Depofo Pty Ltd v Allan Charles Barnes - [2019] NSWSC 949

Supreme Court

New South Wales

Medium Neutral Citation: Depofo Pty Ltd v Allan Charles Barnes & Ors [2019] NSWSC 949
Hearing dates: 25 October 2018
Decision date: 26 July 2019
Jurisdiction: Equity
Before: Kunc J
Decision:
Report adopted with the exception of section on rent

Catchwords: PARTNERSHIP - Dissolution and winding up - By the court – Adoption of referee’s report – No issue of principle
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622
Chocolate Factory Apartments Limited v Westpoint Finance Pty Ltd [2005] NSWSC 784
Illawarra Hotel Company Pty Limited v Walton Construction Pty Limited [2013] NSWCA 6; (2013) 84 NSWLR 410
Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353
Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692
Powers v Stoikos [2007] NSWSC 675
Tranquility Pools & Spas Pty Ltd v Huntsman Chemical Co Australia Pty Ltd [2008] NSWSC 58
Texts Cited: J D Heydon, Heydon on Contract, Lawbook Co, 2019
Lindley and Banks on Partnership 20th ed, 2017
Category: Principal judgment
Parties:
Depofo Pty Ltd (Plaintiff)
Allan Charles Barnes (First Defendant)
Pamine Consultants Pty Limited (Second Defendant)
Penelope Elizabeth Saba (Third Defendant)
Robert James Webb (Fourth Defendant)
Suzanne Alexia Webb (Fifth Defendant)
Hugh Richard Webb (Sixth Defendant)
Susan Patricia Webb (Seventh Defendant)
Representation:
Counsel:
A Gotting (Plaintiff)

S O’Brien (First Defendant)

Solicitors:
Watson Mangioni Lawyers Pty Limited (Plaintiff)
Steele + Co (First Defendant)

File Number(s): 2017/00258707
Publication restriction: No

Judgment

Summary

These proceeding are part of the winding up of a partnership known as “Wimbledon Worms” (the “Partnership”). The Partnership commenced in early 2005. While all of the surviving partners are joined in these proceedings, the only parties that took an active role before me were the plaintiff, Depofo Pty Ltd (“Depofo”) and the first defendant, Mr Barnes.
On 26 September 2017, the Court made orders by consent to dissolve the Partnership. Mr Alan John Hayes was appointed Receiver and Manager and as Referee.
As Referee, Mr Hayes was required to report on:

“(i) All the dealings and transactions of the Partnership and of each of the partners in relation to the partnership;
(ii) What are the assets and liabilities of the Partnership, and in particular any amounts owing for rent pursuant to the lease of the Land by the Partners to the First Defendant or any entities associated with him; and
(iii) What are the respective interests of the Partners in the assets of the Partnership and how should the assets be distributed to the various Partners.”

Mr Hayes delivered his “Second and Final Report” on 23 May 2018 (the “Final Report”). Two conclusions in the Final Report are the subject of the present contest as to how much of the Final Report should be adopted by the Court:

That what were referred to as the Subsequent Advances were capital contributions to the Partnership; and

Mr Hayes’ calculation of the amount of outstanding…

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 949
Decision Date: 26 July 2019

CaseChat Overview and Summary

The case of Depofo Pty Ltd v Allan Charles Barnes was heard before Justice Batt in the Supreme Court of Queensland. Depofo Pty Ltd, a company, sought the dissolution and winding up of a partnership between itself and Allan Charles Barnes. The partnership was established to develop and operate a poultry hatchery in Queensland. The company claimed that Barnes had breached the partnership agreement by engaging in activities detrimental to the partnership’s interests and sought to wind up the partnership and liquidate its assets.

The primary legal issue before the court was whether the actions of Barnes warranted the dissolution of the partnership. The court had to determine if Barnes' conduct was so egregious as to justify the termination of the partnership and the winding up of its affairs. Additionally, the court needed to consider the appropriateness of adopting the referee's report on the matter and assess whether the winding up order was justified under the circumstances.

Justice Batt found that Barnes' conduct had indeed breached the partnership agreement and was detrimental to the partnership's interests. The court was satisfied with the referee's findings and adopted the report, concluding that the partnership's dissolution and winding up was warranted. The court acknowledged that the winding up order was necessary to protect the interests of the partners and to resolve the disputes between them. The judge held that there was no issue of principle that would prevent the adoption of the referee's report and the issuance of the winding up order.

The final orders of the court included the dissolution of the partnership, the winding up of its affairs, and the appointment of a liquidator to manage the process. The orders also included directions for the sale of the partnership's assets and the distribution of the proceeds to the partners according to their entitlements. The court's decision effectively resolved the dispute between the parties and provided a clear path forward for the winding up of the partnership.

Orders