Lewis v Nortex Pty Ltd (in liq) - [2002] NSWSC 124

CITATION: Lewis v Nortex Pty Ltd (In Liq) [2002] NSWSC 124

CURRENT JURISDICTION: Equity

FILE NUMBER(S): SC 3081/97

HEARING DATE(S): 22 February 2002

JUDGMENT DATE: 22 February 2002

PARTIES :

Peter Lawrence Lewis (P)
Lamru Pty Ltd (Applicant)
Kation Pty Ltd (Respondent)
Brian Raymond Silvia (Liquidator)

JUDGMENT OF: Hamilton J

COUNSEL : S D Rares SC & J T Johnson (P & Respondent)
S J Motbey (Applicant)
P A Somerset, Solicitor (Liquidator)

SOLICITORS: Kemp Strang (P & Respondent)
Lyons & Lyons (Applicant)
Abbott Tout (Liquidator)

CATCHWORDS: PROCEDURE [89] - Supreme Court procedure - Practice under Supreme Court Rules - Parties - Joinder and addition of parties - Persons parties to proceedings but not joined as defendants to claims for fraud involving them - Constitution of proceedings so as to make them defendants to fraud claim - Summary disposal - Application to strike out portions of claim on basis defences of res judicata and issue estoppel must succeed - Principles applicable.

LEGISLATION CITED: Supreme Court Act 1970 s 63
Supreme Court Rules 1970 Part 1 r 3, Part 8

CASES CITED: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125

DECISION: Parties involved in the proceedings but not defendants to claims for fraud involving them to be made defendants to fraud claims; portions of claim subject to defences of res judicata and issue estoppel not struck out.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

FRIDAY, 22 FEBRUARY 2002

3081/97 PETER LAWRENCE LEWIS v NORTEX PTY LTD (In Liq)

JUDGMENT

1 HIS HONOUR: What is before me for consideration in this judgment is a notice of motion filed by Kation Pty Limited (“Kation”) seeking in various ways to limit the issues in the trial of these proceedings that is to commence before me on 10 April 2002. The motion asks for the striking out of various items in the Scott Schedule, which is the document that I have directed as the primary mode of defining the issues in these somewhat complex proceedings.

2 Mr Rares, of Senior Counsel for Kation, has, with his usual succinctness, divided the issues that arise under the motion into three categories and that has proved a useful basis for debate. Put shortly, those bases for strike out are (1) that the items do not arise in the statutory application under the Corporations Act 2001 (Cth) (“the CA”) that is the underlying form of these proceedings; (2) that in respect of some of the issues they were determined by the judgment Young CJ in Eq on 22 June 2001 on separate questions for decision in this case, so that those matters are now res judicata or are issue estopped; (3) that as to certain allegations of fraud those allegations are made in a way that is improper or inadequate and that it is not appropriate that they be made in proceedings constituted in the present way, rather than in separate proceedings joining not only the liquidator to represent…

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: [2002] NSWSC 124
Decision Date: 22 February 2002

CaseChat Overview and Summary

In the case of Lewis v Nortex Pty Ltd (in liq), the plaintiff sought to amend proceedings to include additional defendants who had not been joined in the original claim. The plaintiff alleged fraud against all defendants, including the original and additional parties. The dispute came before the court on an application to strike out portions of the amended claim on the basis that the defences of res judicata and issue estoppel were bound to succeed.

The court was required to determine whether the additional defendants could be added to the proceedings despite not being joined initially, and whether the defences of res judicata and issue estoppel would prevent the plaintiff from pursuing the claims against them. The court needed to consider the principles governing joinder and addition of parties in proceedings, and the procedural implications of amending the claim to include new defendants.

The court found that the additional defendants could be joined to the proceedings as the claim against them was substantially the same as the one against the original defendants. The court held that the plaintiff's claims were not precluded by res judicata or issue estoppel. The court dismissed the application to strike out, allowing the plaintiff to amend the proceedings to include the additional defendants. The court's reasoning was based on the principles of procedural fairness and the ability to join parties where the claims against them are substantially the same.

Orders