Mills v. Mills - [2008] QSC 249

SUPREME COURT OF QUEENSLAND

CITATION:

Mills v Mills [2008] QSC 249

PARTIES:

EDWARD WILSON MILLS
(plaintiff)

v

MARGARET MILLS (AS TRUSTEE OF THE ESTATE OF JOHN WILLIAM ROBERT MILLS (DECEASED) ABN 24 009 790 354)
(defendant)

FILE NO/S:

BS No 5016 of 2006

DIVISION:

Trial Division

PROCEEDING:

Civil Trial

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

17 October 2008

DELIVERED AT:

Brisbane

HEARING DATE:

30 September, 1-3 October 2008

JUDGE:

Applegarth J

ORDER:

Defendant to submit draft minutes of orders to be settled

CATCHWORDS:

PARTNERSHIP – DEATH OF PARTNERS – VALUATION AND PURCHASE OF DECEASED PARTNER’S SHARE – conflicting expert valuations of partnership interests – where plaintiff succeeded to deceased partner’s half share of partnership – where defendant entitled to payment for transfer of the partnership interest to plaintiff – where main partnership asset was a family owned and operated business – whether future maintainable earnings of the business should reflect operating expenses of the family-run business – what the value of the partnership assets were at the date of the deceased partner’s death

Partnership Act 1891, s 36(1), s 45

Powell v Powell (1932) 32 SR (NSW) 407, cited

Spencer v The Commonwealth (1907) 5 CLR 41, applied

COUNSEL:

J A Griffin QC, with R J Clutterbuck, for the plaintiff
R J Anderson for the defendant

SOLICITORS:

Beven Bowe & Associates for the plaintiff
McGinness Wilson for the defendant

The issue remaining in dispute
in this litigation is the amount to be paid by the surviving member of a partnership that conducted a supermarket at Cunnamulla.

At the start of the trial, the parties tendered a statement of agreed facts, the contents of which I shall incorporate in the following paragraphs.

Agreed facts

John William Robert Mills (“the deceased”) died on 1 February, 2004.

Immediately before he died, the deceased and the plaintiff conducted a mixed business at 30 John Street, Cunnamulla, in partnership.

The terms of the partnership were set out in a Deed of Partnership dated

29 October 1965, clauses 21 and 22 of which provide as follows:

“21.If any partner shall die during the continuance of the partnership the surviving partners shall as from the date of such death succeed in equal shares to the share of the deceased partner in the partnership business and the property and goodwill thereof and shall undertake all the debts and liabilities and obligations of the partnership the price of such share shall be the nett value of such share as at the date of death after providing for the then debts and liabilities of the partnership such value in case of dispute to be determined by arbitration under the provisions in that behalf hereinafter contained PROVIDED ALWAYS that it shall be lawful for the surviving partners to elect not to purchase the share of the deceased partner on giving notice in writing of such election to the representatives of such deceased partner or (if there be none) on leaving such notice at the place of business of…

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 Mills v. Mills

Details

AGLC: Mills v Mills [2008] QSC 249
Case: [2008] QSC 249
Decision Date: 17 October 2008

CaseChat Overview and Summary

In the matter of Mills v Mills, the parties involved were the plaintiff, who succeeded to the deceased partner's half share of the partnership, and the defendant, who was entitled to payment for the transfer of the partnership interest. The case revolved around the valuation and subsequent purchase of the deceased partner's share in a family-owned and operated business. The primary asset of the partnership was this family business, and the dispute centred on the valuation of the partnership interests and the calculation of the future maintainable earnings of the business, particularly in relation to the operating expenses of the family-run enterprise.

The key legal issues that the court had to address were whether the future maintainable earnings of the business should take into account the operating expenses of the family-run business, and the determination of the value of the partnership assets at the date of the deceased partner's death. The court had to consider the conflicting expert valuations provided by both parties and decide on the appropriate method for calculating the partnership's valuation and the consequent payment to the defendant for the transfer of the partnership interest.

The court held that the future maintainable earnings of the business should indeed reflect the operating expenses of the family-run business. This approach was considered appropriate as it provided a realistic assessment of the business's earning potential. The court also determined the value of the partnership assets at the date of the deceased partner's death by considering the evidence presented and the methodologies employed by the experts. Based on this reasoning, the court reached its decision, and the defendant was required to submit draft minutes of orders to be settled.

Orders

Orders of the court

Defendant to submit draft minutes of orders to be settled

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Mills v Mills [2008] QSC 249
PARTIES:	EDWARD WILSON MILLS (plaintiff) v MARGARET MILLS (AS TRUSTEE OF THE ESTATE OF JOHN WILLIAM ROBERT MILLS (DECEASED) ABN 24 009 790 354) (defendant)
FILE NO/S:	BS No 5016 of 2006
DIVISION:	Trial Division
PROCEEDING:	Civil Trial
ORIGINATING COURT:	Supreme Court of Queensland
DELIVERED ON:	17 October 2008
DELIVERED AT:	Brisbane
HEARING DATE:	30 September, 1-3 October 2008
JUDGE:	Applegarth J
ORDER:	Defendant to submit draft minutes of orders to be settled
CATCHWORDS:	PARTNERSHIP – DEATH OF PARTNERS – VALUATION AND PURCHASE OF DECEASED PARTNER’S SHARE – conflicting expert valuations of partnership interests – where plaintiff succeeded to deceased partner’s half share of partnership – where defendant entitled to payment for transfer of the partnership interest to plaintiff – where main partnership asset was a family owned and operated business – whether future maintainable earnings of the business should reflect operating expenses of the family-run business – what the value of the partnership assets were at the date of the deceased partner’s death Partnership Act 1891, s 36(1), s 45 Powell v Powell (1932) 32 SR (NSW) 407, cited Spencer v The Commonwealth (1907) 5 CLR 41, applied
COUNSEL:	J A Griffin QC, with R J Clutterbuck, for the plaintiff R J Anderson for the defendant
SOLICITORS:	Beven Bowe & Associates for the plaintiff McGinness Wilson for the defendant