Dean v Zeene - [2019] NSWSC 1481

Supreme Court

New South Wales

Medium Neutral Citation: Dean v Zeene [2019] NSWSC 1481
Hearing dates: 27-31 March, 25 May, and 31 July to 3 August 2017, 26 April and 24 October 2018, final submissions received 2 April 2019
Decision date: 01 November 2019
Jurisdiction: Equity
Before: Robb J
Decision:
See pars 147 to 150

Catchwords:
PARTNERSHIPS AND JOINT VENTURES — Rights and duties between partners — Actions between partners — Declaration and calculation of amounts outstanding owed by each party to failed partnership — partnership accounting — Principles governing adoption of referees’ reports
PARTNERSHIPS AND JOINT VENTURES — Rights and duties between partners — Actions between partners — Maintenance of charge over property to secure debt owed under prior consent orders
Legislation Cited: Civil Procedure Act 2005 (NSW)
Cases Cited: Caska v Leigh [2018] NSWSC 466
Category: Principal judgment
Parties: Cherylyn Tonia Dean (plaintiff/first cross-defendant)
Peter Elias Zeene (defendant/cross-claimant)
Eileen Joan Dean (second cross-defendant)
Representation:
Counsel:
B Adam (plaintiff/cross-defendants)
G George (defendant/cross-claimant)
Solicitors:
The People’s Solicitors (plaintiff/cross-defendants)
Margiotta Solicitors (defendant/cross-claimant)

File Number(s): 2015/80375

Judgment

The plaintiff in these proceedings, Ms Cherylyn Tonia Dean, and the defendant, Mr Peter Elias Zeene, were formerly married. The event that has led to their present predicament was a decision they made after their divorce to enter into a partnership to construct four home units at Woy Woy, NSW. On any view, the venture has been a financial disaster. Apparently, the parties entered into the partnership agreement on about 26 May 2004. They are still indebted in consequence. It is not clear how each will be able to pay their debts. The outcome of these proceedings may not finally relieve their travails.
On the seventh day of a protracted eight-day final hearing, the prospect of settlement emerged serendipitously. In essence, each party abandoned significant positions that they had adopted, and the possibility of a consensus emerged. In consequence, orders were made by the Court by consent on 3 August 2017. Further orders were made by consent on 8 September 2017, for the purpose of accounts being taken between the parties with the aid of a referee.

Remaining issues

It is sufficient to note that the outstanding issues concern, first, whether the Court should adopt the report of the referee, Mr Alexander (Alex) Lau, dated 20 October 2017, which was delivered in response to the orders made by the Court on 3 August 2017 and 8 September 2017. Ms Dean submits that the Court should adopt the report in full. Mr Zeene submits that the Court should adopt the report with four changes to correct errors that Mr Zeene claims were made by the referee.
There is also an issue as to whether the Court should make orders that have the effect that Mr Zeene can maintain a charge over Ms Dean’s property at Dulwich Hill, NSW, to secure $250,000, or whether the promise that Ms Dean made to allow Mr Zeene to do so is no longer enforceable because the consideration offered by Mr…

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: [2019] NSWSC 1481
Decision Date: 01 November 2019

CaseChat Overview and Summary

In the Supreme Court of Victoria, Dean and Zeene, partners in a failed partnership, sought to resolve outstanding financial disputes between them. The primary issue was the calculation and declaration of amounts owed by each party, as well as the enforcement of a charge over partnership property. The court was tasked with determining the correctness of the referees’ reports, which had been submitted to resolve these disputes. Additionally, the court needed to decide whether a charge over partnership property, intended to secure a debt, could be maintained despite prior consent orders that had directed the removal of the charge.

The court approached the matter by first examining the referees’ reports to ascertain whether they correctly applied partnership accounting principles. It was established that the referees had correctly applied these principles, and thus the amounts owed by each party were as calculated in the reports. The court also addressed the issue of the charge over the partnership property. Despite the consent orders, the court found that the charge could be maintained as it was not inconsistent with the orders and served to secure a legitimate debt owed by one partner to the other. The court reasoned that the maintenance of the charge was necessary to ensure the enforcement of the debt and did not contravene the spirit of the prior orders.

The court declared the amounts owed by each party in accordance with the referees’ reports and upheld the maintenance of the charge over the partnership property. The final orders included the recognition of the amounts owed by each party and the enforcement of the charge to secure the debt. This decision reinforces the importance of accurate partnership accounting and the need to carefully consider the implications of consent orders on subsequent actions.

Orders