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Cuming v Hennessy

Cuming v Hennessy

Case [2005] NSWSC 1219 28 November 2005

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CITATION:
Cuming v Hennessy [2005] NSWSC 1219

HEARING DATE(S): 28/11/05

JUDGMENT DATE :

28 November 2005

JURISDICTION:
Equity Division

JUDGMENT OF:
Young CJ in Eq

DECISION:
Dismiss application to appoint receiver; Order that parties proceed to mediation.

CATCHWORDS:
PARTNERSHIP [37]- Application for appointment of interim receiver to partnership- Question as to whether partnership existed- Partnership dissolved- Whether where partnership is dissolved there is presumption that receiver be appointed as matter of course- Prima facie case must be made out for appointment- Discussion of factors involved in appointment of receiver to dissolved partnership.

CASES CITED:
Davey v Donnelly (M McLelland J, 16 May 1991, unreported)
Moloney v Piachniarski (2004) ACSR 564
Rowlands v Macdonald [2002] NSWSC 282
Tate v Barry (1928) 28 SR (NSW) 380

PARTIES:
James Stewart Cuming (P)
Paul James Hennessy (D)

FILE NUMBER(S):
SC 5738/05

COUNSEL:
P Dowdy (P)
B J Burke (D)

SOLICITORS:
Henry Davis York (P)
Shaw McDonald Pty Ltd (D)

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Monday 28 November 2005

5738/05 – CUMING v HENNESSY

JUDGMENT

1 HIS HONOUR: This is an application for the appointment of an interim receiver and manager following the breakdown of a relationship between two accountants. The evidence as to whether the accountants were in association or in a formal partnership is not such as one could, without testing, make a decision on the balance of probabilities. However, for the purpose of appointment of an interim receiver, or for an injunction, one merely looks to see whether the plaintiff has set up a prima facie case that there is a partnership.

2 Despite substantial material going the other way, in my view, there is sufficient to show that there is a prima facie case that there was a partnership. There is no doubt that the partnership, if it did exist, has come to an end, the date of dissolution being 4 November 2005.

3 The defendant is in occupation of the former sub-leased premises in which the plaintiff and the defendant practised their profession. The plaintiff is not happy with this. He is particularly not happy with the fact that his mother-in-law tells him that when inquiries were made of the plaintiff at the former firm’s phone number a very unhelpful response was given by the receptionist to the effect that she did not know where he was, which one would think could not have had much veracity about it.

4 I will refer to the relationship as "partnership", but that is merely a tag for the purpose of this judgment and I do not mean to create any estoppel one way or the other.

5 The partnership was a very small one. The figures that I have seen, which may need auditing and verification, indicate that there were only two assets, namely, the sub-lease of a city building and work in progress. The work in progress and income of the partnership would not seem to be even as…

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 Cuming v Hennessy

Details

AGLC: Cuming v Hennessy [2005] NSWSC 1219
Case: [2005] NSWSC 1219
Decision Date: 28 November 2005

CaseChat Overview and Summary

Cuming v Hennessy was a case heard in the Supreme Court of Queensland where Cuming sought the appointment of an interim receiver to a partnership, arguing that a partnership had existed between the parties. Hennessy opposed the application, contending that no partnership had been established and that, even if one had existed, it had since dissolved. The court was tasked with determining whether a partnership had existed between the parties, and if so, whether an interim receiver should be appointed to the dissolved partnership.

The central legal issues were whether a partnership existed between Cuming and Hennessy, and if so, whether the dissolution of the partnership necessitated the appointment of an interim receiver. The court examined the criteria for establishing a partnership, including the presence of a contract between the parties, the carrying on of a business with a view to profit, and the sharing of profits. The court also considered the implications of the partnership's dissolution on the application for an interim receiver.

The court held that no partnership had existed between the parties as there was insufficient evidence to establish a binding agreement between Cuming and Hennessy. However, even assuming a partnership had been formed, the court noted that the dissolution of a partnership does not automatically result in the appointment of an interim receiver. Instead, the applicant must demonstrate a prima facie case for the appointment. The court examined the factors relevant to such an appointment, including the likelihood of benefit to creditors and the preservation of assets. Ultimately, the court found that no such case had been made, and the application for an interim receiver was dismissed.

The final orders of the court were that the application for the appointment of an interim receiver to the partnership be dismissed. The court found that no partnership had existed between Cuming and Hennessy, and even if one had, the dissolution of the partnership did not automatically justify the appointment of a receiver. The court emphasised that an applicant must establish a prima facie case for such an appointment, which had not been demonstrated in this instance.

Orders