Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd
[2006] NSWSC 417
•3 May 2006
CITATION: Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2006] NSWSC 417 HEARING DATE(S): 3 May 2006
JUDGMENT DATE :
3 May 2006JURISDICTION: Equity JUDGMENT OF: Hamilton J DECISION: Further money released from Mareva restraint to meet costs of proceedings. CATCHWORDS: EQUITY [340] - Equitable remedies - Injunctions - Interlocutory injunctions - Injunctions to preserve property pending determination of rights - Mareva injunctions - Other matters - Need to fund litigation - Whether funds available to party from other sources. CASES CITED: Lewis v Nortex Pty Ltd (in Liq); Lamru Pty Ltd v Kation Pty Ltd [2004] NSWSC 1238
Lewis v Nortex Pty Ltd (in Liq); Lamru Pty Ltd v Kation Pty Ltd [2005] NSWSC 1060PARTIES: 3081/97
Peter Lawrence Lewis (P)
Lamru Pty Ltd (Applicant)
Kation Pty Ltd (Respondent)
Brian Raymond Silvia (Liquidator)
1750/02
Lamru Pty Limited (P)
Kation Pty Limited (D1)
Peter Lawrence Lewis (D2)
Mark Lewis (D3)
Nortex Pty Ltd (In Liq) (D4)
FILE NUMBER(S): SC 3081/97; 1750/02 COUNSEL: J Baird (Solicitor) (P L Lewis & Kation P/L)
S J Motbey (Lamru P/L & R W Lamb)
V R W Gray (Liquidator & Nortex P/L)SOLICITORS: Kemp Strang (P L Lewis & Kation P/L)
Lyons & Lyons (Lamru P/L & R W Lamb)
Abbott Tout (Liquidator & Nortex P/L)
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
HAMILTON J
WEDNESDAY, 3 MAY 2006
3081/97
PETER LAWRENCE LEWIS v NORTEX PTY LIMITED (In Liq)
1750/02
LAMRU PTY LIMITED v KATION PTY LIMITED & ORS
JUDGMENT (on Mareva application - see T 8247)
1 HIS HONOUR: This is an application for a further release for the purpose of the payment of Mr Motbey’s fees from the fund held under Mareva order. A number of releases have previously been made, the last as recently as 24 April 2006 to permit the payment of transcript charges. Pertinent to the arguments put today are what I have previously said on such applications in Lewis v Nortex Pty Ltd (in Liq); Lamru Pty Ltd v Kation Pty Ltd [2004] NSWSC 1238 (“my December 2004 judgment”) and Lewis v Nortex Pty Ltd (in Liq); Lamru Pty Ltd v Kation Pty Ltd [2005] NSWSC 1060 (“my October 2005 judgment”) at [6] and [3] respectively.
2 The first argument put by Mr Baird, solicitor for the Lewis interests, in opposition to the release application, is that the hearing of the last three weeks has largely been a contest between Lamru on the one hand and the Liquidator on the other and the participation by the Lewis interests has been minimal. However, it must be said that that situation is by choice of the Lewis interests. By what I take to have been a costs saving mechanism, the Lewis interests placed the bulk of their submissions concerning the relevant subject matter in writing and have chosen only in a limited way to participate by appearance at the recent hearing. However, by both written and oral submissions they have participated quite fully in all aspects of the matter and Lamru has been put to costs, including counsel’s fees, to conduct the matter. I do not think that release from the Mareva fund should be refused on that ground.
3 The other ground put forward by Mr Baird has perhaps more substance. It is that the business of Ecodownunder is continuing to improve. Over the eight months to 31 March 2006 it has shown income of some $45,000, which is greater than it has previously shown. Its stock in hand (which is the major item of its assets) has advanced from $252,000 odd to $303,000 odd, an increase of some $50,000.
4 I observed in my December 2004 judgment at [6] that the business of Ecodownunder is a modest one. I drew attention to the fact that, on the evidence available, Mr Lamb is not living out of its proceeds, but he and his wife are living on her salary or wage. I expressed the view that it would be to everybody’s advantage in the long run if the business is allowed to become viable. In my October 2005 judgment at [3] I observed that the profits of the business have continued to be modest and could not bear expense at the rate at which it was being incurred in this litigation. I said that neither did I think it reasonable that that modest business should be destroyed by compulsion of the liquidation of its stock and that I did not regard funds as reasonably available from that company to fund the litigation.
5 As indicated by the facts as stated above, the business has advanced further, so that the profits of the last few months slightly exceed the amount now sought to be released for Mr Motbey’s fees. However, the documents presented show that, as previously, the income of the business has not been drawn out by the principals of the company, but has been left in the company to consolidate the steady but comparatively slow growth of that business.
6 Mr Baird has fairly and properly conceded on behalf of the Lewis interests that the release of further funds is a matter of the Court’s discretion. I should add that the basis on which the discretion should be exercised is a matter of degree. The business has advanced somewhat since the last release and is perhaps closer to a situation where income could be made available to the owners of the business, but the situation still at the moment is that stock of the slowly growing business would have to be liquidated in order to achieve that effect and to do so would obviously affect the consolidation of the business.
7 In all the circumstances, I do not think the time has yet arrived where the business could not, without substantial damage to it, bear the costs of the litigation that are now sought to be released and I propose to order that a sum to permit the payment of Mr Motbey’s fees should be released from the fund.
8 The order that I now propose to make is that the Mareva order made on 27 June 2003 and varied by orders made on 17 February, 8 April, 11 May and 17 November 2004, 8 March, 5 August and 13 October 2005 and 24 April 2006 be further varied so as to authorise and direct the payment forthwith out of the fund of $43,070 to Mr Motbey on account of counsel’s fees and GST thereon and disbursements of counsel.
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