Public Trustee v Schultz [1964] HCA 44

Public Trustee v Schultz [1964] HCA 44

By majority, the partners' express agreement and course of dealing varied the annual accounting requirements so that goodwill was ignored for all purposes of the partnership, including cl. 15. The annual accounts as at 30th June 1950 therefore provided the basis for calculating the deceased partner's share notwithstanding that they did not include goodwill and were not signed. The respondent's tenders did not preclude interest, and the trial judge was justified in awarding interest for the period after 11th October 1953. Interest under cl. 15(c) was payable on the combined amounts under cl. 15(a) and cl. 15(b).

Jurisdiction
Australia
Procedural Posture
Appeal and Cross Appeal in an Equity Suit Concerning Dissolution of a Partnership and Payment for a Deceased Partner's Share / High Court Appeal From a Decree Made in a Suit Heard in the Equitable Jurisdiction of the Supreme Court
Outcome
Appeal dismissed with costs. Cross-appeal dismissed with costs to be set off against the costs of the appeal.
Legal Topics
['variation of Partnership Articles by Consent or Course of Dealing' "valuation of Deceased Partner's Share" 'goodwill of Partnership Business' 'annual Partnership Accounts' 'interest on Purchase Money' 'tender']
['partnership Law' 'equity' 'contract Law'] ['variation of Partnership Articles by Consent or Course of Dealing' "valuation of Deceased Partner's Share" 'goodwill of Partnership Business' 'annual Partnership Accounts' 'interest on Purchase Money' 'tender']

Case Brief

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Procedural Posture

Appeal and Cross Appeal in an Equity Suit Concerning Dissolution of a Partnership and Payment for a Deceased Partner's Share / High Court Appeal From a Decree Made in a Suit Heard in the Equitable Jurisdiction of the Supreme Court

Legal Issues

  1. 1 ["Whether annual accounts prepared without including estimated goodwill could be used to ascertain the price payable for the deceased partner's share under cl. 15 of the partnership agreement." "Whether the absence of partners' signatures on the annual accounts prevented their use for the purposes of cl. 15." "Whether the respondent's tenders prevented an award of further interest." 'Whether interest should be awarded after 11th October 1953 and whether cl. 15(c) interest applied to the sum of the amounts under cl. 15(a) and cl. 15(b).']

Ratio Decidendi

By majority, the partners' express agreement and course of dealing varied the annual accounting requirements so that goodwill was ignored for all purposes of the partnership, including cl. 15. The annual accounts as at 30th June 1950 therefore provided the basis for calculating the deceased partner's share notwithstanding that they did not include goodwill and were not signed. The respondent's tenders did not preclude interest, and the trial judge was justified in awarding interest for the period after 11th October 1953. Interest under cl. 15(c) was payable on the combined amounts under cl. 15(a) and cl. 15(b).

Court Disposition

Appeal dismissed with costs. Cross-appeal dismissed with costs to be set off against the costs of the appeal.

Orders

  • ['Appeal dismissed with costs.' 'Cross-appeal dismissed with costs to be set off against the costs of the appeal.']