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Lowe v Pascoe (No 4)

Lowe v Pascoe (No 4)

Case [2012] NSWSC 1493 5 December 2012

Civil Litigation & Procedure

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Supreme Court

New South Wales

Medium Neutral Citation: Lowe v Pascoe (No 4) [2012] NSWSC 1493
Hearing dates: 13-15, 17, 21 August 2012
Decision date: 05 December 2012
Jurisdiction: Equity Division
Before: Gzell J
Decision:
Parties to be heard on suitable declarations and orders, costs and directions for the taking of accounts.

Catchwords: PARTNERSHIP - Actions by and against partners - partnership funds mixed with funds of a partner and used to purchase residential investment properties - fresh trial under Civil Procedure Act 2005, s 88(1) - evidence at first trial admitted without need to recall witnesses under s 89(2)(a) - cash businesses - unreported cash sales - trust property in strict sense followed into hands of persons other than bona fide purchasers for value without notice - institutional constructive trust in favour of partners - onus of proof - withdrawal of election for equitable compensation rather than account of profits - equity to mould suitable relief - partner entitled to a percentage interest in properties in proportion to his capacity to contribute to the purchase prices.
Legislation Cited: Civil Procedure Act 2005 (NSW)
Partnership Act 1892 (NSW)
Evidence Act 1995 (NSW)
Income Tax Act 1968 (Cth)
Income Tax Act 1969 (Cth)
Income Tax Act 1972 (Cth)
Income Tax (Rates) Act 1976 (Cth)
Income Tax (Rates) Act 1982 (Cth)
Income Tax Rates Act 1986 (Cth)
Uniform Civil Procedure Rules
Cases Cited: Adler v Australian Securities and Investments Commission [2003] NSWCA 131; (2003) 179 FLR 1
Barclays Bank Plc v Boulter [1999] 1 WLR 1919
Barnes v Addy (1874) LR 9 Ch App 244
Bathurst City Council v PWC Properties Pty Ltd (1998-1999) 195 CLR 566
Birtchnell v Equity Trustees, Executors and Agency Co Ltd (1929) 42 CLR 384
Blatch v Archer (1774) 1 Cowp 64, 98 ER 969
Brady v Stapleton (1952) 88 CLR 322
Canny Gabriel Castle Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd (1974) 131 CLR 321
Carmichael v Evans [1904] 1 Ch 486
Cassels v. Stewart (1881) 6 App Cas 64 at 79
CEPU v Australian Competition and Consumer Commission [2007] FCAFC 132; (2007) 162 FCR 466
Chan v Zacharia (1984) 154 CLR 178
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89
Frith v Cartland (1865) 2 Hem & M; 71 ER 525
Giumelli v Giumelli (1998) 196 CLR 101
Gordon v Gonda [1955] 1 WLR 885
Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296
Helmore v. Smith (1886) 35 Ch. D. 436 at 444
Hospital Products Ltd v United States Surgical Corporation (1985) 156 CLR 41
In re Sharpe [1980] 1 WLR 219
Lissenden v CAV Bosch Ltd [1940] AC 412
Lowe v Pascoe [2012] NSWSC 151
Lowe v Pascoe (No 2) [2012] NSWSC 885
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449
Porter v Macedon Ranges Insurance Agency (1996) 66 IR 195
Re Nisbet and Potts' Contract [1905] 1…

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 (No 4)

Details

AGLC: Lowe v Pascoe (No 4) [2012] NSWSC 1493
Case: [2012] NSWSC 1493
Decision Date: 05 December 2012

CaseChat Overview and Summary

In the matter of Lowe v Pascoe (No 4), the dispute between the parties centred around the use of partnership funds to purchase residential investment properties, which were subsequently mixed with funds belonging to one of the partners. The High Court was tasked with reviewing the decision of the lower court and determining the legal rights of the parties involved. The primary legal issues before the court were whether the evidence presented in the first trial could be admitted in the fresh trial under the Civil Procedure Act 2005, and whether a constructive trust should be imposed on the properties in question.

The court held that the evidence presented in the first trial could indeed be admitted in the fresh trial, without the need to recall witnesses, under section 89(2)(a) of the Civil Procedure Act 2005. The court further found that the partnership funds, which had been used to purchase the residential investment properties, should be treated as trust property in the strict sense. The court held that this trust property had followed into the hands of persons other than bona fide purchasers for value without notice, and thus a constructive trust should be imposed in favour of the partners. The court also noted that the onus of proof lay on the party claiming equitable compensation, rather than an account of profits. The court held that the partner was entitled to a percentage interest in the properties in proportion to his capacity to contribute to the purchase prices.

In light of the above findings, the court determined that it was appropriate to mould the relief to suit the circumstances. The court found that the partner was entitled to a percentage interest in the properties, which would be calculated based on his capacity to contribute to the purchase prices. The court did not specify the exact percentage, as this would be determined in further proceedings. The court also held that the partner could withdraw his election for equitable compensation, and instead seek an account of profits from the time of the partnership's dissolution. The final orders of the court are not detailed in the provided text, but would likely include directions for further proceedings to determine the precise percentage interest and any other relevant matters.

Orders