Lewis v Nortex Pty Ltd [2005] NSWSC 1127 | Case summary

3081/97 PETER LAWRENCE LEWIS v NORTEX PTY LIMITED (In Liq) 1750/02 LAMRU PTY LIMITED v KATION PTY LIMITED & ORS JUDGMENT 1 HIS HONOUR: A number of the issues in this complex matter are before me again this morning. I did indicate when the matter was last before me on 13 October 2005, that I was minded to order a second mediation in the matter, an initial mediation having occurred before Sir Laurence Street before the trial began. 2 This does seem to me to be a matter crying out for settlement. The costs incurred have long since surpassed any subject matter. The matter is fixed for another three weeks next year. What is worse, there are outstanding issues between the parties in these proceedings that have been ordered to be tried separately, and in other proceedings. The matter simply looks like going on consuming court time and the parties' money to little end, when in the absence of funds the conflict looks from where I am to be conflict for the sake of conflict, and not about any real subject matter (other than the costs). It is eating up the parties' resources and it is eating up the parties' energies, which could, I should have thought, been better applied to the conduct of businesses which the parties have in the past proved successful in conducting when not engaged in conflict with each other. 3 However, I find there is a situation which is only too usual in these proceedings, when matters are stood over in the hope that discussion will take place between the parties. It would seem that no discussion has taken place on the subject of mediation between 13 October and this morning, 4 November, when the matter is back before the Court. Some discussion has taken place this morning. At one stage I adjourned, leaving open the telephone link established for contact with Mr Motbey, of counsel for Lamru, in North Queensland. At long last some discussion did take place between the parties concerning the prospects of mediation. 4 As a result of that discussion, no party asks me to order a mediation, and all parties express reluctance. The mediation would not be an ordinary or a cheap one, because it could not be conducted in two or three hours, or in a day. That is because of the vast amount of material in this case, some significant part at least of which the mediator would have to absorb and the parties would have to traverse in discussing the matter with each other and with the mediator. 5 In those circumstances, with some reluctance I have decided that it would not be appropriate for me to order a mediation in the present circumstances under the powers conferred by s 26 of the Civil Procedure Act 2005, although I have in other cases ordered mediation over opposition, including in one instance ordering a second mediation: see Remuneration Planning Corp Pty Ltd v Fitton [2001] NSWSC 1208; Singh v Singh [2002] NSWSC 852; Unconventional Conventions Pty Ltd v Accent Oz Pty Ltd [2004] NSWSC 1050. The other complicating factor that discourages the Court from ordering a mediation is that that would then lead to considerable argument as to how the mediation was to be funded. This would include argument as to whether there should be a release for that purpose from funds frozen by Mareva relief and various other issues as to the provision of the necessary funds for the mediation. 6 The only matter of any encouragement that I have heard after this morning's belated discussions is that there is some interest between the parties in the matter being settled. I only hope that that can be seriously pursued. For it to be pursued, the parties would, while the matter is out of court, have to be prepared to take the trouble to speak to each other, instead of leaving any discussion between them until the morning of the next hearing that is fixed for next year. I can only hope, for their own sakes more than anyone else's, that they will take the trouble to do so, including congregating with their legal representatives in the same place, so that the discussions can take place face to face. I cannot see any realistic possibility of a matter of the complexity of this matter being settled without face to face engagement. I can only encourage them to do so. I shall say only one other thing pertinent to settlement. If there is anyone out there who thinks he has a lay down misere to receive a bonanza out of a costs order in these proceedings, he should think again. I am the person who will decide costs in these proceedings and it certainly is not clear to me at this stage how the costs situation will fall out. 7 I had earlier expressed a hope that I should be able to finalise at least the orders flowing from the trial that I have conducted before the end of this year, as I am constantly alarmed by the protraction of this matter. There are now four matters outstanding. I list them as follows: (1) declaratory relief; (2) interest; (3) the figures in order 9; (4) costs. 8 The matter I have numbered (1) is the following. I have, as I earlier indicated I should, circulated to the parties a draft of the orders that I propose to make, subject to final argument. Belatedly, Mr Motbey has sought to argue that the Court does not have power, or that it is inappropriate for the Court, to make at least some of those declaratory orders. I have already in one recent judgment, Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2005] NSWSC 1062, precluded arguments being brought late in this litigation. I have certainly had some inclination to decline to hear Mr Motbey's arguments about declarations on the same basis. However, quite apart from any other reasons why I might decide that I should hear them, the fact is that, if a question is raised as to the Court's power to make particular orders, the Court cannot proceed as a practical matter to do so, without giving serious consideration to the question of whether it does have the power. It will be better if it does so with the assistance of submissions made by the parties. I therefore regard matter number (1) as open. 9 Matter (2) is as to interest. The argument there is as to whether interest on the sums to be paid should be calculated as simple interest, or whether it should be calculated as compound interest, because of the trust or fiduciary element in respect of these moneys. That question is undoubtedly open. I believe that I now have all written submissions from all parties relating to that. 10 The third matter is the question of the figures in my proposed order 9, ie, the figures by reference to which a declaration is to be made as to the balance of the loan accounts with Nortex of Lamru and Kation respectively as at the date of the winding up of Nortex. On this matter, despite the passage of considerable time, the parties' submissions are simply not complete. There are discussions continuing to take place between the liquidator and the Lewis interests as to whether they can agree on the figures proposed to be put forward. I remain at the moment quite unclear as to the degree to which what will be put forward on behalf of the liquidator and/or the Lewis interests differs from what is put forward by Lamru. The simple fact of the matter is that submissions on this matter are not concluded. 11 The fourth matter is costs, which it was hoped at one stage would be the only matter to be debated next year. Despite my earlier hopes that the first three matters could be resolved and final orders made this year, it seems that the parties have not brought themselves to a situation in which that can be done. The Court has, and I have as a Judge of the Court, many other matters to attend to. Regrettable as I find it, I do not think I can responsibly devote further time this year or early next year to dealing with these matters that the parties have not got themselves fully ready to deal with. 12 In the circumstances, I propose that the hearing - the proposed dates for which are now 13 days commencing on 18 April 2006 - should be the time at which all four of the matters I have mentioned above are dealt with. 13 Mr Cotman, of Senior Counsel for the Lewis interests, has indicated that his clients do not intend to be represented by lawyers or in person at that hearing. They have, however, prepared full written submissions. Those written submissions, with one exception that is expected in the near future, are already in a folder that has been handed to me. The last submission of theirs, when received, will be put in that folder. Mr Cotman indicates to me in open court that, despite his clients' absence from oral submissions, I am asked to take into account the submissions in the folder on the outstanding issues. He also indicates definitively that those submissions are the only submissions on behalf of his clients that he wishes to be taken into account as to the four outstanding issues. 14 Although that course is somewhat unusual, I am prepared to accede to that course in this case. The fact that the Lewis interests will not be represented at that oral hearing will, I hope, mean that I shall not need to use all the 13 days that I have set aside. But, in view of the history of this matter, I propose to keep them set aside. The date of 18 April was selected in discussions between the lawyers and my staff as a commencing day suitable to Mr Ventry Gray, of counsel for the liquidator. Mr Motbey has asked if the commencement of oral submissions can be delayed for one day until 19 April. I am prepared to adopt that course, since I have a large amount of written material to absorb. The hearing will commence on 18 April 2006, but I shall employ that day in absorbing the written material. None of the parties need to attend until 10am on 19 April 2006.

Lewis v Nortex Pty Ltd

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