Giddins v Bolger

[2003] NSWSC 1015

CITATION:	Giddins v Bolger [2003] NSWSC 1015
HEARING DATE(S):	31 October 2003
JUDGMENT DATE:	5 November 2003
JURISDICTION:	Equity Division
JUDGMENT OF:	Smart AJ at 1
DECISION:	See para 33.
CATCHWORDS:	Partnership existed - dissolved. No question of principle.
LEGISLATION CITED:	Nil
CASES CITED:	Nil
PARTIES :	Gregory Allen Giddins v James William Bolger
FILE NUMBER(S):	SC 1845/02
COUNSEL:	(P) Mr Darvall (D) In Person
SOLICITORS:	(P) Denniston and Day (D) In Person

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Wednesday, 5 November 2003

SMART AJ
1845/02: Gregory Allen GIDDINS v James William BOLGER

JUDGMENT

1. By his statement of claim Mr Giddins alleged that in or about April 1999 it was agreed between him and Mr Bolger that they should commence a business in the acquisition of, and entry into racing events by, thoroughbred horses and that they should be partners in the business. It was alleged that the partnership was at will and that the terms included that they should share the profits and bear the losses in equal shares, that the assets of the business should belong to them in equal shares and that they should contribute to the business in equal shares. Mr Giddins alleged that pursuant to the agreement he had contributed $93,480 to the capital of the partnership.

2. Mr Giddins alleged that about 14 September 2001 he delivered to Mr Bolger a notice of dissolution dissolving the partnership forthwith.

3. By his statement of defence the defendant denied that he and the plaintiff entered into the partnership alleged or any partnership. The defendant alleged that he purchased shares in various horses with the plaintiff between April and October 1999. The defendant alleged that the individual racehorses raced in shared ownership between the plaintiff and the defendant and other persons including Karen Flack, Noel Coonan and Mark Killian at various dates between Aril1999 to date (14 June 2002). The defendant denied the terms of the agreement alleged by the plaintiff. The defendant claimed that the owners or part owners of each thoroughbred racehorse were to share in the profits and the losses in respect to each thoroughbred racehorse as per their respective shares.

4. The defendant claimed in his defence that since April 1999 the plaintiff had not contributed to the expense or the upkeep of any of the racehorses. The defendant admitted that the plaintiff on or about 14 September 2001 delivered to the defendant a notice of dissolution of the partnership dissolving it forthwith.

5. The plaintiff read and relied on his affidavit of 5 March 2002. The plaintiff said that in April 1999 a conversation to this effect occurred:

Defendant: "It will be all straight forward. We will split the purchase cost of the horses, and all other costs and prize money will be shared equally. As I am the one with the connections, the horses will be registered in my name and I will arrange to open up a bank account in our names at the Commonwealth Bank Narrandera."

Plaintiff: That all sounds fine to me."

6. The plaintiff stated that he drew these cheques as directed by the defendant on account of the plaintiff's share of the purchase price of the horses purchased as well as on account of expenses and other capital expenditure:

" Date Amount Cheque Number

1 May 1999 $ 500.00 001009
20 May 1999 $ 5,000.00 bank transfer
2 June 1999 $13,500.00 bank transfer
11 June 1999 $ 2,500.00 001019
25 June 1999 $ 1,500.00 001024
19 August 1999 $ 3,500.00 001032
19 August 1999 $ 3,500.00 001033
20 August 1999 $ 1,480.00 001035
23 September 1999 $ 7,000.00 001039
5 November 1999 $22,000.00 001040
14 January 2000 $18,000.00 bank cheque"

Mr Bolger asserted that the plaintiff had only contributed $72,500. He further claimed that the plaintiff owed him $74,000.

7. The plaintiff said:

(a) the horses were raced and won regularly,
(b) he could not obtain a proper accounting from the defendant and this has continued,
(c) about June 2000 the defendant first disclosed to him that he (Bolger) was an undischarged bankrupt.

8. Mr Bolger could not remember when he was discharged from bankruptcy. It was in either 2001 or 2002.

9. In a letter dated 1 May 2000 the defendant wrote, amongst other things:

"This is to dissolve a partnership between Gregory A Giddins and myself regarding racehorses."
The moneys are to come from my claim on Zurick (sic) No 313222.
The payout figure is $50,000 ..."

10. In cross-examination Mr Bolger agreed that he had made a claim on Zurich Insurance, that he had expected to receive in excess of $50,000 by way of compensation but, unfortunately this did not happen. He was to buy out Mr Giddins' share.

11. By letter of 10 April 2001 the plaintiff's accountant sought details of the purchase price paid by him for his share in some seven horses and authority to contact Trevor Lobb at Crown Lodge, Warwick Farm. The solicitors for Mr Bolger advised the accountants of the amounts paid by Mr Giddins for some seven horses and that Mr Bolger could not provide the accountants with an authority to obtain information from Mr Lobb.

12. On 8 November 2001 Mr Lobb of Ingham Bloodstock advised of the prices paid by Mr Bolger for various horses. The following comparison emerges:

Horse Price paid by Price paid by
plaintiff to defendant defendant to Ingham
_____ ________________ Bloodstock

Lipgloss $ 5,000 $ 6,000
Nobel prize $ 7,500 $ 3,000
Vertex $15,000 $ 9,500
Hindrance - $ 7,000
Stamina $ 10,000 $ 4,000
Mamba $ 10,000 $ 4,000
Fingerprint $ 10,000 $ 7,000
Short Run $ 15,000 $ 7,000
Jacobite - $ 7,000

The Court was informed that Noble (Nobel) Prize was deceased. Hindrance and Jacobite do not appear to be the subject of these proceedings.

13. The plaintiff complained that he had been misled as to the purchase price of the horses. Mr Bolger maintained that he had disclosed the purchase price of Lipgloss to Mr Giddins, but that is most unlikely. Mr Bolger regarded the purchase price as irrelevant. He insisted that the price paid by the plaintiff was fixed by the value of the horses as he (Bolger) determined.

14. There was a body of evidence about the horse, Lipgloss. Mr Bolger determined the value of that horse at $20,000, albeit that he had purchased it some days, perhaps a few weeks previously, from Ingham's Bloodstock for $6000. Mr Bolger contended that a syndicate was formed as to this horse comprising himself, Ray Coonan, the plaintiff and Mark Killian and that each was to pay $5000 for this horse. Mr Bolger stated that because Mark Killian and the plaintiff had a major disagreement, Killian did not wish to have anything to do with the plaintiff and did not proceed. He did not pay $5000. His share went to Karen Flack, formerly Mr Bolger's wife but now his de facto wife.

15. Mr Bolger called two witnesses. Mr Ray Coonan has known Mr Bolger for 30 years and is a close friend. Mr Coonan said that a meeting involving himself, Mr Bolger, the plaintiff and Mr Mark Killian took place about a week after the purchase of Lipgloss. Karen Flack was also present. Mr Coonan said that he did not concern himself about the cost of that horse. He said that each of the four men agreed to take an equal share in Lipgloss, which was valued at 20,000 by Mr Bolger; each of them was to contribute $5000. Mr Killian did not pay. Mr Coonan said that he paid the sum of $5000 in cash to Mr Bolger over three months. No receipts were issued. Mr Coonan said that he also purchased a share in a horse known as Cold Amber and later sold that share. Cold Amber has since died.

16. Ms K Flack said that in about June 1999 a meeting was held in the evening. The horses had been purchased by Mr Bolger in May 1999. A decision had been made to "syndicate" the horses, that is to form a syndicate in respect of each horse. Each syndicate was to consist of a number of venturers. She said that at the meeting the plaintiff and Messrs Coonan and Killian wanted shares. Each was to pay $5000 to join the syndicate for Lipgloss. It was not to be a partnership. She said that Mr Killian had an argument with the plaintiff and withdrew, He did not pay $5000. Mr Bolger was to be the manager. She said that the papers for the horses were in her husband's name. She claimed that the horses were in her husband's name and that of the plaintiff. Reference was also made at one stage to the papers of one of the horses (Stamina) being with the plaintiff. Ms Flack said that the horses won in excess of $100,000 (as prize money). There would have been a lot of expenses in maintaining training and racing the horses.

17. Ms Flack and Mr Coonan had the meeting taking place at different places and different times (evening and mid-morning respectively). Neither Mr Coonan nor Ms Flack were satisfactory witnesses. Despite these discrepancies the important point is whether a meeting took place and what was said and agreed. I do not believe that Mr Coonan did not know what Mr Bolger had paid for Lipgloss nor that he was not interested in that matter. He was quite vague in giving much of his evidence. His knowledge of the detail of the meeting was vague. He seemed to know what Mr Bolger wanted him to say. Mr Bolger was inclined to put words into Mr Coonan's mouth.

18. Ms Flack was an aggressive advocate in both examination in chief and cross-examination. She and Mr Bolger helped each other out by signals and prompts as each gave evidence. That had to be stopped. They may not have understood initially that this is impermissible. They were very close and felt deeply about this case. Each spoke with a great deal of emotion. I do not criticise them for their deep feelings and for speaking with emotion. They were convinced that the plaintiff was a bad man, who was responsible for their woes. They also blamed his solicitor. However, the evidence of Mr Bolger, Ms Flack and Mr Coonan was not accurate. The written statement of 1 May 2000 by Mr J W Bolger, namely "This is to dissolve a partnership between Gregory A Giddins and myself regarding Racehorses" accompanied by the statement that the "payout figure is $50,000" must prevail.

19. Mr Bolger relied heavily on the letter of 14 September 2001 from the plaintiff's solicitor to him:

"Please note that the partnership between yourself and our client Mr Greg Giddins in respect of the joint enterprise of racing thoroughbred horses is hereby dissolved on the grounds of your fraud and or misrepresentation in the dealings with the partnership assets.

Pursuant to this revocation you have no authority to incur any liability in the joint names of yourself and Mr Giddins as partners. We require that you deliver to our client within 7 days of receipt of this letter copies of all accounts and other documents related to the operations of the partnership Failing this we shall seek an injunction from the Supreme Court of New South Wales to compel production of such documents."

20. Mr Bolger contended that the plaintiff's solicitor had requested the police to investigate what had taken place between the plaintiff and the defendant and to consider taking action against the defendant. About 2 May 2002 the defendant was charged by the police in Narrandera with six counts of obtain money by deception. These charges related directly to his dealings with the plaintiff which are the subject of these proceedings. Mr Bolger's former solicitor has stated that the charges came before the Narrandera Local Court on numerous occasions and that a brief of evidence was compiled and served. On 5 February 2003 the prosecuting authorities withdrew the criminal charges.

21. Mr Bolger complained that the partnership had been dissolved on untrue grounds, namely, his "fraud and or misrepresentation in the dealings with the partnership assets" as the withdrawal of the criminal proceedings evidenced. Too much should not be read into that withdrawal. The discrepancy between the cost of each of the horses and the "value" placed upon them by Mr Bolger required investigation. His explanations were less than convincing.

22. While the criminal charges and the proceedings appear to cover much common factual ground, the issues in these proceedings differ substantially from those in the criminal proceedings. Mr Bolger did not appreciate this. Nor did he appreciate the different standards of proof which applied to the two sets of proceedings.

23. Mr Bolger did not comply with the Court's directions to file affidavits from the witnesses on whose evidence he proposed to rely. Mr D G Morgan, the former solicitor for Mr Bolger in his affidavit of 11 April 2003 explained the delay to that date thus:

"7. The criminal charges relate to the same set of facts as the current proceedings and had sworn evidence been filed in the current proceedings it may have adversely affected the criminal matter.

8. It was my advice to the defendant that no affidavits or material should be filed in the civil matter until the criminal charges had been dealt with as they covered the same area in dispute."

24. The Court file discloses that on 17 April 2003 the Court directed, by consent, that the defendant file and serve the affidavits on which he relied by 8 May 2003 and that the matter be relisted on 12 June 2003. No affidavits were filed or served. On 12 June 2003 the matter was stood over to 3 July 2003 on which day the matter was placed in the Call Over on 10 September 2003. On that day the matter was placed in the Short Notice list for hearing. By letter dated 24 October 2003 Mr Bolger was notified by the Court that the matter would be heard on 31 October 2003. His attention was drawn to Practice Note 46, the effect of which was that he should be ready to proceed.

25. When the hearing commenced on 31 October 2003 counsel for the plaintiff objected to the defendant being permitted to call oral evidence. The defendant explained that he had to appear for himself as he had no money to afford legal fees and sought the Court's help. He wanted the Court to hear his side of the story. He claimed he had been reduced to his state of poverty because the plaintiff had not paid him moneys which were due and the criminal proceedings had destroyed his business and his reputation. In those circumstances I heard the oral evidence of Mr Coonan, Ms Flack and Mr Bolger. I also heard Mr Bolger's submissions. He found the distinction between evidence and address somewhat difficult to keep, Because of the small amounts of money now involved and available it was desirable that the hearing of this case be completed on 31 October 2003.

26. On 9 April 2002 this Court ordered that pending the determination of these proceedings Mr Stephen Jay of Nichols & Co, Accountants ["or some other fit and proper person" – these words should be deleted] be appointed Receiver of the business conducted by the plaintiff and the defendant without security for the purpose of taking possession and preserving the assets of the said business pending further order, such assets including, but not limited to the horses known as Nobel Prize, Vertex, Lipgloss, Stamina, Mamba, Fingerprints, Short Run and Cold Amber.

27. Upon being appointed Mr Jay placed the horses in question with various trainers upon the understanding that the training fees and other costs in respect of the horses would not be met unless the horses won prizemoney from racing.

28. It appears that a number of horses were left with Mr John Hickmott at Murray Bridge, South Australia. About 21 April 2003 Mr Bolger Ms Flack and Mr Coonan went to Murray Bridge and took possession of the horses which had been left with Mr Hickmott. Mr Bolger stated that Mr Hickmott did not wish to keep them and that Mr Hickmott had not been able to contact Mr Jay by telephone or obtain instructions. According to Mr Bolger, an employee of Mr Jay had been handling the matter and was dismissed for unsatisfactory service. I do not know whether these allegations are true, but even if they were this did not entitle Mr Bolger to take the law into his own hands and take possession of the horses vested in the Receiver.

29. The horses have been in the possession and care of Mr Bolger for some months at Narrandera at considerable cost to him and have been looked after by himself and his children. He said that they were now in good condition. If sold by auction, he thought that they would only fetch modest amounts. Mr Bolger came across as a man who was a law unto himself and expected his will to prevail. Ms Flack and Mr Coonan supported him.

30. In his evidence Mr Bolger stressed that Mr Giddins was a pensioner who did not want income (other than in cash) as it would affect his pension. He was not looking for an income but an interest. A partnership would not have suited him. While I take these matters into account in evaluating the probabilities, I have to look at the agreements reached and the arrangements made by the parties.

31. Both Mr Coonan and Ms Flack objected to a Receiver having been appointed, claiming that their interests had been ignored. This appears primarily to apply to the horse Lipgloss. They were happy with the management of Mr Bolger. I do not accept that Mr Coonan and Ms Flack had any interest in the horses or any of them. In reaching that conclusion I have not overlooked the evidence that Mr Coonan drove the truck containing the horses from Murray Bridge to Narrandera and that he has since carted food for the horses.

32. It has been unnecessary for me to consider whether even upon Mr Bolger's evidence and statement of defence a partnership existed. Mr Bolger's statement of 1 May 2000 makes it clear that there was a partnership.

33. I make the following declarations and orders:

1. A declaration that a partnership existed between the plaintiff and the defendant as to the purchase, maintenance, training and racing of thoroughbred racehorses.

2. A declaration that the partnership was dissolved as from 14 September 2001.

3. An order that the said partnership business be wound up under the direction of this Court.

4. An order that Stephen Jay be appointed, without security as Receiver and Manager of the partnership.

5. An order that James William Bolger deliver up to the Receiver all racehorses the subject of the agreement, including, but not limited to Vertex, Lipgloss, Stamina, Mamba, Fingerprint and Short Run. Provided that in the case of Stamina if this horse is no longer in the possession or under the control of the defendant this order shall not apply to such horse.

6. An order that the Receiver advertise the dissolution of the partnership and that it require that all claims by creditors should be submitted within 21 days of the advertisement to the Receiver.

7. An order that an account be taken of all the dealings and transactions of the partnership and of the partners or any of them in relation to the partnership.

8. An order that an inquiry be held as to what the assets of the partnership consist of and the respective interests of the partners therein

9. An order that the assets of the partnership be realised and the proceeds applied in due course of administration, with liberty to each partner to bid for any such assets.

10. An order that the Receiver be at liberty to act upon any agreement or compromise reached by the parties
11. Costs of the plaintiff of this action to date to be paid by the defendant.

12. Liberty to either party and the Receiver to apply.

34. It was apparent that Mr Bolger had little if any money and that the remaining horses were not worth much. Despite strong personal feelings and Mr Bolger's severe disappointment with the result of these proceedings, it would be in the financial interests of both parties to try and reach an agreement on the winding up of the partnership and their affairs. Although Mr Giddins has succeeded in this action, the cupboard may be bare. Only the legal representatives and the Receiver may benefit financially. The plaintiff sought an order that upon payment of the debts of partnership by him Mr Jay deliver up the horses to him. Having regard to the feelings between the parties this would be impractical and I decline to make such an order.

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Last Modified: 11/10/2003