Old v Hodgkinson; Old v McInnes [2009] NSWSC 1160

Old v Hodgkinson; Old v McInnes [2009] NSWSC 1160

There was no binding enforceable agreement obliging KJM (McInnes) to pay Old for goodwill, nor did the facts support a quantum meruit or restitutionary claim for payment based on benefit received; agreements and negotiations never reached sufficient finality, and any benefit conferred was not subject to an understanding of remuneration given the partnership was at will, negotiations were ongoing, and there was mutual interest in continuing the business. Equitable compensation for Old's breach of fiduciary duty concerning goodwill should be discounted by one-third, setting the amount at $95,288 rather than the referee's figure. Costs of the referee are to be apportioned one-third to each...

Jurisdiction
Australia
Judgment Date
03 November 2009
Procedural Posture
Civil (equity/partnership) / Post Trial Judgment on Accounts, Costs, and Final Orders
Outcome
Substituted (discounted) value of goodwill for equitable compensation; leave to amend claim/refused quantum meruit/restitution claim; no adjustment to referee's costs beyond allocations; final determination stood over for orders on short minutes.
Legal Topics
['partnership Dissolution' 'goodwill Valuation' 'quantum Meruit' 'equitable Compensation' 'account of Profits' 'winding Up Partnerships' 'costs of Court Appointed Referee']
['partnership' 'restitution' 'equity'] ['partnership Dissolution' 'goodwill Valuation' 'quantum Meruit' 'equitable Compensation' 'account of Profits' 'winding Up Partnerships' 'costs of Court Appointed Referee']

Case Brief

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Procedural Posture

Civil (equity/partnership) / Post Trial Judgment on Accounts, Costs, and Final Orders

Legal Issues

  1. 1 ['Whether equitable compensation for breach of fiduciary duty should include a goodwill component' 'Whether an agreement existed obliging McInnes to pay for partnership goodwill' "Whether Old's claim in quantum meruit or restitution is sustainable" 'How the costs of the court-appointed referee should be determined and apportioned']

Ratio Decidendi

There was no binding enforceable agreement obliging KJM (McInnes) to pay Old for goodwill, nor did the facts support a quantum meruit or restitutionary claim for payment based on benefit received; agreements and negotiations never reached sufficient finality, and any benefit conferred was not subject to an understanding of remuneration given the partnership was at will, negotiations were ongoing, and there was mutual interest in continuing the business. Equitable compensation for Old's breach of fiduciary duty concerning goodwill should be discounted by one-third, setting the amount at $95,288 rather than the referee's figure. Costs of the referee are to be apportioned one-third to each...

Court Disposition

Substituted (discounted) value of goodwill for equitable compensation; leave to amend claim/refused quantum meruit/restitution claim; no adjustment to referee's costs beyond allocations; final determination stood over for orders on short minutes.

Orders

  • ["The referee's equitable compensation calculation adjusted: goodwill value fixed at $95,288." 'Leave to amend claim for contract or quantum meruit refused; no entitlement found on those grounds.' "No further adjustment to the referee's costs; referee costs to be shared one-third by each partner, with precise...