Court of Appeal
Supreme Court
New South Wales
- Amendment notes
Medium Neutral Citation: Old v McInnes and Hodgkinson [2011] NSWCA 410 Hearing dates: 1 and 2 November 2011 Decision date: 22 December 2011 Before: Beazley JA at [1]
Giles JA at [42]
Meagher JA at [43]Decision: In appeal No. 184482 of 2004:
(1) Order that the appeal be dismissed.
(2) Grant leave to the first respondent to cross-appeal from Order 2 made on 10 December 2010.
(3) Order that the cross-appeal be allowed.
(4) Order that Order 2 made by Young JA on 10 December 2010 be set aside.
(5) Order that the cross-respondent pay the first respondent's costs of the proceedings in the Court below.
(6) Order that the appellant pay the first respondent's costs of the appeal and cross-appeal.
(7) Order that there be no order as to the costs of the second respondent of the appeal and cross appeal.
In appeal No. 187484 of 2004:
(1) Order that the appeal be allowed in part.
(2) Order that Order 4(a) made by Young JA on 10 December 2010 be varied by amending the statement of account marked "A" in the column headed "Final Amount" by deleting the amount of $47,644 in respect of Mr McInnes and Mr Hodgkinson and the amount of -$95,288 in respect of Mr Old.
(3) Order that Orders 4(c) to (f) made by Young JA on 10 December 2010 be varied to read as follows:
(c)declares that the parties' entitlements to those funds are as follows:
(i) Hugh Rudyard Hodgkinson: $104,432
(ii) Fraser Patison Old: $83,933
(iii) Kenneth John McInnes: $130,014
(d)declares that on the balance of the partnership's accounts, excluding interest:
(i) Fraser Patison Old owes Kenneth John McInnes $22,193;
(ii) Hugh Rudyard Hodgkinson owes Kenneth John McInnes $1,694;
(e)declares that Fraser Patison Old is liable to pay interest up to judgment on 10 December 2010 pursuant to s 100 of the Civil Procedure Act as follows:
(i) to Hugh Rudyard Hodgkinson from 1 July 2004:
$20,948
(ii) to Kenneth John McInnes from 1 July 2004:
$20,948
(f)the Court gives judgment:
(i) for Hugh Rudyard Hodgkinson against Fraser Patison Old for $20,148;
(ii) for Kenneth John McInnes against Fraser Patison Old for $43,141;
(iii) for Kenneth John McInnes against Hugh Rudyard Hodgkinson for $1,694.
(4) Grant leave to the respondents to cross-appeal from Order 5 made by Young JA on 10 December 2010
(5) Order that the cross-appeal be dismissed.
(6) Order that there be no order as to the costs of the appeal and that the respondents pay the appellant's costs of the cross-appeal.
(7) Grant liberty to the parties to apply to the Registrar within seven days of the date of these orders to vary Orders 2 or 3 above if they do not give effect to the decision in this appeal
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is…
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- AGLC
- Old v McInnes and Hodgkinson [2011] NSWCA 410
- Case
- [2011] NSWCA 410
- Decision Date
CaseChat Overview and Summary
The primary legal issues before the court were whether the conduct of one of the former firms constituted a breach of fiduciary duty owed to the other partners, particularly in relation to the removal and retention of client files, and whether any equitable compensation awarded for such a breach should include an amount reflecting a reduction in the value of the partnership's goodwill. Additionally, the court was required to determine the existence and enforceability of a contract for the payment of goodwill by an incoming partner, and to exercise its discretion regarding the costs of the dissolution proceedings, considering the adequacy of settlement offers.
The Court of Appeal, comprising Beazley, Giles, and Meagher JJA, considered the distinction between goodwill itself and the sources of goodwill, finding that the removal of client files could impact the value of the former partnership's goodwill. The court analysed the fiduciary obligations that continue to exist between partners even after dissolution, especially during the winding-up period. The court also examined the contractual elements required for a binding agreement concerning the payment for goodwill. The court's reasoning led to significant variations in the orders made by the court below concerning the financial entitlements and liabilities of the former partners, and a re-evaluation of the costs orders.
In appeal No. 184482 of 2004, the appeal was dismissed, leave was granted for a cross-appeal which was allowed, setting aside a previous order and ordering the cross-respondent to pay the first respondent's costs below, with the appellant to pay the first respondent's costs of the appeal and cross-appeal. In appeal No. 187484 of 2004, the appeal was allowed in part, with specific orders varying the statement of account and declaring the parties' entitlements and liabilities, including judgments for specific amounts and interest. Leave was granted for a cross-appeal which was dismissed, with no order as to the costs of the appeal and the respondents ordered to pay the appellant's costs of the cross-appeal. Liberty was granted for parties to apply to the Registrar to vary certain orders.
Orders
Orders of the court
In appeal No. 184482 of 2004:
(1) Order that the appeal be dismissed.
(2) Grant leave to the first respondent to cross-appeal from Order 2 made on 10 December 2010.
(3) Order that the cross-appeal be allowed.
(4) Order that Order 2 made by Young JA on 10 December 2010 be set aside.
(5) Order that the cross-respondent pay the first respondent's costs of the proceedings in the Court below.
(6) Order that the appellant pay the first respondent's costs of the appeal and cross-appeal.
(7) Order that there be no order as to the costs of the second respondent of the appeal and cross appeal.
In appeal No. 187484 of 2004:
(1) Order that the appeal be allowed in part.
(2) Order that Order 4(a) made by Young JA on 10 December 2010 be varied by amending the statement of account marked "A" in the column headed "Final Amount" by deleting the amount of $47,644 in respect of Mr McInnes and Mr Hodgkinson and the amount of -$95,288 in respect of Mr Old.
(3) Order that Orders 4(c) to (f) made by Young JA on 10 December 2010 be varied to read as follows:
(c)declares that the parties' entitlements to those funds are as follows:
(i) Hugh Rudyard Hodgkinson: $104,432
(ii) Fraser Patison Old: $83,933
(iii) Kenneth John McInnes: $130,014
(d)declares that on the balance of the partnership's accounts, excluding interest:
(i) Fraser Patison Old owes Kenneth John McInnes $22,193;
(ii) Hugh Rudyard Hodgkinson owes Kenneth John McInnes $1,694;
(e)declares that Fraser Patison Old is liable to pay interest up to judgment on 10 December 2010 pursuant to s 100 of the Civil Procedure Act as follows:
(i) to Hugh Rudyard Hodgkinson from 1 July 2004:
$20,948
(ii) to Kenneth John McInnes from 1 July 2004:
$20,948
(f)the Court gives judgment:
(i) for Hugh Rudyard Hodgkinson against Fraser Patison Old for $20,148;
(ii) for Kenneth John McInnes against Fraser Patison Old for $43,141;
(iii) for Kenneth John McInnes against Hugh Rudyard Hodgkinson for $1,694.
(4) Grant leave to the respondents to cross-appeal from Order 5 made by Young JA on 10 December 2010
(5) Order that the cross-appeal be dismissed.
(6) Order that there be no order as to the costs of the appeal and that the respondents pay the appellant's costs of the cross-appeal.
(7) Grant liberty to the parties to apply to the Registrar within seven days of the date of these orders to vary Orders 2 or 3 above if they do not give effect to the decision in this appeal
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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