KHOURY v FITZ-GIBBON [1989] NSWCA 124

KHOURY v FITZ-GIBBON

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

KIRBY P, MAHONEY and PRIESTLEY JJA 28 and 29 August 1989, 4 October 1989 [1989] NSWCA 124

PARTNERSHIP — dissolution — articles provide for valuation of goodwill — partnership dissolved after short interval parties request appointment of valuer — valuer appointed — later settlement deed — deed provides for one partner to take clients — valuer not informed of settlement terms — valuation made — valuation challenged — held: (1) On a true construction of the articles of partnership and settlement deed. It was not open to hold that the valuation could be attacked on the basis that it failed to offset the goodwill included in the clients taken by one partner in accordance with the settlement deed; (2) On its true construction the valuation was of the goodwill and not, as the appellant claimed, of the practice of the partnership; (3) On the true construction of the partnership deed there was not, as the appellant claimed, one single "sum" payable on dissolution such as to render the respondent's action for the valued goodwill premature; (4) Accordingly, appeal dismissed. VALUATION — goodwill — observations by Priestley JA as to the proper approach to valuing goodwill of a solicitor's practice. LEGAL PRACTITIONERS — solicitor — value of practice goodwill. WORDS AND PHRASES — "goodwill"; "sum". ORDERS The parties within 14 days to bring in short minutes of the orders which they ask the Court to make in the light of the dismissal of the appeal and the conclusion of the other proceedings between the parties. Such orders to provide that the appellant pay the respondent's costs of the appeal.

Kirby P The facts are set out in the judgment of Priestley JA. as his Honour'srecapitulation of the arguments of the appellant demonstrates, the resolution of this appeal is not without difficulty. The source of the difficulty is the ambiguous language in which the parties expressed their 1984 and 1985 agreements. That difficulty is compounded by the unexplained fact that neither party saw fit to bring to the notice of the valuer, appointed at their request by the President of the Law Society, the terms of the 1985 deed.