Nixon v Walker - [2010] NZCA 273

IN THE COURT OF APPEAL OF NEW ZEALAND
CA804/2008
[2010] NZCA 273
BETWEENSHAUN ROGER NIXON

First Appellant
ANDMARTIN VICTOR RICHARDSON AND SHAUN ROGER NIXON, AS TRUSTEES OF THE FIRM TRUST

Second Appellants

ANDGEOFFREY DONALD CAMPBELL WALKER, ROWAN JOHN CHAPMAN, TIMOTHY JOSEPH GOLDFINCH, MARTIN VICTOR RICHARDSON, DIANNE MAREE LUDWIG AND KURT SHERLOCK

First Respondents
ANDGOSLING CHAPMAN LIMITED

Second Respondent

Hearing:2 and 3 March 2010

Court:Glazebrook, Chambers and Ellen France JJ
Counsel:S A Grant and T A Chubb for Appellants

F J Thorp for Respondents

Judgment:25 June 2010 at 3 pm

JUDGMENT OF THE COURT

A The appeal is dismissed.
B The appellants must pay the respondents costs for a standard appeal on a band A basis and usual disbursements.

REASONS OF THE COURT

(Given by Chambers J)

Table of Contents
Para No.

A partner leaving Gosling Chapman  [1]
Issues on the appeal  [11]
Were the arbitrator and the Judge right in holding that Mr Nixon,
in order to be entitled to his share of the second instalments of
the incoming partners’ goodwill payments, had to be a partner at
the date on which the second instalments were paid?

The relevant contractual provisions  [17]
The findings of the arbitrator  [27]
Our view on this issue   [32]

Did the arbitrator’s award, unbeknownst to the arbitrator, in fact
provide for Mr Nixon receiving his share of the second
instalments? [48]

Can Mr Nixon now run an argument that in late July 2003 the
continuing partners, by their conduct, accepted his proposed
terms for his proposed consultancy? [59]

Can Mr Nixon now run an argument that the continuing partners
are estopped from denying Mr Nixon was entitled to be a
consultant on the terms he had proposed? [73]

Result [84]

A partner leaves Gosling Chapman
[1]        The story begins, for current purposes, on 1 April 2002. On that date, two of the first respondents, Dianne Ludwig and Kurt Sherlock, joined Shaun Nixon, the first appellant, and Geoffrey Walker, Rowan Chapman, Timothy Goldfinch, and Martin Richardson, the remaining first respondents, as partners in the accountancy firm, Gosling Chapman. Under the terms of the partnership agreement, Ms Ludwig and Mr Sherlock were required to pay goodwill. Each had to pay $168,000 on 1 April 2002 and a further $100,000 (subject to adjustments) on 1 April 2004. The existing partners were entitled to share equally in those receipts.
[2]        In January 2003, Mr Nixon gave notice to his partners of his intention to retire from the partnership as from 31 December 2003. Later he extended this to 31 March 2004.
[3]        Initially, the continuing partners, as we shall call the first respondents collectively, were sorry to be losing Mr Nixon. In June and July 2003, Mr Nixon had discussions with Mr Richardson, one of the continuing partners, about the possibility of Mr Nixon becoming a consultant to the firm after his resignation came into effect. Indeed, in July 2003, Mr Nixon, in the presence of other partners, announced to the Gosling Chapman management and staff that he would…

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.

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Details

Case: [2010] NZCA 273
Decision Date: 25 June 2010

CaseChat Overview and Summary

This appeal concerns a dispute between two former partners in an accounting firm and five continuing partners. The former partner, Mr Nixon, sought to be paid his share of incoming partners' goodwill payments and to be paid for his services as a consultant after leaving the partnership. The continuing partners refused to pay these amounts. The dispute was referred to arbitration and the arbitrator held that Mr Nixon was not entitled to any part of the goodwill payments and that no consultancy agreement existed. The High Court upheld the arbitrator's award and Mr Nixon appealed to the Court of Appeal. The Court of Appeal held that Mr Nixon was entitled to his share of the second instalments of goodwill payments but that he was not entitled to payment for his services as a consultant. The Court of Appeal held that it did not have jurisdiction to consider the estoppel argument as it had not been pleaded before the arbitrator. The appeal was dismissed.

Orders