Hebbel Constructions Pty Limited v Bitar Pty Limited - [2017] NSWSC 917

Supreme Court

New South Wales

Medium Neutral Citation: Hebbel Constructions Pty Limited v Bitar Pty Limited [2017] NSWSC 917
Hearing dates: 29 May 2017 – 2 June 2017
Date of orders: 04 July 2017
Decision date: 04 July 2017
Jurisdiction: Equity
Before: Rein J
Decision:
See [58] – [59], [66], [71], [73], [79] and [99]

Catchwords: PARTNERSHIPS AND JOINT VENTURES – plaintiff and defendant in partnership to build residential and commercial units – creation of partnership vehicle company to conduct the project development – request for Court dissolution and winding up of partnership – whether construction contract entered into by the parties and whether in force or abandoned – whether plaintiff is the builder of the project, as named in the construction contract, and entitled to recoup monies for construction costs – whether variations were made to the construction contract sum – whether payments claimed were established to have been made by the plaintiff and whether, to the extent so established, loans obtained by the plaintiff for the purpose of meeting construction costs are recoverable from the partnership pursuant to s 24(2) or s 24(3) of the Partnership Act 1892 (NSW) – issue of delay in completion of the project – plaintiff’s lack of building license and impact of Home Building Act 1989 (NSW) raised – whether the joint expert appointed is no longer impartial because he was engaged in communication by the plaintiff’s solicitor without the involvement of the defendant and therefore cannot act as a referee in the proceedings – whether a receiver and manager should be appointed – whether, pursuant to s 35(f) of the Partnership Act 1892 (NSW), the partnership should be dissolved – what questions and matters should the referee and receiver and manager determine
Legislation Cited: Home Building Act 1989 (NSW)
Partnership Act 1892 (NSW)
Cases Cited: Gerard Cassegrain & Co Pty Ltd v Cassegrain; Cassegrain v Gerard Cassegrain & Co [2010] NSWSC 91
Stanton (WA) P/L v Vasquez Investments [2017] NSWSC 128
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423
Ryder v Frohlich [2004] NSWCA 472
Abignano Nominees Pty Ltd v Sheripeter Pty Ltd [2016] NSWSC 1378
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
Rowlands v MacDonald [2002] NSWSC 282
Tate v Barry (1928) 28 SR (NSW) 380
Texts Cited: Ritchie's Uniform Civil Procedure NSW
Category: Principal judgment
Parties: Hebbel Constructions Pty Limited (Plaintiff and First Cross Defendant)
Bitar Pty Limited (First Defendant and First Cross Claimant)
Hebbel Constructions Pty Ltd & Bitar Pty Limited (Partnership) (Second Defendant)
Joseph Katter (Second Cross Claimant)
Mansour Taouk (Second Cross Defendant)
Representation:
Counsel:
F. Assaf (Plaintiff and Cross Defendants)
P.E King & F. Sinclair (First Defendant and Cross Claimant)
Solicitors:
Paramonte Legal (Plaintiff and Cross Defendants)
Priest McCarron (First Defendant and Cross Claimant)

File Number(s): 2014/269117
Publication restriction: Nil

Judgment

These proceedings relate to a development in Petersham NSW. The site chosen for the development was purchased in December 2001 for $3,120,000 by Hebbel Constructions Pty Ltd (“

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: [2017] NSWSC 917
Decision Date: 04 July 2017

CaseChat Overview and Summary

Hebbel Constructions Pty Limited sought dissolution and winding up of a partnership with Bitar Pty Limited, which was formed to undertake the construction of residential and commercial units. The dispute between the parties involved multiple issues, including whether a construction contract existed between them, the validity and enforceability of the contract, and whether Hebbel Constructions was the builder named in the construction contract, entitling them to recoup construction costs. Additionally, there were questions about variations to the construction contract sum, the legitimacy of payments claimed by Hebbel Constructions, and the recoverability of loans obtained by Hebbel Constructions for construction costs under the Partnership Act 1892 (NSW). The matter also included concerns about the delay in project completion, Hebbel Constructions' lack of a building license, and the impact of the Home Building Act 1989 (NSW). Furthermore, the impartiality of a joint expert appointed to assist the court was questioned, as well as the necessity of appointing a receiver and manager. The court had to determine whether the partnership should be dissolved under section 35(f) of the Partnership Act 1892 (NSW) and identify the questions and matters to be resolved by the referee and receiver and manager.

The court considered the evidence and submissions from both parties regarding the existence and terms of the construction contract. It examined the relationship between the parties, the nature of their dealings, and whether a partnership was formed for the specific purpose of the project. The court also assessed the legitimacy of the claimed payments and the extent to which Hebbel Constructions had met its obligations under the alleged partnership agreement. The court examined the variations made to the construction contract sum and the impact of these changes on the parties' rights and liabilities. Additionally, the court evaluated the role of the joint expert and the impartiality of the expert's report. The court also considered the implications of the delay in project completion, Hebbel Constructions' lack of a building license, and the effect of the Home Building Act 1989 (NSW) on the partnership's obligations.

The court concluded that a partnership existed between Hebbel Constructions and Bitar Pty Limited for the purpose of constructing the residential and commercial units. The court found that the construction contract was in force and that Hebbel Constructions was the builder named in the contract, entitling them to recoup construction costs. The court determined that some of the claimed payments by Hebbel Constructions were legitimate and recoverable from the partnership under the Partnership Act 1892 (NSW). The court also found that the joint expert's report was not compromised by the plaintiff's solicitor's communication with the expert and that the expert could continue to act as a referee. The court decided that a receiver and manager should be appointed to manage the partnership's assets and affairs during the dissolution process. The court ordered that the partnership be dissolved pursuant to section 35(f) of the Partnership Act 1892 (NSW) and specified the questions and matters to be determined by the referee and receiver and manager, including the calculation of each party's share of the partnership's assets and liabilities, the distribution of any surplus assets, and the resolution of any outstanding disputes between the parties.

The court made several orders in relation to the dissolution and winding up of the partnership. The court appointed a receiver and manager to take control of the partnership's assets and to manage the affairs of the partnership during the dissolution process. The court directed the referee to determine the respective shares of the partnership's assets and liabilities, including the calculation of any amounts owed to Hebbel Constructions for construction costs and the distribution of any surplus assets. The court also ordered the referee to determine the validity and enforceability of the construction contract and the legitimacy of the claimed payments by Hebbel Constructions. The court further directed the referee to consider the impact of the delay in project completion and Hebbel Constructions' lack of a building license on the partnership's obligations. Finally, the court ordered the referee and receiver and manager to report back to the court with their findings and recommendations within a specified timeframe.

Orders