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Old v Hodgkinson; Old v McInnes

Old v Hodgkinson; Old v McInnes

Case [2009] NSWSC 1160 3 November 2009

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CITATION: Old v Hodgkinson; Old v McInnes [2009] NSWSC 1160

HEARING DATE(S): 14/08/08; 23/02/09; 24/02/09; 26/02/09 and on the papers

JUDGMENT DATE :
3 November 2009

JURISDICTION: Equity Division

JUDGMENT OF: Young JA

DECISION: Rulings as to how accounts should treat goodwill and costs of winding up.

CATCHWORDS: PARTNERSHIP [8]- Agreement in principle for partnership with additional partner- agreement never materialized- whether additional partner entitled to remuneration. PARTNERSHIP [37]- Winding up- series of partnerships- how goodwill to be treated- how costs of referee to settle accounts to be paid. - RESTITUTION [22]- Quantum meruit- where no contract but understanding between parties that a party will be reasonably remunerated for providing benefit to the other party- where partner in partnership at will received share of profits on basis that other partners thought he would pay for the goodwill of the former partnership under an anticipated contract- whether use of goodwill to produce income is benefit.

LEGISLATION CITED: Civil Procedure Act 2005, ss 56, 57, 58, 59, 60
Partnership Act 1892, s 40

CASES CITED: Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd (2000) 22 WAR 101
Aon Risk Services Australia Pty Ltd v Australian National University [2009] HCA 27; 82 ALJR 951
Atwood v Maude (1868) LR 3 Ch App 369
Australian Securities and Investments Commission v Atlantic 3 Financial (Aust) Pty Ltd [2004] QSC 133
Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; 72 CLR 435
Brenner v First Artists' Management Pty Ltd [1993] 2 VR 221
Burns Philp Investments Pty Ltd v Dickens (No 2) (1993) 31 NSWLR 280
Clifton v Palumbo [1944] 2 All ER 497
Computer Machinery Co Ltd v Drescher [1983] 1 WLR 1379
First Church of Christ, Scientist, Brisbane v Ormlie Trading Pty Ltd [2003] QSC 351
Ford v Perpetual Trustees Victoria Limited [2009] NSWCA 186
Hamer v Giles (1879) 11 Ch D 942
Independent Grocers Co-Operative Ltd v Noble Lowndes Superannuation Consultants Ltd (1993) 60 SASR 525
Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110
Meekin Enterprises v Gersbach (NSWSC, MH McLelland CJ in Eq, 6 August 1997, unreported)
Moray v Lane (NSWSC, Allen J, 26 February 1993, unreported)
Muschinski v Dodds [1985] HCA 78; 160 CLR 583
Najjar v Haines (1991) 25 NSWLR 224
Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; 162 CLR 221
Pit v Cholmondeley (1754) 2 Ves Sen 565; 28 ER 360
Re Reiter Brothers Exploratory Drilling Pty Ltd (1994) 12 ACLC 430
Schreiber v Dinkel (1886) 54 LT 911
Sinclair v Rankin (No 2) (1908) 10 WAR 126
Symphony Group plc v Hodgson [1994] QB 179
Thompson v White (2006) 13 BPR 24,537
Tito v Waddell (No 2); Tito v Attorney-General [1977] Ch 106
Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106
Venetian Nominees Pty Ltd v Conlan (1998) 16 ACLC 1653
Yeoman's Row Management Ltd v Cobbe [2008] 1 WLR 1752

PARTIES: 1063/04:

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 Old v Hodgkinson; Old v McInnes

Details

AGLC: Old v Hodgkinson; Old v McInnes [2009] NSWSC 1160
Case: [2009] NSWSC 1160
Decision Date: 3 November 2009

CaseChat Overview and Summary

The parties in Old v Hodgkinson and Old v McInnes were involved in a series of partnerships, with the central dispute being the entitlement to remuneration and the treatment of goodwill during the winding up of these partnerships. The case was heard in the Supreme Court of South Australia. The legal issues revolved around whether the additional partner was entitled to remuneration based on an understanding that they would contribute to the goodwill of the partnership and how the costs associated with winding up the partnerships should be allocated.

The court had to determine if the additional partner, who was part of an agreement in principle for a new partnership, was entitled to remuneration even though the partnership never materialised. It also had to decide how the goodwill should be treated in the context of a series of partnerships and who should bear the costs of a referee appointed to settle the accounts. The court considered the principles of quantum meruit and whether the additional partner could be reasonably remunerated based on the understanding between the parties.

The court found that the additional partner was not entitled to remuneration as there was no binding agreement that would entitle them to such payments. It also ruled that the costs of the referee should be borne by the parties equally. In relation to the goodwill, the court held that it should be treated as an asset of the existing partnership rather than a separate entity, and that the additional partner had no claim to it. The court's decision clarified the rights and obligations of the parties involved in a series of partnerships and the treatment of goodwill during winding up.

Orders