Bilioara v Leisure Investments - [2001] NTCA 8

Bilioara v Leisure Investments [2001] NTCA 8
PARTIES:BILIOARA PTY LIMITED

v
LEISURE INVESTMENTS PTY LIMITED

TITLE OF COURT:  COURT OF APPEAL OF THE NORTHERN TERRITORY
JURISDICTION:  CIVIL APPEAL FROM THE SUPREME COURT EXERCISING TERRITORY JURISDICTION
FILE NO:AP1 of 2001
DELIVERED:  6 September 2001
HEARING DATES:  31 July & 1 August 2001
JUDGMENT OF:  MILDREN, BAILEY & RILEY JJ
CATCHWORDS:
REPRESENTATION:
Counsel:
Appellant:P Bick QC and A Young
Respondent:  D Jackson QC and AH Silvester
Solicitors:
Appellant:Ward Keller
Respondent:  Hunt & Hunt
Judgment category classification:    B
Judgment ID Number:  Mil01249
Number of pages:  24

IN THE COURT OF APPEAL
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
AP1 of 2001
Bilioara v Leisure Investments [2001] NTCA 8

BETWEEN:
BILIOARA PTY LTD

Appellant
AND:
LEISURE INVESTMENTS PTY LTD

Respondent

CORAM: MILDREN, BAILEY & RILEY JJ
REASONS FOR JUDGMENT
(Delivered 6 September 2001)
THE COURT:

This is an appeal from the decision of Thomas J. The respondent, Leisure Investments Pty Ltd (hereinafter called Leisure Investments), brought proceedings against Bilioara Pty Ltd, (hereinafter called Bilioara) seeking certain declarations relating to the dissolution of the partnership between Leisure Investments and Bilioara and as to the validity of a notice of exercise of an option by Leisure Investments to purchase Bilioara's interest in the partnership. Her Honour delivered reasons for judgment in on 27 November 2000 and after hearing further submissions, made inter alia the following declarations on 6 December 2000:
1.      The partnership between the plaintiff (respondent) and                   defendant (appellant) constituted by the deed dated 29 May            1990 ("the partnership deed"):
(a)     was dissolved on 26 November 1998;
(b) thereafter continued as a partnership at will pursuant to section 31 of the Partnership Act ("the Act");
         (c)     was dissolved on 1 July 1999;
(d) thereafter continued as a partnership at will pursuant to section 3l of the Act;
(e)     was dissolved on 31 December 1999.
2.      The notice dissolving the partnership on 31 December 1999           incorporating the notice of the exercise of the option by the           plaintiff to purchase the defendant's interest in the partnership                and the partnership assets conferred by clause 15(a) of the           partnership deed was validly given and exercised.
It is common ground that there is a slip in the formal order made on 6 December 2000 in that the partnership was dissolved not on 26 November 1998 as declared in paragraph 1(a) of the order, but was dissolved on 26 September 1998.
It is common ground that the appeal in this matter raises two questions:
1.Whether clauses 14(d) and 15(a) of the partnership Deed dated 29 May 1990 are inconsistent with the partnership at will? It is common ground that if the answer to this question is yes, the appeal must succeed and the declaration of the validity of the notice of the exercise of the option conferred by clause 15(a) of the Deed must be answered in the negative.
2.If the clauses are not inconsistent with the partnership at will, the second question is whether or not her Honour was…

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: [2001] NTCA 8
Decision Date: 6 September 2001

CaseChat Overview and Summary

This is an appeal from the decision of Thomas J. Bilioara Pty Ltd (the appellant) appeals against the decision of the respondent, Leisure Investments Pty Ltd, that it had validly exercised its option to purchase Bilioara's interest in the partnership under clause 15(a) of the partnership Deed dated 29 May 1990. The appeal raises two questions: 1) whether clauses 14(d) and 15(a) of the partnership Deed are inconsistent with the partnership at will; and 2) whether the learned trial Judge was in error in finding that there was an irreconcilable deadlock between the parties. If the clauses are not inconsistent with the partnership at will and there was no irreconcilable deadlock, then the exercise of the option would be invalid. If the appeal succeeds on either of these grounds, a third question arises as to whether the respondent is entitled to a Syers order.

The Court found that the relevant clauses were not inconsistent with the partnership at will and that the learned trial Judge's finding of an irreconcilable deadlock was correct. The Court held that a right of pre-emption is an incidence of a partnership agreement which is not necessarily inconsistent with a partnership at will. The Court also held that the partnership was deadlocked and unworkable due to unresolved matters, the refusal of Bilioara to pass the 1999 budget, and the irreconcilable deadlock which had existed between the parties since September 1998. The Court rejected the appellant's submissions that there was no irreconcilable deadlock and that the budget was not relevant to the running of the business. The Court concluded that the respondent had acted bona fide and not for the purpose of deriving an undue advantage from the state of the firm's engagements.

Accordingly, the appeal is dismissed with costs, except to the extent that it is necessary to correct the slip in paragraph 1(a) of the learned trial Judge's order of 6 December 2000 by deleting "26 November 1998" and replacing it with "26 September 1998".

Orders