Kation Pty Ltd v Lamru Pty Ltd (No 3) [2012] NSWSC 1105

Supreme Court New South Wales

Medium Neutral Citation: Kation Pty Ltd v Lamru Pty Ltd (No 3) [2012] NSWSC 1105 Hearing dates: 6 September 2012 Decision date: 19 September 2012 Jurisdiction: Equity Division Before: Ball J Decision: See paragraphs 32 and 33 of this judgment Catchwords: No issue of principle Legislation Cited: Civil Procedure Act 2005 (NSW) Cases Cited: Kation Pty Ltd v Lamru Pty Ltd (2009) 257 ALR 336; [2009] NSWCA 145 Kation Pty Ltd v Lamru Pty Ltd (No 2) [2009] NSWCA 428 Kation Pty Ltd v Lamru Pty Ltd (No 2) [2012] NSWSC 356 Lewis v Nortex Pty Ltd (In Liq) [2004] NSWSC 1143 Lewis v Nortex Pty Ltd (In Liq) [2006] NSWSC 480 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Category: Principal judgment Parties: Kation Pty Limited (Plaintiff/Cross Defendant) Lamru Pty Limited (First Defendant/First Cross Claimant) Russell William Lamb (Second Defendant/Second Cross Claimant) Representation: JT Johnson (Plaintiff/Cross Defendant) MW Young / I Tam (Defendants/Cross Claimants) Toomey Pegg (Plaintiff/Cross Defendant) Lyons & Lyons (Defendants/Cross Claimants) File Number(s): 2002/62736

Judgment

Introduction 1On 19 June 1991, the cross claimant, Lamru Pty Ltd, a company controlled by Mr Russell Lamb, acquired a 40 percent interest in the Nortex Unit Trust (the Trust) from Hirmanu Pty Ltd, a company controlled by Mr Graeme Dufty. The remaining 60 percent of the units in the Trust were owned by Kation Pty Ltd, a company controlled by Mr Peter Lewis. Nortex Pty Ltd, as trustee of the Trust, carried on a successful business of importing and selling manchester products throughout Australia. 2Mr Lamb and Mr Lewis fell out and, on 8 July 1997, Nortex was placed in liquidation. The parties have been in litigation ever since. 3These proceedings were commenced by Kation on 27 June 2002. Essentially, Kation claimed that it had lent Mr Lamb or Lamru the sum of $250,000 to assist Lamru to pay the purchase price for the units in the Trust acquired by Lamru and that Lamru had not repaid that loan. Lamru and Mr Lamb filed a cross-claim on 27 July 2006. By that cross-claim, Lamru alleges that, by an agreement made between Mr Lewis on behalf of Kation and Mr Lamb on behalf of Lamru at the time Lamru acquired its units in the Trust, it was agreed that each would lend money to Nortex in proportion to the number of units they held in the Trust, that those loans would be interest free, but that, to the extent that one of the unitholders lent more than its proportionate share in any one financial year, the other unitholder would pay that unitholder the amount over lent and interest on that amount calculated in accordance with Commonwealth Bank (CBA) rates. Lamru claims a total of $1,317,990.64 (inclusive of interest) as at the date the cross-claim was heard (6 September 2012) together with interest from that date to the date of judgment. 4For reasons which are unclear, an order was made that Kation's claim should be heard separately from Lamru's cross-claim. I heard Kation's claim on 11 and 12 April 2012 and delivered judgment in Lamru's favour on 17 April 2012: see Kation Pty Ltd v Lamru Pty Ltd (No 2) [2012] NSWSC 356. This judgment concerns the cross-claim.