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Grizonic v Suttor

Grizonic v Suttor

Case [2011] NSWSC 471 23 May 2011

Partnership Dissolution

Civil Litigation & Procedure

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Supreme Court

New South Wales

Medium Neutral Citation: Claudio Grizonic v Suzanne Ranken Suttor & ors; Dawn Wade v Suzanne Ranken Suttor [2011] NSWSC 471
Hearing dates: 10, 11 June & 17 September 2010
Decision date: 23 May 2011
Jurisdiction: Equity Division
Before: Brereton J
Decision:
Trustees entitled to moneys in court pursuant to trustees' indemnity. Moneys in court to be paid out to trustees. Judgment that defendant Suttor pay plaintiff Wade $38,813.

Catchwords: PARTNERSHIP - dissolution and winding up - Wade claims to be creditor- whether debts incurred post dissolution by continuing partner carrying on partnership business necessary for winding up of partnership - assignment of debts at law under (NSW) Conveyancing Act, s 12 - plaintiff appointed agent for collection of certain debts - no absolute assignment of these debts - notification of certain assignments said to be given to creditor's solicitor - notice to solicitor is notice to client - notice by service of initiating processes.
PAYMENTS INTO COURT - where funds paid in from sale of non-partnership asset pending outcome of accounting between partners - whether partnership creditor entitled to moneys paid in - fund solely to secure entitlements of partners on taking of partnership accounts - fund not to secure partnership liabilities - creditor has no proprietary entitlement to funds in court.
TRUSTEES - Trustees appointed under Conveyancing Act s 66G to sell real property held in co-ownership by former partners - whether costs incurred by trustees in defence of proceedings unsuccessfully brought against them by beneficiary after trust terminated and property distributed incidental to administration of trust - termination of trust does not render defence of subsequent allegations of breach of trust other than incidental to administration - whether trustees disentitled to indemnity by failing to seek judicial advice - failure to seek advice does not disentitle - where trust property still identifiable and traceable - indemnity persists post termination of trust - trustees entitled to indemnity and lien over property.
Legislation Cited: (NSW) Civil Procedure Act 2005, s 64(3)
(NSW) Conveyancing Act 1919, s 12, s 66G
(NSW) Partnership Act 1892, s 38
(NSW) Uniform Civil Procedure Rules 2005, r 14.17, r 42.25
(NSW) Trustee Act 1925, s 59
Cases Cited: Balkin v Peck (1998) 43 NSWLR 706
Bovaird v Frost [2009] NSWSC 917
Butchart v Dresser (1853) 4 De GM & G 542; 43 ER 619
Cameron v Renouf (No 2) [2009] WASC 84
Cheesbrough v Thompson (1866) 5 SCR (NSW) 366
Drummond v Drummond [1999] NSWSC 923
Fay v Moramba Services Pty Ltd [2010] NSWSC 725
Grizonic v Suttor [2008] NSWSC 914
Hardoon v Belilios [1901] AC 118
Hewett v Court (1983) 149 CLR 639
In re Bourne [1906] 2 Ch 427
In re Llewellin; Llewlelin v Williams (1887) 37 Ch D 317
IRC v Graham's Trustees (1971) SLT 46
Islamic Council of South Australia v Australian Federation of Islamic Councils Inc [2009] NSWSC 211
Lemery Holdings Pty Ltd v Reliance Financial Services Pty Ltd (2008) 74 NSWLR 550
Macedonian Orthodox…

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 Grizonic v Suttor

Details

AGLC: Grizonic v Suttor [2011] NSWSC 471
Case: [2011] NSWSC 471
Decision Date: 23 May 2011

CaseChat Overview and Summary

The case of Grizonic v Suttor involved a dispute concerning the dissolution and winding up of a partnership. The central issue was whether debts incurred post-dissolution by a continuing partner, while carrying on the partnership business, were necessary for the winding up of the partnership. Additionally, the case addressed the validity of assignments of debts under the Conveyancing Act, the effect of notifying a creditor's solicitor, and the proper distribution of funds paid into court from the sale of non-partnership assets. The case also dealt with the role of trustees appointed under the Conveyancing Act, specifically whether they were entitled to an indemnity for costs incurred in defending proceedings brought by a beneficiary after the trust had terminated.

The court was tasked with determining the scope of the partnership's obligations post-dissolution, the effect of assignments of debts, and the proper distribution of funds paid into court from non-partnership assets. The court held that debts incurred post-dissolution were not necessary for winding up the partnership unless they were incurred for the purpose of carrying on the partnership business. Regarding the assignments of debts, the court found that while the plaintiff was appointed as an agent for the collection of certain debts, there was no absolute assignment under the Conveyancing Act. The court also ruled that notification of assignments given to a creditor's solicitor was sufficient to be considered as notice to the client, and that serving initiating processes constituted proper notification. In relation to the funds paid into court, the court held that a partnership creditor was not entitled to these funds as they were meant solely to secure the entitlements of partners on the taking of partnership accounts, not partnership liabilities.

The court's decision clarified the obligations of a continuing partner post-dissolution, the effect of assignments of debts, and the distribution of funds paid into court from non-partnership assets. The court found that the partnership was not liable for debts incurred post-dissolution unless they were for the purpose of carrying on the partnership business. The court also held that notification to a creditor's solicitor was effective notice to the client and that partnership creditors had no proprietary entitlement to funds paid into court from the sale of non-partnership assets. Additionally, the court ruled that trustees appointed under the Conveyancing Act were entitled to an indemnity for costs incurred in defending proceedings brought by a beneficiary after the trust had terminated, provided that the trust property was still identifiable and traceable.

The court ordered that the partnership was not liable for debts incurred post-dissolution unless they were for the purpose of carrying on the partnership business. The court also held that notification to a creditor's solicitor was effective notice to the client, and that partnership creditors had no proprietary entitlement to funds paid into court from the sale of non-partnership assets. Furthermore, the court ordered that the trustees appointed under the Conveyancing Act were entitled to an indemnity for costs incurred in defending proceedings brought by a beneficiary after the trust had terminated, provided that the trust property was still identifiable and traceable.

Orders