S&C Nicola Pty Ltd v Peter Holmes Investment Pty Ltd [2022] NSWCA 72

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: S&C Nicola Pty Ltd v Peter Holmes Investment Pty Ltd [2022] NSWCA 72 Hearing dates: 23 February 2022 Date of orders: 6 May 2022 Decision date: 06 May 2022 Before: Macfarlan JA at [1]; Leeming JA at [22]; White JA at [59]. Decision: (1) Allow the appeal. (2) Set aside Orders 1 and 2 made in the Equity Division on 20 September 2021. (3) Direct the referee that, in the taking of the Partnership accounts, the interest entitlement due to the respondent is to be treated as an expense of the Partnership which is to be paid from the Partnership assets before the division of profits and not from the appellant's share of the Partnership profits. (4) Order the respondent to pay the appellant's costs of the appeal. Catchwords: CONTRACTS – construction and interpretation –partnership agreement – whether interest on funds provided to the partnership by one partner to be treated as a partnership expense or as an independent debt to be paid by the other partner – whether inconsistency between agreement's recitals and operative provisions and how any such inconsistency to be resolved Legislation Cited: Partnership Act 1892 (NSW), s 24 Cases Cited: Commissioner of State Taxation of South Australia v Cyril Henschke Pty Ltd (2010) 242 CLR 508; [2010] HCA 43 Coulls v Bagot's Executor and Trustee Co Ltd (1967) 119 CLR 460; [1967] HCA 3 Down Town Visuals Pty Ltd v Panorama Investments Pty Ltd [2018] VSC 427 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 Ex parte Dawes (1886) 17 QBD 275 Fitness First Australia Pty Ltd v Fenshaw Pty Ltd (2016) 92 NSWLR 128; [2016] NSWCA 207 Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407 Harpur v Levy (2007) 16 VR 587; [2007] VSCA 128 Hurts v Bryk [2002] 1 AC 185 In re Gulbenkian's Settlements [1970] AC 508 Mackenzie v The Duke of Devonshire [1896] AC 400 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 Norton Property Group Pty Ltd v Ozzy States Pty Ltd (in liq) [2020] NSWCA 23 OneSteel Manufacturing Pty Ltd v Blue Scope Steel (AIS) Pty Ltd (2013) 85 NSWLR 1; [2013] NSWCA 27 Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 Tom Elvin Pty Ltd v Knell [2003] ACTSC 36 Texts Cited: J Carter, The Construction of Commercial Contracts (Hart Publishing, 2013) P Herzfeld and T Prince, Interpretation (2nd ed, 2020, Law Book Co) K Fletcher, Higgins and Fletcher the law of partnership in Australia and New Zealand (8th ed, 2001, LBC Information Services) Category: Principal judgment Parties: S&C Nicola Pty Ltd ACN 055 802 205 ATF S&C Nicola Family Trust (Appellant) Peter Holmes Investments Pty Ltd CAN 000 500 283 (Respondent) Representation: Counsel: P Braham SC / C Carroll (Appellant) B Coles QC / E Keynes (Respondent)