WILLIAMS v Nicoski - [2003] WASC 224

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: WILLIAMS -v- NICOSKI & ANOR [2003] WASC 224

CORAM: MASTER NEWNES

HEARD: 6 NOVEMBER 2003

DELIVERED : 12 NOVEMBER 2003

FILE NO/S: CIV 1404 of 1999

BETWEEN: TROY WILLIAMS
Plaintiff
AND
GEORGETTE NICOSKI
First Defendant
NUTRIMETICS INTERNATIONAL (AUSTRALIA) PTY LTD
Second Defendant

Catchwords:

Practice and procedure - Directions under O 61 r 2 - Application to adjourn taking of account until after appeal - Principles to be applied - Turns on own facts

Legislation:

Supreme Court Rules, O 61 r 2

Result:

Taking of accounts adjourned until after determination of appeal

Category: B

Representation:

Counsel:

Plaintiff:     Mr T B Lyons
First Defendant             :     Mr M D Howard
Second Defendant         :     Mr M D Howard

Solicitors:

Plaintiff:     Gibson Lyons
First Defendant             :     Tottle Partners
Second Defendant         :     Tottle Partners

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

Alexander v Cambridge Credit Ltd (1985) 2 NSWLR 685
Catlin v National Australia Bank Ltd [2002] WASCA 224
Federal Commissioner of Taxation v Myer Emporium Ltd (No 1) (1986) 160 CLR 220
Hamersley Iron Pty Ltd v Lovell (No 2) (1998) 20 WAR 79

Case(s) also cited:

Christmas Island Resort Pty Ltd v Geraldton Building Co Pty Ltd (No 5) (1997) 18 WAR 334
Deputy Commissioner of Taxation v Fontana [1989] WAR 262
Hyam v Terry (1880) 29 WR 32
Stambulich v Ekamper [2001] WASCA 212
Total Autos Pty Ltd v Ure [2000] WADC 118
Wentworth v AttorneyGeneral (NSW) (1984) 154 CLR 518
Williams v Spautz (1992) 174 CLR 509

MASTER NEWNES: The plaintiff has applied, under O 61 r 2 of the Supreme Court Rules, for directions following orders by Barker J, after the trial of the action, for the taking of accounts and inquiries. In substance, the plaintiff merely seeks to have the taking of the accounts adjourned until an appeal by the first defendant against the orders of Barker J is determined.
The primary proceedings between the plaintiff and the defendants concerned the plaintiff's entitlements in respect of a Nutrimetics consultancy business. It is unnecessary for present purposes to go into the detail of the proceedings. Suffice it to say that the plaintiff alleged he had been a partner with the first defendant in the business from February 1997 and that the partnership had never been terminated. The plaintiff said he had ceased to have any active involvement in the business from 22 December 1999, when the personal relationship between himself and the first defendant broke down. The first defendant denied that there was ever a partnership between the plaintiff and herself.
Following a trial lasting six days, Barker J found that the plaintiff and the first defendant were partners in the business from 5 February 1997 to 19 April 1999, when, his Honour found, the partnership was dissolved. As a consequence of his findings, Barker J made a number of orders, including the following:
"(6)orders that the following accounts or inquiries be taken by a Master of the Court:
(a)an account of all receipts and payments, dealings and transactions of the plaintiff and the first defendant under the 1988 limited agency agreement in respect of the partnership business from 22 December 1997 until 19 April 1999;
(b)an account of all receipts and payments, dealings and transactions of the plaintiff and the first defendant under the 1997 limited agency agreement in respect of the partnership business from 22 December 1997;
(c)an account of all the debts and liabilities of the partnership;
(d)an account of all credits or payments that may become payable under the 1997 limited agency agreement;
(e)an inquiry as to what has become of any property of the partnership business;
(f)for the purposes of pars (a) and (b) of this order, the accounts be taken as a single account, whether the receipts and payments or the dealings and transactions of the plaintiff and the first defendant occurred under the 1988 limited agency agreement or under the 1997 limited agency agreement in respect of the partnership business;
(g)in the taking of the account for the purposes of this order, to the extent that the first defendant has paid income tax on the profits the subject of the account, and is unable to obtain any refund of any portion thereof, such income tax shall be considered a business expense;
(h)in the taking of the account for the purpose of this order, where the first defendant has received a benefit or remuneration under the 1988 limited agency agreement or the 1997 limited agency agreement that does not comprise commissions paid as money, such benefit or remuneration, or proportion thereof, that was applied in the running of the business and the earning of income, as assessed by the Master, shall not be brought to account.
7.orders that, in taking the accounts and inquiries directed above, the first defendant to be at liberty to submit any claim as to just allowances which she may be advised ought to be made to them on account of her services in managing, transacting and carrying on the business alone between 22 December 1997 and 19 April 1999 and such allowances, if any, as shall appear to be proper in respect therefor are to be made accordingly;"
The first defendant has appealed against a number of the findings made by Barker J, including the finding that there was a partnership between the plaintiff and the first defendant.
The plaintiff has filed an application for directions in which he seeks an order that there be a stay of the above orders until the first defendant's appeal is determined. The plaintiff submitted that special circumstances to justify a stay were sufficiently made out because, if the first defendant's appeal was successful, the time and costs of the parties and the resources of the Court in taking the accounts will have been wasted.
The first defendant opposed any stay and said that the taking of the accounts should proceed despite her appeal. The first defendant also contended that the Court has no power on an application under O 61 r 2 to grant a stay.
In the written submissions filed on behalf of the first defendant, it was also argued that no special circumstances had been shown which would justify a stay of the taking of the accounts. Reference was made to Alexander v Cambridge Credit Ltd (1985) 2 NSWLR 685, Federal Commissioner of Taxation v Myer Emporium Ltd (No 1) (1986) 160 CLR 220, Hamersley Iron Pty Ltd v Lovell (No 2) (1998) 20 WAR 79, and Catlin v National Australia Bank Ltd [2002] WASCA 224.
Under O 61 r2, the Court may give directions with respect to proceedings to be taken under a judgment or order and, in particular, directions as to the manner in which any account or inquiry is to be conducted and the time within which any such proceeding is to be taken. Although couched in terms of a stay, what, in truth, is sought by the plaintiff in the present case is a direction that the taking of the accounts be stood over until the appeal is determined.
I should say at the outset that the principles relating to a stay of execution do not seem to me to be apposite here. What is now to be undertaken is not by way of execution, but rather is a further proceeding of this Court to give effect to the findings made at trial. That has an important consequence because the further proceeding involves not only the parties, but also the utilisation of the publicly funded, and limited, resources of the Court. The public interest in the efficient use of those resources is a factor that must be taken into consideration.
It is not in contention that the taking of the accounts is for the benefit of the plaintiff. In essence, accounts are to be taken in respect of the period during which the partnership was found to exist, but after the plaintiff had ceased to have any active role in it. The substantive issue is what (if any) amount is payable by the first defendant to the plaintiff.
In support of the contention that the taking of the accounts should proceed, notwithstanding her appeal, it was submitted on behalf of the first defendant that the taking of the accounts will involve substantial issues of law because of the nature of the accounts which it has been ordered be taken. It was submitted that, much more than in the normal case, the taking of the accounts in this case will be an extension of a number of issues raised at the trial, involving significant questions of law. It was quite conceivable that an appeal may follow any determination on the taking of the accounts. Counsel argued that it was therefore more appropriate that, if there should be an appeal, it be heard at the same time as the appeal presently only foot. If it appeared that the latter appeal would, in the ordinary course, be heard before the completion of the taking of the accounts, it would be necessary for the first defendant to seek directions that the hearing of the appeal await the outcome of the taking of the accounts. Counsel argued that it would be an inefficient use of the Court's and the parties' resources for there to be two appeals at different times.
I do not think there is a perfect solution. Whichever way the matter is dealt with, it could eventually involve some waste of time and costs. On balance, however, I consider the more appropriate course is to delay the taking of the accounts until the first defendant's present appeal is determined.
I did not understand it to be suggested that the first defendant would be significantly prejudiced by delay in the taking of the accounts, although understandably she wishes the matter to be resolved. I accept that there would be some benefit, if it turned out to be possible to do so within a reasonable time, to have any appeal arising from the taking of the accounts heard at the same time as the existing appeal. But at this stage it is by no means clear that it would be possible to do that without unduly delaying the hearing of the existing appeal. Moreover, the savings in costs are likely to be limited, because it is likely the appeals will, to a greater or lesser extent, involve different questions. To the extent, if any, that questions that arise on the current appeal are common, or relevant, to those that may arise on the taking of the accounts, it is plainly desirable that those questions be resolved before, rather than after, the accounts are taken.
On the other hand, if the taking of the accounts goes ahead and subsequently the first defendant's appeal succeeds on the primary issue of the existence of a partnership, there is no doubt that all of the costs of the taking of the accounts, and the judicial resources which had been expended upon it, will have been entirely wasted. Even if there is only some variation to the existing orders, that may involve undertaking the accounts again either in whole or in part.
I will therefore direct that the taking of the accounts be adjourned pending the determination of the first defendant's appeal, with liberty to the parties to apply in the event that circumstances arise which require the position to be reconsidered.