Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd

[2004] NSWSC 287

CITATION:	Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2004] NSWSC 287
HEARING DATE(S):	8 April 2004
JUDGMENT DATE:	8 April 2004
JURISDICTION:	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.
CASES CITED:	Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2004] NSWSC 64
PARTIES :	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:	N A Cotman SC & J T Johnson (P L Lewis & Kation P/L) S J Motbey (Lamru P/L) V R Gray (Liquidator & Nortex P/L) No appearance (M Lewis)
SOLICITORS:	Kemp Strang (P L Lewis & Kation P/L) Lyons & Lyons (Lamru P/L) Abbott Tout (Liquidator & Nortex P/L) Corrs Chambers Westgarth (M Lewis)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

THURSDAY, 8 APRIL 2004

3081/97 PETER LAWRENCE LEWIS v NORTEX PTY LIMITED (In Liq)
1750/02 LAMRU PTY LIMITED v KATION PTY LIMITED & ORS

JUDGMENT re Mareva Relief

1 HIS HONOUR: Application is made to me today for the release from the fund held under Mareva relief of an additional $37,564.30 for the payment of the fees of Mr Motbey of counsel for Lamru Pty Ltd. I have already released $75,000 for that purpose: Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2004] NSWSC 64 (“my judgment”). That release has, however, been exhausted, leaving the further sum that I have mentioned unpaid. The application has been conducted in private chambers with Mr Motbey, of counsel for Lamru, present by telephone link. His instructing solicitor, Mr Jim Lyons, is present in my chambers.

2 The orders that I made consequent on my judgment including the release of the $75,000, were made upon undertakings as to the provision to the Lewis interests of financial material relating to Ecodownunder Pty Ltd. In particular undertaking 3 was in the following terms:

3 To furnish to the Lewis interests within 14 days of the end of each calendar month a verified statement of the financial position of Ecodownunder as at the end of the month giving a reasonable statement of its profit, if any, and its assets and liabilities for the relevant month, including listings of its bank accounts, stock, aged debtors and aged creditors ...

3 That undertaking has been in part carried out for the month of February but not carried out as meticulously as it should have been. There is a statement that there was, at the end of February $63,000, cash at bank. There was, however, no listing of the bank accounts in which that was held. May I make it quite clear that what is required by the undertaking, in my view, is a specification of each account at each bank at which any relevant account is maintained. The note appended to the "Cash at bank" item in the accounts does not do this and the undertaking was not met in that regard. The note that is appended to the item indicates that $50,000 had been paid to Mr Ower, but $150,000 was still owing. To the significance of this, I shall return. Probably more seriously, the February statement was not verified until an affidavit was brought forward this morning. It is of considerable importance that the Lewis interests have the comfort of verification delivered at the same time as the financial statement.

4 Undertaking 3 is of great importance in view of the scheme created under my judgment and I shall take a very serious view if, in future, it is not carried out more meticulously than it was in February. However, what was done does perform the function, important for the purposes of the present application, of showing what cash was held at bank and of specifying that it should not be regarded as available to be paid to Lamru's lawyers for costs. That is because it must be paid to Mr Ower, non-payment of whom is likely to disrupt the entire orderly process of the realisation of stock and payment of obligations: see [3] of my judgment.

5 I have previously adverted to, and my judgment proceeded on the basis of, the importance of the principle that Mareva relief must not be allowed to prevent proper legal representation in the proceedings in which the relief has been granted. Mr Johnson, of counsel for the Lewis interests, now argues that this principle does not apply because the legal work concerned has already been provided on credit and there is no evidence of any present threat of Lamru's lawyers to down tools for non payment. However, it is quite clear that Mr Motbey continued to assist not only his clients but the Court in this very complicated matter on the faith of the principle to which I have just adverted and the Court’s enunciation of it. It is also suggested on behalf of the Lewis interests that the longer hearing not anticipated when the release of $75,000 was made "can in large measure be attributed to the length of Mr Motbey's submissions". Whilst the length of submissions of all parties in this case may well be open to just criticism, it is, in my view, quite wrong to suggest that this situation is somehow the sole responsibility of Mr Motbey.

6 In all the circumstances, it is, in my view, appropriate that the variation asked for be granted and I propose to make an order in that regard. In doing so, I can only re emphasise that that payment, like the $75,000 before it, must be regarded as subject to the regime laid down in my judgment. I have already uttered criticism as to the manner of compliance with undertaking 3 and I expect this undertaking to be complied with meticulously in the future. I indicate that I expect that efforts should be made to repay this additional sum into the fund secured by the Mareva relief and, as I have already stipulated in [5] of my judgment, that should be done in respect of the $75,000 already paid out.

7 I order that the Mareva order made on 27 June 2003 and varied by order made on 17 February 2004 be varied so as to authorise and direct the trustees of the fund to pay out of the fund an additional $37,564.30 to Mr Motbey on account of counsel's fees (and GST thereon) and disbursements (of counsel).

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Last Modified: 05/10/2004