Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd
[2002] NSWSC 271
•5 April 2002
CITATION: Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2002] NSWSC 271 CURRENT JURISDICTION: Equity FILE NUMBER(S): SC 3081/97; 1750/02 HEARING DATE(S): 26 & 27 March 2002 JUDGMENT DATE: 5 April 2002 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)JUDGMENT OF: Hamilton J
COUNSEL : J T Johnson (Kation P/L & P L Lewis)
S J Motbey (Lamru P/L)
P A Somerset, Solicitor (Liquidator)
M Wilks, Solicitor, later M P Cleary (M Lewis)SOLICITORS: Kemp Strang (P L Lewis & Kation P/L)
Lyons & Lyons (Lamru P/L)
Abbott Tout (Liquidator)
Corrs Chambers Westgarth (M Lewis)CATCHWORDS: PROCEDURE [90] - Supreme Court procedure - Practice under Supreme Court Rules - Parties - Representative orders - Whether person should be appointed to represent trust where no current trustee but the only two beneficiaries are parties. LEGISLATION CITED: Corporations Act 2001 (Cth) s 471B
Supreme Court Rules 1970 Part 8 rr 13 & 14CASES CITED: Lewis v Nortex Pty Ltd (in Liq); Lamru Pty Ltd v Kation Pty Ltd [2002] NSWSC 249 DECISION: No separate representative of the beneficiaries of the Nortex Unit Trust should be appointed or joined as a defendant in the proceedings.
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
HAMILTON J
FRIDAY, 5 APRIL 2002
3081/97 PETER LAWRENCE LEWIS v NORTEX PTY LTD (In Liq)
1750/02 LAMRU PTY LTD v KATION PTY LTD & ORS
JUDGMENT
1 HIS HONOUR: In this matter I agitated, in a judgment delivered on 27 March 2002 (Lewis v Nortex Pty Ltd in Liq; Lamru Pty Ltd v Kation Pty Ltd [2002] NSWSC 249 – “my judgment”) an outstanding question as to whether, in the absence of a present trustee of the Nortex Unit Trust, a representative of that Trust should be appointed and made a party to the proceedings. The reasons, as I saw them, that conduced for and against that course being followed were set out in [9], [10] and [11] of my judgment and I shall not repeat them here. I decided that the matter required consideration at a little more leisure, which I have now given it. I use the same nomenclature in these reasons for judgment as employed in my judgment.
2 The two possible sources of power to make such an appointment are Part 8 r 13 and Part 8 r 14 of the Supreme Court Rules 1970. The case does not fall within Part 8 r 13 because the persons who may be appointed under that rule are “the defendants or other persons (as representing whom the defendants are sued))”, and there is no prospective appointee within that class.
3 The debate before me centred on Part 8 r 14. The condition which would require to be satisfied for action to be taken under that rule is:
- ”that, though the person, or the class and the members thereof can be ascertained and found, it appears to the Court expedient ... to exercise the power for the purpose of saving expense”: r 14(2)(c).
The consequence of making the order is that:
- “A judgment or order entered or made in the proceedings shall be binding on the person or class represented as if he or they were parties”: r 14(3).
4 Although I have not totally dispelled the lingering thought which I adverted to in [11] of my judgment, particularly bearing in mind the complexity of these proceedings and the hostility that exists between those who control, on the one hand, the plaintiff and, on the other hand, the first defendant, who all are agreed are the only beneficiaries of the Nortex Unit Trust, I have come to the conclusion that the appointment ought not be made. If there is any outstanding fear that future proceedings might be avoided by joining a representative whose presence would ensure that all relevant parties were bound, I take the view that the expense referred to in r 14(2)(c) is not necessarily limited to expense incurred in the course of the proceedings, but may refer to expense which may be incurred by the bringing of later proceedings. Nonetheless, I have come to the conclusion that there is no real point in a joinder in this case.
5 That is because the effect of the order, if made, is to bind all the represented persons “as if he or they were parties”. But here, in fact, the represented persons could only be the plaintiff and the first defendant, who are already parties to the proceedings and will be bound accordingly by any decision in them. I suppose it is conceivable that some action on behalf of the Trust may be necessary, arising from exactly what, in the end, comes out of these proceedings, but in relation to anything decided, the parties who are the only persons entitled in the long run to the proceeds of the Trust fund will, in fact, be bound by the decision. I have already expressed in my judgment a reluctance to cause any unnecessary expenditure of additional costs. I am also anxious to avoid any further over complication of these already over complicated proceedings. In the result, the view that I have taken is that no additional representative should be appointed in respect of the Nortex Unit Trust or the property subject to it.
6 It having no further utility at this stage, I propose to dismiss the plaintiff’s motion of 3 August 2000.
7 In relation to the costs of that motion, the plaintiff has not obtained relief before me under it, nor, despite some discussion on the motion before Young CJ in Eq when the matter was before his Honour, was any order made by his Honour under the motion. At the time the motion was taken out in proceedings 3081/97, in relation to a very different situation where the plaintiff and the first defendant had not directly joined issue on matters in dispute, there may well have been a greater argument for the appointment of a trustee or other representative of the Trust than there now is. Furthermore, I divine that both before his Honour and before me, debate on the matters raised by the motion has proceeded in conjunction with and on the same occasions as debate upon other motions or matters before the Court in relation to the proceedings. In all the circumstances, the order that I propose to make in respect of the costs of this motion is that there be no order as to the costs of the motion.
2
1
2