Approved Developments Pty Ltd v CJN Constructions Pty Ltd [2017] QCAT 247

CITATION: Approved Developments Pty Ltd & Anor v CJN Constructions Pty Ltd & Anor [2017] QCAT 247 PARTIES: Approved Developments Pty Ltd Paul McManus (Applicants) v CJN Constructions Pty Ltd Clinton James Newman (Respondents) APPLICATION NUMBER: MCDO170-16 MATTER TYPE: Other minor civil dispute matters HEARING DATE: On the papers HEARD AT: Cleveland DECISION OF: Adjudicator Bertelsen DELIVERED ON: 21 July 2017 DELIVERED AT: Brisbane ORDERS MADE: 1. The application is dismissed for lack of jurisdiction. CATCHWORDS: ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – partnership agreement – partnership’s motor vehicle purchase from partner – asserted non-delivery – final accounting on dissolution – where vehicle sits in context of final accounting – final accounting under Partnership Act 1891 (Qld) – no jurisdiction in context of final accounting Partnership Act 1891 (Qld), s 42 APPEARANCES: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). -- 1 of 4 -- 2 REASONS FOR DECISION Application [1] By application filed 3 November 2016, Approved Developments Pty Ltd and Paul Michael McManus claim as against CJN Constructions Pty Ltd (CJN) and Clinton James Newman the sum of $18,838.93 being monies paid for the purchase of a Holden Rodeo utility vehicle pursuant to a written agreement and which was never delivered subsequent to a partnership breakdown between Approved Developments Pty Ltd and CJN. Background and evidence [2] On 1 April 2014, a written partnership agreement for building and construction purposes was entered into between Paul Michael McManus (50% share) and CJN (50% share). The business name under which the partnership was to operate was Approved Developments. [3] Shortly prior, on 11 March 2014, the company Approved Developments Pty Ltd was registered. From the outset, Paul Michael McManus and CJN were recorded as the beneficial holders of one fully paid share each. The business address for Approved Developments was recorded in the partnership agreement as Level 1, Cleveland Plaza, 15/48 Bloomfield Street, Cleveland. The registered office of Approved Developments Pty Ltd as recorded with ASIC for the period 11 March 2014 to 1 September 2014 was C/ Approved Developments, Cleveland Plaza Unit 15, Level 1, 48 Bloomfield Street, Cleveland. [4] The common business address for both Approved Developments Pty Ltd and Approved Developments, as well as the identical company shareholding and partnership proportions and the coincidental start up date for both entities would indicate on balance that the mechanism by which the partnership was to operate was through the company Approved Developments Pty Ltd. [5] Mr McManus produced an ‘Approved Developments Meeting Minutes’ which stated, amongst other things, that: b) Approved Developments agrees to purchase the two motor vehicles from CJN Constructions being the 2006 Holden Rodeo RA LX with approx. 150000km for $13,000 and the 2006 Ford Falcon Ute BF XL with approx.. 111000km for $7,500. c) Approved Developments agrees to pay $648.77/m and $342.81/m respectively for the above two cars to pay off the above purchase price costs and the remaining funds paid over and above the purchase price costs of approx. $7,500 and $5,000 respectively will be a loan from Approved Developments to CJN Constructions… [6] As far as the Holden Rodeo was concerned, nine payments of $648.77 per month were made in the period 25 August 2014 to 24 April 2015, a total of $5,838.93; that on 22 May 2015, CJN issued invoice No. 615 for $13,000.00 -- 2 of 4 -- 3 to Approved Developments Pty Ltd; that on 26 May 2015, Approved Developments Pty Ltd paid $13,000.00 to CJN as evidenced by ANZ bank statement and by the electronic payment details report. [7] Mr Newman of CJN asserted the claim arose out of a ‘dispute’ concerning the final settlement of accounts upon the dissolution of the Approved Developments partnership dated 1 April 2014; that Approved Developments Pty Ltd was the corporate partnership vehicle owner jointly by Mr McManus and CJN; that the partnership was dissolved by operation of law at the earliest April 2016, and at the latest October 2016. [8] Mr Newman asserted that the written agreement was only the meeting minutes of 25 April 2014, and that such was an Approved Development partnership meeting; that there was no agreement between Approved Developments Pty Ltd and CJN. He said the Holden Rodeo was an asset of the partnership pursuant to the partnership agreement Clauses 6, 30 and 31 and that as such, the vehicle belonged 50% to Paul McManus and 50% to CJN ‘subject to the final taking of accounts between the former partners consequent upon dissolution of the partnership’. He said no such accounting had occurred, specifically that Mr McManus had failed to contribute the initial capital of $100,000.00 as designated in Clause 36 of the partnership agreement, had failed to divide partnership profits and finally attend to any final settlement of accounts, despite request. [9] Mr Newman said the prerequisite here was an account pursuant to Clause 77 of the partnership agreement, and s 42 of the Partnership Act 1891 (Qld). In addition, Mr Newman claimed QCAT did not have jurisdiction to hear and determine questions under Chapter 2, Parts 3 or 4 of the Partnership Act 1891 (Qld) or to make any orders for an account on dissolution of a partnership. [10] In further material placed before the Tribunal, Mr McManus stated Approved Developments Pty Ltd paid over and above for a motor vehicle that it never received. Conclusions [11] On 1 April 2014, Mr McManus and CJN entered into a 50/50 written partnership agreement for building and construction. The business name under which the partnership would conduct business was Approved Developments. The mechanism, or vehicle, through or by which day to day business would be conducted was Approved Developments Pty Ltd. [12] The meeting of 25 April 2014 was clearly a meeting between the two partners, Mr McManus and Mr Newman on behalf of CJN, considering the purchase and then deciding on the terms of purchase of two motor vehicles by the partnership from CJN. The partnership purchase of the two vehicles went beyond a simple purchase. The meeting minutes refer to funds paid over and above the purchase price costs of approximately $7,500.00 and $5,000.00 respectively being a loan from Approved Developments Pty Ltd to CJN. -- 3 of 4 -- 4 [13] It was then the case that the partnership, having paid a number of monthly instalments in respect of the purchase of the Holden Rodeo at least, would then have some beneficial interest in the ownership of that vehicle. The fact that CJN invoiced Approved Developments Pty Ltd is not unusual given that the company was the mechanism or vehicle by and through which the partnership operated. [14] Whilst nine monthly payments of $648.77 were made in the period August 2014 through April 2015 with a final payment of $13,000.00 in May 2015 there is no evidence of any further transacting in respect of the Holden Rodeo in the period May 2015 through at the earliest April 2016 or later in October 2016, the timeframe within which the partnership apparently broke down. [15] Whether it was just assumed that the Holden Rodeo having been subsumed into the partnership by virtue of payments made was not clear. If it was a case of refund of payments made due to non-delivery then that is not a debt, but an asserted right to refund based on non-delivery. The minutes of meeting of 25 April 2014 is inadequate in itself to ground a finding of monies due and owing outside the ambit of the partnership agreement. [16] Here there is also an assertion that funds payable by Mr McManus i.e. $100,000.00 pursuant to the partnership agreement were never paid. The efficacy of that assertion is a matter to be included in the taking of a final account of the partnership. [17] The issue of transfer of the Holden Rodeo only seems to have arisen latterly in the context of the partnership dissolution in the period April 2016 – October 2016 after a hiatus of a year or longer. It may well transpire that beneficial ownership of the Holden Rodeo vests in the partnership for the purpose of final accounting of the partnership itself. [18] Here it is a case of the partnership vehicle (being the entity in which the partnership assets and liabilities would appear to vest) claiming against a former partner in the absence of any final accounting post-dissolution and in the context of money allegedly owing to the partnership by the other former partner. It would seem that the whole purpose of final accounting is to address such issues and crystallise who owes what to whom and/or who is entitled to be paid or alternatively contribute. [19] In summary, the issue of the beneficial ownership of the Holden Rodeo and the entitlement to possession of the Holden Rodeo are clearly matters to be determined in the final accounting of the partnership. To that extent, the nature of the claim involves the final accounting of the partnership, and as such is a matter in respect of which the Tribunal clearly does not have jurisdiction. [20] The application is dismissed for lack of jurisdiction. -- 4 of 4 --