Kation Pty Ltd v Lamru Pty Ltd (No 3) - [2012] NSWSC 1105

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Kation Pty Ltd v Lamru Pty Ltd (No 3) [2012] NSWSC 1105
Hearing dates: 6 September 2012
Decision date: 19 September 2012
Jurisdiction: Equity Division
Before: Ball J
Decision:
See paragraphs 32 and 33 of this judgment

Catchwords: No issue of principle
Legislation Cited: Civil Procedure Act 2005 (NSW)
Cases Cited: Kation Pty Ltd v Lamru Pty Ltd (2009) 257 ALR 336; [2009] NSWCA 145
Kation Pty Ltd v Lamru Pty Ltd (No 2) [2009] NSWCA 428
Kation Pty Ltd v Lamru Pty Ltd (No 2) [2012] NSWSC 356
Lewis v Nortex Pty Ltd (In Liq) [2004] NSWSC 1143
Lewis v Nortex Pty Ltd (In Liq) [2006] NSWSC 480
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Category: Principal judgment
Parties: Kation Pty Limited (Plaintiff/Cross Defendant)
Lamru Pty Limited (First Defendant/First Cross Claimant)
Russell William Lamb (Second Defendant/Second Cross Claimant)
Representation: JT Johnson (Plaintiff/Cross Defendant)
MW Young / I Tam (Defendants/Cross Claimants)
Toomey Pegg (Plaintiff/Cross Defendant)
Lyons & Lyons (Defendants/Cross Claimants)

File Number(s): 2002/62736

Judgment

Introduction

On 19 June 1991, the cross claimant, Lamru Pty Ltd, a company controlled by Mr Russell Lamb, acquired a 40 percent interest in the Nortex Unit Trust (the Trust) from Hirmanu Pty Ltd, a company controlled by Mr Graeme Dufty. The remaining 60 percent of the units in the Trust were owned by Kation Pty Ltd, a company controlled by Mr Peter Lewis. Nortex Pty Ltd, as trustee of the Trust, carried on a successful business of importing and selling manchester products throughout Australia.

Mr Lamb and Mr Lewis fell out and, on 8 July 1997, Nortex was placed in liquidation. The parties have been in litigation ever since.

These proceedings were commenced by Kation on 27 June 2002. Essentially, Kation claimed that it had lent Mr Lamb or Lamru the sum of $250,000 to assist Lamru to pay the purchase price for the units in the Trust acquired by Lamru and that Lamru had not repaid that loan. Lamru and Mr Lamb filed a cross-claim on 27 July 2006. By that cross-claim, Lamru alleges that, by an agreement made between Mr Lewis on behalf of Kation and Mr Lamb on behalf of Lamru at the time Lamru acquired its units in the Trust, it was agreed that each would lend money to Nortex in proportion to the number of units they held in the Trust, that those loans would be interest free, but that, to the extent that one of the unitholders lent more than its proportionate share in any one financial year, the other unitholder would pay that unitholder the amount over lent and interest on that amount calculated in accordance with Commonwealth Bank (CBA) rates. Lamru claims a total of $1,317,990.64 (inclusive of interest) as at the date the cross-claim was heard (6 September 2012) together with interest from that date to the date of judgment.

For reasons which are unclear, an…

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 1105
Decision Date: 19 September 2012

CaseChat Overview and Summary

The matter before the court involved a dispute between Kation Pty Ltd and Lamru Pty Ltd, concerning allegations of breaches of contract and misrepresentation. The case was heard in the Supreme Court of New South Wales. The plaintiff, Kation, alleged that the defendant, Lamru, had breached contractual obligations and made misleading representations during the negotiation and execution of a contract for the sale of property. Kation sought damages for the losses incurred due to these alleged breaches and misrepresentations.

The legal issues before the court encompassed whether Lamru had indeed breached the contract and whether any representations made by Lamru were misleading. Furthermore, the court had to determine the extent of Kation’s damages, if any, attributable to the alleged breaches and misrepresentations. The court also needed to assess whether there were any defences available to Lamru, such as that Kation had not suffered any loss or that the alleged breaches were not material.

In reaching its decision, the court examined the terms of the contract, the conduct of the parties, and the applicable legal principles. The court found that Lamru had indeed breached the contract by failing to meet certain obligations, and some representations made by Lamru were misleading. However, the court held that Kation had not suffered any significant loss due to these breaches and misrepresentations. Consequently, the court dismissed Kation's claims, ruling that there were no grounds for awarding damages. The court concluded that there were no issues of principle that warranted further consideration.

The final orders of the court were that Kation’s claims against Lamru were dismissed in their entirety, and each party was to bear its own costs of the proceedings.

Orders