Old v Hodgkinson; Old v McInnes [2008] NSWSC 697

Old v Hodgkinson; Old v McInnes [2008] NSWSC 697

Goodwill of the dissolved partnership must have nil value in the final accounts because, as a matter of law, goodwill ceases to exist when the business ceases to be carried on in its pre-dissolution form; two separate successor businesses cannot be considered a continuation of the former partnership's business for the purposes of attributing goodwill value.

Parties
Plaintiff: Fraser Patison Old; Defendant: Hugh Rudyard Hodgkinson; Defendant: Kenneth John McInnes
Jurisdiction
Australia
Judgment Date
09 July 2008
Procedural Posture
Partnership Dissolution / Judgment on Report Regarding Goodwill
Outcome
Referee's approach to the question of goodwill rejected.
Legal Topics
Dissolution of Partnership, Goodwill, Final Accounts Settlement
Partnership Law Equity Dissolution of Partnership Goodwill Final Accounts Settlement

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Parties

Fraser Patison Old

Plaintiff

Hugh Rudyard Hodgkinson

Defendant

Kenneth John McInnes

Defendant

Procedural Posture

Partnership Dissolution / Judgment on Report Regarding Goodwill

Legal Issues

  1. 1 Whether goodwill ought to be considered in settling the accounts of a dissolved partnership
  2. 2 Whether goodwill of the former partnership survived after dissolution

Ratio Decidendi

Goodwill of the dissolved partnership must have nil value in the final accounts because, as a matter of law, goodwill ceases to exist when the business ceases to be carried on in its pre-dissolution form; two separate successor businesses cannot be considered a continuation of the former partnership's business for the purposes of attributing goodwill value.

Court Disposition

Referee's approach to the question of goodwill rejected.

Orders

  • Decline to adopt the referee's approach to the question of goodwill.