Wang v Rong [2015] NSWSC 1419

Supreme Court New South Wales

Medium Neutral Citation: Wang v Rong [2015] NSWSC 1419 Hearing dates: 30, 31 March and 1 April 2015 Date of orders: 30 September 2015 Decision date: 30 September 2015 Jurisdiction: Equity Before: Robb J Decision: Refer to [123] – [124] Catchwords: PARTNERSHIP – principles of partnership law governing remuneration of partners and entitlement to share in profits and contribute to losses – s 24(6) of the Partnership Act 1892 (NSW) – partner's failure to undertake work in partnership may disentitle that partner to receipt of salary or may be a breach of the partnership agreement subjecting defaulting party to liability to pay damages – ultimately obligations will depend on proper construction of relevant partnership agreement

PARTNERSHIP – agreed statement of issues to be determined – first plaintiff and first defendant entitled to receive payment stipulated in agreement subject to caveats – distribution to partners are to be credited against share of profits – whether the first plaintiff's failure to work in the partnership business disentitles him to agreed salary distribution – whether implied term in partnership agreement reduces the obligation that fiduciary duties would have otherwise imposed – court finds distribution of 'salary' and 'wages' was to be paid to partners in proportion to work undertaken, particularly given nature of the business – consideration of surrounding circumstances – evidence does not prove that parties understood the first plaintiff was solely an investor and would not work in the business – post-contract conduct not admissible in construction of present partnership agreement – the first defendant's conduct is too equivocal to justify finding of admission – first plaintiff not entitled to proportion of salary in the absence of working Legislation Cited: Civil Procedure Act 2005 (NSW) Partnership Act 1892 (NSW) Cases Cited: Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570 Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184 Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 Johnston v Brightstars Holding Company Pty Ltd [2014] NSWCA 150 Wardle v Agricultural and Rural Finance Pty Ltd [2012] NSWCA 107 Texts Cited: Keith Fletcher, The Law of Partnership in Australia (9th ed 2007, Lawbook Co.) Geoffrey Morse, Partnership Law (6th ed 2006, Oxford University Press) Roderick I'Anson Banks, Lindley & Banks on Partnership (19th ed 2010, Thomson Reuters) Category: Principal judgment Parties: Jing Chao Wang (first plaintiff) Rui Zhang (second plaintiff) Kevin Yu Rong (first defendant) KK Win Pty Ltd (second defendant) Representation: Counsel: C Harris SC (first and second plaintiffs) S Gray (first and second defendants)