Say-Dee Pty Ltd v Farah Constructions Pty Ltd (No.2)

The Court of Appeal of New South Wales considered an appeal by Say-Dee Pty Ltd against orders made by Palmer J. The dispute concerned the acquisition, development, and resale of properties at 11, 13, and 15 Deane Street, Burwood. Say-Dee Pty Ltd alleged that it had entered into a partnership with Farah Constructions Pty Ltd for the acquisition of 11 Deane Street, and that Farah Constructions, along with other respondents, had subsequently acquired the adjoining properties (13 and 15 Deane Street) in breach of their fiduciary duties, holding them on constructive trust for the partnership.

The primary legal issues before the Court of Appeal were whether a partnership existed between Say-Dee Pty Ltd and Farah Constructions for the development of the properties, and whether the other respondents held the adjoining properties on constructive trust for this partnership. The Court was also required to determine the appropriate orders for the management, sale, and distribution of proceeds from these properties, including the extent of any allowance for entrepreneurial skills.

The Court of Appeal found that a partnership had indeed been formed between Say-Dee Pty Ltd and Farah Constructions for the acquisition and development of 11 Deane Street, commencing from the date of the contract to purchase that property. It further declared that the second to sixth respondents held their interests in the adjoining properties on constructive trust for the partnership. Consequently, the Court allowed the appeal, set aside the previous orders, and made extensive declarations and orders regarding the appointment of receivers to manage and sell all three properties, the discharge of partnership liabilities, the taking of accounts, and the ultimate division of profits or losses between the appellant and the first respondent, with a specific allowance for the entrepreneurial efforts of the second respondent. The Court also made orders concerning the costs of the proceedings.