Lim v Padgham

[2011] VCC 456

IN THE COUNTY COURT OF VICTORIA Revised

(Not) Restricted

AT MELBOURNE
COMMERCIAL LIST

GENERAL DIVISION

Case No. CI-09-01559

CHERYL HOON GAIK LIM	Plaintiff
v.
SANDRA FAYE PADGHAM	Defendant

---

JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	28 April 2011
DATE OF JUDGMENT:	28 April 2011
CASE MAY BE CITED AS:	Lim v. Padgham
MEDIUM NEUTRAL CITATION:	[2011] VCC 456

REASONS FOR JUDGMENT

---

Catchwords:  Partnership – termination after one party denied access to partnership
business – subsequent sale of business by partner remaining in
possession – Calculation of entitlement of excluded partner.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. Fronistas	Kyrou Lawyers
For the Defendant	No appearance
HIS HONOUR:

1           The disputes between the plaintiff and defendant relating to the partnership business they conducted at Windsor between 2005 and 2008 were listed for trial today. The defendant did not appear and the matter proceeded without the defendant being represented. On 8 April 2011, the defendant’s solicitors were given leave to file and serve a notice of ceasing to act. This had been foreshadowed at a hearing on 29 March 2011 when the defendant’s solicitor, Mr Witt, informed the Court that “his client

a. For 50 percent of the sale price for the business of $230,000. This sum was paid by three instalments by the purchaser, Mr Ritchie; $60,000 on 14 December 2010 and two payments of $150,000 and $20,000 on 21 January 2011. I have, in calculating the judgment, allowed the plaintiff the sum of $115,000 and interest pursuant to statute on that sum from the relevant dates of payment by Mr Ritchie;
b. defendant changed the locks at the premises and effectively shut the plaintiff out and told her there was “no need for you to work in the business anymore”. The plaintiff had sought to support herself from her share of the takings of the partnership business. After being excluded from the business, she was forced to seek alternative employment, which she obtained from 8 January 2009 as a The plaintiff was excluded from the business on 14 November 2008. The week. I have allowed the sum of $5,015.93, calculated on the basis of her inability to earn income from the partnership business for the period of 54 days from 14 November 2008 to 8 January 2009. I have allowed interest pursuant to statute from the later date.
c. On 14 November 2008, when the plaintiff was denied access to the business, the business bank account with Bendigo Bank Ltd had a balance of $48,051.30. The business had a tax liability as at that date of $28,3064.48, which, if the defendant had chosen to do so, could have been paid from the business bank account. Instead, pursuant to an arrangement with the Australian Taxation Office, the amount was repaid by instalments from March 2009 until December 2010. The plaintiff is entitled to $9,843.41 being 50 percent of the balance of the account after allowing for the taxation liability as at 14 November 2008. I have allowed interest pursuant to statute on that sum from 28 November 2008.
5	appropriate that an order be made requiring the bank to pay to the plaintiff’s solicitors,

was aware of the trial date and would not be providing him with any further

instructions in the matter”.

2           The defendant is in default in relation to compliance with paragraph 8 of an order made by me on 25 February 2011. On that date, I gave leave to the plaintiff to deliver a request for further discovery by 3 March 2011, to which the defendant was required to respond by 16 March 2011.

3           In paragraph 7 of my order, dated 29 March 2011, I referred to the trial judge for determination at the commencement of the trial any application by the plaintiff in respect of the defendant’s compliance or lack of compliance with the plaintiff’s

request for further discovery, dated 3 March 2011. The request for further discovery contained in a letter from the plaintiff’s solicitors to the defendant’s solicitors, dated 3 March 2011, sought discovery of documents which, in my view, should have

appropriately been discovered by the defendant in view of the matters in issue
between the parties and the defendant’s obligations to make discovery, pursuant to
the directions of the Court. The defendant’s response to the plaintiff’s request in a
letter from her solicitors, dated 17 March 2011, was, in my view, inadequate. In the
circumstances, it is appropriate that the defendant’s defence, dated 27 May 2009, be
struck out.

4           The plaintiff pursues three claims in the proceeding:

The most recent statement of the account discloses a balance of $4,862.05. It is is also appropriate that I further extend the freezing order made originally by His Honour Judge Ginnane on 1 February 2011. Whilst it is clear that the defendant is now overseas, and the only asset of the defendant which the plaintiff is aware that has been specifically frozen by the order is the business account with the Bendigo Bank Ltd, nevertheless, it is possible that there are further assets of the defendant which have not been moved overseas by her.

6

Further, it is appropriate that an order be made requiring the defendant to disclose have been covered by the freezing order made by Judge Ginanne on 1 February 2011 and extended after that date.

7           The defendant’s solicitors, in a letter dated 28 December 2010, specifically denied (on instructions) that the defendant had sold the former partnership business. This statement was untrue, as is apparent from the documents produced by Mr Ritchie which are in evidence. In those circumstances, I have made an order for the payment

of the plaintiff’s costs on a party party basis up until the date of the defendant’s
solicitor’s letter, and thereafter on an indemnity basis.

- - -

Certificate

I certify that these 3 pages are a true copy of the reasons for decision of His Honour Judge

Anderson delivered on 28 April 2011 and revised on 29 April 2011.

Dated: 29 April 2011

Caroline Dawes

Associate to His Honour Judge Anderson