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

[2003] NSWSC 1048

CITATION:	Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2003] NSWSC 1048
HEARING DATE(S):	11 November 2003
JUDGMENT DATE:	11 November 2003
JURISDICTION:	Equity
JUDGMENT OF:	Hamilton J
DECISION:	Evidence rejected.
CATCHWORDS:	EVIDENCE [24] - Admissibility and relevancy - Facts relevant to facts in issue - In general - Facts relevant only to costs where costs not to be determined on current hearing.
LEGISLATION CITED:	Supreme Court Rules 1970 Part 52A r 42
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

MONDAY, 11 NOVEMBER 2003

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

JUDGMENT: (see Transcript p 3221)

1 HIS HONOUR: The purpose of this judgment is to rule on objections taken to the following question asked by Mr Motbey, of counsel for Lamru, in cross examination of the liquidator, Mr Silvia:

Q. Do you agree with me that when you were confronted with that lawsuit, joined in effect as a respondent to the appeal, you might have or you were aware that you might have taken the approach: I'll let those two fight it out among themselves and I won't take an active part. Whatever the court decides, I'll accept.

After a fairly wide-ranging debate it has become plain that Mr Motbey puts the admissibility of his question upon two bases. The first is that it is relevant to the exercise by the Court of its discretion under Part 52A r 42 of the Supreme Court Rules 1970 as to the entitlement of the liquidator to costs out of the fund held by him. The second is that it goes to Mr Silvia’s credit.

2 In my belief it has already been made plain, and I certainly make it plain now, that I do not intend to deal with questions of costs in the judgment that I shall deliver at the end of the present hearing. I have proceeded on the basis which it seems to me is the appropriate one, that questions of costs can be better dealt with afterwards, not on a range of hypothetical bases, but upon the basis of the decisions that I have actually come to. In those circumstances the question of what should be done purely on costs is not open in the hearing before me. Insofar as matters relate only to that subject matter, they are not sufficiently relevant to be admitted on the present hearing. There has been some effort by Mr Motbey to suggest that the issues to be raised under Part 52A r 42 are not solely matters of costs but are substantive matters, but in my view they arise in these proceedings as relating to the issues of costs of the proceedings which, as I have indicated, should be debated subsequently, not to the matters currently in debate before me. The question should not therefore be admitted on the basis that it seeks to elicit matters relevant to the subject matter at present before the Court.

3 So far as the question of Mr Silvia's credit is concerned, it is suggested in the course of argument in support of the objection that there was no substantive challenge in the proceedings to Mr Silvia's conduct so as to permit the quality of his conduct to be challenged in cross examination. It seemed at one stage to be suggested that an attack upon Mr Silvia's credit was unexpected. It was certainly my initial recollection that an attack had been launched upon Mr Silvia's conduct. However, it was put in submission in support of the objection that those were mere airy allegations from Mr Motbey's end of the bar table.

4 However, Mr Motbey has given substance to my recollection and to his allegations by referring me to par 85 and the subsequent paragraphs of the consolidated points of claim and to the answer to those paragraphs in par 16 of the liquidator's points of defence. In short, the points of claim allege that the Lewis interests "advanced a new set of accounting conventions abandoning the accounting conventions" which had been adopted between the parties and that the liquidator acted in conformity with those submissions. This conduct of the liquidator was alleged to constitute a breach by Nortex of the agreement constituting the conventions and, in light of certain other stated matters, to have been conduct unconscionable on the liquidator's part. The liquidator's response is that, whilst it was true that the Lewis interests had made submissions to him to this effect, the reason that he abandoned the earlier conventions was that this was required by the judgment delivered in 2001 by Young J, as his Honour then was, on the decision of preliminary questions and was not simply followed by him at the instance of the Lewis interests and was perfectly proper conduct on his part.

5 Issues as to the liquidator’s conduct are therefore clearly included among the issues between the parties in these proceedings. As some allegation of impropriety in his conduct has been made by Lamru and denied by him, appropriate questions may be asked of Mr Silvia in cross examination going to his credit. However, I am not convinced that the question which was asked and has been objected to has any sufficient or sufficiently relevant connection with the impugned conduct or with Mr Silvia's credit generally to be permissible. I therefore reject the question.

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Last Modified: 11/17/2003