Lewis v Lamru Pty Ltd; In the Matter of Lewis

REASONS FOR JUDGMENT 1 I have before me an Interlocutory Application filed by the respondent in the proceeding, Lamru Pty Ltd, for an order that a sum of money paid into Court by the applicant in the proceeding, Peter Lawrence Lewis (Mr Lewis) be paid out to Lamru Pty Ltd. The Interlocutory Application was filed on 12 August 2011 and was supported by an affidavit sworn by Russell William Lamb on 11 August 2011. 2 The disputes involving Mr Lewis, Lamru Pty Ltd and Mr Lamb have a significant history in the Supreme Court of New South Wales. 3 The proceeding which I heard and ultimately determined on 6 July 2011 (Lewis v Lamru Pty Ltd; In the Matter of Lewis [2011] FCA 758) was an application by Mr Lewis to set aside a Bankruptcy Notice which had been served upon him by Lamru Pty Ltd. On 6 July 2011, I dismissed Mr Lewis' application with costs. When I delivered my judgment on 6 July 2011, Counsel for Mr Lewis sought an extension of the time for compliance with the Bankruptcy Notice for a period of seven days in order to enable Mr Lewis and his advisers to consider my judgment with a view to a potential appeal. Counsel informed me on that occasion that his client would be content for that extension requested by him to be conditional upon payment into Court, within 24 hours of 6 July 2011, of the amount claimed in the Bankruptcy Notice. 4 After some further discussion on 6 July 2011, I made the following orders: 1. ORDER that the Application be dismissed. 2. ORDER that the applicant pay the respondent's costs of and incidental to the Application. 3. ORDER that, upon condition that the applicant pay into Court by 4.00 pm on Friday 8 July 2011 the amount of $424,969.29 plus interest for the period from 1 July 2010 up to and including Friday 8 July 2011 at the rate required by order 3(f) of the orders of the New South Wales Court of Appeal made on 12 June 2009, the time for compliance with Bankruptcy Notice No 4655 issued on 19 October 2010 (the Bankruptcy Notice) be extended up to and including Wednesday 13 July 2011. 4. DIRECT that, in the event that the applicant appeals from the judgment delivered by Foster J this day and wishes to seek a further extension of the time for compliance with the Bankruptcy Notice, such application for further extension be made to a Judge acting on behalf of the Full Court. 5 In the course of the exchange between Counsel for Mr Lewis and me on 6 July 2011, Counsel for Mr Lewis said that his client was offering the condition that the money be paid into Court so that the position of Lamru Pty Ltd would be protected. He said that, if an appeal were subsequently lodged, an appropriate application could be made to a Judge sitting as the Full Court for an extension of the time for compliance with the Bankruptcy Notice pending the hearing of the appeal from my judgment. 6 As matters unfolded, the amount referred to in the Bankruptcy Notice plus interest was paid into Court within the time specified in the orders which I made on 6 July 2011. 7 The present Application has resulted from the circumstance that the amount claimed in the Bankruptcy Notice has in fact been paid into Court. Lamru Pty Ltd seeks an order that the moneys be paid out to it. 8 Yesterday, on 30 August 2011, the solicitor for Mr Lewis, Mr Chapman, filed and served an affidavit which raised some matters collateral to the present Application. I do not need to deal with that affidavit in great detail. It is sufficient for present purposes for me to say that the affidavit establishes that, on 18 August 2003, the High Court of New Zealand entered judgment in the amount of NZ$400,000 plus interest in favour of Mr Lewis against Mr Lamb. That judgment was registered in the Supreme Court of New South Wales on 1 April 2004. The affidavit of Mr Lewis' solicitor also establishes that, in recent times, attempts to recover the amount of that judgment from Mr Lamb have been undertaken by Mr Lewis. Included amongst those attempts was the obtaining of a garnishee order against Lamru Pty Ltd on the basis that Lamru Pty Ltd owes money to Mr Lamb and that Mr Lewis is entitled to attach those moneys by way of garnishee order. 9 The affidavit of Mr Chapman, which was filed yesterday, has spawned an affidavit from Mr Lamb which has been sworn this morning. That affidavit traverses a number of matters designed to answer the affidavit filed by Mr Chapman yesterday. In very broad terms, the affidavit of Mr Lamb seeks to establish that, through a series of transactions between him and Lamru Pty Ltd, no money is due from Lamru Pty Ltd to him. 10 When the matter was called on this morning, Counsel for Mr Lewis objected to my receiving into evidence the affidavit of Mr Lamb or, in the alternative, sought an adjournment of the hearing in order to enable his client and Mr Lewis' legal advisors to consider the contents of Mr Lamb's affidavit sworn this morning, with particular emphasis on certain details of financial transactions as between Lamru Pty Ltd and Mr Lamb provided in that affidavit. 11 It seems to me that I should allow some time for Mr Lewis to consider his position and, in particular, to consider whether and in what way he might wish to answer the material filed this morning. However, in allowing that time, I also think that it needs to be remembered that this material was filed in answer to the affidavit filed by Mr Chapman yesterday, which was some two and a half weeks after the present Application was filed and at the last possible moment before this morning's hearing. It is really the late service of material on behalf of Mr Lewis that has caused the adjournment which he now seeks. 12 I propose to grant the adjournment sought but, in the circumstances, to do so on the basis that Mr Lewis pay the costs occasioned by the adjournment. 13 There will be orders accordingly. 14 Before I leave the matter, I need to refer to a circumstance which has troubled me somewhat. When the offer of payment into Court as a condition of an extension of time for compliance with the Bankruptcy Notice was made by Counsel for Mr Lewis on 6 July 2011, I was not informed that, should the payment actually be made, that circumstance would be relied upon as satisfaction of the amount claimed and the requirements of the Bankruptcy Notice based upon, apparently, some old law. What I was told on 6 July 2011 was that Mr Lewis had under consideration an appeal from my judgment and that, in recognition of the fact that any extension of the time for compliance with the Bankruptcy Notice would cause some prejudice to Lamru Pty Ltd, Mr Lewis was offering to pay the money into Court, in effect, to mitigate that prejudice. 15 I think that it is, at the very least, regrettable that I was not told that those advising Mr Lewis had in mind arguing that the payment in itself would constitute satisfaction of the Bankruptcy Notice. I must say that I had the impression at the time that the payment was being offered as the price for the extension of time which I ordered on that occasion, and for no other reason. It may be that the substantive rights of the parties are not altered in any event because Mr Lewis may well have been entitled to pay the money into Court without any permission or order from the Court. However, the position is most unsatisfactory. I should also record that, on 28 June 2011, at the conclusion of the hearing before me on that day, Counsel offered that Mr Lewis would pay into Court the amount specified in the Bankruptcy Notice as a gesture of good faith. I rejected that overture on that occasion. It now seems to me that the proffered earnest gesture of good faith had also been advanced on that occasion for the purpose of placing Mr Lewis in a position of advantage by giving him a basis for arguing that the Bankruptcy Notice would have been satisfied had permission to pay been given by the Court. This was not revealed on that occasion, either. 16 For the reasons I have explained, I will adjourn this proceeding to a date to be fixed. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster.