Kathleen Vouris.
Richard Albarran.
Two of Hall Chadwick’s finest have fumbled an opportunity to secure early leverage in a battle over assets in cash-strapped publican Jon Adgemis’s hospitality group.
Instead of gaining possession of The Terrace in the Sydney suburb of Alexandria, the pair have been injuncted from doing so after a judge ruled they’d breached Section 440B of the Corporations Act.
For good measure they’ve also been ordered to pay the costs of administrators appointed to the companies operating the adjacent Camelia Grove Hotel after unsuccessfully defending proceedings brought by those administrators.
“I do not consider it necessary or desirable for the Court to express a view on whether or not a person who is not a party to the proceedings could, consistently with s 440B, take action in respect of the Terrace. This could be seen as akin to giving an advisory opinion to the Mortgagee prior to it taking certain enforcement action.” Judge Scott Nixon, SC.
Kathleen Vouris and Richard Albarran were appointed receivers to 152 Henderson Street Pty Ltd which controls The Terrace after the appointment of administrators and receivers to the related Adgemis entities operating the pub next door.
The Terrace provided essential facilities to the pub, including a bottle shop, cold storage and an outdoor eating area and beer garden.
But after being appointed Vouris and Albarran erected a wire fence and post notices of possession.
The result was that pub staff and patrons were denied access to The Terrace, imperilling the profitability of the pub in circumstances where receivers Vaughan Strawbridge and Joe Hansel of FTI Consulting were trading on in a bid to sell Camelia Grove as a going concern.
After successfully applying to have the signs and fence removed administrators Duncan Clubb and Andrew Sallway of BDO sought declarations that the acts of Vouris and Albarran constituted breaches of Section 440B.
In their defence, which included an application for leave to take possession, Vouris and Albarran argued that such a grant wouldn’t prejudice other Adgemis group creditors and that they should have possession so as to be involved in setting the appropriate realisation strategy to ensure the company to which they were appointed by GEMI 377 Pty Ltd would be properly compensated.
Further they argued that there was nothing to stop GEMI 377 from acting on its initiative as mortgagee-in-possession so seeking such an injunction against The Terrace’s receivers was futile.
This last argument however proved equally futile with Justice Nixon saying: “I do not consider it necessary or desirable for the Court to express a view on whether or not a person who is not a party to the proceedings could, consistently with s 440B, take action in respect of the Terrace. This could be seen as akin to giving an advisory opinion to the Mortgagee prior to it taking certain enforcement action.”
And as In the matter of Camelia Grove Operations Pty Ltd, Public Lifestyle Management Pty Ltd and 146 Henderson Street Pty Ltd in its personal capacity and in its capacity as the Trustee for 146 Henderson Street Unit Trust (No 2) [2024] NSWSC 1383 also shows, missed meetings, being late with evidence and relying on patently unsuitable valuations couldn’t have helped.
” … the 152 Receivers relied on a valuation from more than two years ago, which was provided on the basis of an assumption that certain renovations were completed, resulting in four separate accommodation rooms on the first floor of the Terrace.
“Those renovations have not taken place. In those circumstances, the Plaintiffs submitted, and I accept, that this valuation is of little weight,” his honour observed.
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