LUKIN v LOVRINOV and ANOR No. SCGRG-95-541 Judgment No. S6614
[1998] SASC 6614
•9 April 1998
LUKIN v LOVRINOV and ANOR
Perry J
The plaintiff seeks a declaration that a partnership entered into between him and the defendants in 1977 is still subsisting. As well, he seeks a declaration that certain fishing rights attaching to what has been described as a tuna quota granted by the Commonwealth Government in 1984, which authorises the use of a boat to take southern blue fin tuna in waters off South Australia, were an asset of the partnership at the time of the acquisition of the quota.
The defendants, who are husband and wife, deny that the plaintiff is entitled to the relief which he seeks. They counterclaim for a declaration that the partnership has long since been terminated, and that the tuna quota was never an asset of the partnership.
That statement of the issues bears little resemblance to the cases as pleaded, but they are the central issues upon which I was asked to rule by the conclusion of the trial. There are some incidental issues to be addressed, including the assertion by the defendants that the plaintiff’s claim is barred by reason of certain provisions in the Limitation of Actions Act 1936 or by reason of laches.
In the plaintiff’s statement of claim, the prayer for relief seeks an “account of the partnership from its inception to date” and an order that the defendants pay to the plaintiff “25% of the net profits of the partnership since inception”. Apart from seeking a declaration that the quota was an asset of the partnership, the prayer for relief does not seek any other specific order.
In their defence and counterclaim, apart from seeking an order that the partnership “was dissolved as from at least October 1984”, the defendants seek various money adjustments either within or extrinsic to the partnership accounts. The adjustments are said to be necessary in order to reflect what is alleged to be due with respect to work done by the defendant Branko Lovrinov on various boats and in various businesses owned or conducted by the plaintiff, and various items of expenditure said to have been incurred by the defendants when they conducted the partnership business without, so the defendants maintain, any assistance from the plaintiff.
At the trial, none of the parties sought to pursue at this stage any matter of accounting either with respect to the partnership accounts or with respect to the other heads the subject of the defendants’ counterclaim. Those were matters, so it was said, which should be left for another day, to be considered in the light of my determination of the issues which I have been asked to address at this stage. I agreed to approach the matter on the basis suggested by the parties, even though the relief which I have been asked to consider is not fully comprehended in the prayers for relief in the pleadings.
As will be seen, the tuna quota was the subject of certain dealings between the defendants and their son Goran Lovrinov. As a result of those dealings he acquired the quota, and subsequently sold much of what he had acquired to third parties.
I expressed some concern at an early stage of the hearing that I was being asked to try a case which could impact upon Goran Lovrinov’s rights, when he was not a party to the proceedings. It appears that he is involved in other litigation with the parties the resolution of which will, inter alia, determine the propriety of his dealings with the defendants with respect to the quota.
I pointed out that it would have been better if that other litigation had been brought on for hearing at the same time as the present case. But according to counsel for the parties before me, the interlocutory stages of the other litigation have not yet been completed. If that is so, it is a reflection upon the parties concerned, or their advisers, that they have not got the cases ready, and that they did not see to it that the cases were brought on together.
The parties have only themselves to blame if the upshot of that state of affairs is that findings in the present case, for example, as to credit, may ultimately differ from findings in the other proceedings.
The general rule is that litigation which is so closely connected both as to identity of parties and as to subject matter as the litigation in question, should generally be brought on before the same trial judge, to be dealt with either together or sequentially, in whatever convenient manner may appear appropriate in order to avoid unnecessary duplication and the possibility of conflicting findings. It is regrettable that that course was not followed here.
Against that somewhat unfortunate background, I will do my best to deal with the issues which I have been asked to address.
The Witnesses
The plaintiff gave evidence and called one witness, Brian Jeffriess, who is the executive director of the Tuna Boat Owners’ Association of Australia.
Mr Jeffriess gave evidence as to the changes brought about when the Commonwealth Government introduced the tuna quota scheme, and the manner in which the scheme operated. His evidence was not challenged in any relevant respect. I accept his evidence.
The plaintiff, who is now 62, was born in Croatia and migrated to Australia as a young man. He knew the defendants before he migrated, as they lived in the same town in Croatia.
The plaintiff commenced fishing in New South Wales with one boat. Eventually he settled in Port Lincoln where he built up a fleet of some five vessels, together with a processing factory and other properties. He is proud of his achievements.
But as a witness, he proved to be garrulous and anxious to give an impression of his own importance. He attempted to convey the impression of a large, generous personality whom the defendants had let down by failing to acknowledge the help which he had given to them. He was indignant at any suggestion that he might have applied any pressure on the defendants or failed to help them.
At the end of the day, I formed an unfavourable view of the plaintiff’s credit. While I think that he did offer some help to the defendants, his motivation was his own economic advantage. I have no doubt that assistance from him in the partnership business was not forthcoming on many occasions when he was unable to see that his own interests would be served.
I reject his evidence on most issues. But as will be seen, I accept it on some matters, particularly where his evidence is intrinsically likely, or supported by other credible evidence.
The defendant Branko Lovrinov struck me as having a very simple outlook, and appeared totally unversed in business matters. Through a combination of lack of formal education and an inability to speak or read in English, except in the most basic way, he left everything to do with the partnership, except the actual activity of fishing, to his son Goran.
Branko Lovrinov was very much an advocate in his own cause. He painted a picture of being overborne and used by the plaintiff.
His feeling that he had been poorly treated by the plaintiff coloured his evidence and led him to exaggerate and over-dramatise the significance of various incidents which occurred during their business relationship.
He was quite unable to distinguish between his personal finances and those of the partnership, a failing which is much in evidence when one has regard to the confused way in which the partnership finances were accounted for.
The various bases, at times quite inconsistent, in which he put his case forward are illustrative of the fact that from time to time he was prepared to give whatever account of his dealings with the plaintiff he thought might suit his case.
I reject his evidence on most of the critical issues.
The defendant Andjelka Lovrinov demonstrated a combination of antagonism towards the plaintiff and support for her husband, whom she regarded as having been shabbily treated by the plaintiff. She was prepared to say anything which she thought might help her husband’s cause. I place no reliance on her evidence in the critical areas.
The defendants’ son Goran Lovrinov came to Australia at the age of 14, following which he finished his schooling in this country and studied architecture at the University of Adelaide. He graduated in architecture in 1980.
Despite the fact that he was still a student at the time the partnership was entered into in 1977, he helped his parents from the start with the accounting and clerical side of the business, and took an increasing role (other than as to the actual fishing) as the years went by.
I obtained the impression that his parents relied on their son for guidance in just about all of the business aspects of the operation of the partnership. When it came to applying for the tuna quota, he was very much instrumental in helping them and in subsequently applying for a variation of it and, as will be seen, in leasing it out. Goran Lovrinov kept such books and records as were maintained with respect to the business, and dealt on an annual basis with the accountant, F.V. Lang & Co, who attended to the income tax returns, including the drawing up of the profit and loss account and balance sheet each year.
As I have already indicated, Goran Lovrinov eventually acquired the quota. Except for the small part which he has been restrained by order of this Court from selling, he has sold it, pocketing the proceeds.
The accounts record substantial payments to Goran Lovrinov for “consulting” fees. When giving his evidence, he was anxious to justify the payments and to emphasise the extent of his contribution to the business, both in terms of time and money. He maintained that it still owed him a considerable sum of money.
Goran Lovrinov is an astute man. He used his influence over his parents and their trust in him to his advantage. He was quick to disown any responsibility for much of the information contained in the annual accounts, although it is clear that he was the sole source of instructions given to the accountant.
To the extent that Goran Lovrinov eschews responsibility for much of the misleading or dubious information in the accounts, I do not accept his evidence. On issues other than the accounts, his evidence is equally unreliable and was designed to sanitise his involvement in the partnership affairs.
The defendants called a lawyer, Ms Anna Vicic, and an accountant with F.V. Lang & Co, Mr Abraham Martini. I accept their evidence.
The Formation of the Partnership
Before the relevant dealings with the plaintiff, the defendant Branko Lovrinov operated the vessel known as the Torpedo in partnership with another man, Livio Brecevic, and Brecevic’s wife Anna. Apparently the Brecevics wished to dissolve the partnership and give up their interest in the boat.
The Brecevics on the one hand and Branko Lovrinov on the other regarded the boat as an asset held by them in equal shares. Branko did not have the means to buy the Brecevics’ share. He confided in the plaintiff. Lukin offered to help him. Lukin suggested a figure of $70,000 as representing the value of the boat. He offered to buy a quarter share for $17,500 and to lend another $17,500 to Branko Lovrinov who would then be able to buy out the Brecevics’ share in the boat.
Apparently the suggested figure of $70,000 was acceptable to the Brecevics. The three of them went ahead with the transaction on that basis. They approached Mr Grivec, a solicitor who spoke Croatian. He assisted with the mechanics of the dissolution of one partnership and the formation of the other.
Grivec drew up articles of partnership which on 14 November 1977 were executed under seal.
The partnership deed was expressed to be between the defendants, Branko and Andjelka Lovrinov on the one hand and the plaintiff on the other. The deed states that the partnership business is that of fishing. It further provides that the partnership would commence on and from 15 October 1977 (a month earlier than the execution of the deed), and would continue “until determined as hereinafter provided”.
The deed provides that the firm name is “M.H. and L.B. Torpedo”, which was the name of the previous partnership between Branko Lovrinov and the Brecevics. The deed further provides that the capital of the partnership is to be contributed as to 75% by the Lovrinovs and as to 25% by the plaintiff, and that the capital of the partnership would belong to the partners “in the shares and proportions of their respective contributions”. The net profits of the business and all losses were to be shared on the same basis.
The partnership deed expressly provides that Branko Lovrinov “shall attend to and be responsible for the fishing activities of the partnership” and would be in charge of the “partnership boat”. The latter expression is not defined. But there is no doubt that the partner contemplated that the fishing business would be conducted by utilising the Torpedo.
Clause 17 reads:
“Any partner may give to the others four calendar months’ notice in writing of his intention to retire from the partnership.”
Clause 18 is in the following terms:
“If any partners (sic) shall -
(A)... commit any breach of the provisions of this agreement, or
(B)... become insane or incapable of managing his affairs, or
(C)... commit any act of bankruptcy, or
(D)... commit any felony or misdemeanour, or
(E)... do or suffer any act which would be a ground for the dissolution of the partnership by the court then in any such case the other partners may at any time within four calendar months after becoming aware thereof by notice in writing to the offending partner determine the partnership.”
Clause 19 creates an option in favour of any partner who wishes to carry on the business following the death or retirement of any other partner, to purchase that other partner’s share in the partnership.
Under clause 22, upon any dissolution of the partnership “a full and general account shall be taken of the assets credits debts and liabilities of the partnership and of the transactions and dealings thereon”. The clause further stipulates that on the taking of the “full and general account”, assets and “credits” would be sold, realised and got in and the proceeds applied in discharge of any debts and liabilities. The balance, if any, is to be divided in the proportion in which the partners shared profits.
The loan of $17,500 to the defendants was effected by a company controlled by the plaintiff, Orao Pty Ltd (“Orao”). The deed of partnership (clause 23) includes an express acknowledgment by the defendants of their indebtedness to Orao in the sum of $17,500, and further contains an acknowledgment of the liability attaching to the defendants to pay to Orao interest at the overdraft interest rate charged by the partners’ bankers, quarterly. The deed further stipulates that the loan from Orao is to be repaid no later than five years after execution of the deed of partnership. Upon payment out of Orao, the defendants would have an option to purchase the plaintiff’s share in the partnership at a price to be determined in the same way as would be the case under the earlier clauses of the deed dealing with the payment out by continuing partners of a retiring or deceased partner.
The Carrying on of the Partnership
What was said to be the partnership bank account was opened with the Enfield branch of the National Bank of Australia Ltd. I have used that expression as the account was styled “Branko Lovrinov and Mrs Andjelka Lovrinov”. The account statements were tendered at the trial and show that it was opened in November 1977 and closed in January 1985.
That the account was in the names of the defendants is typical of the situation which developed during the carrying on of the partnership. Almost all of the partnership activities were conducted in the name of, and through the instrumentality of, Branko Lovrinov or of both of the defendants.
Branko Lovrinov skippered the Torpedo and conducted the fishing business by operating the boat out of Port Lincoln. Until the 1982 fishing season, the boat was used in fishing for tuna.
In July 1982, with Goran Lovrinov’s help, Branko Lovrinov wrote to the Director of Fisheries stating that he was in a “very bad financial situation”. He said that the Torpedo was the “smallest tuna vessel in South Australian waters” and was no longer “capable to compete with other vessels in the tuna fleet currently in South Australian waters”. He went on to explain that he held a South Australian commercial fishing licence of a kind which entitled him to catch pilchards for bait purposes only. He sought permission to engage in fishing for pilchards commercially in lieu of fishing for tuna.
Apparently the application was not successful.
There was a development in 1984 which had an effect on the business operation. The regulation of tuna fishing was changed and a scheme introduced by the Commonwealth Government pursuant to which holders of fishing licences could apply for what the witness Jeffriess described as “individual transferable quotas”. Upon application, a quota was allocated to a tuna fisherman, the quota entitling the fisherman to catch a certain quantity of tuna. The quota was expressed in terms of a certain number of units. Each year a tonnage entitlement for each unit would be fixed by the Government. In that way the total catch throughout the industry would be regulated. Fishing for southern blue fin tuna was not permitted unless a quota was issued to the fisherman concerned, who was entitled to catch up to the limit of the tonnage allowed for that quota in a given season.
The defendant Branko Lovrinov made a late application for the allocation to him of a quota. His letter enclosing the application form is dated 19 September 1984. In the letter he explains that the application was late because he had only then found out about the need to do so from friends, and immediately applied for the application form.
The defendants complain that the plaintiff is in breach of the partnership deed by failing to notify them of the need to apply for the quota. He did fail to do so, which is surprising, given that they lived in Adelaide, except during the tuna season, when they came to Port Lincoln.
The plaintiff was well aware of the need to apply for the quota, as he applied for it with respect to his own boats. I would, however, hesitate to characterise that failure standing alone as a breach of the partnership deed. It was, however, symptomatic of a long course of conduct on the part of the plaintiff in failing to give any attention to the affairs of the partnership, except when it suited him to do so.
At all events, the letter of 19 September 1984 was signed “B. Lovrinov” for Torpedo Fisheries (skipper/owner). The application form itself, however, was in the name of “B Lovrinov” only and a quota was duly issued to the defendant Branko Lovrinov, that is, in his name only. The quota was expressed in terms that it authorised the use of the boat Torpedo to fish to the limit of the quota. Initially, the quota was for 13.643 units. Later, it was increased on appeal to 15.486 units.
Although in the sense which I have explained a quota attached to a boat, it was apparently part and parcel of the scheme pursuant to which the quota was issued that it could be leased to another licensed fisherman who might utilise it in fishing from another boat.
At all events, it may be of significance to note that the application for the allocation of the quota, which was put forward by the defendant Branko Lovrinov, contained particulars of the tonnage of blue fin tuna said to have been caught from the Torpedo during the three seasons 1980/81, 1981/82 and 1982/83. Those catches were a product of the operation of the partnership business.
It is not entirely clear from the evidence to what extent the quota was in fact utilised in the course of fishing from Torpedo. The 1984/85 income tax return of the partnership indicates an income from sales of fish of $9,232.80, which I can only assume is income generated by utilisation of the quota for fishing. Although about the same level of income is disclosed in the revenue statement attached to the income tax return for the following financial year, that is, the financial year ended June 1986, as having been generated from sales of fish, in that year an additional amount in excess of $8,700 is shown as having been received by way of “leasing fees”. Although that is described as a fee received “for lease of licence”, it is clear enough from the evidence that it was an amount received by way of lease of the quota.
The return for the year ended 30 June 1986 is the last return in which the partnership discloses any income from sales of fish.
In subsequent returns, commencing with the return for the year ended 30 June 1987, with minor exceptions not related to income generated from the sale of fish, the income of the partnership was shown to have been derived from the leasing out of the quota.
Other evidence suggests that the Torpedo was brought back to Port Adelaide in 1984 and tied up there, where it has remained ever since. This is just one of many examples where the accounts do not square with the evidence given before me.
The plaintiff makes no complaint about the leasing out of the quota. Indeed, it was on some occasions leased to companies controlled by him, which must have been with his knowledge and approval. But I am satisfied that he was not aware of the progressive sale or transfer by Branko Lovrinov of the whole of the quota to his son Goran Lovrinov. Neither was the plaintiff aware of Goran Lovrinov’s subsequent disposal of most of the quota except for about six units which are still in Goran Lovrinov’s hands and which he is prevented from dealing with by order of this Court.
Branko Lovrinov’s case is that the quota was his personal property, not property belonging to the partnership, and that he was entitled to deal with the quota in whatever way he chose.
The plaintiff cannot and does not in these proceedings impugn the sale or transfer of the quota to Goran Lovrinov as Goran Lovrinov is not a party to these proceedings. But as I have indicated, he seeks a declaration that when it was acquired, the quota was an asset of the partnership.
With respect to the other main issue in the case, that is, whether or not the partnership is still on foot, it is the contention of the defendants that from an early stage the plaintiff effectively abandoned the partnership, refused requests for financial assistance from time to time, in other ways failed to pull his weight as a partner, and indicated that he did not wish to be regarded as a partner. The defendants explain the plaintiff’s action in bringing the proceedings as a colourable attempt to obtain for his own use and benefit what he asserts to be his quarter share of the quota, which would be more than covered by the balance of the quota still in Goran Lovrinov’s hands. His motive in doing so, as the defendants assert, is the substantial increase in the value of the quota which has occurred over the intervening years.
There is a considerable body of evidence to lend support for the proposition that the plaintiff, more or less from the start, did not play an active part in the affairs of the partnership; that he did not contribute any further capital beyond what was subscribed initially; and that the business was solely operated by Branko Lovrinov with assistance from his wife and son.
Some indirect help was given by the plaintiff, but this was only when it suited him, and was to his personal advantage.
However, I am circumspect about the suggestion from the defendants that they, and more particularly Goran Lovrinov, subscribed substantial sums of money by way of working capital to sustain the operation of the business. One of the reasons for my hesitation about that aspect of the matter is my complete lack of confidence in the accuracy of the accounting which finds expression in the taxation returns, including the accompanying revenue statements and balance sheets prepared from year to year.
Sales of fish were at times effected through one of the plaintiff’s companies. The purchasing company was sometimes Karina Fisheries Pty Ltd (“Karina”).
When one of the plaintiff’s companies was to purchase the catch, the plaintiff would permit use of his “spotter” planes, and offer some other assistance, such as advances for bait and other running costs. But I have the impression from the evidence that help with, for example, the spotter plane to assist in obtaining catches to be sold to the plaintiff, would be a normal procedure quite apart from any partnership relationship. Certainly, it has not been proved that assistance of that kind had anything to do with the fact that the plaintiff was in partnership with the defendants. It would be more significant if that sort of help had been given in the case of fishing for catches sold to other interests.
Invoices or sales dockets were tendered in evidence which showed that through Karina, the plaintiff commonly retained one half of the amount due for a particular catch which was delivered, describing on the invoice the moneys retained as “retention for loan”, or words to that effect. That was one method by which the plaintiff was able to see to it that some repayments were made on the loan from Orao.
The accounting, however, was clearly incorrect and patently so. There can be no doubt that in the early years at least, sales of fish caught were sales of fish produced during the operation of the partnership. But repayment of the loan was a personal matter for the defendants, not a liability of the partnership.
By depressing the net return to the partnership from catches where there was a retention by, for example, Karina, the plaintiff created an accounting situation in which effectively the partnership was repaying the loan rather than the defendants.
No doubt the position could have been rectified in the drawing up of the partnership accounts. The full amount due for particular catches could then have been brought to account and the retention shown as drawings by the defendants. It does not appear from the accounts that this was done.
Another means by which the defendants went about paying off the moneys advanced by Orao was by Branko Lovrinov working on various boats owned by the plaintiff or his companies, and apart from the boats, in other aspects of the plaintiff’s business operations. Branko Lovrinov gave evidence that he was paid half the agreed hourly rate for that work on the footing that the other half would be set off against the indebtedness due to the plaintiff.
There was evidence which supports the fact that Branko Lovrinov was working off part of the indebtedness, but as I will explain, a question arises as to which indebtedness was being paid off.
An example of the manner of accounting between the parties is a document headed “Invoice.Statement” addressed to the defendant Branko Lovrinov dated 5 December 1983, which reads as follows:
“Work done Sept, Oct, Nov $5,356.00
Repaid part of loan 2,000.00
------------
Cheque enclosed $3,356.00Paid loan as at 5/12/83
29/3/82 $1,987.40
23/4/82 5,088.49
22/4/82 239.77
5/12/83 2,000.00
-----------
Paid $9,315.66”
In that document I have no doubt that the words “work done” refer to manual work performed by Branko Lovrinov in the circumstances which I have described.
The amount of $2,000 showed under the heading “Paid loan as at 5/12/83” is obviously the earlier figure shown as a deduction against the amount otherwise due for the work done.
As for the other three amounts, it is clear from the invoices or statements which bear the dates shown that those are amounts kept back from moneys otherwise due by Karina for the sale of fish to it. Those invoices or statements are headed “Torpedo Fisheries”. Clearly, they identify sales of fish caught in the course of the partnership business.
Other evidence was produced of the extent of personal work done by Branko Lovrinov for the plaintiff. In particular, he produced an exercise book containing handwritten notes made by him or his wife dating back to 1979 containing words and figures, in the case of the words, in Croatian, which he said was a more or less contemporaneous record of the hours of work done by him. Calculations appear on the sheets which are expressed in dollar amounts.
It was the defendants’ case, or more accurately, one of the several bases upon which the defendants’ case was presented, that the plaintiff had been repaid his quarter share of the partnership and that, as well, the loan by Orao had been repaid. Repayments sufficient to discharge the two liabilities were said to have been made by a combination of the amounts retained out of the remuneration for Branko Lovrinov’s work done for the plaintiff or his companies, and the deductions from the amounts due with respect to the catches of fish.
However, no attempt was made to distil any total figure out of the pages in the exercise book, and no attempt was made to calculate the total of any moneys retained from the price paid by Karina, or any other company controlled by the plaintiff, for fish. The evidence as to the totality of the payments and deductions is fragmentary and inconclusive and does not satisfy me that moneys were kept back or paid to the plaintiff which could possibly cover the two liabilities.
Most of the evidence as to the payments or deductions suggest strongly that they were retained by the plaintiff against the moneys lent by Orao. Indeed, the plaintiff acknowledged in evidence that the Orao loan debt had been repaid over a period of time. But I am not satisfied that the plaintiff ever agreed to the defendants buying out his share in the partnership, although the plaintiff certainly became disinterested in its affairs. That, however, was symptomatic of his approach to the partnership from the very start. Neither am I persuaded that any payments were made by the defendants, or credits given or earned, against the plaintiff’s share in the partnership.
It follows that the evidence as to the payments or adjustments made between the parties with respect to their financial dealings falls short of establishing that the plaintiff’s share in the partnership, or any part of it (as opposed to the loan by Orao) was ever paid out.
That is not to say that the plaintiff’s evidence as to the repayments and credits was any more satisfactory that the defendants’ evidence as to those matters. But at the end of the day, if the defendants are to sustain the defence that they have paid out the plaintiff for his share in the partnership, the defendants must satisfy the onus of establishing an evidentiary basis for that conclusion. They have failed to do so.
Alleged Dissolution of the Partnership by Notice
The defendants argue that if their case that the plaintiff has been paid out of the partnership is rejected, there should be a finding that the partnership was dissolved by written notice from them to the plaintiff.
They rely alternatively on two letters. The first is a letter from them to the plaintiff dated 20 October 1984. The other is a letter from the defendants to the plaintiff dated 23 November 1988.
The plaintiff contended that the copies of those two letters adduced in evidence were concoctions, and that he had never received either letter. I reject both those contentions. I find that the letters were written by the defendants with the assistance of Goran Lovrinov; that they were posted to the plaintiff; and that they were received by him.
True it is that the postage was not by registered pre-paid mail. If it had been, pursuant to clause 24 of the partnership deed, the letters would have been “deemed to have been duly delivered on the second day following the posting thereof”. But that clause is expressed to be “without prejudice to any other mode of service”, so that no question arises as to service of the letters. The question is whether one or other was effective to determine the partnership.
The starting point in addressing that question is to have regard to the relevant provisions of the partnership deed.
I have already referred to clauses 17 and 18 of the partnership deed.
Clause 17 provides for a “notice .... of .... intention to retire” and clause 18 provides for a “notice .... to ... determine the partnership” in the event of a breach of the provisions of the agreement or the happening any of the other events described in the clause. In both cases the notice is for a period of four calendar months.
The first letter is in the following terms:
“20th October 1984
Mr D. Lukin
5 Bonanza Rd
Port Lincoln SA 5606Dear Dinko and Ana
We write to you because both of us are experiencing financial hardship in our business and personally. As you know that the boat Torpedo was not fishing last season. The little money that Branko earned working for you he put into the business to pay bills. You have not been helping with the losses for last seven years and we had to live off private borrowings. We asked you many times to help us but your answer is always negative.
You told us that we can do what ever we please because you lost interest in this business and that you want to be paid back for the moneys you have put in in 1977. Some of that money has already been paid to you as you know through sale of fish to your company and you then deducted odd amounts. We would like to know where we stand because progressive amounts will be made as we can.
Please respond before this season starts because we have no moneys to prepare the boat for the season coming. The business can not go on if you fail your obligations. If you do not help us it will mean that you are already out of the business with boat Torpedo. In that case we will again borrow from our son and prepare the boat for fishing.
Yours faithfully
(signed) Branko Lovrinov (signed) Angelka Lovrinov”
There are several comments which may be made about that letter.
The first is that the letter does not give four calendar months notice, as required either by clauses 17 and 18. The second comment is that the letter could not possibly be construed as the exercise of any option to purchase the plaintiff’s “share and interest” in the partnership pursuant to clause 23(d). Indeed, despite the evidence from the defendants that manual work done by Branko Lovrinov dating back to 1979, was going towards paying off the plaintiff’s share of the partnership, when referring to the moneys “put in in 1977” by the plaintiff, the defendants state:
“Some of that money has already been paid to you as you know through sale of fish to your company and you then deducted odd amounts.”
The absence of any reference to the work done, as opposed to sale of fish, in that context is, if the defendants’ evidence is to be believed, surprising.
The reference to the failure by the plaintiff to respond to requests for help over the preceding seven years, and the suggestion that the plaintiff had indicated that he had “lost interest” in the business is consistent with the view which I have reached on the evidence.
The nearest which the letter comes to constituting notice of determination is the last paragraph, and in particular the sentence, “If you do not help us it will mean that you are already out of the business with boat Torpedo”. That sentence indicates that the defendants still treated the plaintiff as a partner at that time, despite their concern at his failure to give them the help they sought in conducting the partnership business.
Furthermore, the defendants were not in a position to compel the plaintiff to contribute more capital to the partnership. Pursuant to clause 5 of the partnership deed, “the capital of the partnership shall be such as may be mutually agreed”. Absent an agreement between the parties, there was no obligation to contribute more capital.
True it is that clause 15(C) obliged each partner to “be just and faithful to the others of them .... and afford every assistance in his power and carry on the business for their mutual advantage”. But I do not regard that clause as creating an obligation to make financial contributions. Furthermore, it was never contemplated that the plaintiff would be an active partner in any real sense, as the partnership deed specifically provided (clause 15(B)) that the defendant Branko Lovrinov would “attend to and be responsible for fishing activities of the partnership ...”.
No doubt there was an obligation on the plaintiff to meet his share of partnership losses - clause 8 provided that “losses happening in the course of the business shall be borne” in proportion “of their respective shares”. The plaintiff never paid any share of the losses disclosed in the partnership accounts, although he disputes having seen them until some time after the letter of 20 October 1984.
I suspect that he did not see them until late in the day, just when, I cannot be sure. He said in evidence that he had never accounted for any profit or loss from the partnership in his personal tax returns. I am satisfied that if he had seen partnership accounts showing a loss distributed, in part to him, he would have taken advantage of it by bringing it into account in his personal tax return. That he did not do so, tends to support the view that he did not see the partnership tax returns and associated accounts until a late stage, sometime after the years to which they related. As a partner, he could have obtained the accounts at the time they were drawn up. Indeed, his failure to do so is entirely his own fault and supports the conclusion that he was totally disinterested in the partnership affairs.
Returning to the letter of 20 October 1984, it does not read as a notice of termination based upon a failure before then to contribute towards past losses pursuant to clause 8 of the partnership deed. Rather, it is a threat that the defendants will regard the plaintiff as “out of the business”, which I assume means out of the partnership, unless he helps “to prepare the boat for the season coming”.
However generously from the point of view of the defendants one was to construe the letter of 20 October 1984, subsequent events put paid to any suggestion that in the minds of the defendants it operated as a letter giving notice of dissolution or determination of the partnership, or was intended by them to have that effect. Any such suggestion simply cannot be accepted in light of the fact that until the year ended 30 June 1988 the defendants, through the agency of their son Goran, continued to have prepared partnership returns showing the plaintiff as a partner and allocating to him his share of profits or losses.
So that despite the defendants’ dissatisfaction with the plaintiff’s failure, as they perceived it, to pull his weight in the partnership, both their contention that he had effectively “abandoned” it at that stage or that they had, by the letter of 20 October 1984 determined it, or given notice of its determination, cannot be accepted.
I turn to the letter of 23 November 1988. This reads as follows:
“23rd November 1988
Mr D. Lukin
5 Bonanza Road
Pt Lincoln SA 5606Dear Dinko,
This short note is to advise you that we must prepare something for the accountant in order to finalise “Torpedo partnership”. As you know we have been to Pt Lincoln many times to do this but only came in contact with Ana. She is always saying that we must talk to you only, and not her, because it is “Dinko’s bussines”.
When you finish fishing this season we are going to see you in Pt Lincoln so that papers could be signed for termination of the partnership as it stands. Last three years have proven to be just as bad, when we used to go tuna fishing with you vessel “Karina G” and Torpedo was tied up in port. All the money that Branko earned working on your boats as a cook or as a carpenter etc he deposited into Torpedo account to pay for bussines expenses. Our record shows that you held back payment to B. Lovrinov in the order of $47,000.00 and this is not including interest on the unpaid moneys going back to 1979. One must also take into consideration the moneys which was borrowed in order to keep the bussines going. At the end of the calculations you will need to pay moneys to us to cover for all the losses over the many years as you know.
Please let us know when you will be in Pt Lincoln after this tuna season. If possible Goran will come with us to explain anything that may concern you.
Yours faithfully
(signed) B. Lovrinov
B. Lovrinov”The first sentence of the letter undoubtedly indicates a desire on the part of Branko Lovrinov to put an end to the partnership. But it is equally clear from the letter that he regarded the partnership as still being on foot. This must be so in view of his expression “... so that papers could be signed for termination of the partnership as it stands”.
Again, the letter lends no support to the suggestion that before then, the defendants had acquired the plaintiff’s share in the partnership by paying him out.
The suggestion that payments were retained from amounts otherwise due to Branko Lovrinov, of the order of $47,000, was vigorously denied in evidence by the plaintiff. For the reasons which I have already given, I am quite unable to accept that either that or any other figure has been established on the evidence.
The sentence “at the end of the calculations you will need to pay moneys to us to cover for all the losses over the many years as you know” is a belated request for the plaintiff to contribute his share of the alleged losses.
But whatever perspective one cares to consider the letter, it cannot be construed as a notice of termination of the partnership as opposed to a request that the plaintiff agree to wind it up.
Interestingly, notwithstanding the terms of the letter, a partnership income tax return for the year to 30 June 1988 was prepared in the usual way, with the plaintiff still included as a partner. The copy of that return tendered in evidence shows a tax agent’s certificate dated 8.6.89 and a place for someone to sign on behalf of the partnership which has been dated the same date, although the copy return put in evidence is not signed.
I can only assume that the necessary instructions were given to the accountant F.V. Lang for the preparation of the partnership tax return to 30 June 1988 by Goran Lovrinov on behalf of the defendants, on the basis that the partnership was still on foot.
However, there were no further partnership returns prepared, at least on an annual basis, until developments which occurred in 1994 which I will come to. Indeed, the evidence as to events which transpired after the letter of November 1988 is sketchy and unsatisfactory.
It appears that the defendants continued to lease out the quota, and indeed, insofar as the business was ongoing, that appears to have been the only income. There was no further revenue from fishing.
There was a somewhat strange communication admitted into evidence in 1991. It is a facsimile message from the plaintiff’s wife, Ann Lukin, to Goran Lovrinov. It reads as follows:
“October 1991
TO; GORAN LOVRINOV
FM; ANN
RE OUR CONVERSATION THE OTHER NIGHT REPLY I RECEIVED WAS THAT HE DOES NOT RECALL HAVING A SHARE OF ANY PROFITS OR COST OF RUNNING THE BOAT WHY SHOULD IT BE HIS BUSINESS NOW.”Although Ann Lukin was not called to give evidence, the communication seems clearly enough to be a response to a request for further help made by Goran on behalf of his parents. The reference in the communication to “he” no doubt is a reference to the plaintiff. That he should “not recall having a share of any profits or cost of running the boat” is, in one sense, a strange statement by somebody who now comes to court to say that all along he regarded himself as a partner. But the fact that the request was made to him operates against any suggestion that the defendants regarded the partnership at an end at that stage.
I think the fax is explained by reference to the fact that despite his evidence to the contrary, the plaintiff at all times distanced himself from putting any money into the business, apart from his initial contribution of capital. Furthermore, he had almost nothing to do with the day to day affairs of the business except to the extent of buying some fish when it was brought in, and some incidental assistance when that was the case.
The communication of 7 October 1991 was just another example of a refusal by the plaintiff to make any financial contribution to the operation of the business.
The evidence of the defendant Branko Lovrinov was that there was no discussion between the plaintiff and the defendants about the partnership between the letter of 23 November 1988 and an occasion in 1993.
That occasion was at the time of the opening of the Croatian Club in Port Lincoln. This was in about October 1993. The evidence of Mrs Lovrinov was that on that occasion the plaintiff, out of the blue, came across to a table where she was sitting and said, “There was enough love, (sic) I want my quota”. Her evidence was that she responded by saying, “Dinko, we have to sit down and talk about business. Everything is in the papers regarding the flow of the business and then we’ll decide everything”. She said that he went on, “I don’t know any papers - I don’t want to hear about any papers, I just want my quota”. She said that she suggested to Goran Lovrinov that he should go and see the plaintiff in his office the next day.
The evidence of Goran Lovrinov was that he did go to see the plaintiff, at the request of his parents, the day after the opening of the Croatian Club. But after he had explained that he had been told to come and see the plaintiff, the plaintiff replied, “Really, OK, well, we got nothing to discuss”. Goran Lovrinov’s evidence was that, following some other inconsequential exchanges, the plaintiff said, “Well, I just want my quota”. Goran Lovrinov said that he explained to the plaintiff that the quota was in his father’s name, and that the plaintiff was upset when that was indicated to him.
The plaintiff denied that he had a conversation with Mrs Lovrinov at the Croatian Club or that there was a meeting between him and Goran Lovrinov at his office the next day, or any meeting at which there was a discussion in the terms suggested by Goran Lovrinov.
I am satisfied that there was some discussion first between the plaintiff and Mrs Lovrinov at the opening of the Croatian Club and the next day, or soon thereafter, with Goran Lovrinov at the plaintiff’s office. I think it highly likely that by then the plaintiff was well aware that the quota had become a valuable asset. In a simplistic way he thought that he would be able to compel the transfer of a quarter of the total number of units on the quota. I think that that explains why these proceedings have been brought after so many years, when he did not for so long display any real interest in the affairs of the partnership.
Be that as it may, there appears to have been no further development of any significance until 1994. Towards the end of 1994, Anna Vicic, solicitor, was instructed on behalf of the defendants, again through the agency of Goran Lovrinov, with respect to proceedings which had been instituted by Orao against Branko Lovrinov. The evidence before me does not indicate the nature of those proceedings.
After Ms Vicic commenced acting, she communicated with F.V. Lang & Co and asked them to prepare a set of accounts for the business as though it was still being operated by the partnership for the years following the last annual accounts prepared for the partnership, that is, the years following 30 June 1988. They did this in the form of a spreadsheet for the years 1989 to 1994 inclusive. The revenue included in the spreadsheet were the amounts received for the lease of the quota. Against that was set out a number of items of expenditure of much the same kind as had been set out in the accounts when the fishing business was being conducted. A number of those items of expenditure are questionable, to say the least, but I do not pause to deal further with that.
An argument developed at the trial as to the admissibility of the document prepared by F.V. Lang & Co. Having heard Ms Vicic, whose evidence I accept, I am satisfied that it was prepared for the purpose of without prejudice discussions. The privilege that would ordinarily attach to material prepared solely for the purpose of without prejudice discussions between the solicitors, however, was lost when the document was discovered in the ordinary course of the making of discovery in these proceedings. No claim for privilege was then advanced, and the document was disclosed on inspection following discovery.
Although the document was, therefore, admissible in evidence before me, and I so ruled, the circumstances of its preparation are such that the document does not operate as was contended by Mr Hoile for the plaintiff, as a concession that the partnership was on foot throughout the years covered by the spreadsheet, that is, between 1989 and 1994.
The question remains as to whether or not the plaintiff succeeds in establishing that the partnership in fact remained on foot during those years, and for that matter, until now.
Continued Existence of the Partnership
I have explained that the letters of 20 October 1984 and 23 November 1988 did not operate to terminate the partnership.
It was open to the defendants at any time to terminate the partnership by invoking the procedures envisaged by the partnership deed. They did not do so. Instead, they drifted along, failing in successive attempts to bring matters to a head by informal means.
If the partnership was still on foot, the defendant could give notice to determine it now, in accordance with the provisions of the partnership deed. Furthermore, I have no doubt that the defendants would be entitled to an order dissolving the partnership pursuant to s35(c), (d) and (f) of the Partnership Act. I am unable to say whether or not they would be entitled to such an order under s35(e), as I have no confidence at all in any of the financial figures which have been put before me relating to the partnership’s affairs and the carrying on of the business.
In his final submissions, Mr Keith for the defendants sought an order of dissolution under s35. But the prayer for relief in the counterclaim of the defendants does not seek such an order, only a declaration that the partnership “was dissolved as from at least October 1984”. It would be wrong, so late in the day, to consider relief under s35 when it has not been pleaded.
In any event, I think that for other reasons it is unnecessary to consider dissolution under s35. I say that because it seems to me that on the whole of the evidence there was clearly an abandonment of the partnership by the plaintiff.
Irrespective of the specific provisions in the partnership deed pursuant to which one partner or the other might determine the partnership, if one partner by his or her words or conduct effectively abandons the partnership, it will be regarded in law as at an end.
Suppose, for example, that the plaintiff simply turned his back on his business interests in Australia and returned to Croatia. Even absent any other formalities, there could be no doubt that the defendants would be entitled to regard the partnership as determined.
Likewise, in Palmer v Moore,[1] it was held by the Privy Council that a written document signed by a partner addressed to his co-partners explaining that he was unable to make any further contribution to the partnership and telling them to do whatever they wished with the partnership property, constituted an abandonment of his interest in the partnership.[2]
[1] [1900] AC 293.
[2] See also Jorgensen v Boyce (1896) 22 VLR 408, where it was held that in the case of a working partnership, it might terminated by one of the partners ceasing to work.
In my opinion, the dealings between the parties at about the time of the opening of the Croatian Club in Port Lincoln in October 1993 signalled an effective abandonment by the plaintiff of his participation in the partnership. I am satisfied that he then made it clear to Goran Lovrinov that he was not interested in the affairs of the partnership and simply wanted what he described as “my quota” given to him. That was, in any event, a simplistic way of viewing the matter. If the partnership accounts were to be accepted as correct, there were, on the face of it, such substantial accumulated losses that, even if the tuna quota was brought to account within the partnership, there would be no amount due to the plaintiff.
Be that as it may, it seems to me that his conduct and attitude at that stage as manifested in his discussion first with Mrs Lovrinov and subsequently with Goran Lovrinov, the letter from Mrs Lukin of October 1991, and his long-standing failure to contribute in any way to the affairs of the partnership, which persisted after the exchange between the parties in October 1993, ought properly to be regarded as an abandonment of the partnership by the plaintiff, having the legal effect of terminating it.
Nothing much turns on the precise date, but I think that as a matter of convenience the partnership should be regarded as determined as from 31 December 1993, and if necessary accounts struck as of that date to wind it up.
None of the parties seek any order for the taking of accounts, so that it will be sufficient as to this aspect of the matter, to declare that the partnership was determined as from 31 December 1993.
Was the Quota an Asset of the Partnership?
This is a difficult question.
Neither the plaintiff nor the defendants questioned the proposition that the quota “... gave rise to valuable rights which were capable of being held for the partnership in such a way as to constitute partnership property”.[3]
[3] See Kelly v Kelly (1990) 92 ALR 74 per Mason CJ, Deane, Dawson, Toohey and Gaudron JJ at 78 citing Ambler v Bolton (1872) LR 14 Eq 427; O’Brien v Komesaroff (1981) 150 CLR 310; 41 ALR 255.
I have already referred to the circumstances in which the quota was acquired. In presenting the case for the plaintiff, Mr Hoile made much of the fact that the letter enclosing the formal application for the quota, being the letter dated 19 September 1984, was signed “B. Lovrinov for Torpedo Fisheries (skipper/owner)”. However, the actual printed form of application was in the name of the defendant Branko Lovrinov only. He gave his own personal details and made no reference to any partnership under the heading “Name and residential address of applicant(s)” where that information was sought on the application form.
Under the heading “Particulars of boat for which quota and endorsement is sought”, he gave the name of the boat as the Torpedo. It must be accepted that the Torpedo was an asset of the partnership, indeed, its principal asset, its acquisition with funds advanced in part by the plaintiff, being the principal reason why the partnership was entered into.
The application form required information to be furnished as to the catch of southern blue fin tuna taken by the applicant, expressed in tonnes for each of the three years preceding the application. No doubt this information had a relationship with the size of the quota issued if the application was successful. The defendant Branko Lovrinov furnished in that respect details of the total tonnage of southern blue fin tuna taken by the Torpedo during the 1980/81, 1981/82 and 1982/83 seasons. It must be accepted that the tuna taken during those three seasons was taken on behalf of the partnership and accounted for within the partnership.
At about the time the partnership was formed, namely, in November 1978, the defendant Branko Lovrinov applied for and obtained a fishing licence under the Fisheries Act 1952 (Cth). The licence was never accounted for as a partnership asset and remained at all times in his name only. Furthermore, the evidence of Branko Lovrinov was that the licence was never discussed with the plaintiff.
When the plaintiff’s application for a quota was accepted, and a quota was granted, the grant was evidenced by an endorsement on the existing licence held by the defendant Branko Lovrinov. The endorsement authorised the use of the boat Torpedo in the southern blue fin tuna fishery. A certificate issued by the Commonwealth Department of Primary Industry on 25 March 1986 certified that the registered holder of the relevant quota was the defendant Branko Lovrinov. After referring to the units available for use in the 1985/86 season, the certificate goes on to indicate that the units were “assigned” to the fishing boat Torpedo.
Neither the licence nor the quota were ever brought into the partnership accounts as an asset of the partnership. However, it was conceded by the defendants that prior to 1984 the partnership paid the annual licence fee for Branko Lovrinov’s fishing licence, and after 1984 it paid the annual levy for the quota.
A number of legal authorities were referred to by both counsel in support of their respective contentions as to ownership of the quota.
S19 of the Partnership Act 1891 provides:
“The mutual rights and duties of partners, whether ascertained by agreement or defined by this Act, may be varied by the consent of all the partners and such consent may be either express or inferred from a course of dealing.”
S20 provides, inter alia:
“(1).. All property and rights and interest in property originally brought into the partnership stock or acquired whether by purchase or otherwise on account of the firm or for the purpose and in the course of partnership business are called in this act partnership property and must be held and applied by the partners exclusively for the purposes of the partnership and in accordance with the partnership agreement.”
Not all the property of each partner used for the purposes of the partnership business must necessarily be regarded as having been brought into the partnership. “It may in some circumstances remain the separate property of one partner.” - see O’Brien v KomesaroffI.[4] In the same case, Mason J went on to say:
[4] See O’Brien v Komesaroff (1981) 150 CLR 310 at 322 per Mason J with whose judgment Murphy, Aickin, Wilson and Brennan JJ agreed. See also Gian Singh & Co v Nahar [1965] 1 All ER 768 and Harvey v Harvey (1970) 120 CLR 529.
“The acts and intention of the parties, not the operation of s24, (the provision in the Victorian Partnership Act corresponding with s20 of the South Australian Act), determined finally and ultimately the question whether property owned by a partner becomes partnership property.”[5]
[5] Referring to Harvey v Harvey (supra) at 549 per Mason J, at 533 per Menzies J and 556-563 per Walsh J. Mason J also refers to Higgins and Fletcher, The Law of Partnership in Australia and New Zealand, 4th ed (1991) at 137 and Lindley Law of Partnership 14th ed (1979) at 445.
The intention of partners may be manifested by their conduct.
I have already referred to the fact that the quota allocation was made by reference to the previous catch history, that catch history being referable to the conduct of the partnership business, including the utilisation of the Torpedo, the acquisition of which was in part financed by the plaintiff. Those circumstances are factors which must be taken into account as pointing to the conclusion that the quota was an asset of the partnership.
But on reflection, I do not think that they can weigh heavily in the scales. After all, the catch history was in fact simply a matter of record and reflected the exertions of the defendant alone, albeit with the use of a boat partly paid for by the plaintiff. Furthermore, the evidence makes it clear that at the time the catch history was recorded, the defendants were virtually running the business single-handed, with the assistance of their son.
The fact that the fruits of the utilisation of the licence with the quota endorsed on it was brought into account as income of the partnership, is obviously a relevant consideration. So is the fact that the utilisation of the quota was almost entirely effected by leasing it out. Given that the business of the partnership was fishing, why should the proceeds of the leasing out of the quota, which was an item of property in the name of the defendant Branko Lovrinov, be accounted for as income of the partnership unless the defendants’ conduct in doing so was a mute recognition of the fact that they intended the quota to be an asset of the partnership?
The answer is that there is no evidence of anything said or done as between the partners at any stage over the long history of the matter which could support the conclusion that the plaintiff on the one hand and the defendants on the other ever reached an agreement that the quota was to be treated as an asset of the partnership. Furthermore, I do not think that the defendants distinguished between utilisation of the quota to support fishing activities by the partnership using Torpedo as a fishing boat and utilisation of the licence as a means of generating income by leasing out the quota attaching to it.
True it is that the accounting by the defendants within the partnership accounts for the income generated by the leasing is suggestive of an acknowledgment by them that the quota was a partnership asset. But in the circumstances of this case, I am not prepared to regard that aspect of the matter as conclusive. I say that, because to reason in that way would be to ascribe to the defendants a subtlety of perception far beyond their business acuity.
One might just as well reason the other way from their action in selling off the quota over a period of time and not accounting within the partnership for the proceeds of sale. That might be regarded as a contrary indication that they regarded the quota as an asset of the partnership.
In my opinion, the important consideration is that, however one approaches the matter, there is simply no evidence upon which it could be said that there was ever an express, or even an implied, agreement between the partners to treat the quota as an asset of the partnership. However unbusinesslike the defendants may have been to have acted as they did, that is not the same as evidence of an agreement between the parties. There was never any relevant discussion between the parties over the acquisition of the quota.
It is true that the plaintiff arranged for the supply of some information as to the size of the catches sold to Karina, which were catches disclosed in the application form for two out of the three years with respect to which the catch history was stated (the first year and part of the second year being with reference to sales to SAFCOL). But I have no doubt that the plaintiff would have supplied that information to anybody who was applying for a tuna quota and who had previously sold fish to him or any of his companies.
The case bears some similarity to the circumstances considered by the High Court in Kelly v Kelly.[6] There, despite the fact that the annual licence fees were paid by the partnership, it was held that an abalone authority attached to the licence, the proceeds of which were paid into the partnership, was not an asset of the partnership. In that case, the abalone authority was not accounted for as a capital item in the accounts of the partnership, as was the case here with the tuna quota.
[6] (1990) 92 ALR 74.
An important feature of this case is that the evidence makes it clear that the defendants were quite unable to distinguish between their personal finances and those of the partnership. No clear distinction was drawn by them in their minds between their personal affairs and those of the partnership. Not only does this help to explain the confusing manner in which the accounts were drawn up, but it creates a situation in which it would be wrong to ascribe to the defendants an intention to regard the tuna quota as an asset of the partnership by reference to their manner of dealing with it.
In all the circumstances, I am satisfied that the plaintiff’s claim, made late in the day after the partnership had run for many years after the acquisition of the tuna quota, that the defendants were liable to account for the quota as an asset of the partnership is born of opportunism, fed by a realisation that it had become a valuable asset, rather than a claim generated out of any agreement or understanding reached between the parties at the time the quota was granted. The parties never put their minds to the question, and it is not for the court to superimpose on their business relationship a contract which they never made.
The plaintiff’s claim for a declaration that at the time of its acquisition the quota was an asset of the partnership must be dismissed.
Other Matters
The defendants have pleaded that the plaintiff’s action is barred by the Limitation of Actions Act (1936) or that the plaintiff is estopped from pursuing the action by reason of the equitable doctrine of laches.
As for the Limitation of Actions Act, the defendants point to s35 of the Act pursuant to which “actions of account” must be commenced “within six years next after the cause of action accrued and not after”.[7] The defendants say that any cause of action that may have accrued, cannot have accrued prior to 9 March 1989 and is barred.
[7] See s35(b).
But at this stage, no account is sought. If, as a consequence of my declaration as to the determination of the partnership as at 31 December 1993, accounts are ordered to be taken, that date is within six years of the institution of the proceedings.
As to laches and acquiescence, I am not satisfied that there is any reason in this case to deny relief in favour of the plaintiff on that score. In any event, for the reasons which I have indicated, the plaintiff fails in his claim for relief with respect to the question of ownership of the quota.
Conclusion
The orders which I will pronounce at this stage are:
(a)A declaration that the partnership was determined as at 31 December 1993.
(b)Dismissal of the application for a declaration that the tuna quota was at the time of its acquisition an asset of the partnership.
I will, therefore, hear the parties as to the terms of the orders necessary to give effect to these reasons, as to the question of the taking of accounts, and as to costs.
3
4
0