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Decisions of the Superior Courts of New South Wales, 1788-1899

Gosling v. Dutton

injunction - partnership

Supreme Court of New South Wales, Port Phillip

Willis J., Equity Side, 24 September 1841

Source: Port Phillip Patriot, 27 September 1841

In this case an injunction had been granted in July last, on the application of the trustees of the estate of W.H. Dutton, to restrain the defendants from selling the partnership property; a rule nisi was obtained to show cause why the injunction should not be dissolved. Mr. Barry appeared to show cause against the rule, and Mr. Cunninghame in support of the application.

Mr. Barry said a special injunction had been granted on the 3 rd of July, to restrain the parties from selling the partnership property; an answer had been put in on the 10 th instant, and the defendants now prayed that the injunction might be dissolved; in support of their answer, which he submitted was insufficient, the defendants had filed an affidavit.

Judge Willis---Upon what ground do they file affidavits, I am not trying the injunction on affidavits, what is the use of an answer if supported by affidavit?

Mr. Barry---But I contend with great respect, your Honor, that the answer itself is insufficient, as only two out of the three defendants have put in an answer.

Judge Willis---There may be a distinction in this case, Mr. Barry; Dutton is before the court, inasmuch as he is represented by his assignees, and consequently they state the case for him.

Mr. Barry---Would with deference again submit that the answer was not sufficient, until Dutton was before the court.

Judge Willis---I think Dutton is sufficiently before the court, are you prepared to go into the case, Mr. Barry? when did you get your brief?

Mr. Barry---The day before yesterday your Honor, and I must say, I am not prepared to argue the case to-day.

Judge Willis---How is it you have not been properly instructed, and in sufficient time? it appears you have not been so, for what reason I cannot tell; however I have not the least doubt, that the other side will consent to the matter standing over until a future day.

Mr. Cunninghame had not the least objection that the case should stand over to any day his Honor might fix, as he was not quite prepared himself.

Judge Willis---As it is my duty to be satisfied that the answer to the injunction is a proper one, I have examined it with considerable attention, and as I shall have a good deal to say on it bye and bye, I will read such hints now, as I consider worthy of notice; merely to draw the attention of counsel to those parts, which I consider extremely important they should be acquainted with, before the case comes on to be argued.

It is stated in the defendants' answer that 300 head of cattle had been sold by auction, by parties carrying on business, under the name, style, and firm of the "Melbourne Auction Company." Now, I must know, as it is sworn to in the defendants' answer, who these auctioneers are, as I am bound to see whether they have qualified themselves to act as auctioneers according to law; the 300 head of cattle were sold for £1,500, out of which, it is stated in the answer, Donald Campbell Simson has appropriated £1,000 to private purposes, and the balance has been placed in the bank to the account of Kemmis and others; before I dissolve the injunction, I shall require to have it explained by what right Simson appropriated £1,000 out of the partnership property for private purposes, and also, relative to the parties calling themselves the Melbourne Auction Company, as sworn in the answer.

Mr. Cunninghame submitted that his clients were not bound to answer for the legality or illegality of the Auction Company's proceedings.

Judge Willis---There is a transaction stated in the answer to have taken place with these parties, and I am bound to know who they are. It has not been applied for, but I will throw out this suggestion that a manager and receiver be appointed to wind up the affairs of the partnership, and lay the accounts before the court; this will meet the views of all parties. (After a long conversation between the parties, it was agreed that Mr. Power, should be requested to act as manager and receiver for the court. The injunction still remaining in force.)

Mr. Barry said he hoped that the pretended sale of £7000 or £8000 of property to a relative, at a nominal price, would be accounted for to the receiver; he would propose to rescind that sale altogether, and then the matter could be finally arranged.

Mr. Cunninghame had never before heard of an application to rescind a bona fidesale; there were the bills which were negotiable.

Judge Willis---I think the present will be both a tedious and a very expensive proceeding to all parties, and I should wish to see the matter arranged out of court in an amicable manner if possible. This I have no doubt can be done, for in these times I have no doubt the creditors will think half a loaf better than no bread. From what came out on a late trial that Dutton held a sixth share in the Port Phillip Heraldnewspaper, and two-sixths of the same journal were in the hands of Simson and Darlot, it appeared that there was a source from which funds might yet be derived. As at present advised, Cavenagh, the present proprietor, as he styles himself, having selected his own mode of payment for the share of the newspaper to Dutton, until the deed is done away with by another, Dutton is as much a partner now in the Port Phillip Herald newspaper, as when he first entered into partnership with Cavenagh. His Honor said he should make no further remarks on this subject at present. Neither was he giving an extra judicial opinion, other questions might arise when the matter could be fully argued, and one of the questions might be the priority of executions.

The matter was then adjourned until Tuesday next, his Honor repeating his wish that the parties would settle the matter out of court.

Willis J., Equity Side, 24 September 1841

Source: Port Phillip Patriot, 30 September 1841

His Honor asked if any arrangements had been made by the parties in this case.

Mr. Barry---I am sorry to say not, your Honor.

Judge Willis---I regret to hear you have not been able to settle the matter out of court, Mr. Barry, for as I before said, this will be an expensive suit, and a chancery suit is like hunting in Germany, where they hunt in waggons, and by the time they get up to the game it is putrid. If this case goes on, there will no doubt be cross-suits, other parties must be brought before the court, and there may be an issue in the case; it may also be found necessary to impugn the sale of the property that has been referred to, then it may be necessary to file a supplemental bill, and not only one, but several issues may be applied for; the expense will be ruinous to all parties; they had better settle the matter out of court, and thereby put something in the pockets of the whole of the creditors, for there is no use in throwing away the money in law expenses, and I should like to see the parties meet.

Mr. Barry said, the only contention was respecting the injunction; all they required was that Dutton's share of the property should be handed over to the trustees, then the other defendants could do as they liked with the remainder.

Mr. Cunninghame---That is precisely what we want.

Judge Willis said as Mr. Barry's proposition seemed to meet the wishes of the other side, he would again adjourn the case for the parties to come to an amicable settlement out of court. (After some conversation, it was agreed that the matter should again stand over until to-morrow morning, at 12 o'clock, in order that the parties may settle the matter if possible out of court.)

Published by the Division of Law, Macquarie University