Pirrottina v Pirrottina [2024] NSWSC 558

Supreme Court New South Wales

Medium Neutral Citation: Pirrottina v Pirrottina [2024] NSWSC 558 Hearing dates: 11-12, 18-20 March 2024 Date of orders: 14 May 2024 Decision date: 14 May 2024 Jurisdiction: Equity Before: Rees J Decision: (1) Declare that the partnership between the plaintiff and defendant was dissolved on 8 January 2022. (2) Declare that the defendant has an equitable interest in the land identified in the survey annexed to the Amended First Statement of Cross-Claim and the improvements thereon (the Lot), located on the property known as 2018 Wisemans Ferry Road off Mangrove Mountain (the Property). (3) Declare that the plaintiff holds his title to the Property on trust for the defendant to the extent of the defendant's equitable interest in the Lot. (4) Direct the defendant to obtain an updated valuation of the market value of the Property from Kent Wood within 28 days, with the cost of the updating report to be borne by the defendant in the first instance, until the issue of costs is determined. (5) Order the defendant to acquire the plaintiff's interest in the Property for 40% of the updated market value, such purchase to be completed within 28 days of receipt of the updated valuation or such other date as may be agreed by the parties. (6) Direct the parties to bring in orders within 14 days in respect of: (a) the appointment of a referee to determine whether the remaining disputed items of plant and equipment are partnership assets, and to take an account; (b) the buy-out of partnership assets in the possession of each partner; and (c) how the parties wish to proceed in respect of costs. (7) Parties to notify any errors or omissions within 14 days. (8) Liberty to apply in respect of Orders 4 to 6. Catchwords: CLIENT LEGAL PRIVILEGE – waiver – whether executor can waive testator's privilege to advance personal interests – at [6]-[10] ESTOPPEL BY REPRESENTATION – 30 years ago, farming parents offer to buy land for son in recognition of years of unpaid labour – son asks for second house to be built on farm instead – parents represent that the house and surrounding land (the Lot) are his – 8 years later, parents transfer farm to the son and his brother as tenants-in-common in equal shares – son's interest not discussed at time of transfer, nor mentioned in parents' later wills – principles at [160]-[167], [171], [173] – whether representations made by the parents subject to conditions, at [174] – son has equitable interest in the Lot. PERSONAL EQUITY – principles at [182]-[188] – whether brother held his half-share on trust for the son – brother knew of the other's equitable interest –whether necessary to find "superadded" factor such as acknowledgement, agreement or undertaking to act in accordance with equitable interest – Presbyterian Church v Scots Church [2007] NSWSC 676 considered – not necessary where brother not a third party – brother's legal interest subject to constructive trust in respect of the Lot. ESTOPPEL BY ACQUIESCENCE – principles at [200]-[201] – son undertakes renovations on the Lot over 20 years – his brother remains silent – brother estopped from denying equitable interest in Lot. JUDICIAL SALE – s 66G(1), Conveyancing Act 1919 (NSW) – principles at [242]-[247] – not relevant to discretion that son's interest is more than 50% – Callahan v O'Neill [2002] NSWSC 877 considered –order refused where inconsistent with equitable obligation. PARTNERSHIPS – date of dissolution – s 32(c), Partnership Act 1892 (NSW) – principles at [135]-[137] – 'in principle' agreement to dissolve partnership – infer partners did not wish to continue the partnership from date of AVO. PARTNERSHIP ASSETS – whether farm is a partnership asset – ss 20(1), 21, Partnership Act 1892 (NSW) – principles as [143]-[146] – no express agreement – whether implied agreement – farm not included in partnership accounts – farm was partners' personal property. REALISING PARTNERSHIP ASSETS – whether a buy-out order should be made – principles at [251]-[261] – brothers continue to farm separately – some assets are fixtures, warranting a buy-out by owner of farm where asset is affixed – consideration of cost of appointing receiver – unlikely to produce better outcome on sale of second-hand farm equipment and vehicles. UNCLEAN HANDS – principles at [210] – mortgage payments paid by partnership 50:50, without taking into account son's interest in the Lot – son did not control payment of mortgage – no relation between alleged impropriety and equitable interest. LACHES – principles at [215]-[217] – equitable interest not raised when legal title was transferred – parents since passed away – no knowledge that brother did not deny equitable interest until shortly before action. EQUITABLE COMPENSATION – principles at [235]-[237] – difficulty in ascribing value to the Lot where no separate title – market value with separate title discounted to reflect possibility that farm would be sold notwithstanding parents' wish to keep it in the family and the parents unable to buy their son another property. Legislation Cited: Conveyancing Act 1919 (NSW), s 66G Evidence Act 1995 (NSW), 140(2) Partnership Act 1892 (NSW), ss 20(1), 21, 26(2), 32(c), 35 and 39 Cases Cited: Attorney-General (NT) v Maurice (1986) 161 CLR 475 Bahr v Nicolay (No 2) (1988) 164 CLR 604 Bant v Bant [2003] WASC 137 Bassett v Cameron [2021] NSWSC 207 Bell Group Ltd (in liq) v Westpac Banking Corp (No 9) and (No 10) (2008) 39 WAR 1; [2008] WASC 239; [2009] WASC 107 Black Uhlans Inc v New South Wales Crime Commission [2002] NSWSC 1060 Blackwell v Blackwell [2020] NSWSC 1208 Bonzalie v Cullu [2013] NSWSC 1576 Bova v Avati [2009] NSWSC 921 Breskvar v Wall (1971) 126 CLR 376 Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 Brooks v Young (2018) ALR 329 Bullivant v Attorney-General for Victoria [1901] AC 196 Cain v Cain (2007) 13 BPR 24,963 Calacoci v Calacoci [2020] NSWSC 476 Callahan v O'Neill [2002] NSWSC 877 Canson Enterprises Ltd v Boughton & Co (1991) 85 DLR (4th) 129 Carter v Brine [2015] SASC 204 Chia v Ireland [2000] SASC 47 Cobbe v Yeoman's Row Management Ltd [2008] UKHL 55 Crago v McIntyre [1976] 1 NSWLR 729 Crawley v Short (2009) 262 ALR 654; [2009] NSWCA 410 D Capital 2 Pty Ltd v Western (2022) 20 BPR 42919; [2022] NSWSC 1064 Delaforce v Simpson-Cook [2010] NSWCA 84 Dempster v Mallina Holdings Ltd (1994) 13 WAR 124 DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728 Doueihi v Construction Technologies Australia Pty Ltd (2016) 92 NSWLR 247 Drummond v Drummond [1999] NSWSC 923 Duke Group Ltd (In liq) v Alamain Investments Ltd (2003) 232 LSJS 58 E Co v Q [2018] NSWSC 442 Evans v Evans [2011] NSWCA 92 FAI Insurances Ltd v Pioneer Concrete Services Ltd (1987) 15 NSWLR 552 Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411 Ford v Princehorn; Estate of Ford [2012] NSWSC 1165 Foundas v Arambatzis [2020] NSWCA 47 Fragar v Fragar [2024] NSWSC 193 Frazer v Walker [1967] 1 AC 569 Gerovich v Gerovich (as executor of the estate of Gerovich) [2018] WASC 153 Gillespie v Gillespie [2013] QCA 099; [2013] 2 Qd R 440 Gillett v Holt [2001] Ch 210 Gritzman v McRae [2022] NSWSC 745 Harvey v Harvey (1970) 120 CLR 529 Heggies Bulkhaul Ltd v Global Minerals Australia Pty Ltd (2003) 59 NSWLR 312; [2003] NSWSC 851 Horn v GA & RG Horn Pty Ltd [2022] NSWSC 1519 Houghton v Imner (No 155) Pty Ltd (1997) 44 NSWLR 46 In the matter of Lorebray Pty Ltd [2023] NSWSC 1650 In the Will of Greer (1911) 11 SR (NSW) 21 Ithaca Ice Works Pty Ltd v Queensland Ice Supplies Pty Ltd [2002] QSC 222 Jennings v Rice [2002] EWCA Civ 159 Jones v Dunkel (1959) 101 CLR 298 Kelly v Kelly (1990) 92 ALR 74 Laird v Vallance [2023] VSCA 138 Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (Uncle Bens) (1994) 126 ALR 58 Lawfund Australia Pty Ltd v Lawfund Leasing Pty Ltd (2008) 66 ACSR 1 Lewis v Nortex Pty Ltd (in liq) [2004] NSWSC 1143 Loke Yew v Port Swettenham Rubber Co Ltd [1913] AC 491 Loughran v Loughran (1934) 292 US 216 Lucas v Lucas [1962] Qd R 205 Matsen v Matsen [2008] NSWSC 135 McNicholas v Sarandopoulos [2018] NSWSC 576 Miles v Clarke [1953] 1 All ER 779 Mullins v Laughton [2003] Ch 250 Ngatoa v Ford (1990) 19 NSWLR 72 Nicholls v Michael Wilson & Partners Ltd [2012] NSWCA 383 Nocton v Lord Ashburton [1914] AC 932 O'Brien v Komesaroff (1982) 150 CLR 310 O'Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262 Orr v Ford [1989] HCA 4; (1989) 167 CLR 316 Prus Grzybowski v Everingham (1986) 44 NTR 7 Q v E Co [2020] NSWCA 220 Ramsay v BigTinCan Pty Ltd (2014) 101 ACSR 415; [2014] NSWCA 324 Re McNamara and the Conveyancing Act (1961) 78 WN (NSW) 1068 Reynolds v Medway [2013] NSWSC 206 Ryan v Starr [2005] NSWSC 170 Saffron v Cowley [2012] NSWSC 1108 Savage v Lunn [1998] NSWCA 204 Sergei Sergienko v AXL Financial Pty Ltd [2021] NSWSC 297 Sidhu v Van Dyke (2014) 251 CLR 505 Skrimshire v Melbourne Benevolent Asylum (1894) 20 VLR 13 Snowlong Pty Ltd v Choe (1991) 23 NSWLR 198 Syers v Syers (1876) 1 App Cas 174 The New South Wales Trotting Club Limited v The Council of the Municipality of The Glebe (1937) 37 SR (NSW) 288 The Presbyterian Church (NSW) Property Trust v Scots Church Development Ltd (2007) 64 ACSR 31; [2007] NSWSC 676 Thorner v Major [2009] 1 WLR 776; [2009] UKHL 18 Walton v Walton [1994] CA Transcript No 479 Wantagong Farms Pty Ltd as Trustee for the Bulle Family Trust v Bulle [2015] NSWSC 1603 Warman International Ltd v Dwyer (1995) 182 CLR 544; 128 ALR 201 Watson v Foxman (1995) 49 NSWLR 315 Williams v Legg (1993) 29 NSWLR 687 Williams v Nicoski [2003] WASC 131 Willmott v Barber (1880) 15 Ch D 96 Woodson (Sales) Pty Ltd v Woodson (Australia) Pty Ltd (1996) 7 BPR 14,685 Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484; [2003] HCA 15 Texts Cited: Ian Spry, The Principles of Equitable Remedies (9th ed, 2014, Thomson Reuters) Keith Fletcher, The Law of Partnership in Australia (9th ed, 2007, Lawbook Co) Roderick I'Anson Banks, Lindley & Banks on Partnership (21st ed, 2022, Thomson Reuters) Category: Principal judgment Parties: Rocco Pirrottina (Plaintiff) Saverio Pirrottina (Defendant) Representation: Counsel: C Wood SC / J Hart (Plaintiff) M Ashhurst SC / K Dyon (Defendant)