Slim & Ors v Kabra & Ors [2006] NSWSC 837

New South Wales Supreme Court

CITATION : Slim & Ors v Kabra & Ors [2006] NSWSC 837

HEARING DATE(S) : 16 August 2006

JUDGMENT DATE : 16 August 2006

JURISDICTION : Equity Division

JUDGMENT OF : Palmer J

EX TEMPORE JUDGMENT DATE : 08/16/2006

DECISION : Costs of proceedings to be for partnership account, save in one respect.

CATCHWORDS : COSTS – PARTNERSHIP – Dissolution of partnership – dispute as to taking of accounts – whether costs of Referee should be for partnership account – whether usual rule should be followed.

Hamer v Giles (1879) 11 Ch D 942 CASES CITED : Xie v Zhou [2002] NSWSC 1114 "Lindley & Banks on Partnership" (18th Ed) paras 23-120

Ali Slim – First Plaintiff Monique Slim – Second Plaintiff PARTIES : Sunil Ramniwas Kabra – First Defendant Neeta Sunil Kabra – Second Defendant Suresh Kumar Guduguntla – Third Defendant Pyiyadarshini Guduguntla – Fourth Defendant

FILE NUMBER(S) : SC 2852/03

COUNSEL : J.K. Chippindall – Plaintiff R.E. Steele – Defendant

SOLICITORS : Proctor Phair Lawyers – Plaintiffs Michie, Shehadie & Co – Defendants

Introduction

1 Both the Plaintiffs and the Defendants have filed Notices of Motion seeking orders for the working out of accounts between them following upon the dissolution of their partnership. 2 The parties were partners in a single venture partnership. The Plaintiffs together constituted a one-third interest in the partnership, the First and Second Defendants together constituted another one-third interest, and the Third and Fourth Defendants together constituted the remaining one-third interest in the partnership. The business of the partnership was the acquisition and commercial utilisation of a property at Villawood called Birmingham Industrial Park. 3 It is clear that shortly after the venture commenced the parties fell into bitter disagreement. The property the subject of the partnership was sold in 2003. Since that time the parties have been in protracted litigation as to the consequences of the dissolution and as to the accounts between them consequent upon the failure of the venture. 4 The Court appointed Mr Rogers, an accountant, as Referee for the purposes of determining a large number of disputed claims as to who had contributed what to the partnership capital. There was no question but that the Plaintiffs had contributed some $277,000, but the Plaintiffs disputed what the Defendants were claiming to be their contributions to the capital of the partnership. 5 A Scott Schedule was prepared by the Plaintiffs listing some twenty-five items of dispute; it is not necessary for purposes of this determination to go through them in detail. It is sufficient to say that, in essence, the Plaintiffs were saying that the claims made by the Defendants for contribution to the capital of the partnership in relation these items should be wholly disallowed, substantially disallowed, or off-set by benefits taken by the Defendants from the partnership and costs which should be accounted against the Defendants in the partnership reckoning. 6 The Referee delivered a number of reports in the course of the reference. The final report is dated 16 April 2004 and has been adopted by the Court. That report is careful and voluminous. The Referee goes through the items put in dispute by the Plaintiffs and arrives at a determination of the respective contributions to capital by each of the partnership interests. 7 It is fair to say, I think, in broad summary, that in many, if not most cases, the Referee allowed the contributions which the Defendants were claiming they had made to the partnership capital, but reduced them in quite a number of instances by what might be described as relatively small amounts in the context of the sums in dispute as a whole. The Referee found that the Plaintiffs had contributed to capital some $277,000 and that the Defendant partners had made contributions respectively between approximately $144,000 and $146,000.