Williams v Bowman

[2022] WASC 68

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   WILLIAMS -v- BOWMAN [2022] WASC 68

CORAM:   SMITH J

HEARD:   21 FEBRUARY 2022

DELIVERED          :   21 FEBRUARY 2022

PUBLISHED           :   28 FEBRUARY 2022

FILE NO/S:   CIV 1744 of 2021

BETWEEN:   RUSSELL MORRIS WILLIAMS

Plaintiff

AND

TELFER BOWMAN

Defendant

TELFER BOWMAN

Plaintiff by counterclaim

RUSSELL MORRIS WILLIAMS

Defendant by counterclaim

Catchwords:

Appeal - Decision of a Registrar - De novo appeal

Practice and Procedure - Pleadings - Application to strike out defence to counter claim - Whether essential facts pleaded - Turns on own facts

Legislation:

Nil

Result:

Appeal dismissed

Category:    B

Representation:

Counsel:

Plaintiff	:	M Curwood SC
Defendant	:	DH Solomon & G Zagari
Plaintiff by counterclaim	:	DH Solomon & G Zagari
Defendant by counterclaim	:	M Curwood SC

Solicitors:

Plaintiff	:	GG Legal
Defendant	:	Solomon Brothers
Plaintiff by counterclaim	:	Solomon Brothers
Defendant by counterclaim	:	GG Legal

Cases referred to in decision:

Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281

Cheney v Moore [2020] WASC 227

English v Vantage Holdings Group Pty Ltd [2021] WASCA 47

Fazio v Fazio [2012] WASCA 72

Priority Networking Pty Ltd v Peterson [2018] WASC 36

Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398

SMITH J:

1.0 The appeal

1. The appellant (defendant and plaintiff by counterclaim), Mr Bowman, appeals against orders made by an acting registrar on 21 December 2021 dismissing his application dated 17 November 2021 to strike out pars 12 and 19(a) of the respondent's (plaintiff and defendant by counterclaim), Mr Williams' Reply and Amended Defence to Counterclaim dated 18 November 2021, and a consequent order requiring Mr Bowman to pay Mr Williams' costs of the application, to be taxed if not agreed.

2. The pleas sought to be struck out by Mr Bowman relate to whether an agreement was reached in or about 1990 to dissolve a partnership between Mr Bowman and Mr Williams of a concrete formwork business,[1] that had been in existence since sometime in the 1970s.

   [1] Mr Bowman describes the partnership business as a concrete formwork business in par 11 of his Defence and Counterclaim dated 12 October 2021, and Mr Bowman admits this paragraph in his Reply and Amended Defence to Counterclaim dated 18 November 2021, par 4.  Consequently, there appears to be no material difference between the description of the partnership business by Mr Bowman as a concrete formwork business and the description used by Mr Williams of a concrete form working business.  In these reasons, the business of the partnership will be referred to as a concrete formwork business.

3. After hearing counsel for Mr Bowman and senior counsel for Mr Williams, I made an order to dismiss the appeal. 

4. The reasons why I dismissed the appeal are as follows.

1.1 Appeal from a registrar ‑ a hearing de novo

1. Pursuant to O 60A r 4(1) of the Rules of the Supreme Court 1971 (WA), a party who is dissatisfied with an order or decision of a registrar may appeal from it. Order 60A r 6 provides that an appeal is to be by way of a new hearing of the matter. It is a hearing de novo in the sense that the powers of the court on appeal are exercisable not only where there has been some legal, factual or discretionary error. Thus, the court may exercise its powers regardless of any error.[2]

   [2] Priority Networking Pty Ltd v Peterson [2018] WASC 36 [23] ‑ [28] (Le Miere J); Cheney v Moore [2020] WASC 227 [9] (Le Miere J).

2.0 Relevant principles

2.1 Pleadings and strike out

1. In English v Vantage Holdings Group Pty Ltd, the Court of Appeal approved of the summary of the principles summarised at first instance that are to be applied in determining a strike out application of a statement of claim, a defence or a reply.[3]  Those principles need not be repeated in this matter, as not all of those principles are relevant to the determination of this application.  The principles summarised in Vantage Holdings Group Pty Ltd v Donnelly[No 4] that are directly relevant to this application are as follows:[4]

   [3] English v Vantage Holdings Group Pty Ltd [2021] WASCA 47 [55] ‑ [56]; Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398 [60] (Smith J).

   [4] Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398 [60] (footnotes omitted).

   (a)the essential functions of a pleading are to define and limit the issues for decision, to provide the basis for determining discovery and the admissibility of evidence for trial, and to ensure a fair trial by putting the other side on notice of the case it must meet;

   (b)a statement of claim must not plead allegations at too high a level of generality.  A pleading must be sufficiently particular to conform with one of the primary objects of pleadings, to inform the opposing party of the case that it must meet;

   (c)a statement of claim must state specifically the relief or remedy claimed;

   …

   (g)in considering a strike out application, it is now necessary to consider the role of pleadings in the context of case management techniques. Case management considerations are not, however, necessarily antithetical to the observance of pleading rules. The objects of O 1 r 4A and 4B of the Rules of the Supreme Court 1971 (WA) are often promoted by a clear and precise statement of the issues for decision;

   (h)provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action (or defence), and apprising the parties of the case that has to be met, the court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the court to be spent extensively debating the application of technical pleading rules that evolved in, and derive from, a very different case management environment;

   (i)pleadings may be struck out on the ground that they may prejudice, embarrass or delay the fair trial of the action because they are evasive, they conceal or obscure the real questions in controversy, they are ambiguous or not reasonably intelligible, they raise immaterial or irrelevant issues, they fail to confine the issues or state the case of the party in question with reasonable particularity, or they raise a case in terms which are simply too general; and

   ...

2. The approach of the court by regard to principle referred to in (h) was formulated by Martin CJ in Barclay Mowlem Construction Ltd v Dampier Port Authority is particularly relevant in this appeal.  At the heart of the point the former Chief Justice made in that matter is the observation that a pedantic approach to pleading should not be taken.[5]

2.2 Dissolution of a partnership by an agreement may be inferred from the conduct of the parties

[5] Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281 [4] – [10].

1. The legal principles that apply to the termination of a partnership by dissolution were comprehensively set out by Murphy JA in Fazio v Fazio.[6]  These principles do not need to be repeated for the purposes of disposing of the appeal.  It is to be noted, however, that a partnership may be dissolved, in the sense of terminated or determined, by agreement.  Such agreement may be formal, informal, including partly or wholly oral, or partly or wholly inferred.[7]

   [6] Fazio v Fazio [2012] WASCA 72 [59] – [76].

   [7] Fazio v Fazio [2012] WASCA 72 [68].

2. In these proceedings, Mr Williams claims that it can be inferred that there was an agreement to dissolve and windup a concrete formwork business that he and Mr Bowman carried out as partners, which agreement is to be inferred by a conversation that took place in 1990 and by subsequent conduct by him and Mr Bowman.

3.0 Grounds of Mr Bowman's application to strike out part of Mr Williams' Reply and Amended Defence to Counterclaim

1. Although it is usual to set out the parties' pleaded cases before dealing with the issues raised in a strike out application by a party seeking to strike out a pleading in whole or part, because the grounds of the application misinterpret what is pleaded by Mr Williams, it is necessary to first to briefly set out the arguments raised in the grounds of the appeal, and then to address the parties' pleaded cases.

2. The grounds set out in the notice of appeal are unnecessarily lengthy and raise matters of submission and complaints which appear to go to a lack of particularity in the matters pleaded in pars 3, 4 and 5 of the Amended Statement of Claim dated 14 September 2021 (statement of claim).[8]  Leaving these issues aside, although the arguments put on behalf of Mr Bowman are somewhat difficult to understand, there is essentially one ground of appeal as follows.

   [8] There is no application before the court for further and better particulars of pars 3, 4 and 5 of the Amended Statement of Claim, nor has any application be made to strike out any part of this pleading.

3. The ground put by Mr Bowman is that Mr Williams does not plead either in pars 12 and 19(a) or elsewhere in the reply and defence to counterclaim or in any other pleading any of the essential material facts to establish an affirmative case that a partnership between Mr Williams and Mr Bowman was dissolved and wound up, those material facts being:

   (a)the terms of the partnership which was allegedly dissolved by the agreement made in or about 1990;

   (b)the manner in which the agreement to dissolve that partnership was made;

   (c)the time at which the partnership was dissolved;

   (d)the property of the partnership at the time of dissolution; and

   (e)how and when the property of the partnership at the time of dissolution was disposed of and the affairs of the partnership were wound up, because the statement of claim, read with answer 2.1 to the response to the request for further particulars of the statement of claim filed 16 September 2021, does not plead a claim that any partnership was wound up.

4. From this ground, Mr Bowman raises three points.

5. First, it is argued that the terms of the partnership are not pleaded in statement of claim, and it is not necessary to do so because Mr Williams pleads that the real property in respect of which Mr Williams claims relief in the statement of claim is not property of the partnership,[9] so it follows therefore that no relief is sought by Mr Williams in the statement of claim arising out of the partnership, and the plea of a partnership is simply a plea of a background fact.

   [9] This argument is said to arise because in the further and better particulars of the Amended Statement of Claim dated 16 September 2021, Mr Williams states that none of the properties defined in par 1(c) of the statement of claim are properties of the partnership.

6. In particular, Mr Bowman contends that what is pleaded in par 5 of the statement of claim is simply an agreement that Mr Williams would become the sole proprietor of four unencumbered properties, which claim cannot be found to be a plea that relates to an agreement to dissolve the partnership, because it is Mr Williams' case that the properties are not properties of the partnership.

7. Mr Bowman also contends that pars 3, 4 and 5 of the statement of claim do not plead the making of an agreement by the parties to dissolve a partnership by mutual agreement, and it is not pleaded in any part of the statement of claim that the business activities pleaded in par 1 of the statement of claim were carried on by Mr Williams and Mr Bowman as partners.

8. Second, Mr Bowman contends pars 12 and 19(a) of the defence to counterclaim plead for the first time a positive case that the partnership was dissolved, which is a different agreement to the agreement pleaded in the statement of claim.  The basis of this argument is that when and how the partnership was dissolved is not pleaded in pars 3, 4 and 5 of the statement of claim.  If this argument is accepted, then Mr Bowman points out that material facts of the agreement to dissolve and wind up the partnership have not been pleaded.  In particular, how the partnership was dissolved, and wound up is not pleaded.  Thus, it is said that pars 12 and 19(a) of the defence to counterclaim simply plead a conclusion, without material facts to support that conclusion.  Consequently, it is contended that Mr Bowman does not know any of the facts as to the making of the agreement pleaded in these paragraphs of the defence to counterclaim.

9. An argument is put on behalf of Mr Bowman that the words 'any partnership' was dissolved by an agreement between the parties in or around late 1990 and wound up on the basis of that agreement in pars 12 and 19(a) of the defence to counterclaim is so vague to be meaningless and incomprehensible, because the material facts of the terms of the partnership are not pleaded in the reply or the defence to counterclaim or in the statement of claim.  In particular, nothing is pleaded about how the partnership was to operate.

10. Third, it is argued on behalf of Mr Bowman that the plea in pars 12 and 19(a) of the defence to counterclaim can only relate to par 3 of the statement of claim because it is pleaded in these paragraphs in the defence to counterclaim that the agreement was made in or about 1990, whereas when pars 3, 4 and 5 of the statement of claim are read together, an agreement is claimed to have been made not only by the conversation that is said to have occurred in 1990, but by the performance of subsequent conduct (which conduct must have occurred later than 1990).  On this basis also, the pleas in pars 12 and 19(a) of the defence to counterclaim are claimed to be so ambiguous as to be incomprehensible.

4.0 The parties' pleaded cases

1. In these proceedings, the pleadings are neither lengthy nor complex.  The case of each party is relatively straightforward, and none of the points sought to be made by Mr Bowman in this appeal have any merit.

2. First, when the parties' pleadings are carefully read, there is no effective disagreement between them that they were engaged in a partnership as individuals, the partnership was created sometime in the 1970s, and the business of the partnership was as Mr Bowman pleads in par 11 of his defence and counterclaim dated 12 October 2021.

3. It is not in dispute by either Mr Bowman or Mr Williams that (a) they entered into a partnership with each other prior to 1978; (b) the partnership was registered in the name of Bowman & Williams; (c) the partnership was not at any time subject to or governed by any written agreement;[10] and (d) from the time of the inception of the partnership, until at least on or about 12 October 1987, the partnership carried on a concrete formwork business.[11]

   [10] Defence and Counterclaim dated 12 October 2021, pars 5 to 9; admitted in Reply and Amended Defence to Counterclaim dated 18 November 2021, par 4.

   [11] Defence and Counterclaim dated 12 October 2021, par 11; admitted in Reply and Amended Defence to Counterclaim dated 18 November 2021, par 4.

4. It is clear that the central dispute between the parties is whether the partnership between Mr Williams and Mr Bowman was dissolved and wound up following a discussion 1990 and by subsequent conduct in the early 1990s,[12] or whether that partnership continued as varied on 12 October 1987 and varied again in or about 1989, and continued until written notice was given by Mr Bowman in September 2021.

   [12] On the case of Mr Bowman, it appears that Mr Williams ceased to have involvement in Kyilla by 10 July 1992, Defence and Counterclaim dated 12 October 2021 par 1.2.1, and in Walker Holdings by 28 August 1995, par 1.2.2.

5. Mr Williams pleads in par 1(a) of the statement of claim that he and Mr Bowman, from in or about 1970 until 1990, carried on together a concrete form working business in their individual capacities as partners under the name of Bowman & Williams and through a company called Kyilla Holdings Pty Ltd. 

6. Mr Williams pleads in par 1(b) of the statement of claim that he and Mr Bowman also worked together in a company called Walker Holdings Pty Ltd, trading as Inform, which Mr Bowman controlled a shareholding on behalf of both of them.

   Mr Williams pleads in par 1(c) of the statement of claim that from the income derived from the concrete form working business described in par 1(a) (from their concrete form working business carried out in the individual capacities as partners and through Kyilla), purchased as tenants in common in equal shares property known as and situated at:  2 Rennie Crescent, Lancelin; 37 Cordoba Way, Cervantes; and 66 and 68 Goodwood Parade, Burswood (the Properties).  It is agreed that Mr Williams and Mr Bowman purchased the Properties as individuals and as tenants in common.  Mr Williams claims that none of the Properties are properties of the partnership, and Mr Bowman pleads that the partnership purchased the Burswood properties.[13]

   [13] Although it is not specifically pleaded by Mr Bowman, at the hearing of the appeal, counsel for Mr Bowman informed the court that it is common ground between the parties that the country properties (the Lancelin and Cervantes properties) are not and were not properties of the partnership.

7. Mr Williams pleads in pars 3 to 5 of the statement of claim the material facts of an agreement made between him and Mr Bowman to dissolve the partnership as follows:

   3.In or about late 1990, the plaintiff told the defendant in substance that the partnership between them (with respect to the business interest referred to in paragraphs 1(a) and 1(b)) was at an end, that the plaintiff would take the Properties, the defendant could have the plaintiff's interest in the businesses in 1(a) and 1(b) and the defendant would be responsible for paying out loans secured by the mortgages over the Burswood properties.

   4.After the conversation pleaded in paragraph 3:

   (a)the plaintiff has paid all outgoings, expenses and maintenance costs of the Properties and used and enjoyed the Properties to the exclusion of the defendant;

   (b)the defendant caused the mortgages on the Burswood Properties to be discharged;

   (c)the plaintiff ceased any involvement with Bowman & Williams and Kyilla and received no money from its cash at bank or retention funds due under its contracts, and

   (d)the plaintiff ceased any involvement with Walker Holdings and received no money from the shareholding controlled by the defendant in that entity nor any benefit for the labour he had contributed to Walker Holdings.

   5.As a consequence of the matters pleaded in paragraphs 3 and 4, an agreement was entered into between the parties that:

   (a)the defendant would take the benefit of the plaintiff's interest in Bowman & Williams, Kyilla and Walker Holdings,

   (b)the defendant would be responsible for paying out loans secured on mortgages of the Properties, and

   (c)the plaintiff would become the sole proprietor of the Properties

   ('the agreement'), which agreement has been partially performed.

8. The effect of pars 3 to 5 of the statement of claim are: (a) that Mr Williams had a conversation with Mr Bowman in or about late 1990; (b) that certain steps set out in par 4 were taken in accordance with what was discussed in the conversation pleaded in par 3, from which an inferred agreement to terminate the partnership was reached, the terms of which are pleaded in par 5 of the statement of claim.

9. It is Mr Bowman's case in his counterclaim that the partnership was not terminated at any time prior to September 2021, and there were two agreements reached to vary the terms of the partnership agreement.  The first variation is claimed to have occurred no later than 25 August 1987, when it was agreed that the partnership would cease carrying on the concrete formwork business and the concrete formwork business would be carried on by Kyilla.[14]  Mr Bowman pleads and Mr Williams admits that Mr Williams was a director of Kyilla from 12 October 1987 until 10 July 1992.[15]

   [14] Defence and Counterclaim dated 12 October 2021, par 12.

   [15] Defence and Counterclaim dated 12 October 2021, par 1.2.1.1; admitted in Reply and Amended Defence to Counterclaim dated 18 November 2021, par 2(a) and Mr Williams says in par 2(b) that on 10 July 1992, Kyilla was deregistered.

1. In par 12 of Mr Bowman's counterclaim, he pleads the material facts of what he claims is the first variation of the partnership agreement and that by no later than 25 August 1987, he and Mr Williams agreed to the business of the partnership (that is the concrete formwork business) being varied in that:  (a) the partnership would cease carrying on the concrete formwork business; (b) this business would be carried on through the limited liability of the Company which he identifies in par 14 as Kyilla; (c) the partnership would make its current and future assets, including the Burswood properties, available to Kyilla to assist it in carrying on the concrete formwork business; and (d) the partnership would acquire land for the purpose of making it available to Kyilla to use in carrying on the concrete formwork business.[16]

   [16] Defence and Counterclaim dated 12 October 2021, pars 12.1, 12.3 and 12.4.

2. Prior to the hearing of the appeal on 21 February 2022, Mr Williams understood Mr Bowman's plea in par 12 of the of the counterclaim to be a plea that from no later than 25 August 1987, Kyilla formed part of the partnership.  However, at the hearing, counsel for Mr Bowman made it clear that that was not the case and what is pleaded in par 12 is that by no later than 25 August 1987, the partnership ceased carrying on the concrete formwork business and by agreement it was agreed the concrete formwork business was to be carried on by Kyilla.  Consequently, it appears that Mr Bowman's case is that he and Mr Williams ceased to carry on any concrete formwork business from 25 August 1987, but the partnership continued.

3. Mr Bowman pleads in par 13 of his counterclaim, pursuant to the first variation agreement pleaded in par 12, that on or about 25 August 1987, he and Mr Williams entered into a written agreement to purchase the Burswood properties.  By the pleas in pars 12, 13, 16 and 17 of his counterclaim, Mr Bowman pleads that the Burswood properties were partnership properties and were acquired for the purpose of the concrete formwork business (which was not conducted by Mr Bowman and Mr Williams as partners but by a separate corporate entity, Kyilla).  It is also pleaded in par 17.2 of his counterclaim that the Burswood properties were used for storage by Kyilla of the plant and equipment and as an office to conduct the business of Kyilla.

4. In par 18 of his counterclaim, Mr Bowman pleads that he and Mr Williams agreed in or about 1989 to enter into a second variation of the partnership so as to broaden the business of the partnership to include making the current and future assets of the partnership available to all business ventures that both Mr Bowman and Mr Williams were equally involved in, as well as assisting Kyilla in the concrete formwork business.

5. In pars 19, 20 and 21 of his counterclaim, Mr Bowman pleads that on or about 5 July 1989 onwards, the partnership made available to Walker Holdings the partnership assets to assist Walker Holdings with carrying on its concrete formwork business,[17] including the Burswood properties.

   [17] The pleas in these paragraphs indicate that Mr Bowman claims Walker Holdings was carrying out a concrete formwork business that was a different business to the business carried out by Kyilla, and formerly carried out by the partnership.

6. In par 26 of his counterclaim, Mr Bowman pleads that Mr Williams, without agreement or consent of Mr Bowman during the 1990s, took sole control and possession of the partnership assets, including the Burswood properties and the plant and equipment for his own personal benefit and use.

7. In par 27 of his counterclaim, Mr Bowman sets out a plea of a claim that Mr Williams breached his fiduciary obligations pleaded in par 10 by misappropriating the partnership assets for his own benefit and use, and not contributing to payment of interest and loans.  In par 10 of his counterclaim, Mr Bowman pleads that at all times during the course of, and until the winding up of, the partnership, Mr Williams was, and is, subject to a fiduciary obligation to not act otherwise than in the interests of both Mr Bowman and Mr Williams in the exercise of any power or discretion affecting their interest as partners of the partnership in a legal or practical sense.

8. In par 10 of his amended defence to Mr Bowman's counterclaim, Mr Williams does not admit par 10 of Mr Bowman's counterclaim.  In par 10B of his defence to the counterclaim, Mr Williams pleads in response to par 26 of Mr Bowman's counterclaim that from about late 1990 he took control and possession of the Burswood properties, and that there was no plant and equipment on the Burswood properties save for miscellaneous acro props and floor setters.

9. Mr Bowman pleads in par 29 of his counterclaim that on 22 September 2021, he gave Mr Williams notice in writing of his intention to dissolve and determine the partnership on 22 September 2021, pursuant to s 37(1), and further or alternatively s 43(c), of the Partnership Act 1895, and by the giving of that notice, the partnership was dissolved and determined on 22 September 2021.

10. In par 12 of the defence to counterclaim, Mr Williams pleads that:

    [A]ny partnership between himself and Mr Bowman was dissolved by an agreement between the parties in or about 1990 and wound up on the basis of that agreement as a consequence of the matters pleaded in paragraphs 3, 4 and 5 of the statement of claim.

11. In par 19(a) of the defence to counterclaim, Mr Williams pleads that:

    [I]n answer to the claim of Mr Bowman seeking an order that the business and affairs of any partnership between Mr Williams and Mr Bowman be wound up and for directions for accounts, Mr Williams says:

    (a)any partnership between Mr Williams and Mr Bowman was dissolved by an agreement between the parties in or around late 1990 and wound up on the basis of that agreement as a consequence of the matters pleaded in paragraphs 3, 4 and 5 of the statement of claim;

12. The effect of the agreement pleaded by Mr Williams in par 5 (which can be inferred from the conversation pleaded in par 3 and the subsequent conduct in par 4 of the statement of claim when read with par 12 and 19(a) of the defence to counterclaim) is that any business relationship between Mr Williams and Mr Bowman (including the partnership) was brought to an end when the partnership was dissolved and wound up or subject to an accord or satisfaction as a consequence of an agreement between them, and the partial performance of that agreement.

13. Mr Williams asserts in par 7 of the statement of claim that, pursuant to the partially performed agreement, he is entitled to specific performance of the agreement, and a declaration that he is entitled to be the sole registered proprietor of the Properties.

14. Mr Williams asserts that Mr Bowman's failure to complete the transfer of his interest in the Properties to him gives rise to a claim for relief.  The relief claimed by Mr Williams includes an order for specific performance of the agreement (being the agreement pleaded in pars 3, 4 and 5 of the statement of claim), which on the basis of the matters pleaded in pars 4 and 5 is the only remaining part of the agreement which Mr Williams claims remains unperformed.  The unperformed part of the agreement he claims is the transfer of the interest that Mr Bowman holds as a tenant in common in each of the Properties.

15. Importantly for this application, the dispute on Mr Williams' case is whether there was an agreement reached in or about 1990 to dissolve the partnership whereby it was agreed that Mr Bowman would pay out the loan secured on the mortgages of the properties, Mr Williams would become the sole owner of the properties, and Mr Bowman would take the benefit of Mr Williams' interests in the partnership, Kyilla and Walker Holdings.

16. Mr Williams does not plead a different agreement in pars 3, 4 and 5 of the statement of claim to the agreement referred to in pars 12 and 19(a) of his defence to counterclaim.

17. What is clearly pleaded in par 5 of the statement of claim when read with pars 3 and 4 of the statement of claim and pars 12 and 19(a) of the defence to counterclaim is an agreement:

    (a)not only to dissolve and wind up the partnership by disposing of Mr Williams' interest in the partnership to Mr Bowman;

    (b)but also to dispose of Mr Williams' interest in Kyilla to Mr Bowman, which Mr Williams pleads was a company through which the partnership was conducted; and

    (c)to also dispose of Mr Williams' interest in Walker Holdings, which was not an interest of, nor formed part of, the interests of partnership;

    in exchange for;

    (d)Mr Bowman's share of all the Properties, each of which did not form any part of property of the partnership. 

18. Consequently, what is pleaded in these paragraphs is that there was an agreement to dispose of the business interests of Mr Williams, which were all of Mr Williams' interest in the partnership together with other business other business interests which did not form part of the partnership.

19. What is pleaded in par 4 of the statement of claim, when read with pars 12 and 19(a) of the defence to counterclaim, is conduct which took place after the conversation referred to in par 3, from which it can be inferred that the terms pleaded in par 5 are the terms of the agreement to dissolve and wind up the partnership.

20. The words 'any partnership' in pars 12 and 19(a) of Mr Williams' defence to counterclaim are an acceptable and convenient form of pleading where Mr Williams does not accept the categorisation of the terms of the partnership pleaded by Mr Bowman.  More specifically, Mr Williams claims that the partnership was dissolved and wound up and pleads that the partnership business was carried out by him and Mr Bowman in their individual capacities through Kyilla, whereas Mr Bowman pleads that post 25 August 1987, the partnership ceased carrying out that business and the business formally carried out by the partnership as individuals was carried out by Kyilla.

21. In essence, Mr Bowman claims that the agreement which Mr Williams says was an agreement to end the partnership was not made, and the partnership continued through until 22 September 2021, or around that time, when it was dissolved by Mr Bowman giving written notice of his intention to dissolve the partnership to Mr Williams.

22. As senior counsel for Mr Williams points out, assessment of the factual disputes between the parties at trial will revolve around:

    (a)ascertaining what were the assets of the partnership;

    (b)making a finding of whether all of the business interests of Mr Williams and Mr Bowman (including the business of the partnership) were wound up and dealt with by an agreement made in or around 1990 or were the subject to an accord and satisfaction, or alternatively, if no agreement was made at that time as Mr Williams alleges, how the partnership dissolved by the notice given by Mr Bowman in 2021; and

    (c)what ancillary orders are required by the taking of accounts.

23. As senior counsel for Mr Williams points out, at trial, the court will be able to take into account the conduct of the parties after 1990 in relation to the identification of an agreement and its terms by the application of the principle that a contract may be inferred from a number of matters including the acts and conduct of the parties as well as the absence of their words.[18]

    [18] Fazio v Fazio [2012] WASCA 72 [187] ‑ [189].

5.0 Disposition of the appeal

1. The case which Mr Bowman must meet at trial is clear, properly pleaded and articulated in the statement of claim and the reply and defence to counterclaim in respect of what Mr Williams says constituted the partnership and how it was dissolved and wound up.  Consequently, there is no proper basis to strike out pars 12 and 19(a) of the defence to counterclaim.

2. For these reasons, the grounds of appeal are without merit.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

EC

Associate to the Honourable Justice Smith

28 FEBRUARY 2022