PARTNERSHIP ACCOUNTS

Southland Times, Issue 21088, 21 May 1930, Page 15

PARTNERSHIP ACCOUNTS

COURT’S AID SOUGHT.

AN INVOLVED TRANSACTION. ' In the Supreme Court last Thursday, before Mr Justice Kennedy, an action was brought by James Bradshaw, of Invercargill, oyster merchant, against Hans Anderson, of Bluff, fisherman, to recover the sum of £250 which plaintiff alleged was lent to the defendant about May 1, 1929, and which had not been repaid. Bradshaw further claimed the sum of £l9 14/4, the reasonable price of certain chattels sold and delivered by him to Anderson, and £l5 for wages for the month of August, 1929. The defendant counter-claimed for £250 damages, £lO money lent and £94 5/- for oysters sold and delivered. Defendant alleged that he entered into partnership with plaintiff and the sum of £250 was paid by the plaintiff to the defendant as a contribution to the capital of the partnership. Defendant also said he agreed to go to Bluff as requested by plaintiff if a sum of money was deposited with him as security against loss in moving from Napier and engaging in the oyster trade as requested, and as security for the performance by the plaintiff of his part of the contract between them, whereby the plaintiff was to dispose of all oysters landed by the Pania. The plaintiff failed to perforin his part of the contract, it was claimed, and the defendant lost sums exceeding £6OO in bringing the Pania to Bluff and in the failure of the plaintiff to dispose- of the oysters landed by 'the Pania.

At the hearing Mr A. F. Hogg appeared for the plaintiff, while Mr B. W. Hewat represented the defendant. After the case had proceeded at some length, counsel conferred and it was admitted that a partnership existed between the litigants from May, 1929. The hearing was then adjourned until yesterday in the hope that a complete agreement would be reached regarding some minor differences. ’ Settlement Not Reached. When the case was called yesterday Mr Hogg informed his Honour that counsel were unable to arrive at a settlement on the question whether there had been" a dissolution of the partnership and, if so, the date thereof. He submitted that the onus rested on the defendant to prove these contentious matters. Mr Hewat: I accept that position, your Honour, and we are now dealing with the counter-claim. It has been agreed that there existed a partnership and the. application now before the Court is that accounts be taken. Counsel sought (and was granted) permission to amend the counter-claim by adding to the prayer for relief the words, “That the said partnership was rescinded on or about September 3, 1929.” His Honour: In consequence of the unusual turn proceedings have taken, I shall grant Mr Hogg the right to call witnesses and you shall, of course, have the right to reply, Mr Hewat. Mr Hewat, in opening his case, informed the Court that he intended calling the defendant, who would testify that as the result of quarrels with the plaintiff, he removed from the trawler on September 3 certain trappings belonging to Bradshaw, whom he notified of his action. The latter said: “I hope we are not going to fall out,” to which defendant replied that they were out and he was finished. Such conversation was followed by letters which clearly indicated that the partnership was at an end. The defendant, Hans Anderson, gave evidence that it was intended that he should carry on the oyster trade when he came south. In August, 1929, four trips for oysters were made and the plaintiff disposed of the catches. Plaintiff later left for the north to attempt to establish sales, but on. his return he told witness his mission had proved unsuccessful as whitebait was in demand in Christchurch and Dunedin. Subsequently defendant refused to carry on the. partnership and put plaintiff’s fittings ashore. A Mr Dawson, who was also interested in the concern, helped witness to take the gear ashore. His Honour: Are the terms of the partnership agreed upon, Mr Hewat? Mr Hewat: No, sir, we seek only that accounts be taken subject to leave being granted to the parties to apply to the Court in case of any dispute. In continuation of his evidence, defendant explained the method of pay of the crew of an oyster fleet. The crew usually received £3 when' the oysters were fetching £5 per 1000 dozen. The skipper shared in the £3, while the balance went to the account of the ship’s share. It was not always customary to paj' anything extra to the skipper from the ship’s share. There was no discussion between plaintiff and witness as to how the profits were to be applied, though a conversation had taken place with Dawson when the extra money was paid in and it was arranged that each partner should have a share of the profits. Such share, however, was not then determined. Question of Dissolution.

To Mr Hogg: No provision was made at the outset of the negotiations as regards a dissolution in the future if things were not satisfactory. It was not correct to say that, before Bradshaw was sent north, he (witness) bad given up oystering in favour of trawling. The first dissatisfaction arose when the promised market was not forthcoming. He came south for oystering and oystering alone. He did not remember instructing the plaintiff to write to a certain merchant in Melbourne inquiring as to the prospect of marketing there. For the month of August, £493 was his earnings. When the conversation ensued with Dawson, witness was not aware of the unsatisfactory state of the oyster market.

To His Honour: He was at a loss to say what the partnership really was. The twofifths not distributed was allocated to the ships’ upkeep and there would possibly be a profit. There was no arrangement as regards the disposal of such profit. The £250 contributed by Bradshaw was paid by witness in expenditure upon the vessel and to enable him to get down south. Re-examined by Mr Hewat: He arrived in Bluff on July 3, but he did not put to sea until August as the' plaintiff had not the necessary gear in readiness. It was. after the first trip that Dawson came -into the business. /It the conference between the three parties it was agreed that the business should be run under the name of witness.

Ewen McQuarrie, of Bluff, tally clerk, in his evidence, said he was approached by the plaintiff with a view to joining the undertaking as a partner. Ultimately, the plaintiff, defendant and witness met to discuss the business, and Anderson said that if the partnership eventuated it would be carried out in his name. There was no discussion as to shares, but the defendant put the amount of £2700 on his vessel and trawls. Witness thought this rather on the high side and questioned the figure, though Bradshaw made on demur. Plaintiff said he had put in £250 and witness agreed, if the conditions were satisfactory, he would contribute a like sum. It was arranged that all would work into equal shares. Witness did not become a partner. Notice Of Dissolution Indefinite.

Mr Hogg at this stage submitted that counsel for defendant had not proved any dissolution, firstly, because the defendant had not notified all the partners of the dissolution (for Dawson had not been eo advised), and secondly, the notification (if any) was not definite and unambiguous. The authorities demanded that the advising must be explicit. Counsel said that a question might arise whether there had not been expulsion. His Honour: Even if I took your view, Mr Hogg, the action cannot be disposed of in the nature of a non-suit.

Mr Hogg then recalled the plaintiff to answer the allegations made by the defendant.

Bradshaw said he went north on August 17, but it was incorrect to say that, after receiving instructions from Anderson, he (witness) did not leave until a few days later. Anderson certainly put the gear of witness on the wharf, but defendant did not say the partnership was at an end. It

was not exactly correct to say that the reason the defendant did not go oystering immediately on arrival was because he (witness) was not ready for him. Anderson’s health had not been good when he first settled at Bluff.

To Mr Hewat: There were about six oyster boats at Bluff. No trawling was carried out there until defendant’s boat came south. One of the objects of Anderson’s leaving Napier was to engage in trawling as well as oystering. He would admit that the oyster bed was not in readiness in July. Some of the oysters were sold in the local auction marts at the end of August. Defendant did not tell witness he was finished with him, but simply ignored him. Consequently, as witness could not get any' satisfaction, he consulted Mr Hogg. Witness made several efforts to endeavour to interest persons in the venture. The business, it was agreed, should be carried on in Anderson’s name. To his Honour: He would agree to the ship being reckoned as a capital contribution of £2700. There was a custom, wellknown to witness at Bluff, that those who worked the oyster boats received threefifths of the £5 charged for 1000 dozen oysters. He could not say if there was a corresponding custom in the case of the crew of a trawler. Re-examined by Mr Hogg: The man on shore was always paid set wages. When he went north, some 40 sacks were left on the beds. James Dawson, of Bluff, fisherman, said he put £lOO into the venture, and in return he “supposed” he was to receive a share. However, no discussion took place on this question at the time. Anderson agreed that witness was to receive a share. Defendant told witness he had finished with Bradshaw, and he (Dawson) queried: “What about his £250?” Anderson replied that it was there to be had at any time. Witness understood Bradshaw had to look after the business ashore and keep the books. Partnership Assumed. To Mr Hewat: He received his £lOO back out of the business. In addition he got interest and his share as one of the crew of the proceeds sold, but he took no proportion of the two-fifths share. The actual basis of his settlement with Anderson was not on the assumption that there existed a partnership. To his Honour: The £lOO was received in January last. Henry Bradshaw, of Bluff, a fish merchant, stated that his brother had brought Anderson to witness to inquire as to the prospects at the port. Witness told the defendant the venture should be successful and advised him to be at Bluff for the opening of the oyster season. To Mr Hewat: He would not say that there were difficulties besetting any stranger settling at Bluff. Mr Hogg said that if his Honour held that the partnership had been dissolved in September, he would submit in such case that the boat brought by the defendant to Bluff was a partnership asset and, accordingly, that plaintiff was entitled to a share of the profits up to the date of the dissolution. If, further, it was held that substantial sums had been expended upon such vessal, it might well be that the plaintiff should receive a certain share of the profits even after the alleged dissolving of the partnership. Mr Hewat argued that on such a transaction as that in issue.it was not necessary for the court to look for formal notice of dissolution, and he submitted that the evidence generally could support such a conclusion. All the surrounding circumstances appeared to support Anderson’s story, and the evidence of Dawson (called for the plaintiff) seemed to corroborate the contention of the defence. So long as the intention of the parties was clear that they intended the partnership to terminate, that was sufficient, contended counsel. His Honour said he would reserve his decision.