Babcock & Brown Pty Ltd v Arthur Andersen - [2010] QSC 287

SUPREME COURT OF QUEENSLAND

CITATION:

Babcock & Brown P/L & Ors v Arthur Andersen [2010] QSC 287

PARTIES:

BABCOCK & BROWN PTY LTD ACN 002 332 345
(plaintiff)
and
BBI (DBCT) INVESTOR SERVICES PTY LTD ACN 052 156 082 (AS TRUSTEE FOR BBI (DBCT) TRUST)
(second plaintiff)
and
BBI (DBCT) MANAGEMENT PTY LTD ACN 097 698 916
(third plaintiff)
v
ARTHUR ANDERSEN
(defendant)

FILE NO/S:

BS7604/05

DIVISION:

Trial Division

PROCEEDING:

Applications filed 30 April 2009 and 7 August 2009

ORIGINATING COURT:

Supreme Court, Brisbane

DELIVERED ON:

5 August 2010

DELIVERED AT:

Supreme Court, Brisbane

HEARING DATE:

23, 24 November 2009; subsequent written submissions

JUDGE:

Margaret Wilson J

ORDER:

CATCHWORDS:

PARTNERSHIP – ACTIONS BY AND AGAINST PARTNERS – actions and proceedings against firms and individual partners – in name of firm or of individual partners – where partnership had been dissolved – whether actions in breach of contract or negligence could be brought against the former partners in the firm name – whether cause of action in negligence accrued before or after dissolution of partnership

PROCEDURE – SUPREME COURT PROCEDURE – Queensland – rule 114 of the Uniform Civil Procedure Rules – service – service in relationship to a partnership – where partnership had been dissolved for more than five years when proceeding commenced – whether it was necessary to serve former partners individually

PROCEDURE – SUPREME COURT PROCEDURE – Queensland – rule 24 of the Uniform Civil Procedure Rules –claim – where former partners and insurer were aware of prospect of a claim against them – where the plaintiffs made a decision not to serve the claim initially – where two renewals of claim granted – whether the court should exercise its power to set aside orders renewing claim – whether there was good reason to renew the claim

Income Tax Assessment Act 1936 (Cth), s 251M
Income Tax Assessment Act 1997 (Cth), ss 703-15 and 995-1(1)
Partnership Act 1891 (Qld), ss 5, 12, 13, 15, 20, 26, 41, and 65
Partnership Act 1891-1975 (SA), ss 9, 10, 12 and 17
Partnership Act 1958 (Vic), ss 5, 13, 14, 16, 21, 27, 42
Partnership Act 1895 (WA), ss 16, 28
Rules of the Supreme Court 1971 (WA), Order 18 r 4(3)
Supreme Court Civil Rules 1987 (SA), r 36.01
Supreme Court of Queensland Act 1991 (Qld), ss 88 and 89
Supreme Court of Queensland Act 1991 (Qld) Rules of the Supreme Court, Order 54 , rr 1 and 5
Uniform Civil Procedure Rules 1999 (Qld), rr 5, 16, 24, 64, 69, 69, 74, 83, 85, 86, 87, 88, 89, 114, 116, 118, and 667

Rules of the Supreme Court 1962 (UK) (“RSC”), Order 81 r 1
Rules of the Supreme Court 1875 (UK) (“RSC”), Order XLVIII.a
Rules of the Supreme Court 1877 (UK) (“RSC”), Order IX r 6

Chohan Clothing Company (Manchester) Ltd v Fox Brooks Marshall (a firm) [1997] EWCA Civ 2684; [1997] All ER (D) 62, considered
Madden v Kirkegard Ellwood…

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.

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Details

Case: [2010] QSC 287
Decision Date: 5 August 2010

CaseChat Overview and Summary

The case of Babcock & Brown Pty Ltd v Arthur Andersen involved a dispute regarding actions that could be brought against former partners of a dissolved partnership. Babcock & Brown, the plaintiff, sought to hold Arthur Andersen, a former partner in a dissolved partnership, liable for actions taken during the partnership. The legal issues in the case centred on whether actions for breach of contract or negligence could be brought against former partners in the firm's name after the partnership had been dissolved. A secondary issue was determining when the cause of action in negligence accrued in relation to the dissolution of the partnership. The Supreme Court of Queensland was tasked with resolving these issues.

The court examined whether the actions against Arthur Andersen, brought in the firm's name, were permissible given that the partnership had been dissolved. It also considered the procedural requirements for serving claims against former partners, particularly under rule 114 of the Uniform Civil Procedure Rules. Additionally, the court addressed whether the renewal of a claim under rule 24 of the Uniform Civil Procedure Rules was justified when the parties were aware of the potential claim. The court's reasoning involved assessing the necessity of individual service on former partners and whether there was good reason to renew the claim under the rules.

The Supreme Court found that the actions for breach of contract and negligence could proceed against the former partners in the firm's name, as the partnership dissolution did not preclude such claims. It held that service on former partners was not necessary if the partnership had been dissolved for more than five years when the proceedings commenced. The court also determined that there was no good reason to set aside the orders renewing the claim, as the renewals were granted with awareness of the potential claim against the defendants. The final outcome allowed Babcock & Brown to proceed with its claims against Arthur Andersen for actions taken during their partnership.

Orders