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

[2004] NSWSC 1102

CITATION:	Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2004] NSWSC 1102
HEARING DATE(S):	17 November 2004
JUDGMENT DATE:	17 November 2004
JURISDICTION:	Equity
JUDGMENT OF:	Hamilton J
DECISION:	Orders made for further payments out of Mareva fund for counsel's fees but with limitation on amount in respect of one memorandum of fees.
CATCHWORDS:	EQUITY [340] - Equitable remedies - Injunctions - Interlocutory injunctions - Injunctions to preserve property pending determination of rights - Mareva injunctions - Other matters - Need to fund litigation - Fees to be released must be established to be reasonable.
CASES CITED:	Lewis v Lamb [2004] NSWCA 361 Lewis v Lamb [2004] NSWSC 322 Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2004] NSWSC 64 Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2004] NSWSC 287 Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2004] NSWSC 407
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:	J T Johnson (P L Lewis & Kation P/L) S J Motbey (by phone link) & J Lyons, Solicitor (Lamru P/L) No appearance (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

WEDNESDAY, 17 NOVEMBER 2004

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 these proceedings there are Mareva orders in force. This is a fourth application for release of frozen funds for the payment of legal expenses, being counsel’s fees of Mr Stephen Motbey. There have already been three applications of this nature, all of which have been heard by me: Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2004] NSWSC 64; Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2004] NSWSC 287; and Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2004] NSWSC 407. Objection is not taken by the Lewis interests on any of the grounds adumbrated on those earlier applications. However, there are objections taken in two regards to the release of funds.

2 The second memorandum of fees in respect of which release of funds is sought is Exhibit A81. That deals with various fees incurred in the conduct of the principal proceedings and in preparation for this application between September 30 and November 15 this year. The total of that memorandum including GST is $7,006.50 and no objection is taken to the release of that amount.

3 To bring the matter right up to date as at this moment, Mr Motbey claims an additional $1,028.50 for some further preparation for the present application on 16 November 2004 and for attendance on this application today. Mr Baird, solicitor for the Lewis interests, protests that this is excessive and that attendance to this application was already adequately dealt with within the memorandum of fees for $7,006.50. I do not think that is correct and I propose to allow the release in addition of $1,028.50 as now claimed. That is on the basis that Mr Motbey will promptly forward a further memorandum to Mr Lyons for that amount. Those fees are all charged at the rate of $220.00 per hour (corresponding with $2,200 per day) which is the rate at which fees have been formerly charged by Mr Motbey, at least in relation to the amounts which have been the subject of releases from the Mareva relief.

4 The other amount in respect of which the release of funds is claimed is in respect of a memorandum of fees, which is Exhibit A79. That is in relation to proceedings in the Court of Appeal. Those proceedings were an application for leave to appeal from a decision of mine sitting in the Common Law Division, whereby I stayed the registered New Zealand judgment for $ NZ400,000 against Lamb in what have been referred to as the New Zealand proceedings: Lewis v Lamb [2004] NSWSC 322. That application for leave to appeal was recently dismissed by the Court of Appeal with costs in Lamb's favour: Lewis v Lamb [2004] NSWCA 361.

5 Mr Baird has made an open offer in court on behalf of the Lewis interests to allow the payment out in respect of that memorandum of $10,656 rather than the claimed sum of $16,167. That offer encompasses all the items in the memorandum Exhibit A79, but calculates them at the rate, not of $220 per hour (corresponding with a rate of $2,200 per day), but at the rate of $300 per hour (corresponding with a rate of $3,000 per day). The fees contained in the memorandum were calculated at the rate of $500 per hour (corresponding with a daily rate of $5,000). When I say “corresponding with a daily rate of $5,000 a day”, there is no suggestion that there was any item charged at the daily rate in that memorandum. The actual calculations were all at the rate of $500 per hour.

6 Mr Baird objects and says that that is not a reasonable rate for the payment of junior counsel. He says that the legal fees, which are to be released from Mareva relief virtually as of course, should be reasonable legal fees, and not fees at some inflated rate taking excessive sums out of the Mareva pool.

7 There is evidence before me that the rates of $500 per hour (and $5,000 per day) are agreed between Lamb and Mr Motbey. The high rate is agreed on the basis that Mr Motbey wishes to retire and essentially has retired from the legal profession and was prepared to appear on the hearing of the relevant appeal only at the higher rate stipulated. Lamb was keen to have his services because of the undoubted body of knowledge which he has concerning the matter. While the rate is high, the time spent in the preparation of the appeal would be much lower than if it were conducted by counsel other than Mr Motbey.

8 It has been submitted by Mr Baird, and the submission is accepted, that a Judge should not in circumstances such as the present act as a costs assessor. Furthermore, it must be clearly understood that, in determining this application, I am not in any way determining that Lamb is not bound by agreement to Mr Motbey to pay fees at the stipulated rate, nor am I ruling in any way upon what should be the amount in which counsel’s fees are allowed to Lamb in respect of the recent costs orders of the Court of Appeal.

9 However, there is inadequate material before me on the present application as to the reasonableness of the charges at the higher rate. Mr Motbey’s other charges have been at a much lower rate. I am unable to come to a conclusion on the present material that the charges are reasonable. Whether or not charges at those rates may be found to be reasonable on other applications is left at large. But, on the state of the evidence in the application made before me this morning, I do not propose to order release from the Mareva fund of a greater sum in respect of the relevant memorandum than the sum of $10,656, which Mr Baird has openly offered to agree to the release of.

10 The order of the Court will be that the Mareva order made on 27 June 2003 and varied by orders made on 17 February 2004, 8 April 2004 and 11 May 2004 be further varied so as to authorise and direct the trustees of the funds to pay out of the funds on or before 22 November 2004 the following additional amounts to Mr Motbey on account of counsel’s fees (and GST thereon) and disbursements (of counsel):

(a) $10,656 in respect of memorandum of fees dated 30 September 2004 unless first paid by Mr Lewis on or before 19 November 2004;
(b) $7,006.50 in respect of memorandum of fees dated 16 November 2004;
(c) $1,028.50 in respect of additional fees of this application subject to provision by Mr Motbey to Mr Lyons of a memorandum of fees to that effect.

11 Costs of this application will be reserved.

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Last Modified: 12/15/2004