Sheehan v Zaszlos - [1994] QCA 145

IN THE COURT OF APPEAL	[1994] QCA 145
SUPREME COURT OF QUEENSLAND	Appeal No. 130 of 1993
Brisbane
Before	Macrossan C.J. Davies J.A. Pincus J.A.

[Sheehan v. Zaszlos]

BETWEEN:

DONALD JOHN SHEEHAN and
KATHLEEN ANNE SHEEHAN

(Plaintiffs) Appellants

AND:

ALEX ZASZLOS and LOLITA ZASZLOS

(Defendants) Respondents

REASONS FOR JUDGMENT - THE COURT

Judgment delivered 13/05/1994

This is an appeal from a refusal to declare that the parties to the action were partners. The sole question in this appeal is whether a partnership agreement came into existence between the parties. If it did, it is common ground that the appellants are entitled to judgment for $32,227.53 and costs, this being a one-half share of the net profit from a venture said to have been the subject of the partnership.

Whether there was an agreement for a partnership between the parties depends on the correct inferences to be drawn from the evidence of the male appellant, the evidence of Wayne Robert Jones, an officer of Esanda Finance, and some other evidence of conduct by the male appellant and the male respondent. It was conceded by the respondent before this Court that, the learned trial judge having accepted the appellant's version of events in preference to that of the respondent, the respondent's evidence may be disregarded.

Counsel for the respondent did not question his Honour's findings in this respect.

Notwithstanding his acceptance of the evidence of the male appellant, the learned trial judge dismissed the appellants' claim for a declaration that a partnership agreement existed between the parties because his Honour said that the proper inference from this evidence was that it was the intention of the parties that there should not be any binding partnership agreement between them unless and until a written agreement was completed. There being no such written agreement, his Honour concluded that no final agreement was reached and dismissed the appellants' claim for a declaration that such an agreement existed.

It appears from his reasons for judgment that the learned trial judge reached his conclusion primarily the basis of a short passage in the appellant's evidence. That passage is in the following terms:

"What did you discuss on that occasion?-- We discussed that we would have to have something in writing between us. Alec's agreed to all of that.
Was that discussed again?-- Yes, it was discussed numerous times.
Why was the writing discussed?-- Well, we needed some agreement that in the event of one partner being deceased, either one of us could for that matter, that we needed something in writing.
Had you already discussed that?-- Yes. That was discussed the first day that our agreement was started.
When you say your agreement was started, in terms of writing when you discussed these things with Mr Zaszlos, what part did writing play in your discussions?-- Well, it was part of our agreement as far as I was concerned.
What do you mean 'part of our agreement'?-- Well, I just wouldn't go into any form of agreement…

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 Sheehan v Zaszlos

Details

AGLC: Sheehan v Zaszlos [1994] QCA 145
Case: [1994] QCA 145
Decision Date: 13/05/1994

CaseChat Overview and Summary

In the case of Sheehan v Zaszlos, the appellants, Donald John Sheehan and Kathleen Anne Sheehan, sought to establish that a partnership agreement existed between themselves and the respondents, Alex Zaszlos and Lolita Zaszlos. The central issue before the Court of Appeal was whether the parties had entered into a partnership agreement and, if so, whether the appellants were entitled to a declaration of partnership and a half share of the net profits from the venture.

The trial judge had dismissed the appellants' claim, concluding that while there was an oral agreement, the intention of the parties was that there should not be a binding partnership agreement unless and until a written agreement was completed. Given that no written agreement was produced, the trial judge ruled that no final agreement had been reached. The Court of Appeal disagreed, finding that the evidence of the appellant, supported by conduct of the parties, demonstrated an immediate intention to be bound by the terms of their agreement, even though they intended to formalize it in writing at a later stage. The conduct of the parties, such as opening a joint bank account and sharing work on the site, was more consistent with an existing partnership agreement.

The Court of Appeal held that the case fell within the first class of cases identified in Masters v Cameron, where parties intend to be immediately bound by the terms of their bargain, even if they plan to restate those terms in a formal written agreement. The Court rejected the respondent's reliance on New Zealand cases which suggested a "natural inference" against immediate binding effect in the absence of a formal written agreement, finding such an inference inconsistent with the view that the intention of the parties must be inferred from their language and conduct. As a result, the Court allowed the appeal, granted the appellants judgment for $32,227.53 and costs, and ordered the respondents to pay the costs of the appeal.

Orders