R v Ross-Jones; Ex parte Beaumont

High Court of Australia|1979-07-01|Before: Aickin JJ, Gibbs J

The application initially made by the wife was for a declaration that the partnership existed and had not been determined, and for orders that a named person, being an official liquidator, be appointed receiver of the partnership and that the books of account and assets of the partnership be handed to the receiver and that he prepare partnership accounts. The amended application sought, in addition to orders for settlement of a sum of money and transfers of certain property, orders (inter alia) that the receiver should have power to conduct the partnership practices and to make "all payments and receipts in respect of the conduct of the practices as appear to the "Trustee" " [receiver] "to be necessary or desirable" and out of the net proceeds of the practices to pay each week to the husband and wife the sum of $500.00.

When the matter came on before Ross-Jones J. the husband's counsel submitted that the Family Court had no jurisdiction to hear the original application and the wife's counsel opposed that submission. The affidavit of the wife in support of the application for the order nisi stated that "After a brief adjournment my senior counsel and Mr. Lockhart of senior counsel for the respondent/husband announced to the Court that both parties would desire to test the question of jurisdiction in the High Court of Australia and both counsel invited the Court by consent to make a formal finding that the Family Court of Australia had no jurisdiction to hear the application so that the question of jurisdiction could be tested in the High Court". The affidavit goes on to say, "In response to the invitation of counsel His Honour Mr. Justice B. E. Ross-Jones made a formal decree but without any finding on the merits of the application, that the Court had no jurisdiction to hear the said application."

The formal order made by Ross-Jones J. is not included in the papers before the Court and it does not appear whether any formal order was in fact taken out.

The argument before us was primarily directed to the question whether the Family Law Court had power to appoint a receiver and make consequential orders of the kind sought. An appearance was announced by counsel on behalf of the husband, but he said that he did not propose to address any argument and his client would submit to any order the Court might make. He was given leave to withdraw.

It is well settled that mandamus is a discretionary remedy and that it does not go either as of right or as of course. In the present case mandamus is sought to command a judge to hear or further hear the application made by the wife for declarations and orders as sought in the original application. There are, in my opinion, two substantial reasons why mandamus should be refused as a matter of discretion.

The first is that an appeal lies as of right from a single judge of the Family Court to the Full Court of the Family Court, pursuant to s. 94 of the Family Law Act 1975. There is in these circumstances no apparent reason why an appeal should not have been taken to the Full Court of the Family Court after a decision by Ross-Jones J. The second reason why a writ of mandamus should not be issued is that the order made by the Family Court judge was made by consent of both the parties expressed through senior counsel acting on their behalf. I can see no basis upon which this Court should direct a writ of mandamus to a judge who has made an order by consent of the parties. If they have other remedies available by which to challenge that which was done by their consent, no doubt they can be pursued.

The reasons which I have set out above are sufficient to require the conclusion that the order nisi for a mandamus should be discharged and in the particular circumstances of this case without any order as to costs.

However, in view of the fact that other members of the Court have expressed their opinion on the extent of the jurisdiction of the Family Court to make orders of the kind initially sought in these proceedings, it is I think desirable that I should express my own view on those matters. In my opinion the Family Court has no power or jurisdiction to make an order that a receiver be appointed of the "partnership", or an order that the books of account and the assets of the partnership be handed to the receiver. Equally I am satisfied that the Family Court has no jurisdiction to order that the receiver shall have the powers referred to in pars. (a) and (b) of the amended relief as sought orally in the hearing before Ross-Jones J., namely, an order that the receiver conduct the partnership practices and make "all payments and receipts in respect of the conduct of the practices as appear to the "Trustee" " [receiver] "to be necessary or desirable". The difficulties inherent in a receiver, who is not a qualified medical practitioner, conducting a medical practice need only be mentioned to appear overwhelming, but that may not be a matter of jurisdiction. In my opinion the nature of the orders sought overlooks the difference between the assets of the partners and the assets of the partnership. It may well be that there would be jurisdiction to appoint a person to receive or collect the assets of the parties to the marriage with a view to facilitating the making of some order for the adjustment of property matters pursuant to s. 78 and s. 79. It is trite law that the interest of a partner in a partnership and in the partnership assets is a very different one from mere co-ownership of the relevant assets. The interest of a partner in a partnership is in truth his proportionate share of the assets of the partnership after their realization and conversion into money and after the payment of partnership debts. It is convenient to explain the nature of a partner's interest by quoting the observations of Kitto J. in Livingston v. Commissioner of Stamp Duties (Q.) [10] :

An analogy may be seen also in the case of a partner's interest in the partnership assets. That he has a beneficial interest, which the law will recognize and enforce, in every piece of property which belongs to the partnership is clearly established: In re Holland; Brettell v. Holland [11] ; Manley v. Sartori [12] ; In re Fuller's Contract [13] ; and none the less so because the nature of the interest is peculiar in that his share in the partnership, by virtue of which the interest in a given asset exists while the asset belongs to the partnership, consists not of a title to specific property but of a right to a proportion of the surplus after the realization of the assets and payment of the debts and liabilities of the partnership: In re Ritson; Ritson v. Ritson [14] ; Bakewell v. Deputy Federal Commissioner of Taxation [15] ; that is to say, not a "definite" share or interest in a particular asset, no "right to any part" of it, but an interest which "can be finally ascertained only when the liquidation has been completed, and consists of his share of the surplus": Rodriguez v. Speyer Brothers [16] . In so far as the Family Court may have power to appoint a receiver as part of the exercise of its powers under ss. 78 and 79, its orders can only affect the interest of a husband or wife in the partnership and will not extend to orders with respect to partnership assets properly so called. If the partnership is to be dissolved it must be dissolved in accordance with the law relating to partnerships and not otherwise. An order that the books of account and the assets of the partnership be handed to a receiver, in the circumstances in which the receiver could have no power to wind up the affairs of the partnership or pay its debts, would in my opinion be beyond the jurisdiction of the Family Court, even though the only partners may be husband and wife. Before they could be said to be entitled in any real sense to their proportion of the partnership assets or the proceeds of their realization, all the creditors of the partnership would have to be paid and, in the absence of some agreement to the contrary, all its assets realized. In the absence of some agreement in the course of the winding up of the partnership, arrangements would have to be made for dealing with the goodwill of the partnership if it be regarded as a saleable asset. 1. (1960) 107 C.L.R. 411, at p. 453. 2. [1907] 2 Ch. 88, at p. 91. 3. [1927] 1 Ch. 157, at pp. 163-164. 4. [1933] Ch. 652, at p. 656. 5. [1898] 1 Ch. 667; [1899] 1 Ch. 128. 6. (1937) 58 C.L.R. 743, at p. 770. 7. [1919] A.C. 59, at p. 68.

I respectfully agree that to make an order appointing a receiver of the assets of the partnership would be confusing and misleading, as well as beyond the jurisdiction of the Family Court. It would be another matter to appoint some person to receive and hold, pending some further order of the Family Court, the share to which each partner would become entitled upon the completion of the winding up of the affairs of the partnership. That presumably would be permissible, but to describe that person as a receiver of the partnership or of the partnership assets would be misleading. If the Family Court thought it appropriate that the partnership should be wound up to facilitate a property settlement it could presumably direct either or both parties to give an appropriate notice so as to terminate the partnership which, as it is now a partnership at will, could be done by a simple signed instrument delivered by one partner to the other. That course would allow the partnership assets to be realized and the interests of the respective partners to be ascertained and paid or transferred to them or to some designated person to receive them on behalf of each of the parties to await such disposition as the Family Court might order.

We were referred to Jones v. Jones [17] ; Dimov v. Dimov [18] and Anderson v. Anderson [19] which were decided under the Matrimonial Causes Act 1959 which contained a provision in similar terms to s. 80 (k) of the Family Law Act. In so far as those cases decided that the Matrimonial Causes Act itself conferred on courts exercising the jurisdiction conferred by that Act a power to appoint a receiver of a partnership or directly to order its winding up, they were in my opinion wrongly decided.

(1967) 10 F.L.R. 493; [1968] 1 N.S.W.L.R. 206. 2. (1970) 17 F.L.R. 462; [1971] W.A.R. 113. 3. (1972) 19 F.L.R. 480.

I agree with the view expressed by my brother Jacobs that the Family Court could in the exercise of powers with respect to property settlements make declarations as to the respective existing interests of parties in particular property and make orders requiring the transfer of interests in property (including an interest in a partnership) from one party to another, and in appropriate cases for the appointment of a receiver to preserve or protect particular items of property of either party. In my opinion, however, what is sought in this application goes far beyond that. The Family Court has been asked to appoint a receiver of the partnership (not of the interests of the partners therein) and to deal with the partnership property as such. That, in my opinion, it has no jurisdiction to do.

Accordingly I am of opinion that, even if there were not what I regard as compelling reasons for declining as a matter of discretion to make absolute the order nisi for a mandamus, the application should be refused because the Family Court had no jurisdiction to make the orders referred to in the order nisi.

I would therefore discharge the order nisi and make no order as to costs.

High Court of Australia Gibbs, Stephen, Jacobs, Murphy and Aickin JJ. R v Ross-Jones; Ex parte Beaumont [1979] HCA 5

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