Cole v Lee - [2017] NSWSC 1011

Supreme Court

New South Wales

Medium Neutral Citation: Cole v Lee [2017] NSWSC 1011
Hearing dates: 30 May 2017
Date of orders: 02 August 2017
Decision date: 02 August 2017
Jurisdiction: Equity
Before: Parker J
Decision:
Prayers for relief 1, 3 and 4 of Summons dismissed

Catchwords: Partnerships and Joint Ventures – validity of notice of determination – statutory termination – “retirement” – “dissolution” – Partnership Act 1892 (NSW), s 32 – “fixed term” – “single adventure or undertaking” – “undefined time” – Partnership Act 1892 (NSW), s 26 – “no fixed term”
Legislation Cited: Partnership Act 1890 (UK), s 27
Partnership Act 1892 (NSW), ss 17, 19, 25, 26, 27, 31, 32, 33, 34, 35, 37, 38, 39, 42, 43
Partnership Bill 1880 (UK), ss 44, 45
Partnerships Bill 1883 (UK), ss 45, 46
Interpretation Act 1987 (NSW), s 34(1)(b)
Cases Cited: ACE Project Group Pty Ltd v Ginger Development Enterprises Pty Ltd [2006] NSWSC 962
Giltej Applications Pty Ltd v Rosaria Grace Moschella [2005] NSWSC 599
Maillie v Swanney 2000 SLT 464
Moss v Elphick [1910] 1 KB 465
Moss v Elphick [1910] 1 KB 846
Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462
Williams v Nicoski [2003] WASC 131
Texts Cited: Banks, R C I’Anson, Lindley & Banks on Partnership (19th ed, 2010, Thomson Reuters)
House of Commons Debate (21 July 1882) vol 272
Sir Frederick Pollock, A Digest of the Law of Partnership (2nd ed, 1880, Stevens and Sons)
Sir Frederick Pollock, A Digest of the Law of Partnership (3rd ed, 1884, Stevens and Sons)
Sir Nathaniel Lindley, A Treatise on the Law of Partnership (6th ed, 1893, Sweet and Maxwell)
Category: Principal judgment
Parties: Jacquelene Miriam Cole (Plaintiff)
Adrian Wei-Chun Lee (First Defendant)
Richard Pezhman Samimi (Second Defendant)
Representation:
Counsel:
MW Young SC (Plaintiff)
RA Parsons (Defendants)
Solicitors:
WKA Legal (Plaintiff)
Kells Lawyers (Defendants)

File Number(s): 2016/383540
Publication restriction: Nil

Judgment

These proceedings concern a partnership between the plaintiff, the first defendant and the second defendant, who are pharmacists.
The partnership began in about February 2000 when the plaintiff, who had previously operated two pharmacies in the Randwick area as a sole trader, sold a one-third interest in one of those pharmacies to each of the defendants. The pharmacy in question was known as “Royal Randwick Pharmacy” (“RRP”).
The partnership was the subject of a deed executed by the parties and styled “Partnership Deed”. The Deed permitted the plaintiff to continue to operate the other pharmacy on her own account, and that other pharmacy is of no further relevance for these proceedings.
Since the partnership began, by arrangement between the parties, the management of the business has been carried out by the defendants. The plaintiff worked initially in the dispensing area on weekends, but it is not clear from the evidence whether she still does so.
By agreement between the parties, the RRP business was subsequently sold. Three pharmacies were then acquired at the Macquarie Shopping Centre, North Ryde, and operated…

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.

Continue reading Cole v Lee

Details

AGLC: Cole v Lee [2017] NSWSC 1011
Case: [2017] NSWSC 1011
Decision Date: 02 August 2017

CaseChat Overview and Summary

The matter before the court involved a dispute between Cole and Lee, two partners in a business partnership. The conflict centred on the interpretation of statutory provisions concerning the validity of a notice of determination, particularly in relation to the termination of a partnership under the Partnership Act 1892 (NSW). The key issue was whether a notice of determination given by Cole to Lee effectively terminated the partnership and if the statutory requirements were met.

The court was required to determine whether the notice of determination was valid and if the partnership had been legally terminated. This involved interpreting the relevant sections of the Partnership Act 1892 (NSW), including sections 26 and 32. The court had to consider whether the partnership was of a fixed term, a single adventure or undertaking, or for an undefined time. Furthermore, it was necessary to examine whether the notice complied with the statutory requirements for termination and whether the term "retirement" in the notice was sufficient to constitute a valid dissolution of the partnership.

In delivering the judgment, the court found that the notice of determination was not valid as it did not strictly adhere to the statutory requirements for terminating a partnership. The court held that the notice did not clearly specify the grounds for termination as required by section 32 of the Partnership Act 1892 (NSW). Additionally, the term "retirement" used in the notice did not meet the criteria for dissolution under section 26, as it did not correspond to a fixed term, a single adventure or undertaking, or an undefined time partnership. Consequently, the court ruled that the partnership had not been effectively terminated, and the notice of determination was invalid.

As a result of the court's decision, the partnership between Cole and Lee remained in effect, and the notice of determination was deemed invalid. The court's ruling ensured that the statutory requirements for the termination of a partnership were adhered to, and it provided clarity on the interpretation of relevant sections of the Partnership Act 1892 (NSW).

Orders