Shazbot Pty Ltd v Warner Capital Pty Ltd [2018] NSWSC 1645

Supreme Court New South Wales

Medium Neutral Citation: Shazbot Pty Ltd v Warner Capital Pty Ltd [2018] NSWSC 1645 Hearing dates: 5, 6, 12, 13 and 14 February 2018 Date of orders: 31 October 2018 Decision date: 31 October 2018 Jurisdiction: Equity Before: Parker J Decision: 1. The second plaintiff, Steven Barry Kugel, is entitled to an order for an account of the assets and liabilities of the insolvency practice CRS Warner Kugel, which the second plaintiff conducted in partnership with the second defendant, Anthony John Warner, between 19 September 2007 and 22 September 2014. 2. The business of the partnership included acting as company administrator, company liquidator, trustee in bankruptcy and administrator of Bankruptcy Act 1966 (Cth), Part X arrangements, but did not include the remaining Bankruptcy Act 1966 (Cth), Part IX debt agreement business operated by Debtfree Pty Ltd. 3. The first plaintiff, Shazbot Pty Ltd, is entitled, at its election, to an account of profits or an award of equitable compensation arising from the transfer of its share in Debtfree Pty Ltd to the first defendant, Warner Capital Pty Ltd, on 22 September 2014. Catchwords: PARTNERSHIPS AND JOINT VENTURES – partnerships – legal characterisation – insolvency practice trading through a proprietary company acting as trustee of a unit trust – fees earned in personal capacity by parties to insolvency practice – where insolvency practice previously conducted business as a partnership – where parties to insolvency practice are directors of proprietary company – whether partnership exists – role of company in partnership – whether income belonged to unit trust – sham