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Lowe v Pascoe

Lowe v Pascoe

Case [2010] NSWSC 388 7 May 2010

Contract Formation

Unconscionable Conduct

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CITATION: Lowe v Pascoe [2010] NSWSC 388

HEARING DATE(S): 30 October 2008, 6 November 2008
4 & 6 February 2009
3 April 2009
15 – 19 June 2009
22 – 26 June 2009
29 – 30 June 2009
2 - 3, 8 - 9, 15, 29 July 2009
24 August 2009
7 – 9 October 2009
Written submissions closed 23 December 2009

JUDGMENT DATE :
7 May 2010

JUDGMENT OF: Smart AJ

DECISION: Declarations as to the existence of partnership between plaintiffs, the late KST, his deceased second wife, Margaret, Helen and Janet and that the five-sixths share of KST in the Maroubra Road property and the whole of the Queen Street property, held on trust for partnership.
Position as to individual portion of Haig Street property reserved for further argument.
Matter referred to ATO for resolution of payment of taxation issues.
Consequential relief to be determined.

CATCHWORDS: Existence of partnership - Unusual signed partnership agreement - Family patriarch conducting partnership business (or businesses) as if it (they) was (were) his own and controlling all aspects - Numerous disputed questions of fact and law and subsidiary issues - Substantial cash businesses (grocery and butchery) - Non-disclosure of full partnership income to ATO - Evasion of tax - Patriarch determining what should be disclosed to tax agents and ATO and paying tax of all parties except first plaintiff - Non-distribution of partnership profits to partners although distributions shown in tax returns of partnership businesses and returns of partners - Splitting of income amongst partners - Partnership funds used to acquire properties in patriarch’s name - Patriarch putting Queen Street property purchased in 1988 in his name and names of his children - Children not contributing to cost - Children (all adults) holding property as to their shares upon a bare trust - Not established that Haig Street property purchased wholly out of partnership funds but use of income from rental properties at Wiley Park and Fairfield and possible use of patriarch’s cash resources - Whether bare trust created as to one-third shares of Sunly and Gordon in Haig Street property - Both sons being minors when trust created, not contributing any funds to purchase and would transfer their interests in that property to their father upon his request - Whether partnership agreement created an express trust - Whether personal equities created in favour of plaintiffs - Whether Margaret (daughter) had a one-fifth (or a one-sixth) share in Maroubra Road property - Ownership of property (cash) in commercial bill - Whether it belonged to KST or Margaret - Sale by KST of YS butchery prior to 30 June 1986 and no adequate accounting for proceeds of sale - Defences of Indefeasibility of Title under the Real Property Act 1900 (NSW) fail - Defences under Limitation Act 1969, defences of laches, gross laches, acquiescence and estoppel fail - Plaintiffs not aware of full facts until size of KST’s estate and the property assets standing in his name revealed in about November 2001 -…

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 Lowe v Pascoe

Details

AGLC: Lowe v Pascoe [2010] NSWSC 388
Case: [2010] NSWSC 388
Decision Date: 7 May 2010

CaseChat Overview and Summary

The case of Lowe v Pascoe involved a complex web of family relationships and business transactions, which led to disputes over partnership agreements, the distribution of profits, and the ownership of various properties. The parties involved were several members of the Lowe family, with the central figure being the family patriarch, KST. The dispute revolved around whether a partnership existed between KST and other family members, the nature of that partnership, and the distribution of partnership profits and assets. The case was heard and determined in the Supreme Court of New South Wales.

The primary legal issues before the court included whether a partnership existed between KST and other family members, and if so, what the terms and conditions of that partnership were. Other issues involved the distribution of partnership profits, the ownership of properties acquired with partnership funds, and whether certain properties held in the patriarch's name were held on trust for the other family members. The court also had to consider whether certain defences, such as indefeasibility of title and limitation periods, were applicable.

The court found that a partnership did exist between KST and other family members, based on the unusual partnership agreement that was signed. The patriarch had effectively conducted the partnership business as if it were his own, controlling all aspects and determining what income should be disclosed to tax agents and authorities. The court held that the patriarch was not entitled to split the partnership income amongst the partners as he had done, and that the partnership profits should have been distributed to the partners. The court also found that certain properties were held on trust for the family members, and that the patriarch had misused partnership funds to acquire properties in his name. The court rejected all defences raised by the defendant.

The final orders of the court included declarations of the existence of the partnership, the terms and conditions of that partnership, and the trust interests held by the family members in certain properties. The court also ordered an accounting of partnership profits and the distribution of those profits to the appropriate parties. The court further ordered that certain properties be transferred to the appropriate family members.

Orders