CONTRACT — applicant alleged partnership agreement which provided for equal three-way split of profits from future property developments — whether evidence supported case as pleaded — whether parties had reached concluded agreement — contractual uncertainty and incompleteness — whether agreement reached on all essential terms —whether agreement reached on matters ordinarily agreed upon in transactions of the class in question
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 172 OF 2005
BETWEEN:
CHRISTOPHER GERARD QUINLAN Applicant
AND:
A & J BRADY PTY LTD (ACN 005 528 610) First Respondent
A & J BRADY (VIC) PTY LTD (ACN 005 975 717) Second Respondent
BRADY CONSTRUCTIONS PTY LTD (ACN 055 285 259) Third Respondent
BRADY KING PTY LTD (ACN 092 856 696) Fourth Respondent
BRADY FLINDERS PTY LTD (ACN 085 343…
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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In the case of Quinlan v A and J Brady Pty Ltd, the primary dispute centred around whether the parties had entered into a partnership agreement as alleged by the applicant, Quinlan. The court was tasked with determining the existence of the partnership and the terms that could be implied or were to be implied by law. The respondent, A and J Brady Pty Ltd, argued against the existence of such an agreement and contested the terms that were proposed by Quinlan. The evidence presented by the parties included affidavits from Quinlan, O’Sullivan, and Brady, each detailing their interactions and understanding of the alleged partnership agreement.
The legal issues before the court included whether there was sufficient evidence to establish the existence of the partnership and the terms that could be implied from the need to give business efficacy to the agreement. The court also needed to determine if certain terms could be implied by law. The court examined the evidence of the three key witnesses to ascertain the facts of the case, focusing on previous contacts and discussions, meetings at specific locations, and the agreement regarding the percentage profit share. The court needed to resolve significant conflicts in the evidence to ascertain whether the parties had indeed entered into a partnership agreement.
In its reasoning, the court found that the evidence presented by Quinlan lacked clarity and consistency, particularly in relation to the terms of the alleged partnership agreement. The court highlighted that Quinlan could not recall specific discussions that were crucial to establishing the agreement, such as the terms of the $500,000 contribution and the security guarantees. The court also noted that Quinlan had not signed any agreement and had not lodged a tax return as a partner. Given these findings, the court concluded that there was insufficient evidence to establish the existence of the partnership agreement as claimed by Quinlan.
As a result, the court dismissed the application, finding that the evidence did not support the existence of the alleged partnership agreement between Quinlan, Brady, and O’Sullivan. The court held that the terms proposed by Quinlan could not be established on the evidence provided, and therefore, the application was dismissed.
Orders
Orders of the court
1. The application be dismissed.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
The remaining terms were said to be implied. The Amended Statement of Claim alleged that the terms referred to at (g) and (i) were to be implied from the need to give business efficacy to the partnership agreement, and that the term referred to at (h) was to be implied by law. THE EVIDENCE The question of whether the parties actually entered into the alleged partnership agreement depends largely on the facts. It is therefore necessary to set out in some detail the evidence given by each of the three key witnesses, Messrs Quinlan and O’Sullivan for the applicant and Mr Brady for the respondents. Mr Quinlan’s evidence-in-chief was set out in two affidavits sworn on 5 December 2005 and 27 February 2007 respectively. Mr O’Sullivan’s evidence-in-chief was also set out in two affidavits. These were sworn on 23 December 2005 and 27 February 2007 respectively. Mr Brady’s evidence-in-chief was set out in an affidavit sworn on 17 March 2006. As there are significant conflicts in the evidence of these three witnesses, I have summarised what each of them has said with specific reference to:·previous contact and discussions between the parties;·the meeting at the Radisson Hotel; ·the meeting at the Hudson apartments; ·the “agreement” regarding the percentage profit share to be paid to Mr Quinlan and Mr O’Sullivan from the Fairfield Views and Empire apartments projects; ·the conclusion of the alleged agreement; and ·the subsequent conduct of the parties. Previous contact and discussionsMr Quinlan’s evidence Mr Quinlan explained that he first met Mr Brady in Melbourne in 1989. At that time he had been working as a site manager for Civil and Civic Pty Ltd in relation to an extension and refurbishment of the Knox Shopping Centre. Mr Brady was, at that stage, one of the bricklaying contractors on that project. Mr Quinlan stated that he first met Mr O’Sullivan in connection with the same Knox Shopping Centre project. He said that he had employed Mr O’Sullivan on a recommendation, and that they had worked together for about three years in connection with that project. Afterwards, the two continued to stay in contact. After spending some time working in Canberra, Mr Quinlan returned to Melbourne in 1994 and joined Concrete Constructions Group Limited (“Concrete Constructions”). He worked on a number of projects as a project manager and in 1997 he became the company’s construction manager in relation to the Commonwealth Law Courts project. He said that his salary as construction manager was $186,190 per annum plus allowances, the provision of a company car, and bonuses. Based on his previous bonuses of up to $30,000 per annum, he estimated that his total gross package for the year ending 30 June 1998 would have been in excess of $245,000. In 1997 Mr Quinlan recruited Mr O’Sullivan to work as a project manager on the Commonwealth Law Courts project. In that role Mr O’Sullivan was required to report to Mr Quinlan. Mr Quinlan said that in or around November 1997 he had a number of conversations with Mr O’Sullivan regarding the possibility of establishing an essential services management company. He said that those discussions led to a number of meetings between Mr O’Sullivan, Robert Murdoch (who was at that time working for the Brady Group as a salesman) and later Mr Brady himself.
Decision
Reasons for decision
WEINBERG J
According to Mr Brady, Mr Quinlan commenced working with Brady Constructions shortly after that discussion took place in early February 1998.Conclusion of alleged agreementMr Quinlan’s evidence According to Mr Quinlan, as at Friday, 6 February 1998 there was an agreement in place between himself, Mr Brady and Mr O’Sullivan. In his affidavit he summarised that “partnership agreement” as being:“1.Bernie and I would each receive 3% of the profits earned by the Brady Group from the Fairfield Views project and Empire apartments project.2.Tony, Bernie and I would each be entitled to a one third share of the profits from future projects. 3.Each of Tony, Bernie and I would work exclusively as partners.4.I would hold the position of development manager, Bernie that of operations manager and Tony that of sales and administration manager.5.Tony, Bernie and I would each draw a monthly advance of $10,000 to be deducted from the profit share when profit was realised.6.Bernie and I would provide an amount of $500,000 as a loan to the Brady Group if and when requested by the Brady Group.7.Tony, Bernie and I would provide guarantees and other security to secure finance for future Brady Group developments if and when requested by the [Brady] Group.” In cross-examination Mr Quinlan readily acknowledged that in the three years he worked for the Brady Group he never signed any agreement in relation to this alleged partnership agreement. He also agreed that he had not at any stage lodged a tax return as a partner. When asked with whom he thought he was entering into a partnership, Mr Quinlan responded Mr Brady personally and not any of the Brady companies: “Then we get to the 2 February meeting where we're basically looking at setting up a new entity. Tony had said, well, I've already got A&J Brady already own Empire. Brady Constructions already exists, it's got the licenses forever, whatever so we were basically the partnership. We were sitting above these corporate entities.” Mr Quinlan also stated that he could not recall when agreement was reached regarding the contribution of $500,000. He maintained that the issue had been discussed at the Radisson Hotel meeting despite the fact that there was no reference to it in either the first or second diagram. However, in later cross-examination he agreed that there had been no agreement on that issue at the Radisson Hotel meeting. In addition, he stated that the issue was never talked about at the meeting at the Hudson apartments. Mr Quinlan could not recall the following matters being discussed at either of those meetings:·how Mr Quinlan would finance the contribution of $500,000;·whether that contribution of $500,000 would take the form of a loan or an equity contribution; and·if called upon, how long Mr Quinlan had to contribute the $500,000. As demonstrated by the following passage of cross-examination, Mr Quinlan was also unsure about what was discussed in relation to the issue of security or cross-guarantees:“Well let's do it step by step. You accept that at the Radisson dinner no agreement about $500,000. You accept that?‑‑‑At that point we would have another meeting. I wasn't sort of saying, well we've agreed this, this and this, until we sorted the whole thing in a whole.Let's just deal with the question. You accept that at the conclusion of the Radisson meeting there was no agreement about you contributing $500,000 as and when called on?‑‑‑Yes.You agree with me?‑‑‑Yes.You also say that you have no recollection of the matter being discussed at the 2 February meeting?‑‑‑Yes.Where did this term come from? Where did the term that you would contribute $500,000 as and when called upon, when was that agreed?‑‑‑I cannot recall whether it was between those meetings or when it was agreed.But it wasn't agreed, was it? You didn't have an agreement with Mr Brady whereby you, that Mr Brady said: I can call on you to contribute $500,000 as and when I wish, to the Brady Group. That was never agreed?‑‑‑It was agreed but ‑ ‑ ‑ How? Tell his Honour how you say that was agreed?‑‑‑I can't recall. I wish - if I could recall I - I would certainly be telling your Honour but I cannot recall.Tell his Honour, well, was it agreed at the end of the Radisson meeting that you would - you personally, Mr Quinlan - would provide security for any new venture?‑‑‑I don't believe it was discussed at the Radisson. I - I can't recall.I beg your pardon. Was it discussed at the 2 February meeting that you would provide security for the new venture?‑‑‑I can't recall what it would be but it would be probable that that would be the case.Because there's a note on your piece of paper?‑‑‑Yes.So the only basis for you saying that the matter was discussed is a note on the right-hand corner of the piece of paper saying, "Cross guarantee for any security"?‑‑‑Yes.But you don't know what was said or who said it or if anything was said?‑‑‑I just can't recall it.Well do you say, do you say - I don't know - do you say that at the end of the 2 February meeting, there was an agreement between you and Mr Brady in relation to security for any future development?‑‑‑There - there would have been.Well, what was the term?‑‑‑That we were equal partners and we were going to be jointly and severally liable for whatever ventures we went into.Yes but what about security?‑‑‑All I could put up, as I said, was the $500,000.But did you leave the meeting thinking: I'm under an obligation when called on to guarantee all these arrangements?‑‑‑Yes.But you don't recall any discussion about it, do you?‑‑‑I can't recall the discussion.”
