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Raulfs v Fishy Bite Pty Ltd

Raulfs v Fishy Bite Pty Ltd

Case [2011] NSWSC 105 2 March 2011

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Supreme Court

New South Wales

Medium Neutral Citation: Raulfs v Fishy Bite Pty Ltd [2011] NSWSC 105
Hearing dates: 15-19, 26 November 2010
Decision date: 02 March 2011
Before: Rein J
Decision:
The first and second defendants are liable to repay the amount of $368,000 plus interest to the receiver of the partnership. The third defendant is not liable to the plaintiff or the receiver

Catchwords: CONTRACTS - partners - whether partnership agreement in respect of a restaurant business should be rectified - whether there was a breach of fiduciary duty by the first defendant - whether money paid by the plaintiff to the first defendant should be repaid on the basis of a Quistclose trust, constructive trust and/or total failure of consideration - whether the second defendant, who was the sole director and a shareholder of the first defendant, is liable to repay monies paid by the plaintiff as a knowing recipient, and if so to whom - whether the de facto wife of the second defendant is liable as a volunteer to repay monies paid by the plaintiff - whether money claimed to have been paid by the plaintiff to the second defendant towards the purchase of another restaurant was paid
Legislation Cited: Partnership Act 1892 (NSW)
Real Property Act 1900 (NSW)
Cases Cited: Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570
Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344
Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567
Barnes v Addy (1874) 43 LJ Ch 513
Black v S Freedman & Co [1910] HCA 58; (1910) 12 CLR 105
Bofinger v Kingsway Group Ltd [2009] HCA 44; (2009) 239 CLR 269
Boscawen v Bajwa [1995] 4 All ER 769
Browne v Dunn (1829) 57 ER 909
Challenger Managed Investments Ltd v Direct Money Corp Pty Ltd [2003] NSWSC 1072; (2003) 59 NSWLR 452
Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502
Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178
Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89
Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 264 ALR 15
Gilbert v Gonard (1884) 54 LJCL 439
Heperu Pty Ltd v Belle [2009] NSWCA 252; (2009) 76 NSWLR 230
John Nelson Developments Pty Ltd v Focus National Developments Pty Ltd [2010] NSWSC 150
Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133
Markus v Provincial Insurance Co Ltd (unreported, 11 May 1983)
Marsden v Amalgamated Television Services Pty Ltd [1999] NSWSC 428
Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583
National Commercial Banking Corp of Aust Ltd v Batty [1986] HCA 21; (1986) 160 CLR 251
Pooley v Driver (1876) 5 Ch D 458
Re Australian Elizabethan Theatre Trust (1991) 30 FCR 491
Roxborough…

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 Raulfs v Fishy Bite Pty Ltd

Details

AGLC: Raulfs v Fishy Bite Pty Ltd [2011] NSWSC 105
Case: [2011] NSWSC 105
Decision Date: 02 March 2011

CaseChat Overview and Summary

The plaintiff, Raulfs, brought an action against Fishy Bite Pty Ltd and two of its directors, alleging various breaches of contract and fiduciary duty. Raulfs claimed that the partnership agreement governing the operation of a restaurant business should be rectified, that there was a breach of fiduciary duty by the first defendant, and that money paid by Raulfs to the first defendant should be repaid based on a Quistclose trust, constructive trust, and/or total failure of consideration. Raulfs also sought repayment of monies from the second defendant, who was the sole director and a shareholder of the first defendant, as a knowing recipient, and from the de facto wife of the second defendant, who was considered a volunteer. Additionally, Raulfs claimed that money paid towards the purchase of another restaurant was not actually paid.

The court was required to determine whether the partnership agreement should be rectified, whether there was a breach of fiduciary duty by the first defendant, and the basis for repaying money paid by Raulfs to the first defendant. The court also had to decide whether the second defendant, as a knowing recipient, and the de facto wife, as a volunteer, were liable to repay the monies. Finally, the court needed to ascertain whether the money claimed to have been paid towards the purchase of another restaurant was actually paid.

The court found that the partnership agreement did not need rectification, and that there was no breach of fiduciary duty by the first defendant. The court held that the money paid by Raulfs to the first defendant should be repaid based on a total failure of consideration. The second defendant, as a knowing recipient, was liable to repay the monies to Raulfs, while the de facto wife was not liable as a volunteer. The court also determined that the money claimed to have been paid towards the purchase of another restaurant was not actually paid.

The court ordered the first defendant to repay the monies to Raulfs, and the second defendant to repay the same amount to Raulfs. The court dismissed all other claims.

Orders