John James McNicholas v Triada Sarandopoulos [2018] NSWSC 576

Supreme Court New South Wales

Medium Neutral Citation: John James McNicholas v Triada Sarandopoulos [2018] NSWSC 576 Hearing dates: 26 April 2018 Date of orders: 03 May 2018 Decision date: 03 May 2018 Jurisdiction: Equity Before: Emmett AJA Decision: See paragraph [36] Catchwords: PARTNERSHIPS AND JOINT VENTURES – whether partnership agreement existed between the parties – whether and when partnership was dissolved – requirements of notice of dissolution of partnership

LIMITATION OF ACTIONS – whether order for taking of accounts barred by s 15 of the Limitation Act 1969 (NSW) Legislation Cited: Limitation Act 1969 (NSW) s 15 Partnership Act 1892 (NSW) ss 26, 32 Cases Cited: Syers v Syers (1876) 1 App Cas 174 Toogood v Farrell [1988] 2 EGLR 233 Texts Cited: R I Banks (ed), Lindley & Banks on Partnership (Sweet & Maxwell, 2017, 20th Ed) L Fletcher, The Law of Partnership in Australia (Lawbook Co, 2007, 9th Ed) Category: Principal judgment Parties: John James McNicholas (Plaintiff) Triada Sarandopoulos (Defendant) Representation: Counsel: P O'Loughlin (Plaintiff)

Solicitors: Macedone Legal (Plaintiff) File Number(s): 2016/245336

Judgment 1. By summons filed on 15 August 2016, the plaintiff, Mr John McNicholas, sought an order under s 35 of the Partnership Act 1892 (NSW) (the Partnership Act) that the partnership between him and the defendant, Triada Sarandopoulos, be dissolved. Alternatively, Mr McNicholas claimed an order that the partnership was dissolved on 14 December 2010. The summons then sought an order for the taking of accounts and an enquiry into the dealings and transactions of the partnership, the assets and liabilities of the partnership and the respective interests of the partners in the assets of the partnership. The summons also sought declarations that a notice to terminate the partnership dated 14 December 2010 by Ms Sarandopoulos is invalid and of no effect and that Mr McNicholas and Ms Sarandopoulos are equally liable for any debt incurred and owing by the partnership to the Commissioner of Taxation. 2. On 29 September 2017, Mr McNicholas filed an amended statement of claim reiterating the relief sought in the summons. The amended statement of claim alleged that, in or about March of 2007, the parties made an oral agreement to enter into a partnership to acquire and operate a bakery business. The amended statement of claim alleged that the terms of the agreement were as follows: 1. Mr McNicholas would pay $50,000 for the purchase price of the business and any start-up costs of the business; 2. Ms Sarandopoulos would pay half of whatever was paid by Mr McNicholas; 3. the partners would share the profits equally and bear the burden of the losses equally; and 4. either party could require the other in writing to contribute to any partnership losses. 1. Ms Sarandopoulos filed a defence to the amended statement of claim on 30 October 2017. The defence denied the existence of a partnership agreement as alleged by Mr McNicholas. While Ms Sarandopoulos accepted that the parties had agreed to acquire and operate the bakery business, and that Mr McNicholas had agreed to pay $50,000 for the purchase price and any start-up costs of the business, she denied that the other terms alleged were terms of the agreement. 2. In the alternative, Ms Sarandopoulos alleged that, if a partnership agreement did exist as alleged by Mr McNicholas, the partnership was dissolved in October 2008, or, alternatively, at a time prior to 15 August 2010, such that an order for the taking of accounts is barred by s 15 of the Limitation Act 1969 (NSW) (the Limitation Act). Section 15 provides that an action on a cause of action for an account founded on a liability at law to account is not maintainable in respect of any matter if brought after the expiration of a limitation period of six years running from the date on which the matter arises. That is, Ms Sarandopoulos relies on the requirement that any action for the taking of accounts must be commenced within six years of the dissolution of the partnership. 3. In the light of the defence filed on behalf of Ms Sarandopoulos, the following questions appear to arise: 1. Did a partnership come into existence between Mr McNicholas and Ms Sarandopoulos? 2. If so: 1. what were the terms of the partnership? 2. was the partnership dissolved more than six years prior to 15 August 2016, being the date when the proceedings were commenced?