Velissaris v Maryvell Investments Pty Ltd (In Liquidation) & Anor

The parties to this proceeding were the liquidator of Maryvell Investments Pty Ltd (in liquidation) and Mr Velissaris, a director of the company. The liquidator sought to recover from Mr Velissaris amounts paid by the company to him during the period of 12 months prior to the company's liquidation, alleging these payments constituted an unfair preference. The matter came before Hayne J in the Supreme Court of Victoria.

The central legal issue before the court was whether the payments made by Maryvell Investments Pty Ltd to Mr Velissaris within the relevant period were voidable as unfair preferences under section 588FA of the Corporations Act 2001 (Cth). To establish this, the liquidator was required to demonstrate that the company was insolvent at the time of the payments, or became insolvent by reason of the payments, and that the payments were made to Mr Velissaris in his capacity as a creditor, thereby giving him a preference over other creditors.

Hayne J considered the evidence presented regarding the company's financial position and the nature of the payments. His Honour applied the principles established in case law concerning unfair preferences, focusing on the company's solvency and the effect of the payments on the distribution of assets amongst creditors. The court examined whether Mr Velissaris received more than he would have received in a winding up of the company.

The court found that the liquidator had not discharged the onus of proof required to establish that the payments constituted an unfair preference. Accordingly, the liquidator's claim was dismissed.