Williams v Nathan - [2019] QSC 127

SUPREME COURT OF QUEENSLAND

CITATION:

Williams v Nathan [2019] QSC 127

PARTIES:
DANIEL WILLIAMS

(plaintiff)

v

JULIAN NATHAN

(first defendant)

NATHAN LAWYERS BRISBANE PTY LTD (IN LIQUIDATION) ACN: 154 104 426

(second defendant)

FILE NO/S:

No 12663 of 2018

DIVISION:

Trial Division

PROCEEDING:

Civil trial

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

23 May 2019

DELIVERED AT:

Brisbane

HEARING DATE:

13 March 2019, 14 March 2019

JUDGE:

Boddice J

ORDER:

I shall hear the parties as to the form of orders and costs.

CATCHWORDS:

PROFESSIONS AND TRADES – LAWYERS – DUTIES AND LIABILITIES – GENERALLY – where the second defendant was an incorporated legal practice, of which the plaintiff and first defendant were its directors and equal shareholders – where the second defendant, was wound up on the just and equitable ground – where there was no suggestion the second defendant was insolvent – where the second defendant was operating two legal practices, of which one was operated by the plaintiff and one by the first defendant – whether, as the plaintiff contends, the practice operated by him is held by the second defendant on constructive trust for him and that the other practice is held by the second defendant on constructive trust for the first defendant

Legal Profession Act 2007 (Qld), s 117

Beatty v Guggenheim Exploration Co (1919) 225 NY 380

Council of the Law Society of NSW v Wehbe [2018] NSWCATOD 14

Daly v Sydney Stock ExchangeLtd (1986) 160 CLR 371

Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498

Grant v Edwards [1986] 2 All ER 426

Green v Green (1989) 17 NSWLR 343

Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41

Iman Ali Islamic Centre v Iman Ali Islamic Centre Inc [2018] VSC 413

Muschinski v Dodds (1985) 160 CLR 583

Nelson & Anor v Nelson & Ors (1995) 184 CLR 538

Raulfs v Fishybite [2012] NSWCA 135

Shepherd v Doolan [2005] NSWSC 42

COUNSEL:
A Crowe QC, with L Copley, for the plaintiff

P O’Brien for the first defendant
C A Wilkins for the second defendant

SOLICITORS:

Clarke Kann Lawyers for the plaintiff

Mullins Lawyers for the first defendant
K&L Gates for the second defendant

The second defendant, an incorporated legal practice, was incorporated on 4 November 2011. The plaintiff and first defendant were its directors and equal shareholders.
On 27 November 2018, the second defendant was wound up on the just and equitable ground. There was no suggestion at the time of the making of that order, or subsequently, that the second defendant was insolvent.
The present proceedings do not challenge the winding up of the second defendant. Instead, the plaintiff seeks declaratory and other relief in relation to assets of the second defendant.
At the time of the winding up order, the second defendant was operating two legal practices. One of those legal practices operated almost exclusively in personal injuries law. It was conducted by the plaintiff from premises at Oxley (“the Oxley practice”).…

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 Williams v Nathan

Details

AGLC: Williams v Nathan [2019] QSC 127
Case: [2019] QSC 127
Decision Date: 23 May 2019

CaseChat Overview and Summary

The case of Williams v Nathan involved a dispute between the plaintiff, Williams, and the first and second defendants, Nathan and his incorporated legal practice respectively. Williams and Nathan were both directors and equal shareholders of the second defendant. The dispute arose when the second defendant was wound up on the just and equitable ground, with no suggestion of insolvency. The second defendant operated two separate legal practices, one managed by Williams and the other by Nathan. Williams contended that the practice he operated was held by the second defendant on constructive trust for him, and that the other practice was held by the second defendant on constructive trust for Nathan.

The court was required to determine whether Williams' claims about the constructive trusts were valid. This involved examining the nature of the second defendant's assets, specifically the two legal practices, and whether there was any basis for imposing constructive trusts on those assets in favour of Williams and Nathan respectively. The court needed to assess whether the winding up of the second defendant justified the imposition of such trusts, and if so, to what extent.

In examining these issues, the court considered the equitable principles relevant to constructive trusts and the circumstances of the winding up. It was established that the second defendant was not insolvent, and therefore, the winding up was not due to financial distress. The court scrutinised the management and ownership structures of the two legal practices and the roles of Williams and Nathan within those structures. The court concluded that there was insufficient evidence to support the imposition of a constructive trust in favour of Williams over the practice he managed. However, it found that there was a basis for Nathan to claim a constructive trust over the other practice he managed. The court ruled that the second defendant held the practice managed by Nathan on constructive trust for him, but did not impose a constructive trust in favour of Williams.

Pending further submissions from the parties, the court indicated that it would consider the form of orders and costs.

Orders

Orders of the court

I shall hear the parties as to the form of orders and costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Williams v Nathan [2019] QSC 127
PARTIES:	DANIEL WILLIAMS (plaintiff) v JULIAN NATHAN (first defendant) NATHAN LAWYERS BRISBANE PTY LTD (IN LIQUIDATION) ACN: 154 104 426 (second defendant)
FILE NO/S:	No 12663 of 2018
DIVISION:	Trial Division
PROCEEDING:	Civil trial
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	23 May 2019
DELIVERED AT:	Brisbane
HEARING DATE:	13 March 2019, 14 March 2019
JUDGE:	Boddice J
ORDER:	I shall hear the parties as to the form of orders and costs.
CATCHWORDS:	PROFESSIONS AND TRADES – LAWYERS – DUTIES AND LIABILITIES – GENERALLY – where the second defendant was an incorporated legal practice, of which the plaintiff and first defendant were its directors and equal shareholders – where the second defendant, was wound up on the just and equitable ground – where there was no suggestion the second defendant was insolvent – where the second defendant was operating two legal practices, of which one was operated by the plaintiff and one by the first defendant – whether, as the plaintiff contends, the practice operated by him is held by the second defendant on constructive trust for him and that the other practice is held by the second defendant on constructive trust for the first defendant Legal Profession Act 2007 (Qld), s 117 Beatty v Guggenheim Exploration Co (1919) 225 NY 380 Council of the Law Society of NSW v Wehbe [2018] NSWCATOD 14 Daly v Sydney Stock ExchangeLtd (1986) 160 CLR 371 Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 Grant v Edwards [1986] 2 All ER 426 Green v Green (1989) 17 NSWLR 343 Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 Iman Ali Islamic Centre v Iman Ali Islamic Centre Inc [2018] VSC 413 Muschinski v Dodds (1985) 160 CLR 583 Nelson & Anor v Nelson & Ors (1995) 184 CLR 538 Raulfs v Fishybite [2012] NSWCA 135 Shepherd v Doolan [2005] NSWSC 42
COUNSEL:	A Crowe QC, with L Copley, for the plaintiff P O’Brien for the first defendant C A Wilkins for the second defendant
SOLICITORS:	Clarke Kann Lawyers for the plaintiff Mullins Lawyers for the first defendant K&L Gates for the second defendant