Phillips v Spinaze - [2005] QSC 268

SUPREME COURT OF QUEENSLAND

CITATION:

Phillips v Spinaze [2005] QSC 268

PARTIES:

MARK PHILLIPS
(Applicant)
v
STEVEN EDWARD SPINAZE
(Respondent)

FILE NO/S:

SC No 307 of 2005

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Cairns

DELIVERED ON:

1 September 2005

DELIVERED AT:

Cairns

HEARING DATE:

2 August 2005

JUDGE:

Jones J

ORDER:

(1) I declare that upon the retirement of the applicant from the partnership constituted by the Deed of Partnership dated 20 June 2002 between the applicant and the respondent, the partnership was dissolved as at 22 September 2004.
(2) I declare that upon the true construction of the said Deed of Partnership the respondent is entitled to purchase the applicant’s interest in the partnership upon the terms set out in Cl 13.2 of the Deed and by reference to the accounts prepared by Pacifico Chartered Accountants dated 13 December 2004 subject to any challenge the applicant wishes to make in respect of the accounts in accordance with the said Deed.
(3) I give liberty to apply in respect of any dispute which might arise concerning the calculation of the amount payable by the respondent to the applicant for the applicant’s interest in the partnership.

(4) I reserve the question of costs to allow the parties to make written submissions on that issue within 14 days from the date hereof.

CATCHWORDS:

PARTNERSHIP – DISSOLUTION AND WINDING UP – RIGHTS AND DUTIES OF PARTNERS INTER SE – partnership deed provided a mechanism for winding up partnership – applicant seeks to avoid winding up mechanism – whether winding up mechanism conferred by partnership deed is extinguished on dissolution of partnership

S J Mackie Pty Ltd v Dalziell Medical Practice Pty Ltd [1989] 2 Qd R 87
Rushton (Qld) P/L & Anor v. Rushton (NSW) P/L & Anor [2002] QCA 210
McGowan & Anor v. Commissioner of Stamp Duties [2001] QCA 236

COUNSEL:

Mr J Jacobs for the applicant
Mr M Jonsson for the respondent

SOLICITORS:

O’Reilly Stevens Bovey Lawyers for the applicant
Bakers Lawyers for the respondent

By this application, Mark Phillips (“the applicant”) seeks declarations that his partnership with Steven Spinaze (“the respondent”) was dissolved on 22 September 2004 and that the parties’ rights are governed by Cl 16 of the Deed of Partnership.[1] He seeks orders also that the partnership be wound up pursuant to Cl 16.
[1]Ex “MP1” to affidavit of Mark Phillips filed 29/07/05

The Facts

On 20 June 2002, the applicant and respondent entered into a partnership pursuant to the said Deed. The assets of the partnership comprise a pontoon and moorings and various Marine Parks permits which permits the use of those items. The partners are also directors and shareholders of the business Down Under Helicopters Pty Ltd to which the partners gave the right to use the assets of the partnership.

On 29 February 2004, the applicant wrote to the respondent to the effect that he intended to dissolve the partnership. He put forward a proposal whereby he…

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.

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Details

Case: [2005] QSC 268
Decision Date: 1 September 2005

CaseChat Overview and Summary

In the case of Phillips v Spinaze, the applicant, Phillips, brought an application to the Supreme Court of New South Wales to interpret and enforce a partnership deed. The dispute revolved around the dissolution of the partnership and the subsequent winding up of the partnership's affairs, specifically whether the winding up mechanism set out in the partnership deed was effective upon the dissolution of the partnership. The respondent, Spinaze, argued that upon the dissolution of the partnership, the winding up mechanism ceased to have effect.

The central legal issue before the court was whether the winding up mechanism in the partnership deed remained in force after the dissolution of the partnership. The court needed to determine if the dissolution of the partnership, which occurred upon the applicant's retirement, also extinguished the winding up mechanism outlined in the partnership deed. Furthermore, the court had to assess whether the respondent was entitled to purchase the applicant's interest in the partnership and whether the accounts prepared by the chartered accountants correctly reflected the financial position of the partnership.

The court found that the partnership was indeed dissolved upon the applicant's retirement. However, the court ruled that the winding up mechanism in the partnership deed was not extinguished by the dissolution. The court held that the respondent was entitled to purchase the applicant's interest in the partnership according to the terms set out in the partnership deed. The court also noted that any challenges to the accounts prepared by the chartered accountants could be made by the applicant in accordance with the partnership deed. The court granted the respondent the right to apply for disputes concerning the calculation of the amount payable for the applicant's interest in the partnership. The issue of costs was reserved to allow for written submissions from both parties.

Orders

Orders of the court

(1) I declare that upon the retirement of the applicant from the partnership constituted by the Deed of Partnership dated 20 June 2002 between the applicant and the respondent, the partnership was dissolved as at 22 September 2004.

(2) I declare that upon the true construction of the said Deed of Partnership the respondent is entitled to purchase the applicant’s interest in the partnership upon the terms set out in Cl 13.2 of the Deed and by reference to the accounts prepared by Pacifico Chartered Accountants dated 13 December 2004 subject to any challenge the applicant wishes to make in respect of the accounts in accordance with the said Deed.

(3) I give liberty to apply in respect of any dispute which might arise concerning the calculation of the amount payable by the respondent to the applicant for the applicant’s interest in the partnership.

(4) I reserve the question of costs to allow the parties to make written submissions on that issue within 14 days from the date hereof.

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:	Phillips v Spinaze [2005] QSC 268
PARTIES:	MARK PHILLIPS (Applicant) v STEVEN EDWARD SPINAZE (Respondent)
FILE NO/S:	SC No 307 of 2005
DIVISION:	Trial
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Cairns
DELIVERED ON:	1 September 2005
DELIVERED AT:	Cairns
HEARING DATE:	2 August 2005
JUDGE:	Jones J
ORDER:	(1) I declare that upon the retirement of the applicant from the partnership constituted by the Deed of Partnership dated 20 June 2002 between the applicant and the respondent, the partnership was dissolved as at 22 September 2004. (2) I declare that upon the true construction of the said Deed of Partnership the respondent is entitled to purchase the applicant’s interest in the partnership upon the terms set out in Cl 13.2 of the Deed and by reference to the accounts prepared by Pacifico Chartered Accountants dated 13 December 2004 subject to any challenge the applicant wishes to make in respect of the accounts in accordance with the said Deed. (3) I give liberty to apply in respect of any dispute which might arise concerning the calculation of the amount payable by the respondent to the applicant for the applicant’s interest in the partnership. (4) I reserve the question of costs to allow the parties to make written submissions on that issue within 14 days from the date hereof.
CATCHWORDS:	PARTNERSHIP – DISSOLUTION AND WINDING UP – RIGHTS AND DUTIES OF PARTNERS INTER SE – partnership deed provided a mechanism for winding up partnership – applicant seeks to avoid winding up mechanism – whether winding up mechanism conferred by partnership deed is extinguished on dissolution of partnership S J Mackie Pty Ltd v Dalziell Medical Practice Pty Ltd [1989] 2 Qd R 87 Rushton (Qld) P/L & Anor v. Rushton (NSW) P/L & Anor [2002] QCA 210 McGowan & Anor v. Commissioner of Stamp Duties [2001] QCA 236
COUNSEL:	Mr J Jacobs for the applicant Mr M Jonsson for the respondent
SOLICITORS:	O’Reilly Stevens Bovey Lawyers for the applicant Bakers Lawyers for the respondent