"PARTNERSHIP DISPUTES & INSOLVENCIES
LITIGATION TO RESOLVE PARTNERSHIP DISPUTES"




"SELLING BUILDERS' HOMES"

by Leslie M. Schwarz, Barrister-at-Law.

A recent decision of the Court of Appeal of the Supreme Court of Victoria has clarified the duties owed by builders who sell their homes which they have built. Judgment in the case of Zumpano v. Montagnese was delivered on 3 October 1996.

The facts of the case were relatively straight-forward. Aldo and Rosemarie Zumpano ("the builders") were professional builders. In 1985, they built a family home near the Darebin Creek. In October 1986, they sold the house to Frank and Rosa Montagnese ("the owners"), who entered into occupation in or about February, 1987. In 1991, the owners became aware of blockages in the sewerage system. They discovered through a plumber who had been engaged by them to attend the property that a boundary trap had not been installed by the builders' original plumber when the house was constructed in 1985. The failure to install the boundary trap was not the cause of the sewer blockages. Nevertheless the owners sued the builders in negligence for the cost of installing the boundary trap and reinstating the landscaping. The evidence in respect of the boundary trap was that the builders had left it to their sub-contracting licensed plumber to perform the necessary works, namely to supply all waste and vent pipes and make the sewerage connection.

The plumber was to supply and install the boundary trap in accordance with the relevant regulations. He failed to install the boundary trap. However a "Notice of Acceptance" was issued by the Melbourne & Metropolitan Board of Works, which had attached to it a property sewerage plan which showed the boundary trap.

The Magistrate found that the builders owed a duty of care to the owners and were negligent in failing to ensure that the boundary trap had been installed. Damages were awarded to the owners, albeit for an amount far less than the amount claimed. An appeal to a Judge of the Supreme Court was dismissed.

The Court of Appeal referred to the recent High Court case of Bryan v. Maloney (1995) 182 C.L.R. 609. In that case, it was decided that a builder who constructs a house pursuant to a construction contract with an owner owes a duty to any subsequent purchaser of the house for defects ("the duty"). The scope and effect of this decision was discussed by the Court of Appeal. On one view, a builder might be said to owe the duty to all persons who may own or occupy a building which has been constructed or renovated irrespective of the nature of the defects. On the other hand, the decision could be confined to its particular facts, and no general or wide principle could be formulated from the case. Tadgell JA. raised a number of questions as to the applicability of Bryan v. Maloney. However two exceptions were noted. Firstly, the duty only applies to a builder who constructs a house under a building contract with an owner. Secondly, the duty applies only where there are structural defects and those defects affect the value of the house.

Tadgell JA. held that the builders were not negligent in relying on the work of the plumber as there was no evidence that it was usual for a builder to check that a boundary trap had in fact been installed. Fits Honour also rejected that the builders had a non-delegable duty which would result in them being liable in negligence as a result of the plumber's failure to install the boundary trap as there was no special element in the relationship between the builders and the owners to warrant the imposition of such a duty.

His Honour also stated that the breadth of the statutory warranties imposed by Section 8 of the Domestic Building Contracts and Tribunal Act 1995 (Vic.) would lessen the practical importance of Bryan v. Maloney. In any event, due to the existence of the above Act and Section 7 of the House Contracts Guarantee Act 1987(Vic.) it was arguable that the duty should not exist for Victorian builders.

Tadgell and Phillips JJA. also held that there was no negligence by the builders and they were not to be held liable for the default of their sub-contractor as there was no evidence that the builders should have checked that the boundary trap was installed by the plumber. i.e. it was reasonable to rely on the plumber and the inspector of the authority who inspected the plumber's work. Their Honours rejected that the builders had a non-delegable duty as that duty usually related to cases involving safety issues. Their Honours also indicated that a builder may well have a duty under a construction contract to properly supervise the work of sub-contractors but this was not the case here.

Therefore, subject to the relevant legislation, builders will not necessarily be held liable for latent defects discovered by subsequent purchasers of their family homes.

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PARTNERSHIP DISPUTES & INSOLVENCIES
LITIGATION TO RESOLVE PARTNERSHIP DISPUTES

Paper originally presented at a LAAMS Seminar held on 2 December 1997 (full proceedings of the seminar can be obtained from LAAMS Publications).

By Leslie M. Schwarz, Barrister-at-law - 2 December 1997


INTRODUCTION

A partnership is an association between 2 or more persons or entities which carry on business together with a view to making a profit. So much is stated in section 5(1) of the Partnership Act 1958 (Vic.)("the Act"). It is a commercial marriage and a partner may experience the whole range of emotions not dissimilar to that of a domestic marriage. For example, a partner's wishes may be ignored; disputes can often occur long over small matters; power-plays are often relevant; there can be mutual frustration, mutual distrust and sometimes misconduct. In these circumstances, it is hardly surprising that a partner in either of the above partnerships will be disappointed if their dispute ends up before a court.

With this background in mind, I propose to briefly deal with each of the topics listed below as part of my main topic.
I will give an overview on litigation between partners and will refer to some relevant sections of the Act and seminal and recent cases.

It is outside the scope of my topic and not possible in the time which I have available to deal with all of the factual situations which may arise.

1.Tactics

It is crucial that any person considering commencing litigation in the court considers the following questions:-
- What is it that they wish to achieve by litigation?
- Are they prepared for or do they desire the partnership to be dissolved?
- Do they wish to sell or acquire the other partners? interest in the partnership?
- What is the value of their interest and the partnership?
- Is the partnership trading profitably?
- What are the likely costs to be incurred if litigation ensues?
- Are there any other means of resolving their differences eg. mediation or direct discussion between the partners with the assistance of lawyers?

I would strongly recommend that prior to the institution of any proceedings, the dissatisfied partner makes every endeavour to discuss his areas of concern with the other partner(s) and if need be (after obtaining legal advice), send a letter to the other partner(s). Mediation or other alternatives to litigation should always be canvassed.

I would suggest that each of the above matters be carefully considered as often clients lack the objectivity that one would normally expect from a commercial dispute. The situation may be very difficult for a partner given that he or she has to work in the partnership and is clearly unhappy. Furthermore, without a clear action plan, a partner may be worse off by resorting to litigation than if other alternatives are pursued e.g. a court may order that the partnership be dissolved and the business sold when the plaintiff would have been satisfied with another result.

2.proceedings

Prior to the commencement of any proceedings, a detailed letter of demand should be forwarded to the other partner detailing how it is alleged that the other partner has breached the partnership agreement and giving the other partner a reasonable time to remedy the alleged breaches if possible.

Section 100 of the Magistrates' Court Act 1989 (Vic.) and section 37 of the County Court Act 1958 (Vic.) give the above courts jurisdiction to hear partnership disputes subject to the monetary limits of those courts. For example, a partner may seek a declaration that a partnership does in fact exist. Section 6 of the Act provides rules which assist the Court in determining whether a partnership exists. In particular, I refer to section 6(3) of the Act which provides that "the receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business "

The Rights and Duties Of Partners

It is important to look at the terms of any partnership agreement rather than to rely solely on the perception of the partner concerned. Section 28 of the Act provides rules to determine the rights and duties of partners "subject to any agreement express or implied between the partners". Section 23 of the Act provides that "the mutual rights and duties of partners whether ascertained by agreement or defined by this Act may be varied by the consent of all the partners, and such consent may be either express or inferred from a course of dealing".

The duties of partners set out in the Act are as follows:-

- to render true accounts and full information (section 32);
- to account to the firm for any benefit derived by him without the consent of the other partners (section 33);
- not to compete with the firm (section 34);

The rights of partners set out in section 28 of the Act are as follows:-

- to share equally in the capital and profits of the business;
- to be indemnified by the firm for liabilities incurred or acts done in the course of the partnership business;
- to take part in the management of the business;
- to have access to, inspect and copy the firm's books of account.

Litigation To Dissolve The Partnership

It should be borne in mind that litigation to enforce a right or to prevent a breach of duty should be the last resort in that it may well lead to the irretrievable breakdown of the partnership relationship.

The majority of reported cases relate to the winding up a partnership. If there is no partnership agreement and no term has been agreed upon for the duration of the partnership, any partner may determine the partnership at any time by giving notice of his intention to do so (see section 30 of the Act).

Partnership Dissolution

If there is no written agreement between the partners, the Act provides for a dissolution if the following events occur:-
- the term of the partnership expires (section 36(a));
- the adventure or undertaking terminate (section 36(b));
- by any partner giving notice of his intention to dissolve the partnership, in which case the partnership is dissolved as from the date specified in the notice as the date of dissolution or if no date is specified, as from the date of the communication of the notice (section 36(c));
- by the death or bankruptcy of a partner (section 37 (1));
- a partner charges his share of the partnership property for his separate debt (section 37);
- by the happening of any event which makes it unlawful for the business of the firm to be carried on (section 38).
- when a partner is found to be of unsound mind (section 39(a));
- when a partner becomes permanently incapable of performing his part of the partnership contract (section 39 (b));
- when a partner has been guilty of conduct which is calculated to prejudicially affect the carrying on of the business (section 39 (c));
- when a partner wilfully or persistently commits a breach of the partnership agreement or conducts himself in a way which shows that it is not reasonably practicable for the other partner to carry on the business in partnership with him (section 39 (d));
- when the business of the partnership can only be carried on at a loss (section 39 (e));
- when the court is of the view that it is just and equitable that the partnership be dissolved (section 39 (f));
- for fraud or misrepresentation - rescission is available, inter alia, with the other rights of a partner (section 45).

I shall now deal with each of the situations referred to in sections 36(c), 38 and 39 of the Act.

Notice of Dissolution of the Partnership: Section 36(c)

A partner must comply with the terms of a partnership agreement and cannot purport to immediately dissolve the partnership when the agreement contains notice provisions (Isoland Pty. Ltd. v. Rostar Pty. Ltd., unreported, Supreme Court of Western Australia, 29 May 1997). In that case, the defendant purported to give notice of an immediate dissolution of the partnership where the partnership deed provided for three months' notice to be given. The plaintiff sought a Declaration that the notice was a notice given pursuant to the partnership deed. The court held, inter alia, that the defendant was not entitled to effect an immediate dissolution of the partnership and that its rights were confined by the three month written notice clause contained in the partnership deed. Therefore, the plaintiff was not successful in obtaining a declaration that the notice given by the defendant to the plaintiff was a notice pursuant to the partnership deed i.e. a valid three month notice.

Expulsion of Partners

There must usually be an express term of the partnership agreement that a member can be expelled for certain breaches of the partnership agreement. Such a term will not generally be implied. In Folks v. Woolf (1933) V.L.R. 403 the Court refused to sanction the expulsion of a member for failure to pay a levy as the resolution was passed in a meeting at which all partners were not present and there was no right in the partnership deed to make such a resolution. Injunctive relief in a similar situation was granted in Champion v. McGeoch (unreported, Supreme Court of New South Wales, 24 June 1997).

The partnership deed must expressly countenance such a resolution and will be construed strictly against those seeking to rely on such provisions. If the partnership deed provides that a partner guilty of breaches of the partnership agreement can be expelled, same cannot be used against minority partners and must apply only to one partner (see Bond v. Hale (1969)72 S.R.(N.S. W.)201 ). Further, the power must be used fairly (Ebrahimi v. Westbourne Galleries Ltd. [1973] A.C. 360). and must not be used with improper motive (Peyton v. Mindham [1972]1W.L.R. 8).

In Hartin v. Hunter (unreported, Supreme Court of New South Wales, per Young J. at page 7) it was held that words which might indicate resignation said in anger could not be used to engineer a resolution to accept the resignation.

Illegality

Section 38 provides that a partnership is dissolved "upon the happening of any event which makes it unlawful for the business of the firm to be carried on or for the members of the firm to carry it on in partnership."

The most likely scenario which may bring into operation the above subsection would be the passing of legislation which prohibits a certain kind of activity or business. Generally, a prohibition has existed to prevent unqualified persons from practising in a professional capacity but it very much depends upon the wording and policy of a particular Act (e.g. Raynard v. Chase (1756) 1 Burr. 2 and Douglas v. Hill [1909] S.A.S.R. 28 and Chapter 8, Lindley and Banks on Partnership (17th edition), Sweet and Maxwell, London, 1995). No relief will be granted to the partners of an illegal partnership or parties to partnerships which are against public policy. However the proceeds from an illegal activity may be subject to an account between them. In Theunissen v. Fillipini [1967] V.R. 7 the plaintiff and defendant carried on businesses in partnership which involved the supply of birds and animals. There was a taking of accounts on the dissolution of the partnership and the defendant objected to the inclusion of certain sales of birds which were made in contravention of the Quarantine Act 1908 (Cth.). Adam J. stated at page 11:-

"the court is not enforcing or carrying out any illegal contract but merely enforcing a legal partnership agreement as between the parties, in relation to moneys derived from a third party pursuant to an illegal transaction which has been completed. The right against the other partner to an account for the moneys received arises from the lawful partnership agreement, not from the illegal transaction of the partnership with the third party."

Unsound Mind: Section 39 (a)

"when a partner is found lunatic by inquisition or is shown to the satisfaction of the court to be of permanently unsound mind, in either of which cases the application may be made as well on behalf of that partner by his committee or next friend or by the Master of the Supreme Court or the public trustee or other person having title to intervene as by any other partner".

As with all other situations listed in section 39 of the Act, the court has a discretion with respect to the dissolution of a partnership if it is established that a partner is of permanently unsound mind. The application may be made by a representative of the partner or by another partner. In practice, applications for a dissolution of a partnership as a result of mental incapacity are rare.

Permanent Incapacity - Section 39(b)

"When a partner other than the partner suing becomes in any other way incapable of performing his part of the partnership contract."

This subsection deals with instances of physical disabilities of a partner where a partner loses physical attributes required to perform the partnership agreement. The terms of the subsection are couched in terms that only the partner who is not permanently incapacitated can make the application on this ground. In Peyton v. Mindham (supra), a notice given to a doctor as a result of his partner believing that he was not performing his " fair share of work" was held to be valid.

Prejudicial Conduct-Section 39(c)

"when a partner other than the partner suing has been guilty of such conduct as in the opinion of the court regard being had to the nature of the business is calculated to prejudicially affect the carrying on of the business".

The use of the words "calculated" as well as "prejudicially" in this subsection permits a court to look at the motives of the offending partner. However in this context, the effect of the offending partner's actions will be likely to be looked at in order to determine that partner's intention. The type of conduct which may allow an application to be made to the court might be similar to a partner acting mala fides in respect of the partnership.

A dissolution will not be ordered by the court on the basis of suspicions held by the plaintiff that the defendant may be the acting against the interests of the partnership. In the case of Jenkins v. Bennett [1965] W.A.R. 42 at page 47:-

"... as to prejudicial conduct, the section requires regard to be had to the nature of the business, and as to "circumstances rendering it just and equitable" the section enables the Court to degree a dissolution if the circumstances "have arisen", and does not specify that defendant must have caused them to arise, although plaintiffs accepted the onus of proving that last-mentioned fact in this action."

Wilful Or Persistent Breach Of The Partnership Agreement-Section 39(d)

"when a partner other than the partner suing wilfully or persistently commits a breach of the partnership agreement or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable for the other partner or partners to carry on the business in partnership with him."

This subsection implies that an inadvertent breach of the partnership agreement is not sufficient to justify dissolution. However it is a question of degree as to whether the offending partner has conducted himself in such a way that it is not reasonably practicable for the other partner to carry on the business in partnership. I imagine that there may be situations where the conduct complained of may not in itself be in breach of the partnership agreement but which may make it very difficult to carry on in partnership e.g. a partner not devoting their entire time to the partnership without competing with it in contravention of section 34 of the Act, lack of communication, annoying habits. The partner seeking a dissolution of the partnership will need to show to the court why it is not reasonably practicable to carry on the business e.g. instances evidencing a breakdown in the relationship of the partners.



A dissolution will not generally be ordered simply because the partners have minor differences or even if a partner is mistreated in some respects. The misconduct of the other party must be consistent or with "extensive result" (Campbell v Blair (1873) 4 A.J.R. 148).

The differences between the partners must result in all probability that the partnership cannot be continued. As Webb J. stated in Knight v. Bell (1887) 13 V.L.R. 878 at page 882:-

" In an action for the dissolution of a partnership, where there has been misconduct of a partner, or such ill-feeling between the partners that the mutual confidence is destroyed, so that it is impossible for them to carry on the business, it is a matter for the court to consider, what the feeling between the partners is at the time the dissolution is to be made."

It must be practically impossible to carry on the business successfully or beneficially. The above case also refers to "mutual incompatibility of temper" as being a reason to dissolve the partnership.

The Partnership Can Only Be Carried On At A Loss-Section 39(e)

"When the business of the partnership can only be carried on at a loss."

It is interesting to observe that the import of the subsection appears to be prospective. Presumably, evidence would need to be submitted to the court of previous years' trading figures or of circumstances which show that the partnership will trade at a loss and that it is unlikely that a profit can be achieved in the foreseeable future (rather than trading at a loss for one year). A substantial reconstruction of the partnership, the seeking of additional partners, a decrease in drawings or increase in capital is not required before a dissolution will be ordered.

Just And Equitable Relief That The Partnership Be Dissolved-Section 39(f)

"whenever in any case circumstances have arisen which in the opinion of the court render it just and equitable that the partnership be dissolved."

This subsection deals with applications where each of the partners may have been guilty of misconduct or are simply unable to deal with each other. A court may dissolve a partnership on the grounds that it is just and equitable to do so irrespective of the misconduct of various partners. Generally, the mutual distrust or lack of trust and confidence in each other is sufficient to found an application to the court for a dissolution of the partnership.

The cases on company winding up which contain similar terms in the legislation are relevant to an application for the dissolution of a partnership eg. Re Yenidje Tobacco Co. Ltd. [1916] 2 Ch. 426, Loch v. John Blackwood Limited [1924] A.C. 783, Re Tivoli Freehold [1972]V.R. 445 and Ebrahimi v. Westbourne Galleries Ltd. (supra).

In the case of Jenkins v. Bennett (supra), the defendant's wife purchased a business similar to that of the partnership business. The plaintiffs conceded that the defendant had not done anything dishonest or did anything which damaged the partnership and was devoting his full working time to the partnership but were concerned that the defendant may divert present or prospective customers from the partnership to his wife's business should he choose to do so. Negus J. stated at page 48:-

"The test of reasonable practicability etc. in this case is whether or not it remains possible, from a practical point of view, for plaintiffs, thinking and acting reasonably, to carry on this particular business in partnership with this particular defendant. Thinking reasonably involves plaintiffs examining the suspicions and prejudices very carefully to find out if they are just and soundly based, and casting them aside if they are not; and not allowing themselves to be unduly influenced by narrow ideas of what is right and wrong. Acting reasonably involves plaintiffs doing everything in their power to co-operate.

The words "just and equitable" are of the widest significance. Whether or not the circumstances render a dissolution just and equitable is a question of fact.

His Honour then proceeded to draw a distinction between suspicion and fact as follows:-

"But the mere fact that plaintiffs' faith is shaken and they are upset is not enough. It must also be shown that the loss of confidence and perturbation are justified by their having actually suffered some detriment; or by a reasonable prognosis that some detriment is inevitable .......

It is one thing for partner A to say to partner B, "I no longer trust you", and quite another to say, "you are not trustworthy". If A can prove and justify the latter statement it would be just and equitable to order a dissolution, but a court could not generally take that drastic step on a mere statement, such as the former, unsupported by proof of actual breach of trust. If it could, no partner would ever be safe in his partnership" (page 49).

His Honour refused to dissolve the partnership in the above case as the plaintiff could not establish any breach of trust etc. (see also Brill v. Duddy, unreported Supreme Court of New South Wales, 22 September 1994, per Young J. at page 3, Hartin v. Hunter, (supra) per Young J. at page 7 and Ruut v. Head (1996) 20 A.C.S.R. 160).

The failure by a partner to contribute capital or make advances is not a ground for the dissolution of the partnership (Meekin Enterprises Pty. Ltd. v. Gersbach, unreported, Supreme Court of New South Wales, 1 August 1996 at page 7).

3.Orders other than dissolution

Injunctions

Section 37 of the Supreme Court Act 1986 (Vic.) provides "the court may by order, whether interlocutory or final, grant an injunction or appoint a receiver if it is just and convenient to do so."

The court may grant an interlocutory injunction under subsection (1) "restraining a party to a proceeding from removing from Victoria or otherwise dealing with assets located within Victoria, whether or not that party is domicile, resident or present within Victoria".

Section 49 of the County Court Act 1958 (Vic.) empowers the County Court to grant an injunction or appoint a receiver. Section 100 of the Magistrates' Court Act 1989 Vic. grants that Court jurisdiction as well as Order 35.04 of the Magistrates' Court Civil Procedure Rules 1989. The power is given under section 33 of the Supreme Court Act 1986 (Vic.).

Generally, an injunction will usually be sought to prevent a partner from breaching the partnership agreement if a partner also seeks a dissolution of the partnership. However a court will not order an injunction if its effect would be to make a partner carry out his partnership duties as it would be tantamount to the court making a decree of specific performance of personal services (see Lindley (supra) at page 319).

Receiver

A receiver may be appointed if there are some assets of the partnership which are in danger or the business cannot be carried on by the partners as there is a serious dispute (Wedge v. Wedge (1995) 12 W.A. R 489). Usually, a receiver is appointed for the purposes of protecting the goodwill of a business so that the partnership can be dissolved and the business sold. As Santow J. pointed out in Lee v. Lecky (unreported, Supreme Court of New South Wales, 4 February 1994):-

"Whilst appointment of an impartial receiver usually follows a successful winding up application in order to facilitate sale of the assets, such appointment by the Court is not automatic. A receiver will readily be appointed where assets may be in danger or the partners are in serious dispute, or where, unless a receiver were appointed, the equitable winding up of the partnership assets would not otherwise occur or would be prejudiced or delayed by the unilateral action or resistance of one of the partners. These are preservative or facilitative reasons for such an appointment."

The appointment of a receiver is an expensive exercise and will not be ordered if there are other means in which to have an orderly winding up of the partnership business. However the appointment of an "agent" may present difficulties (Rankine v. Harris, unreported, Supreme Court of Queensland, 9 July 1997 at page 3 )

If a partnership is denied, the court may be more reluctant to appoint a receiver due to the serious consequences of such an appointment, especially when the appointment may cause irreparable injury upon one party of the partnership. (Tate v. Barry (1928) 28 N.S.W.S.R. 380).

Unless the matter is urgent, an application for an appointment of a receiver should be made on notice.

4.Enforcement

If a partner, who has received proper notice of an injunction which has been obtained, fails to comply with same, then the partner who obtained the injunction may apply to the court for an order that the offending partner is guilty of contempt of the court. An example of an application for this type of relief is contained in Fine Real Estate Network v. Howell (unreported, New South Wales Supreme Court, 10 April 1996). In that case, the plaintiff failed to have punitive sanctions imposed upon a defendant as it had not complied with the Supreme Court rules in respect of giving notice to the defendant of the injunction. Therefore it was not clear that the defendant was aware of the precise terms of the injunction and was not informed that what the defendant proposed to do would be in breach of the injunction obtained and that the defendant was at risk of sanctions for the breach of the injunction. However the court did order the defendant to pay the plaintiff's indemnity costs and charged various properties of the defendant in favour of the plaintiff with the payment of any moneys found to be owing to the plaintiff. The reasons for this were that "the court must always be astute to protect the integrity of its own orders and parties who draw to the court's attention clear breaches of those orders should ordinarily be indemnified in respect of the costs of doing so"(page 2).

5.RETIRING PARTNERS AND RECENT CASES

Use Of The Partnership Name Upon Dissolution

If there is an agreement on dissolution that one partner will continue to carry on the business, then by implication that partner would be entitled to use the business name providing there is no reference to the former partnership (see Scott v. Bail [1914] V.L.R. 270).

Use Of Confidential Information

This issue is particularly interesting in respect of solicitors. Generally, a solicitor cannot use confidential information received during the course of one partnership to act against a client of his former partnership (In re A Firm of Solicitors [1996]3 W.L.R. 16).

The Settling of Accounts

Section 46 of the Act provides:-

"Where any member of a firm has died or otherwise ceased to be a partner and the surviving or continuing partners carry on the business of the firm with its capital or assets without any final settlement of accounts as between the firm and the outgoing partner or his estate then in the absence of any agreement to the contrary the outgoing partner or his estate is entitled at the option of himself or his representatives to such share of the profits made since the dissolution as the court may find to be attributable to the use of his share of the partnership assets or to interest at the rate of seven per centum per annum on the amount of his share of the partnership assets:"

In the case of Oddy v. Fry, (unreported, Supreme Court of Victoria, 16 June 1977), the parties consented to the appointment of a special referee to give his opinion in respect of a number of matters in issue in the proceeding including, inter alia, the value of the net tangible assets of the firm. The plaintiff claimed interest pursuant to section 58(1) of the Supreme Court Act 1986 (Vic.) together with costs in respect of the proceeding. McDonald J stated at page 6:-

"In my view, that which the plaintiff is entitled to recover against the defendants is also a "sum certain" and became a sum which was certain on it being determined what share of the profits of the continuing firm, made since the time that the plaintiff retired from it, was attributable to the use of his share of the partnership assets."

Therefore, His Honour determined that the plaintiff was entitled to interest pursuant to statute together with costs, including solicitor/client costs subsequent to the date of an Offer of Compromise which had been made by the plaintiff.


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