, considering the primary judge's detailed reasoning and the appellants' decision not to seek an adjournment of the trial. The court also reviewed the evidence of Mr Dwyer, Mr Vasiliou’s solicitor, who testified about the intended transfer but noted that the process was abandoned due to high stamp duty costs. The primary judge accepted Mr Dwyer’s evidence over the appellants' claims of misapplication of funds, finding that Mr Vasiliou retained the properties. The court found that the appellants' arguments lacked merit and did not establish a basis for overturning the primary judge's findings.

The court concluded that the appellants' grounds of appeal were without merit and rejected their submissions. It found that the primary judge’s conclusions were well-reasoned and supported by the evidence. The appeals were dismissed, and the appellants were ordered to pay the respondent's costs.

Orders

Orders of the court

1. The appeals be dismissed.

2. The appellants pay the respondent’s costs of the appeals.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Secondly, we accept, as in substance Mr Marchesi submitted, that the appellants have not identified any proper basis for the grant of leave to appeal, supposing such leave was sought. It is apparent from his Honour’s reasons that the primary judge gave due consideration to the question whether or not leave should be granted. It should be borne in mind too that his Honour expressly noted that the appellants had, for their own reasons, chosen not to make an application for the adjournment of the trial (see Marchesi v Apostolou [2007] FCA 254 at [5] and [23]).Mr Phillip Dwyer’s evidence The appellants called Mr Dwyer to give evidence in relation to the restructuring of Mr Vasiliou’s affairs in 1987. He was a significant witness since he was Mr Vasiliou’s solicitor and involved in the purported transfer of the subject properties from Mr Vasiliou to Optquest as trustee of the VFT. Mr Dwyer’s evidence was that: (1) he initially took instructions from Mr Vasiliou but subsequently acted for both Mr Vasiliou and Optquest; (2) Mr Vasiliou instructed him to set up the VFT and to prepare documents relating to the transfer of the properties to it; (3) Mr Vasiliou instructed him not to proceed because the stamp duty was too expensive; (4) the executed TL Act transfers were neither stamped nor lodged at the Titles Office; and (5) by 1 March 1988, the gift had not been finalised. The primary judge accepted the evidence of Mr Dwyer. His Honour found that Mr Dwyer acted in the normal course of his practice as a solicitor and dealt with the funds that Mr Vasiliou gave him in accordance with his professional obligations. His Honour rejected the allegations of Mr Vasiliou and Ms Apostolou that Mr Dwyer had misapplied these funds to his own professional fees instead of for the payment of stamp duty. His Honour made these findings on the basis of conflicting evidence and after dealing with credibility issues of the kind that inevitably arise in such a case as this. The primary judge referred to the fact that Mr Dwyer ultimately accounted to Mr Vasiliou, and not Optquest, for the balance of money held in his trust account. Further, although he did not recall to whom the transfers were sent after he ceased to act, Mr Dwyer “expressed amazement that it might be suggested that his firm had corresponded with Optquest” by means of the envelope relied upon by the appellants. His Honour accepted Mr Dwyer’s evidence in this regard and said that the explanation for the envelope “is at least as likely to be falsification on the initiative of Mr Vasiliou as any other” (see Marchesi v Apostolou at [72]). There were, as Mr Marchesi noted, other considerations that supported Mr Dwyer’s version of events and the finding that Mr Vasiliou retained the transfers in his personal capacity. These considerations included that neither Optquest nor any subsequent trustee of the VFT attempted to complete the transfer of the properties. The primary judge found the transfers produced to Mr Marchesi in April 2006 were fabrications. Mr Vasiliou admitted continuing to treat the properties as his own and made numerous identifications of the properties as his, with no reference to the VFT. Indeed, Mr Vasiliou acknowledged retaining control of the properties as his own to deal with as he saw fit. Further, the appellants did not call as witnesses any of the accountants who advised them over the years, notwithstanding the clear warnings of Mr Marchesi’s counsel and the Court. In 1997, Mr Vasiliou’s accountants stated in a letter that Mr Vasiliou had ‘very substantial land holdings in Melbourne’. The VFT did not record the properties in a list of its assets or a balance sheet (as required by cl 15 of the Trust Deed) or prepare tax returns or other trust accounts or records evidencing its ownership of the properties.

Decision

Reasons for decision

FINN, KENNY AND EDMONDS JJ
We would reject the appellants’ submissions to the contrary and the grounds of appeal that were said to support them.CONCLUSION The appellants’ appeals must be dismissed with costs.

Ratio Decidendi

Legal Principle Established

Established by: FINN, KENNY AND EDMONDS JJ

Full text does not contain this section.