Rowella Pty Ltd v Abfam Nominees Pty Ltd

Rowella Pty Ltd and others, as special partners of a limited partnership, sought special leave to appeal to the High Court of Australia against a decision of the Full Court of the Supreme Court of Queensland. The dispute concerned the distribution of assets upon the dissolution of the partnership, specifically the interpretation of "profits" under section 47(2)(d) of the Partnership Act, which applied to limited partnerships.

The central legal issue before the High Court was how the term "profits" in section 47(2)(d) of the Partnership Act should be interpreted in the context of settling accounts upon partnership dissolution. This section outlines the order of distribution of partnership assets, with the final step being the division of the ultimate residue among partners in the proportion in which profits are divisible. The applicant contended that "profits" could encompass trading profits, capital profits, or a combination of both.

The applicant argued that clause 10(d) of the partnership deed, which defined "net profits" as determined by the general partner in accordance with generally accepted accounting principles, supported their interpretation. This clause, read with other provisions regarding the employment of profits and the distribution of "distributable profits" between the general and special partners, suggested a quarterly calculation and distribution of profits. The Full Court of Queensland had reversed a prior determination in favour of the applicant, indicating a disagreement on the proper construction of the relevant provisions.