Kelly v Tucker - [1907] HCA 40

[ ] KELLY TUCKER

ON APPEAL FROM THE SUPREME COURT OF Partnership-Dissolution- At will or for single venture-Unequal contribution of

capital-Repayment-Partnership Act 1891 (Vict.) (No. 1222), secs. 28, 30, 36, 39, 48.

A. and B. made a verbal contract whereby they agreed to enter into MELBOURNE, partnership in the business of buying racehorses in Australia, shipping them to South Africa, and there selling them; that A. should provide £800 as capital for the business; and that the profits should be equally divided between A. and B. A. provided the £800, and racehorses were bought and raced in Australia, but no horses were sent to South Africa. A. gave notice of dissolution of the partnership. In an action by A. for winding up the partnership he claimed a declaration that the £800 should be paid to him out of the assets of the partnership in priority to any payment to B. in respect of profits. Judgment was given declaring that the partnership was dissolved, and that A. was entitled to be allowed the whole of the £800, and ordering that, in the taking of the accounts, the sum of £800 should be allowed to A. as capital of the partnership business.

5 CLR 2

Held, that there was evidence to justify a finding that there was an implied agreement that the £800 should be repaid to A. before there was any division of profits.

Held also (Higgins J. dissenting), that there was evidence to justify a find- ing that the adventure to South Africa was abandoned, and, therefore, that the partnership became one for an indefinite term and was determined by the

Judgment of Hood J. affirmed.

APPEAL from the Supreme Court of Victoria.

An action was brought in the Supreme Court of Victoria by George Edward Tucker against John Joseph Kelly, the writ in which was issued on 29th September 1906 and served on 4th October 1906. By the statement of claim the plaintiff alleged as follows -That, in November 1905, it was verbally agreed be- tween the plaintiff and the defendant that they should enter into partnership in the business of buying some racehorses in Aus- tralia and shipping them to South Africa and there selling them, and that the plaintiff should provide £800 as the capital for the said business, and that the plaintiff and the defendant should both go to South Africa with the said horses for the purpose of SO sell- ing them, and that the profits should be divided equally between them; that no agreement was made as to the length of time during which the partnership business was to be carried on; that in pursuance of such agreement the defendant bought certain racehorses on account of the partnership, and the plaintiff paid to the defendant the sum of £800 that in December 1905 the defendant received £240 for and on behalf of the plaintiff in respect of a bet made and won by the defendant on behalf of the plaintiff,…

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 Kelly v Tucker

Details

AGLC: Kelly v Tucker [1907] HCA 40
Case: [1907] HCA 40
Decision Date: 12 September 1907

CaseChat Overview and Summary

This case involved an appeal to the High Court of Australia from a decision of the Supreme Court of Victoria concerning the dissolution of a partnership. The dispute arose between George Edward Tucker (the respondent) and John Joseph Kelly (the appellant) regarding the winding up of their business, which involved buying racehorses in Australia for sale in South Africa. Tucker had provided £800 in capital, and the profits were to be shared equally. However, the horses were raced in Australia, and the planned shipment to South Africa did not occur. Tucker sought a declaration that his £800 capital contribution should be repaid to him from the partnership assets before any profits were distributed to Kelly.

The legal issues before the High Court were whether there was an implied agreement that Tucker's £800 capital contribution should be repaid prior to profit distribution, and whether the partnership had become one for an indefinite term, thus being dissolvable by notice. The appellant argued that the £800 was partnership capital to be shared equally, and that the partnership was for a single venture to South Africa, not dissolvable at will until that venture was completed. The respondent contended that the £800 was an advance to be repaid and that the partnership had become one at will.

The High Court, by majority, affirmed the judgment of the Supreme Court. It held that there was sufficient evidence to justify a finding that an implied agreement existed for the repayment of Tucker's £800 capital before any division of profits. Furthermore, the Court found that the evidence supported the conclusion that the adventure to South Africa had been abandoned, rendering the partnership one for an indefinite term, which was then validly dissolved by Tucker's notice. The Court reasoned that the original intention of a single adventure to South Africa, which did not materialise, allowed for the inference of an implied term for the repayment of capital.

Consequently, the appeal was dismissed. The Court upheld the Supreme Court's declaration that the partnership was dissolved and that Tucker was entitled to be repaid his £800 capital contribution from the partnership assets before any distribution of profits to Kelly.

Orders