TANDOR Pty Ltd v Australian Liquor Marketers (WA) Pty Ltd - [2008] WASC 244

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: TANDOR PTY LTD -v- AUSTRALIAN LIQUOR MARKETERS (WA) PTY LTD [2008] WASC 244

CORAM: MASTER SANDERSON

HEARD: 2 SEPTEMBER 2008

DELIVERED : 30 OCTOBER 2008

FILE NO/S: CIV 1666 of 2006

BETWEEN: TANDOR PTY LTD (ACN 009 146 954)
Plaintiff
AND
AUSTRALIAN LIQUOR MARKETERS (WA) PTY LTD (ACN 009 196 614)
Defendant

Catchwords:

Account - Application for interim account - Turns on own facts

Legislation:

Nil

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff: Mr G H Murphy SC
Defendant: Mr S Penglis

Solicitors:

Plaintiff: Macdonald Rudder
Defendant: Freehills

Case(s) referred to in judgment(s):

Holborow v Macdonald Rudder (a firm) [2001] WASCA 91

MASTER SANDERSON: This is the return of two applications. The first in time is the plaintiff's application seeking an order for an account. The other application is the defendant's application for leave to amend its defence in terms of a further amended minute of amended further amended re‑amended defence (the minute). It is convenient to deal with that second application first.
It is common ground in these proceedings that the plaintiff and the defendant were in partnership from about 5 November 1998 to 27 June 2000. At that time, the partnership was dissolved. In 2003, prior to the issue of these proceedings, the plaintiff requested the defendant to join in the winding up of the partnership and to provide an account. At that stage, the defendant denied the existence of the partnership. As I have indicated, that issue has now fallen away.
In the action, the plaintiff alleges that the defendant gave certain accounting to the plaintiff in the period December 1998 to January 2000. It is said that this accounting failed to disclose the costs paid to suppliers and any other costs or expenses charged by the defendant to the partnership after gross sales. It is further alleged that the defendant ceased to account to the plaintiff at all after January 2000 save for April 2000.
Turning to the defendant's minute, it says, by par 3(d), that it duly accounted to the plaintiff as required save for the months of May and June 2000. By par 3(e), it says that the plaintiff is now estopped from asserting an entitlement to an account in a form or with a content different from the form and content already provided by the defendant. On behalf of the plaintiff it is said that the proposed plea is embarrassing and discloses no reasonable cause of action.
In my view, there is no reason why a plea in this form cannot be put. Paragraph 3(d) raises a straightforward question of fact. The defendant says an account has been provided. It has either been provided or it has not. If something has been provided which the plaintiff says does not amount to a proper account, then doubtless a reply will be filed and that issue can be ventilated at trial. But I see no reason why a plea in terms of par 3(d) cannot be maintained.
Paragraph 3(e) is a plea of estoppel. Properly considered, it may be a plea of settled accounts. But either way it raises, with clarity, an issue that the defendant says precludes the relief sought by the plaintiff. The plaintiff knows the case that it has to meet as a result of that plea and, in my view, the plea is in an acceptable form.
Accordingly, I would allow amendment of the defence in terms of the minute and I will make orders accordingly.
That then leaves the plaintiff's application for an account. The application is brought under O 45 r 1(1). Effectively, that rule provides for an interim account - all that is required is that a statement of claim has been filed and an appearance has been entered. As both parties accepted, and as is indicated by the heading of the rule, the ordering of such an account is a summary procedure for use as and where appropriate. It is also relevant to mention r 1(3). It is in the following terms:
On the hearing of the application, the Court may, unless satisfied by the defendant by affidavit or otherwise that there is some preliminary question to be tried, order that an account be taken and may also order that any amount certified on taking the account to be due to either party be paid to him within a time specified in the order.
It is the defendant's position on this application that there is a preliminary question to be tried and that it is not appropriate to make the order. Before dealing with that question, I should deal with an issue which arose during the hearing of the application, but was not the subject of written submissions. It has to do with the form of the order sought by the plaintiff in the application.
Paragraph 1 of the plaintiff's chamber summons is in the following form:
An account be taken of all income of, and costs of goods sold by, the partnership referred to in the statement of claim for every calendar month from the inception of the partnership to and including 30 June 2000.
The rest of the orders sought are really in the nature of programming orders to allow the account to be completed. During the course of his submissions, counsel for the defendant pointed out that the orders for account sought in the statement of claim are materially different to the orders sought in the chamber summons. The relevant paragraphs in the prayer for relief are as follows:
3.An order that the partnership be wound up, its goodwill sold and the following accounts and enquiries be taken and made:
(a)An account of the partnership assets debts liabilities profits and losses at and to 30 June 2000;
(b)An account of all receipts and payments, dealings and transactions of the defendant in respect of the partnership business from 1 July 2000.
There must be some doubt as to whether or not the relief sought in par 3(b) is consistent with the relief sought on an interim basis. It rather seems that the interim relief is more detailed than the ultimate relief sought in the statement of claim. In my view, that provides the plaintiff with a significant difficulty. What relief precisely does the plaintiff say it is entitled to? The answer may be that it is entitled to relief in the nature of the interim relief sought. Paragraph 6 of the statement of claim is in the following terms:
It was inter alia an express term of the Partnership Agreement (as varied) in effect that:
(a)…
(b)…
(c)the defendant account to the plaintiff for all revenue and expenses of the partnership and remit to the plaintiff its share of profit every month.
It may be that this term of the agreement required monthly accounting. That is implied, but it is not entirely clear from the pleading. However, for the purposes of this argument, I am prepared to assume that the statement of claim alleges that the defendant would account to the plaintiff on a monthly basis.
It is a defence to an action for an account that true and proper accounts have been rendered. This principle emerges from the decision of Holborow v Macdonald Rudder (a firm) [2001] WASCA 91 [7] (Anderson & Steytler JJ). Further, in the context of an application for the ordering of an account on a summary basis '[a]s soon as it appears that there is an arguable case that the accounting party has already accounted, the Court cannot fail to be satisfied that there is, in terms of O 45 r 1(3) "some preliminary question to be tried" ' [10].
The defendant relies on an affidavit of Ante Golem sworn 21 August 2008 to support its argument that it has already accounted. Appearing as annexures AG1 to AG34 are a series of documents which Mr Golem says are the accounts. In my view, that is arguably the case. That conclusion can be illustrated by looking at annexure AG1.
The document is headed 'Johnson Harper WA - Kalgoorlie Branch - Expense Share Summary'. It is said to be for the month of December 1998. On the left side of the document, there are descriptions of the figures found on the right side of the page. Under the heading 'Sales', there is an amount for 'Gross Sales', an amount for 'Sales Tax' and a figure for 'Net Sales'. That then leads to a figure which is said to be 'Gross Profit'. There is then amounts which represent expenses. There are amounts under the heading 'Wages' and amounts under another heading 'Variable Expenses'. This then leads to a figure for 'Total Expenses'. This is then deducted from the gross profit and the payment due to the partners is specified.
I would accept that the document is somewhat difficult to understand. For instance, it is difficult to see how gross profit is calculated. No figure is given for the cost of goods sold. But that may be a question as to the adequacy of the accounts, rather than a question as to whether or not the required accounts have actually been provided. Furthermore, given that what the defendant says were accounts have been provided, there is, to my mind, an issue as to whether or not the plaintiff is entitled to anything more. That is an issue which should be resolved at trial prior to any account being taken.
I am not satisfied that this is a proper case for an interim account. To my mind, the better course is to work out what form, if any, of account the plaintiff is entitled to. That should be done sooner rather than later. This business concluded in 2000 - some eight years ago. It is by no means clear from the documents presently on file that the parties are arguing about an amount of any significance. But if the argument is to be maintained, then the relationship between the parties needs first to be clarified. Then, if appropriate, an account can be ordered.
I would dismiss the plaintiff's application. I will hear the parties as to the form of orders and as to costs.