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Cobanov v Josifovski (No 2)

Cobanov v Josifovski (No 2)

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SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Cobanov v Josifovski (No 2)
Citation:	[2021] ACTSC 111
Hearing Dates:	21 October 2019 – 24 October 2019, 16 June 2020
Submissions Last Received:	1 July 2020
DecisionDate:	3 June 2021
Reasons Date:	4 June 2021
Before:	Loukas-Karlsson J
Decision:	See [853]
Catchwords:	PARTNERSHIP – whether common intention of parties to form partnership – whether property ‘partnership property’ – whether express term illegal or unenforceable as against public policy – where express term is for avoidance of paying capital gains tax – whether owed fiduciary obligations – remedies for breach of fiduciary duties – account of profits – equitable compensation – restitution – resulting trust CONTRACT – standard form building contract – whether inclusions list incorporated – whether rectification damages warranted – where owner sold the property TORTS – NEGLIGENCE – standard of care
Legislation Cited:	Building Act 2004 (ACT) ss 42, 48 Civil Law (Property) Act 2006 (ACT) ss 201, 204 Civil Law (Wrongs) Act 2002 (ACT) ss 42, 45 Court Procedure Rules 2006 (ACT) Pts 2.8, 2.9, r 1241 Evidence Act 2011 (ACT) s 135 Income Tax Assessment Act 1936 (Cth) Pt IVA, ss 177A, 177C, 177D, 177F Income Tax Assessment Act 1997 (Cth) ss 102.5, 102.20, 104.5, 104.10, 108.5, 118.110 Partnership Act 1963 (ACT) ss 5, 6, 24, 33, 39, 44 Statute of Frauds (1677) (29 Car 2)
Cases Cited:	Bellgrove v Eldridge (1954) 90 CLR 613 Birtchnell v Equity Trustees Executors and Agency Co Ltd [1929] HCA 24; 42 CLR 384 Black Uhlans Inc v NSW Crime Commission [2002] NSWSC 1060 Bloch v Bloch (1981) 189 CLR 390 Blundell v Leighton [2013] ACTCA 1 Brenner v First Artists Management Pty Limited [1993] 2 VR 221 Brooks v Burns Philip Trustee Co Ltd [1969] HCA 4; 121 CLR 432 Bryant Bros v Thiele [1923] SASR 393 Calverley v Green (1984) 155 CLR 242 Central Coast Leagues Club Limited v Gosford City Council (Unreported, Supreme Court of New South Wales, Giles CJ, 9 June 1998) Cesare v Deluxe Motors Pty Ltd (1996) 13 BCL 136 Chan v Zacharia [1984] HCA 36; 154 CLR 178 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 Cobanov & Anor v Josifovski [2019] ACTSC 269 Colburn v Simms (1843) 2 Hare 543 Comlin Holdings Pty Ltd v Metlej Developments Pty Ltd [2018] NSWSC 761 Commissioner of Taxation v Hart [2004] HCA 26; 217 CLR 216 Cordon Investments Pty Ltd v Ledesor Properties Pty Ltd [2012] NSWCA 184 Craig v Silverbrook [2013] NSWSC 1687 Dart Industries Inc v Decor Corporation Pty Ltd (1993) 179 CLR 101 David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; 175 CLR 353 Director of Public Prosecutions (NSW) v Elskaf [2012] NSWSC 21 Director of War Services Home v Harris (1986) QdR 275 Dr Martens Australia Pty Ltd v Bata Shoe Co of Australia Pty Ltd [1997] FCA 505; 75 FCR 230 Duke of Westminster’s Case [1936] AC…

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: [2021] ACTSC 111
Decision Date

CaseChat Overview and Summary

John Ivo Cobanov and A-Shell Homes Pty Ltd (the plaintiffs) brought a claim against Kiki Josifovski (the defendant) concerning the construction of a residential property in the suburb of Casey (the property). The plaintiffs claimed that the first plaintiff entered into a partnership with the defendant to develop and sell the property. The plaintiffs also claimed that the second plaintiff performed works that were additional (the Additional Works) to the HIA ACT Residential Building Contract for New Dwellings (HIA Contract) that was entered into by the first plaintiff on behalf of the second plaintiff with the defendant. The defendant denied any the existence of any partnership agreement and contended that the relationship between the parties was an ordinary arms-length builder/owner relationship. The defendant further disputed any liability for the Additional Works claim.The defendant also brought a counterclaim against the plaintiffs alleging that the second plaintiff breached the HIA Contract by failing to complete the contract requirements as to stages of the construction. The counterclaim also alleged that the second plaintiff failed to take reasonable care in undertaking the construction works which were the subject of the HIA Contract and that the negligence of the second plaintiff caused the defendant to suffer loss and damage. The court was not persuaded on the balance of probabilities that the plaintiffs had established the existence of a partnership agreement between the first plaintiff and the defendant. The court found that the evidence did not support a finding that the parties entered into a partnership agreement. The court concluded that even if a partnership had been established, it would have been void for illegality or unenforceable as it was against public policy reasons. The counterclaim was not made out on the balance of probabilities and the defendant was not entitled to the relief sought. The orders of the court were that judgment be entered for the defendant on the plaintiffs' claim, judgment be entered for the plaintiffs on the defendant's counterclaim, and the defendant pay the plaintiffs' costs of the application for an interim injunction.

Orders