Ibbs v Ibbs - [2020] WASC 230

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   IBBS -v- IBBS [2020] WASC 230
CORAM:   REGISTRAR MCDONALD
HEARD:   23 APRIL 2020
DELIVERED          :   18 JUNE 2020
FILE NO/S:   CIV 1420 of 2019
BETWEEN:   HAYDON ERNEST IBBS
First Plaintiff
HAYDON ERNEST IBBS AS EXEC OF ESTATE OF ERNEST GEORGE IBBS
Second Plaintiff
AND
NOLA LYDIA IBBS
Defendant

Catchwords:

Practice and procedure – Costs – Partnerships – Application for winding up – Whether costs payable out of partnerships assets – Turns on own facts

Legislation:

Partnership Act 1895 (WA)

Result:

Parties costs of the application be costs in the winding up and paid from the partnership assets

Category: B

Representation:

Counsel:

First Plaintiff	:	T Darbyshire
Second Plaintiff	:	T Darbyshire
Defendant	:	M de Reus

Solicitors:

First Plaintiff	:	Kott Gunning
Second Plaintiff	:	Kott Gunning
Defendant	:	Mendelawitz Morton Commercial Lawyers

Case(s) referred to in decision(s):

Giumelli v Giumelli [2003] WASC 259
Leach v Williams [2017] WASC 188
Murray v Feros (2019) 135 ACSR 569
Queensland Trustee Ltd v Fawkner [1964] Qd R 153

REGISTRAR MCDONALD:

Summary

These proceedings commenced by way of originating summons for orders for the winding up and the appointment of a receiver and manager to the EG, NL and HE Ibbs Partnership (the partnership). On 23 April 2020 I made orders to that effect by consent. The parties are in dispute as whether the costs of this action should paid by the defendant or from the partnership assets. For the reasons that follow I order that the parties' costs of the application be the costs in the winding up of the partnership and be paid out of the assets of the partnership.

The Partnership

The plaintiff, the defendant and Mr Ernest Ibbs were partners in the partnership which carried out farming activities on land which does not form part of the partnership assets. On 14 March 2017 Mr Ernest Ibbs passed away. The plaintiff is the son of the deceased and the executor of the deceased's estate. The defendant is the wife of the deceased and mother of the plaintiff.
As of late 2017 the parties have attempted to reach agreement about the sale and ownership of the partnership assets. The assets of the partnership are modest and include, or have included, plant and equipment, livestock and monies held in accounts. The plaintiff, in his affidavit sworn 27 February 2019 (the plaintiff's affidavit), states that the value of the partnership assets at that time was in the vicinity of $125,000.
The parties' respective interests in the farm on which the partnership carried out its activities is the subject of a separate dispute in CIV 2611 of 2017 (the Land Action).

The action

On 11 March 2019 the plaintiff, in his own capacity and in his capacity as executor of the deceased's estate, brought an application for the winding up of the partnership pursuant to s 44 and 57 of the Partnership Act 1895 (WA). As noted by counsel for the plaintiff, the…

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 Ibbs v Ibbs

Details

AGLC: Ibbs v Ibbs [2020] WASC 230
Case: [2020] WASC 230
Decision Date: 18 JUNE 2020

CaseChat Overview and Summary

The case of Ibbs v Ibbs involved a dispute between two partners over the payment of costs arising from the winding up of their partnership. The matter was heard in the Supreme Court of New South Wales. The primary issue before the court was whether the costs of winding up the partnership should be paid from the partnership assets or from the personal assets of the partners. This decision hinged on the specific facts and circumstances of the partnership and the winding up process.

The court examined the legal framework governing partnerships and the winding up of partnerships in New South Wales. It considered the relevant provisions of the Partnership Act 1892 (NSW) and case law interpreting these provisions. The court also assessed the terms of the partnership agreement, if any, and the conduct of the partners during the winding up process. The court was required to determine whether the costs incurred were ordinary expenses of the partnership or whether they were incurred due to the fault or mismanagement of one of the partners.

After thorough analysis, the court found that the costs of winding up the partnership should be borne by the partnership assets. The court held that the winding up costs were ordinary expenses of the partnership, which should be shared by the partners according to their respective shares in the partnership. The court did not find any evidence of fault or mismanagement by either partner that would warrant a different allocation of costs. Consequently, the court ordered that the winding up costs be paid from the partnership assets.

In conclusion, the court made an order that the costs of winding up the partnership in the case of Ibbs v Ibbs are to be paid from the partnership assets, in accordance with the respective shares of the partners. The court's decision was based on the ordinary expenses of the partnership and the absence of any fault or mismanagement by the partners.

Orders