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[2014] WASCA 212
Court of Appeal (WA)
2015-01-28
Buss JA
Original judgment source is linked above.
2 Those orders reflected the court's reasons in Nelson v Moorcraft [2014] WASCA 212.
3 Subsequently, the parties filed written submissions in relation to the costs of the appeal and the costs of the proceedings in the District Court action.
4 On 2 May 2014, the trial judge ordered Mr Nelson to pay Mr Moorcraft's costs of the District Court action. See Nelson v Moorcraft [2012] WADC 170 (S2). See also Nelson v Moorcraft [2012] WADC 170 (S).
5 Section 37(1) of the Supreme Court Act 1935 (WA) confers a broad discretion on the court in relation to costs with full power to determine, relevantly, by whom and to what extent such costs are to be paid. This discretionary power enables the court to make orders with respect to the allowance of costs generally. See also O 66 r 1(1) of the Rules of the Supreme Court 1971 (WA), which should be read together with s 37(1) of the Act.
6 By O 66 r 10(2) of the Rules of the Supreme Court, relevantly, in the case of an appeal, the costs of the proceedings giving rise to the appeal, as well as the costs of the appeal and of the proceedings connected with it, may be dealt with by the court hearing the appeal.
7 Rule 5(1) of the Supreme Court (Court of Appeal) Rules 2005 (WA) provides that the Court of Appeal Rules must be read with the Rules of the Supreme Court.
8 Mr Nelson had substantial success in the appeal. However:
(a) Mr Nelson was not successful on some of the issues in the appeal; and
(b) his applications filed 26 August 2013 and 8 July 2014 were dismissed.
9 If the District Court action had been tried and determined in accordance with this court's reasons, Mr Nelson would have had substantial success in the District Court trial.
10 It is unnecessary to reproduce the various arguments and contentions in the written submissions filed by the parties in relation to costs. It is sufficient to note that Mr Moorcraft has applied for an indemnity certificate under s 10 of the Suitors' Fund Act 1964 (WA). See also s 11 of that Act.
11 After taking into account the successes and failures of each of the parties on particular issues in the appeal; the court's reasons for decision in the appeal; the successes and failures which each of the parties should have had on particular issues at the District Court trial if the District Court action had been tried and determined in accordance with this court's reasons; the fact that, pursuant to par 5 of this court's orders made on 14 November 2014, part of Mr Nelson's claim in the District Court action was remitted to the trial judge for resolution in accordance with this court's reasons; and the submissions of the parties on the orders that should now be made, justice would be done as between the parties if:
(a) the trial judge's order as to the costs of the District Court action were to be set aside;
(b) Mr Moorcraft were to be ordered to pay 70% of Mr Nelson's costs of the District Court action, including the costs of the counterclaim and any reserved costs, to be taxed if not agreed; and
(c) Mr Moorcraft were to be ordered to pay 70% of Mr Nelson's costs of the appeal, including any reserved costs, to be taxed if not agreed.
12 These orders are preferable to this court endeavouring to make individual orders by reference to particular issues or events at the District Court trial or in the appeal.
13 As to Mr Moorcraft's application under s 10 of the Suitors' Fund Act, this court has an unfettered discretion under s 10 but the discretion must be exercised judicially. The discretion is a discretion to grant, rather than a discretion to refuse, an indemnity certificate. The respondent must establish that there is an appropriate basis for the exercise of the court's discretion in his or her favour. The mere fact that the respondent succeeded at first instance, but lost on appeal on a question of law, is insufficient. See Richards v Faulls Pty Ltd [1971] WAR 129, 137 - 139; Jones v Dalcon Construction Pty Ltd [2006] WASCA 205 (S) [5]. A relevant consideration is whether (and, if so, to what extent) the question of law was of general importance or application or whether the question of law merely arose from the particular facts of the case. See Corruption and Crime Commission of Western Australia v Allen [2012] WASCA 242 (S) [3]; Barr v Farrell [2013] WASCA 211 [13].
14 Mr Moorcraft has not shown an appropriate basis for the exercise in his favour of the discretion under s 10. The questions of law on which Mr Nelson succeeded and Mr Moorcraft failed were not of general importance or application. They arose from the unusual facts and circumstances of the case. Mr Moorcraft's application should be dismissed.
15 Accordingly, the court will make orders as follows:
(1) The trial judge's order as to the costs of the District Court action is set aside.
(2) Mr Moorcraft is to pay 70% of Mr Nelson's costs of the District Court action, including the costs of the counterclaim and any reserved costs, to be taxed if not agreed.
(3) Mr Moorcraft is to pay 70% of Mr Nelson's costs of the appeal, including any reserved costs, to be taxed if not agreed.
(4) Mr Moorcraft's application under s 10 of the Suitors' Fund Act is dismissed.
Abbott
Abbott
Citation : NELSON -v- MOORCRAFT [2012] WADC 170
Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99
Brisbane City Council v Group Projects Pty Ltd [1979] HCA 54; (1979) 145 CLR 143
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337
Commissioner of State Taxation (SA) v Cyril Henschke Pty Ltd [2010] HCA 43; (2010) 242 CLR 508
Davis Contractors Ltd v Fareham Urban District Council [1956] UKHL 3; [1956] AC 696
EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78; (2010) 41 WAR 23
Fazio v Fazio [2012] WASCA 72
Fullers' Theatres Ltd v Musgrove [1923] HCA 12; (1923) 31 CLR 524
Hewett v Court [1983] HCA 7; (1983) 149 CLR 639
International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 234 CLR 151
Maslen v Perpetual Executors Trustees & Agency Co (WA) Ltd [1950] HCA 55; (1950) 82 CLR 101
McGowan v Commissioner of Stamp Duties [2001] QCA 236; [2002] 2 Qd R 499
Nullagine Investments Pty Ltd v Western Australian Club Inc [1993] HCA 45; (1993) 177 CLR 635
oOh! Media Roadside Pty Ltd (formerly Power Panels Pty Ltd) v Diamond Wheels Pty Ltd [2011] VSCA 116; (2011) 32 VR 255
Raulfs v Fishy Bite Pty Ltd [2012] NSWCA 135
Rushton (Qld) Pty Ltd v Rushton (NSW) Pty Ltd [2002] QCA 210; [2003] 1 Qd R 320
Tanwar Enterprises Pty Limited v Cauchi [2003] HCA 57; (2003) 217 CLR 315
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Toohey v Gunther [1928] HCA 19; (1928) 41 CLR 181
Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2011) 86 ALJR 1
In law the retirement of a partner, or the admission of a new partner, constitutes the dissolution of the old partnership and the formation of a new one. Here, upon the happening of such events there were no overt signs of dissolution; the partnership's financial structure and arrangements were such that none was required but that does not alter the underlying legal significance of any retirement or new admission (Income Tax Commissioners (City of London) v Gibbs [1942] AC 402, particularly at 414 per Viscount Simon LC; at 429, 430 per Lord Wright; at 432 per Lord Porter; Brace v Calder [1895] 2 QB 253 at 258 per Lord Esher MR; at 261 per Lopes LJ; at 263 per Rigby LJ; Lindley on the Law of Partnership, 15th ed (1984), pp 543, 983) (455).
213 It is to be noted that the court would not compel the performance in specie of the partnership agreement: Renowden v Hurley [1951] VicLawRp 2; [1951] VLR 2; (1951) VLR 13, 20 - 22; Meagher RP, Heydon JD and Leeming MJ, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (4th ed, 2002) [20-60].
A partnership may be 'dissolved' in the sense of terminated or determined - as opposed to 'dissolved' in the other sense in which it is sometimes used to connote the winding-up of the business - in a variety of ways. (As to dissolution in the sense of termination, see, eg, Lindley and Banks on Partnership (19th ed, 2010) [24-01]; Geraghty v Minter [1979] HCA 42; (1979) 142 CLR 177, 180 - 181, 181 - 182, 190 - 192.) Dissolution in the sense of termination can include, for example, subject to any agreement to the contrary, dissolution by the death or bankruptcy of a partner (s 44 of the Partnership Act), or where the partnership was for a fixed term or a single venture and the fixed period has expired or the single venture has terminated (s 43(a) and (b)).
A partnership may also be determined by curial decree in a variety of specified circumstances, including where an order is made on a 'just and equitable' ground: s 46.
A partnership is also dissolved by the happening of an event which makes it unlawful to carry on the business: s 45.
A partnership (whether for a fixed term or at will) may be determined by mutual agreement: Maslen v Perpetual Executor Trustees (112); Lindley and Banks on Partnership [24-04].
The statute provides that in the case of a partnership for a fixed term, a partner may not retire except, in effect, by the consent or agreement of the other partners: s 36. The statute also provides that for a partnership where no fixed term is agreed, a partner may, unilaterally, determine the partnership by giving written notice to the other partners: s 37(1). Such written notice does not have to be given under seal, even where the original partnership agreement was constituted by a deed: s 37(2). Unless the partners otherwise agree, the partnership is dissolved on the date specified in the notice or, if no date is specified, as from the date of the communication of the notice: subs (c) and the concluding words of s 43. (Note also the overlap between s 37 and s 43 generally, which is discussed in relation to the broadly equivalent English provisions (s 26 and s 32) in Lindley and Banks on Partnership [9-01] - [9-03], and where the learned authors observe, in effect, that both sections (and not just s 43), will take effect subject to any agreement between the partners to the contrary - see also
Barr v Farrell [2013] WASCA 211
Corruption and Crime Commission of Western Australia v Allen [2012] WASCA 242 (S)
Jones v Dalcon Construction Pty Ltd [2006] WASCA 205 (S)
Richards v Faulls Pty Ltd [1971] WAR 129
(1973) 129 CLR 99
(2010) 242 CLR 508
(1983) 149 CLR 639
(1993) 177 CLR 635
(1928) 41 CLR 181
(1979) 142 CLR 177
(2003) 1 Qd R 320
(1979) 145 CLR 143
(1982) 149 CLR 337
(2010) 41 WAR 23
(1923) 31 CLR 524
(2008) 234 CLR 151
(1950) 82 CLR 101
(2011) 32 VR 255
(2003) 217 CLR 315
(2004) 219 CLR 165
(2011) 86 ALJR 1
(1956) 95 CLR 420
A retirement of a partner, mutually agreed or unilaterally effective, has the consequence of dissolving the partnership: Commissioner of State Taxation v Cyril Henschke Pty Ltd [11].
Where a partner retires by mutual agreement on terms that the remaining partners will continue in partnership and take on the assets and liabilities of the old firm, without a break in the continuity of the business, the dissolution of the firm effected by the retirement of the partner is in the nature of what is often called a 'technical dissolution', or a 'notional dissolution' and the 'continuing' partners are, in point of law, operating a new partnership: see Commissioner of State Taxation v Cyril Henschke Pty Ltd [11] - [12], [19], [24] - [29]; Lindley and Banks on Partnership [19-09], [24-01] - [24-04]; Rushton (Qld) Pty Ltd v Rushton (NSW) Pty Ltd [2003] QCA 210; (2003) 1 Qd R 320 [9]. As McPherson JA observed, however, in Rushton v Rushton [9], the reference to a 'technical' or 'notional' dissolution is somewhat of a misnomer, because it is not the dissolution itself, but the winding-up which is notional. Where there is a binding agreement involving a 'technical dissolution' of the former partnership, with consideration being given for the retiring partner's chose in action, the former partner's chose in action is extinguished by accord and satisfaction: Commissioner of State Taxation v Cyril Henschke Pty Ltd [19], [28].
...
Where there is a retirement by agreement, the agreement may be formal (eg, as reflected in the formal instrument in Commissioner of State Taxation v Cyril Henschke Pty Ltd), or informal, including partly or wholly oral, or partly or wholly inferred. Sobell v Boston (1975) 1 WLR 1587 appears to be an example of an oral agreement, which had been executed (see Goff J, as his Lordship then was, at 1588 - 1590) where, although it is not clear, the court arguably inferred or implied a term of the agreement as to how the retiring partner's interest was agreed to be dealt with - see Truong v Lam [2009] WASCA 217 [27]. Insofar as the term was inferred or implied, it appears to have been aided by the circumstance that the agreement had been executed, and was not merely executory (1590 - 1591). On the implications of terms in executed contracts, see the authorities collected in Lewison K and Hughes B, The Interpretation of Contracts in Australia (2012) [6.19].
As to inferred or at least partly inferred agreements respecting dissolution on the departure of a partner, see, for example, Jorgensen v Boyce [1897] VicLawRp 73; (1896) 22 VLR 408; Palmer v Moore [1900] AC 293, and in the court below - Moore v Morgan (1900) 21 LR (NSW) Eq 158; Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420, 431, 439 - 440; Cutts v Holland [1965] TASStRp 2; [1965] TAS SR 69, 71 - 72; Thompson v De Lissa (Unreported, NSWSC, Powell J, 16 February 1990), 52; Lukin v Lovrinov (Unreported, SASC, Perry J, 9 April 1998), 22.