Velissaris v Dynami Pty Ltd & Zervas
[2010] VSC 587
•14 December 2010
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. SCI 10468 of 2009
BETWEEN
| GEORGE VELISSARIS | Plaintiff |
| and | |
| DYNAMI PTY LTD (ACN 130 300 542) & BETTY ZERVAS | Defendants |
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JUDGE: | SIFRIS J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 1-2 December 2010 and 6-9 December 2010 | |
DATE OF JUDGMENT: | 14 December 2010 | |
CASE MAY BE CITED AS: | Velissaris v Dynami Pty Ltd & Zervas | |
MEDIUM NEUTRAL CITATION: | [2010] VSC 587 | |
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PERSONAL PROPERTY – Ownership and Possession – Claim for damages for value of plant and equipment and consequential loss – Failure by plaintiff to establish ownership or any right to possession of plant and equipment – Failure to establish any loss and damage – No cause of action established against defendants.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | In person | |
| For the Defendants | Mr D Forbes | Stonnington & Zervas |
TABLE OF CONTENTS
A.Background............................................................................................................................. 1
B.Other proceedings.................................................................................................................. 2
C.The claim.................................................................................................................................. 7
Ownership of the plant and equipment.............................................................................. 7
Claim against the defendants.............................................................................................. 13
Loss and damage.................................................................................................................. 14
D.Disposition............................................................................................................................ 16
HIS HONOUR:
A. Background
Maryvell Investments Pty Ltd (“Maryvell”) is a company in liquidation.
Maryvell was wound up by order of this Court made on 10 June 2006. Laurence Andrew Fitzgerald was appointed liquidator (“the Liquidator”).
Maryvell was the registered proprietor of the land situated at and known as 333 to 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 (“Contract of Sale”).
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 the 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.
B. Other proceedings
The plaintiff is no stranger to court proceedings. He has been involved in many proceedings in this Court and in the Federal Court of Australia. He is a vexatious litigant. In both the Federal Court and this Court orders have been made requiring the plaintiff to obtain leave prior to the commencement of any proceeding. A judge of this Court gave the plaintiff leave to commence this proceeding on 3 December 2009.
It is unnecessary to set out all proceedings that the plaintiff has been involved in. However, it is desirable to set out those proceedings that relate to this case.
By proceeding number 4484 of 2006 (“the 2006 Proceeding”) Maryvell resisted an application that it be wound up and opposed the appointment of a Liquidator. In opposing the application, the plaintiff swore that Maryvell owned the plant and equipment. He is bound by this admission and accordingly, his claim should be dismissed. However, as the matter will go further I will set out in more detail my reasons why the plaintiff’s claim is wholly unmeritorious.
In the 2006 Proceeding (which was used for many purposes), the plaintiff alleged that he was entitled to remain in possession of the Property pursuant to a lease from Maryvell dated 15 May 2006. On 15 February 2007, Master Efthim (as Efthim AsJ then was) declared that the 2006 lease was void and unenforceable pursuant to various provisions of the Corporations Act2001 (Cth). The plaintiff appealed against the order. He remained in occupation of the Property pending the determination of the appeal and from the date of the liquidation. In September 2007 he was finally evicted after losing the appeal. The plaintiff also claimed that the Property should be transferred to him and that he had a licence to occupy the Property rent-free for life.[1]
[1]He claimed that Maryvell held the Property as trustee of the Maryvell Family Trust (“the Trust”) – a fact not in dispute – and that as appointor he had removed Maryvell and appointed himself as trustee.
By proceeding number 5288 of 2007, the Liquidator sought to recover possession of the Property from the plaintiff. The plaintiff raised many defences as to why he was entitled to remain in occupation of the Property. This matter was heard together with the matters in the 2006 Proceeding (as referred to in paragraph 14) before Dodds-Streeton J. In a judgment dated 2 August 2007, her Honour dismissed the plaintiff’s appeal from the decision of Master Efthim and dismissed the other claims made by the plaintiff. Her Honour ordered that the Liquidator recover possession of the Property from the plaintiff.[2]
[2]Tolhurst Druce & Emmerson (a firm) v Maryvell Investments Pty Ltd (in liq) [2007] VSC 271.
In relation to credit Dodds-Streeton J said this:
“148Mr Velissaris progressively advanced many widely fluctuating and mutually contradictory versions of events, and at intervals, produced various documents apparently calculated to serve his immediate goals in the litigation, without any adequate explanation for the failure to produce them previously.
149He originally asserted, in opposition to the winding up application, that the company was the legal and beneficial owner of the property. He did not, at that stage, refer to any trust. Subsequently, Mr Velissaris asserted that the company had held title to the property only as a trustee of the Maryvell Family Trust and had, in that capacity, conferred on him the entitlement to occupy it rent-free for life. Mr Velissaris initially asserted that the company operated the business, but subsequently maintained that he personally owned and operated it. He also asserted that the company’s right to an indemnity from the trust assets had been removed pursuant to an amendment he made to the trust deed, at the direction of an officer of BankWest, the secured creditor. A representative of the BankWest deposed that it was highly unlikely that such a direction (which was contrary to its policy and interests) had been given. Mr Velissaris ultimately disclaimed any proprietary interest in the property (while simultaneously maintaining that he had a non-proprietary, irrevocable licence to occupy it rent-free for life). He also maintained, incorrectly, that he was not a beneficiary of the Maryvell Family Trust.
150Although he originally deposed that the property was available for lease at market rates, Mr Velissaris subsequently asserted that the company had leased him the property for a nominal rental, pursuant to the 2006 lease. When the 2006 lease was held to be uncommercial, he asserted that he had a prior entitlement pursuant to the deed of agreement and settlement, which was inconsistent with the 2006 lease. He then falsely deposed that he had transferred the property to the company gratuitously. He did not disclose that the company purchased the property pursuant to a mortgagee’s sale, for consideration. He did not disclose his bankruptcy in 1999, which was revealed only by the inquiries of the liquidator. His statement of affairs in bankruptcy made no reference to any interest in the property pursuant to the deed of agreement and settlement. In his response to the questionnaire of the secured creditor, he falsely stated that he had not been declared bankrupt. Despite his many different assertions on the identity of the party who owned and operated the business, Mr Velissaris ultimately conceded that the company had incurred all its liabilities, including liabilities for the business, as a trustee. He neither conceded nor denied, however, that the liabilities were properly incurred.
151The widely fluctuating assertions in his many affidavits and the exhibited voluminous correspondence in support of the changing submissions advanced on Mr Velissaris’ behalf, indicated a scant regard for the truth. Mr Velissaris attributed the many changes in his evidence to the defaults of his successive legal advisers, his failure to read and understand affidavits prepared by his lawyers, or his lack of legal training. I am satisfied, however, that he was actively engaged in the conduct of the litigation, exhibited a considerable capacity to understand legal issues and personally devised and prepared many affidavits, documents and letters. Numerous assertions were repeatedly made with apparent deliberation, but were subsequently retracted.
152Given the ambiguities, uncertainties and contradictions of the unwitnessed deed of agreement and settlement, its sudden and opportunistic production, the impediments to the enforceability of interests purportedly created or recorded by a document falsely predicated on a non-existent transfer of property to the company by its sole director, the repeatedly false and unreliable evidence of Mr Velissaris and the fact that any valid interest which was, on a reasonable construction, otherwise created by the deed of agreement and settlement would, in any event, have vested in his trustee in bankruptcy in 1999, I am not persuaded that Mr Velissaris has established an arguable case or serious question to be tried that he has any subsisting entitlement to occupy the property based on the deed of agreement and settlement or on the transactions it purports to document.”
In the 2006 Proceeding (and by further interlocutory process dated 29 July 2008), the plaintiff sought various orders including orders that the liquidation be stayed and that an inquiry be held into the conduct of the Liquidator. The plaintiff alleged further that the Property was improperly sold for under value. In the 2006 Proceeding the Liquidator brought an application to summarily dismiss or stay the plaintiff’s proceeding on the grounds that it was scandalous, vexatious and an abuse of the process of the court. In his reasons for decision, Robson J held that the interlocutory process should be stayed and that an order be made preventing the plaintiff from filing any further applications in the Court concerning:
(a) the conduct of the Liquidator or the liquidation;
(b) Maryvell; or
(c) the Property,
without the leave of the Court. Robson J stayed the proceeding.[3]
[3]Re Maryvell Investments Pty Ltd (in liq) [2009] VSC 61.
In relation to the Liquidator’s claim that the plaintiff’s application was scandalous, frivolous and vexatious Robson J said this:
“60 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.
61Apart 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.
…
76The 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.
…
85He 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.”
The decision of Robson J did not stop the plaintiff from making further applications for leave to commence further proceedings against the Liquidator based on an assertion that the Property was sold at an under value. For obvious reasons, Vickery and Davies JJ each refused leave.[4]
[4]Vellisaris & Ors v Maryvell Investments Pty Ltd (in liq) [2009] VSC 448 (Vickery J, 1 October 2009), Re Maryvell Investments Pty Ltd (in liq) [2010] VSC 278 (Davies J, 11 June 2010).
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.
C. The claim
Ownership of the plant and equipment
The first issue in this case is whether the plaintiff was the owner of the plant and equipment as identified in the statement of claim. If he was not the owner that is the end of the case. If he was the owner, the second issue will be whether he has a claim against the defendants. If so, the remaining issues relate to the value of the plant and equipment and other suggested loss and damage.
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 (“Mrs 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.[5] 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]The plaintiff asserted that some of the plant and equipment was purchased, upgraded or replaced at a later time, but he presented no evidence at all as to the dates when such equipment was purchased (other than perhaps that it was in 2003 or 2004) and what its value was.
In the 2006 Proceeding, the plaintiff swore an affidavit in opposition to an application made to wind up Maryvell by Tolhurst Druce & Emmerson. In the affidavit sworn on 13 June 2006 (“the 13 June 2006 affidavit”) the plaintiff admitted that the plant and equipment belonged to Maryvell. The exhibits to the affidavit, together with paragraphs 15, 19 and 42 of the affidavit, make it absolutely clear that in opposing the winding up the contention made by Maryvell and the plaintiff was that Maryvell operated the restaurant and that the plant and equipment was owned by Maryvell.[6] The evidence is unambiguous and unequivocal. Earlier affidavits filed in the application confirm this evidence.[7] No doubt, in opposing the winding up Maryvell contended that it was solvent and the plant and equipment was included as an asset.
[6]Paragraph 15 commences “The company operates a business at the Property”. Paragraph 19 includes the following sentence, “It is my intention for the Company to continue operating the business as an ongoing concern …”.
[7]In an affidavit sworn 25 May 2006, the plaintiff confirmed that Maryvell operated a restaurant business from the premises.
In evidence before me the plaintiff said that he did not read the 13 June 2006 affidavit. He said that he swore the affidavit in hurried circumstances a few minutes before the Supreme Court Registry was due to close. He said that he did so because he was told to sign the affidavit by his solicitor, Phillip Dinning.
In evidence given before me, Mr Dinning told me that he acted for Maryvell as its solicitor in opposing the winding up application. Although he agreed that the 13 June 2006 affidavit was sworn a few minutes before the closing of the Registry, he said that he received full instructions from the plaintiff in relation to its preparation (and the preparation of other affidavits) and the inclusion of the various exhibits which were provided by the plaintiff. He told me that the plaintiff read the 13 June 2006 affidavit progressively as it was being prepared and confirmed the accuracy of its contents. He said that the plaintiff was intimately involved in its preparation over many days. I accept Mr Dinning’s evidence as the more probable version of events.
Mr Dinning produced from his file a financial statement for Maryvell for the financial year ending June 2005. It appears to have been prepared by the plaintiff’s daughter, Mrs Patroungas and records Maryvell as owning the plant and equipment. Although not an exhibit itself, it supports the critical exhibit referred to in the 13 June 2006 affidavit. This exhibit (GV 3) shows plant and equipment as an asset of Maryvell with a value of $190,000.
Accordingly, there is evidence before me to the effect that the plaintiff has admitted under oath that the plant and the equipment was owned by Maryvell and not him. This position is contrary to the position that the plaintiff now asserts. It is not open to the plaintiff to change his position.
In addition to the oral evidence referred to, the plaintiff tendered numerous affidavits. I reject his evidence. He is not a witness of truth and cannot be relied on. He will say whatever it takes to support his case. I have reached that conclusion without regard to the comments of Dodds-Streeton and Robson JJ although their comments confirm my view.
The plaintiff signed two documents in the name of others – his daughter, Mrs Patroungas and a Food Safety Auditor, Anita Vlahusic. He put the documents forward intending others to rely on them as authentic documents signed by Mrs Patroungas and Ms Vlahusic respectively. In the case of a caveat on the Property, Mrs Patroungas denied signing the document. In the case of a Food Report, Ms Vlahusic denied signing the document. These are serious matters which may be taken further.
Further, the plaintiff put forward a document as being the opinion of a real estate agent, Mario DeSanctis. However, Mr DeSanctis denied providing any authority to the plaintiff to do so and it is clearly not his or his firm’s (Holland Price) document. Evidence to such effect was given by Mr DeSanctis. I accept his evidence and that of Ms Vlahusic, as well as the admission by Mrs Patroungas that she did not sign the caveat. More about the admission made by Mrs Patroungas later.
There is no other evidence before me of sufficient reliability or probity to the effect that the plaintiff acquired the plant and equipment as alleged by him. I do not accept that Mrs Patroungas gave or transferred the plant and equipment to him. I refer to her evidence in this regard below.
The plaintiff called many witnesses of questionable relevance. I permitted him to call anyone he chose. It is not open to him to complain of any unfairness or restriction so far as evidence is concerned. However, I was not impressed with any of the witnesses called by the plaintiff. They did not give any evidence of sufficient relevance or weight. Further, the manner of giving evidence was wanting. The plaintiff could not control himself and in addition to leading the witnesses, made loud suggestive answers. He also interrupted and tried to navigate the answers to suit his case. A perusal of the transcript will illustrate and confirm the point.
Ozan Kiamil was the plaintiff’s first witness. He was a neighbour of the plaintiff. He said he had been to the restaurant twice for dinner and the food was great. He was guarded in his evidence and it was obvious that he did not want to be a witness. His evidence is not relevant or probative of any issue.
Terry Karoutsos and Yul Fayad are real estate and business brokers. They both gave evidence that the food at the plaintiff’s restaurant was good. However, they went further. Mr Karoutsos gave evidence that he had a buyer for the restaurant who was willing and able to pay $385,000 in 2006. Mr Fayad also had a buyer. Two in fact. One was prepared to pay $370,000 and the other $390,000 - $395,000 in around 2006.
It is obvious that both Mr Karoutsos and Mr Fayad tried to assist the plaintiff even apart from the plaintiff’s conduct referred to above. In fact, whilst under cross-examination Mr Karoutsos met the plaintiff over lunch. They were, he told me, seated at different tables and discussed other matters, but did not discuss the case. This is most improbable given the personality and conduct of the plaintiff.
In any case, their evidence is not probative and its relevance is questionable. First, there were no documents whatsoever produced to the Court by either witness. No authority to sell, no correspondence or notes. No request for information. Secondly, both conceded that any purchaser would require a lease. No evidence was led about this. Thirdly, the evidence in addition to being unsupported was vague and inconclusive. Nothing was said about any terms or conditions of sale or conditions precedent. Further, any reasonable due diligence – which both witnesses conceded would be required – would have revealed information that would have had an impact on the purchase price or indeed the purchase itself. More about this later.
In all of the circumstances, I am not satisfied that there was a buyer available and willing and able to buy the restaurant for the amounts referred to by Messrs Karoutsos and Fayad. However, even if there was, it says nothing about the ownership of the plant and equipment - the central issue in this case. At best, it may possibly be relevant to any assessment of damages in the event that the plaintiff establishes ownership. Even in such a case, what value does one ascribe to the plant and equipment? Neither witness gave any evidence of any breakup of the alleged purchase consideration, or any value attributable to the plant and equipment.
Mrs Patroungas also gave evidence. She was very nervous and clearly did not want to give evidence. She was under a lot of pressure to assist her father and was even prepared to mislead the Court until I gave her a suitable warning and adjourned the Court for five minutes to enable her to consider her position. When the Court re-convened she resiled from her previous answer (affirming her signature) and admitted that her father had forged her signature on a caveat purportedly lodged by her claiming an interest in the Property. Aside from this, I am reluctant to accept any of her evidence. Her recall was poor and she had no supporting documentation. This is most peculiar given that she is a tax accountant. Further, her evidence was most affected by the conduct of the plaintiff as referred to in paragraph 31 above.[8] She also mislead the Court about relevant tax thresholds.[9]
[8]During the course of cross-examination, the plaintiff made frequent interjections including “No Mary” (Transcript 202), “Say nothing Mary” (Transcript 204) and “Do not answer Mary” (Transcript 211).
[9]She said that she did not declare the cash wages she received from the restaurant because the amount was below the threshold. However, she was working at the time as a tax accountant earning income way in excess of the threshold.
However, her evidence as to ownership of the plant and equipment and in particular, the alleged transfer to her father was unsupported and fabricated.
Mrs Patroungas gave evidence that she purchased the Property at a mortgagee auction in 1997. The purchase was in her name or nominee. Maryvell was incorporated and became the registered proprietor of the Property in 1998. Mrs Patroungas gave evidence that to the best of her recollection, the plant and equipment was listed in a schedule and was included as part of the sale. She did not give evidence of any further disposition of the plant and equipment to any other party, other than a gift or transfer of the plant and equipment to her father in 2003.
It is clear on the evidence that before the alleged gift in 2003 the plant and equipment was owned by Maryvell. There is no evidence to the effect that any other entity or person acquired ownership of the plant and equipment whether at the time of the acquisition of the Property[10] or after, but before the alleged gift. Accordingly and leaving aside the gift, I find that at all material times Maryvell was the owner of the plant and equipment. The only disposition suggested was the gift.[11] If there was no gift or disposition to the plaintiff Maryvell would continue to own the plant and equipment until its liquidation.
[10]Relevantly, Mrs Patroungas did not give evidence that either at the time of acquisition of the Property, at the time of settlement or at any time, she personally acquired the plant and equipment.
[11]See note 5 above.
I have grave reservations about the gift. The evidence of Mrs Patroungas in this regard is, like most of her evidence, unsatisfactory. I find that the gift was not made. First, there is no documentation of any kind. No note. No correspondence. No financial record evidencing any gift, disposition or change in ownership. As pointed out, this is remarkable given that Mrs Patroungas is a tax accountant. Secondly, I do not believe Mrs Patroungas. She was not a witness of truth, although she was placed in a very difficult position by her father. Thirdly, there is adequate and sufficient documentary evidence (other than the 13 June 2006 affidavit) to the effect that even after the alleged gift or disposition, Maryvell remained as owner of the plant and equipment. This is hardly surprising as there was simply no gift or disposition as alleged. Fourthly, the alleged gift or transfer to the plaintiff of the plant and equipment by Maryvell has, despite opportunity, never been referred to before. It is a total fabrication.
The Liquidator gave evidence to the effect that he had no reason to believe, and more particularly no evidence to support, the contention that the plant and equipment was not owned by Maryvell. He told me several times that he relied on the 13 June 2006 affidavit to the effect that Maryvell owned the plant and equipment. I accept his evidence.
The Liquidator gave further evidence to the effect that as at the date of his appointment he did not observe any business actively trading at the Property.
In the circumstances and having considered the matter and taken advice, he decided that it would be in the best interests of the company if the plant and equipment was sold with the freehold.
In the events that occurred the Lease was negotiated. As pointed out above, the lease included the acquisition by the Tenant of the plant and equipment for $1.
More importantly, both the Tenant and Dynami thought that the Liquidator had the power to dispose of the plant and equipment.
What then is the evidence of ownership of the plant and equipment? It is most confusing and unsatisfactory and I must find that the plaintiff has failed to establish ownership. The critical matter is the plaintiff’s own evidence as referred to in paragraph 24 above.
Claim against the defendants
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 witness 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.
Loss and damage
In the event that my conclusion as to ownership of the plant and equipment is incorrect and the plaintiff was the owner of the plant and equipment[12] (and for some reason does have a case against the defendants), I find that the plaintiff has failed to establish any loss and damage. There is simply no evidence before the Court of any value of the plant and equipment on which the Court can make any assessment for the purpose of awarding the plaintiff damages.
[12]In any event, photographs tendered by the defendants establish that the air conditioners, sinks, basins and probably the bar, were fixtures.
Further, I reject the plaintiff’s claim for any consequential loss or loss of goodwill. The matters set out below (amongst others) are relevant.
The plaintiff has a history of non-compliance with the Food Act 1984 (Vic) (“Food Act”) and a blatant disregard for its provisions. He has been in dispute with the Moreland City Council (“the Council”) for close to a decade. Maryvell has been fined and the plaintiff has been ordered to close the restaurant.[13]
[13]The closure order was revoked in 2004.
The restaurant was last registered under the Food Act in January 2000. The Act as it then stood, provided that registration of a food premises generally continued in force for 1 year from the date it was last granted or renewed.[14]
[14]However, the Minister may declare that registration of a specified class of food premises is to remain in force for a specified period of greater than one year, in which case, registration of a food premises continues in force for that specified period: Food Act ss 40B and 40C(a).
Evidence was given by Robert Brunton, who was the Council's Public Services Health Coordinator at the relevant times, regarding the history of the plaintiff's dealings with the Council. Mr Brunton gave evidence that he inspected the Property in August 2002 and found it unclean. He seized food found in the premises pursuant to a Notice of Seizure and Detention dated 22 August 2002 as he considered that the food represented a potential hazard to public safety. During cross-examination, Mr Brunton acknowledged that the inspection took place at a time when the sewer on a neighbouring property was broken and that the plaintiff had asserted at the time of the inspection that he was not operating a restaurant from the Property. However, the issues between the plaintiff and the Council were clearly ongoing. I accept his evidence.
Elvio Ponza, the Council's Coordinator of Environmental Health, also gave evidence. He attended the plaintiff's restaurant in 2006. He ordered a meal and took a number of photographs of the food. He gave evidence that he was concerned about the conditions in which the food was prepared.
Further, at a meeting in 2006 the Council resolved not to register the premises.
During the trial, the plaintiff repeatedly made submissions to the effect that the Council had no power to close his restaurant. While this is true, the Council clearly had a role to play under the Food Act.
At the relevant times, section 35 of the Food Act provided that a proprietor of a food business must not allow the business to operate from any food premises that is not registered with the council of the municipal district in which the premises is located. Failure to comply with the section could result in a fine of 50 penalty units for the first offence and 100 penalty units for a subsequent offence. The Act defined “food business” as:
“a business, enterprise or activity (other than a business, enterprise or activity that is primary food production) that involves –
(a) the handling of food intended for sale; or
(b) the sale of food, regardless of whether the business, enterprise or activity concerned is of a commercial, charitable or community nature or whether it involves the handling or sale of food on one occasion only.”
It is apparent that the plaintiff’s restaurant fell within the definition of a “food business” and consequently, it was required to be registered with the Council. It was not registered.
This short recitation of facts tells against any claim for goodwill. Further, as observed by the Liquidator, the restaurant was closed when he and his staff visited it after his appointment.
D. Disposition
The claim must fail.
I will order that the plaintiff’s claim be dismissed with costs including reserved costs.
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