Barescape Pty Limited as trustee for The V's Family Trust & Anor v Bacchus Holdings Pty Limited as trustee for The Bacchus Holdings Trust & Anor (No 9) [2012] NSWSC 984

Supreme Court New South Wales

Medium Neutral Citation: Barescape Pty Limited as trustee for The V's Family Trust & Anor v Bacchus Holdings Pty Limited as trustee for The Bacchus Holdings Trust & Anor (No 9) [2012] NSWSC 984 Hearing dates: 9-12, 15-18 August, 6-9, 12-16 September, 12 October 2011, 9 March, 2-5,10-13 April, 19-20 June 2012 Decision date: 27 August 2012 Jurisdiction: Equity Division Before: Black J Decision: Mechanism for valuation of First Plaintiff/First Cross-Defendant's interest in partnership failed. First Plaintiff/First Cross-Defendant's interest to be valued on basis of Second Joint Report of accounting experts, adjusted for 40% discount for goodwill. First Plaintiff/First Cross-Defendant and Second Plaintiff/Second Cross-Defendant breached fiduciary duties owed to First Defendant/Cross-Claimant. Defences of informed consent, waiver or ratification not established. First Defendant/Cross-Claimant entitled to equitable compensation and damages. Parties to be heard as to form of orders and costs. Catchwords: CONTRACT - Written agreement - Interpretation - Manner in which commercial contracts should be interpreted - Expert valuation clause - Whether valuation mechanism failed - Whether expert valuations binding on parties. CONTRACT - Damages - Quantification of damages - Mitigation of loss. PARTNERSHIP - Breach of partnership agreement - Conduct of partner of referring function inquiries to alternative business - Whether default. EQUITY - Fiduciary duties - Breach of duty - Obligations of partners in fiduciary relationship - No profit rule - No conflict rule - Scope of duties - Whether duties extended to function business of restaurant - Breach of no profit rule - Whether defences of informed consent, waiver or ratification established. EQUITY - Fiduciary duties - Knowing assistance. REMEDIES - Equitable compensation - Account of profits - Entitlement to election between remedies after judgment. Legislation Cited: - Civil Procedure Act 2005 (NSW) s 100 - Partnership Act 1892 (NSW) ss 30(1), 44 - Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: - Aas v Benham [1891] 2 Ch 244 - AMP Services Ltd v Manning [2006] FCA 256 - Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 - Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 - Australian Securities and Investments Commission v Healey [2011] FCA 717; (2011) 196 FCR 291; 278 ALR 618 - Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104 - Barescape Pty Ltd v Bacchus Holdings Pty Ltd (No 6) [2012] NSWSC 257 - Barescape Pty Ltd v Bacchus Holdings Pty Ltd (No 8) [2012] NSWSC 512 - Barnes v Addy (1874) LR 9 Ch App 244 - Beevers v Port Phillip Sea Pilots Pty Ltd [2007] VSC 556 - Birtchnell v Equity Trustees, Executors and Agency Co Ltd (1929) 42 CLR 384 - Blackmagic Design Pty Ltd v Overliese [2011] FCAFC 24; (2011) 191 FCR 1; 276 ALR 646 - Boardman v Phipps [1967] 2 AC 46; [1966] 3 WLR 1009 - BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 - Briginshaw v Bringinshaw [1938] HCA 34; 60 CLR 336 - Bristol & West Building Society v Mothew [1998] Ch 1 - Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 - Cameron v Cuddy [1914] AC 651 - Canberra Residential Developments Pty Ltd v Brendas [2010] FCAFC 125; (2010) 188 FCR 140 - Candoora No 19 Pty Ltd v Freixenet Australasia Pty Ltd & Anor (No 2) [2008] VSC 478 - Canson Enterprises Ltd v Boughton & Co [1991] 3 SCR 534; (1991) 85 DLR (4th) 129 - Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178 - City of Sydney v Streetscape Projects (Australia) Pty Ltd [2011] NSWSC 1214 - Clarke v Newland [1991] 1 All ER 397 - Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337 - Colbeam Palmer Ltd v Stock Affiliates Pty Ltd [1968] HCA 50; (1968) 122 CLR 25 - Colour Control Centre Pty Ltd v Ty [1995] NSWSC 96 - Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 - Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64 - Commonwealth Bank of Australia v Smith (1991) 42 FCR 390; 102 ALR 453 - Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 - Concut Pty Ltd v Worrell [2000] HCA 64; (2000) 75 ALJR 312 - Cypjayne Pty Ltd v Babcock & Brown International Pty Ltd [2011] NSWCA 173; (2011) 282 ALR 152 - Dart Industries Inc v Decor Corporation Pty Ltd [1993] HCA 54; (1993) 179 CLR 101 - Digital Pulse Pty Ltd v Harris [2002] NSWSC 33; (2002) 40 ACSR 487 - Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 4 FCR 450; 57 ALR 167 - Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 - Federal Commissioner of Taxation v Whitfords Beach Pty Ltd [1982] HCA 8; (1982) 150 CLR 355 - Fitzgerald v Masters (1956) 95 CLR 420 - Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603 - Gibson v Tyree (1900) 20 NZLR 278 - Glassington v Thwaites (1822) 1 Sim & St 124; 57 ER 50 - GM & AM Pearce & Co Pty Ltd v Australian Tallow Producers Pty Ltd [2005] VSCA 113 - Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121 - Hill v Rose [1990] VR 129 - Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch 169 - Holt v Cox (1994) 15 ACSR 313 - Holt v Cox (1997) 23 ACSR 590 - Holyoake Industries (Vic) Pty Ltd v V-Flow Pty Ltd [2011] FCA 1154; (2011) 86 ACSR 393 - Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 - House v The King [1936] HCA 40; (1936) 55 CLR 499 - Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443 - J C Houghton & Co Pty Ltd v Nothard, Lowe & Wills Ltd [1928] AC 1 - Jireh International Pty Ltd t/as Gloria Jean's Coffee v Western Exports Services Inc [2011] NSWCA 137 - John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1; 266 ALR 462 - Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 - Kanivah Holdings Pty Ltd v Holdsworth Properties Pty Ltd [2001] NSWSC 405 - Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361 - Labelmakers Group Pty Ltd v LL Force Pty Ltd [2012] FCA 512 - Legal & General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314 - Links Golf Tasmania Pty Ltd v Sattler [2012] FCA 634 - Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 - Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449 - Mander Pty Ltd v Clements [2005] WASCA 67; (2005) 30 WAR 46 - McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579 - McGrath v McGrath [2012] NSWSC 578 - McRae v Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377 - Murphy v Overton Investments Pty Ltd [2004] HCA 3; (2004) 216 CLR 388 - New Zealand Netherlands Society 'Oranje' Inc v Kuys [1973] 2 NZLR 163; 1 WLR 1126; 2 All ER 1222 - Nissho Iwai Australia Ltd v Malaysian International Shipping Corporation, Bhd [1989] HCA 32; (1989) 167 CLR 219 - Nocton v Lord Ashburton [1914] AC 932 - Nottingham University v Fishel [2000] ICR 1462 - O'Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262; 29 ACSR 148 - Old v McInnes [2011] NSWCA 410 - Omnilab Media Pty Ltd v Digital Cinema Network Pty Ltd [2011] FCAFC 166; (2011) 285 ALR 63 - Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 - Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1996] AC 514 - Pilmer v Duke Group Ltd (in liq) [2001] HCA 31; (2001) 207 CLR 165 - Queensland Mines Ltd v Hudson (1978) 18 ALR 1 - Re Contact 121 Pty Ltd [2011] NSWSC 519 - Re Dawson (deceased); Union Fidelity Trustee Co Ltd v Perpetual Trustee Co Ltd [1966] 2 NSWR 211; (1966) 84 WN (Pt 1) (NSW) 399 - Re McGrath & Anor (in their capacity as liquidators of HIH Insurance Ltd) [2010] NSWSC 404; (2010) 78 ACSR 405 - Re Pauling's Settlement Trusts [1962] 1 WLR 86 - Regal (Hastings) Ltd v Gulliver [1967] 2 AC 137 - Rigg v Sheridan [2008] NSWCA 79 - Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 - Ryder v Frohlich [2004] NSWCA 472 - Ryder v Frohlich [2004] NSWSC 418 - Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332 - Short v Crawley (No 30) [2007] NSWSC 132 - Spellson v George [1992] NSWCA 254; (1992) 26 NSWLR 666 - Spotless Group Ltd v Blanco Catering Pty Ltd [2011] FCA 979; (2011) 93 IPR 235 - Streeter v Western Areas Exploration Pty Ltd (No 2) [2011] WASCA 17; (2011) 278 ALR 291; 82 ACSR 1 - Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444 - Target Holdings Ltd v Redferns [1996] 1 AC 421 - Tasman Capital Pty Ltd v Sinclair [2008] NSWCA 248; (2008) 75 NSWLR 1 - Tawfik v Bill [2010] NSWSC 1034 - Tesco Supermarkets Ltd v Nattrass [1972] AC 153 - Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 - TX Australia Pty Ltd v Broadcast Australia Pty Ltd [2012] NSWSC 4 - Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333 - Victoria University of Technology v Wilson [2004] VSC 33 - Visnic v Sywak [2009] NSWCA 173; (2009) 257 ALR 517 - Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544 - Watson v Phipps (1985) 60 ALJR 1 - Weldon & Co Services Pty Ltd v Harbinson [2000] NSWSC 272 - Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2011) 282 ALR 604 - White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd [2008] NSWSC 1225 - Winthrop Investments Ltd v Winns Ltd (No 2) (1975) 1 ACLR 222 - Woolworths Ltd v Olson [2004] NSWSC 849 Texts Cited: - K L Fletcher, The Law of Partnership in Australia, 9th ed, Lawbook Co, 2007 - P D Finn, Equity and Commercial Relationships, Lawbook Co, 1987 - P D Finn, Fiduciary Obligations, Lawbook Co, 1977 - R P Austin, "Fiduciary Accountability for Business Opportunities" in P D Finn, Equity and Commercial Relationships, Lawbook Co, 1987 - R P Meagher, J D Heydon and M J Leeming, Meagher, Gummow and Lehane's Equity: Doctrines and Remedies, 4th ed, LexisNexis Butterworths, 2002 Category: Principal judgment Parties: Barescape Pty Limited as trustee for The V's Family Trust (First Plaintiff/First Cross-Defendant) Anthony Ventura (Second Plaintiff/Second Cross-Defendant) Midfielder Pty Limited (Third Cross-Defendant) Bacchus Holdings Pty Limited as trustee for The Bacchus Holdings Trust (First Defendant/Cross-Claimant) Matthew Gordon Higgins (Second Defendant) Representation: R.J. Burbidge QC (9-11 August, 6-9, 12-13 September 2011), C.D. Wood (Plaintiffs/Cross-Defendants) J.C. Kelly SC (9-12, 15-18 August, 6-7, 9, 13-16 September 2011), A.A. Henskens SC, N.E. Furlan (Defendants/Cross-Claimant) Hicksons (9 August 2011-9 March 2012), Anthony Ventura (9 March-20 June 2012) (Plaintiffs/Cross-Defendants) Bilbie Dan (Defendants/Cross-Claimant) File Number(s): 09/291437