FEDERAL COURT OF AUSTRALIA Evangelinidis, in the matter of Tsekouras v Tsekouras [2000] FCA 861 VIVECA EVANGELINIDIS v CON TSEKOURAS N 7106 OF 2000 HELY J 14 JUNE 2000 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 7106 OF 2000 BETWEEN: VIVECA EVANGELINIDIS APPLICANT AND: CON TSEKOURAS RESPONDENT JUDGE: HELY J DATE OF ORDER: 14 JUNE 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. A sequestration order be made against the estate of Con Tsekouras. 2. The costs of the petition including reserved costs be taxed and paid in accordance with the statute. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 7106 OF 2000 BETWEEN: VIVECA EVANGELINIDIS APPLICANT AND: CON TSEKOURAS RESPONDENT JUDGE: HELY J DATE: 14 JUNE 2000 PLACE: SYDNEY REASONS FOR JUDGMENT (3) 1 In 1987 Mr Tsekouras was involved in some litigation in the Supreme Court of New South Wales in which he claimed damages for personal injuries which he suffered in a motor vehicle accident. He was awarded damages by Badgery-Parker J, but apparently was dissatisfied with the amount of that award because there was an unsuccessful appeal to the Court of Appeal. When I say unsuccessful I mean substantially unsuccessful because the Court of Appeal may have slightly increased the judgment sum in the personal injuries proceedings. 2 Mr Tsekouras was represented in the proceedings before Badgery-Parker J by Ms Evangelinidis, as his solicitor. Mr Tsekouras then commenced proceedings against Ms Evangelinidis in the Supreme Court of New South Wales for negligence in the conduct of the earlier personal injuries claim and those proceedings were transferred into the District Court. The proceedings were heard by Cripps J in the District Court in February 1999 and his Honour entered a judgment in favour of Ms Evangelinidis upon the basis that Mr Tsekouras had not established that she was guilty of any negligence in the conduct of the earlier personal injuries claim. 3 On 14 October 1999 a judgment was entered in the District Court against Mr Tsekouras in the sum of $73,251.84 representing the legal costs of the proceedings before Cripps J. On 1 November 1999 a bankruptcy notice (issued by Ms Evangelinidis and based upon that judgment) was served on Mr Tsekouras. I am satisfied that an act of bankruptcy was committed on 7 December 1999 when a registrar refused an application to set aside that bankruptcy notice. That decision was later confirmed by Gyles J on 8 February 2000. On 10 February 2000 a creditor's petition was lodged. I am satisfied that the matters stated in the petition have been proved. I am satisfied that service of the petition has been effected and I am satisfied that the debt on which the applicant relies is still owing. 4 There is thus a prima facie entitlement in the applicant to the making of a sequestration order. Mr Tsekouras resists the making of such an order. The basis of his resistance is to be found in documents styled "Notice of Intention to Oppose Application or Petition" and "Amended Notice of Intention to Oppose Application or Petition" which, although filed in matter number N 131 of 2000, I permitted Mr Tsekouras to rely upon by way of opposition to the petition in the present proceedings. The ground of opposition stated in that document is that Mr Tsekouras has a claim of $166,469.54 against Ms Evangelinidis which exceeds the amount of her claim by a sum of about $93,217. 5 Mr Tsekouras has not endeavoured in these proceedings to establish that he is able to pay his debts. There is no evidence before me as to his assets or liabilities. The ground on which he says that a sequestration order ought not be made is that he has a claim against Ms Evangelinidis which exceeds the amount of her claim against him. Mr Tsekouras filed an affidavit resworn on 8 June 2000 which sets out the details of his claim against Ms Evangelinidis. Paragraph 2 of that affidavit reads: "The respondent (ie Ms Evangelinidis) claims that she has paid all of the following amounts, but this is not true. I, the applicant, have paid all of the following amounts totalling $244,895.52." 6 There is a list of about 24 payments made principally to lawyers which are said to constitute that sum. The fact that those payments may have been made by Mr Tsekouras is immaterial unless the circumstances in which the payments were made were such as to give rise to a corresponding liability in Ms Evangelinidis to Mr Tsekouras. I should say at the outset that there is simply no evidence before me which would establish the existence of any liability in Ms Evangelinidis to Mr Tsekouras for any of the sums itemised in par 2 of this affidavit. 7 There has, however, been some investigation of the nature of those payments in cross-examination of Mr Tsekouras which either establishes, or if it does not establish, strongly suggests that there is no liability in Ms Evangelinidis to him in relation to any of those sums. The list of payments can, for the sake of convenience, be split into two parts by ruling a line underneath the payment to Waverney Ford Private Investigator of $800 on 30 May 1991. 8 The payments which fall above that line can be compared with those which appear on page 28 of the Appeal Book filed in connection with the applications for leave to appeal in this Court which were determined by a Full Court on 30 May last. What I might call the above line payments total $166,469.54; that is, the sum referred to in the notice of opposition. 9 So far as the payments below the line are concerned, the evidence of Mr Tsekouras indicates that they are either (i) comprised entirely of sums which he has paid to lawyers in connection with the special leave application to the High Court from the decision of the Court of Appeal dismissing his appeal from Badgery-Parker J's decision on the personal injury claim or (ii) they relate to payments made to solicitors acting on his behalf in connection with the negligence claim against Ms Evangelinidis which was unsuccessful before Cripps J. 10 It may be that those sums would have been recoverable against Ms Evangelinidis had Mr Tsekouras succeeded in that claim. But the fact is that he failed and Cripps J dismissed his claim. There is thus no warrant for any inference that Ms Evangelinidis is under any liability to Mr Tsekouras in relation to any of those sums. Rather the evidence establishes that in consequence of the failure of the District Court proceedings there could be no such liability. 11 So far as the claims above the line are concerned they perhaps should be dealt with on an individual basis. The first item is Ms Evangelinidis (6/4/93) $23,138.81. This is a sum paid on 6 April 1993 by Carroll & O'Dea, Solicitors to Ms Evangelinidis on account of the taxed costs awarded in the proceedings against the Government Insurance Office in the sum of $18,623.81, and a further sum of $4,515.00 payable to Ms Evangelinidis for taxed costs in connection with a superannuation claim. 12 Again, given the failure of the negligence claim against Ms Evangelinidis there is no basis for the inference, let alone a conclusion, of any liability in her to Mr Tsekouras on account of that payment. The next item is Evangelinidis $37,209.30. The only material to which my attention has been directed in relation to that sum is a letter dated 18 November 1991 from Ms Evangelinidis to Carroll & O'Dea which appears at page 36 of the Appeal Book. That letter sets out a number of accounts said to be outstanding and an estimate of profit costs in connection with the motor vehicle accident claim totalling $37,209.30. 13 It is apparent there is some duplication between items which appear in that letter and items which appear elsewhere, particularly the letter commencing at page 51 of the Appeal Book and specifically, on page 53 of that letter. Again, all that has emerged in relation to this letter is that it represents at the highest costs and disbursements payable in connection with the personal injuries claim and as such would not be recoverable from Ms Evangelinidis having regard to the failure of the negligence claim against her. 14 The next item is headed, Superannuation $30,555.00. I have no information before me about this claim other than what appears on pp 28 and 31 of the Appeal Book. At page 28, there is nothing more than an assertion that in some way and for some reason Mr Tsekouras paid a sum of $30,555.00 in connection with superannuation. At page 31, there is a further affidavit indicating that under the Mandarin Club Employee Benefit Plan Mr Tsekouras was entitled to a sum of $30,555 on permanent disablement. 15 There is simply nothing which establishes any liability in Ms Evangelinidis to Mr Tsekouras in relation to these sums. If one were to speculate one would infer that the basis of the claim was some negligence on the part of Ms Evangelinidis in the conduct of the personal injuries proceedings. However, having regard to the decision of Cripps J, this cannot be productive of any benefit to Mr Tsekouras. 16 The next item which appears is NSW Insurance Ministerial $55,241.18. That is the same sum as is referred to in a letter of 17 July 1997 commencing at page 51 of the Appeal Book. This is a letter from McKells, one of the firms of solicitors who was at one stage acting for Mr Tsekouras, directed towards the Government Insurance Office and is a memorandum of costs and disbursements of those solicitors in the personal injuries claim against the Government Insurance Office. 17 There is an application for assessment of party/party costs signed by Mr Tsekouras at pages 40 and 41 of the Appeal Book which if taken at face value is an application to have those costs referred to a costs assessor, including an assertion that the costs have been fully paid in an amount of $55,241.18. The coincidence of amounts leads me to conclude that the reference on page 40 is to the document commencing on page 51. 18 Exhibit 2 on the other hand includes a statement by Mr Tsekouras that his cost assessor has prepared a bill "to me" for $55,241.18. Again because of the coincidence of the amount I assume that it is the same subject matter which is being referred to. There is no warrant for a conclusion upon the basis of the material to which I have referred that Ms Evangelinidis is under any liability to Mr Tsekouras in relation to this sum. 19 The next item is GIO payment - party costs $17,000.00. This is referred to on page 32 of the Appeal Book by the following entry: "GIO payment by way of party costs $17,000.00" The document at page 32 is a letter, the heading of which indicates that it was concerned in some way with a summons for leave to appeal in connection with the personal injuries claim. This amount is also referred to in Exhibit 2, which is a letter signed by Mr Tsekouras and tendered by counsel for Ms Evangelinidis, which contains this statement: "Evangelinidis has received $17,000.00 from GIO by way of party costs to pay my bills, which, as of today's date, have not been paid." 20 It is not clear to me what I should make of the reference to $17,000.00. On the one hand, in his affidavit of 8 June 2000 Mr Tsekouras appears to assert that it is a sum of money which he has paid, whereas in Exhibit 2 he refers to it as a payment from the Government Insurance Office to pay my bills which as of today's date have not been paid. 21 I am simply uncertain as to what the status of this sum is. I am not satisfied on the evidence that it reflects a liability of Ms Evangelinidis to Mr Tsekouras, but my uncertainties in relation to the position are such that I should refrain from making any specific finding with respect to that sum. 22 It is not necessary that I should do so in order to dispose of this application, because even if it be assumed that $17,000.00 was payable by Ms Evangelinidis to Mr Tsekouras, that would not be sufficient to offset the District Court judgment for $73,251.84 unless augmented by other significant sums. 23 There are then four items: Dr Tahmindjis O/S fees v GIO (7/1/92) $478.75; Waverney Ford Private Investigator (30/5/91) $1160.00; Fox Service and Security (30/5/91) $886.50; and under that Waverley Ford Private Investigator (30/5/91) $800.00. The first two of these sums are referred to on page 32 of the Appeal Book, the second two are referred to in Exhibit 2 (although the numbers are different). It is apparent from those references that each of the sums relates to the personal injury claim which Mr Tsekouras had against the Government Insurance Office as with the other payments that relate to that claim. The judgment in favour of Ms Evangelinidis in the District Court proceedings indicates that there is no basis on which those sums can be recovered from her. 24 Accordingly, subject to the possible exception of the sum of $17,000.00, I am satisfied that Mr Tsekouras has not made out a case for any liability in Ms Evangelinidis for the sums referred to in his affidavit of 8 June 2000. I am not satisfied in a positive sense that he has made out a case in relation to the sum of $17,000.00, but even if it be assumed that such a case could be made, it would not be sufficient to disentitle the applicant Ms Evangelinidis from her prima facie entitlement to a sequestration order. For those reasons I make a sequestration order against the estate of Con Tsekouras. I order that the costs of the petition including reserved costs be taxed and paid in accordance with the statute. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely. Associate: Dated: 27 June 2000 Applicant appeared in person Counsel for the Respondent: Mr J Johnson Solicitor for the Respondent: Sally Nash & Co Date of Hearing: 14 June 2000 Date of Judgment: 14 June 2000