Hutchinson v Nottas
[2025] VSC 325
•6 June 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST
S ECI 2025 02695
| WENDY LEE HUTCHINSON (and another according to the attached Schedule) | Plaintiffs |
| v | |
| CONSTANTINOS NOTTAS (and others according to the attached Schedule) | Defendants |
---
JUDGE: | Attiwill J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 4 June 2025 |
DATE OF RULING: | 6 June 2025 |
CASE MAY BE CITED AS: | Hutchinson v Nottas |
MEDIUM NEUTRAL CITATION: | [2025] VSC 325 |
---
INTERLOCUTORY INJUNCTION – Legal partnership – Injunction to restrain partners acting on a notice to convene a general meeting to consider resolutions to terminate partners – Whether serious question to be tried – Whether balance of convenience favours the grant of the injunction – Injunction granted.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr M Hoyne | JAG Lawyers |
| For the Defendants | Mr T Donaghey | Colin Biggers & Paisley |
HIS HONOUR:
INTRODUCTION
This proceeding concerns a dispute amongst the equity and salaried partners of the Hutchinson Legal Partnership. The first and second plaintiffs, Mrs and Mr Hutchinson, an equity and salaried partner respectively, seek an urgent interlocutory injunction to restrain the first to fourth defendants from terminating their membership of the partnership. Mrs Hutchinson is an equity partner in her capacity as trustee of the Hutchinson Practice Trust. The defendants are as follows:
(a) the first defendant, Mr Nottas, in his personal capacity as a salaried partner, and in his separate capacity as an equity partner, as trustee for the Nottas Practice Trust;
(b) the second defendant, Ms Comben, who is a salaried partner;
(c) the third defendant, SOS Giving Pty Ltd, which is an equity partner, as trustee for the Comben Practice Trust;
(d) the fourth defendant, HL & YL Giving Pty Ltd, which is an equity partner, as trustee for the Southern Cross Trust. Its directors include Mr Hutchinson, Mr Nottas and Ms Comben. It has not filed an appearance;
(e) the fifth defendant, Hutchinson Legal Pty Ltd, which operates the legal business as agent of the partnership. Its directors include Mr Hutchinson, Mr Nottas and Ms Comben. It has not filed an appearance.
For convenience, I will refer to the first to third defendants as ‘the partner defendants’.
On 9 May 2025, an email was sent by Ms Comben to Ms Hutchinson giving notice of resolutions to be put at a general meeting of the partners (9 May Notice). These included the termination of:
(a) Ms Hutchinson’s membership as an equity partner of the practice on the basis of breaches by Mr Hutchinson of the partnership agreement pursuant to cl 25.6 of the partnership agreement; and
(b) Mr Hutchinson’s membership as a salaried partner of the practice on 4 months’ notice pursuant to cl 27.4 of the partnership agreement.
Ultimately, Mr and Mrs Hutchinson sought an interlocutory injunction in the following terms:
The first, second, third and fourth defendants are restrained, until the trial and determination of this proceeding, from passing, or purporting to pass, the following resolutions of the partnership known as the Hutchinson Legal Partnership as set out in the notice of meeting dated 9 May 2025:
a.terminating the first and second plaintiffs’ membership of the Hutchinson Legal Partnership;
b.preventing of the first plaintiff from exercising any voting right they may have under the partnership agreement entered into between the parties;
c.preventing the plaintiffs, or either of them, from attending at 38 New Street, Ringwood.
The applicable law relating to the grant of an interlocutory injunction is well established. Mr and Mrs Hutchinson must establish that there is a serious question to be tried and that the balance of convenience favours the grant of the injunction. Ultimately, the Court should take the course that appears to carry the lower risk of injustice if it should turn out to have been wrong.
RESOLUTION CONCERNING THE TERMINATION OF MS HUTCHINSON AS AN EQUITY PARTNER
The 9 May Notice proposes (amongst others) the following resolutions:
Resolution 3 – Pursuant to clause 25.6 of the Hutchinson Legal Partnership Agreement, to terminate the membership of Wendy Lee Hutchinson as Trustee of the Hutchinson Practice Trust (HPT) as an Equity Partner for breaches by the Associate, Grant Hutchinson, that cannot be remedied.
Resolution 4 – note that HPT, following its removal from the Partnership at this meeting, has no voting rights at the General Meeting or otherwise a right to participate in the meeting.
Clause 25.6 provides:
25.6A Lesser Majority of Equity Partners (“Complying Partners”) may terminate an Equity Partner’s membership of the Practice if an Equity Partner (“Non-complying Partner”) or an Associate of an Equity Partner:
(1)breaches a material provision of this Agreement and, in the case of a remediable breach, fails to remedy that breach within fourteen (14) days after notice from the Complying Partners to do so;
(2)a Change in Control occurs in respect of the Non-complying Partner, to which the Complying Partners have not first provided their written consent.
The term ‘Lesser Majority’ is defined as follows:
Lesser Majority means a resolution that is carried at a General Meeting with no more than two Partners casting a dissenting vote, who is also present at the General Meeting.
Clause 6.1 is also relevant and provides:
6.1Each Partner must be just, faithful and act with utmost good faith in their dealing with the other Partners in all transactions relating to the Practice, the Business and personal dealing with other Partners. Further, each Parter must fulfil obligations necessary for the efficient and profitable running of the Business including those obligations set out in Duty Statements agreed to by the Equity Partners. In relation to this Clause 6.1 only, the agreement of the Equity Partners to obligations set out in Duty Statements must be unanimous.
The partner defendants submitted that Ms Hutchinson’s membership of the practice may be terminated pursuant to cl 25.6 because her ‘Associate’, Mr Hutchinson, has irremediably breached cl 6.1 of the partnership agreement. Mr Hutchinson’s breaches are said to arise from his alleged conduct between about mid-2024 and 9 May 2025, including negative interactions with employees and unauthorised use of the firm’s resources. This conduct is set out in the 9 May Notice.
The partner defendants accepted that there is a serious question to be tried but described it as a weak case. As a result, I am satisfied there is a serious question to be tried. But I am not satisfied that it is a weak or strong case. This is because:
(a) Mr and Mrs Hutchinson accepted that they seek to enforce an implied negative stipulation in relation to Resolution 3 that the partners would not terminate Mrs Hutchinson’s membership of the practice unless Mr Hutchinson had breached a material provision of the partnership agreement that was not able to be remedied within 14 days;
(b) the final relief sought by Mr and Mrs Hutchinson is a permanent injunction founded on a threatened breach of contract;
(c) the conduct alleged in the 9 May Notice is, in some limited respects, substantiated by contemporaneous and independent documentary evidence. But Mr Hutchinson gave evidence that he denies the substance of the allegations in the 9 May Notice. He has also provided detailed evidence in which he disputes many of the matters set out in the 9 May Notice. Mr Nottas, Mr Lau and Ms Comben dispute some matters addressed by Mr Hutchinson. In addition, the context and seriousness of some of the conduct is also disputed by Mr Hutchinson;
(d) as a result, I am not able to determine the strength of the claims at this time. There are extensive factual disputes;
(e) I accept that in the event that it is established Mr Hutchinson engaged in all of the impugned conduct set out in the 9 May Notice, he has a weak case of establishing that it was not a breach of cl 6.1 (see especially the second sentence of cl 6.1); and
(f) the consequences of some of the alleged conduct appears to be remediable, while in other respects this is unclear, given the partner defendants’ general allegations as to the working environment created by Mr Hutchinson.
As a result, this matter also does not weigh in either direction as regards the balance of convenience.
But the balance of convenience strongly favours the grant of an injunction in relation to Resolution 3. This is also the course that appears to carry the lower risk of injustice.
First, in the event that the injunction is not granted, it is likely that resolutions terminating Mr and Mrs Hutchinson from the partnership will be passed within a few days. This was common ground at the hearing of the application. The subject matter of the claims would be destroyed. Mr and Mrs Hutchinson would be terminated from the partnership. They would then need to amend their claims and make claims of breaches of the partnership agreement. This is a significant factor in favour of the grant of the injunction.
Second, in the event that the injunction is not granted, there is a real risk that that Mr Hutchinson’s reputation will be seriously damaged. This is because he would be terminated from a partnership that bears his name and on the basis of allegations concerning his conduct. The partner defendants did not submit to the contrary. This is a significant factor in favour of the grant of the injunction.
Third, in the event that the injunction is not granted, there is a real risk that Mr Hutchinson may not obtain employment with another firm, given the circumstances of his termination, and he may have to take steps to set up a new law firm. This may involve significant cost and expense. This is a significant factor in favour of the grant of the injunction. The partner defendants offered, in effect, to undertake to take steps to pass a resolution not to enforce the restraint in cl 11 of the partnership agreement. As a result, in the event that the injunction is not granted, it is unlikely that Mr Hutchinson would be bound by the restraint or that it would be enforced against him. But this does not address the real risk that Mr Hutchinson may not obtain employment with another firm.
Fourth, in the event that the injunction is granted, this will not finally determine the parties’ rights in the proceeding. This is because Mr and Mrs Hutchinson would have to establish at trial that they are entitled to a permanent injunction. In the event that Mr and Mrs Hutchinson do not succeed at the trial then the partner defendants, together with possibly the fourth defendant, could convene a general meeting to consider the resolutions set out in the 9 May Notice, including Resolution 3.
Fifth, in the event that the injunction is granted, the continued supervision of the Court would not be required. The partner defendants did not submit to the contrary.
Sixth, in the event that the injunction is granted, the continued involvement of Mr Hutchinson at the firm may lead to further disputes between the partners. The partner defendants submitted that the granting of an injunction would be a burden on each party and cause further disputes. As acknowledged by counsel for Mr and Mrs Hutchinson: ‘[t]here may be some awkwardness’. Mr Nottas also gave evidence that:
the removal of [Mr Hutchinson] from the firm would remove a huge blockage in terms of the type of management difficulties and conflict which has plagued HL since at least mid-2024, but have become more exacerbated since November 2024.
I also refer to the evidence of Mr Lau concerning Mr Hutchinson‘s conduct, behaviour and management style, including the matters in his affidavit at [11]. I make the following observations on those matters:
(a) Adamis proceedings: I address this shortly below;
(b) costs and carriage of a matter named ‘Vitello’: this evidence is characterised by its lack of detail and ambiguity;
(c) personal attacks: this evidence is, again, characterised by its lack of detail and ambiguity.
Nonetheless, I accept that Mr Lau considers that Mr Hutchinson engages in ‘personal attacks’ with persons within Hutchinson Legal. Mr Nottas gave evidence that the ‘main issue was [Mr Hutchinson’s] behaviour’.
At the hearing, when discussing the effect of Mr Hutchinson’s potential return to the firm in relation to the balance of convenience, counsel for the partner defendants submitted:
So this is a partnership that has been under strain and in dispute for a considerable amount of time … [it is] more likely to create further dispute if Mr Hutchinson were to [be enabled], by way of injunction, to return to the firm.
The partner defendants submitted that ‘the granting of an injunction would force the inclusion of Mr Hutchinson in the legal practice until trial, which is a burden on each party. It seems unavoidable – that this would cause further disputes.’
The partner defendants also submitted that Mr and Mrs Hutchinson have a limited capacity to respect the cooperative elements in the partnership agreement and referred to a number of examples. I refer to the partner defendants’ submissions at [13(c)]. I accept that there are examples of disputes between Mr Hutchinson and the partner defendants. The key matter relied upon is the Adamis proceedings.
There has been a substantial dispute concerning whether the firm should be acting in various proceedings involving Mr Hutchinson, described as the ‘Adamis proceedings’. I accept that there have been substantial disputes between the parties concerning this. I also accept that it is arguable that Mr Hutchinson did not obey some directions about this and that it is also arguable that he used staff resources without authorisation. But Mr Hutchinson submits that this is connected to the present dispute between them, and the dispute surrounding the Adamis proceedings has now, in effect, resolved as Mr Hutchinson has retained new solicitors.
Disputes amongst partners of law firms are not uncommon. In addition, they are officers of this Court and should be able to address any further disputes between them in a reasonable businesslike manner. As submitted by Mr and Mrs Hutchinson ‘this is a matter in which professional people, acting professionally, should be able to deal with’. Mr Hutchinson gave evidence to a similar effect (see his affidavit at [38]). Ms Comben has resigned and her last day is today. Mr Nottas did not give evidence that working with Mr Hutchinson would be intolerable or untenable. Mr Hutchinson and Mr Nottas originally formed the Hutchinson Legal Partnership in 2009 and have worked together in that partnership since that time. The parties are also before the Court and I expect that this may give added incentive to the parties to co-operate. Nonetheless, there remains a real risk of dispute. As a result, on balance, this is a significant factor against the grant of the injunction.
Seventh, in the event that the injunction is granted, I am not satisfied that there is a real risk that Mr Hutchinson will engage in the behaviour the subject of a confidential workplace investigation report, either in relation to the complainant or any other person. First, the precise circumstances are disputed. Second, Mr Hutchinson sought to apologise to the complainant and his evidence before me has demonstrated insight into actions. I refer to his affidavit at [71] and [73]. Third, there is no evidence that Mr Hutchinson has engaged in similar conduct with respect to other employees or partners of Hutchinson Legal. Fourth, Ms Comben gave evidence that ‘[t]his sort of event has not happened in the [Hutchinson Legal] office, to my recollection’. Fifth, the conduct involved, at worst for Mr Hutchinson, a form of intimidating behaviour. Sixth, the complainant is not at work and there was no evidence of when they will return. Finally, counsel for the partner defendants only described the conduct as ‘potentially bullying’ (emphasis added).
Eighth, Mr and Mrs Hutchinson have stated that they will give the usual undertaking as to damages. The partner defendants did not submit that this undertaking is inadequate.
Ninth, Mr and Mrs Hutchinson have also stated that they will, if required, give an undertaking to prosecute the case promptly so that the proceeding may be heard and determined as efficiently as possible. I will require that undertaking to be given. It is appropriate in the circumstances of this case.
Tenth, in the event that the injunction is not granted this would not mean that Mr and Mrs Hutchinson and the partners defendants would not have any working relationship:
(a) Mr Hutchinson would continue to have involvement in YourLawyer Pty Ltd, which conducts a substantial business in respect of claims of victims of crime, personal injury and migration law. There was, however, no evidence of the directors and shareholders of this company;
(b) Mr Hutchinson would continue to have involvement in the fourth defendant, HL & YL Giving Pty Ltd, as a trustee of the Southern Cross Trust which, I have already said, is an equity partner. There was no evidence of the directors and shareholders of this company but Mr Hutchinson gave evidence that each of the salaried partners, which include Mr Hutchinson, had a ‘vote’ on behalf of Southern Cross Trust;
(c) Mr Hutchinson would continue to have involvement as a director of the fifth defendant, Hutchinson Legal Pty Ltd, which, as I have already said, operates the legal business as agent of the partnership, unless he was removed. Mrs Hutchinson is a shareholder as is HL & YL Giving Pty Ltd;
(d) as a result, Mr Hutchinson and the partner defendants also have an incentive to get along as they have other important working relationships.
Finally, counsel for the partner defendants submitted ‘in his discussions with me, [Mr Nottas] has emphasised that the Hutchinson affidavit is not complete, and evasive in setting out the factual background’. This submission was not developed at the hearing. Counsel for the partner defendants submitted ‘I am yet to assess this’. Mr Nottas gave evidence that parts of Mr Hutchinson’s affidavit are incorrect and incomplete. But it is not possible on this application to determine the truth of such matters, given the factual disputes between the parties. Also, Mr and Mrs Hutchinson have sought this injunction inter partes and have provided every opportunity for the partner defendants to put before the Court all matters it considers relevant.
In the circumstances, I have decided to exercise my discretion and grant an injunction in relation to Resolution 3. This is because:
(a) if I do not grant the injunction and I turn out to be wrong, the subject matter of the proceeding will be destroyed and it is likely that Mr Hutchinson’s reputation will be significantly adversely affected;
(b) if I do grant the injunction and I turn out to be wrong, there is a real risk that there will continue to be disputes and the partnership may be adversely affected to some extent. But a significant matter of dispute (i.e. the Adamis litigation) has been resolved at least insofar as it concerns the retainer by Mr Hutchinson of Hutchinson Legal. The parties are also before the Court and I expect that this may incentivise the parties to co-operate. In addition, Mr Hutchinson and the partner defendants have an incentive to get along as they have other important working relationships. Mr and Mrs Hutchinson have given the usual undertaking as to damages and this may be called on in that event;
(c) the course that appears to carry the lower risk of injustice if it should turn out that I am wrong is to grant the injunction;
(d) even if I am incorrect and the serious issue to be tried is weak, as a result of the matters immediately above I would still have exercised my discretion and granted the injunction;
(e) it is not necessary to consider the application in relation to Resolution 4 as it was common ground at the hearing that if the partner defendants are restrained from passing Resolution 3 they will not have the numbers to pass Resolution 4.
RESOLUTIONS CONCERNING THE TERMINATION OF MR HUTCHINSON AND THE DIRECTION FOR HIM NOT TO ATTEND THE OFFICE
The 9 May Notice also proposed the following resolutions:
Resolution 5 – Pursuant to clause 27.4 of the Hutchinson Legal Partnership Agreement:
(a)Grant John Hutchinson’s membership of the Practice as a Salaried Partner be terminated;
(b)Four months prior written notice of termination be given to Grant John Hutchinson, commencing 20 May 2025 and ending on 19 September 2025.
…
Resolution 7 – pursuant to clause 38.8 of the Hutchinson Legal Partnership Agreement, the Equity Partners instruct directors of the Agent (Hutchinson Legal Pty Ltd) to ensure that the Agent abides by the following resolutions as soon as reasonably possible:
(a)The Agent directs Grant John Hutchinson and Wendy Lee Hutchinson to not attend the Agent’s (Hutchinson Legal Pty Ltd) work premises located at 38 New Street, Ringwood, VIC 3134 during the notice period that ends on 19 September 2025.
Clause 27.4 provides:
27.4A Greater Majority of Equity Partners may terminate a salaried Partner’s membership of the Practice upon giving the Salaried Partner four months prior written notice
The term ‘Greater Majority’ is defined as follows:
Greater Majority means a resolution that is carried at a General Meeting with no more than one Partner casting a dissenting vote, who is also present at the General Meeting.
The 9 May Notice proposed that 4 months’ notice would be provided to Mr Hutchinson of his termination. Counsel for Mr and Mrs Hutchinson correctly accepted that there is no serious question to be tried in relation to Resolution 5. This is because cl 27.4 only requires four months prior written notice. In addition, it was common ground at the hearing that if the partner defendants are restrained from passing Resolution 3 they will not have the numbers to pass Resolutions 5 or 7. As a result, there is no utility in any injunction concerning Resolutions 5 or 7. In the event that the partner defendants simply prevent Mr and Mrs Hutchinson from entering the work premises then Mr and Mrs Hutchinson may seek further interlocutory relief from the Court.
Conclusion and orders
As a result, I will grant the injunctive relief in relation to Resolution 3. In my preliminary view, the following order is appropriate:
(a) Subject to further order, the first to fourth defendants are restrained, until the determination of this proceeding, from passing, or purporting to pass, the resolution identified as ‘Resolution 3’, in the notice of meeting of the Hutchinson Legal Partnership dated 9 May 2025.
I will hear the parties on the precise form of order. My preliminary view is that the parties’ costs should be their own costs in the proceeding. I will, however, give the parties an opportunity to address the issue of costs.
---
SCHEDULE OF PARTIES
S ECI 2025 02695
| WENDY LEE HUTCHINSON ATF THE HUTCHINSON PRACTICE TRUST (ABN 70 114 642 355) | First Plaintiff |
| GRANT JOHN HUTCHINSON | Second Plaintiff |
| - and - | |
| CONSTANTINOS NOTTAS IN HIS PERSONAL CAPACITY AND ATF THE NOTTAS PRACTICE TRUST (ABN 74 244 778 479) | First Defendant |
| SHANI COMBEN | Second Defendant |
| SOS GIVING PTY LTD (ACN 634 269 855) ATF THE COMBEN PRACTICE TRUST (ABN 50 793 275 866) | Third Defendant |
| HL & YL GIVING PTY LTD (ACN 139 965 076) ATF THE SOUTHERN CROSS TRUST | Fourth Defendant |
| HUTCHINSON LEGAL PTY LTD (ACN 104 714 132) | Fifth Defendant |
0
0
0