A recent case, Hawes v Dean, in the Supreme Court of NSW highlighted why it is important to document your business agreements from the beginning. If an agreement is clearly written, it makes life much easier when the business arrangement comes to an end.
Mr Hawes and Mr Dean had entered into many business ventures together, over the course of 17 years. During that period they had worked together on 15 property development projects and they had used a number of corporate and trust structures. At no time during their partnership did they enter into an overarching written partnership or joint venture agreement.
When they decided to part ways in 2004-2005 they engaged the help of their accountants to assist in disentangling their affairs. A series of settlement deeds and agreements were prepared dealing with their various business structures. The case was brought before the court due to issues with 3 of the settlement deeds which had not sufficiently dealt with the complex business relationship that had developed and this in turn led to many claims and cross-claims between the two parties. One such claim was for rectification of a settlement deed to give effect to what had originally been agreed at the outset of their arrangement – that all assets and liabilities would be shared equally.
Although written agreements can be drafted to assist in the dissolution of a business partnership, it is beneficial for all parties to have these agreements drafted from the very beginning. This can reduce the likelihood of a dispute arising down the track.
The commercial and contract lawyers at Matthews Folbigg Parramatta can assist in providing legal advice and drafting business agreements for partnerships, joint ventures and corporate structures. Contact us today.
Phillip Brophy – email@example.com or 9635 7966