Q. He has referred to the various times that you would make an appointment to go and see him. To the best of your recollection, how often did you go and see him at his office?
A. The only time I seen him at his office was after the dispute in 2002. That was when I managed to get some time off to go and see him regarding paperwork. And that's about it."
71 Evidence on this matter was given by two employees of Mr Ioannidis - the accountant Mr Brkljac previously mentioned and an accounts clerk, Ms Tadros. Mr Brkljac said in his affidavit that he recalled seeing the plaintiff in the office of Ioannidis & Associates on at least five occasions in 2000, 2001 and 2002, that on at least three occasions he attended with the defendant and that on at least two occasions the plaintiff attended alone. Mr Brkljac was challenged in cross-examination as to the quality of his recollections after such a passage of time. He agreed that he could not be precise about dates but said he was "sure" that the plaintiff had been at the office in 2001 and at the beginning of 2002. He knew that one visit was before a telephone conversation in late 2001 because a chair was taken from his office for a meeting the plaintiff attended.
72 Ms Tadros deposed that, in the period 2000 and 2002, she had seen the plaintiff in the office on at least six or seven occasions when he was either seeing Mr Ioannidis or leaving or collecting documents. She said that on some occasions he was alone and on others he attended with the defendant. In cross-examination she agreed that she had no recollection of the number of times she saw the plaintiff or of the dates. But she maintained her assertion that the dates on which she saw him in 2002 were in the middle of the year rather than towards the end.
73 The plaintiff's evidence is, as I have said, that he visited the office only once and that this was towards the end of 2002 after the dispute between the parties had developed. He made much of the fact that his duties at Grant's Pharmacy meant that he, as the only registered pharmacist, had to be there while the shop was open, so that he could not leave during normal business hours unless he arranged a locum. It was conceded that the wages records of the business did not disclose the employment of a locum at any relevant time.
74 The plaintiff sought to confirm this by calling evidence from pharmacy employees who said the plaintiff was always present when the shop was open. But the defendant points to wages records which call this evidence into question. In particular, Ms Carmeci gave evidence that she worked four days per week in the period including September 2000 and that the plaintiff was not absent on any of Monday 18, Tuesday 19, Friday 29 September 2000, whereas the wages records show that, in the period in question, she worked only three days a week (Monday, Wednesday and Thursday), with the result that she cannot speak for Tuesday 19 or Friday 29 September 2000. Similar evidence given by Ms Gourias does not take account of the fact that, according to the wages records, she did not work on 18 or 29 September 2000 and worked only 5.5 hours on 19 September 2000. Ms Calvert's evidence to similar effect is countered by wages records showing that she did not work on 29 September 2000, worked six hours on 18 September 2000 and worked only three hours on 19 September 2000. Ms Warncken's similar evidence must be viewed in the light of wages records showing that she did not work on 18 and 19 September 2000 and worked eight hours on 29 September 2000. Particularly in relation to 19 September 2000 (when Ms Gourias worked for 5.5 hours and Ms Calvert worked for three hours), it is quite possible that the plaintiff left the shop during business hours without any of the employees knowing.
75 On the basis of the evidence I have reviewed under this heading, I conclude that, on the balance of probabilities, the plaintiff did visit Mr Ioannidis' office on one or more occasions before the latter part of 2002 and that Mr Ioannidis' account of the plaintiff's dealings with Mr Ioannidis is to be preferred to that of the plaintiff.
Mr Vu's evidence
76 The last of the non-family witnesses to be mentioned is Mr Vu. He met the defendant and his wife in 1988 when he was seventeen years old. A year later, he went to live with them because of family problems. He also got to know the plaintiff and his family and developed a great deal of respect for the plaintiff's father who, upon Mr Vu's marriage in 2000, acted in the place of his own father who had died in the Vietnam war. Mr Vu attended a number of the family gatherings and celebrations. He refers in his affidavit to a dinner at the defendant's house at Christmas 2001 at which "most of the family" was present, including the plaintiff, his parents, his sister Melissa and brothers David and Andrew, the defendant and the defendant's wife. According to Mr Vu, the plaintiff's father said to the defendant on that occasion words in Vietnamese meaning literally, "Eat together - split equal". He was challenged on this in cross-examination but confirmed having heard those words spoken; also that the plaintiff's father had on other family occasions said to the defendant things like:
"We build something together and help your brother to succeed in business and we split together."
77 Mr Vu accepted in cross-examination that he was on good terms and friendly with the defendant but said that he occupied an identical position in relation to the plaintiff and his family. He accepted also that the defendant had got him involved in the Amway business but denied that he had agreed to give evidence for the specific purpose of helping the defendant.
78 The plaintiff's father said that there was no dinner at the defendant's home on Christmas Day 2001. That may well be so: I did not understand Mr Vu, when he said, "At Christmas in 2001, a dinner was held at Peter's house", to be necessarily referring to a dinner on 25 December 2001, as distinct from some other day in the Christmas period. The plaintiff's father also denied having spoken to the defendant in Mr Vu's presence the Vietnamese words meaning "Eat together - split equal". It must be said, however, that the father's evidence was generally unhelpful in the way I have already mentioned.
Conclusions on existence of partnership
79 For reasons I have stated, the evidence of all family members presents problems and cannot safely be relied upon. The parties' controversy needs to be approached principally by reference to the contemporary documentary evidence and the evidence of non-family witnesses, being Mr Ioannidis, the two other persons from his office, the pharmacy employees and Mr Vu.
80 I am satisfied that that evidence supports the case sought to be made by the defendant, namely, that he and the plaintiff intended to (and did) become partners at the time of the purchase of the Grant's Pharmacy business and the post office agency operated within the pharmacy premises and that that partnership continued up to November 2002 and extended to the acquisition of the North Ryde premises in which Grant's Pharmacy operated and the acquisition of the South Windsor pharmacy operations. I am not satisfied, however, that the acquisition of the adjoining premises at South Windsor (a venture undertaken by the defendant and his wife) was within the scope of the partnership business which was, of its nature, a pharmacy business which did not extend to property dealing or property development proposals unrelated to pharmacy operations.
81 These conclusions with respect to Grant's pharmacy, the post office agency, the North Ryde property and the South Windsor pharmacy are warranted mainly by the evidence of Mr Ioannidis and the evidence and findings as to attendances by the plaintiff at Mr Ioannidis' office, allied with the tax returns and other documents Mr Ioannidis prepared. Those elements of the evidence are consistent with the role played by the defendant, together with the plaintiff, in the various acquisitions, as it emerges from the contemporary documents and the uncontroversial matters. I am satisfied that, despite the plaintiff's denials, he did attend Mr Ioannidis' office and otherwise communicated with Mr Ioannidis as Mr Ioannidis testified; and that Mr Ioannidis' treatment of matters on the basis of the existence of a partnership between the plaintiff and the defendant had its source in instructions to that effect given by both the plaintiff and the defendant. This conclusion is strengthened, although not substantially, by the evidence of Mr Vu of a general view within the family (at least before the differences of late 2002) of equal sharing.
Impact of the Pharmacy Act
82 Partnership is, of course, the relationship that subsists between persons carrying on a business in common with a view of profit. This is the definition in s.1 of the Partnership Act 1892. Implicit in my finding as to the existence of a partnership between the plaintiff and the defendant, therefore, is a finding that they carried on the relevant business in common, that each was a party to the carrying on of the business and that each had a financial interest in it. The business was, in my view, a single business centred initially upon Grant's Pharmacy and the post office agency which, over time, expanded to include ownership of the North Ryde property and ownership of the pharmacy operations in the leased premises at South Windsor.
83 Against that background, I return to s.25 of the Pharmacy Act 1964. Section 25(1) imposes a prohibition upon, among others, "[a] person (not being a pharmacist)" and "a body of persons unincorporated". There can be no doubt that a partnership, as such, is within the latter description: so much is recognised by s.25(1A) which creates an exception for "a body of persons unincorporated, being a partnership consisting only of pharmacists" and of a particular description. The prohibition created by s.25(1) is a prohibition upon two things. The first is described by the words "shall not carry on, as owner or otherwise, the business of a pharmacist in a pharmacy". The second is described by the words "otherwise have a pecuniary interest, direct or indirect, in the business of a pharmacist carried on in a pharmacy".
84 In light of my findings, two contraventions of s.25(1) have been committed. First, the "body of persons unincorporated" consisting of the plaintiff and the defendant has contravened the section by carrying on the partnership business. Second, the defendant has, with the knowledge and assistance of the plaintiff, contravened by having, as a partner, an interest in the partnership business.
85 It is submitted on behalf of the plaintiff that if, as I have found, a partnership exists between him and the defendant, the circumstance that the relationship of partnership is contractual in nature means that the contract of partnership is illegal as formed and therefore void. The defendant says that the statute does not show an intention to prohibit partnerships of which persons other than pharmacists are members in such a way as to preclude legal recognition of such partnerships and the rights and obligations arising from them; and that the consequence of contravention is no more than the commission of the offence created by s.25(3) or s.25(4).
86 The submissions refer to the three landmark decisions of the High Court concerning the effects of statutory illegality on contracts: Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410, Nelson v Nelson (1995) 184 CLR 538 and Fitzgerald v F J Leonhardt Pty Ltd (1997) 189 CLR 215. In the first of these cases, Gibbs ACJ said (at p.413):
"There are four main ways in which the enforceability of a contract may be affected by a statutory provision which renders particular conduct unlawful: (1) The contract may be to do something which the statute forbids; (2) The contract may be one which the statute expressly or impliedly prohibits; (3) The contract, although lawful on its face, may be made in order to effect a purpose which the statute renders unlawful; or (4) The contract, although lawful according to its own terms, may be performed in a manner which the statute prohibits."
87 In determining whether a contract offending against a particular statutory provision declaring something to be unlawful comes within one of these classifications, the task of the court is to have regard to "the true effect and meaning of the statute" (St John Shipping Corporation v Joseph Rank Ltd [1957] 1 QB 267 at 286) and to "the language used and the scope and purpose of the statute" (Archbolds (Freightage) Ltd v Spanglett Ltd [1961] 1 QB 374 at p.390).
88 In undertaking that task, I begin with a brief account of the origins and history of s.25. Provisions restricting ownership and operation of pharmacies in New South Wales were first enacted by the Pharmacy (Amendment) Act 1940 which amended the Pharmacy Act 1897 by inserting a new s.18A. Sub-section (1) of that section was as follows:
"Except as provided in subsection two of this section, no company, and no association of persons incorporated or unincorporated, not being a partnership shall carry on the business of a pharmacist in an open shop."
89 Section 18A(2) went on to exempt companies and associations that were already engaged in the relevant activity, provided that they conformed to certain conditions in so doing. Sections 18A(3) and (4) created offences for contravention. The Act of 1940 did not seek to preclude partnerships between pharmacists and non-pharmacists. That legislative step was taken when the Pharmacy Act 1964 was enacted. The minister's second reading speech on the Bill for that Act said in part (Legislative Assembly Hansard, 4 September 1963, p.4756):
"I also pointed out that intending pharmacists are at present required to undertake a three year, full time, degree course in pharmacy at the University of Sydney, and to serve as an assistant for a period of not less than twelve months in the business of a registered pharmacist, before becoming entitled to registration as a pharmacist. These requirements are claimed to have considerably enhanced the status of pharmacists and the Government has agreed to take action under this bill to assist them in confining the conduct of pharmacies to registered pharmacists and also to enable them to become the owners of their own individual businesses."