LEACH v. WILLIAMS

Australia

11.07.2017

Contract

Court has discretion and will exercise that discretion to award costs to one party, where it is just to make costs order

In facts of present case, Plaintiff and Defendant carried on a pharmacy business in partnership. Plaintiff holds 60% interest and Defendant 40% interest in pharmacy. Defendant is registered with Pharmacy Registration Board of Western Australia as pharmacist with overall responsibility for pharmacy and worked at and managed pharmacy. Relationship between Plaintiff and Defendant started to deteriorate and since, about February or March, 2015, each has been represented by lawyers. Both Partners made allegations against other regarding alleged breaches of partnership deed and mismanagement of pharmacy. Plaintiff commenced present proceeding by way of originating summons seeking an order for dissolution of partnership between Plaintiff and Defendant, an order for taking of accounts and an order that, partnership business be sold. On 13th April, 2017, Parties are in dispute concerning costs of proceeding. Parties are in dispute as to costs of proceedings. Plaintiff seeks an order that, Defendant pay his costs.

Subject to provisions of Supreme Court Act, 1935 (WA) and to Rules of Court or any other Act, costs of proceedings are in discretion of Court. General rule is that, costs follow the event, that is Court will generally order that, successful party recover his costs. Plaintiff's application was not an application merely for taking of accounts and winding up of partnership's affairs. It was not an application for winding up of partnership affairs consequent upon dissolution or an application for taking of accounts. It was primarily an application for dissolution of partnership which Plaintiff anticipated would be opposed by Defendant. That is why Plaintiff prepared and filed affidavits to make out grounds for a dissolution under Section 46(f), (g) and (d) of Partnership Act, 1893. Plaintiff acted reasonably in bringing application and supporting it by evidence.

On 15th February 2017, Plaintiff commenced these proceedings. In circumstances, Plaintiff acted reasonably in commencing proceedings and supporting its application by affidavits filed. In 2016, Defendant maintained that, there was no basis for making an application to dissolve partnership on grounds advanced by Plaintiff, which were grounds on which Plaintiff sought dissolution of partnership in these proceedings. Defendant did not offer to consent to orders for dissolution of partnership and consequential orders for its winding up until Plaintiff applied for urgent orders on 28th March 2017.

Where an action is compromised before hearing and parties have reached no agreement as to costs, Court will often determine that, appropriate course is that, each party bear its own costs. However, Court has a discretion and will exercise that discretion to award costs to one party, where it is just to make a costs order.

In present case, Plaintiff acted reasonably in bringing originating summons and supporting it by affidavits setting out evidence in support of grounds upon which Plaintiff sought dissolution of partnership. That was reasonably necessary in view of Defendant's previous denial of grounds for dissolution advanced by Plaintiff. Notwithstanding Defendant's explanation for why he eventually consented to orders dissolving partnership, Defendant effectively surrendered. Defendant was directed to pay Plaintiff's costs of action and of Plaintiff's application for costs.

Tags : Partnership Dissolution Cost

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