Law Report Case Study the Supreme Court

Law Report Case Study

The Supreme Court of New South Wales heard the case Pastizzi Cafe v Hossain in mid-July of 2011. The case involved a variety of different legal issues -- issues that ranged from what constitutes a business partnership to whether a partner can end a corporation on her or his own without the consent of other partners. In this case, the main parties are Deborah Ross, Leonard Ross and Miraj Hossain and the three reached an agreement to create and administer a restaurant called Pastizzi Cafe Pty Ltd. There are a number of unique twists and fact in this particular controversy. To start, there is a Ms Ross who is guarantor of the partnership's initial funding, and she is a shareholder of the corporation as well. There is a Mr. Ross who is not a formal partner (his partnership is on hold for two years due to a break up with a former girlfriend,) and there is a Mr. Hossain and his company, Talukder Enterprises Pty Ltd. (Pastizzi Cafe v Hossain, 4). Mr. Hossain complains to the Court that Mr. And Ms Ross are making all business decisions while leaving him out of the decision-making loop. Of course, Mr. And Ms Ross do not agree, since he can come to corporate meetings and since he has access to all the partnership's financial documents (Pastizzi Cafe v Hossain, 4). Another problem that complicates the case is the fact that Mr., Hossain sold his third of the partnership to Mr. And Ms Ross in late 2010. They disagreed on the value of the business at this time, however. To make matters worse, several months later, Mr. Hossain locks the Rosses out of the restaurant, changes the name, and ends the partnership. Because of this, Mr. And Ms Ross sue Mr. Hossain for lost profits and damages due to loss of the businesses goodwill (Pastizzi Cafe v Hossain, 5).

Though there are several interesting minor legal questions (the case involving Mr. Ross and his former girlfriend, for example,) the main legal questions involve the nature of the partnership, the right of Hossain kick the Mr. And Ms Ross off of his (and Pastizzi's) property and end the partnership, and the value of the business and the damages for lost profit and goodwill.

First, the Supreme Court of New South Wales ruled that all three individuals were equal partners with equal responsibilities and duties. The Court used the earlier Ebrahimi v Westbourne Galleries decision to hold that each individual was not only equal in partnership but that each partner has a fiduciary responsibility and obligation to Pastizzi's; and further, using s9 of the Corporations Act, the Court believed that Mr., Ross was both a manager and director of the business, since he was intimately involved in the decision making and day-to-day operations of the restaurant. The justices held that Mr. Hossain had no right to prevent the entrance of Mr. And Ms Ross and end the business (Pastizzi Cafe v Hossain, 8). The Court's reasoning that the Ross's did have a right to the property was based upon past judicial decisions. Using various precedents, the Justice stated that when a person grants use of a property to another for business purposes, that person has the right to run a business. Also, should something happen that harms the renter, he does have the right to seek compensation. Citing a number of different cases such as Jaques v Millar, Ductline Pty Ltd. v Arcric Investments Pty Ltd., and especially Territory Sheet Metal Pty Ltd. v Australia and New Zealand Banking Group Ltd., the Court ruled that Mr. And Ms. Ross were to have access to the property and they were also to have damages (Pastizzi Cafe v Hossain, 7,8). Mr. And Ms Ross were granted lost profits and damages for goodwill. Additionally, the Court upheld the ruling in TSM that Mr. And Ms Ross were to have lost profits and goodwill, and the Court quoted from the same case the principle that the Rosses should receive damages commensurate to loss of value for potential goodwill (Pastizzi Cafe v Hossain, 9).