Page v McKensey

[2008] NSWSC 147

CITATION:	Page v McKensey [2008] NSWSC 147
HEARING DATE(S):	7, 14 and 22 February 2008
JUDGMENT DATE :	28 February 2008
JURISDICTION:	Equity Division
JUDGMENT OF:	Windeyer J at 1
DECISION:	Leave to applicants to enforce judgment and costs orders
CATCHWORDS:	PARTNERSHIP - separation agreement entered into on retirement of two members of five member partnership - order for specific performance of separation agreement - whether judgment debt and claim for costs treated as assets of the partnership - whether effect of separation agreement amounted to equitable assignment of those assets to remaining partners - whether to assist in performance leave should be given to remaining partners to enforce costs order and judgment - CONTRACTS - joint creditors release of debt by two of five joint creditors - whether bound other three - JUDGMENTS AND ORDERS - judgment in favour of five defendants - whether joint judgment - whether severed by separation agreement on partnership dissolution - whether severed by bankruptcy of one joint creditor - whether leave should be given to three of five joint creditors to enforce judgment and orders for costs
LEGISLATION CITED:	Partnership Act 1892 Supreme Court Act 1970
CATEGORY:	Consequential orders
CASES CITED:	Australian Workers Union v Bowen (1946) 72 CLR 575 Hewitt v McKensey & Ors [2003] NSWSC 1186 Wallace v Kensall (1840) 7 M&W 264; Wright v Gibbons (1949) 78 CLR 313 at 323
TEXTS CITED:	Bacon’s Abridgement Vol 5 Release D Butt P, Land Law, 5th Ed (2006), par 1463
PARTIES:	Geoffrey Francis Page (Plaintiff/Respondent) Hugh Stanley McKensey (First Defendant/First Applicant) Victor John Lewis (Second Defendant/Second Applicant) Phillip Anthony Nelson (Third Defendant/Second Respondent) Christopher Michael Hewitt (Fifth Defendant/Third Respondent) Peter Charles Hicks (Fourth Defendant/Third Applicant)
FILE NUMBER(S):	SC 4206 of 1992
COUNSEL:	G K Burton SC (Plaintiff/First Respondent) T A Alexis SC with him Mr C D Wood (First, Second and Fourth Defendant/First Second and Third Applicants) In Persons (Third Defendant/Second Respondent) P Hewitt (S) (Fifth Defendant/Third Respondent)
SOLICITORS:	Shaw McDonald (Plaintiff/First Respondent) Bowen-Thomas & Barlow First, Second and Fourth Defendant/First Second and Third Applicants) In Person (Third Defendant/Second Respondent) Hewitts Commercial Lawyers (Fifth Defendant/Third Respondent)

- 19 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

THURSDAY 28 FEBRUARY 2008.

4206/92 GEOFFREY FRANCIS PAGE V HUGH STANLEY MCKENSEY & 5 ORS

JUDGMENT on notice of motion

Question for decision

1 In the particular circumstances of this case, are three out of five original joint creditors entitled to enforce a money judgment and costs orders against a judgment debtor and a person subject to costs orders not yet quantified?

Proceedings

2 This judgment concerns an amended notice of motion filed on 19 September 2007 by three of the five named first defendants and a notice of motion of the first plaintiff filed on 3 April 2007. The action in which the motions are brought commenced as its number shows in 1992. The proceedings in 1992 were the first action in the sad saga of the accounting firm known as Forsythes. There were other defendants but that is not relevant to this decision. In this 1992 action Mr Page and an associated company sued the other five members of an accounting partnership carrying on business in Newcastle under the name Forsythes. Various matters fell for decision including the question of the date of dissolution, the valuation of goodwill, and the accounts between the partners, the defendants being Messrs McKensey Lewis, Hicks, Hewitt and Nelson shown on the record as the first defendant.

3 I gave a substantive judgment in the original proceedings and made declarations and orders on 17 December 1993. A declaration was made that Mr Page owed to the five first defendants, being his partners to 30 June 1992 the sum of $21,348. Judgment was not entered to allow Mr Page to bring a claim under s 42 of the Partnership Act 1892. Those orders made by me were entered on 12 July 1994.

4 Mr Page appealed to the Court of Appeal against my judgment and orders. That appeal was dismissed on 28 February 1995 and Mr Page was ordered to pay the respondents/defendants’ costs of that application. An application to re-open the appeal was dismissed on 29 January 1996 with an order for costs in favour of the five first defendants against Mr Page.

5 On 15 March 1996 I dealt with the question of costs in the original proceedings. The orders as entered do not appear to me to follow my judgment of 15 March 1996, from which it is apparent the costs orders were to be limited to those relating to some separate questions rather than to cover all the costs of the action. I will return to this.

6 On 26 April 1996 the proceedings came before Bryson J on a motion for entry of judgment. His Honour entered judgment against Mr Page in favour of the five first defendants for $21,348 and ordered the two plaintiffs in the proceedings, namely Mr Page and the company Hasana Pty Limited to pay the first defendants’ costs of the motion. The first defendant was always shown to be the five partners other than Mr Page. The judgment was a joint judgment.

7 Although only of peripheral relevance here, Mr Page commenced new proceedings against three of the original defendants, namely Messrs McKensey, Lewis and Hicks in action 1595 of 1996. The statement of claim was struck out and the proceedings dismissed by order of the then Master McLaughlin on 26 June 2002 who ordered that Mr Page pay the costs of McKensey, Lewis and Hicks, but not of Nelson and Hewitt. An appeal from that decision was dismissed by Gzell J on 2 September 2003 with costs in favour of all five respondents and an appeal to the Court of Appeal was dismissed on 1 December 2004 with costs in favour of McKensey, Lewis and Hicks. A third action to set aside the original judgment and orders, on the ground the judgment was obtained by fraud, was commenced by Mr Page but was discontinued.

8 The five first defendants in the original proceedings formed and carried on a partnership under the Forsythes name from 1 July 1992 until 28 August 1994, when pursuant to the terms of a document, which has been called “the separation agreement” dated 10 September 1994, Messrs Nelson and Hewitt left the partnership. This separation gave rise to further litigation. Messrs Nelson and Hewitt fell into a long and bitter dispute with Messrs McKensey, Lewis and Hicks as to entitlements under the separation agreement. That litigation which was No 1585 of 1995 was intended to be settled by consent orders of Einstein J for specific performance of the separation agreement and a consent declaration as to the proper construction of one of the clauses in that separation agreement. Although that declaration and the orders were made in 1997 it was still necessary to determine the partnership accounts as at 28 August 1994 irrespective of goodwill and to determine the value of goodwill which was required under two separate clauses of the separation agreement.

9 In 2007 I heard and determined first, the proper construction of the consent orders and second, the balance due by Mr Hewitt to Messrs McKensey, Lewis and Hicks under the separation agreement on its proper construction. Again this is somewhat peripheral other than to explain the extraordinary delay in bringing that matter to a conclusion which to some extent has caused the problems which now arise. Messrs Hewitt and Nelson had changed sides and were in fact endeavouring to assist Mr Page in his continuing battle with Messrs McKensey Lewis and Hicks. That continuing battle, to put it very simply, revolves around the continuing claim of Mr Page that the original judgment as to goodwill was obtained by fraud, the fraud being the concealment by the McKensey interests of the existence of a partnership agreement between the six partners prior to 30 June 1992. The judgment on goodwill was given on the understanding and finding that there was no partnership agreement in existence, which may have been of considerable significance on the question of the value of the goodwill of the six member partnership.

10 It seems that as a result of a change of allegiance, and perhaps to enlist the aid of Mr Page in their defence and cross claim in the action on the separation agreement, and perhaps because they formed the view that there had in fact been a partnership agreement in 1992, Messrs Hewitt and Nelson entered into reciprocal releases with Page dated 1 November 1996, to which I will return.

11 McKensey, Lewis and Hicks have on two occasions brought bankruptcy proceedings against Mr Page, based on the judgment for $21,348. Those proceedings have failed and have been discontinued or dismissed as incompetent as not brought with the consent of all joint judgment creditors: Australian Workers Union v Bowen (1946) 72 CLR 575. Attempts to proceed with assessment of costs on the part of the same persons, but without Messrs Hewitt and Nelson joining in the application for assessment have met the same complaint and are now presently stayed by the costs assessor.

12 The original notice of motion relevant to the present question was filed on 5 February 2007, seeking orders that the joint judgment and the order for costs be partitioned and divided among the judgment creditors. That motion was not pursued and an amended notice of motion was filed on 19 September 2007. This is one of two motions I am deciding. Under that motion, in which Messrs McKensey, Lewis and Hicks are applicants and Messrs Page, Nelson and Hewitt are respondents, although named as parties affected, the applicants seek the following orders:

1. A Declaration that Hugh Stanley McKensey, Victor John Lewis and Peter Charles Hicks are entitled to enforce the orders for costs made on 28 February 1995 and 29 January 1996 in the Court of Appeal and 15 March 1996 and 26 April 1996 (together “Costs Orders”) and the judgement given on 26 April 1996 (“Judgement”)
2. An order that Geoffrey Francis Page pays interest on each of the costs orders from 27 April 1996.
3. An order that the applicants have leave, pursuant to UCPR 39.1 to issue a writ of execution against the plaintiff to enforce the judgement and any judgement obtained on assessment of the costs orders.
4. Such other orders as in the aid of enforcement of the judgement orders as the Court sees fit.
5. An order that the plaintiff, Mr Page , pay the costs of this motion.

13 Mr Page, by motion filed on 3 April 2007 seeks a declaration that he “be released from any obligation to pay the judgment debt and the costs orders and that the application for assessment of costs be permanently stayed.” While the language is a little inept, it is accepted that what is really sought is a declaration that Mr Page has been released as a result of the release obtained from two of the joint creditors from any obligation to pay the judgment debt and costs. The matter proceeded on that basis.

Additional facts – separation agreement

14 The document referred to as the separation agreement is the most important document bearing on this action. Its intention as stated in its heading was to set out the proposed basis for Messrs Nelson and Hewitt leaving the five member partnership which was described in the document and which I will now describe as Forsythes (Old). The firm to be continued by the three remaining partners is referred to in the document as Forsythes (New). The construction of certain paragraphs has already been the subject of consent orders by Einstein J and two determinations by me. It is accepted that the document was binding on the five partners of Forsythes (Old).

For present purposes the following terms of the separation agreement are important:

Definitions:
…
“The Dispute” means the appeal by Geoffrey Francis Page against the decision of Windeyer J on December 1993 in the matter of Page v McKensey & Others in the Equity Division of the Supreme Court of NSW, and any subsequent related litigation
“Settlement Date” means the date of the finalisation of The Dispute.
“Settlement Payment” means the net balance of all amounts due by Forsythes (New) to the Retiring Partners or the net balance of all amounts due by the Retiring Partners to Forsythes (New) at the Settlement Date, paid by 60 equal monthly instalments together with interest thereon at an annual rate equal to the Prime Overdraft Rate of National Australia Bank at the beginning of each month of the relevant payment. The first instalment is to be one months after the Settlement date.
…
Agreement
1. The Retiring Partners will retire with effect from 28 August 1994.
…
6. The Retiring Partners jointly will purchase from Forsythes (New) the assets as set out in Schedule E attached hereto, for the amounts assigned thereto. Settlement for these amounts will be in accordance with the Settlement Payment.
…
8. The Retiring Partners will be entitled to be paid the balances standing to the credit of their capital and current accounts as at 28 August 1994 and will be obliged to pay the balances standing to the debit of those accounts at that date, adjusted by any amounts relevant to Forsythes (Old) which may become known prior to the last instalment of the Settlement Payment. Settlement for these amounts will be in accordance with the Settlement Payment.
9. A balance sheet and profit and loss account will be prepared for Forsythes (Old) as at 28 August 1994 on an accruals basis and once accepted by all parties will be binding thereon other than as adjusted in 8.
10. On or before 31 December 1994, the parties shall jointly engage, and pay in the proportions of their interests in Forsythes (Old) at 28 August 1994, the services of Rob Knights of Rob Knights & Co, Chartered Accountants of Sydney, or in the event of him being unable or unwilling to so act, a valuer appointed by the NSW State Chairman of the Institute of Chartered Accountants in Australia, to value the goodwill of the accountancy practice and associated entities of Forsythes (Old), excluding the HMC Unit Trust, Forsythes Computer Systems Pty Ltd and Back to Basics Business Services Pty Ltd.
The basis upon which the valuation is to be conducted is that of a willing but not anxious buyer and a willing but not anxious seller, with the seller being prepared to enter into reasonable covenants not to compete. The above valuation will be based solely upon the trading results of Forsythes (Old) for the year ended 30 June 1994. Settlement for the amount owing to the Retiring Partners, representing their share of the goodwill, will be in accordance with the Settlement Payment.
11. The value of plant, equipment, furniture and fittings of Forsythes (Old) at 28 August 1994, will be the value as determined by Windeyer J in his decision in the matter of Page v McKensey & Others in December 1993, adjusted for disposals and acquisitions (at cost) from 30 June 1992 to 28 August 1994. Settlement for the amount owing to the Retiring Partners, representing their share of plant, equipment, furniture and fittings, will be in accordance with the Settlement Payment.
12. The Retiring Partners will pay to Forsythes (New) upon written request, twenty (20) per centum of any payment or payments made by Forsythes (New) after 28 August 1994, to other parties, in connection with the action in the Supreme Court of New South Wales by Geoffrey Francis Page against Forsythes (Old) within thirty days of Forsythes (New) making such payment or payments.
…
16. An interim schedule of the maintainable fees earned by Forsythes (Old) from clients taken over by the Retiring Partners jointly, based on fees applicable to the year ended 30 June 1994, is attached hereto as Schedule G. On final determination of those fees, the value of the goodwill attributable to them is to be determined by the same valuer in accordance with 10. The value so determined will be due to Forsythes (New) by the Retiring Partners and will form part of the Settlement Payment.
…
26. Any matter dealt with in this agreement which cannot be resolved by the parties hereto is to be referred to an arbitrator to be appointed by the NSW State Chairman of the Institute of Chartered Accountants in Australia whose decision shall be binding on all parties. The cost of the arbitrator will be paid by the parties as determined by the arbitrator.

15 On first impression I would have thought it clear that the intention and effect of the agreement was to set out the basis on which Hewitt and Nelson would retire from Forsythes (Old) which would then continue to carry on business as a three member partnership with three partners under the Forsythes name. In other words the entitlement of the outgoing partners would be determined in accordance with the agreement and the continuing partners would retain all of the assets of the partnership which were not to be taken by Hewitt and Nelson under particular clauses of the agreement and that the three partners of Forsythes (New) would be responsible for all the liabilities of the five member partnership at the date of dissolution, these liabilities being taken into account in determining the capital and current accounts of the outgoing partners. The question I must decide is whether the first impression is correct.

16 Pursuant to clause 26 of the separation agreement, Mr M E Wayland was appointed as arbitrator to determine the accounts and balance sheet of the partnership as at 28 August 1994. There has been extraordinary delay in nearly everything in this struggle but he finally made his award on 20 August 2003. Proceedings to set aside that award were dismissed: Hewitt v McKensey & Ors [2003] NSWSC 1186.

17 There were problems concerning the valuation of goodwill which are discussed in some detail in my judgment on a notice of motion in proceedings number 1585 of 1995 (See [2007] NSWSC 307). Mr Vella was appointed to value the goodwill as required by clauses 10 and 16 of the separation agreement because Mr Knight, who was the person nominated to carry out this task under the agreement, was not able to do so. Mr Vella made his determination on 21 June 2006. In the judgment to which I referred I dismissed a motion to set aside his determination.

The balance sheet as at 28 August 2004, as determined by Mr Arbitrator Wayland included the following items under current assets:-

G E Page suspense $309,974
Less amount not yet paid ($ 63,826)

This therefore brought about a net asset of $246,148. That balance sheet also included as a liability the following item:
Loan from related partnership $ 26,610

18 That figure of $26,610 related to a balance of certain assets and liabilities which the five member partnership was said to have taken over from the original six member partnership as from 1 July 1992, and included in the balancing figure as a credit the amount of the judgment debt due by Page to the five first defendants in this action, namely the other five members of the six person partnership. The affidavit of Mr McKensey gave an explanation of this which I accept.

19 The G E Page suspense item of $246,148 represents legal costs paid by Forsythes (Old) to solicitors in connection with the Page litigation which the partners hoped to recover from Page. There were as at 28 August 1994 no costs orders in place but there was at least the right to apply for an order for costs with a reasonable expectation of an order. In the Wayland arbitration the McKensey interests argued for the removal of this item as an asset and Mr Hewitt argued for its retention and succeeded. Having had his and Mr Nelson’s shares on current account and capital account determined and credited on the basis of clause 12, with the inclusion of this item as an asset, I think it is impossible to argue that the three remaining partners were not entitled to the benefit of the asset or to argue it was not treated as an asset of Forsythes (Old) when the submission to Mr Wayland was that it was a partnership asset. Thus the benefit of the costs recovered from Page would accrue to McKensey, Lewis and Hicks subject to any final adjustment in accordance with clause 8. The same applies to the judgment debt.

20 Mr Nelson in cross-examination of Mr McKensey established that Forsythes (Old) had, for tax purposes, claimed as a deduction the amount of costs paid and he submitted that accordingly it could not be an asset. That has, however, been determined by the arbitration. Insofar as it was put forward as a basis to deny equitable relief to the applicants on some basis of unconscionable conduct or unclean hands it must fail.

Additional matters relating to costs

21 In July or September 2006 – it is not clear which - the applicants applied for assessment of costs pursuant to the costs order made by me on 15 March 1996. The matter was referred to Mr Garde as costs assessor it seems in September 2006. It is unnecessary to go into the rather contentious correspondence between the costs assessor and the parties, other than to say that on 9 July 2007, having been advised that there were problems as to entitlement to proceed to assessment, Mr Garde wrote saying “this assessment is thus stayed pending the making by the Court, on the application of the costs applicant or costs respondent, of proper directions as to e.g. the proper parties who may enforce the subject costs orders relied on herein.”

22 The costs orders sought to be enforced against Mr Page through the assessment are my order of 15 March 1996 and the order of Bryson J of 26 April 1996, together with the costs orders in the Court of Appeal of 28 February 1995 and 29 January 1996. It is accepted that enforcement other than by the five first defendants would require leave of the court. It is not within the power of a trial judge to make orders bearing upon the orders in the Court of Appeal. Such power could be exercised by a single judge of the Court of Appeal pursuant to s 45(1)(d) of the Supreme Court Act 1970. Thus any orders I make as to enforcement by the applicants must be limited to the costs orders of 15 March 1996 and 26 April 1996. As the bill of costs lodged for assessment is not in evidence, I do not know its form and whether it is separated as to the various costs orders. Mr Page would be entitled to an order to stay proceedings on assessment of the costs in the Court of Appeal.

23 There is a further difficulty in that the order for costs of Bryson J was against both plaintiffs. That is a joint judgment. Hasana Pty Ltd is not a respondent to this motion. Any writ of execution would have to name both judgment debtors although a levy could be made against either. It follows that the relief sought in respect of the costs order of Bryson J is not available.

24 That leaves my costs order of 15 March 1996 to which I return. Order 6 of the orders as entered on 8 July 1996 is as follows:

6. The costs of the first to fifth defendants be paid by the first plaintiff.

My judgment made it clear that I was awarding costs only in respect of the hearings of two separate issues determined by me saying the costs of each issue follow the event and “I propose to so order”. The next paragraph of the judgment is as follows:

I do not propose to make any other order as to costs in this matter until it is finally concluded. I would expect, however, that if it can be concluded without any further contests hearing on the s 42 matter or on the transfer of the unit trusts, that it would be appropriate to let the parties go their own way and make no other order as to costs. That, however, will have to be the subject of a separate determination by me or, if I am not available, by a Master.

And then after dealing with an application for indemnity costs I said:

The order will be in relation to the costs of the issues determined by Judgments of 27 May 1993 and 17 December 1993, I order that the costs of the first to fifth defendants be paid by the first plaintiff.

25 I have checked my notebook and the Associate’s Record of Proceedings in both of which the following appears:

Order that the costs of the first to fifth defendants of the issues determined by my judgments of 27 May 1993 and 17 December 1993 be paid by the first plaintiff.

It is clear the order as entered does not reflect the order made. It should be corrected and I will so order. The parties have been given notice of this intention. The parties also accept that order 5 should be amended by adding the words “no order as to costs”.

26 Interest is sought on the costs from 27 April 1996, being the day after the money judgment. As the costs sought were, on the evidence, paid before that date it is reasonable to allow interest from that date in spite of the long delay.

The Releases

27 If, as I consider and find, the effect of the separation agreement was that the remaining partners, namely those in Forsythes (New) became entitled to the benefit of any costs recovered and the judgment debt it is not necessary to consider the question of release further. However, it is probably desirable to do so.

28 In the absence of fraud a release of a judgment debt by one of several joint judgment creditors operates to release the joint judgment debt: Wallace v Kensall (1840) 7 M&W 264; Bacon’s Abridgement Vol 5 Release D. The recitals and clause 1 to the relevant release dated 1 November 1996 between Page of the one party and Messrs Nelson and Hewitt of the other are as follows:

WHEREAS:
A. Page has instituted several claims in the Supreme Court of New South Wales against Hewitt and Nelson and other partners of the firm known as “Forsythes” relating to Page’s exit from that partnership.
B. Page and Hewitt and Nelson are desirous of settling all current and future claims arising out of Page’s exit from the partnership known as “Forsythes”.
NOW THIS DEED WITNESSETH that in consideration of the premises contain herein.
1. Hewitt and Nelson hereby agree to release Page from all claims and cross claims, suits, actions, costs and liabilities of any nature whatsoever arising from or relating to the exit of Page from the partnership known as Forsythes (“Forsythes”) including any judgment, either obtained or to be obtained, in any jurisdiction, orders for costs or interest made in any court and any debt owing or found to be owing to Hewitt and Nelson in their capacity as partners at the time of Page’s exit from the partnership. This is an essential condition of this agreement.

29 Mr Alexis, Senior Counsel for the applicants, argued that clause 1 of the agreement on a proper construction did not operate as a release of the debt or claim for costs owing by Page to the five joint judgment creditors. He also argued that it would not so operate as it was executed for a fraudulent purpose, meaning an improper purpose. On consideration I consider that the release is effective. So far as the judgment debt is concerned, because it was a liability arising from or relating to the exit of Page from the Forsythes partnership and so far as the costs orders were concerned, because they resulted from that action. Fraud or improper purpose would operate to defeat the release but there is a difference between pleading and proof. Neither Nelson nor Hewitt was cross-examined, and although Nelson’s evidence was rejected on the basis the court would note his contention that there was fraud on the part of the McKensey interests in the original proceedings no application was made that he be called for cross-examination and in fact Mr Alexis said that he did not wish to cross-examine either Hewitt or Nelson. The same result would arise under the argument of Mr Alexis based on s5 of the Partnership Act. Whatever the position as to assets nobody thought Forsythes (Old) continued after the separation. The release, if effective, had to be outside any partnership. Thus if it were necessary to so find, I would have found the release was effective to release Page from the judgment debt and the claim for costs. However, as I have stated this decision is not required as I have found that at the date of the release neither Nelson nor Hewitt had any interest in the judgment or in any possible order for costs which would otherwise have been released.

Severance

30 The next argument I should deal with, although once again it is not necessary, is the claim of severance. If the release were not effective as I have found, and if as a result of the separation agreement it was not agreed that the judgment debt and claims for costs would remain an asset of the continuing partners, then those assets remain held by the five judgment creditors as joint creditors. Unless there was some severance the title remained joint. The separation agreement would not be a severance because in those circumstances it would not bear on the joint assets. Mr Nelson became bankrupt on his own petition on 19 September 2000 and obtained an automatic discharge on 20 September 2003. If the release were ineffective and ownership did not pass, at least in equity, as a result of the severance agreement then the bankruptcy brought about a severance of the joint tenancy but only so far as the interest of Nelson was concerned: see discussion of Latham CJ in Wright v Gibbons (1949) 78 CLR 313 at 323; Butt P, Land Law, 5th Ed (2006), par 1463. From bankruptcy therefore title to a one fifth share of the joint assets would be held by the trustee in bankruptcy, as tenant in common with the other four creditors, who would continue to hold their interests as joint tenants. All this is probably incidental as there is no claim to enforce rights in respect of a one-fifth separate interest of Nelson. Neither could there be because that interest would vest in Mr Wily, the trustee in bankruptcy, who was not joined as a party. Mr Hewitt would remain a non-consenting joint owner of 80% of the judgment debt. There is no claim for leave to enforce 80% of the rights against Mr Page.

Conclusion

31 The upshot of all of this is that I consider the claims against Mr Page as judgment debtor and for costs were treated as assets of the five member partnership; that the separation agreement operated as an agreement that all assets of Forsythes (Old) other than those taken by the retiring partners, would be retained by the partners of Forsythes (New) with the interests of Nelson and Hewitt being paid or adjusted in accordance with that agreement. Einstein J has ordered the agreement be specifically enforced.

Relief

32 The question remains as to relief. What is really sought against Nelson and Hewitt are orders to make good the order for specific performance of the separation agreement this being required because there has been no legal assignment of partnership assets and assumption of liabilities. While this is not the kind of relief ordinarily given on a motion in an action which preceded action on the separation agreement, and while in some ways, it might have been more procedurally correct to commence a new action, this was not argued and it seems to me that the court should endeavour to bring about what is a proper result without the need for even more proceedings. It was not argued that relief could not be given, although it was argued that as relief was discretionary it should not be given as the applicants lack clean hands and were guilty of disentitling conduct. However, that claim was nothing other than an attempt to raise a claim that the original judgment valuing goodwill was obtained by fraud an action based upon that claim having been discontinued. I refused to allow evidence on that issue as to allow it would be to allow an allegation to impugn the judgment on the ground of fraud without a fresh pleaded action. A last minute attempt was made to raise a different claim of improper conduct related to the claiming of the costs paid as a deduction for tax purposes. So far as Mr Page is concerned the conduct did not concern him. An application to re-open on this subject was dismissed for reasons given in a separate judgment.

33 As there is no pleading there is no claim for orders by way of enforcing performance to require the recalcitrant judgment creditors to co-operate. In any event that would be more appropriate to the other action. On the other hand the court should do what is necessary to enable the applicants in as simple a way as possible to enforce that to which they are entitled. Thus they should have orders that they are entitled to the benefit of the judgment and entitled to take steps to enforce it; and that they should have leave to issue execution on the judgment. That leave is necessary as otherwise the form of writ must follow the form of the action as to parties. The applicants should also have leave to enforce my costs order of 15 March 1996 once that is amended in accordance with these reasons and orders.

34 Finally to prevent any suggestion that the costs order after amendment cannot be enforced, because no final costs orders have been made it will be necessary to give leave to proceed to assessment and enforcement forthwith.

Costs

35 The notice of motion filed on 8 February 2007 was effectively abandoned on filing of the amended notice of motion on 17 September 2007. Bryson J has already made orders as to the costs thrown away by the amendment and the vacation of the hearing date fixed for 6 September. The applicants have succeeded in substantial part on the amended notice of motion contested by all respondents, but they have not succeeded on all claims regarding costs. The applicants should have 90% of their costs on the amended notice of motion against all respondents.

36 So far as the notice of motion of Mr Page filed on 3 April 2007 is concerned, Mr Page has failed on his main claim of release. Without further evidence as to other details of the assessment before Mr Garde, I cannot determine whether there should be a permanent stay. It may be the matter is so confused it would be better to start again but I have not considered any limitation questions. In any event it may be that confusion can be ended by ordering a permanent stay on the present assessment other than assessment pursuant to order 6 as amended of the orders of 13 March 1996. As each side has had a measure of success the appropriate costs order would be there be no order as to costs leaving the parties to bear their own.

1. Direct pursuant to UCPR 36.17 that paragraphs 5 and 6 of the orders of 15 March 1996, entered on 8 July 1996, be amended so as to read as follows:

5. On Defendants Motion of 9 October 1995: Order that the application for indemnity costs be dismissed with no order as to costs.
6. The costs of the first to fifth named first defendants of the issues determined by judgments on 27 May 1993 and 17 December 1993 be paid by the first plaintiff.


2. Declare that Hugh Stanley McKensey, Victor John Lewis and Peter Charles Hicks are entitled to proceed to assessment and to enforce order 6 as amended. Give leave to proceed to assessment and enforcement forthwith.

3. Order that interest be paid on such costs as assessed from 27 April 1996.

4. Order pursuant to UCPR 39.1 that the said Hugh Stanley McKensey, Victor John Lewis and Peter Charles Hicks, have leave to issue a writ of execution against Geoffrey Francis Page to enforce the judgment of 26 April 1996.

5. Order that the respondents pay 90% of the applicants’ costs of the amended notice of motion.

Notice of motion of 3 April 2007.

37 I will hear submissions on this in light of paragraph 36.

38 I will stand the matter over for a few days to enable the parties to consider these reasons and to prepare draft orders.

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