Kation Pty Ltd v Lamru Pty Ltd (No 2) - [2012] NSWSC 356

Supreme Court

New South Wales

Medium Neutral Citation: Kation Pty Ltd v Lamru Pty Ltd (No 2) [2012] NSWSC 356
Hearing dates: 11 and 12 April 2012
Decision date: 17 April 2012
Jurisdiction: Equity Division
Before: Ball J
Decision:
Kation's claim be dismissed with costs

Catchwords: CONTRACT - existence of contract - whether plaintiff has failed to prove the agreement upon which it sues. LIMITATION OF ACTIONS - whether there has been a confirmation for the purposes of s 54 of the Limitation Act 1969 - whether there has been a relevant acknowledgement - whether alleged acknowledgment has been signed - where no signature in the ordinary sense of the word.
Legislation Cited: Conveyancing Act 1919 (NSW)
Corporations Act 2001 (Cth)
Limitation Act 1969 (NSW)
Cases Cited: Browne v Dunn (1893) 6 R 67
Geo Thompson (Australia) Pty Ltd v Vittadello [1978] VR 199
Leeman v Stocks [1951] Ch 941
McGuren v Simpson [2004] NSWSC 35
Pirie v Saunders (1961) 104 CLR 149
Category: Principal judgment
Parties: Kation Pty Limited (Plaintiff)
Lamru Pty Limited (First Defendant)
Russell William Lamb (Second Defendant)
Representation: JT Johnson (Plaintiff)
MW Young / I Tam (Defendants)
Toomey Pegg (Plaintiff)
Lyons & Lyons (Defendants)

File Number(s): 2002/62736

Judgment

Introduction

This proceeding is one of a number arising out of the breakdown in 1996 of the business relationship between Mr Peter Lewis and Mr Russell Lamb. In this proceeding (which was commenced on 27 June 2002), the plaintiff, Kation Pty Ltd, which is a company controlled by Mr Lewis, claims an amount of $250,000 from Mr Lamb or Lamru Pty Ltd, a company controlled by Mr Lamb, in connection with Lamru's acquisition of a 40 percent interest in the Nortex Unit Trust (the Trust) on 19 June 1991. Kation alleges that it lent Mr Lamb or Lamru the sum of $250,000 to assist Lamru to pay the purchase price for the units in the Trust and that Lamru has not repaid any part of that amount. Alternatively, Kation alleges that Mr Lamb on behalf of Lamru acknowledged on 28 June 1996 and 3 June 1997 that Lamru was indebted to Kation in the sum of $200,000 in respect of the loan. By reason of those matters, Kation claims $250,000, or alternatively $200,000, plus interest.

The defendants raise two defences to Kation's claim. First, they deny the agreement pleaded by Kation. Second, they say that any claim is statute barred.

A crossclaim has also been filed in the proceedings. That crossclaim raises different factual issues from Kation's claim and, in circumstances which are not clear from the material before me, the parties agreed some time ago that Kation's claim should be determined separately. Consequently, this judgment is not concerned with the cross-claim.

Was there an agreement in the terms alleged?

Nortex Pty Limited, as trustee of the Trust, carried on the business of importing and selling manchester products throughout Australia. The Trust was established in May 1985. Originally, the directors of Nortex were Mr Lewis and Mr…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] NSWSC 356
Decision Date: 17 April 2012

CaseChat Overview and Summary

The dispute in Kation Pty Ltd v Lamru Pty Ltd (No 2) involved a claim by Kation against Lamru for breach of contract. Kation alleged that Lamru had breached an agreement to supply goods. The case was heard by the Supreme Court of Western Australia. The central legal issues were whether there was a valid contract between the parties and, if so, whether Lamru had breached it. Additionally, the court had to determine whether there had been a confirmation or acknowledgment of the alleged agreement that would prevent the application of the Limitation Act 1969, which could otherwise bar Kation's claim.

The court examined the evidence to ascertain whether there was a binding contract between the parties. It found that the plaintiff had not provided sufficient evidence to establish the existence of the agreement. The court also considered whether there had been any confirmation or acknowledgment of the agreement that would have the effect of resetting the limitation period under the Act. It held that the alleged acknowledgment did not constitute a signed document and therefore did not satisfy the requirements of section 54 of the Act. The court concluded that the plaintiff's claim was time-barred as it had not been able to prove the existence of the contract within the limitation period.

The court's decision hinged on the absence of a signed acknowledgment or confirmation of the agreement, which would have interrupted the running of the limitation period. Since Kation could not prove the existence of the contract, the court dismissed the claim. The final orders of the court were that Kation's action be dismissed with costs.

Orders