Faitrouni v El Omar [1999] NSWSC 84

New South Wales Supreme Court CITATION : Faitrouni v El Omar [1999] NSWSC 84 CURRENT JURISDICTION : FILE NUMBER(S) : 2588/96 HEARING DATE(S) : 10 February 1999 JUDGMENT DATE : 10 February 1999

PARTIES : Abdull Sattar Faitrouni v Ibraham El Omar JUDGMENT OF : Windeyer J at 1

COUNSEL : Mr. A. Clout (Plaintiff) Ms J Needham (Defendant) SOLICITORS : Johnston & Vaughan (Plaintiff) Robinson Creais (Defendant) CATCHWORDS : DECISION : Claim for order for accounts dismissed. Balance of plaintiff's claim dismissed

1 HIS HONOUR: This is an action arising out of a partnership which was carried on from 1 June 1986 between the plaintiff and the defendant for the specific purpose of importing tiles from Lebanon into Australia for sale in Australia. 2 The action has by an earlier order proceeded on pleadings, but as a result of consent orders made earlier today to a large extent the issues which might have been seen to arise on those pleadings no longer arise. 3 Under those consent orders, I made declarations that a partnership existed between the plaintiff and the defendant for this specific purpose; that the partners were entitled to share in the profits and obliged to share in the losses in equal shares; that upon dissolution of the partnership the partners were entitled, if there were sufficient funds available, to be repaid their capital contributions prior to any balance being distributed to them in equal shares; and finally, that the partnership was dissolved on 1 January 1990. 4 On this latter matter it is clear that the purpose of the partnership at that date came to an end subject to any question of final accounting. As a result of those declarations, the only question which remained for determination by me was whether or not there should be an order for accounts which would be taken before the Master, the accounts, of course, being consequent upon the dissolution of the partnership. In general a partner is entitled to an order for accounts upon dissolution and it was not suggested otherwise by counsel for the defendant. The grounds upon which an order was opposed were, first, that applying the Limitation Act by analogy the time for bringing the action for accounts had passed; and secondly, that the plaintiff's claim should be disallowed by reason of laches. 5 This action was commenced by summons filed on 29 June 1996 which is, of course, more than six years after the date upon which the partnership was dissolved. It follows from this that if this were a claim for an account at law it would be barred by Section 15 of the Limitation Act 1969. While counsel for the defendant did argue that Section 15 applied, I do not think this argument was pressed very strongly and I think it relevant to state that a defence based on Section 15 has never been pleaded. However, while no application has been made to mount the defence, I think it right to say that I am of the clear view that an action for accounts of a partnership is a claim in Equity, not a claim which arises at law, and in those circumstances Section 15 of the Limitation Act is not applicable. That does not mean that a limitation period of the same kind ought not to be applied by analogy. 6 As this is, in essence, a claim for an account in Equity, there has been nothing put to me which would indicate that the same limitation period should not be applied to a claim for an account in Equity. In my view it is clear that it ought to be, and in those circumstances the plaintiff is not entitled to an order for accounts. 7 I should add that although there is some evidence of an oral acknowledgment, although this is contested, it is not suggested that there has been any acknowledgment in writing and counsel for the plaintiff has not contended, and quite rightly has not contended, that Section 54 of the Limitation Act is of assistance to the plaintiff. 8 In view of this decision, it is not necessary to deal with the defence based on laches. However, I should say that the evidence is clear that any documentary evidence which the defendant had has not been available since 1991. It cannot be said that had a claim been brought about within a year or two after that time the claim of the plaintiff would have been defeated by laches, and I do not think that it could be said that a subsequent period, albeit of three years, could make that defence sustainable as there is no evidence that there has been any disadvantage to the defendant which would arise through that consequent delay to make it inequitable to allow the claim to be brought. 9 In all those circumstances, albeit with some reluctance, the claim for an order for accounts must be dismissed. 10 In addition to the declarations which I made by consent this morning, I order the plaintiff's claim be otherwise dismissed. 11 COUNSEL FOR THE DEFENDANT SOUGHT COSTS 12 COUNSEL FOR THE PLAINTIFF MADE SUBMISSIONS AS TO COSTS 13 HIS HONOUR: The only further question that arises is the question of costs. In ordinary circumstances this must follow the event. I do not think there is anything which justifies a departure from that rule. Order the plaintiff pay the defendant's costs.