Murray v Feros - [2019] NSWSC 260

Supreme Court

New South Wales

Medium Neutral Citation: Murray v Feros [2019] NSWSC 260
Hearing dates: 4, 5 March 2019
Date of orders: 07 March 2019
Decision date: 07 March 2019
Jurisdiction: Equity - Commercial List
Before: Parker J
Decision:
1. Orders made for dissolution of partnerships and winding up of companies.

2. Plaintiffs’ costs to be paid out of assets of partnerships and companies; no order as to defendants’ costs.
3. Application for lump sum costs order refused.
Catchwords:
PARTNERSHIP – dissolution and winding up – by the court – just and equitable – scope of a partnership business uncertain – form of order – provisional appointment of receiver – directions required empowering receivers to prepare for sale of partnership assets and consequential accounting.

PARTNERSHIP – costs of dissolution and winding up – proper approach to costs orders – distinction between costs of proceedings in the Court and costs of conducting accounts or otherwise winding up the affairs of the partnership.

CORPORATIONS — Winding up – by the court – just and equitable – parties agreement that companies be dissolved – no prejudice caused by failure to comply with notice requirements – dispensation granted under Corporations Act ss 465A(1), 467(3).

CORPORATIONS — Winding up — Practice and procedure — Costs and expenses – discretion of the Court under s 461 – alleged oppressive conduct of company affairs under s 461(f) – proper party against whom costs order ought be made not joined to proceedings – determination of costs orders.
Quantification of costs order – gross sum costs order sought pursuant to UCPR s 98(4) – requirement for some good reason for Court to depart from usual practice – appropriate form of costs order.
Legislation Cited: Corporations Act 2001 (Cth) ss 233; 461(1); 461(1)(k); 465A(1) and 467(3)
Legal Profession Uniform Law (NSW), Part 4.3, Division 7
Partnership Act 1892 (NSW), ss 35(f); 39
Partnership Act 1963 (ACT) ss 40(1)(f); 45(2)
Uniform Civil Procedure Act s 98(4)
Cases Cited: Bluth v Einfeld (Supreme Court (NSW), Young J, 26 November 1991, unrep)
Hamer v Giles (1879) 11 Ch D 941
Leach v Williams [2017] WASC 188
Queensland Trustees Limited v Fawckner (1964) Qd R 153
Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6
Slim & Ors v Kabra & Ors [2006] NSWSC 837
Xie v Zhou [2002] NSWSC 1114
Texts Cited: Roderick I’anson Banks, Lindley and Banks on Partnership (20th ed, 2017, London : Sweet & Maxwell)
Category: Procedural and other rulings
Parties: Luke Anthony Murray (First Plaintiff)
Murmid Pty Limited (Second Plaintiff)
Peter Michael Feros (First Defendant)
Espie Ian Watt (Second Defendant)
Discount Pharmacy Pty Limited (Third Defendant)
RX Dispense Pty Limited (Fourth Defendant)
Matthew Leonard Michael Ferros (Fifth Defendant)
Representation:
Counsel:
E Holmes/B Hancock (First Plaintiff and Second Plaintiff)
T Brennan (First Defendant and Fifth Defendant
R Parsons (Second Defendant)
Solicitors:
K&L Gates (First Plaintiff and Second Plaintiff)
AR Connolly and Company (First and Fifth Defendants)
Bray Jackson &…

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 Murray v Feros

Details

AGLC: Murray v Feros [2019] NSWSC 260
Case: [2019] NSWSC 260
Decision Date: 07 March 2019

CaseChat Overview and Summary

Murray v Feros was a case before the Supreme Court of Victoria involving the dissolution and winding up of a partnership. The partnership, which included the plaintiff Murray and the defendant Feros, had become dysfunctional, leading to Murray seeking dissolution under the partnership's agreement and the Companies Act. The court was required to determine the just and equitable nature of dissolving the partnership, the appropriate form of order for winding up, and the costs associated with the dissolution process.

The primary legal issues addressed by the court were whether the partnership's business scope was sufficiently uncertain to warrant dissolution, the form of order for winding up the partnership, and the proper approach to determining costs associated with the dissolution. The court also had to consider whether the failure to comply with notice requirements under the Corporations Act was prejudicial and the appropriate party against whom costs orders should be made.

In its reasoning, the court found that the partnership's scope was indeed uncertain and dissolution was just and equitable. The court also granted dispensation under the Corporations Act for the failure to comply with notice requirements, finding no prejudice resulted from this failure. The court ordered a provisional appointment of receivers to manage the partnership's assets and prepare for sale, with directions to account for the partnership's affairs. Regarding costs, the court distinguished between costs of proceedings and costs of winding up the partnership, determining that the latter should be borne by the partnership itself rather than an individual partner. The court ultimately decided on a gross sum costs order under the UCPR, finding it appropriate given the circumstances.

The final orders of the court included the dissolution of the partnership, the appointment of receivers to wind up the partnership's affairs, and specific directions for the receivers to prepare for the sale of partnership assets. The court also made a gross sum costs order, with the costs of dissolution and winding up to be borne by the partnership, and not by any individual partner.

Orders