Abignano Nominees Pty Ltd v Sheripeter Pty Ltd - [2016] NSWSC 1378

Supreme Court

New South Wales

Medium Neutral Citation: Abignano Nominees Pty Ltd v Sheripeter Pty Ltd [2016] NSWSC 1378
Hearing dates: 5-7 September 2016
Decision date: 30 September 2016
Jurisdiction: Equity
Before: White J
Decision:
Plaintiff to bring in short minutes of order in accordance with reasons.

Catchwords: PARTNERSHIP — Taking of account — Plaintiff and defendant entered into an oral partnership agreement for the acquisition and development of a property — Partners agreed to contribute equally to the costs of the purchase and development of the property — Partners agreed that they would be entitled to share in the profits equally — Partners entered into a partition agreement — Partners dispute how the costs, expenses and profits of the partnership should be accounted for and divided between the parties on the final accounting — Whether payments made during the course of the partnership constituted advances or contributions of capital — Payments better characterised as advances not contributions to capital — Whether the values of distributed units should be determined according to their true market value or the values assigned in the partition agreement — Written partition agreement not intended by the parties to be a complete record of their agreement — Parties agreed orally that the values of the units would be reassessed on a final accounting —Oral agreement not inconsistent with the terms of the written agreement —Values of the distributed units to be determined according to their true market value — Whether the account should recognise a liability of the partnership to the defendant’s building company in respect of a margin on construction costs — The partners agreed that the builder would not be entitled to a margin on construction costs — No liability should be included on the taking of the account for a liability to pay a margin to the builder — Whether an adjustment is required in respect of the refund received by the defendant for GST paid by the partnership —Tax treatment of units distributed to individual partners does not affect an assessment of whether profits have been distributed equally — No adjustment to be made on the taking of accounts in respect of the GST issue identified by the plaintiff
Legislation Cited: Partnership Act 1892 (NSW)
Duties Act 1997 (NSW)
A New Tax System (Goods and Services Tax) Act 1999 (Cth)
Cases Cited: Maybury v Atlantic Union Co Ltd (1953) 89 CLR 507
Hoyt’s Pty Ltd v Spencer (1919) 27 CLR 133
B & R Stevens Transport Pty Ltd v Burkitt [2016] NSWCA 259
Texts Cited: K L Fletcher, The Law of Partnership in Australia, (9th ed 2007, LawBook Co)
R, l’Anson Banks, Lindley and Banks on Partnership, (19th ed 2010, Thomson Reuters)
Category: Principal judgment
Parties: Abignano Nominees Pty Ltd (Plaintiff)
Sheripeter Pty Ltd (Defendant)
Representation:
Counsel:
S A Wells (Plaintiff)
R Weaver (Defendant)
Solicitors:
Macpherson & Kelley Lawyers (Plaintiff)
W H Parsons & Associates Solicitors (Defendant)

File Number(s): 2015/109138

Judgment

HIS HONOUR: This is a partnership dispute. The plaintiff, Abignano…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read Abignano Nominees Pty Ltd v Sheripeter Pty Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2016] NSWSC 1378
Decision Date: 30 September 2016

CaseChat Overview and Summary

In this case, the plaintiff, Abignano Nominees Pty Ltd, and the defendant, Sheripeter Pty Ltd, entered into an oral partnership agreement for the acquisition and development of a property. The partners disputed how the costs, expenses, and profits of the partnership should be accounted for and divided between the parties on the final accounting. The legal issues that the court was required to decide included whether certain payments made during the course of the partnership should be characterised as advances or contributions of capital, whether the values of distributed units should be determined according to their true market value or the values assigned in the partition agreement, whether the partnership account should recognise a liability to the defendant’s building company in respect of a margin on construction costs, and whether an adjustment is required in respect of the refund received by the defendant for GST paid by the partnership.

The court found that the payments made during the partnership were better characterised as advances rather than contributions to capital. It was also determined that the written partition agreement was not intended by the parties to be a complete record of their agreement, and that the parties had orally agreed that the values of the units would be reassessed on a final accounting. The court held that the values of the distributed units should be determined according to their true market value. Additionally, the court found that the partners had agreed that the builder would not be entitled to a margin on construction costs, and therefore, no liability should be included on the taking of the account for a liability to pay a margin to the builder. Lastly, the court held that the tax treatment of units distributed to individual partners does not affect an assessment of whether profits have been distributed equally, and no adjustment should be made on the taking of accounts in respect of the GST issue identified by the plaintiff.

In conclusion, the court determined that the values of the distributed units should be determined according to their true market value, and that no liability should be included on the taking of the account for a liability to pay a margin to the builder. The court also held that no adjustment should be made on the taking of accounts in respect of the GST issue identified by the plaintiff.

Orders